# EDGAR Filing Document

**Accession Number:** 0001829311
**File Stem:** 0001683168-25-004889
**Filing Date:** 2025-7
**Character Count:** 200597
**Document Hash:** 814b276c488d4f5c760d30b389d2b321
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-25-004889.hdr.sgml**: 20250702

**ACCESSION NUMBER**: 0001683168-25-004889

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 57

**CONFORMED PERIOD OF REPORT**: 20250531

**FILED AS OF DATE**: 20250702

**DATE AS OF CHANGE**: 20250702

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BITMINE IMMERSION TECHNOLOGIES, INC.
- **CENTRAL INDEX KEY:** 0001829311
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 843986354
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0831

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42675
- **FILM NUMBER:** 251101367

**BUSINESS ADDRESS:**
- **STREET 1:** 10845 GRIFFITH PEAK DR. #2
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89135
- **BUSINESS PHONE:** 562-310-0160

**MAIL ADDRESS:**
- **STREET 1:** 10845 GRIFFITH PEAK DR. #2
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89135

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Sandy Springs Holdings, Inc.
- **DATE OF NAME CHANGE:** 20201021

?xml version='1.0' encoding='ASCII'? BITMINE IMMERSION TECHNOLOGIES, INC. 10-Q

[**Table of Contents**](#q3_001)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the quarterly period ended May 31, 2025**

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 000-56220

---

| |
|:---|
| **BITMINE IMMERSION TECHNOLOGIES, INC.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Delaware** | **84-3986354** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |
| **10845 Griffith Peak Dr. #2**<br> **Las Vegas, NV** | **89135** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code **(404) 816-8240**

_________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of exchange on which registered** |
| Common Stock, par value $0.0001 per share | BMNR | NYSE American |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The number of shares outstanding of the registrant's common stock as of July 1, 2025 was 4,303,366 shares.

DOCUMENTS INCORPORATED BY REFERENCE — NONE

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [**Part I – FINANCIAL INFORMATION**](#q3_002) | [**Part I – FINANCIAL INFORMATION**](#q3_002) |  |
| Item 1. | [Financial Statements (unaudited)](#q3_004) | 4 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#q3_011) | 30 |
| Item 3. | [Quantitative and Qualitative Disclosures about Market Risk](#q3_012) | 45 |
| Item 4. | [Controls and Procedures](#q3_013) | 45 |
| [**Part II – OTHER INFORMATION**](#q3_014) | [**Part II – OTHER INFORMATION**](#q3_014) |  |
| Item 1. | [Legal Proceedings](#q3_015) | 46 |
| Item 1A. | [Risk Factors](#q3_016) | 46 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#q3_017) | 46 |
| Item 3. | [Defaults Upon Senior Securities](#q3_018) | 46 |
| Item 4. | [Mine Safety Disclosures](#q3_019) | 46 |
| Item 5. | [Other Information](#q3_020) | 46 |
| Item 6. | [Exhibits](#q3_021) | 47 |
| **[SIGNATURES](#q3_022)** | **[SIGNATURES](#q3_022)** | 48 |

---

**PART I – FINANCIAL INFORMATION**

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Information contained in this quarterly report on Form 10-Q contains "forward-looking statements." All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. These forward-looking statements are contained principally in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," and are generally identifiable by use of the words "may," "should," "expect," "anticipate," "estimate," "believe," "intend" or "project" or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions, or strategies concerning future events, including, but not limited to: our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by any forward-looking statements. These risks, uncertainties, and other factors include but are not limited to:

· the risks of limited management, labor, and financial resources;

· our ability to establish and maintain adequate internal controls;

· our ability to develop and maintain a market in our securities;

· our ability to obtain financing, if and when needed, on acceptable terms;

· our projected financial position and estimated cash burn rate;

· the success of our digital currency mining and hosting activities;

· the volatile and unpredictable cycles in the emerging and evolving industries in which we operate, increasing difficulty rates for bitcoin mining;

· the continued trading of digital currencies, and in particular bitcoin, at prices that make it profitable to mine new digital currencies;

· the availability of cost-efficient energy supplies available to mine digital currencies;

· bitcoin halving;

· new or additional governmental regulation;

· the anticipated delivery dates of new hosting containers and miners;

· the ability to successfully develop and deploy new hosting facilities;

· the expectations of future revenue growth may not be realized;

· ongoing demand for our services;

· other risks described in our prior press releases and filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in our Annual Report on Form 10-K and any subsequent filings with the SEC.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

As used in this quarterly report on Form 10-Q, "we", "our", and "us" refer to Bitmine Immersion Technologies, Inc., a Delaware corporation unless the context requires otherwise.

**Item 1. Financial Statements.**

**Index to Financial Statements**

---

| | |
|:---|:---|
|  | **Page** |
| **FINANCIAL STATEMENTS:** |  |
| [Balance Sheets, May 31, 2025 (unaudited), and August 31, 2024](#q3_006) | 5 |
| [Unaudited Statements of Operations, for the Three and Nine Months Ended May 31, 2025 and May 31, 2024](#q3_007) | 6 |
| [Unaudited Statements of Changes in Stockholders' Equity, for the Three and Nine Months Ended May 31, 2025 and May 31, 2024](#q3_008) | 7 |
| [Unaudited Statements of Cash Flows for the Nine Months Ended May 31, 2025 and May 31, 2024](#q3_009) | 8 |
| [Notes to the Unaudited Interim Financial Statements](#q3_010) | 9 |

---

**Bitmine Immersion Technologies, Inc.**

**Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **May 31,**<br>**2025** | **August 31,**<br>**2024** |
|  | (Unaudited) | |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1473501 | $499270 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 155000 | 675000 |
| &nbsp;&nbsp;&nbsp;Cryptocurrency | 173916 | 14966 |
| &nbsp;&nbsp;&nbsp;Notes receivable related party-short term | 374444 | 374444 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2176860 | 1563679 |
| &nbsp;&nbsp;&nbsp;Notes receivable - related party-long term | 218426 | 280834 |
| &nbsp;&nbsp;&nbsp;Investment in joint venture | 667707 | 667707 |
| &nbsp;&nbsp;&nbsp;Fixed assets, net | 2113258 | 1699744 |
| &nbsp;&nbsp;&nbsp;Fixed assets - not in service | 3089565 | 3071565 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $8265816 | $7283529 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $470435 | $400584 |
| &nbsp;&nbsp;&nbsp;Accrued interest - related party | 516407 | 315609 |
| &nbsp;&nbsp;&nbsp;Accrued officer compensation | 585000 |  |
| &nbsp;&nbsp;&nbsp;Customer advances | 1804546 | 703500 |
| &nbsp;&nbsp;&nbsp;Loans payable-related party | 1875000 | 1625000 |
| &nbsp;&nbsp;&nbsp;Deferred revenue-short term | 86193 | 86193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 5337581 | 3130885 |
| &nbsp;&nbsp;&nbsp;Deferred revenue long term | 50279 | 64645 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 5387860 | 3195530 |
| Commitments and contingencies |  |  |
| Stockholders' Equity: |  |  |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock, $0.0001 par value, 500,000 shares authorized, 453,966 and 453,966 shares issued and outstanding as of May 31, 2025 and August 31, 2024, respectively | 45 | 45 |
| &nbsp;&nbsp;&nbsp;Series B Preferred Stock, $0.0001 par value, 3,000 shares authorized, 2,500 and -0- shares issued and outstanding as of May 31, 2025 and August 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 500,000,000 shares authorized; 2,053,366 and 2,495,630 shares issued and outstanding as of May 31, 2025 and August 31, 2024 respectively | 206 | 249 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 16816614 | 12311575 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (13938910) | (8223870) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 2877956 | 4087999 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and equity | $8265816 | $7283529 |

---

The accompanying notes are an integral part of these unaudited financial statements.

**Bitmine Immersion Technologies, Inc.**

**Statements of Operations**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months**<br>**ended**<br>**May 31,**<br>**2025** | **Three months**<br>**ended**<br>**May 31,**<br>**2024** | **Nine months**<br>**ended**<br>**May 31,**<br>**2025** | **Nine months**<br>**ended**<br>**May 31,**<br>**2024** |
| Revenue from the sale of mining equipment | $129200 | $20470 | $846347 | $210662 |
| Revenue from hosting |  | 16763 |  | 38743 |
| Revenue from self-mining | 813027 | 1187758 | 2814133 | 2378507 |
| Revenue from consulting | 35068 |  | 35068 |  |
| Revenue from leasing | 1074561 | – | 1074561 | – |
| Total revenue | 2051857 | 1224991 | 4770110 | 2627913 |
| Cost of sales mining equipment | 82432 |  | 752432 | 180891 |
| Cost of sales self-mining | 785129 | 988094 | 2408459 | 1767885 |
| Cost of sales hosting |  | 15212 |  | 29746 |
| Cost of sales consulting | 7500 |  | 7500 |  |
| Cost of sales leasing | 685924 | – | 685924 | – |
| Gross profit | 490872 | 221687 | 915794 | 649391 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 33059 | 47715 | 183790 | 118654 |
| &nbsp;&nbsp;&nbsp;Depreciation | 180735 | 226663 | 539054 | 684564 |
| &nbsp;&nbsp;&nbsp;Professional fees | 217702 | 116734 | 536670 | 420124 |
| &nbsp;&nbsp;&nbsp;Investor relations | 4450 | 27800 | 30850 | 169360 |
| &nbsp;&nbsp;&nbsp;Insurance | 27697 | 30912 | 83092 | 109739 |
| &nbsp;&nbsp;&nbsp;Officers compensation | 230370 | 210276 | 1109148 | 630829 |
| &nbsp;&nbsp;&nbsp;Directors compensation | 56355 | 13200 | 182265 | 39600 |
| &nbsp;&nbsp;&nbsp;Employee shareholder compensation | 174143 | 126108 | 541251 | 383304 |
| &nbsp;&nbsp;&nbsp;Change in the fair value of cryptocurrency | 34313 | (43183) | (24733) | (119774) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 958824 | 756224 | 3181387 | 2436401 |
| Loss from operations | (467952) | (534537) | (2265594) | (1787010) |
| Other income (expense) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (71867) | (56563) | (200798) | (210262) |
| &nbsp;&nbsp;&nbsp;Bad debt expense recovery | 124815 |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss on the extinguishment of debt | (207758) | (133915) | (288718) | (355123) |
| &nbsp;&nbsp;&nbsp;Loss on investment |  | (58840) |  | (170613) |
| &nbsp;&nbsp;&nbsp;Change in derivative liability |  | 114835 |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | – | 14792 | 719 | 44376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other (expense), net | (154810) | (119691) | (488798) | (691622) |
| Net loss | (622762) | (654228) | (2754391) | (2478632) |
| Deemed dividend on Series A Preferred Stock | – | – | (2960648) | – |
| Net loss attributable to common stockholders | $(622762) | $(654228) | $(5715039) | $(2478632) |
| Basic and diluted (loss) per common share | $(0.31) | $(0.26) | $(2.62) | $(0.99) |
| Weighted-average number of common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 2006202 | 2491843 | 2185206 | 2493358 |

---

The accompanying notes are an integral part of these unaudited financial statements.

**Bitmine Immersion Technologies, Inc.**

**Statements of Changes in Stockholders' Equity**

**(Unaudited)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred** | **Series A Preferred** | **Series B Preferred** | **Series B Preferred** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Value** | **Shares** | **Value** | **Shares** | **Value** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| Balance, August 31, 2023 | 453966 | $45 |  | $– | 2483282 | $248 | $11188439 | $(4931367) | $6257365 |
| Common stock issued for services - related party |  |  |  |  | 4153 |  | 277465 |  | 277465 |
| Net loss | – | – |  | – | – | – | – | (921722) | (921722) |
| Balance, November 30, 2023 | 453966 | $45 |  | $– | 2487435 | $249 | $11465904 | $(5853089) | $5613108 |
| Stock based compensation - related parties |  |  |  |  | 3650 |  | 277458 |  | 277465 |
| Net loss | – | – |  | – | – | – | – | (902682) | (902682) |
| Balance, February 29, 2024 | 453966 | $45 |  | $– | 2491085 | $249 | $11738635 | $(6755771) | $4987891 |
| Stock based compensation - related party |  |  |  |  | 4500 |  | 279487 |  | 279496 |
| Net loss | – | – |  | – | – | – | – | (654228) | (654228) |
| Balance, May 31, 2024 | 453966 | $45 |  | $– | 2495584 | $249 | $12018122 | $(7409999) | $4613159 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **`** | **`** | | | | | | | |
|  | **Series A Preferred** | **Series A Preferred** | **Series B Preferred** | **Series B Preferred** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Value** | **Shares** | **Value** | **Shares** | **Value** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| Balance, August 31, 2024 | 453966 | $45 | – | $– | 2495630 | $249 | $12311575 | $(8223870) | $4087999 |
| Series A Preferred - for change of vesting terms |  |  |  |  |  |  | 25000 |  | 25000 |
| Series A - deemed dividend due to convert price reset |  |  |  |  |  |  | 2960648 | (2960648) |  |
| Conversion of common stock to Preferred B stock and purchase of Preferred B Stock |  |  | 2500 |  | (575000) | (58) | 200058 |  | 200000 |
| Stock based compensation for services |  |  |  |  | 12750 | 1 | 398871 |  | 398872 |
| Stock based compensation - related parties |  |  |  |  | 50000 | 5 | 72245 |  | 72250 |
| Net loss | – | – | – | – | – | – | – | (974738) | (974738) |
| Balance, November 30, 2024 | 453966 | $45 | 2500 | $– | 1983380 | $198 | $15968395 | $(12159256) | $3809382 |
| Stock based compensation - services |  |  |  |  |  |  | 65146 |  | 65146 |
| Stock based compensation - services related parties |  |  |  |  |  |  | 135511 |  | 135511 |
| Net loss | – | – | – | – | – | – | – | (1156891) | (1156891) |
| Balance, February 28, 2025 | 453966 | $45 | 2500 | $– | 1983380 | $198 | $16169052 | $(13316148) | $2853149 |
| Stock based compensation - services |  |  |  |  | 8500 | 1 | $49129 |  | 49130 |
| Stock based compensation - services |  |  |  |  |  |  | 65234 |  | 65234 |
| Stock based compensation- services related parties |  |  |  |  | 61500 | 6 | 533196 |  | 533202 |
| Repurchase of fractional shares in reverse split |  |  |  |  | (14) |  |  |  |  |
| Net loss | – | – | – | – | – | – | – | (622762) | (622762) |
| Balance, May 31, 2025 | – | $45 | – | $– | 2053366 | $206 | $16816614 | $(13938910) | $2877956 |

---

The accompanying notes are an integral part of these unaudited financial statements.

**Bitmine Immersion Technologies, Inc.**

**Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine months**<br>**ended**<br>**May 31,**<br>**2025** | **Nine months**<br>**ended**<br>**May 31,**<br>**2024** |
| Cash flows from operating activities |  |  |
| Net loss | $(2754391) | $(2478632) |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 1319346 | 834427 |
| &nbsp;&nbsp;&nbsp;Depreciation | 539054 | 684564 |
| &nbsp;&nbsp;&nbsp;(Gain) Loss on the sale of equipment | (46768) | 31641 |
| &nbsp;&nbsp;&nbsp;Loss on investment |  | 170613 |
| &nbsp;&nbsp;&nbsp;Amortization of note discount | (7723) |  |
| Change in balance sheet accounts |  |  |
| &nbsp;&nbsp;&nbsp;Cryptocurrencies | (485605) | (379688) |
| &nbsp;&nbsp;&nbsp;Notes receivable | 187222 | 280832 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 520000 | (673703) |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 222254 | 484241 |
| &nbsp;&nbsp;&nbsp;Accrued officer compensation | 585000 |  |
| &nbsp;&nbsp;&nbsp;Customer advances | 1101046 | 703500 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | (14365) | (64645) |
| &nbsp;&nbsp;&nbsp;Accrued interest - related party | 200798 | 159833 |
| Net cash provided by (used in) operating activities | 1365868 | (247017) |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Return of capital on joint venture |  | 8408 |
| &nbsp;&nbsp;&nbsp;Purchase of fixed assets | (18000) | (75934) |
| Net cash (used in) investing activities | (18000) | (67526) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Series A preferred stock | 25000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Series B preferred stock | 200000 |  |
| &nbsp;&nbsp;&nbsp;Loan repayment | (848637) |  |
| &nbsp;&nbsp;&nbsp;Related party loans | 250000 | 325000 |
| Net cash provided by (used in) financing activities | (373637) | 325000 |
| Net increase in cash and cash equivalents | 974231 | 10457 |
| Cash and cash equivalents at beginning of period | 499270 | 270547 |
| Cash and cash equivalents at end of period | $1473501 | $281004 |
| Supplemental disclosure of non-cash investing and financing activity |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds received from bitcoin loan | $– | $577934 |
| &nbsp;&nbsp;&nbsp;Repayment of bitcoin loan in bitcoin-net | $100681 | $577934 |
| &nbsp;&nbsp;&nbsp;Purchase of equipment for loan payable | $1035000 | $339525 |
| &nbsp;&nbsp;&nbsp;Deemed dividend on Preferred A stock | $2960648 | $– |

---

The accompanying notes are an integral part of these unaudited financial statements.

