8-K/A: Olenox Industries Completes CS Digital Acquisition, Files Financials

Olenox Industries Inc. has filed an amendment to its Form 8-K to include the financial statements of CS Digital Ventures, LLC, following its acquisition on May 26, 2026.

Summary

• Olenox Industries Inc. (the Company) filed an amendment (Form 8-K/A) to its previous report to include the financial statements of CS Digital Ventures, LLC (CS Digital).
• The acquisition of 100% of CS Digital's membership interests by Olenox was completed on May 26, 2026.
• This amendment provides the audited financial statements for CS Digital for the years ended December 31, 2025 and 2024, and unaudited financial statements for the three months ended March 31, 2026 and 2025.
• Unaudited pro forma consolidated financial statements for Olenox, reflecting the acquisition, are also included for the three months ended March 31, 2026, and the year ended December 31, 2025.
• The pro forma information is for illustrative purposes and may not be indicative of future results.
• CS Digital reported net losses for the years ended December 31, 2025 ($1,648,799) and 2024 ($1,239,210).
• For the three months ended March 31, 2026, CS Digital reported a net loss of $970,265, compared to a net income of $1,005,341 for the same period in 2025.
• The acquisition consideration included $30,000,000 in upfront consideration (Series D Preferred Stock and a promissory note), warrants, and up to $20,000,000 in earnout shares.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as slightly negative due to the continued net losses reported by CS Digital Ventures, despite the acquisition by Olenox Industries. While the acquisition itself is a significant event, the underlying financial performance of the acquired entity remains a concern.

Positives

• The acquisition of CS Digital Ventures, LLC by Olenox Industries Inc. has been completed, integrating the digital asset mining operations into Olenox.
• CS Digital's revenue increased significantly from $3,889,742 in 2024 to $20,634,274 in 2025.
• CS Digital's mining revenue for the three months ended March 31, 2026, was $3,981,070, an increase from $2,688,532 in the prior year period.
• Subsequent to year-end 2025, CS Digital's loan obligation of $15,202,424 was extinguished through a debt-for-equity exchange.
• As of May 31, 2026, CS Digital held approximately $2.84 million in total liquid assets (cash and Bitcoin).
• Management projects positive monthly free cash flows for CS Digital beginning in July 2026 through at least August 2027.

Negatives

• CS Digital Ventures, LLC reported a net loss of $1,648,799 for the year ended December 31, 2025, and $1,239,210 for the year ended December 31, 2024.
• CS Digital reported a net loss of $970,265 for the three months ended March 31, 2026, a significant downturn from a net income of $1,005,341 in the same period of 2025.
• As of December 31, 2025, CS Digital had an accumulated deficit of $2,888,009 and a consolidated loan obligation of $15,202,424, raising substantial doubt about its ability to continue as a going concern prior to the debt-for-equity exchange.
• The pro forma financial information indicates a combined net loss of $20,688,239 for the year ended December 31, 2025, and $3,637,628 for the three months ended March 31, 2026.
• The fair value of Bitcoin held by CS Digital decreased from $3,824,230 at December 31, 2024, to $976,363 at December 31, 2025, and further to $599,149 at March 31, 2026.
• Depreciation expense for CS Digital was $6.2 million in 2025 and $1.9 million in 2024, and $1.8 million for the three months ended March 31, 2026.

Risks

• The financial statements of CS Digital Ventures, LLC indicated substantial doubt about its ability to continue as a going concern due to recurring losses and outstanding debt prior to the debt-for-equity exchange.
• The Company's operating results are affected by fluctuations in the market price of Bitcoin.
• The Company is subject to risks associated with the availability and performance of third-party mining pool operators (Foundry USA and ViaBTC).
• The Company's operations are dependent on the availability of electricity and internet connectivity.
• The fair value of digital assets, like Bitcoin, can be highly volatile, impacting financial results.
• The pro forma financial information is presented for illustrative purposes and is not necessarily indicative of future results.
• The acquisition is subject to potential future adjustments based on final purchase price allocation and valuation procedures.

