# EDGAR Filing Document

**Accession Number:** 0001826397
**File Stem:** 0001641172-25-024019
**Filing Date:** 2025-8
**Character Count:** 178178
**Document Hash:** 51213a38082d9f95d974eb6b4c72f142
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-024019.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001641172-25-024019

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 98

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AGRIFORCE GROWING SYSTEMS LTD.
- **CENTRAL INDEX KEY:** 0001826397
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40578
- **FILM NUMBER:** 251218949

**BUSINESS ADDRESS:**
- **STREET 1:** 800-525 WEST 8TH AVENUE
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V5Z 1C6
- **BUSINESS PHONE:** 1-866-226-3514

**MAIL ADDRESS:**
- **STREET 1:** 800-525 WEST 8TH AVENUE
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V5Z 1C6

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

---

| | |
|:---|:---|
| (Mark One) |  |
| ☒ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)**<br> **OF THE SECURITIES EXCHANGE ACT OF 1934**<br>|
|  | **For the quarterly period ended June 30, 2025** |
|  | **or** |
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)**<br> **OF THE SECURITIES EXCHANGE ACT OF 1934**<br>|
|  | **For the transition period from _____ to _____** |

---

**Commission File Number: 001-40578**

![](form10-q_001.jpg)

**AGRIFORCE GROWING SYSTEMS LTD.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **British Columbia** | **Not Applicable** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |
| **800 – 525 West 8<sup>th</sup> Avenue**<br> **Vancouver, BC, Canada** | **V5Z 1C6** |
| (Address of principal executive offices) | (Zip Code) |

---

**(604) 757-0952**

(Registrant's telephone number, including area code)

**N/A**

(Former name or 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 each exchange on which registered |
| Common Shares | AGRI | NASDAQ Capital Market |

---

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer" and "smaller reporting 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 ☒

As of August 14, 2025, the registrant had 1,309,598 common shares, no par value per share, outstanding.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **[PART I — FINANCIAL INFORMATION](#Aa_001)** | **[PART I — FINANCIAL INFORMATION](#Aa_001)** |  |
| Item 1. | [Financial Statements](#Aa_002) | 4 |
|  | [Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024](#Aa_003) | 4 |
|  | [Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2025 and June 30, 2024](#Aa_004) | 5 |
|  | [Unaudited Condensed Consolidated Statement of Changes in Shareholders' Equity for the three and six months ended June 30, 2025 and June 30, 2024](#Aa_005) | 6 |
|  | [Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and June 30, 2024](#Aa_006) | 8 |
|  | [Notes to Unaudited Condensed Financial Statements](#Aa_007) | 9 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 34 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_009) | 44 |
| Item 4. | [Controls and Procedures](#a_010) | 44 |
| **[PART II — OTHER INFORMATION](#a_011)** | **[PART II — OTHER INFORMATION](#a_011)** |  |
| Item 1. | [Legal Proceedings](#a_012) | 45 |
| Item 1A. | [Risk Factors](#a_013) | 45 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_014) | 45 |
| Item 3. | [Defaults Upon Senior Securities](#a_015) | 45 |
| Item 4. | [Mine Safety Disclosures](#a_016) | 45 |
| Item 5. | [Other Information](#a_017) | 45 |
| Item 6. | [Exhibits](#a_018) | 46 |

---

**Cautionary Note Regarding Forward-Looking Information**

This Quarterly Report on Form 10-Q contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; volatility and other risks of cryptocurrencies; and the economy in general or the future of the agriculture technology industry, all of which were subject to various risks and uncertainties.

When used in this Quarterly Report on Form 10- Q and other reports, statements, and information we have filed with the Securities and Exchange Commission ("Commission" or "SEC"), in our press releases, in our periodic reports on Forms 10-K and 10-Q, in oral statements made by or with the approval of an executive officer, the words or phrases "believes," "may," "will," "expects," "should," "continue," "anticipates," "intends," "will likely result," "estimates," "projects" or similar expressions and variations thereof are intended to identify such forward-looking statements. However, any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors.

We do not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in this annual report. In this Quarterly Report on Form 10-Q, AgriFORCE Growing Systems Ltd. has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.

**PART I — FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**AGRIFORCE GROWING SYSTEMS LTD.**

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in US dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | Note | June 30, 2025 | December 31, 2024 |
|  |  | (Unaudited) | |
| **ASSETS** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash |  | $185313 | $489868 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Digital assets (including $321,405 of digital assets restricted as of June 30, 2025) |  | 724971 | 26282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivable |  | 184061 | 115520 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposit receivable |  | 58177 | 73849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 4 | 242620 | 314252 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 5 | 5961 | 5961 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current assets in discontinued operations | 3 | - | 281501 |
| &nbsp;&nbsp;&nbsp;Total current assets |  | 1401103 | 1307233 |
| **Non-current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 6 | 4807533 | 808895 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 7 | 7449223 | 7813576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 3 | 1535333 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease deposit |  | 50079 | 45224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long term assets in discontinued operations | 3 | - | 789055 |
| **Total assets** |  | $15243271 | $10763983 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 9 | $2892170 | $2484184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debentures | 10 | 7976752 | 1443209 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 13 |  | 293761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payable | 11 | 200000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current liabilities in discontinued operations | 3 | - | 99111 |
| **Total current liabilities** |  | 11068922 | 4320265 |
| **Non-current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities |  | 73630 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 13 |  | 191902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term loan | 12 | 41736 | 41699 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term liabilities in discontinued operations | 3 | - | 98864 |
| Total liabilities |  | $11184288 | 4652730 |
| Commitments and contingencies | 17 |  |  |
| **Shareholders' equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common shares, no par value per share - unlimited shares authorized; 420,901 and 172,255 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively\* | 14 | 68345760 | 65042657 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in-capital |  | 5777963 | 2964795 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligation to issue shares | 14 | 44214 | 44214 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit |  | (68987816) | (60782119) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss |  | (1121138) | (1158294) |
| Total shareholders' equity |  | 4058983 | 6111253 |
| **Total liabilities and shareholders' equity** |  | $15243271 | $10763983 |

---

\* reflects the 1:9 reverse stock split effected on July 28, 2025 and 1:100 reverse stock split effected on December 5, 2024.

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.

**AGRIFORCE GROWING SYSTEMS LTD.**

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(Expressed in US dollars)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **REVENUE** | $451955 | $41315 | $725209 | $41315 |
| **OPERATING EXPENSES** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue, excluding depreciation | $239210 | $33731 | $462854 | $33731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wages and salaries | 553793 | 330616 | 1158190 | 719220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting | 35178 | 83281 | 35177 | 186196 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 441142 | 159337 | 579642 | 329729 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office and administrative | 164398 | 285056 | 286351 | 580258 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investor and public relations | 41554 | 17366 | 110071 | 42646 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 318340 | 162941 | 593735 | 329939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation | 81333 | 38782 | 208499 | 64122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 29342 | 50598 | 75875 | 75826 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease expense | 4738 | 14406 | 13015 | 58576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Travel and entertainment | 5387 | 3475 | 21376 | 8158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder and regulatory | 43840 | 29485 | 119660 | 85449 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development |  | 509 |  | 4094 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance Expense | (19946) |  | 124983 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repairs and maintenance | 114723 |  | 200391 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-off of inventory |  |  |  | 38470 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bitcoin unrealized (gain) loss market valuation | (116702) | - | (80318) | - |
| Total operating expenses | 1936330 | 1209583 | 3909501 | 2556414 |
| **Operating loss** | (1484375) | (1168268) | (3184292) | (2515099) |
| **OTHER EXPENSES** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accretion of interest on debentures | 966284 | 838876 | 1937627 | 2203081 |
| &nbsp;&nbsp;&nbsp;Loss on conversion of convertible debt |  | 1119750 | (86563) | 1392482 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment (Note 8) | 4615255 | 1887936 | 4730640 | 2298369 |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities (Note 13) |  | (716695) | (2976911) | (692926) |
| &nbsp;&nbsp;&nbsp;Foreign exchange gain | 20553 | (32121) | 76712 | (86752) |
| &nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets |  |  |  | 4252 |
| &nbsp;&nbsp;&nbsp;Other income | (60624) | (33915) | (61148) | (73806) |
| Net loss from continuing operations | $(7025843) | $(4232099) | $(6804649) | $(7559799) |
| &nbsp;&nbsp;&nbsp;Loss from operations of discontinued component | (130287) |  | (496936) |  |
| &nbsp;&nbsp;&nbsp;Loss on disposal of discontinued operations | (904112) |  | (904112) |  |
| &nbsp;&nbsp;&nbsp;Net loss discontinued operations | (1034399) | - | (1401048) | - |
| **Net loss** | (8060242) | $(4232099) | (8205697) | $(7559799) |
| Other comprehensive loss |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation | - | (128744) | 37156 | (408649) |
| **Comprehensive loss attributable to common shareholders** | $(8060242) | $(4360843) | $(8168541) | $(7968448) |
| **Basic and diluted net loss per common share for continuing operations** | $(24.06) | $(83.03) | $(26.20) | $(290.57) |
| **Basic and diluted net loss per common share for discontinued operations** | $(3.54) | $(0.00) | $(5.39) | $(0.00) |
| **Basic and diluted net loss per common share, total** | $(27.60) | $(83.03) | $(31.59) | $(290.57) |
| **Weighted average number of common shares outstanding – basic and diluted\*** | 292021 | 50973 | 259722 | 26017 |

---

\* reflects the 1:9 reverse stock split effected on July 28, 2025 and 1:100 reverse stock split effected on December 5, 2024.

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.

**AGRIFORCE GROWING SYSTEMS LTD.**

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(Expressed in US dollars, except share numbers)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended June 30, 2025** | **For the three months ended June 30, 2025** | **For the three months ended June 30, 2025** | **For the three months ended June 30, 2025** | **For the three months ended June 30, 2025** | **For the three months ended June 30, 2025** | |
|  | Common shares | Common shares | | | | | |
|  | # of<br>Shares\* | <br>Amount | Additional<br>paid-in-<br>capital | Obligation<br>to issue<br>shares | <br>Accumulated<br>deficit | Accumulated other<br>comprehensive<br>income (loss) |<br>Total<br>&nbsp;&nbsp;&nbsp;&nbsp;shareholders'<br>equity |
| **Balance, April 1, 2025** | 193340 | $65446689 | $2964795 | $44214 | $(60927574) | $(1121138) | $6406986 |
| Shares issued for conversion of convertible debt | 193283 | 2517571 |  |  |  |  | 2517571 |
| Shares issued for executive compensation | 28722 | 322500 |  |  |  |  | 322500 |
| Shares issued for exercise of warrants | 5556 | 59000 |  |  |  |  | 59000 |
| Reclassification of derivative liabilities to additional-paid-in capital |  |  | 2771503 |  |  |  | 2771503 |
| Warrants issued with convertible debt |  |  | 41665 |  |  |  | 41665 |
| Net loss | - | - | - | - | (8060242) | - | (8060242) |
| **Balance, June 30, 2025** | 420901 | 68345760 | 5777963 | 44214 | (68987816) | (1121138) | 4058983 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30, 2025** | **For the six months ended June 30, 2025** | **For the six months ended June 30, 2025** | **For the six months ended June 30, 2025** | **For the six months ended June 30, 2025** | **For the six months ended June 30, 2025** | |
|  | Common shares | Common shares | | | | | |
|  | # of<br>Shares\* | <br>Amount | Additional<br>paid-in-<br>capital | Obligation<br>to issue<br>shares | <br>Accumulated<br>deficit | Accumulated other<br>comprehensive<br>loss |<br>Total<br>shareholders'<br>equity |
| **Balance, January 1, 2025** | 172255 | $65042657 | $2964795 | $44214 | $(60782119) | $(1158294) | $6111253 |
| Shares issued for conversion of convertible debt | 214369 | 2921603 |  |  |  |  | 2921603 |
| Shares issued for executive compensation | 28722 | 322500 |  |  |  |  | 322500 |
| Shares issued for exercise of warrants | 5556 | 59000 |  |  |  |  | 59000 |
| Reclassification of derivative liabilities to additional-paid-in capital |  |  | 2771503 |  |  |  | 2771503 |
| Warrants issued with convertible debt |  |  | 41665 |  |  |  | 41665 |
| Net loss |  |  |  |  | (8205697) |  | (8205697) |
| Foreign currency translation | - | - | - | - | - | 37156 | 37156 |
| **Balance, June 30, 2025** | 420901 | 68345760 | 5777963 | 44214 | (68987816) | (1121138) | 4058983 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended June 30, 2024** | **For the three months ended June 30, 2024** | **For the three months ended June 30, 2024** | **For the three months ended June 30, 2024** | **For the three months ended June 30, 2024** | **For the three months ended June 30, 2024** | |
|  | Common shares | Common shares | | | | | |
|  | # of<br> Shares\* | Amount | Additional<br>paid-in-<br> capital | Obligation<br>to issue<br> shares |<br>Accumulated<br> deficit | Accumulated<br> other<br>comprehensive<br> loss |<br>Total<br>shareholders'<br> equity |
| **Balance, April 1, 2024** | 25082 | $53880259 | $3456475 | $44214 | $(47835004) | $(606501) | $&nbsp;&nbsp;&nbsp;&nbsp;8939443 |
| Shares issued for conversion of convertible debt | 68339 | 6651170 |  |  |  |  | 6651170 |
| Shares issued for compensation | 258 | 20541 |  | 42218 |  |  | 62759 |
| Shares issued for consulting services | 17 | 2624 |  |  |  |  | 2624 |
| Shares issued on conversion of vested prefunded warrants | 7 | 530429 | (530429) |  |  |  |  |
| Share based compensation |  |  | 27837 |  |  |  | 27837 |
| Net loss |  |  |  |  | (4232099) |  | (4232099) |
| Foreign currency translation | - | - | - | - |  | (128744) | (128744) |
| **Balance, June 30, 2024** | 93703 | 61085023 | 2953883 | 86432 | (52067103) | (735245) | 11322990 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30, 2024** | **For the six months ended June 30, 2024** | **For the six months ended June 30, 2024** | **For the six months ended June 30, 2024** | **For the six months ended June 30, 2024** | **For the six months ended June 30, 2024** | |
|  | Common shares | Common shares | | | | | |
|  | # of<br>Shares\* | <br>Amount | Additional<br>paid-in-<br>capital | Obligation<br>to issue<br>shares | <br>Accumulated<br>deficit | Accumulated other<br>comprehensive<br>loss |<br>Total<br>shareholders'<br>equity |
| **Balance, January 1, 2024** | 6490 | $49828942 | $3472444 | $97094 | $(44507304) | $(326596) | $8564580 |
| Shares issued for conversion of convertible debt | 86665 | 10624607 |  |  |  |  | 10624607 |
| Shares issued for compensation | 383 | 73421 |  | (10662) |  |  | 62759 |
| Shares issued for consulting services | 158 | 27624 |  |  |  |  | 27624 |
| Shares issued on conversion of vested prefunded warrants | 7 | 530429 | (530429) |  |  |  |  |
| Share based compensation |  |  | 11868 |  |  |  | 11868 |
| Net loss |  |  |  |  | (7559799) |  | (7559799) |
| Foreign currency translation | - | - |  | - | - | (408649) | (408649) |
| **Balance, June 30, 2024** | 93703 | $61085023 | $2953883 | $86432 | $(52067103) | $(735245) | $11322990 |

---

\* reflects the 1:9 reverse stock split effected on July 28, 2025 and 1:100 reverse stock split effected on December 5, 2024.