**BITMINE IMMERSION TECHNOLOGIES, INC.**

**NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES**

*<u>About Bitmine Immersion Technologies, Inc.</u>*

Bitmine Immersion Technologies Inc. f/k/a Sandy Springs Holdings, Inc. ("<u>Bitmine</u>" or "<u>we</u>," "<u>us</u>," and "<u>our</u>") is a Delaware corporation that commenced operations on July 16, 2020. Our predecessor was incorporated in the state of Nevada on August 16, 1995, as Interactive Lighting Showrooms, Inc.

By a written consent dated July 16, 2021, holders of a majority of our issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to our board of directors, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the "<u>New O&Ds</u>"). Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 1,649,750 shares of common stock in our offering of common stock at $0.30 per share, and the grant of 237,500 shares for services, which were valued at $0.30 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them) collectively acquired 1,244,694 shares of common stock, which represented approximately 62% of the issued and outstanding shares at the time. On May 26, 2022, our board of directors appointed Jonathan Bates as our chief executive officer and Erik Nelson as our president.

The appointment of certain of the New O&Ds to our board, and issuance to the New O&Ds of a controlling interest in our company, were made in order to enable us to enter the business of creating a hosting center for bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the bitcoin digital currency for our own account. Prior to the change of control to the New O&Ds, we were shell company.

During the fiscal year ended August 31, 2022, we began implementing our business plan by generating revenue from the mining of bitcoin digital currency, hosting a third-party bitcoin miner and the sale of mining equipment.

The Company's year-end is August 31st.

 

*<u>Basis of Presentation</u>*

The foregoing unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("<u>GAAP</u>") for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission ("<u>SEC</u>"). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2024. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

Operating results for the nine months ended May 31, 2025, are not necessarily indicative of the results that may be expected for the year ending August 31, 2025.

*<u>Reclassification</u>*

Certain amounts on the Company's Statements of Operations for the three and nine month periods ended May 31, 2024 have been reclassified to conform to the current year presentation. These reclassified amounts had no impact on the Company's revenue, cost of sales, operating expenses and net loss.

*<u>Reverse Stock Split</u>*

 

On May 15, 2025 the Company effected a 1-for-20 reverse stock split of its common stock (the "Reverse Stock Split"). The accompanying financial statements, related notes, and disclosures give retroactive effect to the Reverse Stock Split unless specifically stated otherwise.

 

*<u>Management's Representation of Interim Financial Statements</u>*

 

The accompanying unaudited financial statements have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). We use the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of our financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

*<u>Use of Estimates</u>*

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to the calculation of stock-based compensation, the fair market value of our common stock, the fair market value of our deemed dividend, the fair market value of investment, the calculation of our derivative liability, useful lives and impairment of fixed assets, income taxes, the allocation of cost of sales between self-mining and leasing, the calculation to deternine cost of sales associated with consulting revenues, and contingencies. We base our estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. There have been no material changes to our accounting estimates since the issuance of our financial statements since the year ended August 31, 2024.

*<u>Segment Reporting</u>*

We operate in one segment - the cryptocurrency mining industry. In accordance with the "Segment Reporting" Topic of the ASC, our chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. All of our material operations qualify for aggregation due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes.

*<u>Revenue Recognition</u>*

On July 1, 2018, we adopted Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.

*<u>Revenues from digital currency mining</u>*

We recognize revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

· Step 1: Identify the contract with the customer;

· Step 2: Identify the performance obligations in the contract;

· Step 3: Determine the transaction price;

· Step 4: Allocate the transaction price to the performance obligations in the contract; and

· Step 5: Recognize revenue when we satisfy a performance obligation.

**Step 1:** We enter into a contract with a bitcoin mining pool operator (i.e., the customer) to provide hash calculation services to the mining pool. We only utilize pool operators that determine awards under the Full Pay-Per-Share method (the "FPPS method"). The contracts are terminable at any time by either party without penalty and our enforceable right to compensation only begins when we start providing hash calculation services to the mining pool operator (which occurs daily at midnight Universal Time Coordinated (UTC)). In general, mining revenue for industry participants consists of two parts, (1) the block reward (current bitcoin block reward is 3.125 bitcoin) paid by the network to the miner for successfully mining a block, and (2) the transaction fees paid by the users to the miner for successfully mining a block. When a mining pool successfully finds a block, it is awarded all of the transaction fees in that block and the reward from the network. Under the FPPS method utilized by us, we are entitled to an award of bitcoin equal to the expected reward per block over the measurement period of midnight-to-midnight UTC time based on the hash calculation services provided to the pool during the measurement period. We are also entitled to an aware of transaction fees per block based on the average of the transaction fees over the latest 144 blocks, each of which is about 10 minutes, and the total of 144 blocks equals one day. At the end of each day that runs from midnight-to-midnight UTC time, the pool operator calculates the pool participant's expected block reward and transaction fees for the day based on the hash calculation services provided by the pool participant that day, less net digital asset fees due to the mining pool operator over the measurement period. The actual reward to us each day is based on the number of blocks we should have hypothetically mined during the measurement period based on the hash calculation services provided to the pool by us during the measurement period and the prevailing difficulty index, and is not based on the actual rewards received by the pool during the measurement period, which may be higher or lower than the expected rewards during such period. Applying the criteria per ASC 606-10-25-1, the contract arises at the point that we provide hash calculation services to the mining pool operator, which is the beginning of each contract day at midnight UTC (contract inception), because customer consumption is in tandem with daily delivery of the hash calculation services. Providing hash calculation services to mining pools is an output of our ordinary activities, and an enforceable right to compensation begins when, and continues as long as, such services are provided.

**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

· The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and

· The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, we have a single performance obligation in providing hash calculation services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance obligation of hash calculation services is fulfilled daily over-time, as opposed to a point in time, because we provide the hashrate throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin. We have full control of the mining equipment utilized in the mining pool and if we determine it will increase or decrease the processing power of our machines and/or fleet (i.e., for repairs or when power costs are excessive) the hash calculation services provided to the customer will be reduced.

**Step 3**: The transaction consideration we earn is non-cash digital consideration in the form of bitcoin, which is based on the Full-Pay-Per-Share ("FPPS") payout method under the contract with the pool operator. According to the customer contract, daily settlements are calculated from midnight-to-midnight UTC time, and the amount due in bitcoin is credited to our account shortly thereafter on the following day. The amount of bitcoin we are entitled to for providing hash calculations to the customer's mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees determined as follows:

· The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the hash calculations that we provide to the customer as a percent of the bitcoin network's implied hash calculations as determined by the network difficulty, multiplied by the total bitcoin network block rewards expected to be generated for the same period.

· The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the bitcoin network during the contract period as a percent of total block rewards the bitcoin network actually generated during the same period, multiplied by the block rewards we earned for the same period noted above.

· The sum of the block reward and transaction fees earned by us are reduced by mining pool fees charged by the customer for operating the mining pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the customer's payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC daily. During the year ending August 31, 2024, we utilized one mining pool for our self-mining operations, which charges 0.3% of the bitcoin payable to us as a pool management fee. This amount represents consideration paid to the customer and is thus reported as a reduction in revenue as we do not receive a distinct good or service from the mining pool operator in exchange.

There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The above non-cash consideration is variable in accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, since the amount of block reward earned depends on the amount of hash calculations we perform; the amount of transaction fees we are entitled to depends on the actual bitcoin network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator's agreement. While the non-cash consideration is variable, we have the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. We do not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control of the service is transferred, which is the same day as contract inception.

We measure the non-cash consideration based on the spot rate of bitcoin determined using our primary trading platform for bitcoin at mid-night UTC on the day of contract inception. We recognize non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception.

**Step 4**: The transaction price is allocated to the single performance obligation upon verification for the provision of hash calculation services to the mining pool operator. There is a single performance obligation (i.e., hash calculation services or hashrate) for the contract; therefore, all consideration from the mining pool operator is allocated to this single performance obligation.

**Step 5**: Our performance is complete in transferring the hash calculation services over-time (midnight to midnight UTC) to the customer and the customer obtains control of that asset. In exchange for providing hash calculation services, we are entitled to the expected bitcoin awards earned over the measurement period, plus the expected global transaction fee rewards for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The transaction consideration we receive is non-cash consideration, in the form of bitcoin. Prior to March 1, 2024, we measured the bitcoin at the closing U.S. dollar spot rate at the end of the date earned (midnight UTC). As of March 1, 2024, we began measuring the bitcoin at the opening U.S. dollar spot rate at the beginning of the date earned (midnight UTC). The change in method of calculating revenues from bitcoin mining did not result in material change in the revenues reported.

There are no deferred revenues or other liability obligations recorded by us since there are no payments in advance of the performance. At the end of the 24 hour "midnight-to-midnight" period, there are no remaining performance obligations.

During the nine months ending May 31, 2025, we utilized one mining pool for our self-mining operations, which charges 0.3% of the bitcoin payable to us as a pool management fee. During the nine months ending May 31, 2025 and May 31, 2024, we generated $2,814,133 and $2,378,507, respectively, in revenues from mining cryptocurrency.

*<u>Revenues from Hosting</u>*

We provide energized space to customers who locate their equipment within our co-hosting facility. The equipment generating the hosting revenue is owned by the customer. We give hosting customers the option of having all mining proceeds paid into a cold wallet address in our name, which case we pay the hosting client its share of mining awards on a daily basis, or having all mining awards sent to an account of the customer, in which case we bill the customer monthly for any hosting fee that is contingent on the amount of the client's award. All performance obligations are achieved simultaneously by providing the hosting environment for the customers' operations. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of cryptocurrency generated by the client's hosting activities. With regard to hosting revenues that are billed in U.S. dollars, revenues are recorded at the time of invoicing. With regard to hosting revenues that are based on a percentage of cryptocurrency generated by the customer, revenues are recorded based on our share of cryptocurrency received from the mining pool on the date of receipt or invoicing. For hosting services bundled with equipment sales, performance obligations are satisfied over time as services are rendered. Revenue from hosting is recognized monthly based on usage.

During the nine months ending May 31, 2025 and May 31, 2024, we generated $0- and $38,743, respectively, in revenues from hosting services.

*<u>Classification of revenues from the sale of mining equipment under ASC 606 versus ASC 610</u>*

We record revenue from the resale of mining equipment it has purchased. We evaluated the sale of mining equipment under ASC 606, "*Revenue from Contracts with Customers*," and concluded that these transactions constitute revenue from ordinary activities as part of our ongoing operations. The sales are not incidental or peripheral activities but are integral to our core business model of providing mining equipment and hosting services. Under ASC 606-10-15-3, we determined that these transactions do not meet the scope of ASC 610, which applies to sales of nonfinancial assets outside an entity's ordinary activities. Accordingly, revenue for the sale of mining equipment is recognized under the guidelines of ASC 606.

The Company satisfies its performance obligations for mining equipment sales at a point in time when control transfers to the customer, typically upon delivery or installation of the equipment. Payment terms vary but generally include upfront deposits and remaining balances due within 30 days of delivery. The Company does not provide significant financing components and offers limited warranties, which are accounted for as assurance-type warranties under ASC 460. The Company does not have obligations for returns or refunds, as all sales are final.

During the nine months ending May 31, 2025 and May 31, 2024, we generated $846,347 and $210,662, respectively, in revenues from the sale of mining equipment.

*<u>Deferred Revenue</u>*

Deferred revenue represents payments received in advance for performance obligations not yet satisfied, primarily related to hosting services, post-sale support agreements and consulting services. During the nine months ended May 31, 2025, $14,365 of revenue recognized during the period was included in the deferred revenue balance at the beginning of the period.

The Company records deferred revenue for certain equipment sales where control has transferred but additional post-sale support obligations exist. These obligations are accounted for as separate performance obligations under ASC 606.

During the three months ended May 31, 2025 we introduced Mining-as-a-Service ("MaaS") business model to supplement our revenues from self-mining, hosting and from the sale of equipment. We now deliver end-to-end mining infrastructure and management to companies seeking direct bitcoin mining exposure without the operational burden. Our MaaS strategy includes (i) hardware and infrastructure: this involves the sale or lease of mining machines, as well as full deployment support; (ii) operational management: this involves full fleet oversight, uptime maximization, and mining pool payout optimization; and (iii) financial and compliance support: this involves providing GAAP-aligned reporting tools and treasury integration guidance.

We also offer bitcoin treasury consulting services which help companies strategically integrate bitcoin into their corporate treasury operations. This service provides guidance on how to acquire, store, manage, and account for bitcoin, as well as risk management and hedging strategies.

We also engage in synthetic bitcoin mining through a dual approach: (i) we act as buyers when public miners pre-sell at discounted rates, and (ii) we pre-sell our own future hashrate (as defined below) to buyers and use the proceeds to fund new mining equipment without large upfront costs. Synthetic bitcoin mining is a model that allows participants to gain exposure to bitcoin mining rewards without operating physical mining hardware. Participants or buyers purchase a miner's hashrate via a contract where they make a one-time payment (in either fiat currency or bitcoin) and receive daily bitcoin rewards for the duration of the contract. Essentially, participants or buyers aim to purchase hashrate at a discount to the expected future bitcoin payout.

*<u>Revenue from leasing arrangement</u>*

 

 

During the three months ended May 31, 2025 we entered into two machine leasing agreements with KULR Technology Group, Inc. ("KULR" or the "Lessee"). See Note 8. KULR Agreements. Under the terms of these agreement we leased 3,000 ASIC miners to KULR. Since KULR had control of the ASIC miners during the term of the leases. We met our performance requirement under the guidelines of ASC 606 by ensuring that machines were operating at 99% of capacity throughout the lease term. Cost of sales related to this lease revenue was calculated based on costs directly related to operating the 3,000 miners.

During the three months ended May 31, 2025 we generated $1,074,561 in lease revenue with $685,924 in leasing cost of sales.

 

*<u>Consulting revenue</u>*

 

 

On May 16, 2025, we also entered into a consulting and services agreement with KULR, see Note 8. KULR Agreements, under which we agreed to provide a variety of services to the Lessee relating to both the miners that are subject to the Lease and with regard to bitcoin mining in general. The services provided in relation to the leased miners include: performing, or causing to be performed, all commercially reasonable and necessary services required for the leased miners to operate consistent with the performance guidelines or guarantee in the Lease; managing the relationship with hosting providers of the leased equipment, as well as other hosting providers of the Lessee's other bitcoin mining equipment; managing mining pool providers of the leased equipment, as well as other pool providers of the Lessee's other bitcoin mining equipment; coordinating on-site and off-site miner repairs as necessary; dashboard monitoring of miners (miner and network error troubleshooting); market analysis, including monitoring miner market pricing, advising on miner purchases/sales, etc.; shipping logistics importing purchased miners/exporting sold miners.

In addition, we agreed to provide the following treasury management services: advice on security and custody solutions; regulatory and compliance expertise based on our experience, including GAAP revenue guidance and disclosure obligations; risk management and hedging strategies; techniques and strategies to maximize bitcoin exposure as a public company; customized treasury solutions; and proactive volatility management.

We determined that our cost sales related to providing this consulting income are calculated based on 10% of the gross salary of the individual providing the above related services.

During the three months ended May 31, 2025, we recorded $35,068 in consulting revenue with cost of sales consulting amounting to $7,500.

 

*<u>Cash and cash equivalents</u>*

We consider all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On May 31, 2025 and August 31, 2024, our cash equivalents totaled $1,473,501 and $499,270, respectively.

*<u>Cryptocurrency</u>*

 

The only cryptocurrency which we hold is bitcoin. Bitcoin are included in current assets in our balance sheets due to our ability to sell bitcoin in a highly liquid marketplace, and such bitcoin holdings are expected to be realized in cash or sold or consumed during our normal operating cycle.

