NOTE 5—Closing of the Asset Sale

On January 23, 2026 (the “Closing Date”) the Company (“the “Seller”) completed its previously announced sale (the “Asset Sale”) of substantially all of its assets and liabilities related to the enterprise 5G solutions business, including rugged handsets, smartphones, wireless internet device, software, services, and accessories to Pace Car Acquisition LLC, (the “Buyer”). Excluded assets include the DNA X LLC cryptocurrency trading business, cash, and the Company’s Indian subsidiary. Excluded liabilities include compensation for employees that did not transfer to the Buyer, certain excluded corporate liabilities, and certain excluded contracts.

The purchase price of $15,000 less a working capital adjustment of $1,550 was paid in cash and for the settlement of certain liabilities of the Company, except for $1,500 that was held back by the Buyer and is due to be paid to the Seller on October 28, 2026, less any agreed upon claims. As part of the consideration, the Buyer paid Company’s existing debt of $5,476 with Streeterville Capital, LLC and $2,928 of liabilities of the Company. The Company received $3,546 in cash on the Closing Date.

The Company changed its name to DNA X, Inc. in connection with the Asset Sale. Following the closing, the Company has focused on the development and commercialization of the DNA X trading platform that uses on-chain trading protocol designed to enable users to automate certain decentralized exchange trading strategies. The Company is enhancing the platform to include trading of AI compute time.

The transaction resulted in a $15,311 pre-tax gain for Company and related tax expense of $2,295 for a post tax gain of $13,016 The transaction is included in income from discontinued operations for the first quarter of 2026. For all periods presented, the assets and liabilities sold or assumed were segregated as a disposal group. The sale of the assets represents a strategic shift away from manufacturing hardware because of the high cost of developing new products, higher costs of manufacturing products outside of China, and competition from larger competitors with more resources. As of December 31, 2025, the phone and hotspot business met the criteria for “Held for Sale” classification. Results of the phone and hotspot business have been retrospectively reclassified as discontinued operations for all periods presented. No impairment was recognized as the fair value less costs to sell was not lower than the carrying amount. Discontinued operations represent 100% of the revenue in 2025 and the first half of 2026, and approximately 89% of the Company’s assets as of December 31, 2025.

On December 30, 2025, a special stockholders’ meeting was held and stockholders voted the majority of the outstanding shares in favor of approving the asset sale. This approval made it probable that the assets sale would be completed and was the final criteria that was necessary to record the assets as held for sale. On December 31, 2025 the assets and liabilities of the phone and hotspot disposal group were classified as held for sale. The disposal group was also classified as discontinued operations as of December 31, 2025 and for the six months ended June 30, 2026. 

The following schedules present the carrying amounts of major classes of assets and liabilities associated with the disposal group as of December 31, 2025, the statement of operations for the disposal group, and cash flow for the disposal group. All assets and liabilities that were held for sale on December 31, 2025, were sold or disposed of as of June 30, 2026:

DISCONTINUED OPERATIONS

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025

(IN THOUSANDS)

  Schedule of Discontinued Operations

Non-trade receivables are from the Company’s manufactures who buy parts from the Company. The receivable is paid by the manufacturer after Company pays the related accounts payable for the inventory.

Discontinued operations activity for the six months ended 2026 covers the period January 1, 2026 through January 23, 2026. Discontinued operations activity for 2025 covers the entire three or six month period.

DNA X, INC.

DISCONTINUED OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

(UNAUDITED)

The following cash flows are for discontinued operations only and are supplemental to the Statement of Cash Flows that includes both continuing operations and discontinued operations.

DISCONTINUED OPERATIONS

CONSOLIDATED STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2026 and 2025

(IN THOUSANDS)

The Company ceased depreciation and amortization of property, plant, and equipment and intangible assets included in the Disposal Group starting on December 31, 2025.