Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.1
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 11. SEGMENT REPORTING

 

The Company defines its operating segments as components of the business whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to assess performance and allocate resources. Segment information is prepared on the same basis that management uses for operational decision-making purposes. The Company’s CODM is a committee comprised of the Company’s Chief Executive Officer and Chief Financial Officer.

 

In connection with the launch of the Company’s digital asset treasury reserve strategy in October 2025 and management’s ongoing assessment of the requirements under ASC 280, Segment Reporting, the Company reassessed its segment conclusions and determined that, beginning in the fourth quarter of 2025, it has two operating and reportable segments: (i) the Wholesale and Distribution Segment and (ii) the Digital Asset Segment.

 

The Wholesale and Distribution Segment consists of the Company’s reduced-scale legacy business, including the sale and distribution of wholesale accessories, vape devices, and lifestyle products. These products are generally subject to similar regulatory environments, are sold to similar customer types, and are managed through the Company’s remaining asset-light distribution and e-commerce activities.

 

The Digital Asset Segment consists of the Company’s digital asset treasury activities, including the acquisition, holding, staking, validator participation, and strategic deployment of BERA and BERA-equivalent digital assets. Digital asset treasury activities are managed to support the Company’s treasury strategy, liquidity objectives, ecosystem participation, and staking revenue generation.

 

The CODM assesses performance of the Company’s reportable segments based on net revenue, gross profit, selected operating expenses, and certain asset information. The accounting policies used for segment reporting are consistent with those used in the preparation of the Company’s condensed consolidated financial statements. As the Company continues to develop its digital asset treasury strategy, management may provide additional information to the CODM, including additional treasury, liquidity, fair value, and asset-level metrics, which will be evaluated for inclusion in future segment disclosures.

 

There was no Digital Asset Segment activity for the three months ended March 31, 2025.

 

 

The following table sets forth net revenue, cost of revenue, and gross profit by reportable segment for the three months ended March 31, 2026 and 2025:

 

in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
    Three Months Ended March 31, 2026     Three Months Ended March 31, 2025  
in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Net revenue   $ 27     $ 421     $ 448     $ 1,469       —     $       1,469  
Cost of revenue     231       —       231       748       —            748  
Gross profit   $ (204 )   $ 421     $ 217     $ 721       —     $ 721  

 

The following table sets forth operating expenses by reportable segment for the three months ended March 31, 2026.

 

(in thousands)  

Wholesale and

Distribution

     Digital Asset     Total     Wholesale and
Distribution		     Digital Asset     Total  
   

Three Months Ended March 31, 2026

     Three Months Ended March 31, 2025  
(in thousands)  

Wholesale and

Distribution

     Digital Asset     Total     Wholesale and
Distribution		     Digital Asset     Total  
Operating expenses                                                
Salaries, benefits and payroll taxes   $ 1,055     $ 379     $ 1,434     $

1,267

     $

—

     $

1,267

  
Strategic advisory warrants     —       240       240       —       —       —  
General and administrative     1,360       2,629       3,989      

2,823

       —      

2,823

  
Depreciation     126       —       126      

106

       —      

106

  
Total operating expenses   $ 2,541     $ 3,248     $ 5,789     $

4,196

     $ —     $ 4,196  

 

Changes in fair value of digital assets are not included in segment gross profit and are reviewed separately by the CODM as part of treasury strategy, fair value exposure, and capital allocation activities.

 

The following table sets forth certain asset categories reviewed by the CODM in evaluating the Company’s reportable segments and liquidity profile:

 

(in thousands)   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
    As of March 31, 2026     As of December 31, 2025  
(in thousands)   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Cash equivalents, including qualifying stablecoins     268       13,052       13,320       1,733       30,780       32,513  
Accounts receivable, net     883       -       883       1,572       -       1,572  
Digital asset loan receivable     -       235       235       -       -       -  
Stablecoin-related protocol instruments     -       3,999       3,999       -       -       -  
Digital assets – BERA & BERA-equivalents     -       34,232       34,232       -       36,555       36,555  

 

The following table sets forth net revenue disaggregated by geography:

 

(in thousands)   2026     2025  
    Three Months Ended March 31,  
(in thousands)   2026     2025  
United States   $ 448     $ 1,469  
Canada     —       —  
Europe     —       —  
Total net revenue   $ 448     $ 1,469  

 

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:

 SCHEDULE OF LONG-LIVED ASSETS BY GEOGRAPHIC AREA

(in thousands)   March 31, 2026     December 31, 2025  
    As of  
(in thousands)   March 31, 2026     December 31, 2025  
United States   $ 122     $ 397  
Canada     —       —  
Europe     —       —  
Total long-lived assets   $ 122     $ 397  

 

 

There were no long-lived assets within the Digital Asset Segment as of March 31, 2026 or December 31, 2025. The Company’s digital asset activities are primarily comprised of digital assets, qualifying stablecoins, stablecoin-related protocol instruments, and related treasury activities, which are presented based on their nature, liquidity profile, and applicable accounting classification.