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.

**AGRIFORCE GROWING SYSTEMS LTD.**

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in US Dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | | **For the Six months ended June 30,** | **For the Six months ended June 30,** |
|  | <br>Note | 2025 | 2024 |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss for the period |  | $(8205697) | $(7559799) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 593735 | 329939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation |  |  | 11868 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for consulting services |  |  | 27624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for compensation |  | 208499 | 62759 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs |  | 1912367 | 2149678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of power purchase agreement |  | 115297 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities | 13 | (2976911) | (692926) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on debt conversion | 10 | (86563) | 1392482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 10 | 4730640 | 2298369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of business | 3 | 904112 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets |  |  | 4252 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gains) losses on digital assets |  | (80318) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from digital assets production |  | (724678) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable |  |  | (8479) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposit receivable |  | 15672 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables |  | (76024) | 5652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 192422 | (24737) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories |  |  | 34236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities |  | 420895 | (225737) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease deposit asset |  |  | (18382) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities |  | - | (15336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities |  | (3056552) | (2228537) |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bald Eagle acquisition |  | (4765000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of equipment |  | (1024248) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of crypto assets |  | 105941 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities |  | (5683307) | - |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from debentures – net of discount | 10 | 8550000 | 2250000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of convertible debentures | 10 | (110000) | (802282) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from loan payable |  | 200000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from warrants |  | 59000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing costs of debentures | 10 | (157000) | (84463) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities |  | 8542000 | 1363255 |
| Effect of exchange rate changes on cash and cash equivalent |  | (106696) | (75800) |
| Change in cash |  | (304555) | (941082) |
| Cash, beginning of period |  | 489868 | 3878578 |
| Cash, end of period |  | $185313 | $2937496 |
| Supplemental cash flow information: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for interest |  |  | $53403 |
| Supplemental disclosure of non-cash investing and financing transactions |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("Fifth Tranche Warrants") |  | $- | $564000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of conversion feature of debentures ("Fifth Tranche Debentures") |  | $- | $359000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("Sixth Tranche Warrants") |  | $- | $242000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of conversion feature of debentures ("Six Tranche Debentures") |  | $- | $198000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("Seventh Tranche Warrants") |  | $- | $369000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of conversion feature of debentures ("Seventh Tranche Debentures") |  | $- | $297000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("January 2025 Tranche Warrants") |  | $3722310 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of conversion feature of debentures ("January 2025 Tranche Debentures") |  | $1012000 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("March 2025 Tranche Warrants") |  | $428350 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of conversion feature of debentures ("March 2025 Tranche Debentures") |  | $171000 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial fair value of debenture warrants ("May 2025 Tranche Warrants") |  | $41665 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for conversion of convertible debt |  | $2921603 | $10624607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification of derivative liabilities to equity |  | $2771503 | $- |

---

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended June 30, 2025 and 2024 (unaudited)

(Expressed in US Dollars, except where noted)

**1. NATURE OF OPERATIONS AND BASIS OF PREPARATION**

***Business Overview***

AgriFORCE Growing Systems Ltd. ("AgriFORCE™" or the "Company") was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of the *Business Corporations Act (British Columbia)* on December 22, 2017. The Company's registered and records office address is at 800 – 525 West 8<sup>th</sup> Avenue, Vancouver, British Columbia, Canada, V5Z 1C6.

The addition in 2024 of sustainable Bitcoin mining represents the first pillar in the Company's three pillar strategy to:

● Utilize its modular architecture to mine crypto currency, as well as to offer compute capabilities tailored for AI, edge computing, and sovereign data solutions;

● Continue developing and deploying mobile modular gas-to-power units for off-grid scalability, securing access to sizeable amounts of power; and

● Build a strategic digital reserve, accumulating up to 50% of Bitcoin mined and allocating up to 50% of new capital raised toward Bitcoin and potentially other purchases.

***Basis of Presentation***

The accompanying Unaudited Condensed Consolidated Interim Financial Statements and related financial information of AgriFORCE Growing Systems Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2024 and 2023 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on April 7, 2025. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America ("U.S. GAAP") for complete financial statements.

In the opinion of management, the accompanying interim financial statements contain all adjustments which are necessary to state fairly the Company's financial position as of June 30, 2025 and December 31, 2024, and the results of its operations and cash flows during the six months ended June 30, 2025 and 2024. Such adjustments are of a normal and recurring nature. The results for the six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2025, or for any future period.

***Liquidity and Management's Plan***

The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future. As reflected in the interim financial statements for the six months ended June 30, 2025, the Company had a net loss of $8.2 million, $3.1 million of net cash used in operating activities, and the Company had a working capital deficiency of $9.7 million.

The accompanying interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the development stage of its business plan. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company's ability to continue as a going concern. For the next twelve months from issuance of these interim financial statements, the Company plans to seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to our currently outstanding common shares. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company's ability to raise capital, management believes that there is substantial doubt in the Company's ability to continue as a going concern for twelve months from the issuance of these interim financial statements.

***Reverse Stock Split***

On July 28, 2025, the Company effected a one-for-nine reverse stock split of the Company's issued and outstanding common shares (the "Reverse Split"). As a result of the Reverse Split, every 9 shares of the Company's old common shares were converted into one share of the Company's new common shares. Fractional shares resulting from the Reverse Split were sold at the then prevailing price on the open market, with the proceeds being distributed on a pro-rata basis to the impacted stockholders. The Reverse Split automatically and proportionately adjusted all issued and outstanding shares of the Company's common shares, as well as convertible debentures, convertible features, prefunded warrants, stock options and warrants outstanding at the time of the date of the Reverse Split. The exercise price on outstanding equity-based grants was proportionately increased, while the number of shares available under the Company's equity-based plans was proportionately reduced. Share and per share data (except par value) for the periods presented reflect the effects of the Reverse Split. References to numbers of common shares and per share data in the accompanying financial statements and notes thereto for periods ended prior to July 28, 2025 have been adjusted to reflect the Reverse Split on a retroactive basis.

**2. SIGNIFICANT ACCOUNTING POLICIES**

***Recent Accounting Pronouncements***

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Start-ups Act of 2012, (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

In December 2023, the FASB issued ASU 2023-09, *"Income Taxes (Topic 740): Improvements to Income Tax Disclosures."* ASU 2023-09 requires companies to provide enhanced rate reconciliation disclosures, including disclosure of specific categories and additional information for reconciling items. The standard also requires companies to disaggregate income taxes paid by federal, state and foreign taxes. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The amendments are effective for the Company for the fiscal year ended December 31, 2025. The Company is currently evaluating the impact of adopting the standard.

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures* (Subtopic 220-40): Disaggregation of Income Statement Expenses. The requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures* (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

***Digital assets***

Bitcoin awarded to the Company through its mining activities is accounted for in connection with the Company's revenue recognition policy.

Digital assets are classified on the Company's condensed consolidated interim balance sheet as a current asset due to the Company's ability to sell it in a highly liquid marketplace and its intent to liquidate a portion of its Bitcoin to support operations as needed. The Company measures digital assets at fair value with changes recognized in operating expenses in the condensed consolidated interim statement of operations. The Company tracks its cost basis of digital assets in accordance with the first-in-first-out ("FIFO") method of accounting.

Sales of Bitcoin by the Company are typically included within the investing activities on the condensed consolidated interim statement of cash flows since such Bitcoin is typically not sold nearly immediately after being produced. The Company will monitor its cash needs and sell Bitcoin in the future to fund its cash expenditures as needed. The aggregate cost basis of the Company's Bitcoin as of June 30, 2025 was $644,353 (December 31, 2024 - $25,246). The Company held 6.8 BTC as of June 30, 2025 (December 31, 2024 – 0.3). In June 2025 the Company sold one (1) BTC for $105,941 (December 31, 2024 – nil).

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
|  | Quantity | Cost Basis | Fair Value | Quantity | Cost Basis | Fair Value |
| **Bitcoin** | 6.76743 | $644353 | $724971 |  |  |  |

---

The following table presents information regarding the mining operations including production and sales of mined Bitcoin,

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** |
|  | Quantity | Cost Basis Amount | Quantity | Amount |
| **Balance as of December 31, 2024** | 0.27022 | $25246 |  |  |
| **Additions from crypto mining** | 7.49598 | 724678 |  |  |
| **Disposition from sale** | (1.00119) | (105571) |  |  |
| **Balance as of June 30, 2025** | 6.76743 | $644353 |  |  |

---

Bitcoin had a market price of $107,135 on June 30, 2025.

Bitcoin had a market price of $82,549 on March 31, 2025.

In addition, the Company has pledged three (3) BTC as collateral for the loan as of June 30, 2025 (see Note 11).

***Impairment of Long-Lived Assets***

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. To determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available ("asset group"). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach or cost approach. The reversal of impairment losses is prohibited.

***Inventories***

Inventories consist of finished goods of milled flour and related packaging material recorded at the lower of cost or net realizable value with the cost measured using the average cost method. Inventories include all costs that relate to bringing the inventory to its present condition and location under normal operating conditions.

***Property and Equipment***

Property and equipment are initially recognized at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the Company's management. Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses.

Depreciation is recognized on a straight-line basis to write down the cost less estimated residual value of computer equipment and furniture and fixtures.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in profit or loss within other income or other expenses.

***Revenue Recognition***

The Company recognizes revenue in accordance with ASC 606. The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects 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 the Company satisfies a performance obligation.

In order to identify the performance obligations in a contract with a customer, an entity 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).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

● Variable consideration

● Constraining estimates of variable consideration

● The existence of a significant financing component in the contract

● Noncash consideration

● Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis.

The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate.

The Company earns revenue from the production of digital assets through mining activities. This revenue represents proceeds received from participating in a third-party operated bitcoin mining pool. When the Company is a participant in a third-party operated mining pool, the Company provides a service to perform hash calculations to the third-party pool operators.

The Company is entitled to non-cash compensation in the form of bitcoin based on the pool operator's payout model, which is the Full-Pay-Per-Share ("FPPS") model, under which the pool pays out block rewards and transaction fees, less mining pool fees. The Company is entitled to such non-cash consideration even if a block is not successfully validated by the mining pool operators.

The Company considers the third-party mining pool operator to be its customer under ASC 606. Contract inception and the Company's enforceable right to consideration begins when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract within 24 hours' notice without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates.

The Company's sole performance obligation is to provide hash calculations to the third-party pool operators. Accordingly, the entire transaction price is allocated to such performance obligation. The Company measures the non-cash consideration (bitcoin) it receives is based on the simple average daily spot rate of bitcoin determined using the Company's primary trading platform for bitcoin on the day of contract inception. The Company recognizes 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.

Expenses associated with providing bitcoin transaction verification services, such as hosting fees, electricity costs, and related fees are recorded as cost of revenues. Digital assets received are recorded as digital assets. Cash flows from selling digital assets are typically included within the investing activities on the condensed consolidated interim Statement of Cash Flows.

The Company evaluates and accounts for its digital assets in accordance with ASU 2023-08, *Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60)*, the Company measures digital assets at fair value with changes recognized in operating expenses. The Company applies the first-in-first-out method of accounting to its digital assets and tracks the cost basis of the crypto asset by wallet.

Product revenue in 2024 was limited to sales from hydroxyl generators. We recognized product revenue when we satisfied performance obligations by transferring control of the promised products or services to customers. Product revenue was recognized at a point in time when control of the promised good or service was transferred to the customer, which was at the point of shipment or delivery of the goods.

***Convertible Instruments***

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging ("ASC 815"), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of Conventional Convertible Debt Instrument". Accordingly, the Company records, when necessary, discounts to convertible notes for the fair value of conversion options embedded in debt instruments. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. ASC 815 provides that, among other things, generally, if an event is not within the entity's control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

***Foreign Currency Transactions***

The financial statements of the Company and its subsidiaries whose functional currencies are the local currencies are translated into USD for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders' equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries' accounts are included in "Accumulated other comprehensive loss" as equity in the consolidated balance sheets. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the reporting currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within non-operating expenses. As of April 1, 2025, the functional currency of the Company was changed from Canadian dollars ("CAD") to USD due to a change in the primary economic environment in which the Company operates. The majority of the Company's executive leadership and operations are located in the United States. The majority of revenue generation, expenditures, cash flows, financing, and contractual terms are denominated in USD.

***Definite Lived Intangible Assets***

Definite lived intangible assets consist of a granted patent and intangible assets acquired from an acquisition. Amortization is computed using the straight-line method over the estimated useful life of the asset (Note 7).

***Loss per Common Share***

The Company presents basic and diluted loss per share data for its common shares. Basic loss per common share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. The number of common shares used in the loss per shares calculation includes all outstanding common shares plus all common shares issuable for which there are no conditions to issue other than time. Diluted loss per common share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all potentially dilutive share equivalents, such as stock options and warrants and assumes the receipt of proceeds upon exercise of the dilutive securities to determine the number of shares assumed to be purchased at the average market price during the year.