As a result of adopting ASC 350-60, *Intangibles — Goodwill and Other*, ("ASC 350-60") on September 1, 2024, bitcoin is measured at fair value as of each reporting period (see "*Recently Issued Accounting Pronouncements below*"). The fair value of bitcoin is measured using the period-end closing bitcoin price from its principal market, Coinbase, in accordance with ASC 820, *Fair Value Measurement* ("ASC 820"). Since bitcoin is traded on a 24-hour period, the Company utilizes the price as of 23:59:59 UTC, which aligns with the Company's revenue recognition cut-off. The changes in bitcoin valuation due to remeasurement in fair value within each reporting period are reflected on the Consolidated Statements of Operations and Comprehensive Loss as "*Gain on fair value of bitcoin, net"*. In accordance with ASC 350-60, the Company discloses realized gains and losses from the sale of bitcoin and such gains and losses are measured as the difference between the cash proceeds and the cost basis of bitcoin as determined on a First In-First Out basis.

During the nine months ending May 31, 2025 and 2024, we realized gains from the change in the fair value of cryptocurrency of $24,733 and $119,774, respectively.

We hold our cryptocurrencies in an account at Bitgo Trust ("Bitgo"), a well-known bitcoin custodian, which we also use to liquidate our bitcoin when necessary. We also have an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial Services as a backup facility, and may hold bitcoin from time to time in a cold storage wallet. We use Bitgo's multi-signature feature for account access.

*<u>Prepaid expenses</u>*

 

Prepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense. Prepaid expenses are recorded at fair market value. As of May 31, 2025, and August 31, 2024, the balances of prepaid expenses were $155,000 and $675,000 respectively.

*<u>Customer advances</u>*

 

We defer revenues when cash payments are received in advance of our performance obligation required under the guidelines of ASC 606. Customer advances of $703,500 as of August 31, 2024 relate solely to an advance cash payment received from our customer for the delivery by us of certain transformers subject to the terms of a purchase order. As of May 31, 2025 and August 31, 2024, the balances of customer advances were $1,804,546 and $703,500, respectively.

*<u>Income taxes</u>*

We account for income taxes under FASB ASC 740, *"Accounting for Income Taxes"*. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, *"Accounting for Uncertainty in Income Taxes"* prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% percent likely of being realized upon ultimate settlement. We assess the validity of our conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause us to change our judgment regarding the likelihood of a tax position's sustainability under audit.

*<u>Fair value of financial instruments</u>*

 

The Company follows paragraph ASC 825-10-50-10 for disclosures about fair value of its financial instruments.

To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

☐ Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

☐ Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

☐ Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

As of May 31, 2025 and August 31, 2024, the carrying value of our note receivable was $592,870 and $655,277, respectively. Fair value was determined using a discounted cash flow model based on observable market interest rates for similar instruments (Level 2 inputs). The note receivable is interest bearing at 5% per annum with monthly payments through May 31, 2026.

*<u>Stock-based Compensation</u>*

We account for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. We recognize forfeitures as they occur rather than estimating expected forfeitures upfront. This policy aligns with management's assessment that actual forfeitures are immaterial and do not significantly impact stock-based compensation expense.

*<u>Net Loss per Share</u>*

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

*<u>Stock Purchase Warrants</u>*

We account for warrants issued to purchase shares of our common stock as equity in accordance with FASB ASC 480, *Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock, Distinguishing Liabilities from Equity.* We determine the accounting classification of warrants we issue, as either liability or equity classified, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, *Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity*, then in accordance with ASC 815-40, *Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock*. Under ASC 480, warrants are considered liability classified if the warrants are mandatorily redeemable, obligate us to settle the warrants or the underlying shares by paying cash or other assets, and warrants that must or may require settlement by issuing variable number of shares. If warrants do not meet the liability classification under ASC 480-10, we assess the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature.

If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, we also assess whether the warrants are indexed to our common stock and whether the warrants are classified as equity under ASC 815-40 or other GAAP. After all such assessments, we conclude whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date. We do not have any liability classified warrants as of any period presented.

*<u>Property and equipment</u>*

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:

---

| | |
|:---|:---|
|  | **Life (Years)** |
| Miners and mining equipment | 2 |
| Machinery and equipment | 5 - 7 |
| Office and computer equipment | 3 |

---

 

No depreciation is recorded on an asset until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is properly configured to turn on the machines. As of May 31, 2025 and August 31, 2024 we had $3,228,600 and $3,071,565, respectively, of fixed assets not in service. During the nine months ended May 31, 2025, we performed an analysis of the carrying cost of our mining equipment compared to the current market price for the same equipment. As a result, we did not impair any of our mining equipment in the nine months ending May 31, 2025.

*<u>Recent Accounting Pronouncements</u>*

In February 2016, the FASB issued ASU No. 2016-02, *Leases (Topic 842)*, which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, *Codification Improvements*, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, *Codification Improvements to Topic 842, Leases* in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases *(Topic 842) Targeted Improvements,* which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.

In March 2022, the SEC staff released Staff Accounting Bulletin No. 121 ("SAB 121"), which requires entities that hold crypto assets on behalf of platform users to recognize a liability to reflect the entity's obligation to safeguard the crypto assets held for its platform users, whether directly or through an agent or another third party acting on its behalf, along with a corresponding safeguarding asset. Both the liability and corresponding safeguarding asset shall be measured at fair value. SAB 121 also requires disclosure of the nature and amount of crypto assets being safeguarded, how the fair value is determined, an entity's accounting policy for safeguarding liabilities and corresponding safeguarding assets, and may require disclosure of other information about risks and uncertainties arising from the entity's safeguarding activities. We are not in the business of holding our customer's crypto assets for safekeeping. For crypto assets that are not maintained on our platform and for which we do not maintain a private key or the ability to recover a customer's private key, these balances are not recorded, as there is no related safeguarding obligation in accordance with SAB 121. This guidance is effective from the first interim period after June 15, 2022 and should be applied retrospectively. We adopted SAB 121 during the three months ended August 31, 2024, and it did not have any impact on our financial statements.

In December 2023, the FASB issued Accounting Standards Update No. 2023-08, Accounting for and Disclosure of Crypto Assets ("ASC 350-60"). ASC 350-60 requires entities with certain crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income (loss) in each reporting period. Crypto assets that meet all the following criteria are within the scope of ASC 350-60:

(1) meet the definition of intangible assets as defined in the Codification;

(2) do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets;

(3) are created or reside on a distributed ledger based on blockchain or similar technology;

(4) are secured through cryptography;

(5) are fungible; and

(6) are not created or issued by the reporting entity or its related parties. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets.

Bitcoin, which is the sole crypto asset mined by us, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. We have elected to early adopt the new guidance effective September 1, 2024 resulting in a $-0- cumulative-effect change to adjust our bitcoin held on September 1, 2024.

*<u>Non-GAAP Financial Measures</u>*

We have included in some of our press releases, measures of financial performance that are not defined by GAAP. We believe that these measures provide useful information to investors. For each of these non-GAAP financial measures, we provide a reconciliation of the difference between the non-GAAP measure and the comparable GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to investors.

**NOTE 2 – CRYPTOCURRENCIES**

The following table presents additional dollar and unit information (each bitcoin represents one unit) about our bitcoin activity for the nine months ended May 31, 2025:

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| | | |
|:---|:---|:---|
|  | | **Bitcoin** |
| Beginning balance – August 31, 2024 | $14966 | 0.30 |
| Revenue received from mining | 2814132 | 31.16 |
| Advance payment in cryptocurrency | 449899 | 3.90 |
| Payments of loan with cryptocurrency | (738752) | (7.62) |
| Cash proceeds from the sale of cryptocurrency, net of fees | (2187464) | (23.75) |
| Cryptocurrency used to pay expenses | (203600) | (2.32) |
| Change in the fair market value of bitcoin | 24733 | – |
| Ending balance – May 31, 2025 | $173916 | 1.67 |

---

**NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS**

The following table presents our revenue disaggregated into categories based on the nature of such revenues:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **May 31, 2025** | **May 31, 2024** |
| Revenues from the sale of mining equipment - net | $846347 | $210662 |
| Revenue from hosting, net |  | 38743 |
| Revenues from leasing | 1074561 |  |
| Revenues from consulting | 35068 |  |
| Revenue from self-mining | 2814133 | 2378507 |
| Total revenue | $4770110 | $2627913 |

---

**NOTE 4 – PROPERTY AND EQUIPMENT**

The following table sets forth the components of our property and equipment at May 31, 2025 and August 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **May 31, 2025** | **May 31, 2025** | **May 31, 2025** | **August 31, 2024** | **August 31, 2024** | **August 31, 2024** |
|  | **Cost** | **Accumulated<br> Depreciation** | **Net Book<br> Value** | **Cost** | **Accumulated<br> Depreciation** | **Net Book<br> Value** |
| Equipment | $3733401 | $(1620143) | $2113258 | $3094076 | $(1394332) | $1699744 |
| Equipment not in service | 3089565 | – | 3089565 | 3071565 | – | 3071565 |
| Total fixed assets | $6822966 | $(1620143) | $5202823 | $6165641 | $(1394332) | $4771309 |

---

Equipment not in service as of May 31, 2025 was comprised of the following:

---

| | |
|:---|:---|
| Transformers | $1838760 |
| Immersion containers | 1250805 |
| Total | $3089565 |

---

As of May 31, 2025, equipment not in service was solely comprised of 4 immersion containers, immersion fluid and 15 transformers.

In November 2024, we purchased 3,000 ASIC miners for $1,035,000 (see "*Note – Hash Rate Sale Agreements – November 2024 Luxor Agreement*").

In May 2025, we sold 850 ASIC miners for $129,200, and recorded a gain of $46,768 from the transaction.

For the nine months ended May 31, 2025 and May 31, 2024, we recorded $539,054 and $684,564 respectively, in depreciation expense.

**NOTE 5 – INVESTMENTS AND NOTES RECEIVABLE**

*Policy on Doubtful Accounts*

 

We evaluate notes receivable for impairment under the guidelines of ASC 310-10-35-41. We establish an allowance for doubtful accounts when we determine that collectability of the note is in question.

*Investment in Joint Venture*

 

In October 2022, we entered into a joint venture arrangement with ROC Digital Mining Manager LLC ("ROC Manager") to jointly develop and operate a bitcoin mining operation in Pecos, Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987,429 as a capital contribution to ROC Digital Mining I LLC ("ROC Digital"). An affiliate of ROC Manager also contributed an immersion container. We simultaneously sold ROC Digital four immersion containers for $1,200,000, which is payable pursuant to a promissory note that bears interest at 5% per annum, and provides for monthly amortizing payments through May 31, 2026. The note is secured by the equipment that was sold. As of May 31, 2025 and August 31, 2024, the principal and interest amount due on the note receivable from ROC Digital was $592,870 and $655,277, respectively. As of May 31, 2025, we estimate the fair value of the note receivable is $592,870 which we estimate to be the net realizable amount if we have to repossess the collateral after all related costs, including legal, moving, storage, and other resale expenses. We own approximately 30% of ROC Digital, and 33 1/3% of ROC Manager.

ROC Digital is managed by ROC Manager, which owns all of the Class A Units of ROC Digital. The Class A Units have the sole right to vote on any matter that requires a vote of members, including in the selection of the manager. We own 33 1/3% of ROC Manager. ROC Manager has no financial activity and has no impact on our financial statements. ROC Manager is managed by from one to three managers selected by a vote of the members. We do not currently have a representative or designee serving as manager of ROC Manager. However, the operating agreement for ROC Manager provides that ROC Manager may not take a number of actions in relation to ROC Digital without the unanimous consent of its members, such as incurring more than $50,000 of indebtedness, approval of operating budget, filing for bankruptcy, making any material change in ROC Digital's business, merging, consolidating or combining ROC Digital with another entity, selling off a substantial part of ROC Digital's assets, amending the operating agreement of ROC Digital, or causing ROC Digital to enter into any agreement with a related party.

Day to day management of the operations of ROC Digital is provided by ROC Digital Mining LLC ("ROC Mining"), an affiliate of ROC Manager in which we do not have an interest. ROC Mining is entitled to a monthly management fee equal to 3% of ROC Digital's gross revenue, subject to a monthly minimum of $10,000 and a monthly maximum of $15,000. In additional ROC Mining is entitled to an acquisition fee of 1% of the cost of any assets acquired by ROC Digital. A principal of ROC Manager serves on our board of directors.

As of May 31, 2025 the joint venture arrangement was classified as a long term asset on our balance sheet with a value of $667,707. The site became electrified in June 2023. During the nine months ended May 31, 2025 we conducted a valuation study on the value of our investment. That study determined that the fair value market value of our joint venture investment exceeded our carrying value. However, we did not increase the value of our investment on our balance sheet.

*Notes Receivable*

Notes receivable consist of notes received as partial consideration for the sale of mining equipment. As of May 31, 2025 and August 31, 2024, notes receivable consist of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> May 31, 2025** | **As of<br> August 31, 2024** |
| Note receivable in original principal amount of $1,200,000, bearing interest at 5.0% per annum, payable in 41 equal monthly payments of $31,204 commencing December 30, 2022. | $592870 | $655277 |
| Total | 592870 | 655277 |
| Less: Non-current portion | (218426) | (280834) |
| Notes receivable – short-term | $374444 | $374444 |

---

The note receivable in the original principal amount of $1,200,000 is collateralized by the mining equipment that was the subject of the sale. As of August 31, 2024, the fair value of collateral held was estimated to be in excess of $500,000. In case of default, we have the right to repossess the collateralized equipment. As of May 31, 2025, the note is in default as a result of the borrower's failure to make a number of monthly payments thereon, and as a result the note is on non-accrual status. As of May 31, 2025, the fair value of this note was $592,870, which we estimate to be the net realizable amount if we have to repossess the collateral after all related costs, including legal, moving, storage, and other resale expenses. Fair value was determined using a discounted cash flow model based on observable market interest rates for similar instruments (Level 2 inputs) in accordance with ASC 825-10-50-10.

During the nine months ended May 31, 2025, we recorded $719 in interest income on the note.

**NOTE 6 – RELATED PARTY TRANSACTIONS**

*Line of Credit from IDI*

On October 19, 2022, we entered into a Line of Credit Agreement (the "LOC Agreement") with Innovative Digital Investors Emerging Technology, L.P. ("IDI), a limited partnership controlled by Jonathan Bates, our Chief Executive Officer and Chairman, and Raymond Mow, our Chief Financial Officer and a director. The LOC Agreement provided for loans of up to $1,000,000 at our request to finance the purchase of equipment necessary for the operation of our business, and related working capital. Loans under the LOC Agreement accrue interest at 12% per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. We had the right to submit draw requests under the LOC Agreement until April 15, 2023. Each draw request is subject to the approval of IDI in its sole discretion. Amounts due under the LOC Agreement are secured by an unperfected lien against all of our assets. The amount drawn, plus all accrued interest therein, was repayable in full on December 1, 2023.

Effective May 13, 2023, the LOC Agreement was amended to increase the amount that we may borrow thereunder to $1,750,000, extended the date by which we could borrow funds thereunder to December 1, 2023, and extended the maturity date to December 1, 2024. Simultaneous with the extension, we borrowed an additional $500,000. Effective November 4, 2024, we and IDI amended the LOC Agreement to increase the amount that we may borrow thereunder to $2,300,000. In addition, IDI agreed that we have the right to extend the maturity date for six monthly periods in consideration for an extension fee of $25,000 for each extension, which will be added to the balance due thereunder. In addition, IDI was granted the right to convert 575,000 shares of common stock it owns into 2,300 shares of Series B Convertible Preferred Stock. In consideration for the above amendments, IDI agreed to approve a new draw under the line of credit of $250,000 and to purchase an additional 200 shares of Series B Convertible Preferred Stock for $200,000, for net new financing to us of $450,000. As of May 31, 2025, the amount of principal and interest due to related party was $1,875,000 and $516,407, respectively, as compared to $1,625,000 and $315,609 at August 31, 2024.

In June 2025, the balance due under the LOC Agreement was satisfied in full. See "*Note 10 – Subsequent Events*."

*Transactions with ROC Digital Mining I, LLC*

In October 2022, we entered into a joint venture arrangement with ROC Manager to jointly develop and operate a bitcoin mining operation in Pecos, Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987,429 as a capital contribution to ROC Digital. We simultaneously sold ROC Digital four immersion containers for $1,200,000, which is payable pursuant to a promissory note that bears interest at 5% per annum, and is payable pursuant to monthly payments of $31,203.64 per month through May 31, 2026. The note is secured by the equipment that was sold. As of May 31, 2025 and August 31, 2024 the principal and interest amount due on the note receivable from ROC Digital was $592,870 and $655,277, respectively. We own approximately 30% of ROC Digital, and 33 1/3% of ROC Manager. John Kelly, one of our directors, owns approximately 49% of ROC Digital, 33 1/3% of ROC Manager and is a manager of ROC Manager.

