Executive Summary

Combined Q1 2026 revenue was $7.51M, up 8% year over year, but gross margin compressed to 31% (from 42%), driving a net loss of $5.83M; operating loss was $5.62M as elevated stock-based comp and transaction costs weighed on results .
The company closed a $500M private placement on August 5 to fund a new Digital Asset Treasury focused on BNB, with an explicit goal to own 1% of BNB total supply by year-end 2025; digital assets were acquired post-quarter and are not reflected in Q1 financials .
Liquidity tightness pre-PIPE (cash $3.02M, working capital deficit ~$1.01M) should ease post-close; DAT impacts are expected to appear in Q2 FY26 financials (period ending Oct 31) .
Backlog decreased to ~$0.63M with net bookings of $61K, reflecting continued demand headwinds in CEA and timing uncertainty on contract conversion to revenue .
S&P Global EPS and revenue consensus for Q1 2026 were unavailable; estimate comparisons and beat/miss analysis cannot be performed at this time (values retrieved from S&P Global).*

What Went Well and What Went Wrong

What Went Well

Strategic financing and pivot: $500M PIPE closed on Aug 5 to fund a focused BNB treasury; management targets owning 1% of BNB supply by year-end 2025, with DAT impacts starting Q2 FY26 .
Clear strategic message: “This quarter was the dawn of a new era for our company… to build the world’s leading digital asset treasury company focused on the BNB ecosystem,” said CEO David Namdar .
Revenue growth YoY: Combined revenue rose to $7.51M (+8% YoY) as price/mix helped offset excise tax impacts; acquisition contributed to scale in Canadian vape retail .

What Went Wrong

Margin compression: Gross margin fell to 31% (from 42%), driven by higher material costs (excise taxes), mix, and acquisition-related factors .
Operating loss and non-GAAP load: Operating loss of $5.62M included $4.67M non-cash stock-based comp, debt costs, and higher professional fees tied to the acquisition and transition .
Liquidity/working capital: Pre-PIPE liquidity was tight (cash $3.02M; working capital deficit ~$1.01M), with short-term notes tied to Fat Panda and elevated deferred revenue; DAT arrives post-quarter .

Financial Results

Consolidated Results vs Prior Periods and Prior Year

Metric	Q1 2024 (Oldest)	Predecessor Period (May 1–Jun 6, 2025)	Successor Period (Jun 7–Jul 31, 2025)	Q1 2026 Combined (Latest)
Revenue ($USD)	$6,958,270	$2,927,689	$4,579,758	$7,507,447
Cost of Revenue ($USD)	$4,054,322	$2,001,537	$3,207,166	$5,208,703
Gross Profit ($USD)	$2,903,948	$926,152	$1,372,592	$2,298,744
Gross Margin (%)	42%	—	—	31%
Operating Expenses ($USD)	$2,039,978	$905,550	$7,013,672	$7,919,222
Operating Income (Loss) ($USD)	$863,970	$20,602	$(5,641,080)	$(5,620,478)
Net Income (Loss) ($USD)	$708,423	$19,013	$(5,848,397)	$(5,829,384)
EPS (Basic & Diluted, $)	$502.43	$13.48	$(6.94)	—

Notes: The company reports Predecessor and Successor periods due to the Fat Panda acquisition and change in reporting entity; management provided combined non-GAAP Q1 2026 figures for comparability .

Revenue Disaggregation (Products/Channels) and Geography

Revenue Source ($USD)	Q1 2024 (Oldest)	Predecessor (May 1–Jun 6, 2025)	Successor (Jun 7–Jul 31, 2025)
CEA Equipment & Systems Sales	—	—	$106,827
CEA Engineering & Other Services	—	—	$49,146
CEA Shipping & Handling	—	—	$988
Retail Vape Sales	$6,061,541	$2,717,341	$4,182,722
E-commerce Vape Sales	$735,688	$165,818	$220,675
Factory Direct Wholesale Vape Sales	$7,766	$794	$7,064
Franchise Fee Vape Sales	$122,887	—	—
Other Vape Sales	$30,389	$43,736	$12,336
Total Revenue	$6,958,270	$2,927,689	$4,579,758

Geography ($USD)	Q1 2024 (Oldest)	Predecessor (May 1–Jun 6, 2025)	Successor (Jun 7–Jul 31, 2025)
United States	—	—	$156,961
Canada	$6,958,270	$2,927,689	$4,422,797
Total	$6,958,270	$2,927,689	$4,579,758

