Strengthened Liquidity and Working Capital Position with Cash of
Active Cryptocurrency Strategy Outperformed Market by 6%, Reducing Losses by 23% Relative to Buy-and-Hold2
“With a materially strengthened balance sheet, improved liquidity profile, and significantly improved working capital position, we entered the quarter focused on restoring inventory availability, rebuilding momentum across the Halo® platform, and positioning the Company for scalable long-term growth," stated
“Despite a challenging market environment in which Bitcoin and Ethereum declined 27% over the six-month trading period, our active cryptocurrency strategy limited losses to 21%, reducing loss exposure by 23% relative to a buy-and-hold approach. This performance reflects the strength of our disciplined, data-driven approach to capital allocation. We also look forward to the planned acquisition of EMJX, which we believe will further enhance our AI-driven capabilities and strengthen our digital asset treasury strategy,” stated
On or about
FISCAL SECOND QUARTER 2026 HIGHLIGHTS
- Net revenue growth of 23% quarter over quarter to
$3.4 million - Gross margin remained stable at approximately 37%
- Gross profit growth of 21% quarter over quarter to
$1.3 million - Operating loss improved 52% quarter over quarter to
$(1.8) million - Net loss improved 26% quarter over quarter to
$(6.4) million - Earnings (loss) per share ("EPS") improved 92% quarter over quarter to
$0.02 per share - Adjusted EBITDA1 loss improved 44% quarter over quarter to
$(0.6) million
LIQUIDITY AND CAPITAL RESOURCES
As of
Unaudited Condensed Consolidated Statements of Operations (Dollars in thousands, except share and per share amounts) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net sales | $ | 3,439 | $ | — | $ | 6,246 | $ | — | |||||||
| Cost of goods sold | 2,164 | — | 3,917 | — | |||||||||||
| Gross profit | 1,275 | — | 2,329 | — | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 3,093 | — | 7,937 | — | |||||||||||
| Loss from continuing operations | (1,818 | ) | — | (5,608 | ) | — | |||||||||
| Other expense (income): | |||||||||||||||
| Interest expense, net | 1,780 | — | 3,068 | — | |||||||||||
| Loss on extinguishment of debt | — | — | 3,064 | — | |||||||||||
| Change in fair value of digital assets | 2,895 | — | 3,359 | — | |||||||||||
| Change in fair value of equity securities | 493 | — | 493 | — | |||||||||||
| Change in fair value of derivative liabilities | (592 | ) | — | (592 | ) | — | |||||||||
| Other income, net | (15 | ) | — | (11 | ) | — | |||||||||
| Total other expense, net | 4,561 | — | 9,381 | — | |||||||||||
| Net loss before income taxes | (6,379 | ) | — | (14,989 | ) | — | |||||||||
| Income tax expense | 2 | — | 6 | — | |||||||||||
| Net loss from continuing operations | (6,381 | ) | — | (14,995 | ) | — | |||||||||
| Loss from discontinued operations | — | (10,149 | ) | — | (14,132 | ) | |||||||||
| Net loss | $ | (6,381 | ) | $ | (10,149 | ) | $ | (14,995 | ) | $ | (14,132 | ) | |||
| Weighted average number of shares outstanding, basic | 299,067,382 | 25,801,254 | 164,601,605 | 24,685,849 | |||||||||||
| Weighted average number of shares outstanding, diluted | 299,067,382 | 25,801,254 | 164,601,605 | 24,685,849 | |||||||||||
| Loss per share, basic | $ | (0.02 | ) | $ | (0.39 | ) | $ | (0.09 | ) | $ | (0.57 | ) | |||
| Loss per share, diluted | $ | (0.02 | ) | $ | (0.39 | ) | $ | (0.09 | ) | $ | (0.57 | ) | |||
Unaudited Condensed Consolidated Balance Sheets (Dollars in thousands, except share amounts) | |||||||
| Assets | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 20,543 | $ | 1,309 | |||
| Short-term investments | 2,996 | — | |||||
| Accounts receivable, net | 3,806 | 3,945 | |||||
| Inventories, net | 2,086 | 2,078 | |||||
| Notes receivable | 1,407 | — | |||||
| Digital assets | 8,333 | — | |||||
| Investment in equity securities | 2,531 | — | |||||
| Prepaid expenses and other current assets | 1,447 | 794 | |||||
| Total Current Assets | 43,149 | 8,126 | |||||
| Fixed assets, net | 76 | 88 | |||||
| Right-of-use assets, operating leases | — | 20 | |||||
| Other assets | 139 | 168 | |||||
| Total Assets | $ | 43,364 | $ | 8,402 | |||
| Liabilities & Stockholders’ Equity | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 952 | $ | 2,147 | |||
| Accrued liabilities | 1,510 | 1,375 | |||||
| Operating lease liability, short-term | — | 21 | |||||
| Convertible debt, short-term | 22,616 | — | |||||
| Total Current Liabilities | 25,078 | 3,543 | |||||
| Convertible debt, long-term | — | 4,452 | |||||