We also obtained the right to locate one container at the location that we would be able to use for self-mining. Under our hosting agreement with ROC Digital, we located one immersion container at the site for $500 per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting agreement, we also agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier of the date the electricity provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The hosting agreement has a term of one year, subject to our right to renew the agreement for two one year terms after receipt of notice of the renewal terms of the joint venture's electricity supply agreement for the upcoming year.

See "*Note 5 – Investment in Joint Venture*," for more information about ROC Digital and ROC Manager.

*Transactions with Rykor Energy Solutions, LLC*

 

In May 2024, we brokered the sale of 20 transformers to Rykor Energy Solutions, LLC ("Rykor"). The total sales price of the transformers was approximately $1,407,000 and our total cost was expected to be $1,340,000. As of August 31, 2024, we had received $703,500 against this order which is classified as an advance payment-related party since the order had not shipped as of August 31, 2024. Additionally, we made a payment of $670,000 to the supplier of the transformers. This amount was classified as a prepaid expense on our balance sheet as of August 31, 2024. During the nine months ended May 31, 2025, by mutual agreement the order was reduced to ten transformers instead of 20 transformers. These units were delivered and we recorded revenue of $703,500 with a cost of sales of $670,000 resulting in a profit of $33,500 during the nine months ended May 31, 2025.

At the time of the transaction, Rykor owned 133,600 shares of our common stock and warrants to purchase an additional 267,200 shares, and as a result was the beneficial owner of approximately 17.8% of our common stock. John Kelly, one of our directors, is a principal of Rykor. The warrants expired unexercised in January 2025.

**NOTE 7 – HASH RATE SALE AGREEMENTS**

*November 2024 Luxor Agreement*

On November 14, 2024, we entered into an agreement to purchase 3,000 used S-19j Pro bitcoin miners for a total price of $1,035,000 from Luxor Technology Corporation ("Luxor"). We later entered into a Co-Location Services Agreement with DVSL ComputeCo, LLC to host 2,900 of the miners, and we plan to deploy the remaining 100 miners at our Trinidad data center. We financed $765,862 of the purchase price from the proceeds of a Master Hashrate Purchase and Sale Agreement (the "Hashrate Sale Agreement"). The balance of the purchase price was paid from cash on hand. Under the Hashrate Sale Agreement, we sold 90 PH per day of hashing capacity for 365 days at a price of 0.0005 per hashrate.

Under the terms of the Hashrate Sale Agreement, we recorded the following transactions in our financial statements during the nine months ended May 31, 2025:

---

| |
|:---|
| We recorded fixed assets not in service amounting to $1,035,000 for the 3,000 miners we purchased with an offsetting entry to record a loan due to Luxor of $1,035,000 payable per the terms described above. |
| On the date we entered into the Hashrate Sale Agreement the bitcoin equivalent of 90 PH for 365 days at a price of $0.0005 per hashrate was the equivalent of 16.425 bitcoin. The market equivalent on the same date we entered into the Hashrate Sale Agreement was 18.42474 bitcoin. The price of bitcoin on the date we entered into the contract was $88,100. |
| During the period from inception of the Hashrate Sale Agreement to May 31, 2025 we also recorded a loss on the extinguishment of debt of $288,718 because the contractual value of the hashrate we delivered under the Hashrate Sale Agreement, which retired $765,862 in debt due to Luxor, had a market value of $1,054,580. |
| On May 22, 2025 we closed out our contract with Luxor by making a cash payment of $706,833. As a result the loan balance due to Luxor was $-0- as of March 31, 2025. |

---

*April 2025 Antilia Sur S.A. Agreement ("Antillia")*

On April 23, 2025 we entered into a 30 day Hashrate Purchase Agreement with Antilia to acquire 75 PH hashrate for $104,670. The Company earned $120,987 in revenue from this Agreement. Although the agreement ended on May 22, 2025 Antilia continued to direct more hashrate to our pool than required through May 31, 2025. This resulted in a bitcoin overpayment of 0.6292088 valued at $64,176. We did not record any revenue on this amount and have categorized the $64,176 overpayment received as of May 31, 2025 as a "Customer Advance" on our balance sheet.

**NOTE 8 – KULR AGREEMENTS** 

 

*March 2025 Lease Agreement*

 

On March 8, 2025, we entered into a Machine Lease Agreement (the "March Lease") with KULR Technology Group, Inc. (the "Lessee"), under which we leased 2,500 ASIC miners to KULR for the period from March 8, 2025 to May 7, 2025. Total lease payments under the March Lease were $850,000, with $670,000 paid at the inception of the contract and the remainder paid on April 7, 2025.

 

During the March Lease term, all bitcoin produced by the machines is payable to the Lessee, provided that if the Lessee failed to make the April 2025 lease payment on the time, we had the right to redirect bitcoin production from the miners to our wallet account until the lease payment has been satisfied, by valuing the bitcoin produced each day at the price of bitcoin at midnight Universal Time Coordinated (UTC) on that day. Under the March Lease, we were responsible for any casualty loss of the miners, for insuring the miners against loss, for any repair or maintenance costs of the miners, for any hosting fees or electricity costs of the miners, and for any taxes assessed against the miners, including ad valorem property taxes. The Lessee was responsible for any mining pool fees charged by the mining pool in which the miners participate. We provided a down-time guarantee in the March Lease, under which we were obligated to compensate the Lessee to the extent the operational down-time on any day exceeded one percent. The compensation payable by us was equal to the bitcoin that would have otherwise been mined by the Lessee on that day to the extent the down-time exceeded one percent, valued at the price of bitcoin at midnight UTC time on that day, less any rebates or credits received from the hosting firm of the miners that were passed through to the Lessee.

*May 2025 Lease Agreement*

On May 16, 2025, we entered into a Machine Lease Agreement (the "May Lease") with the Lessee, under which we leased 3,000 ASIC miners to the Lessee for the period from May 16, 2025 to December 31, 2025. Total lease payments under the May Lease are $3,200,000, with $1,600,000 paid at the inception of the contract and the remainder payable through five monthly payments of $320,000 each. The first monthly payment is due July 15, 2025, and the other four payments are due on the 15th day of the next four calendar months.

During the May Lease term, all bitcoin produced by the machines is payable to the Lessee, provided that if the Lessee fails to pay any monthly lease payment by the 20th day of the calendar month, we have the right to redirect bitcoin production from the miners to our wallet account until the lease payment has been satisfied, by valuing the bitcoin produced each day at the price of bitcoin at midnight Universal Time Coordinated (UTC) on that day. Under the May Lease, we are responsible for any casualty loss of the miners, for insuring the miners against loss, for any repair or maintenance costs of the miners, for any hosting fees or electricity costs of the miners, and for any taxes assessed against the miners, including ad valorem property taxes. The Lessee is responsible for any mining pool fees charged by the mining pool in which the miners participate. We provided a down-time guarantee in the May Lease, under which we are obligated to compensate the Lessee to the extent the operational down-time on any day exceeds one percent. The compensation payable by us is equal to the bitcoin that would have otherwise been mined by the Lessee on that day to the extent the down-time exceeds one percent, valued at the price of bitcoin at midnight UTC time on that day, less any rebates or credits received from the hosting firm of the miners that are passed through to the Lessee.

During the three months ended May 31, 2025, the Company recorded $1,074,561 as lease revenue from these contracts. As of May 31, 2025, we had a liability of $1,375,438 due to the Lessee for advance lease payments made and this amount is included in "Customer Advances" on our balance sheet.

*Consulting and Services Agreement*

 

Simultaneous with the execution of the May Lease, we entered into a Consulting and Services Agreement (the "Consulting Agreement") with the Lessee, under which we agreed to provide a variety of services to the Lessee relating to both the miners that are subject to the May Lease and with regard to bitcoin mining in general. The services provided in relation to the leased miners include: performing, or causing to be performed, all commercially reasonable and necessary services required for the leased miners to operate consistent with the performance guidelines or guarantee in the May Lease; managing the relationship with hosting providers of the leased equipment, as well as other hosting providers of the Lessee's other bitcoin mining equipment; managing mining pool providers of the leased equipment, as well as other pool providers of the Lessee's other bitcoin mining equipment; coordinating on-site and off-site miner repairs as necessary; dashboard monitoring of miners (miner and network error troubleshooting); market analysis, including monitoring miner market pricing, advising on miner purchases/sales, etc.; shipping logistics importing purchased miners/exporting sold miners.

In addition, we agreed to provide the following treasury management services: advice on security and custody solutions; regulatory and compliance expertise based on our experience, including GAAP revenue guidance and disclosure obligations; risk management and hedging strategies; techniques and strategies to maximize bitcoin exposure as a public company; customized treasury solutions; and proactive volatility management.

The Lessee agreed to pay us $800,000 of compensation under the Consulting Agreement, of which $400,000 was paid at inception of the contract, and the remaining $400,000 is payable in five monthly payments of $80,000 each beginning on July 15, 2025, and continuing on the 15th day of the next four calendar months. The term of the Consulting Agreement is from May 16, 2025 to May 15, 2026. In the event the Consulting Agreement is terminated by us without cause or by the Lessee for cause, we are obligated to refund the unearned portion of any consulting fees that have been paid, but in no event more than 50% of the amount of consulting fees actually paid.

During the three months ended May 31, 2025 we recorded $35,068 in consulting revenue with a cost of sales of $7,500. As of May 31, 2025, we had a liability of $364,932 due to the Lessee for advance consulting payments made and this amount is included in "Customer Advances" on our balance sheet.

**NOTE 9 – STOCKHOLDERS' EQUITY**

***<u>Stockholders' Equity</u>***

We are authorized to issue 500,000,000 shares of Common Stock with a par value of $0.0001 per share, and 20,000,000 shares of preferred stock with a par value of $0.0001 per share. As of May 31, 2025, and August 31, 2024, there were 2,053,366 and 2,495,630 shares of common stock outstanding, respectively.

***<u>Reverse Stock Split</u>***

On May 15, 2025 the Company effected a 1-for-20 reverse stock split of its common stock (the "Reverse Stock Split"). The Reverse Stock Split became effective by filing an amendment to our certificate of incorporation. The Reverse Stock Split was necessary to enable us to meet the initial minimum share price requirements of a national securities exchange. We did not issue any fractional shares as a result of the reverse split. Instead, shareholders received cash equal to the market value of their fractional shares.

The accompanying financial statements and related notes give retroactive effect to this Reverse Stock Split unless specifically stated otherwise.

 

***<u>Series A Convertible Preferred Stock</u>***

 ****

As of May 31, 2025 and August 31, 2024, our board of directors had authorized the issuance of a series of preferred stock, the Series A Convertible Preferred Stock (the "Series A Preferred"), for 500,000 shares, of which 453,966 shares had been issued. The Series A Preferred has the following rights:

<u>Dividends</u>: Each share of Series A Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series A Preferred were converted into shares of common stock immediately prior to the record date of the dividend declared on the common stock.

<u>Liquidation Preference</u>: The Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $10 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.

<u>Voting Rights</u>: Each holder of Series A Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of common stock into which such share of Series A Preferred Stock would be convertible on the record date for the vote or consent of shareholders. Each holder of Series A Preferred Stock shall also be entitled to one vote per share on each submitted to a class vote of the holders of Series A Preferred Stock.

<u>Directors</u>: The Series A Preferred Stock has the exclusive right to nominate and vote on two (2) members of the board of directors.

<u>Voluntary Conversion Rights</u>: Each share of Series A Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series A Preferred divided by a conversion price of $4.00 per share.

<u>Rank</u>: The Series A Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized.

<u>Redemption by Company</u>: We may redeem all of the Series A Preferred at any time on twenty days notice by payment of the liquidation preference of the Series A Preferred.

<u>Redemption by the Holders</u>: Any holder of Series A Preferred may request that some or all of its Series A Preferred be redeemed to the extent of 30% of our liquid net assets of exceed $2 million. To the extent any holder requests redemption under this provision, we are required to send a notice to all other Series A Preferred holders, who will be entitled to request redemption of some or all of their shares as well. Each holder is required to redeem at least the lesser of 10,000 shares or the number of shares of Series A Preferred held by the holder.

<u>Redemption on Fundamental Transaction</u>: In the event we engage in a fundamental transaction, a majority of the holders of Series A Preferred may require us to redeem all of the Series A Preferred at the closing of the transaction.

<u>Right to Participate in Future Fundings</u>: Each holder of Series A Preferred has the right to participate in future capital raising transactions to the extent of our proportionate ownership, on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible into common or preferred stock, except for certain exempted transactions.

<u>Anti-Dilution Protection</u>: The conversion price of the Series A Preferred is subject to reduction to the extent we issue shares of common stock at a purchase price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.

During the nine months ended May 31, 2025, we issued 2,500 shares of Series B Preferred which was convertible into common stock at $4.00 per share. The issuance of the Series B Preferred with a conversion price of $4.00 per share resulted in the conversion price of the Series A Preferred being automatically lowered to $4.00 per share from $11.50 per share. The reduction of the conversion price of the Series A Preferred resulted in the holders thereof being entitled to an additional 740,162 shares of common stock if all of the Series A Preferred were converted into common stock. As a result, we recorded a deemed dividend charge of $2,960,648 for the value of the extra shares issuable under the Series A Preferred, which were valued at $4.00 per share.

In June 2025, all of the shares of Series A Preferred were converted into common stock. See "*Note 10 – Subsequent Events*."

***<u>Series B Convertible Preferred Stock</u>***

On November 4, 2024, we approved a Certificate of Designations, Rights and Preferences of Series B Convertible Preferred Stock (the "Certificate of Designation") with the Delaware Secretary of State, which authorized the creation and issuance of up to 3,000 shares of Series B Convertible Preferred Stock (the "Series B Preferred"). Under the Certificate of Designation, the Series B Preferred has the following rights:

<u>Dividends</u>: Each share of Series B Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series B Preferred were converted into shares of common stock immediately prior to the record date of the dividend declared on the common stock.

<u>Liquidation Preference</u>: The Series B Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $1,000 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.

<u>Voting Rights</u>: Each holder of Series B Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of common stock into which such share of Series B Preferred Stock would be convertible on the record date for the vote or consent of shareholders. Each holder of Series B Preferred Stock shall also be entitled to one vote per share on each submitted to a class vote of the holders of Series B Preferred Stock.

<u>Voluntary Conversion Rights</u>: Each share of Series B Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series B Preferred divided by a conversion price of $4.00 per share.

<u>Rank</u>: The Series B Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized, but ranks junior to the Series A Convertible Preferred Stock.

<u>Redemption by Company</u>: We may redeem all of the Series B Preferred at any time on twenty days notice by payment of the liquidation preference of the Series B Preferred.

<u>Redemption by the Holders</u>: The holders of the Series B Preferred shall not have the right to compel us to redeem their Series B Preferred unless we are in default under the terms of the Certificate of Designation.

<u>Redemption on Fundamental Transaction</u>: In the event we engage in a fundamental transaction, we shall be obligated to redeem all of the Series B Preferred at the closing of the transaction, provided that holders of the Series B Preferred shall be entitled to convert their shares of Series B Preferred into common stock in lieu of having them redeemed.

<u>Right to Participate in Future Fundings</u>: Each holder of Series B Preferred has the right to participate in future capital-raising transactions to the extent of its proportionate ownership of us on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible into common or preferred stock, except for certain exempted transactions.

<u>Anti-Dilution Protection</u>: The conversion price of the Series B Preferred is subject to reduction to the extent we issue shares of common stock at a purchase price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.

In November 2024, we issued 2,500 shares of Series B Preferred to IDI in consideration for 575,000 shares of common stock owned by IDI and a cash investment of $200,000. These 575,00 common shares were retired and are no longer outstanding.

In June 2025, all of the shares of Series B Preferred were converted into common stock. See "*Note 10 – Subsequent Events*."

***<u>Issuance of Common Shares</u>***

During the nine months ended May 31, 2025, we issued the following shares.

· During the
 three months ended November 30, 2024, we issued 25,000 shares to each of two officers, for a total of 50,000 shares,
 as part of their compensation for fiscal 2025 officer services. These shares were valued at $5.78 each
 and are being amortized to expense quarterly on a pro rata basis (see below).

· During the three months
 ended November 30, 2024, we issued 12,750 shares to various service providers in lieu of cash. These shares were valued at $5.78 each
 and are being amortized to expense quarterly on a pro rata basis (see below).

· During the three months ended May 31, 2025, we issued 61,500 shares to our officers and directors for accrued compensation for 2025 services. These shares were valued at $5.78 each and are being amortized to expense quarterly on a pro rata basis (see below).

· During the three months ended May 31, 2025, we issued 8,500 common shares to two service providers in lieu of cash. These shares were valued at $5.78 each and are being amortized to expense quarterly on a pro rata basis (see below).