KPIs and Balance Sheet Highlights

KPI	Q1 2026 Value	Notes
Backlog	~$630,000	Down from $726,000 at June 6, 2025; timing of conversion to revenue remains uncertain
Net Bookings	$61,000	Versus $85,000 in prior predecessor period
Cash & Cash Equivalents	$3,019,711	Pre-PIPE; DAT funding closed Aug 5
Working Capital	$(1,011,000)	Working capital deficit at July 31, 2025
Store Count (Canada)	33 locations	29 Fat Panda and 4 Electric Fog

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Digital Asset Treasury (DAT) reflection in financials	Q2 FY26 (period ending Oct 31, 2025)	Not provided	DAT expected to be reflected starting Q2; Q1 excludes digital assets	New
BNB Ownership Target	CY 2025	Not provided	Targeting 1% of total BNB supply by year-end 2025	New

Earnings Call Themes & Trends

Note: A Q1 2026 earnings call transcript could not be located; themes reflect MD&A and filings.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2026)	Trend
Digital Asset Treasury pivot	$500M PIPE closed Aug 5; DAT strategy announced; assets to be acquired post-Q1	DAT not yet reflected in Q1; updates promised; Q2 will show treasury	Accelerating strategic pivot
Tariffs/Macro	U.S. tariff uncertainty; PRC exposure; sourcing alternatives under evaluation	Inflation pressures continue; cost increases impacting margins	Persistent headwinds
Litigation/Regulatory	Arbitration scheduled Oct 13, 2025; Optima claim settled (insurance-funded)	~$200K Canadian payroll tax risk; reserve recorded; vendor note offset	Residual legal/regulatory exposures
CEA Demand/Backlog	Backlog $726K (June 6); bookings $85K (predecessor)	Backlog down to $630K; bookings $61K; elevated uncertainty on conversion	Soft bookings; timing uncertainty
Regional mix	Canada-centric retail footprint and revenue	Canada remains dominant in revenue mix; U.S. small contribution	Stable geographic concentration

Management Commentary

“This quarter was the dawn of a new era for our company… to build the world’s leading digital asset treasury company focused on the BNB ecosystem.” — CEO David Namdar .
Management reiterated that digital asset acquisitions commenced after the Q1 reporting period and would be reflected in Q2 results; company will provide transparent updates on BNB holdings and treasury operations .
MD&A emphasized inflationary pressures, excise taxes, and acquisition-related cost increases as drivers of gross margin decline and SG&A step-up .

Q&A Highlights

An earnings call transcript for Q1 2026 was not available; no analyst Q&A themes or clarifications could be verified from primary sources.

Estimates Context

S&P Global consensus estimates for Q1 2026 EPS and revenue were unavailable for BNC; therefore, beat/miss vs Street cannot be assessed (values retrieved from S&P Global).*

Metric	Q1 2026
Primary EPS Consensus Mean	N/A*
Revenue Consensus Mean	N/A*

Key Takeaways for Investors

The $500M PIPE and focused DAT on BNB materially alter the company’s profile; expect treasury assets and related income strategies (validation, DeFi) to begin appearing in Q2 FY26 disclosures .
Near-term reported results reflect pre-DAT operations: Canadian vape retail scale and CEA engineering; margins compressed to 31% in Q1 as excise taxes and inflation elevated costs .
Operating losses were largely driven by non-cash stock-based comp ($4.67M) and transaction-related costs; monitor normalization of SG&A as integration progresses .
Liquidity and working capital constraints at quarter-end should be alleviated post-PIPE; however, short-term notes tied to the acquisition and deferred revenue require execution discipline .
CEA backlog/bookings softness and uncertain timing to revenue persist; Canadian retail remains the revenue anchor; geographic mix concentrated in Canada .
No financial guidance was provided beyond DAT milestones; investors should focus on cadence of BNB purchases, treasury disclosures, and any income-generating on-chain activities .
Without Street estimates, trading catalysts hinge on treasury deployment updates, regulatory developments, and margin trajectory in legacy businesses .

Footnote: Prior two quarters’ earnings documents and Q1 2026 call transcript were not available in the filing set searched; comparisons rely on predecessor/successor periods and prior-year Q1 as provided in the company’s 10-Q .

CEA Industries Inc. (BNC)·Q1 2026 Earnings Summary