Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.1
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 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 commerce business, operated through vapor.com as an asset-light drop-ship referral service. The Company does not hold inventory or handle physical goods in this segment; revenue is generated on a referral basis as orders are fulfilled directly by third-party suppliers.

 

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 (loss), 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 and six months ended June 30, 2025.

 

The following tables set forth net revenue, cost of sales, and gross profit (loss) by reportable segment for the three and six months ended June 30, 2026 and 2025:

 

in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
    Three Months Ended June 30, 2026     Three Months Ended June 30, 2025  
in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Net revenue   $ 82     $ —     $ 82     $ 788     $ —     $ 788  
Cost of sales     50       —       50       786       —       786  
Gross profit (loss)     32       —       32       2       —       2  
                                                 
Staking and yield revenue, net    

—

      

309

      

309

      

—

      

—

      

—

  

 

in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
    Six Months Ended June 30, 2026     Six Months Ended June 30, 2025  
in thousands   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Net revenue   $ 109     $ —     $ 109     $ 2,257     $ —     $ 2,257  
Cost of sales     282       —       282       1,534       —       1,534  
Gross profit (loss)     (173 )     —       (173 )     723       —       723  
                                                 
Staking and yield revenue, net    

—

      

729

      

729

      

—

      

—

      

—

  

 

The following tables set forth operating expenses by reportable segment for the three and six months ended June 30, 2026 and 2025.

 

SCHEDULE OF DETAILED INFORMATION ABOUT REPORTABLE SEGMENT

(in thousands)  

Wholesale and

Distribution

     Digital Asset     Total     Wholesale and
Distribution		     Digital Asset     Total  
    Three Months Ended June 30, 2026     Three Months Ended June 30, 2025  
(in thousands)   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Operating expenses                                                
Salaries, benefits and payroll taxes   $ 295     $ 443     $ 738     $ 1,119     $ —     $ 1,119  
Stock-based compensation – strategic advisory warrants     —       236       236       —       —       —  
General and administrative     1,412       1,113       2,525       1,938       —       1,938  
Depreciation and amortization     126       —       126       201       —       201  
Total operating expenses   $ 1,833     $ 1,792     $ 3,625     $ 3,258     $ —     $ 3,258  

 

(in thousands)  

Wholesale and

Distribution

     Digital Asset     Total     Wholesale and
Distribution		     Digital Asset     Total  
    Six Months Ended June 30, 2026     Six Months Ended June 30, 2025  
(in thousands)   Wholesale and Distribution     Digital Asset     Total     Wholesale and Distribution     Digital Asset     Total  
Operating expenses                                                
Salaries, benefits and payroll taxes   $ 1,350     $ 822     $ 2,172     $ 2,386     $ —     $ 2,386  
Stock-based compensation – strategic advisory warrants     —       476       476       —       —       —  
General and administrative     2,770       3,741       6,511       4,762       —       4,762  
Depreciation and amortization     253       —       253       307       —       307  
Total operating expenses   $ 4,373     $ 5,039     $ 9,412     $ 7,455     $ —     $ 7,455  

 

 

Changes in fair value of digital assets are not included in segment gross profit (loss) 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 June 30, 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   $ 43     $ 6,022     $ 6,065     $ 1,733     $ 30,780     $ 32,513  
Accounts receivable, net     13       —       13       1,572       —       1,572  
Stablecoin-related protocol instruments     —       8,057       8,057       —       —       —  
Digital assets – BERA & BERA-equivalents     —       16,442       16,442       —       36,555       36,555  

 

The following table sets forth revenues disaggregated by geography:

 

(in thousands)   2026     2025     2026     2025  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2026     2025     2026     2025  
Net revenue                                
United States   $ 82     $ 788     $ 109     $ 2,257  
Canada     —       —       —       —  
Europe     —       —       —       —  
Total net revenue     82       788       109       2,257  
Staking and yield revenue, net                                
United States     309       —       729       —  
Canada     —       —       —       —  
Europe     —       —       —       —  
Total staking and yield revenue, net     309       —       729       —  

 

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)   June 30, 2026     December 31, 2025  
    As of  
(in thousands)   June 30, 2026     December 31, 2025  
United States   $ —     $ 397  
Canada     —       —  
Europe     —       —  
Total long-lived assets   $ —     $ 397  

 

There were no long-lived assets within the Digital Asset Segment as of June 30, 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.