Loss per common share calculations for all periods have been adjusted to reflect the reverse stock splits effected on December 5, 2024 and July 28, 2025.

***Fair Value Accounting***

The fair value of the Company's accounts receivable, accounts payable and other current liabilities approximate their carrying amounts due to the relatively short maturities of these items.

As part of the issuance of debentures on June 30, 2022, January 17, 2023, October 18, 2023, November 30, 2023, February 21, 2024, April 11, 2024, May 22, 2024, January 16, 2025, and March 21, 2025 as well as the private placements on June 20, 2023 and October 15, 2024, the Company issued warrants having strike prices denominated in USD. This creates an obligation to issue shares for a price that is not denominated in the Company's functional currency and renders the warrants not indexed to the Company's stock, and therefore, must be classified as a derivative liability and measured at fair value at the end of each reporting period. On the same basis, the Series A Warrants and the representative warrants issued as part of the IPO are also classified as a derivative liability and measured at fair value. As of April 1, 2025, the Company changed its functional currency to USD. The strike prices of the warrants and the Company's functional currency are both denominated in USD. The Company reassessed that the warrants met the classification criteria to be recorded as equity and the warrants were reclassified to additional-paid-in capital.

The fair value of the Company's warrants is determined in accordance with FASB ASC 820, "Fair Value Measurement," which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories:

● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities.

● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

**3. ACQUISITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Radical Clean Solutions Acquisition** 

On August 16, 2024, the Company completed the acquisition of assets of Radical Clean Solutions, Inc. ("RCS"), effectively increasing its interest from 14% to 100%, and providing the Company control over RCS. The RCS technology is a product line consisting of patent-pending "smart hydroxyl generation systems" focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds ("VOCs") and allergy triggers. As the Company's investment in RCS does not have a readily determinable fair value, the Company previously elected to account for its 14% interest in RCS at cost, less impairment. The Company recognized a loss on the investment of $97,488 during the year ended December 31, 2024.

The following table summarizes the consideration transferred to acquire RCS and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

SCHEDULE OF IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

---

| | |
|:---|:---|
| Note payable forgiven | $202093 |
| Convertible debentures repaid on behalf of RCS | 153986 |
| Common shares | 295000 |
| Contingent consideration | 79000 |
| Previously invested equity | 118850 |
| Purchase price | $848929 |

---

---

| | |
|:---|:---|
|  | **August 16, 2024** |
| Purchase price | $848929 |
| Assets acquired |  |
| &nbsp;&nbsp;&nbsp;In-process research and development | 300000 |
| &nbsp;&nbsp;&nbsp;Trademark | 10000 |
| &nbsp;&nbsp;&nbsp;Brand logo | 10000 |
| &nbsp;&nbsp;&nbsp;Web domain | 10000 |
| &nbsp;&nbsp;&nbsp;Customer list | 138000 |
| &nbsp;&nbsp;&nbsp;Device firmware and software | 50000 |
| &nbsp;&nbsp;&nbsp;Blueprints | 20000 |
| Fair value of identified net assets acquired | 538000 |
| Goodwill acquired on acquisition | $310929 |

---

The acquisition of RCS includes a contingent consideration arrangement that requires additional consideration to be paid by AgriFORCE to a previous owner of RCS who now serves as a Consultant to AgriFORCE (the "Consultant"). The Consultant is entitled to receive commissions on sales and production of RCS Units, which are payable in cash upon receipt of revenue or completed inventory by the Company. The consultant is also entitled to other manufacturing, sales and product development milestones, which are outlined below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Completion of wall mount design

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Completion of patent prosecution for any of the patent applications heretofore provided to Company or any new U.S. patent applications

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Execute distribution agreements for other countries or verticals

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Production of 250 RCS units

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Production of 500 RCS units

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Production of 1,000 RCS units

The Consultant is entitled to be awarded 250 restricted common shares of the Company for meeting each milestone.

The Consultant is also entitled to restricted stock units ("RSUs") provided certain conditions are met.

The goodwill is attributable to the acquisition of the RCS technologies, synergies, access to their key vendors, and other non-quantifiable assets which are expected to create growth and diversification opportunities for the Company.

Prior to the acquisition, the Company had a preexisting relationship with RCS. The Company was a 14% investor of RCS and held a receivable of $200,000 for a secured loan note issued to RCS. As part of the acquisition terms, the receivable amount of $200,000 funded the purchase price consideration and was deemed settled.

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company accrued a loss on disposal of the RCS business, which is reflected on the condensed consolidated statement of operations as a loss on disposal of business of $904,112.

Details of the assets and liabilities of discontinued operations are as follows:

SCHEDULE OF ASSETS AND LIABILITIES DISCONTINUED OPERATIONS

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Carry amounts of major classes of assets included as part of discontinued operations |  |  |
| Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | $- | $245019 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | - | 36482 |
| &nbsp;&nbsp;&nbsp;Total current assets in discontinued operations | - | 281501 |
| Non-current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net |  | 494114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | - | 294941 |
| Total long-term assets in discontinued operations | $- | $789055 |
| Carry amounts of major classes of liabilities included as part of discontinued operations |  |  |
| Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $- | $99111 |
| Total current liabilities in discontinued operations | - | 99111 |
| Non-current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | - | 98864 |
| Long-term liabilities in discontinued operations | $- | 98864 |

---

The details of the component information of the discontinued operations are disclosed under columns Radical Clean Solutions in segment reporting information in Note 18.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Redwater Acquisition** 

The purchase price was allocated based on the relative fair value of the assets acquired as follows:

SCHEDULE OF FAIR VALUE OF THE ASSETS ACQUIRED

---

| | |
|:---|:---|
| **Assets Acquired:** | **Fair Value** |
| S19J Pro Bitmain ASIC Miners | $102812 |
| Natural Gas Power Plant | 566009 |
| Power Purchase Agreement | 673769 |
| Bitcoin Mining Facility and Infrastructure | 171116 |
|  | $1513706 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Bald Eagle Acquisition** 

The following pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024.

SCHEDULE OF UNAUDITED PRO FORMA INFORMATION

---

| | | |
|:---|:---|:---|
|  | Proforma for the three months ended June 30, | Proforma for the three months ended June 30, |
|  | 2025 | 2024 |
| Revenue | $451955 | $448068 |
| Net loss | $8060242 | $4044943 |

---

---

| | | |
|:---|:---|:---|
|  | Proforma for the six months ended June 30, | Proforma for the six months ended June 30, |
|  | 2025 | 2024 |
| Revenue | $795478 | $1084743 |
| Net loss | $8205815 | $7346149 |

---

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net loss position.

These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results of Bald Eagle to reflect the additional amortization that would have been charged assuming the fair value adjustments to the intangible assets had been applied from January 1, 2025, with the consequential tax effects.

The following table summarizes the consideration transferred to acquire Bald Eagle and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

SCHEDULE OF CONSIDERATION TRANSFERRED TO ACQUIRE AND IDENTIFY ASSETS ACQUIRED AND LIABILITIES ASSUMED

---

| | |
|:---|:---|
|  | **January 17, 2025** |
| Cash consideration | $3550000 |
| Option payment | 1215000 |
| Purchase price | $4765000 |

---

---

| | |
|:---|:---|
| Assets acquired |  |
| &nbsp;&nbsp;&nbsp;S19J Pro Bitmain ASIC Miners | $746159 |
| &nbsp;&nbsp;&nbsp;Natural gas power generators | 1671586 |
| &nbsp;&nbsp;&nbsp;Transformers | 131878 |
| &nbsp;&nbsp;&nbsp;Data centers | 609554 |
| &nbsp;&nbsp;&nbsp;Shipping containers | 13744 |
| &nbsp;&nbsp;&nbsp;Standby generators | 66090 |
| Fair value of identified net assets acquired | $3239012 |
| Goodwill | $1525988 |

---

As at June 30, 2025, the Goodwill balance was $1,535,333 (foreign exchange gain of $9,345).

**4. PREPAID EXPENSES AND OTHER CURRENT ASSETS**

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Legal retainer | $68504 | $30976 |
| Prepaid expenses | 83575 | 3034 |
| Inventory and equipment advances | 37337 | 227087 |
| Purchase prepayments | 53204 | 53155 |
|  | $242620 | $314252 |

---

**5. INVENTORIES**

As of June 30, 2025, the Company had $5,961 inventory (December 31, 2024 – $42,443) in finished goods.

**6. PROPERTY AND EQUIPMENT**

Property and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Computer equipment and software | $805211 | $835142 |
| Bitminers | 1875483 |  |
| Natural gas power generators and spare parts | 1682066 |  |
| Transformers and Generators | 752502 |  |
| Furniture and fixtures | - | 2358 |
| Total property and equipment | 5115262 | 837500 |
| Less: accumulated depreciation | (307729) | (28605) |
| Property and equipment, net | $4807533 | $808895 |

---

Depreciation expense on property and equipment for the six months ended June 30, 2025 was $285,663 (June 30, 2024 - $329,939), for the three months ended June 30, 2025 was $164,584 (June 30, 2024 $162,941). During the six months ended June 30, 2024, the Company disposed of property and equipment which resulted in a loss of $4,252. There was no disposals in 2025.

**7. INTANGIBLE ASSETS**

SCHEDULE OF INTANGIBLE ASSET

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Manna IP | $7354403 | $7347757 |
| Power Purchase Agreement | 511106 | 625736 |
| Total intangible assets | 7865509 | 7973493 |
| Less: accumulated amortization | (416286) | (159917) |
| Intangible assets, net | $7449223 | $7813576 |

---

Intangible assets include $6,938,117 (December 31, 2024 - $7,209,118) for intellectual property ("Manna IP") acquired under an asset purchase agreement with Manna Nutritional Group, LLC ("Manna") dated September 10, 2021. The Manna IP encompasses patented technologies to naturally process and convert grains, pulses, and root vegetables, into low-starch, low-sugar, high-protein, fiber-rich baking flour products, as well as a wide range of breakfast cereals, juices, natural sweeteners, and baking enhancers. The Company paid $1,475,000 in cash and issued 1,476 prefunded warrants valued at $12,106,677 (the "Purchase Price"). Subject to a 9.99% blocker and SEC Rule 144 restrictions, the prefunded warrants vested in tranches up until March 10, 2024, at which time all tranches were fully vested. When vested the tranches of prefunded warrants became convertible into an equal number of common shares.

The asset was available for use on January 3, 2023. The asset has a useful life of 20 years. The Company recorded $277,524 in amortization expense related to the Manna IP for the six months ended June 30, 2025 (June 30, 2024- $326,242), and $138,762 for the three months ended June 30, 2025 (June 30, 2024 $161,947).

The Company acquired intangible assets from RCS as part of the business combination (Note 3). The following intangible assets were acquired from RCS:

SCHEDULE OF INTANGIBLE ASSETS ACQUIRED FROM RCS

---

| | | |
|:---|:---|:---|
|  | **Weighted Average**<br> **Useful Life (Years)** | |
| In-process research and development | Term of the patent | $300000 |
| Trademark | 10 | 10000 |
| Brand logo | 10 | 10000 |
| Web domain | 5 | 10000 |
| Customer list | 5 | 138000 |
| Device firmware and software | 5 | 50000 |
| RCS blueprints | 5 | 20000 |
|  |  | $538000 |

---

The Company recorded $30,548 (June 30, 2024 - $Nil) in amortization expense, and a foreign exchange loss of $nil (June 30, 2024 - $Nil) related to the RCS assets for the six months ended June 30, 2025. The Company recorded $15,274 (June 30, 2024 - $Nil) in amortization expense, and a foreign exchange loss of $Nil (June 30, 2024 - $Nil) related to the RCS assets for the three months ended June 30, 2025

As of June 30, 2025, the Company recorded the disposal of the RCS assets due to the mutual agreement to return the RCS assets to the seller which resulted in a loss on disposal of business of $904,112 (Note 3). The Company reclassified the assets and liabilities of RCS to assets held for sale and liabilities held for sale. The Company reclassified the revenues and expenses of RCS to net loss from discontinued operations.

The Company acquired an intangible asset from the acquisition of Redwater, as part of the asset acquisition (note 3). The Power Purchase Agreement between the Company and Rivogenix, allows the Company to obtain natural gas for its Natural Gas Power Plant. The Power Purchase Agreement was determined to be a favorable contract asset, and as such was recorded as an intangible asset at the present value of the contractual benefit. The period of the contract has been determined to be 3 years. As of June 30, 2025, 2.5 years remain on the contract. The fair value of the Power Purchase Agreement Contract as of June 30, 2025 is $511,106 (December 31, 2024 - $625,736). The Company recognized $124,531 in amortization expense (reflected in cost of sales) during the six months ended June 30, 2025 and $62,919 for the three months ended June 30, 2025 (June 30, 2024 - $Nil) in relation to the Power Purchase Agreement.

The estimated annual amortization expense for the next five years are as follows:

SCHEDULE OF FUTURE AMORTIZATION EXPENSE

---

| | |
|:---|:---|
| **Period ending:** | **Amount** |
| Remaining 2025 | $401021 |
| 2026 | 780315 |
| 2027 | 739138 |
| 2028 | 555049 |
| 2029 | 555049 |
| Subsequent years | 4418651 |
| Total | $7449223 |

---

**8. INVESTMENT**

On June 18, 2023, the Company signed a memorandum of understanding ("MOU") with Radical Clean Solutions Ltd. ("RCS") to purchase common shares issued by RCS. The Company paid RCS $225,000 for 14% of the issued and outstanding common shares of the Company. Under the terms of the MOU, the use of proceeds is exclusively for the advance purchase of hydroxyls generating devices for commercial sales into controlled environment agriculture, food manufacturing, warehousing and transportation verticals. The Company was to receive one of five board of director seats of RCS and had a right of first refusal to maintain an ownership percentage in RCS of not less than 10% of the total issued and outstanding common shares. On October 1, 2023 the Company and RCS signed a definitive agreement to convert the advance into a 14% ownership investment in RCS.