We estimate the fair value of stock-based compensation based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period (usually the vesting period). We attribute compensation to expense using the straight-line method. Since our common stock is thinly traded, we previously utilized the value, or an estimate thereof, paid by third parties for common stock in arms-length transactions. However, since no stock transactions have occurred since 2022, we engaged an accredited third party valuation firm to estimate the fair market value of our common stock. As a result of their findings, the fair market value of our common stock was reduced from $8.80 to $5.78 for all stock issuances from August 31, 2024 to May 31, 2025.

***<u>Vesting of Shares</u>***

Of our outstanding shares at May 31, 2025, 135,360 shares were issued as compensation to a former officer, and do not vest unless the officer is still acting as a consultant to us as of December 31, 2028. We amortize the value of these share pro rata during the vesting period under the assumption that shares will vest. If the vesting condition is not satisfied, all of the shares will be forfeited by the former officer.

In August 2023, we issued 7,500 shares of common stock to Lori Love as a signing bonus for joining our board of directors. Under the terms of the issuance, the shares vested at the rate of 500 shares per month for 15 months to the extent Ms. Love was still a board member at each vesting date. All of the shares became fully vested in November 2024.

On August 31, 2022, we issued 150,000 shares of Series A Convertible Preferred Stock to Jonathan Bates as compensation for officer services. Under the terms of the issuance, the shares were to vest in full on January 15, 2025 if Mr. Bates was still employed by us at that time. In November 2024, we agreed with Mr. Bates to vest the shares immediately upon payment of $25,000 cash to us, which Mr. Bates did in that month.

On August 23, 2022, we issued 42,500 shares each to Raymond Mow and Erik Nelson as compensation for officer services. Under the terms of the issuance, the shares were to vest in full on January 15, 2025 if the officer was still employed by us at that time. All of the shares vested in full on the scheduled vesting date of January 15, 2025.

***<u>Public Offering of Common Stock</u>***

 ****

On January 21, 2025, we filed a registration statement on Form S-1 to register an indeterminate number of shares of our common stock in a public offering to be led by ThinkEquity LLC as lead underwriter. The public offering is being pursued in order to raise capital to fund the growth of our business and to achieve a listing of our common stock on a national securities exchange. The public offering was declared effective by the Securities and Exchange Commission on June 4, 2025 and was completed on June 6, 2025. (See "*Note 10 – Subsequent Events*").

***<u>Warrants</u>***

As of May 31, 2025, we had the following warrants outstanding:

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| | | | |
|:---|:---|:---|:---|
| **Class** | **Amount Outstanding** | **Exercise Price** | **Expiration Date** |
| Class C-3 Warrants | 1280 | $25.00 | June 27, 2027 |
| Total | 1280 |  |  |

---

During the nine months ended May 31, 2025, a total of 207,280 Class C-1 Warrants and 207,280 Class C-2 Warrants expired.

**NOTE 10 – COMMITMENTS AND CONTINGENCIES**

As of May 31, 2025 and August 31, 2024, we had the following contractual commitments.

On May 16, 2025, we entered into the May Lease with the Lessee, under which we leased 3,000 ASIC miners to the Lessee for the period from May 16, 2025 to December 31, 2025. Total lease payments under the May Lease are $3,200,000, with $1,600,000 paid at the inception of the contract and the remainder payable through five monthly payments of $320,000 each. Under the Lease, we are obligated to pay all costs associated with the ownership and operation of the miners except for mining pool fees. In addition, on the same date, we entered into the Consulting Agreement with the Lessee. The services that we are obligated to provide under the Consulting Agreement include performing, or causing to be performed, all commercially reasonable and necessary services required for the leased miners to operate consistent with the performance guidelines or guarantee in the May Lease. Total consulting payments under the Consulting Agreement are $800,000, with $400,000 paid at inception and the remainder payable through five monthly payments of $80,000 each. See "*Note 8 -- "KULR Agreements,*" for a more complete description of the agreements.

As of May 31, 2025, we had received $1,375,438 in advance lease payments from the Lessee, and $364,932 in advance consulting payments. We have a contractual commitment for the next 212 days to ensure that the 3,000 ASIC miners we leased to KULR are at least 99% operational for each day during that period and to pay all costs associated with their operation other than mining pool fees.

**NOTE 11 – SUBSEQUENT EVENTS**

*Closing of Public Offering*

On January 21, 2025, we filed a registration statement on Form S-1, as amended (File No. 333-284361) (the "Registration Statement"), under the Securities Act of 1933, to register an indeterminate number of shares of our common stock in a public offering to be led by ThinkEquity LLC as lead underwriter. The public offering is being pursued in order to raise capital to fund the growth of our business and to achieve a listing of our common stock on a national securities exchange. The public offering was declared effective by the Securities and Exchange Commission on June 4, 2025.

On June 4, 2025, we entered into an Underwriting Agreement (the "Underwriting Agreement") with ThinkEquity LLC ("Underwriter"), relating to a firm commitment underwritten public offering (the "Offering") of our common stock. Pursuant to the Underwriting Agreement, we sold 2,250,000 shares ("Shares") of our common stock to the underwriters at a discount to the public offering price of $7.40 per share (92.5% of the public offering price of $8.00 per share), and granted the Underwriter a 45-day over-allotment option to purchase up to 337,500 additional shares of Common Stock, equivalent to 15% of the shares of Common Stock sold in the Offering (the "Option").

The closing of the Offering occurred on June 6, 2025. The net proceeds to us from the sale of the Shares, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us, were $16,150,000. We intend to use the net proceeds from the Offering in the short-term to purchase bitcoin.

Upon closing of the Offering, we issued the Underwriter warrants (the "Representative's Warrants") to purchase up to 129,375 shares of Common Stock, representing 5% of the aggregate number of Shares sold in the Offering. The Representative's Warrants are exercisable at a per share exercise price of $10.00, which represents 125% of the public offering price of $8.00. The Representative's Warrants are exercisable, in whole or in part, during the four and one-half year period commencing 180 days from the commencement of sales of the Shares in the Offering.

The Underwriting Agreement contains customary representations, warranties, and covenants made by us. It also provides for customary indemnification by each of us and the Underwriter for losses or damages arising out of or in connection with the Offering, including for liabilities under the Securities Act. In addition, pursuant to the terms of the Underwriting Agreement, each of our directors, executive officers, and holders of 5% or more of the shares of Common Stock have entered into "lock-up" agreements with the Underwriter that generally prohibit, without the prior written consent of the Underwriter, the sale, transfer, or other disposition of our securities for a period of 180 days (with respect to our directors and executive officers) and 90 days (with respect to the holders of 5% or more of the issued and outstanding shares of Common Stock who are not directors and executive officers) from June 4, 2025.

Further, pursuant to the terms of the Underwriting Agreement, we have agreed for a period of 90 days from June 4, 2025 not to (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or caused to be filed any registration statement with the U.S. Securities and Exchange Commission (the "Commission") relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise. In addition, for a period of 24 months after June 4, 2025, we may not directly or indirectly enter into an agreement to engage in any "at-the-market," continuous equity or variable rate transaction without the prior written consent of the Underwriter.

For a period of 24 months following June 6, 2025, the Underwriter has an irrevocable right of first refusal to act as sole and exclusive investment banker, sole and exclusive book-runner and/or sole and exclusive financial advisor, sole and exclusive underwriter and/or sole and exclusive placement agent, at the Underwriter's sole and exclusive discretion, for each and every future public and private equity and debt offerings for us, or any successor to or any subsidiary of us, including all equity linked financings, on terms customary to the Underwriter.

*Letter Agreement with Jonathan Bates and Innovative Digital Investors Emerging Technology, LP*

On January 17, 2025, we entered into a letter agreement (the "Letter Agreement") with Jonathan Bates and Digital Investors Emerging Technology, LP ("IDI") relating to the conversion of preferred shares owned by Mr. Bates and IDI, and settlement and satisfaction of amounts due IDI by us under the LOC Agreement. Mr. Bates is our chairman and chief executive officer. IDI is a limited partnership controlled by Mr. Bates and Raymond Mow, one of our directors and our chief financial officer.

Under the terms of the Letter Agreement, Jonathan Bates and IDI agreed, upon the successful consummation of the Offering, to convert their shares of Series A Convertible Preferred Stock into shares of common stock at the contractual conversion price, which was $4.00 per share after adjustment for the effects of the Company's 1-for-20 reverse stock split (the "Reverse Stock Split"). IDI further agreed, upon the consummation of the Offering, to convert its shares of Series B Convertible Preferred Stock into shares of common stock at the contractual conversion price, which was $4.00 per share after adjustment for the effects of the Reverse Stock Split. On June 6, 2025, the Series A Convertible Preferred Stock held by Jonathan Bates and IDI were converted into 375,000 and 759,915 shares of Common Stock, respectively. On June 6, 2025, the Series B Convertible Preferred Stock held by IDI were also converted into 625,000 shares of Common Stock.

The Letter Agreement also provided for the settlement of the debt due to IDI under the LOC Agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) IDI converted $1,000,000 of the amount due under the LOC Agreement into a new loan of $1,000,000 evidenced by a Promissory Note issued to IDI dated January 28, 2025, but effective as of the closing of the Offering (the "LA Note"). The LA Note provides for interest at 12.5% per annum, monthly payments of accrued interest only, and a ballon payment of all principal and interest due on December 1, 2026. Upon the occurrence of an event of default under the LA Note, IDI may declare the principal amount then outstanding and the accrued interest to be forthwith due and payable. The LA Note is unsecured and not convertible into common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) IDI exchanged $600,000 of the amount owed under the LOC Agreement for the amount due to the Company from ROC Digital Mining I, LLC. This exchange of debt is evidenced by an Assignment of Interest in Loan dated January 28, 2025, but effective as of the closing of the Offering, between the Company and IDI (the "Assignment"). IDI further acknowledged the forgiveness of $2,415.75, representing the difference between $600,000 and the amount due from ROC Digital Mining I, LLC at the time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Any amount remaining due under the LOC Agreement following the transactions described in (i) and (ii) above was exchanged for shares of Common Stock at the public offering price in the Offering. The outstanding amount under the LOC Agreement as of June 6, 2025, after subtracting $1,600,000 (covered by the LA Note and the Assignment), was $796,190 which was converted into 99,523 shares of Common Stock at the public offering price of $8.00. As part of the conversion of the balance under the LOC Agreement into Common Stock, IDI waived the monthly $25,000 fees that it was owed in return for extending the maturity date of the LOC Agreement for six months from December 1, 2024 to May 31, 2024.

*Listing of Common Stock*

Our common stock was approved for listing on the NYSE American LLC stock exchange ("NYSE American"). Trading on NYSE American commenced on June 5, 2025 under the trading symbol "BMNR." Our common stock ceased being quoted on the OTC Markets' OTCQX Best Market concurrent with the NYSE American listing.

*Registration of our Common Stock under Section 12(b) of the Securities Exchange Act*

On June 2, 2025, we filed a registration statement to register our common stock under Section 12(b) of the Securities Exchange Act. Our common stock was previously registered under Section 12(g) of the Securities Exchange Act.

*Private Placement*

On June 30, 2025, we entered into a Securities Purchase Agreement with a number of sophisticated investors to sell up to 55,555,556 shares of common stock (or prefunded warrants exercisable to acquire common stock) at a price of $4.50 per share in a private placement. The expected aggregate proceeds are approximately $250 million before deducting placement agent fees and other offering expenses. The proceeds will be used to implement an Ethereum treasury strategy in the public equity markets. We intend to use the funds to acquire the native cryptocurrency of Ethereum blockchain commonly referred to as "ETH" and the establishment of our treasury operations. ETH will serve as our primary treasury reserve asset. Closing is subject to the approval of the transaction by the NYSE American exchange.

In connection with the private offering, we entered into a Registration Rights Agreement under which we agreed to file a registration statement to register the resale of the common shares sold in the offering, including any common shares that may be acquired upon exercise of the prefunded warrants, within 20 days after the closing date, and to diligently prosecute the registration statement. The Registration Rights Agreement also granted the investors piggyback registration rights to the extent of any shares sold in the offering that are not included in the original registration statement for any reason. In connection with the private offering, each investor also executed a Lock-Up Agreement which provides that the investor will not sell any shares acquired in the offering until the date the registration statement filed under the Registration Rights Agreement is declared effective by the SEC, at which time 50% of the shares acquired in the offering by the investor may be sold. The remainder of any shares acquired by the investor may not be sold under 30 days after the registration statement is declared effective.

*Exercise of Over-Allotment Option*

On July 1, 2025, ThinkEquity LLC exercised an overallotment option to acquire 337,500 share of common stock at the public offering price of $8.00 per share, less an underwriting discount of $0.60 per share, for net proceeds to us of $7.40 per share, or $2,497,500. We expect to receive the proceeds and issued the shares on July 2, 2025.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*The following discussion and analysis of the results of our operations and financial condition for the three and nine months ended May 31, 2025 and May 31, 2024, should be read in conjunction with the other sections of this Quarterly Report, including the Financial Statements and notes thereto of included in this Quarterly Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Quarterly Report as well as other matters over which we have no control. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results may differ materially. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.*

**Overview**

Our business strategy generally involves the accumulation of bitcoin for long-term investment, whether acquired by our bitcoin mining operations or from the proceeds of capital raising transactions. From time to time, subject to market conditions, we intend to (i) issue debt or equity securities or engage in other capital raising transactions with the objective of using the proceeds to purchase bitcoin, and (ii) expand our bitcoin mining operations and retain any bitcoin we generate to the extent it exceeds our working capital requirements. We intend to fund further bitcoin acquisitions and mining expansion primarily through issuances of common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock. We may also finance our mining expansion by conservatively leveraging our bitcoin holdings.

We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin. This overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings.

Our bitcoin mining operations focus in the short-term on placing our new miners with third party hosting firms because we do not have the data center capacity to accommodate new miners. Hosting services include the provision of mining equipment and energized space and the monitoring, troubleshooting, and repair and maintenance of customer mining equipment. In the long-term, we plan to build data centers for our miners because we believe our total costs of operating the miners will be less. At present, we host approximately 9% of our fleet of miners and the remainder is hosted by third parties on a fee basis.

The data centers that we build use immersion cooling technology. Immersion cooling is the process of submerging computer components (or full servers) in a thermally, but not electrically, conductive liquid (dielectric coolant) allowing higher heat transfer performance than air and many other benefits. Manufacturers of immersion systems report that immersion cooling, as compared to air cooling, can reduce the energy costs associated with cooling a data center by up to 90% and can reduce the cost of operating servers by up to 10%. In addition, manufacturers of immersion systems report the cooler, dust-free environment provided by immersion cooling can extend the life of data center equipment when compared to an air-cooled environment.

Through our Mining-as-a-Service ("MaaS") business model, we deliver end-to-end mining infrastructure and management to companies seeking direct bitcoin mining exposure without the operational burden. Our MaaS strategy includes (i) hardware and infrastructure: this involves the sale or lease of mining machines, as well as full deployment support; (ii) operational management: this involves full fleet oversight, uptime maximization, and mining pool payout optimization; and (iii) financial and compliance support: this involves providing GAAP-aligned reporting tools and treasury integration guidance.

We also offer bitcoin treasury consulting services which help companies strategically integrate bitcoin into their corporate treasury operations. This service provides guidance on how to acquire, store, manage, and account for bitcoin, as well as risk management and hedging strategies.

We also engage in synthetic bitcoin mining through a dual approach: (i) we act as buyers when public miners pre-sell at discounted rates, and (ii) we pre-sell our own future hashrate (as defined below) to buyers and use the proceeds to fund new mining equipment without large upfront costs. Synthetic bitcoin mining is a model that allows participants to gain exposure to bitcoin mining rewards without operating physical mining hardware. Participants or buyers purchase a miner's hashrate via a contract where they make a one-time payment (in either fiat currency or bitcoin) and receive daily bitcoin rewards for the duration of the contract. Essentially, participants or buyers aim to purchase hashrate at a discount to the expected future bitcoin payout.

**Our Revenue Sources**

We generate revenues primarily from proprietary mining of bitcoin, consisting of our share of rewards from solving a block and transaction fees. Our digital asset self-mining activity competes with a myriad of mining operations throughout the world to complete new blocks in the blockchain and earn the reward in the form of an established unit of a digital asset. The primary factors that impact proprietary mining revenues include: (i) the price of bitcoin; (ii) the efficiency of our miners relative to that of our competitors; (iii) the availability of attractive electricity prices since power usage is the primary marginal cost for any mining operation; (iv) the availability of mining and immersion hosting equipment at attractive prices; and (v) whether we have available capacity for mining in our data center facilities or are required to use third party hosting firms for our miners.