| Total Liabilities | 25,078 | 7,995 | |||||
| Stockholders’ Equity | |||||||
| Common Stock, | 419 | 31 | |||||
| Preferred Stock, | — | — | |||||
| Additional paid-in capital, common | 52,829 | 23,304 | |||||
| Additional paid-in capital, preferred | 2,961 | — | |||||
| Accumulated deficit | (37,923 | ) | (22,928 | ) | |||
| Total Stockholders’ Equity | 18,286 | 407 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 43,364 | $ | 8,402 | |||
Non-GAAP Measures |
Adjusted EBITDA
We define Adjusted EBITDA to supplement the financial measures prepared in accordance with GAAP. Adjusted EBITDA adjusts EBITDA to eliminate the impact of certain items that we do not consider indicative of our core operations. Adjusted EBITDA is determined by adding the following items to net loss: interest expense, depreciation and amortization, tax expense, share-based compensation, loss on extinguishment of debt, change in fair value of digital assets, change in fair value of equity securities, change in fair value of derivative liabilities, transaction-related expenses, and other non-recurring expenses.
We present Adjusted EBITDA as it is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We believe that the disclosure of Adjusted EBITDA is useful to investors as this non-GAAP measure forms the basis of how our management team reviews and considers our operating results. By disclosing this non-GAAP measure, we believe that we create for investors a greater understanding of and an enhanced level of transparency into the means by which our management team operates our company. We also believe this measure can assist investors in comparing our performance to that of other companies on a consistent basis without regard to certain items that do not directly affect our ongoing operating performance or cash flows.
Adjusted EBITDA does not represent cash flows from operations as defined by GAAP. Adjusted EBITDA has limitations as a financial measure and you should not consider it in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss, gross margin, and our other GAAP results.
The following table presents a reconciliation of net loss, the closest GAAP financial measure, to EBITDA and Adjusted EBITDA for each of the years indicated (in thousands):
| Three Months Ended | Six Months Ended | ||||||||||||
| 2026 | 2025* | 2026 | 2025* | ||||||||||
| Net loss | $ | (6,381 | ) | $ | — | $ | (14,995 | ) | $ | — | |||
| Interest expense, net | 1,780 | — | 3,068 | — | |||||||||
| Depreciation and amortization | (76 | ) | — | (61 | ) | — | |||||||
| Income tax expense | 2 | — | 6 | — | |||||||||
| EBITDA | (4,675 | ) | — | (11,982 | ) | — | |||||||
| Non-cash share-based compensation (a) | — | — | 961 | — | |||||||||
| Loss on extinguishment of debt | — | — | 3,064 | — | |||||||||
| Change in fair value of digital assets | 2,895 | — | 3,359 | — | |||||||||
| Change in fair value of equity securities | 493 | — | 493 | — | |||||||||
| Change in fair value of derivative liabilities | (592 | ) | — | (592 | ) | — | |||||||
| Transaction related (b) | 1,164 | — | 2,767 | — | |||||||||
| Non-recurring and other expenses (c) | 121 | — | 279 | — | |||||||||
| Adjusted EBITDA | $ | (594 | ) | $ | — | $ | (1,651 | ) | $ | — | |||
| (a) Non-cash expenses related to equity compensation awards for certain directors, officers and employees for services in their capacity as such. | |||||||||||||
| (b) Represents transaction, financing, treasury, litigation, and other non-recurring corporate costs, including legal, audit, valuation, professional, | |||||||||||||
| (c) Other single-occurrence expenses, which consist of infrequent and non-recurring costs that are not indicative of the Company’s ongoing operating performance. | |||||||||||||
| *Prior-year comparative figures are not presented because its wholly owned subsidiary, | |||||||||||||
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “expect,” “intend,” “aim,” “plan,” “may,” “could,” “target,” and similar expressions are intended to identify forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks include, but are not limited to, the ability to complete the proposed transaction, shareholder approvals, market conditions, regulatory considerations, and other risks described in the Company’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update them, except as required by law.
Company Contact:
Investor Contact:
T: 212-896-1254
Valter@KCSA.com
Media Contact
EMJX@KCSA.com
______________________
1 Adjusted EBITDA is a non-GAAP measure. Reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.
2