On August 16, 2024, the Company acquired the assets of RCS as part of a business combination. The investment in RCS was accounted for as part of the step-acquisition accounting (Note 3).

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company accrued a loss on disposal of the RCS business, which is reflected on the condensed consolidated statement of operations as a loss on disposal of business which resulted in a loss on disposal of business of $904,112.

**9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Accounts payable | $1926834 | $597057 |
| Accrued expenses | 965336 | 1887127 |
|  | $2892170 | $2484184 |

---

**10. DEBENTURES**

On June 30, 2022, the Company executed the definitive agreements (the "Purchase Agreements") with arm's length accredited institutional investors (the "Investors") for $14,025,000 in debentures with a 10% original issue discount for gross proceeds of $12,750,000 ("First Tranche Debentures"). The First Tranche Debentures were convertible into common shares at $11,100.00 per share. In addition, the Investors received 91 warrants at a strike price of $12,210.00, which expire on December 31, 2025 (the "First Tranche Warrants"). The First Tranche Warrants and First Tranche Debentures each have down round provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The First Tranche Warrants strike price, and the First Tranche Debenture conversion price will be adjusted down to the effective conversion price of the issued equity instruments. The transaction costs incurred in relation to first tranche were $1,634,894. The Debentures are senior to all other indebtedness or claims in right of payment, other than indebtedness secured by purchase money security interested.

The Investors had the right to purchase additional tranches of $5,000,000 each, up to a total additional principal amount of $33,000,000.

On January 17, 2023, the Investors purchased additional debentures totaling $5,076,923 with a 10% original issue discount for gross proceeds of $4,615,385 (the "Second Tranche Debenture"). The Second Tranche Debentures were convertible into common shares at $6,200.00 per share and the Investors received an additional 59 warrants at a strike price of $6,200.00, which expire on December 31, 2025 (the "Second Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First Tranche Debentures and the First Tranche Warrants to $6,200.00. The transaction costs incurred in relation to second tranche were $325,962.

On June 26, 2023, the Company entered into waiver and amendment agreements ("Debenture Modification Agreements") with the Investors to modify terms of the Purchase Agreements. The Debenture Modification Agreements provide as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. The
 July 1, 2023 interest and principal payments will be settled with the Company's Common Shares

2. The
 Conversion Price has been reduced to the lower of $2,250.00 or the price of subsequent dilutive issuances under the Company's
 ATM program.

3. 100 %
 of ATM proceeds up to $1 million USD may be kept by Company, while any dollar amount over this threshold will be distributed 33 %
 to the Company and 67 % to the Investors.

4. The
 minimum tranche value for Additional Closings has been reduced from $5.0 million to $2.5 million.

5. The
 Investors have each agreed to raise no objection to one or more private placements of securities by the Company with an aggregate
 purchase price of up to $1,000,000 at a purchase price of at least $1,250.00 per common share and two-year warrant (with a per share exercise price of $2,500.00 ,
 and no registration rights).

6. The
 Company may not prepay any portion of the principal amount of this Debenture without the prior written consent of the Investor; However
 the Company must apply the approved or percentage of approved gross proceeds from the sale of its Common Stock from an at-the-market
 offering to prepay this Debenture (pro-rated among all Debentures) and shall be permitted to prepay the Debentures notwithstanding
 any contrary provision of this Debenture or the Purchase Agreement.

On August 9, 2023, the Company entered into another waiver and amendment agreement ("Agreement") with the Investors with respect to a certain Senior Convertible Debenture (the "Debentures") due July 17, 2025 issued by the Company to that Investor. The Agreement provides as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. The
 Company wishes to make Monthly Redemptions in shares of the Company's Common Stock in lieu of cash payments, until further
 written notice from the Company to the Purchaser.

2. The
 Purchaser is willing to accept such shares as payment of the Monthly Redemption Amount provided that the Equity Conditions are met;
 and will consider on a case-by-case basis accepting payments in shares of Common Stock if the Equity Conditions are not met, at its
 sole discretion. The Company may inquire of the Purchaser at least five (5) Trading Days prior to a Monthly Redemption Date whether
 the Purchaser is willing to accept Shares without the Equity Conditions having been met. An email reply from the Purchaser shall
 be sufficient evidence of such monthly waiver.

&nbsp;&nbsp;&nbsp;&nbsp;3. The
 Purchaser will accept the August 1, 2023 Monthly Redemption Amount in shares of Common Stock valued at the August 1 Repayment Price
 for such date.

On October 18, 2023, the Investors purchased additional debentures totaling $2,750,000 with a 10% original issue discount for gross proceeds of $2,500,000 (the "Third Tranche Debenture"). The Third Tranche Debentures were convertible into common shares at $2,358.00 per share and the Investors received an additional 689 warrants at a strike price of $2,358.00, which expire on April 18, 2027 (the "Third Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First and Second Tranche Debentures and the First and Second Tranche Warrants to $2,358.00. The transaction costs incurred in relation to third tranche were $31,915.

On November 30, 2023, the Investors purchased additional debentures totaling $2,750,000 with a 10% original issue discount for gross proceeds of $2,500,000 (the "Fourth Tranche Debenture"). The Fourth Tranche Debentures were convertible into common shares at $810.00 per share and the Investors received an additional 2,207 warrants at a strike price of $810.00, which expire on May 30, 2027 (the "Fourth Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second and Third Tranche Debentures and the First, Second and Third Tranche Warrants to $810.00. The transaction costs incurred in relation to fourth tranche were $30,040.

On February 21, 2024, the Investors purchased additional debentures totaling $1,100,000 with a 10% original issue discount for gross proceeds of $1,000,000 (the "Fifth Tranche Debenture"). The Fifth Tranche Debentures were convertible into common shares at $192.60 per share and the Investors received an additional 3,712 warrants at a strike price of $211.86, which expire on August 21, 2027 (the "Fifth Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third and Fourth Tranche Debentures and the First, Second, Third and Fourth Tranche Warrants to $211.86. The transaction costs incurred in relation to fifth tranche were $50,000.

On April 11, 2024, the Investors purchased additional debentures totaling $550,000 with a 10% original issue discount for gross proceeds of $500,000 (the "Sixth Tranche Debenture"). The Sixth Tranche Debentures were convertible into common shares at $146.70 per share and the Investors received an additional 2,437 warrants at a strike price of $162.00, which expire on October 11, 2027 (the "Sixth Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third, Fourth and Fifth Tranche Debentures and Warrants to $162.00. The transaction costs incurred in relation to sixth tranche were $31,309.

On May 22, 2024, the Investors purchased additional debentures totaling $833,000 with a 10% original issue discount for gross proceeds of $750,000 (the "Seventh Tranche Debenture"). The Seventh Tranche Debentures were convertible into common shares at $90.00 per share and the Investors received an additional 6,016 warrants at a strike price of $11.00, which expire on November 22, 2027 (the "Seventh Tranche Warrants"). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third, Fourth, Fifth and Sixth Tranche Debentures and the First, Second, Third, Fourth, Fifth and Sixth Tranche Warrants to $90.00. The transaction costs incurred in relation to seventh tranche were $3,154.

On January 16, 2025, institutional investors purchased additional debentures totaling $7,700,000 with a 10% original issue discount for gross proceeds of $7,000,000 (the "January 2025 Debenture"). The January 2025 Tranche Debentures were convertible into common shares at $23.58 per share and the Investors received an additional 212,256 warrants at a strike price of $25.938 (the "January 2025 Warrants"). The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Warrants to $23.58. The transaction costs incurred in relation to January 2025 tranche were $290,000 ($145,000 paid as of June 30, 2025).

On March 21, 2025, Investors purchased an additional tranche of $1,320,000 with a 10% original issue discount for gross proceeds of $1,188,000 (the "March 2025 Tranche Debenture"). The March 2025 Tranche Debentures were convertible into common shares at $1.99 per share and the Investors received an additional 47,906 warrants at a strike price of $17.91 (the "March 2025 Warrants"). The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, Seventh, and January 2025 Tranche Warrants to $17.91.

On May 21, 2025, an investor purchased an additional tranche of $110,000 with a 10% original issue discount for gross proceeds of $100,000 (the "May 2025 Tranche Debenture"). The May 2025 Tranche Debentures were convertible into common shares at $17.91 per share and the Investors received an additional 4,889 warrants at a strike price of $17.91 (the "May 2025 Warrants").

The First, Second, Third, Fourth, Fifth, Sixth and Seventh Tranche Debentures (the "Debentures") have an interest rate of 5% for the first 12 months, 6% for the subsequent 12 months, and 8% per annum thereafter. Principal repayments will be made in 25 equal installments which began on September 1, 2022 for the First Tranche Debentures, July 1, 2023 for the Second Tranche Debentures, January 1, 2024 for the Third Tranche Debentures, May 1, 2024 for the Fourth Tranche Debentures, August 1, 2024 for the Fifth Tranche Debentures, October 1, 2024 for the Sixth Tranche Debentures and November 1, 2024 for the Seventh Tranche Debentures. The Debentures may be extended by nine months at the election of the Company by paying a sum equal to nine months' interest on the principal amount outstanding at the end of the 18<sup>th</sup> month, at the rate of 8% per annum.

The January 2025, March 2025, and May 2025 Tranche Debentures (the "2025 Debentures") have an interest rate of 5% for the first 12 months, and 8% per annum thereafter. Principal repayments will be made in 25 equal installments which begin on April 1, 2025 for the January 2025 Tranche, July 1, 2025 for the March 2025 Tranche Debenture, and September 1, 2025 for the May 2025 Tranche. The maturity dates are January 17, 2026, March 21, 2026, and May 21, 2026 for the January 2025 tranche, March 2025, and May 2025 tranche respectively, at which time the outstanding debt balance is due. The 2025 Debentures may be extended by six months to July 16, 2026 for the January 2025 Tranche Debentures, September 21, 2026 for the March 2025 Tranche Debentures, and November 21, 2025 for the May 2025 debentures at the election of the Company by paying a sum equal to six months interest at the principal amount outstanding at the end of the 12<sup>th</sup> month, at the rate of 8% per annum.

On April 22, 2025, the Company issued a promissory note (the "April 2025 Note") with an arm's length accredited investor (the "Holder") for $290,000 in debentures with a $40,000 original issue discount for gross proceeds of $250,000. The interest rate is 12% applied on the issuance date to the principal amount of $290,000.

The following table summarizes our outstanding debentures as of the dates indicated:

SCHEDULE OF OUTSTANDING DEBENTURES

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Maturity** | **Interest Rate** | **June 30, 2025** | **December 31, 2024** |
| Principal (First Tranche Debentures) | 12/31/2024 | 5.00% - 8.00% | $25000 | $25000 |
| Principal (Second Tranche Debentures) | 07/17/2025 | 5.00% - 8.00% | 25000 | 25000 |
| Principal (Fourth Tranche Debentures) | 06/01/2026 | 5.00% - 8.00% | 206562 | 1485714 |
| Principal (January 2025 Tranche Debentures) | 01/16/2026 | 5.00% - 8.00% | 6598017 |  |
| Principal (March 2025 Tranche Debentures) | 03/21/2026 | 5.00% - 8.00% | 1320000 |  |
| Principal (April 2025 Note) | 04/15/2026 | 12% | 290000 |  |
| Principal (May 2025 Tranche Debentures) | 5/21/2026 | 5.00% - 8.00% | 110000 |  |
| Debt issuance costs and discounts (Note 10 & 13) |  |  | (597827) | (92505) |
| Total Debentures (current) |  |  | $7976752 | $1443209 |

---

During the six months ended June 30, 2025, the Investors converted $2,420,492 of the Debentures into shares of the Company. The conversions were determined to be an extinguishment of the existing debt and issuance of new debt. As a result, the Company recorded a loss on debt extinguishment in the amount of $4,730,640.

During the six months ended June 30, 2024, the Investors converted $5,467,932 of the Debentures into shares of the Company. The conversions were determined to be an extinguishment of the existing debt and issuance of new debt for the remaining First and Second Tranches. As a result, the Company recorded a loss on debt extinguishment in the amount of $2,298,369.

**11. LOAN**

In May 2025, the Company entered into a Master Loan Agreement (the "loan") with BitGo Prime, LLC for a total of $200,000, collateralized by three (3) BTC. The loan bears interest at a rate of 11% per annum, with maturity date of August 31, 2025.

As of June 30, 2025, the aggregate outstanding balance on the loan was $200,000, The loan includes provisions requiring the collateral to be balanced against the outstanding borrowings.

**12. LONG TERM LOAN**

During the year ended December 31, 2020, the Company entered into a loan agreement with Alterna Bank for a principal amount of $27,824 (CAD$40,000) (December 31, 2024 - $27,799 (CAD$40,000)) under the Canada Emergency Business Account Program (the "Program").

The Program, as set out by the Government of Canada, requires that the funds from this loan shall only be used by the Company to pay non-deferrable operating expenses including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

In April 2021, the Company applied for an additional loan with Alterna Bank under the Program and received $13,912 (CAD$20,000) (December 31, 2024 - $13,900 (CAD$20,000)). The expansion loan is subject to the original terms and conditions of the Program.

The loan was interest free for an initial term that ended on January 18, 2024. Any outstanding loan after initial term carries an interest rate of 5% per annum, payable monthly during the extended term i.e. January 19, 2024 to December 31, 2025. The loan is due December 31, 2026.

The balance as of June 30, 2025 was $41,736 (CAD $60,000) (December 31, 2024 was $41,699 (CAD $60,000)).

**13. DERIVATIVE LIABILITIES**

*Warrant Liabilities*

As of April 1, 2025, the Warrant Liabilities consisting of 91 First Tranche Warrants, 59 Second Tranche Warrants, 689 Third Tranche Warrants, 2,207 Fourth Tranche Warrants, 3,712 Fifth Tranche Warrants, 2,437 Sixth Tranche Warrants, 6,016 Seventh Tranche Warrants, 212,256 January 2025 Tranche Warrants, 47,907 March 2025 Tranche Warrants, and 44,000 May 2025 Tranche Warrants ("Debenture Warrants") were reclassified to equity due to the change in the Company's functional currency (Note 2).