Our approach to synthetic bitcoin mining is also a source of revenue for us; we act as buyers when public miners pre-sell at discounted rates, and we pre-sell our own future hashrate to buyers. We entered into a Hashrate Purchase Agreement with a third party on April 22, 2025, wherein they presold the hashrate from their miners to us for approximately $104,670. The contract is for one month and we are expecting to receive between $110,000 to $115,000 worth of bitcoin throughout the duration of the contract. We expect to continue this arrangement with the third party on a month-to-month basis; however, there can be no assurance that we will continue this arrangement.

We also generate revenues from the advantageous purchase and sale of equipment used for digital asset mining and hosting. We have verbal arrangements with some suppliers that enable us to acquire highly desired equipment at wholesale prices which we sometimes resell to third parties. The primary factors that impact resales of mining equipment include the availability of equipment at attractive prices and the number of participants willing to enter the mining business or expand their existing operations, which is highly correlated to the margin from mining as determined by the market price of bitcoin and prevailing energy costs. Also, we believe our resales of mining equipment will be impacted by the existence of hosting capacity with attractive electricity rates in our hosting operations, as hosting clients have historically been a major source of customers for this line of business.

We also earn revenue from our MaaS and bitcoin treasury consulting services. Through an agreement with KULR Technology Group, Inc. ("KULR"), we leased 3,000 bitcoin ASIC miners to KULR through December 30, 2025, for $3,200,000, with $1,600,000 paid upfront. KULR also engaged us for an $800,000 consulting agreement for one year, focused on bitcoin Mining-as-a-Service and bitcoin treasury strategy.

We have occasionally earned hosting revenues by hosting third party miners when we had spare capacity in our hosting facilities described below. The primary factors that impact future hosting revenues include: (i) the price of bitcoin, since hosting revenues are primarily a percentage of bitcoin mined by clients; (ii) the completion of operational hosting facilities as potential hosting clients have been reluctant to sign contracts prior to the date we have a fully operational hosting facility; and (iii) the availability of attractive electricity prices since power usage is the primary marginal cost for any mining operation. At the present time, we do not have any hosting clients and are not marketing our services to hosting clients.

Revenues from cryptocurrency mining, whether derived from hosting clients or from proprietary mining, are impacted significantly by volatility in bitcoin prices, as well as increases in the bitcoin blockchain's network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Below are changes in key metrics effecting the profitability of mining bitcoin during the nine months ended May 31, 2025:

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| | | | |
|:---|:---|:---|:---|
|  | **As of<br> May 31, 2025** | **As of<br> August 31, 2024** | **Percent<br> Change** |
| Network hash rate | 942.612 | 620.355 EH/s | 51.95% |
| Difficulty index | 126.98 | 89.47 trillion | 41.92% |
| Bitcoin market price | $104638.09 | $58969.90 | 77.44% |

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The primary factors that will impact resales of mining equipment include the availability of equipment at attractive prices and the number of participants willing to enter the mining business or expand their existing operations, which is highly correlated to the margin from mining, as determined by the market price of bitcoin and prevailing energy costs. Also, our resales of mining equipment will be impacted by the existence of hosting capacity with attractive electricity rates in our hosting operations.

*Trinidad Operations*

We have entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited ("TSTT"), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kilowatt ("kW") containers for hosting digital asset miners. TSTT has numerous potential locations for co-location of our containers. Under the agreement, we have the option, but not the obligation, to co-locate containers at our own pace. We pay a fixed amount per container, plus the actual electricity costs incurred by our containers in the amount billed to TSTT by the local utility without any markup. The agreement provides that our hosting containers will be billed for electricity usage at the local utility's standard rate which is the greater of 3.5 cents per kilowatt hour ("kWh") or 75% of the declared reserve capacity, which is equal to the customer's highest expected monthly kilovolt-ampere demand at $7.40. The term of the agreement expires on October 14, 2031. We have the right to terminate our agreement with TSTT at any time that the price for electricity consumption exceeds $0.05 per kWh. Also, both parties have the right to terminate the agreement on one month's notice to the other party in either the third or sixth year of the term.

We have one site with two containers operational in Trinidad. As of the date of this prospectus, we had 465 miners located at the site, of which 315 were in operation. We have two additional unused containers in Trinidad and are evaluating other TSTT sites as a location for those containers. We are also leasing space from a third party under an oral at-will agreement to co-host 60 miners for which we pay a flat rate of $0.06 per kWh each month. We ultimately intend to move all of our miners in Trinidad to our TSTT hosting facilities.

We are currently focusing our efforts on the development of hosting centers in the United States and Canada, both directly and in joint ventures with third parties. We are exploring situations where medium to long-term power agreements may be available at affordable prices, whether using traditional power sources such as coal or natural gas, as well as environmentally friendly sources such as hydroelectric, wind and solar-backed projects, which might allow us to generate collateral revenue from the sale of excess power to the local utility grid and from the generation of saleable carbon credits.

*Pecos, Texas Operations*

 

In October 2022, we entered into a joint venture arrangement with ROC Manager to jointly develop and operate a bitcoin mining operation in Pecos, Texas. Under the joint venture, we contributed one immersion container, six transformers, and cash with an aggregate value of $987,429 as a capital contribution to ROC Digital. An affiliate of ROC Manager also contributed an immersion container. We simultaneously sold ROC Digital four immersion containers for $1,200,000, which is payable pursuant to monthly amortizing payments with interest at 5% per annum through May 31, 2026. The note is secured by the equipment that was sold. As of May 31, 2024 the principal and interest due on the note receivable from ROC Digital was $592,870. We own approximately 30% of ROC Digital, and 33 1/3% of ROC Manager.

The site became fully electrified in June 2023 and has six containers owned by the joint venture. The joint venture initially filled its six immersion containers with ASIC miners provided by hosting clients, although most of the hosting clients' agreements terminated in April 2024. Currently, approximately five of the hosting containers owned by the joint venture are fully or partially occupied by clients, and the joint venture is aggressively trying to fill the remaining capacity with hosting clients. The joint venture also owns two immersion containers which are not installed, which we expect the joint venture to install if hosting demand warrants.

We have entered into a hosting agreement with ROC Digital under which we have located one immersion container at our Pecos, Texas data center. We pay $500 per month, plus our pro rata share of electricity, internet, and insurance for the site. The hosting agreement has a term of one year, subject to our right to renew the agreement for two one-year terms after receipt of notice of the renewal terms of ROC Digital's electricity supply agreement for the upcoming year. In April 2025, we renewed the hosting agreement for an additional year running from May 2025 to April 2026. As of May 31, 2025, we had deployed 145 Antminer S-19 pro miners to our hosting container at the site.

Effective on April 30, 2025, ROC Digital executed an energy services agreement for the site that runs from May 1, 2025 to April 30, 2027. Under the current agreement, the site will receive electricity at the prevailing rate plus $0.00449 per kWh. ROC Digital is not obligated to purchase any specific quantity of electricity, and employs software which automatically discontinues mining operations when the prevailing rate exceeds certain levels.

*Soluna Hosted Locations*

 

On October 9, 2023, we entered into a hosting agreement with Soluna SW, LLC to host 1,095 ASIC miners at its data center at its Murray, Kentucky location. The hosting agreement had a term through April 8, 2025. The hosting agreement provides that we are obligated to reimburse Soluna for the actual cost of the electricity used by our machines and pay a hosting fee equal to 50% of the net profit generated by the machines each month. The hosting fee is payable in bitcoin under certain circumstances. On April 8, 2025, Soluna SW, LLC, elected not to renew its hosting agreement with us on the existing terms, and on April 30, 2025, we terminated our engagement with Soluna SW, LLC. We sold 850 of the ASIC miners hosted by Soluna, SW LLC to a third party for $120,000 and moved the remaining 245 to the Silverton, Texas location.

On December 3, 2024, we entered into a hosting agreement with DVSL ComputeCo, LLC to host 2,900 ASIC miners at its Silverton, Texas location. The hosting agreement terminates on December 2, 2025, provided that the hosting agreement will continue after the termination date on a month-to-month basis if neither party sends a notice of termination at least 30 days before its scheduled termination date. The hosting agreement provides that we are obligated to reimburse DVSL for the actual cost of the electricity used by our machines plus 1.6 cents per kWh, and pay a hosting fee equal to 50% of the net profit generated by the machines each month. As of the date of this prospectus, we had 3,145 miners at the site.

*Miner Summary*

 

Set forth below is a summary of our ASIC miner inventory as of May 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Sites** | **Total Capacity** | **Total Present** | **Total Installed** | **Needing repair / storage** | **Immersion/Air** |
| Trinidad - TSTT Site | 384 | 440 | 315 |  | Immersion |
| Soluna - TX | 2880 | 3145 | 2880 |  | Air |
| Trinidad - Third Party Site | 60 | 60 | 52 |  | Immersion |
| Pecos Texas | 192 | 145 | 145 |  | Immersion |
| Total | 3516 | 3790 | 3392 | 85 |  |

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**Results of Operations**

*Comparison of Results of Operations for the Three Months Ended May 31, 2025 and May 31, 2024.*

<u>Revenues</u>

During the three months ended May 31, 2025, we generated $2,051,857 of revenue, compared to $1,224,992 of revenue in the three months ended May 31, 2024.

During the three months ended May 31, 2025, we generated $813,027 in bitcoin revenue from self-mining digital assets, compared to $1,187,758 of revenue from self-mining in the three months ended May 31, 2024. Mining revenues were negatively impacted somewhat by several factors during the period, including delays in installing approximately 300 newly acquired miners which experienced warranty issues, and the termination of our hosting agreement with Soluna SW, LLC as of April 30, 2025 which impacted 1,095 miners, and which resulted in a sale of 850 miners and downtime for the remaining miners which were moved to our Silverton, Texas location. Revenues were also impacted by a machine lease agreement of 2,500 of our miners from March 8, 2025 to May 7, 2025, and a second machine lease agreement of 3,000 of our miners which was effective as of May 16, 2025. Under both machine lease agreements, the lessee was entitled to all revenues from the leased miners, which resulted in lower bitcoin mining revenue for us, although the lower mining revenues were offset by higher lease revenues. Future revenues will be impacted by the May 16, 2025 machine lease agreement involving 3,000 of our miners, under which the lessee is entitled to receive all revenues from the machines through December 31, 2025 in consideration for aggregate lease payments of $3,200,000.

Mining revenues are impacted by fluctuations in the price of bitcoin and the difficulty index, which could either cause revenues to decrease or increase; however, the impact of those factors will be lessened through December 31, 2025 since a substantial portion of our mining capacity has been leased to a third party through that date for fixed lease payments totaling $3,200,000.

During the three months ended May 31, 2025 we generated $1,074,561 in lease revenue from our miners, all of which were generated from the two machine lease agreements described above. Under the March 2025 machine lease agreement, the lessee paid us $850,000 for all revenues generated from 2,500 of our miners from March 8, 2025 to May 7, 2025. Under the May 2025 machine lease agreement, the lessee agreed to pay us $3,200,000 for all revenues generated from 3,000 of our miners from May 16, 2025 to December 31, 2025.

During the three months ended May 31, 2025, we generated $129,200 in revenue from equipment sales, compared to $20,470 in revenue from equipment sales in the three months ended May 31, 2024.

Our revenue from equipment sales in the three months ended May 31, 2025 and May 31, 2024 were derived from the following transactions:

· In October 2022, we sold four hosting containers to ROC Digital for $1,200,000. The purchase price is payable pursuant to a promissory note bearing interest at 5% per annum, and is paid by 41 equal monthly payments of $31,204 commencing December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026.

· In August 2022, we sold two hosting containers to a private party in Trinidad
for $960,000. After a down payment of $50,000, the balance of the purchase price is payable pursuant to a promissory note bearing interest
at 7.5% per annum, and is paid by 24 equal monthly payments of $40,950 commencing September 30, 2022. On February 1, 2023, we modified
this agreement in conjunction with its entry into a new hosting agreement with the party, under which we agreed that the remaining principal
balance of the note was $731,472, and that the note would be converted into an interest only note until August 31, 2024, at which time
all principal and interest due is payable in full. In addition, the Company agreed to allow the note obligor to repay the note principal
at a 10% discount if it was repaid prior to February 28, 2023. The maturity date of the note was also extended to December
31, 2024.

· In May 2025, we recorded $129,200 of revenue from the sale of 850 ASIC
miners to a third party.

Under the guidelines of ASC 606, we determined that payments due under notes receivable from ROC Digital and the Trinidad borrower were not "probable" due to the start-up nature of the customers and their lack of capitalization. As a result, we report revenue from the equipment sales to both parties under the installment sale method, under which we report our gross profit on the sale as payments are received from the purchaser. With regard to the note receivable from ROC Digital, we recorded revenues of $20,471 in the three months ended May 31, 2024 based on the receipt of three monthly payments, but did not record any revenues in the three months ended May 31, 2025 because we did not receive any payments on the note in that period. With regard to the note receivable from the Trinidad borrower, we did not record any revenues in the three months ended May 31, 2024 because the borrower only made interest only payments in that period, and we did not record any revenues in the three months ended May 31, 2025 because we accelerated and foreclosed on the note in the fourth quarter of 2024.

During the three months ended May 31, 2025, we recorded $129,200 in revenues from the sale of 850 ASIC miners under the "completed sale" method. During the three months ended May 31, 2024, we did not record any revenues from sales of equipment recorded under the "completed sale" method.

In future periods, we expect to generate additional revenues from the resale of certain hosting equipment, primarily containers and transformers, and of miners in "buy/host" transactions, in which we sell miners already installed in our hosting facilities to buyers that simultaneously execute a hosting agreement for the purchased miners, and in some cases additional miners.

We generated $-0- in revenues from hosting in the three months ended May 31, 2025, as compared to $16,762 in hosting revenues in the three months ended May 31, 2024. We terminated all of our hosting clients in the fourth quarter of fiscal 2024, and did not have any hosting clients during the three months ended May 31, 2025. In the current market environment, we believe self-mining is more profitable than hosting third party miners, however we will pursue hosting opportunities on a selective basis. While we still see good opportunities to acquire mining equipment at attractive prices, the price of mining equipment has recently increased with the recent increase in the price of bitcoin.

We generated $35,068 of bitcoin consulting revenue during the three months ended May 31, 2025, as compared to $-0- during the three months ended May 31, 2024. All of our consulting revenue in 2025 was derived from one consulting agreement under which we are obligated to provide various operational, maintenance and consulting services from May 16, 2025 to May 15, 2026 for aggregate consideration of $800,000, of which half was paid on May 16, 2025.

The primary factors that will impact our revenues in subsequent periods are described in the "*—Overview*" above.

<u>Cost of Sales</u>

Cost of sales were $1,560,985 in the three months ended May 31, 2025, compared to $1,003,305 in the three months ended May 31, 2024.

Cost of sales related to self-mining was $785,129 in the three months ended May 31, 2025, compared to $988,094 in the three months ended May 31, 2024. Cost of sales normally includes electricity, utilities, facilities costs, and supplies where we perform mining from our own facilities. Major components of cost of sales include rent to house mining and hosting equipment, electricity, and supplies. Where our miners are hosted by third parties, major components of cost of sales include hosting fees and/or electricity costs. Cost of sales for both owned and hosted facilities does not include depreciation, which is stated separately.

Energy prices can be highly volatile and global events (including the wars in Ukraine and the Middle East) and political events (including the U.S. governments regulation of cryptocurrencies or its imposition of tariffs on foreign trade) may cause fuel prices, and to a lesser extent power prices, to fluctuate widely. All of our sites are currently subject to relatively fixed rates during the term of their current power supply agreements, but variable prices and market rate fluctuations with respect to wholesale power costs over the long-term. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with an eye towards increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates.

Cost of sales related to hosting was $-0- in the three months ended May 31, 2025, compared to $15,212 in the three months ended May 31, 2024. Cost of sales normally includes utilities, facilities costs, and supplies. Unlike the cost of sales from mining, cost of sales from hosting does not include electricity costs, as such costs are passed on to the hosting client.

Cost of sales related to sales of mining equipment was $82,432 for the three months ended May 31, 2025 and $-0- the three months ended May 31, 2024 because all sales of mining equipment during both periods were reported under the installment sales method. Cost of sales from equipment sales includes the purchase price of equipment sold, plus shipping and value added tax on the equipment for sales reported under the completed sales method. There is no cost of sales associated with equipment sales reported under the installment sales method.

Cost of sales related to consulting services was $7,500 for the three months ended May 31, 2025 and $-0- for the three months ended May 31, 2024. Cost of sales for consulting services consists primarily of an allocation of a percentage of the labor costs of the employees who provide the consulting services.

