Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENT REPORTING

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SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 13. SEGMENT REPORTING

 

We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. Our CODM is a committee comprised of our CEO and our CFO.

 

Due to the launch of the digital asset treasury reserve strategy in October 2025 and continual assessment of the requirements under ASC 280, Segment Reporting, the Company has reassessed its segment conclusions and determined that effective with this Annual Report on Form 10-K, the Company is presenting two operating and reportable segments: one reportable segment that develops and distributes wholesale accessories, vape devices, and lifestyle products (the “Wholesale Segment”); and one segment that manages the Company’s digital asset treasury (the “Digital Asset Segment”). In the Wholesale Segment, all brands are predominantly wholesale and distribution products that are manufactured using similar production processes, generally fall under the same regulatory environment, and are sold to the same types of customers in similar size quantities at similar price points and with similar profit margins. In the Digital Asset Segment, the Company’s digital asset investments are maintained and managed to make a return on investment through validation and staking activities to generate revenue.

 

The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM assesses performance for each segment based on revenue and gross profit, which are reported in the condensed consolidated statement of operations. Other costs and expenses of the Company are analyzed by segment. The accounting policies for segment reporting are the same as for the Company’s consolidated financial statements. As the Company continues its operations of the digital asset strategy, it may provide additional data points to the CODM to assist with decision making that will be evaluated for inclusion in the Company’s reportable segment disclosure.

 

There were no Digital Asset Segment activities for the year ended December 31, 2024.

 

 

Our CODM assesses the performance of our one operating segment based on the operating segments’ net sales and gross profit. The following table sets forth information by reportable segment for the years ended December 31, 2025 and 2024 for the Wholesale / Distribution segment.  

 

(in thousands)   2025     2024  
    For the year ended December 31,  
(in thousands)   2025     2024  
Net revenue   $ 4,142     $ 13,275  
Cost of revenue     16,820       6,993  
Gross profit (loss)   $ (12,678 )   $ 6,282  

 

The following table sets forth information by reportable segment for the years ended December 31, 2025 and 2024 for the digital asset segment.

 

(in thousands)   2025     2024  
    For the year ended December 31,  
(in thousands)   2025     2024  
Net revenue   $ 214     $ -  
Cost of revenue     -       -  
Gross profit (loss)   $ 214     $ -  

 

The following table sets forth information by reportable segment for the years ended December 31, 2025.

 

(in thousands)   Wholesale and Distribution     Digital Asset     Total  
Operating expenses                        
Salaries, benefits and payroll taxes   $ 9,506     $ 441     $ 9,947  

Stock based compensation – strategic advisory warrants

     18,553       —       18,553  
General and administrative     9,112       1,534       10,646  
Restructuring expenses     1,492       —       1,492  
Impairment     650       —       650  
Depreciation     493       —       493  
Total operating expenses   $ 39,806     $ 1,974     $ 41,781  

 

The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:

 

(in thousands)   2025     2024  
    For the year ended December 31,  
(in thousands)   2025     2024  
Accounts receivable, net   $ 1,572     $ 4,262  
Inventories   $ -     $ 14,215  
Vendor deposits   $ -     $ 3,091  

 

None of the above assets were present in our digital asset segment.

 

The following table sets forth net sales disaggregated by geography:

 

(in thousands)   2025     2024  
    For the year ended December 31,  
(in thousands)   2025     2024  
United States   $ 4,351     $ 10,900  
Canada     4       157  
Europe     -       2,218  
Total net sales   $ 4,355     $ 13,275  

 

The following table sets forth our long-lived assets by geographic area, which consist of property and equipment, net, and operating lease right-of-use assets:

 

(in thousands)   2025     2024  
    As of December 31,  
(in thousands)   2025     2024  
United States   $ 397     $ 2,459  
Canada     -       4  
Europe     -       -  
Total long-lived assets   $ 397     $ 2,463  

 

There were no long-lived assets within our digital asset segment. The Company’s digital asset activities are primarily comprised of liquid crypto holdings, stablecoins, and related treasury activities, which are presented within current assets based on their nature and liquidity profile.