As of June 30, 2025, the First Tranche Warrants had a fair value that amounted to $761 recorded in additional paid-in capital (December 31, 2024 - $24,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the First Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 90.0%), risk free rate of return 3.90% (December 31, 2024 – 4.16%), and expected term of 0.75 years (December 31, 2024 – expected term of 1 year).

As of June 30, 2025, the Second Tranche Warrants had a fair value that amounted to $591 recorded in additional paid-in capital (December 31, 2024 - $15,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Second Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 95.0%), risk free rate of return 3.72% (December 31, 2024 – 4.21%), and expected term of 1.80 years (December 31, 2024 – expected term of 1.55 years).

As of June 30, 2025, the Third Tranche Warrants had a fair value that amounted to $4,230 recorded in additional paid-in capital (December 31, 2024 - $192,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Third Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 95.0%), risk free rate of return 3.89% (December 31, 2024 – 4.26%), and expected term 2.05 years (December 31, 2024 – expected term of 2.30 years).

As of June 30, 2025, the Fourth Tranche Warrants had a fair value that amounted to $12,380 recorded in additional paid-in capital (December 31, 2024 - $724,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Fourth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 100.0% (December 31, 2024 – 90.0%), risk free rate of return 3.89% (December 31, 2024 – 4.20%), and expected term of 2.17 years (December 31, 2024 – expected term of 2.42 years).

As of June 30, 2025, the Fifth Tranche Warrants had a fair value that amounted to $22,560 recorded in additional paid-in capital (December 31, 2024 - $111,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Fifth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 95.0%), risk free rate of return 3.89% (December 31, 2024 – 4.26%), and expected term of 2.39 years (December 31, 2024 – expected term of 2.64 years).

As of June 30, 2025 the Sixth Tranche Warrants had a fair value that amounted to $15,670 recorded in additional paid-in capital (December 31, 2024 - $73,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Sixth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 – $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 95.0%), risk free rate of return 3.89% (December 31, 2024 – 4.27%), and expected term of 2.53 years (December 31, 2024 – expected term of 2.78 years).

As of June 30, 2025, the Seventh Tranche Warrants had a fair value that amounted to $36,620 recorded in additional paid-in capital (December 31, 2024 - $170,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Seventh Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 – $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 – 95.0%), risk free rate of return 3.89% (December 31, 2024 – 4.27%), and expected term of 2.64 years (December 31, 2024 – expected term of 2.89 years).

As of June 30, 2025, the January 2025 Tranche Warrants had a fair value that amounted to $1,364,830 recorded in additional paid-in capital (January 16, 2025 - $3,722,310 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Eighth Tranche Warrants using the following assumptions: stock price $1.10 (January 16, 2025 – $2.63), dividend yield – nil (January 16, 2025 – nil), expected volatility 100.0% (January 16, 2025 – 100.0%), risk free rate of return 3.90% (January 16, 2025 – 4.32%), and expected term of 3.30 years (January 16, 2025 – expected term of 3.50 years).

As of June 30, 2025, the March 2025 Tranche Warrants had a fair value that amounted to $329,850 recorded in additional paid-in capital (March 21, 2025 - $428,350 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Ninth Tranche Warrants using the following assumptions: stock price $1.10 (March 21, 2025 – $1.42), dividend yield – nil (March 21, 2025 – nil), expected volatility 100.0% (March 21, 2025 – 100.0%), risk free rate of return 3.91% (March 21, 2025 – 3.94%), and expected term of 3.47 years (March 21, 2025 – expected term of 3.49 years).

*Debenture Convertible Feature*

As of June 30, 2025, the fair value of the First Tranche Debentures' convertible feature amounted to $2,057 recorded in additional paid-in capital (December 31, 2024 – $164,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 - $0.47), dividend yield – nil (December 31, 2024 – nil), expected volatility 100.0% (December 31, 2024 – 100.0%), risk free rate of return 3.82% (December 31, 2024 – 5.03%), discount rate 12.25% (December 31, 2024 – 17.50%), and expected term of 0.15 year (December 31, 2024 – 1 year).

As of June 30, 2025 the fair value of the Second Tranche Debentures' convertible feature amounted to $1,714 recorded in additional paid-in capital (December 31, 2024 – $429,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 – $0.47), dividend yield – nil (December 31, 2024 – nil), expected volatility 100.0% (December 31, 2024 – 105.0%), risk free rate of return 3.82% (December 31, 2024 – 4.51%), discount rate 12.25% (December 31, 2024 – 17.50%), and expected term of 0.15 years (December 31, 2024 – 1.55 years).

As of June 30, 2025, the fair value of the Fourth Tranche Debentures' convertible feature amounted to $91,000 recorded in additional paid-in capital (December 31, 2024 – $317,000 in derivative liabilities). As of April 1, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield – nil (December 31, 2024 – nil), expected volatility 100.0% (December 31, 2024 – 90%), risk free rate of return 4.01% (December 31, 2024 – 4.20%), discount rate 11.25% (December 31, 2024 – 11.25%), and expected term of 1.17 years (December 31, 2024 – 1.42 years).

As of June 30, 2025, the fair value of the January 2025 Tranche Debentures' convertible feature amounted to $728,000 recorded in additional paid-in capital (January 16, 2025 - $1,012,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (January 16, 2025 – $2.63), dividend yield – nil (January 16, 2025 – nil), expected volatility 100.0% (January 16, 2025 – 100.0%), risk free rate of return 4.11% (January 16, 2025 – 4.18%), discount rate 11.25% (January 16, 2025 – 10.75%), and expected term of 0.79 years (January 16, 2025 – 1.00 years).

As of June 30, 2025, the fair value of the March 2025 Tranche Debentures' convertible feature amounted to $165,000 recorded in additional paid-in capital (March 21, 2025 - $171,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (March 21, 2025 – $1.42), dividend yield – nil (March 21, 2025 – nil), expected volatility 100.0% (March 21, 2025 – 100.0%), risk free rate of return 4.04% (March 21, 2025 – 4.04%), discount rate 11.25% (March 21, 2025 – 11.00%), and expected term of 0.98 years (March 21, 2025 – 1.00 years).

During the six months ended June 30, 2025, a debt extinguishment of $115,384 occurred for the increase in principal of Tranche 4 of 15%.

As of June 30, 2025, the IPO Warrants, Rep Warrants, and Private Placement Warrants (the "Equity Warrants") are classified as equity due to the Company changing its functional currency to USD as of April 1, 2025. The strike prices of the warrants and the Company's functional currency are both denominated in USD. The Company reassessed that the warrants met the classification criteria to be recorded as equity and the warrants were reclassified to additional-paid-in capital.

As of December 31, 2024, the IPO Warrants, Rep Warrants, and Private Placement Warrants (the "Equity Warrants") are classified as Level 1 financial instruments, while the Debenture Warrants and Debenture Convertible Feature are classified as Level 3 financial instruments.

Changes in the fair value of the Company's financial instruments for the six months ended June 30, 2025 and 2024 were as follows:

SCHEDULE OF CHANGES IN FAIR VALUE OF COMPANY'S LEVEL 3 FINANCIAL INSTRUMENTS

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 3** | **Level 3** | |
|  | **IPO and Rep**<br> **Warrants** | **Debenture**<br> **Warrants** | **Debenture**<br> **Convertible**<br> **Feature** |<br>**Total** |
| Balance at January 1, 2025 | $22 | $191880 | $293761 | $485663 |
| Additions |  | 4150660 | 1183000 | 5333660 |
| Conversions |  |  | (74186) | (74186) |
| Change in fair value |  | (2560523) | (416388) | (2976911) |
| Effect of exchange rate changes |  | 1693 | 1584 | 3277 |
| Reclassification to equity | (22) | (1783710) | (987771) | (2771503) |
| Balance at June 30, 2025 | $- | $- | $- | $- |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 3** | **Level 3** | |
|  | **IPO and Rep**<br> **Warrants** | **Debenture**<br> **Warrants** | **Debenture**<br> **Convertible**<br> **Feature** |<br>**Total** |
| Balance at January 1, 2024 | $11308 | $955000 | $1724000 | $2690308 |
| Additions |  | 1175000 | 854000 | 2029000 |
| Conversions |  |  | (2297316) | (2297316) |
| Change in fair value | 21195 | (1346430) | 632309 | (692926) |
| Effect of exchange rate changes | (563) | (32570) | (64993) | (98126) |
| Balance at June 30, 2024 | $31940 | 751000 | 848000 | 1630940 |

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**14. SHARE CAPITAL**

On June 17, 2024, the Company's Board of Directors authorized a share repurchase program (the "Repurchase Program") under which the Company may repurchase up to $1 million of its outstanding common shares, for a period of six months, subject to contractual requirements. No shares were repurchased under the Repurchase Program. As of June 30, 2025, the Company owed $44,214 worth of stock-based compensation to a former officer of the Company. The balance issuable was classified as an *Obligation to issue shares*.

Basic and diluted net loss per share represents the loss attributable to shareholders divided by the weighted average number of shares and prefunded warrants outstanding during the period on an as converted basis.

**15. REVENUE**

For the six months ended June 30, 2025, the Company sold hydroxyl generating devices and participated in bitcoin mining activities. The Company's revenue is as follows:

SCHEDULE OF REVENUE

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| | | |
|:---|:---|:---|
|  | <br>**Six Months Ended June 30,** | <br>**Six Months Ended June 30,** |
|  | **2025** | **2024** |
| QuadPro devices | $- | $41315 |
| Crypto asset production | 725209 | - |
|  | $725209 | $41315 |

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| | | |
|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** |
| QuadPro devices | $- | $41315 |
| Crypto asset production | 451955 | - |
|  | $451955 | $41315 |

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**16. LEASES**

The components of lease expenses were as follows:

SCHEDULE OF LEASE EXPENSES

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| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Short-term lease cost | $13015 | $58576 |
| Total lease expenses | $13015 | $58576 |

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| | | |
|:---|:---|:---|
|  | **Three months ended June 30,** | **Three months ended June 30,** |
|  | **2025** | **2024** |
| Short-term lease cost | $4738 | $14406 |
| Total lease expenses | $4738 | $14406 |

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**17. COMMITMENTS AND CONTINGENCIES**

***Debenture principal repayments***

The following table summarizes the future principal payments related to our outstanding debt as of June 30, 2025:

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS OUTSTANDING DEBT

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| | |
|:---|:---|
| Remaining 2025 | $2636695 |
| 2026 | 5937884 |
|  | $8574579 |

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***Contingencies***

***Litigation***

On August 11, 2023, AgriFORCE's former CEO, Ingo Wilhelm Mueller filed a Notice of Civil Claim in which he alleges that AgriFORCE wrongfully terminated his employment without notice, in breach of the parties' underlying employment agreement. Mr. Mueller alleges to have suffered damages including, among other things, a loss of base salary of $473,367 CAD per annum and damages from not receiving common stock of AgriFORCE equivalent in value to $468,313 CAD. AgriFORCE's position is that Mr. Mueller was terminated for 'just cause' because he breached his fiduciary duty to act in AgriFORCE's best interest by, among other things, submitting a sizeable bid for the acquisition of a company without first obtaining Board approval. In doing so, Mr. Mueller misrepresented AgriFORCE's financial standing and forged, or instructed others to forge, a document by affixing the electronic signature of AgriFORCE's CFO.

The parties are in the discovery stage of litigation. AgriFORCE has produced relevant documents to Mr. Mueller, and is awaiting Mr. Mueller's production of relevant documents. The parties are also in the process of scheduling examinations for discovery. Management is instructing counsel to advance the matter given the relative strength of AgriFORCE's case.

The likelihood of an unfavorable outcome is not probable given the facts supporting AgriFORCE's 'for cause' termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial.

On September 31, 2023, Stronghold filed a Complaint with the Superior Court of California for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered in relation to the purchase and sale agreement for the Coachella property. Stronghold alleges that AgriFORCE breached the PSA by failing to deposit certain stocks certificates into Escrow, failing to pay amounts owed for its costs incurred in connection with the Sellers Work, and for terminating the PSA despite Stronghold's performance of the Sellers Work. Stronghold is claiming $451,684.00 plus interest in damages based on invoices it provided. AgriFORCE will dispute, among other things, the amount and invoices, estimating approximately $230,000 as Stronghold's true expenses that may be claimed. The Company filed their answer on February 26, 2024. On January 17, 2025, the Company settled the complaint with Stronghold and agreed to pay Stronghold $20,833 monthly for 12 months beginning February 1, 2025.

On March 27, 2024, BV Peeters Advocaten-Avocats ("Peeters") summoned the Company to appear on May 31, 2024 at the First Chamber of the Dutch-Speaking Division of the Business Court in Brussels. Peeters is seeking payment for €467,249 of unpaid bills for legal services plus penalties and interest. The Company believes that Peeters performed actions that were not in the Company's best interest. The Company does not intend to pay the outstanding legal bills and intends to vigorously defend its position in court. The parties are currently in mediation.

On July 11, 2024, AgriFORCE's former General Counsel filed a Notice of Civil Claim with the Supreme Court of British Columbia, in which he alleges that AgriFORCE wrongfully terminated his employment without notice, in breach of the parties' underlying employment agreement. On January 6, 2025, the Company settled the Civil Claim with the Company's former General Counsel and agreed to pay a settlement amount of $160,000 CAD to the Company's former General Counsel. This settlement has been paid in full.

**18. SEGMENTED INFORMATION**

The Company has chosen to organize its operating segments based on products or services offered. Each operating segment is also a reportable segment (i.e. operating segments have not been aggregated). The Company's operating and reportable segments at June 30, 2025 , include Bitcoin Mining; Unthink Food, which produces high protein baking flour; and Radical Clean Solutions, which sells its patented hydroxyl devices. All other activities, including financing, are carried out through the corporate entity. At June 30, 2025, Bitcoin Mining operations were conducted at the Redwater Property in Alberta, Canada, and the Bald Eagle Property in Ohio, USA, which reflects the manner in which the Company's Chief Operating Decision Maker ("CODM"), its Chief Executive Officer, reviews and assesses the performance of the business and allocates resources.