<u>Operating Expenses</u>

During the three months ended May 31, 2025, we incurred $958,824 in operating expenses, compared to $756,224 in operating expenses during the three months ended May 31, 2024. Major components of operating expenses for the 2025 period as compared to the 2024 period were:

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| | | | |
|:---|:---|:---|:---|
|  | **Three months ended**<br>**May 31, 2025** | **Three months ended**<br>**May 31, 2024** | **Percentage**<br>**Change %** |
| General and administrative expenses | $33059 | $47715 | (30.7%) |
| Depreciation | 180735 | 226663 | (20.3% |
| Professional fees | 217702 | 116734 | 86.5% |
| Investor relations | 4450 | 27800 | (84.0%) |
| Insurance | 27697 | 30912 | (10.4%) |
| Officers compensation | 230370 | 210276 | 9.6% |
| Directors compensation | 56355 | 13200 | 326.9% |
| Employee shareholder compensation | 174143 | 126108 | 38.1% |
| Change in fair value of cryptocurrency | 34313 | (43183) | (179.5%) |
| Total operating expenses | $958824 | $756224 | 26.8% |

---

The higher level of operating expenses in the 2025 period as compared to the 2024 period is primarily attributable to increased officer, director and employee/shareholder compensation that we began accruing as of September 1, 2024. Specifically, we issued two of our officers 25,000 shares of common stock on September 1, 2024, each as partial compensation for fiscal 2025 officer services, and we began accruing additional cash and share compensation for our officers as of September 1, 2024, the cash portion of which is not payable until we have sufficient liquidity. The total cash accrual to officers and employee/shareholders is $195,000 per quarter. We also adopted a stock compensation package, beginning September 1, 2024, under which we accrue 30,750 shares per quarter for compensation to officers and employees, including for board and board committee service. All shares accrued during the 2025 period were valued at $5.78 per share based on a third party valuation of our shares. In addition, legal fees increased approximately $101,000 in the 2025 period compared to 2024 due to legal expense associated with the Company's public offering of common stock and its uplisting to the NYSE American exchange. See "*Item 1. Financial Statements -- Note 11 -- Subsequent Events* ."

Operating expenses were also adversely impacted in the 2025 period by a loss from changes in the fair value of cryptocurrency as compared to a gain in the 2024 period. Operating expenses were positively impacted by decreased depreciation expense and investor relations expenses.

We expect that operating expenses will trend materially higher in future periods as we begin paying regular compensation to existing officers and directors, hire additional employees, and incur other costs, such as increased depreciation expense due to the addition of new mining and hosting equipment.

<u>Other Income (Expense)</u>

During the three months ended May 31, 2025, we incurred $154,810 in other expenses, net, as compared to $119,691 of other expenses, net, in the three months ended May 31, 2024. Interest expense was $71,867 in the three months ended May 31, 2025, as compared to $56,563 in the three months ended May 31, 2024, mainly as a result of increased balances due under the LOC Agreement with IDI. Other expenses in the 2025 period were impacted by a reversal of bad debt expense of $124,815 in regard to our note receivable from ROC Digital during the 2025 period, and a loss on extinguishment of debt of $207,758 taken in regard to our Hashrate Sale Agreement with Luxor. Other expenses in the 2024 period were impacted by a loss on extinguishment of debt of $133,915 relating to a different financing with Luxor, a loss of $58,840 from the Company's investment in ROC Digital in 2024 period as compared to $-0- in the 2025 period. Also, we recorded a change in the derivative liability from a financing with Luxor of a positive $114,835 in the 2024 compared to $-0- in 2025. Interest income was $-0- in the 2025 period as compared to $14,792 in the 2024 period primarily as a result of the fact that we did not receive any payments on our note from ROC Digital in the 2025 period, and our placing the ROC Digital note on non-accrual status.

<u>Net (Loss) Attributable to Common Stockholders</u>

As a result of the foregoing, during the three months ended May 31, 2025, we incurred a net loss attributable to common stockholders of $622,762, or $(0.31) per share, as compared to a net loss attributable to common stockholders of $654,228, or $(0.26) per share during the three months ended May 31, 2024. The increase in our net loss in the three months ended May 31, 2025, compared to the three months ended May 31, 2024, is attributable to the factors discussed above.

*Comparison of Results of Operations for the Nine Months Ended May 31, 2025 and May 31, 2024.*

<u>Revenues</u>

During the nine months ended May 31, 2025, we generated $4,770,110 of revenue, compared to $2,627,913 of revenue in the nine months ended May 31, 2024.

During the nine months ended May 31, 2025, we generated $2,814,133 in bitcoin revenue from self-mining digital assets, compared to $2,378,507 of revenue from self-mining in the nine months ended May 31, 2024. Mining revenues were positively impacted during the 2025 period as a result of the purchase of 3,000 ASIC miners in November 2024, most of which were installed in December 2024. Mining revenues were somewhat negatively impacted by several factors during the period, including delays in installing approximately 300 newly acquired miners which experienced warranty issues, and the termination of our hosting agreement with Soluna SW, LLC as of April 30, 2025 which impacted 1,095 miners, and which resulted in a sale of 850 miners and downtime for the remaining miners which were moved to our Silverton, Texas location. Revenues were also impacted by a machine lease agreement of 2,500 of our miners from March 8, 2025 to May 7, 2025, and a second machine lease agreement of 3,000 of our miners which was effective as of May 16, 2025. Under both machine lease agreements, the lessee was entitled to all revenues from the leased miners, which resulted in lower bitcoin mining revenue for us, although the lower mining revenues were offset by higher lease revenues. Future revenues will be impacted by the May 16, 2025 machine lease agreement involving 3,000 of our miners, under which the lessee is entitled to receive all revenues from the machines through December 31, 2025 in consideration for aggregate lease payments of $3,200,000.

Mining revenues are impacted by fluctuations in the price of bitcoin and the difficulty index, which could either cause revenues to decrease or increase; however, the impact of those factors will be lessened through December 31, 2025 since a substantial portion of our mining capacity has been leased to a third party through that date for fixed lease payments totally $3,200,000.

During the nine months ended May 31, 2025 we generated $1,074,561 in lease revenue from our miners, all of which were generated from the two machine lease agreements described above. Under the March 2025 machine lease agreement, the lessee paid us $850,000 for all revenues generated from 2,500 of our miners from March 8, 2025 to May 7, 2025. Under the May 2025 machine lease agreement, the lessee agreed to pay us $3,200,000 for all revenues generated from 3,000 of our miners from May 16, 2025 to December 31, 2025.

During the nine months ended May 31, 2025, we generated $846,347 in revenue from equipment sales, compared to $210,662 in revenue from equipment sales in the nine months ended May 31, 2024.

Our revenue from equipment sales in the nine months ended May 31, 2025 and May 31, 2024 were derived from the following transactions:

· In October 2022, we sold four hosting containers to ROC Digital for $1,200,000. The purchase price is payable pursuant to a promissory note bearing interest at 5% per annum, and is paid by 41 equal monthly payments of $31,204 commencing December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026.

· In August 2022, the Company sold two hosting containers to a private party in Trinidad for $960,000. After a down payment of $50,000, the balance of the purchase price is payable pursuant to a promissory note bearing interest at 7.5% per annum, and is paid by 24 equal monthly payments of $40,950 commencing September 30, 2022. On February 1, 2023, the Company modified this agreement in conjunction with its entry into a new hosting agreement with the party, under which the Company agreed that the remaining principal balance of the note was $731,472, and that the note would be converted into an interest only note until August 31, 2024, at which time all principal and interest due is payable in full. In addition, the Company agreed to allow the note obligor to repay the note principal at a 10% discount if it was repaid prior to February 28, 2023. The maturity date of the noter was also extended to December 31, 2024.

· During the nine months ended May 31, 2025, we recorded $703,500 of revenue from a brokered transaction of ten transformers.

· During the nine months ended May 31, 2024, we recorded $149,250 of revenue from the sale of 100 ASIC miners to a third party.

· During the nine months ended May 31, 2024, we recorded $129,200 of revenue from the sale of 850 ASIC miners to a third party.

Under the guidelines of ASC 606, we determined that payments due under notes receivable from ROC Digital and the Trinidad borrower were not "probable" due to the start-up nature of the customers and their lack of capitalization. As a result, we report revenue from the equipment sales to both parties under the installment sale method, under which we report our gross profit on the sale as payments are received from the purchaser. With regard to the note receivable from ROC Digital, we recorded revenues of $13, 6471 in the nine months ended May 31, 2025 from two monthly payments received on the note, as compared to revenues of $40,942 in the nine months ended May 31, 2024 from nine monthly payments received on the note. With regard to the note receivable from the Trinidad borrower, we did not record any revenues in the nine months ended May 31, 2024 because the borrower only made interest only payments in that period, and we did not record any revenues in the nine months ended May 31, 2025 because we accelerated and foreclosed on the note in the fourth quarter of 2024.

During the nine months ended May 31, 2025 and May 31, 2024, we recorded $832,700 and $149,250, respectively, from sales of equipment recorded under the "completed sale" method from the transactions described above.

In future periods, we expect to generate additional revenues from the resale of certain hosting equipment, primarily containers and transformers, and of miners in "buy/host" transactions, in which we sell miners already installed in our hosting facilities to buyers that simultaneously execute a hosting agreement for the purchased miners, and in some cases additional miners.

We generated $-0- in revenues from hosting in the nine months ended May 31, 2025, as compared to $38,743 in hosting revenues in the nine months ended May 31, 2024. We terminated all of our hosting clients in the fourth quarter of fiscal 2024, and did not have any hosting clients during the nine months ended May 31, 2025. In the current market environment, we believe self-mining is more profitable than hosting third party miners, however we will pursue hosting opportunities on a selective basis. While we still see good opportunities to acquire mining equipment at attractive prices, the price of mining equipment has recently increased with the recent increase in the price of bitcoin.

We generated $35,069 of bitcoin consulting revenue during the three months ended May 31, 2025, as compared to $-0- during the three months ended May 31, 2024. All of our consulting revenue in 2025 was derived from one consulting agreement under which we are obligated to provide various operational, maintenance and consulting services from May 16, 2025 to May 15, 2026 for aggregate consideration of $800,000, of which half was paid on May 16, 2025.

The primary factors that will impact our revenues in subsequent periods are described in the "*—Overview*" above.

<u>Cost of Sales</u>

Cost of sales were $3,854,316 in the nine months ended May 31, 2025, compared to $1,978,522 in the nine months ended May 31, 2024.

Cost of sales related to mining was $2,408,459 in the nine months ended May 31, 2025, compared to $1,767,885 in the nine months ended May 31, 2024. Cost of sales normally includes electricity, utilities, facilities costs, and supplies where we perform mining from our own facilities. Major components of cost of sales include rent to house mining and hosting equipment, electricity, and supplies. Where our miners are hosted by third parties, major components of cost of sales include hosting fees and/or electricity costs. Cost of sales for both owned and hosted facilities does not include depreciation, which is stated separately.

The table below describes the average cost of mining each bitcoin for the nine months ended May 31, 2025 and May 31, 2024, and the total energy usage and cost per each kilowatt hour ("KWH") utilized within both of our facilities.

---

| | | |
|:---|:---|:---|
|  | **May 31, 2025** | **May 31, 2024** |
| **Cost of Mining - owned facilities** |  |  |
| Cost of energy per bitcoin mined | $25182.59 | $22270.46 |
| Other direct costs of mining - non energy utilities per bitcoin mined (1) | $26559.40 | $14347.09 |
| Depreciation expense per bitcoin mined (2) | $23594.44 | $13347.46 |
| Financing expense per bitcoin mined (3) | $0.00 | $0.00 |
| Cost to mine one bitcoin | $75336.43 | $49965.01 |
| Average revenue of each bitcoin mined | $85822.16 | $48938.34 |
| Cost of mining one bitcoin as % of average bitcoin mining revenue | 87.78% | 102.1% |
| **Cost of Mining - hosted facilities** |  |  |
| Cost of energy per bitcoin mined | $52216.60 | $17053.33 |
| Other direct costs of mining - non energy utilities per bitcoin mined (1) | $21706.57 | $12937.14 |
| Depreciation expense per bitcoin mined (2) | $14116.48 | $17079.39 |
| Financing expense per bitcoin mined (3) | $0.00 | $1661.84 |
| Cost to mine one bitcoin - Hosted | $88039.65 | $48731.69 |
| Average revenue of each bitcoin mined (4) | $90756.42 | $48590.69 |
| Cost of mining one bitcoin as % of average bitcoin mining revenue (5) | 97.0% | 100.29% |
| **Statistics - owned facilities** |  |  |
| Total bitcoin mined | 5.514593574 | 7.73501378 |
| Bitcoin mining revenue | $473274.31 | $378538.72 |
| Total miners - as of the periods ended | 585 | 293 |
| Total KWHs utilized | 7695203.64 | 3549179.48 |
| Total energy expense | $138871.76 | $172262.28 |
| Cost per KWH | $0.0180 | $0.0485 |
| Energy expense as % of bitcoin mining revenue, net | 29.34% | 45.51% |
| Other direct costs of mining - non energy utilities | $146464.32 | $110974.94 |
| Total depreciation expense | $130113.75 | $103242.77 |
| Total financing costs | $0.00 | $0.00 |
| **Statistics - hosted facilities** |  |  |
| Total bitcoin mined | 24.44681868 | 34.03642394 |
| Bitcoin mining revenue | $2218705.73 | $1653853.32 |
| Total miners - as of the periods ended | 3205 | 1313 |
| Total KWHs utilized | 31445446.74 | 16526381.40 |
| Total energy expense | $1276529.65 | $580434.30 |
| Cost per KWH | $0.0406 | $0.0351 |
| Energy expense as % of bitcoin mining revenue, net | 57.53% | 35.10% |
| Other direct costs of mining - non energy utilities (1) | $530656.67 | $440334.11 |
| Total depreciation expense (2) | $345103.05 | $581321.23 |
| Total financing costs (3) | $0.00 | $56563.39 |

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______________

(1) Other direct costs of mining for owned facilities consists mostly of rent for the facility, as well as minor costs such as supplies and internet. Other direct costs of mining for hosted miners consist of hosting fees.

(2) Depreciation expense includes depreciation of miners used in mining. For owned facilities, it also includes depreciation of the hosting containers and corollary equipment such as transformers and switches.

(3) Financing costs include the cost of purchase money financing for miners, but do not include any financing costs for miners or hosting equipment acquired with general working capital, nor the cost of hedging the price of bitcoin.

(4) Average revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for both owned and hosted facilities by the total number of bitcoin mined during the respective periods. We have determined that Coinbase is the principal market for valuing bitcoin transactions and uses the daily closing prices as the source of recording revenue.

(5) Weighted average cost of mining one bitcoin is calculated by dividing the sum of total energy expense, hosting expenses, other direct costs of mining, depreciation and financing costs by the total bitcoin mined during the respective periods.

Energy prices can be highly volatile and global events (including the wars in Ukraine and the Middle East) and political events (including the U.S. governments regulation of cryptocurrencies or its imposition of tariffs on foreign trade) may cause fuel prices, and to a lesser extent power prices, to fluctuate widely. All of our sites are currently subject to relatively fixed rates during the term of their current power supply agreements, but variable prices and market rate fluctuations with respect to wholesale power costs over the long-term. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with an eye towards increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates.

Cost of sales related to hosting was $-0- in the nine months ended May 31, 2025, compared to $29,746 in the nine months ended May 31, 2024. Cost of sales normally includes utilities, facilities costs, and supplies. Unlike the cost of sales from mining, cost of sales from hosting does not include electricity costs, as such costs are passed on to the hosting client.

Cost of sales related to sales of mining equipment was $752,432 for the nine months ended May 31, 2025, as compared to $180,891 for the nine months ended May 31, 2024. Cost of sales from equipment sales includes the purchase price of equipment sold, plus shipping and value added tax on the equipment for sales reported under the completed sales method. There is no cost of sales associated with equipment sales reported under the installment sales method.

Cost of sales related to consulting services was $7,500 for the three months ended May 31, 2025 and $-0- for the three months ended May 31, 2024. Cost of sales for consulting services consists primarily of an allocation of a percentage of the labor costs of the employees who provide the consulting services.

