0001493152-26-023890
SEC filingRevenue was $7.6M (-23.7%) Gross Profit was $215.3K (-73.5%) Operating Income was -$10.5M (-642.4%) Net Income was -$76.1M (-2887.2%)
Revenue declined 23.7% to $7.6 million in Q1 2026 from $9.9 million in the prior-year period, reflecting cancellation of certain customer agreements and reduced order volumes. This stemmed from Forever 8, the Company's sole revenue-generating operating segment acquired in October 2022, exiting its liquidation-model operations and winding down relationships where it previously operated customer storefronts. The strategic exit aimed to mitigate ongoing losses from these low-margin activities, allowing focus on core e-commerce inventory funding where liquidity supports merchants' inventory purchasing.
Gross profit fell sharply 73.5% to $215.3 thousand from $813.3 thousand, with gross margin contracting to 2.8%. The decrease was primarily driven by the revenue reduction, as lower volumes directly compressed margins in the inventory solutions business.
Operating income deteriorated to a -$10.5 million loss from -$1.4 million (-642.4% YoY), and operating margin reached -139.0%. This widening reflects the combined pressure of revenue contraction and elevated operating costs amid the transition away from legacy operations.
Net cash used in operating activities was $4.7 million, versus $1.0 million provided last year, with free cash flow at -$4.7 million after minimal $157 capital expenditures (unchanged YoY). Cash burn reflects operational needs including routine corporate expenses, personnel, professional fees, vendor obligations, and working capital for Forever 8's inventory funding, as well as the transition impacts.
Liquidity supports these requirements and strategic private company investments in frontier technology as part of long-term capital allocation. Recent capital raises materially strengthened the balance sheet, funding operating and corporate needs despite digital asset volatility and operational shifts. The Company has no debt covenants requiring specific financial metrics, reducing near-term contractual pressures, though results and liquidity remain sensitive to known trends like asset price swings.