The information used by the CODM to assess performance and allocate resources includes various measures of segment profit, however, for the purposes of the disclosures required by ASC 280, Segment Reporting and ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company has determined that the measure most consistent with the measurement principles used in measuring the corresponding amounts in the condensed consolidated unaudited financial statements is net income. Segment financial information is used to monitor forecast versus actual results in order to make key operating decisions for each segment. The CODM evaluates the performance or allocate resources for each segment based on the Company's assets or liabilities.

The following discloses key financial information including the significant segment expenses, in the context of deriving net income, that are regularly provided to and reviewed by the CODM reconciled to the segment's net income:

SCHEDULE OF FINANCIAL INFORMATION INCLUDING SIGNIFICANT SEGMENT EXPENSES

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Bitcoin Mining** | **Radical Clean Solutions** | **Un(Think) Foods** | **Corporate** | **Total** |
| **Six Months Ended June 30, 2025:** |  |  |  |  |  |
| Revenue | $724678 | $- | $531 | $- | $725209 |
| Significant segment expenses |  |  |  |  |  |
| Costs of services | 462854 |  |  |  | 462854 |
| Bitcoin unrealized gain (loss) market valuation | (80318) |  |  |  | (80318) |
| Selling, general and administrative |  |  | 21377 | 2551302 | 2572679 |
| Consulting | 27964 |  | (12734) | 19947 | 35177 |
| Depreciation | 285382 |  | 308353 |  | 593735 |
| Accretion interest expense |  |  |  | 1937627 | 1937627 |
| Repairs and Maintenance | 200391 |  |  |  | 200391 |
| Severance Expense |  |  |  | 124983 | 124983 |
| Foreign exchange loss / gain |  |  |  | 76712 | 76712 |
| Change in fair value of derivatives |  |  |  | (2976911) | (2976911) |
| Loss (gain) on conversion of convertible debt |  |  |  | (86563) | (86563) |
| Loss on debt extinguishment |  |  |  | 4730640 | 4730640 |
| Other Income |  |  |  | (61148) | (61148) |
| Net loss from discontinued operations |  | 496936 |  |  | 496936 |
| Loss on Disposal of Business | - | 904112 | - | - | 904112 |
| Total operating expenses and other expenses (income) | 896273 | 1401048 | 316996 | 6316589 | 8930906 |
| **Net Loss** | $(171595) | $(1401048) | $(316465) | $(6316589) | $(8205697) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Bitcoin Mining** | **Radical Clean Solutions** | **Unthink Food** | **Corporate** | **Total** |
| **Three Months Ended June 30, 2025:** |  |  |  |  |  |
| Revenue | $451955 | $- | $- | $- | $451955 |
| Significant segment expenses |  |  |  |  |  |
| Costs of services | 239210 |  |  |  | 239210 |
| Bitcoin unrealized gain (loss) market valuation | (116702) |  |  |  | (116702) |
| Selling, general and administrative |  |  | 20134 | 1345393 | 1365527 |
| Consulting | 27964 |  | (12733) | 19947 | 35178 |
| Depreciation | 164303 |  | 154037 |  | 318340 |
| Accretion interest expense |  |  |  | 966284 | 966284 |
| Repairs and Maintenance | 114723 |  |  |  | 114723 |
| Severance Expense |  |  |  | (19946) | (19946) |
| Foreign exchange loss / gain |  |  | 89 | 20464 | 20553 |
| Change in fair value of derivatives |  |  |  |  |  |
| Loss (gain) on conversion of convertible debt | - |  |  |  |  |
| Loss on debt extinguishment |  |  |  | 4615255 | 4615255 |
| Other Income |  |  |  | (60624) | (60624) |
| Net loss from discontinued operations |  | 130287 |  |  | 130287 |
| Loss on Disposal of Business | - | 904112 | - | - | 904112 |
| Total operating expenses and other expenses (income) | 429498 | 1034399 | 161527 | 6886773 | 8512197 |
| **Net Loss** | $22457 | $(1034399) | $(161527) | $(6886773) | $(8060242) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Bitcoin Mining** | **Radical Clean Solutions** | **Un(Think) Foods** | **Corporate** | **Total** |
| **Six Months Ended June 30, 2024:** |  |  |  |  |  |
| Revenue | $- | $- | 41315 |  | 41315 |
| Significant segment expenses |  |  |  |  |  |
| Costs of services |  |  | 33731 |  | 33731 |
| Cost of inventory sold | - | - | - | - |  |
| Selling, general and administrative |  |  | 155858 | 1846596 | 2002454 |
| Consulting |  |  | 6738 | 179458 | 186196 |
| Research and Development |  |  | 4094 |  | 4094 |
| Depreciation |  |  | 326733 | 3206 | 329939 |
| Accretion interest expense |  |  |  | 2203081 | 2203081 |
| Repairs and Maintenance |  |  |  |  |  |
| Severance Expense |  |  |  |  |  |
| Foreign exchange loss / gain |  |  |  | (86752) | (86752) |
| Change in fair value of derivatives |  |  |  | (692926) | (692926) |
| Loss (gain) on conversion of convertible debt |  |  |  | 1392482 | 1392482 |
| Loss on debt extinguishment |  |  |  | 2298369 | 2298369 |
| Other Income |  |  |  | (73806) | (73806) |
| Loss on disposal of fixed assets | - | - | - | 4252 | 4252 |
| Total operating expenses and other expenses (income) | - | - | 527154 | 7073960 | 7601114 |
| **Net Loss** | $- | $- | (485839) | (7073960) | (7559799) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Bitcoin Mining** | **Radical Clean Solutions** | **Unthink Food** | **-Corporate** | **Total** |
| **Three Months Ended June 30, 2024:** |  |  |  |  |  |
| Revenue | $- | $- | $41315 | $- | $41315 |
| Significant segment expenses |  |  |  |  |  |
| Costs of services |  |  |  |  |  |
| Cost of inventory sold | - | - | 33731 | - | 33731 |
| Selling, general and administrative |  |  | 71866 | 857764 | 929630 |
| Consulting |  |  | 6738 | 76543 | 83281 |
| Depreciation |  |  | 162437 | 504 | 162941 |
| Foreign exchange loss / gain |  |  |  | (32121) | (32121) |
| Change in fair value of derivatives |  |  |  | (716695) | (716695) |
| Loss (gain) on conversion of convertible debt |  |  |  | 1119750 | 1119750 |
| Loss on debt extinguishment |  |  |  | 1887936 | 1887936 |
| Other Income | - | - | - | (33915) | (33915) |
| Accretion interest expense |  |  |  | 838876 | 838876 |
| Write-off Inventory | - | - | - | - | - |
| Total operating expenses and other expenses (income) | - | - | 274772 | 3998642 | 4273414 |
| **Net Income (Loss)** | $- | - | $(233457) | (3998642) | (4232099) |

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Other segment items consists of loss on disposition of property, plant and equipment, change in fair value of derivatives, impairment loss, interest income, and foreign exchange (loss) gain, as reported on the condensed consolidated unaudited income statements.

The following table summarizes the additions to long-lived assets, total long-lived assets, and total assets by segment, used by the CODM to assess segment performance.

SCHEDULE OF ADDITIONS BY SEGMENT USED BY THE CODM TO ASSESS SEGMENT PERFORMANCE

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Bitcoin Mining | Radical<br> Clean<br> Solutions | <br> Unthink<br> Food | Corporate | Total |
| **As of June 30, 2025** |  |  |  |  |  |
| Property and equipment, additions | $4075924 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $- | $- | $4075294 |
| Intangible assets, additions |  |  |  |  |  |
| Balances |  |  |  |  |  |
| Property and equipment, net | 4807533 |  |  |  | 4807533 |
| Intangible assets and goodwill, net | 2046438 | - | 6938118 | - | 8984556 |
| Total long-lived assets | $6853971 | - | $6938118 | $— | $13792089 |
| **As of December 31, 2024** |  |  |  |  |  |
| Property and equipment, additions | $807471 | $- | $- | $- | 807471 |
| Intangible assets, additions | 625736 |  |  |  | 625736 |
| Balances |  |  |  |  |  |
| Property and equipment, net | 807471 |  |  | 1424 | 808895 |
| Intangible assets, net | 604456 |  | 7209120 |  | 7813576 |
| Total long-lived assets | $1411927 | $— | $7209120 | $1424 | $8622471 |

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The following tables summarize revenue, assets, and property, plant, and equipment by geographic area based on the location of the underlying action activity or rendering of services and location of the underlying assets :

SCHEDULE OF REVENUE, ASSETS AND PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC AREA

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| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| **Revenue** |  |  |
| Canada | $233097 | $41315 |
| United States | 492112 | - |
| Total Revenue | $725209 | $41315 |

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| | | |
|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** |
| **Revenue** |  |  |
| Canada | $105000 | $41315 |
| United States | 346955 | - |
| Total Revenue | $451955 | $41315 |

---

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| **Assets** |  |  |
| **Cash and cash equivalents for all segments** |  |  |
| Canada | $185313 | $423907 |
| United States | - | 65961 |
| Total cash and cash equivalents | $185313 | $489868 |
| **Property Plant and Equipment** |  |  |
| Canada | $731609 | $808895 |
| United States | 4075925 | - |
| Total property plant and equipment | $4807533 | $808895 |

---

The revenues for the Radical Clean Solutions segment were generated from one customer for the periods ended June 30, 2025 and 2024.

The revenues for the Bitcoin mining segment were generated from Bitcoin pools.

**19. SUBSEQUENT EVENTS**

On July 21, 2025, Investors purchased an additional tranches of debt of $833,333 with a 10% original issue discount for gross proceeds of $750,000 (the "July 2025 Debentures") due July 21, 2026. The Debentures were convertible into common shares at $6.741 per share The Debentures have round down provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, March 2025, and May 2025 Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, March 2025, and May 2025 Tranche Warrants to $6.741

On July 1, 2025, the Company and the previous owner of RCS mutually agreed to settle legal claims, resulting in the return of the RCS Assets acquired on August 16<sup>th</sup>, 2024. The company has accrued for the disposal of the RCS business as of June 30, 2025, and recorded a Loss on disposal of business of $904,112 in Other expenses on its condensed consolidated statement of comprehensive loss.

From July 1, 2025, through August 14, 2025, the Company issued 759,189 common shares upon conversion of convertible debt and conversion of convertible debt in lieu of repayment in cash (principal and interest totaling $4,005,822).

From July 1, 2025, through August 14, 2025, the Company issued shares for cash under its at-the-market offering ("ATM"). In total 125,941 shares were issued for gross proceeds of $402,168.

From July 1, 2025, through August 14, 2025, the Company issued 3,566 shares to consultants for services.

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

*Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." You should review the "Risk Factors" section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

**Company History and Our Business**

**Overview**

AgriFORCE Growing Systems Ltd. ("AgriFORCE™" or the "Company") was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of the *Business Corporations Act (British Columbia)* on December 22, 2017. The Company's registered and records office address is at 800 – 525 West 8<sup>th</sup> Avenue, Vancouver, British Columbia, Canada, V5Z 1C6.

**Our Business**

The addition in 2024 of sustainable Bitcoin mining represents the first pillar in the Company's three pillar strategy to:

● Utilize its modular architecture to mine crypto currency, as well as to offer compute capabilities tailored for AI, edge computing, and sovereign data solutions;

● Continue developing and deploying mobile modular gas-to-power units for off-grid scalability, securing access to sizeable amounts of power; and

● Build a strategic digital reserve, accumulating up to 50% of Bitcoin mined and allocating up to 50% of new capital raised toward Bitcoin and potentially other purchases.

The Company's legacy businesses consisted of the AgriFORCE™ Brands ("Brands") and the AgriFORCE™ Solutions ("Solutions") divisions. Our AgriFORCE™ Brands division has been focused on the development and commercialization of plant-based ingredients and products that deliver more nutritious food. We intend to market and commercialize ingredient supplies, like our Awakened Flour™ and Awakened Grains™, but have not had any success doing so yet.

Brands is focused on the development and commercialization of plant-based ingredients and products that deliver healthier and more nutritious solutions. We strive to market and commercialize both branded consumer product offerings and ingredient supply.

**AgriFORCE™ Brands**

*UN(THINK)™ Foods*

The Company purchased Intellectual Property ("IP") from Manna Nutritional Group, LLC ("Manna"), a privately held firm based in Boise, Idaho on September 10, 2021. The IP encompasses a granted patent to naturally process and convert grain, pulses and root vegetables, resulting in low-starch, low-sugar, high-protein, fiber-rich baking flour as well as produces a natural sweetener juice. The core process is covered under Patent Nr. 11,540,538 in the U.S. and key international markets. The all-natural process is designed to unlock nutritional properties, flavors, and other qualities in a range of modern, ancient and heritage grains, pulses and root vegetables to create specialized all-natural baking and all-purpose flours, sweeteners, juices, naturally sweet cereals and other valuation products, providing numerous opportunities for dietary nutritional, performance and culinary applications.

During the year ended December 31, 2024, the Company achieved milestones towards the commercialization of our UN(THINK) Awakened Flour™, the Company's first line of products to utilize the IP. Management has defined and tested its quality controls and safety protocols for production, and produced several multi-ton batches of germinated grains, refining and scaling production processes with our partners in Canada. We are also in the process of qualifying partners in the US to establish additional production hubs – at no additional CAPEX - which will support growth and reduce logistics costs for customers in the region. Additionally, we have established our supply chain logistics with a contracted shipping company and two warehouses in Canada and the US. Our commercial team made progress in defining pricing and is starting to approach US and Canadian Bakeries and Baked Goods Companies who are now testing our new flours for integration into their manufacturing operations and innovation pipeline. Online sales logistics and advertising materials were developed during the period to support the establishment of the direct-to-consumer sales channel which will be started once the Business to Business channel sales ramp up. Lastly, the Company has developed an extensive number of recipes for the application of Awakened Flour™ product line for both customers and consumers.

The Company is developing several finished product prototypes including a line of pancake mixes, which are ready for consumer testing.

*Wheat and Flour Market*

Modern diet is believed to be a contributor to health risks such as heart disease, cancer, diabetes and obesity, due in part to the consumption of highly processed foods that are low in natural fiber, protein and nutrition; and extremely high in simple starch, sugar and calories. These "empty carbs" produce glycemic swings that may cause overeating by triggering cravings for food high in sugar, salt and starch. As an example, conventional baking flour is low in natural fiber (~ 2-3%), low-to-average in protein (~ 9%), and very high in starch (~ 75%)<sup>(4)</sup>. Apart from dietary fiber, whole flour is only marginally better in terms of these macronutrients <sup>(2)</sup>.