<u>Operating Expenses</u>

During the nine months ended May 31, 2025, we incurred $3,181,387 in operating expenses, compared to $2,436,401 in operating expenses during the nine months ended May 31, 2024. Major components of operating expenses for the 2025 period as compared to the 2024 period were:

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| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended**<br>**May 31, 2025** | **Nine months ended**<br>**May 31, 2024** | **Percentage**<br>**Change %** |
| General and administrative expenses | $183790 | 118654 | 54.9% |
| Depreciation | 539054 | 684564 | (21.3%) |
| Professional fees | 536670 | 420124 | 27.7% |
| Investor relations | 30850 | 169360 | (81.8%) |
| Insurance | 83092 | 109739 | (24.3%) |
| Officers compensation | 1109148 | 630829 | 75.8% |
| Directors compensation | 182265 | 39600 | 360.3% |
| Employee shareholder compensation | 541251 | 383304 | 41.2% |
| Change in fair value of cryptocurrency | (24733) | (119774) | (79.4%) |
| Total operating expenses | $3181387 | 2436401 | 30.6% |

---

The higher level of operating expenses in the 2025 period as compared to the 2024 period is primarily attributable to increased officer, director and employee/shareholder compensation that we began accruing as of September 1, 2024. Specifically, we issued two of our officers 25,000 shares of common stock on September 1, 2024, each as partial compensation for fiscal 2025 officer services, and we began accruing additional cash and share compensation for our officers as of September 1, 2024, the cash portion of which is not payable until we have sufficient liquidity. The total cash accrual to officers and employee/shareholders is $195,000 per quarter. We also adopted a stock compensation package, beginning September 1, 2024, under which we accrue 30,750 shares per quarter for compensation to officers and employees, including for board and board committee service. All shares accrued during the 2025 period were valued at $5.78 per share based on a third party valuation of our shares. In addition, legal fees increased approximately $101,000 in the 2025 period compared to 2024 due to legal expenses associated with the Company's proposed public offering of common stock and its uplisting to the NYSE American exchange. See "*Item 1. Financial Statements -- Note 11 -- Subsequent Events*."

Operating expenses were also adversely impacted in the 2025 period by increased general and administrative, and a lower gain from changes in the fair value of cryptocurrency. Operating expenses were positively impacted by decreased depreciation expense, investor relations expenses, and insurance.

We expect that operating expenses will trend materially higher in future periods as we begin paying regular compensation to existing officers and directors, hire additional employees, and incur other costs, such as increased depreciation expense due to the addition of new mining and hosting equipment.

<u>Other Income (Expense)</u>

During the nine months ended May 31, 2025, we incurred $488,798 in other expenses, net, as compared to $691,622 of other expenses, net, in the nine months ended May 31, 2024. Interest expense was $200,798 in the nine months ended May 31, 2025, as compared to $210,262 in the nine months ended May 31, 2024. Other expenses in the 2025 period were impacted by a decrease in loss on extinguishment of debt in the 2025 period of $66,405 compared to 2024 associated with financings with Luxor. Other expenses in the 2024 period were impacted by a loss on investment of $170,613 compared to $-0- in the 2025 associated with our investment in ROC Digital. Interest income was $719 in the 2025 period as compared to $44,376 in the 2024 period primarily as a result of the fact that in the 2025 period we only received one payment on our note from ROC Digital, and placed the note on non-accrual status in that period, and none on our note from the Trinidad borrower in the 2025 period as that note was foreclosed on in the fourth quarter of 2024.

<u>Net (Loss) Attributable to Common Stockholders</u>

As a result of the foregoing, during the nine months ended May 31, 2025, we incurred a net loss attributable to common stockholders of $5,715,039 or $(2.62) per share, as compared to a net loss attributable to common stockholders of $2,478,632 or $(0.99) per share during the nine months ended May 31, 2024. The increase in our net loss in the nine months ended May 31, 2025, compared to the nine months ended May 31, 2024, is attributable to the factors discussed above, as well as a one-time deemed dividend of $2,960,648 that we incurred during the nine months ended May 31, 2025 as a result of the reduction in the conversion price of the Series A Convertible Preferred Stock to $4.00 per share from $11.50 share. The reduction of the conversion price of the Series A Preferred resulted in the holders thereof being entitled to an additional 740,162 shares of common stock if all of the Series A Preferred were converted into common stock. As a result, under the guidelines of ASC 470 we recorded a one-time deemed dividend charge of $2,960,648 for the value of the extra shares issuable under the Series A Preferred, all of which were valued at $4.00 per share based upon a valuation study performed by an accredited third party valuation firm.

<u>Non-GAAP Financial Measures</u>

We have included in some of our press releases, measures of financial performance that are not defined by GAAP. We believe that these measures provide useful information to investors. For each of these non-GAAP financial measures, we provide a reconciliation of the difference between the non-GAAP measure and the comparable GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to investors.

**Liquidity and Capital Resources**

As of May 31, 2025, we had $1,473,501 in cash on hand. During the nine months ended May 31, 2025, we had a net loss of $2,754,391 and a net loss attributable to common stockholders of $5,715,039, which included the net loss described above plus the impact of a 2,960,648 due to a one-time, non-cash deemed dividend of $2,960,648 to our Series A Convertible Preferred Stockholders as a result of a resetting of its conversion terms. Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. For the year ended August 31, 2024, and the nine months ended May 31, 2025, our primary sources of liquidity came from existing cash and cash equivalents, bitcoin and proceeds, advance payments under machine lease agreements and a bitcoin consulting agreement, loans received under equipment financing transaction with Luxor, loans received under an LOC Agreement with IDI, as described in "*Note 6 — Related Party Transactions – Line of Credit from IDI*" of the financial statements included in Item 1 herein.

As amended, the LOC Agreement allowed us to borrow up to $2,350,000 thereunder until the maturity date of December 1, 2024, and provided that we had the right to extend the maturity date for six monthly periods in consideration for an extension fee of $25,000 per extension. We exercised our right to extend the maturity date of the loan on December 1, 2024, January 1, 2025, February 1, 2025, March 1, 2025, April 1, 2025 and May 1, 2025. As of May 31, 2025, the amount due under the LOC Agreement was $1,875,000 in principal and approximately $516,407 in accrued interest. However, as noted below, in June 2025 the amounts due under the LOC Agreement were either settled or restructured to extend the payment date of such amounts.

We have recently taken a number of steps that have materially increased our liquidity. In December 2024, we entered into an investment banking agreement with ThinkEquity LLC ("ThinkEquity") under which ThinkEquity agreed to use its best efforts to a lead a firm underwritten public offering, and to advise us on listing our common on a national securities exchange. In June 2025, our application to list our common stock on the NYSE American exchange was approved and as a result out stock began trading on that exchange on June 5, 2025. On June 6, 2025, we closed on a public offering led by ThinkEquity as lead underwriter. In the public offering, we sold 2,250,000 shares of our common stock to the underwriters at a discount to the public offering price of $7.40 per share (92.5% of the public offering price of $8.00 per share), and granted ThinkEquity a 45-day over-allotment option to purchase up to 337,500 additional shares of common stock, equivalent to 15% of the shares of common stock sold in the Offering. The net proceeds to us from the sale of the shares, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us, were $16,150,000. We have invested substantially all of the proceeds of the public offering in additional bitcoin.

We also reached an agreement with IDI in January 2025, which closed simultaneous with the closing of the public offering, under which

· $1,000,000 of the IDI debt was converted into an unsecured term loan that bears interest at 12.5% per annum, provides for monthly payments of interest only until December 1, 2026 at which time all principal and unpaid interest are due;

· $600,000 of the IDI debt was exchanged for a loan receivable from ROC Digital; and

· the balance of the IDI debt was converted into common stock at the public offering price, resulting in the issuance of 99,523 shares of common stock to IDI.

We also reached an agreement with IDI and Jonathan Bates, our chief executive officer, under which they converted all of their shares of Series A and B Convertible Preferred Stock into common stock at their existing conversion prices at the closing of the public offering.

On June 30, 2025, we entered into a Securities Purchase Agreement with a number of institutional investors to sell up to 55,555,556 shares of common stock (or prefunded warrants exercisable to acquire common stock) at a price of $4.50 per share in a private placement. The expected aggregate proceeds are approximately $250 million before deducting placement agent fees and other offering expenses. The proceeds will be used to implement an Ethereum treasury strategy in the public equity markets. We intend to use the funds to acquire the native cryptocurrency of Ethereum blockchain commonly referred to as "ETH" and the establishment of our treasury operations. ETH will serve as our primary treasury reserve asset. Closing is subject to the approval of the transaction by the NYSE American Exchange.

We believe that cash on hand, our investments in bitcoin, expected receipts from the sale of equipment, revenue from self-mining and miner leases and contracted consulting revenue will provide us with sufficient liquidity to fund our operations for the next 12 months. As of the date of this Report, we owned approximately 3,790 miners, which includes 3,000 miners acquired during the first quarter of fiscal 2025, which should significantly boost revenues in fiscal 2025 over 2024 levels. Other potential sources of revenue that we may receive include equity distributions from the ROC Digital joint venture.

As a result of the financings that we have completed since May 31, 2025, we do not believe we need additional capital to maintain operations as they currently exist. However, we expect to raise additional capital to the extent that we can do so on favorable terms in order to expand our digital asset hosting and mining business and take advantage of opportunities in the marketplace that currently exist due to the growing adoption of digital currencies as a medium of exchange. Additional capital raises may take the form of the issuance of common stock in secondary public offerings or private placements, or the issuance of convertible notes, preferred stock or warrants. There is no assurance that we will be able to raise additional capital or that the terms of any capital raise are not dilutive to current shareholders or carry other terms that are unfavorable to us and our shareholders.

**Cash Flow**: The following table sets forth the major sources and uses of cash for the nine months ended May 31, 2025 and May 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **Nine Months ended** | **Nine Months ended** |
|  | **May 31, 2025** | **May 31, 2024** |
| Net Loss | $(2754391) | $(2478632) |
| Net cash provided by (used in) operating activities | 1365868 | (247017) |
| Net cash used in investing activities | (18000) | (67526) |
| Net cash provided by (used in) financing activities | (373637) | 325000 |
| Net increase in cash | $974231 | $10457 |

---

*Operating Activities*

Our mining and hosting operations generate non-cash revenue in the form of bitcoin, which we have historically sold to pay operating expenses or conveyed in kind to certain vendors to pay expenses. Cash flows provided by operating activities were $1,365,868 for the nine months ended May 31, 2025, compared to cash flows used in operating activities of $247,017 for the nine months ended May 31, 2024. The increase in cash flows provided by operating activities for the nine months ended May 31, 2025 compared to the same period in 2024 was primarily attributable to the following material factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an increase in non-cash stock based compensation of $484,919 in the 2025 period of $484,919 as compared to the 2024;

· an increase in customer advances of $397,546 in the 2025 period as compared to the 2024 period;

· an increase in prepaid expenses of $1,193,703 in the 2025 period as compared to the 2024 period.

Cash flows provided by operating activities in the in the nine months ended May 31, 2025 compared to the same period in 2024 were adversely affected by the following material factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· a decrease in accounts payable and accrued expenses of $261,987 in the 2025 period as compared to the 2024 period;

· a decrease in depreciation expense of $145,510 in the 2025 period as compared to the 2024 period.

*Investing Activities*

Cash flows used in investing activities were $18,000 for the nine months ended May 31, 2025, compared to cash flows used in investing activities of $67,526 for the nine months ended May 31, 2024. Cash flows used in investing activities primarily consisted of purchases of equipment in the 2025 and 2024 periods, offset by a distribution of $8,408 received from ROC Digital in the 2024 period.

*Financing Activities*

Cash flows used in financing activities were $373,637 for the nine months ended May 31, 2025, compared to cash flows provided by financing activities of $325,000 for the nine months ended May 31, 2024. The cash flows provided by financing activities in both the 2025 and 2024 periods included $250,000 and $325,000, respectively, of advances under a line of credit with Innovative Digital Investors Emerging Technology, L.P. ("IDI"), a limited partnership controlled by Jonathan Bates, our Chairman, and Raymond Mow, our chief financial officer. In the nine months ended May 31, 2025, we also received $200,000 from an investment by IDI in our Series B Convertible Preferred Stock and a $25,000 payment made to accelerate the vesting date of 150,000 shares of Series A Convertible Preferred Stock that had been issued for officer services. In the nine months ended May 31, 2025, cash flows from financing activities were negatively impacted by loan repayments of $848,637 under a financing agreement with Luxor.

**Critical Accounting Estimates**

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP." The preparation of our financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 1 to our financial statements appearing elsewhere in this Quarterly Report. We describe in Note 1 to our financial statements certain critical accounting policies that require us to make significant estimates, assumptions and judgments. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. We believes such critical accounting policies reflect our most significant estimates and assumptions used in the preparation of the financial statements. For further information on the critical accounting policies, see Note 1 of the Financial Statements.

**Off-Balance Sheet Arrangements**

None.

**Item 3. Quantitative And Qualitative Disclosures About Market Risk.**

As a smaller reporting company, we are not required to provide the information called for by this Item.

**Item 4. Controls and Procedures.**

*Evaluation of Disclosure Controls and Procedures.*

Our Principal Executive Officer and Principal Financial Officer, with the assistance of management, conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of May 31, 2025. These controls are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"), and that such information is accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

*Changes in Internal Control over Financial Reporting.*

During the quarter ended May 31, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings.**

We may be involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Legal expenses associated with any contingency are expensed as incurred. Our officers and directors are not aware of any threatened or pending litigation to which we are a party.

**Item 1A. Risk Factors.**

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

**Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds.**

During the three months ended May 31, 2025, we issued the following securities in unregistered transactions:

· 61,500 shares were issued to our officers and directors for accrued compensation for 2025 services. These shares were valued at $5.78 each and are being amortized to expense quarterly on a pro rata basis. The price of $5.78 is based upon a price indicated by a recent valuation study performed on our common stock by a third-party valuation firm.

· 8,500 common shares were issued to two service providers in lieu of cash. These shares were valued at $5.78 each and are being amortized to expense quarterly on a pro rata basis. The price of $5.78 is based upon a price indicated by a recent valuation study performed on our common stock by a third-party valuation firm.

The issuances of common stock described above were deemed to be exempt under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering. The recipients of such securities were our directors, employees or bona fide consultants. Appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us.

During the three months ended May 31, 2025, we repurchased 14 shares of a common stock for aggregate consideration of $115 as a result of the elimination of fractional shares that resulted from our 1-for-20 reverse stock split that was effective May 15, 2025.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

During the three months ended May 31, 2025, none of our directors or officers of adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**Item 6. Exhibits.**

The exhibits listed on the Exhibit Index below are provided as part of this report.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 31.1\* | [Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended](bitmine_ex3101.htm) |
| 31.2\* | [Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended](bitmine_ex3102.htm) |
| 32.1\* | [Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended](bitmine_ex3201.htm) |
| 32.2\* | [Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended](bitmine_ex3202.htm) |
| 101.INS\* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (formatted in iXBRL, and included in exhibit 101). |

---

\* Filed herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **BITMINE IMMERSION TECHNOLOGIES, INC.** | **BITMINE IMMERSION TECHNOLOGIES, INC.** |
| Dated: July 2, 2025 | By: | */s/ Jonathan Bates* |
|  |  | Jonathan Bates, Chief Executive Officer<br> (Principal Executive Officer) |
| Dated: July 2, 2025 | By: | */s/ Raymond Mow* |
|  |  | Raymond Mow Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO RULES 13a-14(a) AND 15d-14(a)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

I, Jonathan Bates, certify that:

---

| | | |
|:---|:---|:---|
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2025 of Bitmine Immersion Technologies, Inc. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2025 of Bitmine Immersion Technologies, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
|  | a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|  | b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|  | c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|  | d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and; |
| 5. | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions); | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions); |
|  | a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|  | b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. |

---

---

| | |
|:---|:---|
| Dated: July 2, 2025 | */s/ Jonathan Bates* |
|  | Jonathan Bates, CEO |
|  | Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO RULES 13a-14(a) AND 15d-14(a)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

I, Raymond Mow, certify that:

---

| | | |
|:---|:---|:---|
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2025 of Bitmine Immersion Technologies, Inc. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2025 of Bitmine Immersion Technologies, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
|  | a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|  | b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|  | c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|  | d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and; |
| 5. | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions); | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions); |
|  | a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|  | b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. |

---

---

| | |
|:---|:---|
| Dated: July 2, 2025 | */s/* Raymond Mow |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED**

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Bitmine Immersion Technologies, Inc. (the "Company") for the fiscal quarter ended May 31, 2025 as filed with the Securities and Exchange Commission (the "Report"), I, Jonathan Bates, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

---

| | |
|:---|:---|
| Dated: July 2, 2025 | */s/ Jonathan Bates* |
|  | Jonathan Bates |
|  | Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED**

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Bitmine Immersion Technologies, Inc. (the "Company") for the fiscal quarter ended May 31, 2025 as filed with the Securities and Exchange Commission (the "Report"), I, Raymond Mow, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

---

| | |
|:---|:---|
| Dated: July 2, 2025 | */s/ Raymond Mow* |
|  | Raymond Mow |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---