Future Outlook

The pro forma financial information suggests a combined net loss for both the year ended December 31, 2025, and the three months ended March 31, 2026. However, management for CS Digital projects positive monthly free cash flows beginning in July 2026 and continuing through at least August 2027, indicating a potential turnaround.

Management Comments

• Management concluded that the recurring losses and outstanding debt of CS Digital raised substantial doubt about its ability to continue as a going concern, but subsequent events have alleviated these concerns.
• Management believes that CS Digital has sufficient liquidity and financial resources to meet its obligations for at least one year from the date the financial statements are available to be issued.
• The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the consolidated financial position or results of operations that would have been realized had the acquisition occurred as of the dates indicated.

Industry Context

StockSavvy.ai notes that this filing highlights the ongoing consolidation within the digital asset mining sector. Olenox Industries' acquisition of CS Digital Ventures signifies a strategic move to integrate mining operations, likely aiming for economies of scale and enhanced operational efficiency in a competitive and volatile market.

Comparison to Industry Standards

• The financial performance of CS Digital, particularly its net losses in 2025 and Q1 2026, contrasts with the profitability of some larger, more established Bitcoin mining companies like Marathon Digital Holdings or Riot Platforms, which have shown periods of profitability and significant revenue growth.
• CS Digital's revenue growth from 2024 to 2025 is substantial, but the increasing cost of revenues and operating expenses led to a net loss, a common challenge in the capital-intensive mining industry where operational efficiency and energy costs are critical.
• The adoption of ASU 2023-08, which requires crypto assets to be measured at fair value with changes recognized in net income, aligns CS Digital with industry best practices for accounting for digital assets, similar to how other publicly traded crypto-focused companies report their holdings.

Legal Proceedings

• As of December 31, 2025, CS Digital had no pending legal proceedings, arbitrations, or formal claims.
• As of March 31, 2026, CS Digital had no pending legal proceedings, arbitrations, or formal claims.

Related Party Transactions

• On May 25, 2025, CS Digital entered into an Asset Purchase Agreement with Shanti Cillo (a member of the Company) to acquire 1,100 mining units for $4,510,000, paid in installments through December 2025.
• Subsequent to December 31, 2025, the $15,202,424 consolidated loan from Francesca Forcella was extinguished through a debt-for-equity exchange, where Francesca Forcella received 6,000,000 Class B Units representing a 6% interest in the Company.
• Subsequent to the acquisition by Olenox, CS Digital received cash transfers totaling $600,000 from Olenox Corp.
• CS Digital made a payment of $50,000 to Kevin McKnight LLC on behalf of Olenox Corp.

Stakeholder Impact

• Shareholders of Olenox Industries Inc. will experience dilution from the issuance of Series D Preferred Stock and warrants as part of the acquisition consideration.
• The acquisition of CS Digital, a digital asset mining company, will impact Olenox's business profile, shifting it towards cryptocurrency operations.
• Creditors of CS Digital had their loans extinguished through a debt-for-equity swap, converting debt to ownership.
• Sellers of CS Digital received a combination of cash, stock, notes, and warrants, diversifying their investment.

Next Steps

• Olenox Industries Inc. will continue to integrate CS Digital Ventures, LLC's operations.
• The Company will finalize the purchase price allocation for the acquisition within the measurement period (not exceeding one year from the acquisition date).
• CS Digital management projects positive monthly free cash flows beginning in July 2026.
• The Company will monitor the achievement of revenue and Adjusted EBITDA milestones for the Earnout Shares.

Key Dates

Recommendation

The acquisition of CS Digital by Olenox Industries is a significant strategic move, but the underlying financial performance of CS Digital, marked by substantial net losses and a decrease in Bitcoin asset value, presents considerable risk. While there are projections of future positive cash flow and revenue growth, the current combined pro forma results are negative. The recommendation is 'hold' due to the uncertainty surrounding the integration and profitability of the acquired digital asset mining operations, balanced against the potential for future upside if management's projections are realized.

Keywords

digital asset mining, CS Digital Ventures, Olenox Industries, Bitcoin, cryptocurrency, acquisition, financial statements, pro forma