In contrast, foods high in fiber help to satiate hunger, suppress cravings and raise metabolism<sup>(3)</sup>. They also assist in weight loss, lower cholesterol, and may reduce the risk of cancer, heart disease and diabetes<sup>(4)</sup>.

*Advantages of the UN(THINK)™ Foods IP*

Our Controlled Enzymatic Reaction & Endothermic Saccharification with Managed Natural Germination ("CERES-MNG") patented process allows for the development and manufacturing of all-natural flours that are significantly higher in fibers, nutrients and proteins and significantly lower in carbohydrates and calories than standard baking flour.

CERES-MNG baking flour produced from soft white wheat has 40 times more fiber, three (3) times more protein and 75% less net carbohydrates than regular all- purpose flour<sup>(5)</sup>.

![Z:\2025 OPERATIONS\EDGAR\08 AUGUST\AGRIFORCE GROWING SYSTEMS LTD\08-03-2025\Form 10-Q_June 30, 2025\Draft\Production](form10-q_002.jpg)

Source: Independent analysis by Eurofins Food Chemistry Testing Madison, Inc, February 2022

The CERES-MNG patent will help develop new flours and products from modern, ancient and heritage grains, seeds, legumes and tubers/root vegetables.

Products that AgriFORCE™ intends to develop for commercialization from the CERES-MNG patented process under the UN(THINK)™ foods brand:

---

| |
|:---|
| High protein, high fiber, low carb modern, heritage and ancient grain flours (for use in breads, baked goods, doughs, pastry, snacks, and pasta) |
| Protein flours and protein additives |
| High protein, high fiber, low carb cereals and snacks |
| High protein, high fiber, low carb oat based dairy alternatives |
| Better tasting, cleaner label, high protein, high fiber, low carb nutrition bars |
| High protein, high fiber, low carb nutrition juices |
| Sweeteners – liquid and granulated |
| High protein, high fiber, low carb pet foods and snacks |

---

(1) Based on protein, fiber, and starch content results from a nationally certified independent laboratory, as compared to standard all-purpose flour.

(2) https://www.soupersage.com/compare-nutrition/flour-vs-whole-wheat-flour

(3) https://my.clevelandclinic.org/health/articles/14400-improving-your-health-with-fiber

(4) https://www.health.harvard.edu/blog/fiber-full-eating-for-better-health-and-lower-cholesterol-2019062416819

(5) Based on protein, fiber, and starch content results from a nationally certified independent laboratory, as compared to standard all-purpose flour.

We intend to commercialize these products behind two (2) main sales channels:

- Branded ingredients (B2B) <br> - Consumer branded products (B2B and B2C)

To produce the UN(THINK)™ power wheat flour, we are using our patented process to develop a new germinated whole grain wheat flour, which we have qualified and made available for sale through November 2023 in Canada and the USA, under the UN(THINK)™ Awakened Flour™ brand. This new Awakened Grains™ flour – available in 3 types: hard white wheat and hard red wheat for breads and soft white wheat for bakery and pastries – will provide enhanced nutrition with over five times more fiber, up to two times more protein and 23% less net carbs versus conventional all-purpose flour (source: Eurofins Food Chemistry Madison, Inc, December 2022).

*GROWTH PLAN*

AgriFORCE™'s organic growth plan is to actively establish and deploy the commercialization of products in four distinct phases:

PHASE 1 (COMPLETED):

● Product and process testing and validation. (*completed*)

● Filing of US and international patents. (*completed*)

● Creation of the UN(THINK)™ foods brand. (*completed*)

● Qualification and operational and commercial set up of the Awakened Grains™ line of products. (*completed*)

PHASE 2:

● Launch of the UN(THINK)™ Awakened Flour™ lightly germinated flour range of products in business to business ("B2B") channel. (*completed)* 

● Develop range of finished products behind the wheat grain flours, qualify patented process for pulse/legume, and rice-based protein flours

● Drive business as ingredients for bakery, snack and plant-based protein products manufacturers.

● Develop relationships with universities, nonprofit organizations and civic organizations focused on health in underserved communities to research impact of patented flour on nutrition.

PHASE 3:

● Develop range of finished products behind the wheat grain flours, qualify patented process for pulse/legume, and rice-based protein flours.

● Drive business as ingredients for bakery, snack and plant-based protein products manufacturers.

● Develop manufacturing base through partnerships and licensing.

PHASE 4:

● Expand product range in US/Canada.

● Expand business to other geographies internationally.

*BUSINESS PLAN*

The Company also looks to expand its efforts into development of blockchain solutions and the implementation of these solutions into FinTech systems to allow quicker and less costly transactions between commercial farmers.

The Company continues to explore opportunities to utilize its patented FORCEGH+™ structure and its related technologies in joint ventures and licensing. The Company is also studying the utilization of FORCEGH+ technologies in arctic, tropical and desert environments and artificial intelligence and blockchain in the development and implementation of FinTech systems to commercial farmers, and advancing on the commercialization of our Hydroxyl clean room systems to greatly reduce the spread of pathogens, mold and disease at processing facilities worldwide.

Through the first half of 2025, the Company has been aggressively pursuing a strategic shift towards the advancement of sustainable technology initiatives through the acquisition of Bitcoin mining facilities. The Company plans to reduce the environmental impact of the Bitcoin mining facilities while simultaneously producing revenue from high yield agricultural operations. By utilizing an integrated and automated onsite carbon sequestering agricultural operation to reuse the waste energy from the natural gas generators used in the Bitcoin mining operation, the Company aims to reduce carbon emissions while also contributing to local food security and economic growth. In addition, the Company intends to generate immediate shareholder value through the generation of Bitcoins from the mining operation.

**Merger and Acquisition ("M&A")**

The Company intends to focus any M&A activity on targets which are focused the bitcoin mining space. This refocused M&A strategy will ensure that proper personnel and economic resources are allocated to the Company's ongoing businesses, while refocusing efforts on synergistic opportunities which work to enhance the Company's existing assets.

**Sustainable Bitcoin Mining**

As we approach a key milestone in the progression of our growth strategy it is important to clarify how our adoption of an innovative combination of technologies will reduce the environmental impact of data centers while simultaneously producing revenue from high yield agricultural operations. We utilize our new data centers to leverage energy generated from flare natural gas-powered operations to increase the environmental mitigation and revenue potential of integrated cogeneration sites.

While benefiting from Alberta's strong incentive programs, i.e., the Alberta Carbon Capture Incentive Program, the Company hopes to reuse waste resources to produce profit from cryptocurrency mining, Alberta carbon credits for carbon sequestration and methane reduction. Since the acquisition, the Company's process captures natural gas flares to generate significant low-cost energy to operate the cryptocurrency mining rigs. We are developing a plan to capture and redirect heat from miners and the generator to warm an enclosure suitable for growing white-legged shrimp (Penaeus Vannamei), and controlled environment agriculture*.* The facility will then be utilized to produce a continuous supply of fresh shrimp, red seaweed and micro-greens for local markets and restaurants. Micro-greens are a fast-growing, nutrient-dense crop that requires relatively little space and water to produce commercial yields, while significantly reducing greenhouse gas emissions.

On November 28, 2024, AgriFORCE Growing Systems, Ltd. (the "Company") entered into an agreement with Rivogenix Energy Corp. to acquire and consummated the acquisition of various assets which comprise a bitcoin mining facility in Sturgeon County, Alberta, Canada. The assets were acquired for $1.5 million in cash from the Company's own available cashflow and are comprised of a data center and approximately 130 bitcoin miners.

On January 17, 2025, AgriForce Growing Systems, Ltd. (the "Company") purchased assets comprising a five MW Bitcoin mining facility (on two sites) in Columbiana County Ohio (the "Facility") from Bald Eagle County, LLC. The asset purchase price (including purchase of an option to purchase the Facility) was $4.55 million. The assets purchased consist of following assets, <u>inter alia</u>: Nine hundred (900) S-19 J Pro BITMAIN Antminers, transformers necessary to operate the Facility, five (5) custom 40 ft Crypto Canman housing containers including 5 power distribution boxes, one Caterpillar trailer mounted standby generator, one Doosan trailer mounted generator set, eight shipping containers and five 1 MW natural gas generator power plants. The Company also received assignment of power purchase agreements to purchase gas at $0.04 per kWh and access leases to the realty underlying the Facility.

These acquisitions represented a pivotal first step in AgriFORCE's commitment to integrating sustainable energy solutions, advanced data operations, and innovative agricultural initiatives to create long-term value for shareholders.

Utilizing energy derived from flare natural gas, these facilities not only generate consistent revenue but also minimizes their environmental footprint. Plans are in place to enhance operations by repurposing waste heat and implementing carbon capture technology, enabling diversified revenue streams through sustainable agricultural practices, such as premium crop cultivation and aquaculture systems.

The majority of the mined assets have been held on the Company's balance sheet, as the starting point of the Company's Bitcoin treasury strategy. We have only sold two (2) BTC to provide the Company with the necessary cash for maintaining operations. The Company is in the process of developing a written policy to govern the cold-storage and liquidation process for selling and borrowing using our bitcoin assets. As of now, the Company holds all of its bitcoin in a BitGo wallet. There is limited risk in volatility at present in bitcoin pricing due to our policy of holding bitcoin for the long term. We intent to continue to hold up to 50% of the mined assets as we continue to build upon our treasury strategy. In May 2025, we borrowed $200,000 at an interest rate of 11% per annum for 90 days, utilizing three (3) BTC as collateral for the loan. We estimate that the increase in value of the collateral will far exceed the interest costs associated with this loan.

We have an agreement with BitGo to hold our Bitcoin in cold storage with instantaneous liquidity available. They will also act as our exchange.

Our miners have an average age of three years in all of our facilities. Statistics on our miners are as follows:

Efficiency: median: 99.86%; mean: 99.58%; range: 99.26 – 99.9%. Our average downtime for scheduled and nonscheduled is 24 hours in a month. This includes activities related to weather and optimization of the power units and miner boards.

Our weighted average of cost of Bitcoin mined is approximately $44,400. Our approximate inputs are as follows:

Alberta:

We have optimized this site some since we acquired it in November 2024 and now generate approximately 0.017 BTC per day, generating 1 BTC every 59 days at an average operating cost of $685.10/day. So, the cost for 1 BTC is approximately $40,300 at this site

Ohio:

We generate approximately 0.061 BTC per day, generating 1 BTC every 16.4 days at an average cost of $2,785/day, so the Ohio cost is $45,600/BTC mined.

A weighted average of the two sites puts the total cost of approximately $44,400 per BTC mined.

**Financing Initiatives**

In late January 2025, the Company also closed on the first tranche of an up to $50 million financing facility with institutional investors. The Company utilized a portion of the first $7 million tranche to pay for the acquisition of the Ohio assets.

This acquisition increased the Company's hash rate by over 600% and highlights the Company's strategic growth plan of stranded gas assets to be coupled with sustainable agricultural assets in the coming months. Ohio has positioned itself as a pioneer in blockchain and cryptocurrency innovation, driven by initiatives like the proposed Ohio Bitcoin Reserve Act (HB 703). This legislation, aimed at leveraging Bitcoin as a hedge against currency devaluation, underscores the state's commitment to financial and technological advancements. AgriFORCE's investment in the Columbiana County facility aligns with these efforts, cementing Ohio's reputation as a leader in clean energy integration and digital asset development.

**Economic and Social Benefits**

The facility's operations are expected to generate meaningful economic benefits for Ohio, including:

● Job Creation: The project will create new opportunities in advanced technology and sustainable agriculture, addressing workforce development needs in the region.

● Enhanced Food Security: By implementing agricultural practices that produce nutrient-rich crops, AgriFORCE will contribute to addressing food insecurity challenges in Ohio, where over 14% of households face such issues.

(6) BCI Labs, Gainesville Florida, February 2022; and various institutional studies.

**Recent Developments**

*Management Restructuring*

On March 4, 2025, Richard Wong and the Company mutually agreed to conclude his employment with the Company. Chris Polimeni was appointed by the board to succeed Richard Wong. Richard Wong will serve in an advisory role to ensure a smooth transition while continuing to support the company's commitment to delivering value to shareholders and customers.

*Share Repurchase Program*

On June 17, 2024, the Company's Board of Directors authorized a share repurchase program (the "Repurchase Program") under which the Company may repurchase up to $1 million of its outstanding common shares, for a period of six months, subject to contractual requirements. The Board will periodically review the Company's Repurchase Program and may decide to extend its term or increase the authorized amount. As of June 30, 2025, no shares have been repurchased under the program.

*Acquisitions*

We purchased the Redwater Bitcoin Mining Facility in November 2024, and the Bald Eagle Bitcoin Mining Facility in January 2025. A discussion of the acquisitions is set forth above in footnote 3 to our financial statements included herein.

**Status as an Emerging Growth Company**

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies.

We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," we intend to rely on certain of these exemptions from, without limitation, (i) providing an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (PCAOB) regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an "emerging growth company" until the earliest of (a) the last day of our fiscal year following the fifth anniversary of the closing of this offering, (b) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (c) the last day of our fiscal year in which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, or Exchange Act (which would occur if the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter), or (d) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.

**FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**Results of Operations**

The following discussion should be read in conjunction with the condensed unaudited financial statements for the interim periods ended June 30, 2025 and 2024 included in this report.

**Revenues**

The Company's primary source of revenue is from its bitcoin mining operations.

We commenced mining bitcoin late in the fourth quarter of 2024 with the acquisition of the Redwater facility. As a result, there was no revenue generated from mining operations during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2025, the revenue from bitcoin mining was $451,955 and $724,768, respectively. The operations resulted in the Company mining 4.3 BTC and 7.5 BTC for the three and six months ended June 30, 2025, respectively.

During the three months and six months ended June 30, 2025 and 2024, the Company also sold its hydroxyl generating devices directly to customers and indirectly to customers through sales brokers. During the three months ended June 30, 2025 and 2024, the Company sold and delivered nil and 8 hydroxyl generating devices, resulting in gross sales of nil and $41,315, respectively. During the six months ended June 30, 2025 and 2024, the Company sold and delivered 12 and 8 hydroxyl generating devices, respectively, resulting in gross sales of $71,162 and $41,315, respectively.

**Operating Expenses**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **Change** | **%** | **2025** | **2024** | **Change** | **%** |
| **OPERATING EXPENSES** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue, excluding depreciation, | $239210 | $33731 | $205479 | 609.2% | $462854 | $33731 | $429123 | 1272.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wages and salaries | 553793 | $330616 | 223177 | 67.5% | 1158190 | 719220 | 438970 | 61.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting | 35178 | 83281 | (48103) | -57.8% | 35177 | 186196 | (151019) | -81.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 441142 | 159337 | 281805 | 176.9% | 579642 | 329729 | 249913 | 75.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office and administrative | 164398 | 285056 | (120658) | -42.3% | 286351 | 580258 | (293907) | -50.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investor and public relations | 41554 | 17366 | 24188 | 139.3% | 110071 | 42646 | 67425 | 158.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 318340 | 162941 | 155399 | 95.4% | 593735 | 329939 | 263796 | 80.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation | 81333 | 38782 | 42551 | 109.7% | 208499 | 64122 | 144377 | 225.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 29342 | 50598 | (21256) | -42.0% | 75875 | 75826 | 49 | 0.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease expense | 4738 | 14406 | (9668) | -67.1% | 13015 | 58576 | (45561) | -77.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Travel and entertainment | 5387 | 3475 | 1912 | 55.0% | 21376 | 8158 | 13218 | 162.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder and regulatory | 43840 | 29485 | 14355 | 48.7% | 119660 | 85449 | 34211 | 40.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development |  | 509 | (509) | -100% |  | 4094 | (4094) | -100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance Expense | (19946) |  | (19946) |  | 124983 |  | 124983 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repairs and maintenance | 114723 |  | 114723 |  | 200391 |  | 200391 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-off of inventory | - | - | - |  | - | 38470 | (38470) | -100.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bitcoin unrealized (gain) loss market valuation | (116702) | - | (116702) |  | (80318) | - | (80318) |  |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | $1936330 | $1209583 | $726747 | 60.0% | $3909501 | $2556414 | $1353087 | 52.9% |

---

Operating expenses primarily consist of wages and salaries, professional fees, consulting fees, office and administration, investor and public relations, research and development, and share-based compensation.

Operating expenses increased during the three months ended June 30, 2025 by $726,747, or 60%, as compared to June 30, 2024 primarily due to the following:

● Professional fees increased by $281,805, or 177%, due to increased legal and auditing services during the second quarter of 2025.

● Office and administrative costs decreased by $120,658, or 42%, due to a reduction in office related expenses resulting
from a reduction in staff and the move to a virtual office.

● Repairs and Maintenance increased by $114,723 due to the increase in the repairs required for the bitcoin facilities, which did not exist in the prior year period.

● Lease expense decreased by $9,668, or 67%, due to the shift to a virtual office.

● Research and development decreased by $509, or 100%, due to settlement and write off of RCS related expenses.

● Travel and entertainment increased by $1,912, or 55%, due to increased international travel for foreign business development.

● Shareholder and regulatory costs increased by $14,355, or 49%, due to an increase in NASDAQ fees during 2025, as well as the costs associated with the Company's shareholders' meeting.

● Investor and public relations increased by $24,188, or 139%, due to an increase in IR campaigns to promote company products.

● Wages and salaries increased by $223,177, or 68%, due to increased staffing for Bitcoin mining and RCS.

● Share based compensation increased by $42,551, or 110%, due to share based compensation to Chairman and CEO of the company.

● Depreciation and amortization increased by $155,399, or 95%, due to the depreciation of fixed assets acquired related to the bitcoin mining operations.

Operating expenses increased during the six months ended June 30, 2025 by $1,353,087, or 53%, as compared to June 30, 2024 primarily due to the following:

● Professional fees increased by $249,913, or 76%, due to increased legal and auditing services during Q2 2025.

● Office and administrative costs decreased by $293,907, or 51%, due to a reduction in office related expenses resulting
from a reduction in staff and the move to a virtual office.

● Repairs and Maintenance increased by $200,391 due to the increase in the repairs required for the bitcoin facilities, which did not exist in the prior year period.

● Lease expense decreased by $45,561, or 78%, due to the shift to a virtual office.

● Research and development decreased by $4,094, or 100%, due to RCS related research and development to design improved devices and testing on its effectiveness against mold.

● Travel and entertainment increased by $13,218, or 162%, due to increased international travel for foreign business development.

● Shareholder and regulatory costs increased by $34,211, or 40%, due to an increase in NASDAQ fees, as well as the costs associated with the Company's AGM.

● Investor and public relations increased by $67,425, or 158%, due to an increase in publicity endeavors to promote company products.

● Wages and salaries increased by $438,970, or 61%, due to increased staffing for Bitcoin mining and RCS.

● Share based compensation increased by $144,377, or 225%, due to share based compensation to Chairman and CEO of the Company.

● Increase in severance expense by $124,983 due to a severance agreement
 for Richard Wong (former CFO) entered into during Q1 2025

● Depreciation and amortization increased by $263,796, or 80%, due to the depreciation of fixed assets acquired related to the bitcoin mining operations.

**Other Expenses / (Income)**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **Change** | **%** | **2025** | **2024** | **Change** | **%** |
| **OTHER EXPENSES** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accretion of interest on debentures (Note 8) | $966284 | $838876 | $127408 | 15.2% | $1937627 | $2203081 | $(265454) | -12.0% |
| &nbsp;&nbsp;&nbsp;(Gain) Loss on conversion of convertible debt (Note 8) |  | 1119750 | (1119750) | -100.0% | (86563) | 1392482 | (1479045) | -106.2% |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment (Note 8) | 4615255 | 1887936 | 2727319 | 144.5% | 4730640 | 2298369 | 2432271 | 105.8% |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities (Note 11) |  | (716695) | 716695 | -100.0% | (2976911) | (692926) | (2283985) | 329.6% |
| &nbsp;&nbsp;&nbsp;Loss on disposal of business | 904112 |  | 904112 | 100.0% | 904112 |  | 904112 | 100.0% |
| &nbsp;&nbsp;&nbsp;Net loss from discontinued operations | 130287 | - | 130287 | 100.0% | 496936 | - | 496936 | 100.0% |
| &nbsp;&nbsp;&nbsp;Foreign exchange gain | 20553 | (32121) | 52674 | -164.0% | 76712 | (86752) | 163464 | -188.4% |
| &nbsp;&nbsp;&nbsp;Other loss |  |  |  |  |  | 4252 | (4252) | -100.0% |
| &nbsp;&nbsp;&nbsp;Write-off of deposit (Note 3) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | (60624) | (33915) | (26709) | 78.8% | (61148) | (73806) | 12658 | -17.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses** | $6575867 | $3063831 | $3512036 | 114.6% | $5021405 | $5044700 | $(23295) | -0.5% |

---

Other expense for the three months ended June 30, 2025 increased by $3,512,036, or 114%, as compared to June 30, 2024 due to the following:

● Change in fair value of derivative liabilities improved by $716,695, 100%, due to due (1) the draw down as well as the extinguishment of conversion feature derivatives as a result of significant conversions of several tranches of debentures, and (2) the Company's stock price stabilizing during the period between, resulting in the smaller revaluation adjustment as of June 30, 2025 and 3) derivatives reclassed to APIC in Q2 2025 and no further change in fair value after Q2 2025.

● Loss on debt extinguishment increased by $2,727,319, or 145%, due to more extinguished debt revalued at losses in Q2

● (Gain) loss on conversion of convertible debt improved by $1,119,750, or 100%, due to unscheduled conversion loss being classified as extinguishments after conversion feature reclassed to equity

● Other income increased by $26,709, or 79%, due to insurance reimbursements received.

● Accretion interest on debentures increased by $127,408, or 15%, due to increased debt levels compared to the comparable prior year period.

● Loss on disposal of business of $904,112 due to settlement of the RCS
 business.

Other expense for the six months ended June 30, 2025 decreased when compared to the six months ended June 30, 2024 due to the following:

● Change
 in fair value of derivative liabilities improved by $2,283,985, or 330%, due to due (1) the draw down as well as the extinguishment of conversion
 feature derivatives as a result of significant conversions of several tranches of debentures; (2) the Company's stock price
 stabilizing during the period between, resulting in the smaller revaluation adjustment as of June 30, 2025; and (3) derivatives reclassed
 to APIC in Q2 2025 and no further change in fair value after Q2 2025.

● Loss
 on debt extinguishment increased by $2,432,271, or 106%, due to more extinguished debt revalued at losses in Q2

● (Gain)
 loss on conversion of convertible debt improved by $1,479,045, or 106%, due to unscheduled conversion loss being classified as extinguishments
 after conversion feature reclassed to equity

● Accretion
 interest on debentures decreased by $265,454, or 12%, due to a lower accretion interest rates applied to Q2 2025 outstanding debentures. The higher
 accretion interest rates for Q2 2024 were due to higher amounts of initial convertible debenture balance being bifurcated to derivative
 liabilities, creating a lower opening convertible debenture balance and higher accretion interest rate.

● Loss
 on disposal of business of $904,112 due to settlement of litigation from the RCS business.

**Liquidity and Capital Resources**

The Company's primary need for liquidity is to fund working capital requirements, capital expenditures, and for general corporate purposes. The Company's ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. We have recorded a net loss of $8,205,697 for the six months ended June 30, 2025. We have recorded an accumulated deficit of $68,987,816 as of June 30, 2025 and $60,782,119 as of December 31, 2024. Net cash used in operating activities for the six months ended June 30, 2025 and June 30, 2024 was $3,056,552 and $2,228,537, respectively.

The Company held $185,313 in cash as of June 30, 2025 as compared to $489,868 as of December 31, 2024.

Our future capital requirements will depend on many factors, including:

● the cost of repairs and maintenance of our power generation and mining equipment in out bitcoin mining facilities;

● the cost and timing of our regulatory activities, especially the process to obtain regulatory approval for our intellectual properties in the U.S. and in foreign countries;

● the costs of R&D activities we undertake to further develop our technology;

● the costs of commercialization activities, including sales, marketing and production;

● the costs of our mergers and acquisitions activity;

● the level of working capital required to support our growth; and

● our need for additional personnel, accounting and auditing projects, information technology or other operating infrastructure to support our growth and operations as a public company.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the stage of development. As such it is certain that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology until such time as the profitability of the bitcoin mining operations is sufficient to offset the corporate overhead costs of the Company. These factors raise substantial doubt about the Company's ability to continue as a going concern.

For the next twelve months from issuance of these financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings, including use of its At the Market facility, or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. Issued debt securities may contain covenants and limit the Company's ability to pay dividends or make other distributions to shareholders. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company's ability to raise capital, management believes that there is substantial doubt in the Company's ability to continue as a going concern for twelve months from the issuance of these financial statements.

**Cash Flows**

The net cash used by operating activities for the six months ended June 30, 2025 was $3,056,552 compared to $2,228,537 for the six months ended June 30, 2024. The increase of $828,015 was primarily due to the following:

● Increase
 in cash flow adjustments of $145,740 for share based compensation due to share compensation issued to the CEO and Chairman of the
 Company.

● Increase
 in prepaid expenses and other current assets used in operating activities of $217,159

● Increase
 in accounts payable and accrued liabilities of $646,632 due to delays in paying bills, AP turnover slowed.

● In
 June 2025, the Company mutually agreed to return the RCS assets to the seller and, as a result, wrote off the RCS assets, which is
 reflected on the Statement of Cashflow in the operating activities as Loss on disposal of business $904,112.

● Increase
 in net loss of $645,898 due to operating expenses and other income (expense) noted above.

● Non-cash
 change in fair value of derivative liabilities improved by $2,283,985 due to (1) the draw down as well as the extinguishment of conversion
 feature derivatives as a result of significant conversions of several tranches of debentures, and (2) the Company's stock price
 stabilizing during the period between, resulting in the smaller revaluation adjustment as of June 30, 2025

● Increase
 in loss on debt extinguishment cash adjustment by $2,432,271 as a result of unscheduled conversions of debentures into the Company's
 common shares which triggered extinguishments of debt due to the change of the fair value of the debt after the conversions.

● Improvement
 in (gain) loss on conversion of convertible debt cash adjustment by $1,479,045 due to a significant amount of unscheduled conversions
 that resulted in shares issued at a higher premium above the exercise price compared to shares issued during the six months ended
 June 30, 2024.

Net cash used in investing activities was $5,683,307. During six months June 2025, the Company paid $4,765,000 for the Bald Eagle Bitcoin Mining Acquisition and received $105,941 for the sale of Crypto Assets.

Net cash provided by financing activities for the six months ended June 30, 2025, represents net proceeds from debentures of $8,550,000 and Line of Credit $200,000. This was partially offset by repayments on convertible debentures of $110,000, and financing costs of debentures of $157,000. Net cash provided by financing activities for the six months ended June 30, 2024, represents net proceeds from debentures of $2,250,000. This was partially offset by repayments on convertible debentures of $802,282, financing costs of debentures of $84,463.

**Off Balance Sheet Arrangements**

None.

**Significant Accounting Policies**

See the footnotes to our unaudited financial statements for the six months ended June 30, 2025 and 2024, included with this quarterly report.

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

As a registrant that qualifies as a smaller reporting company, AgriFORCE™ is not required to provide the information required by this Item.

**Item 4. Controls and Procedures**

***Disclosure Controls and Procedures.***

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404"). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Management assessed the effectiveness of our internal control over financial reporting as of June 30, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework in the 2013 COSO framework. Based on this assessment, management concluded that our disclosure controls and procedures were effective.

***Changes in Internal Controls.***

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

***Limitations on Effectiveness of Controls and Procedures***

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

**PART II — OTHER INFORMATION**

**Item 1. Legal Proceedings**

For a discussion of legal proceedings, see Note 17 to the unaudited condensed consolidated financial statements included under Part I, Item 1 of this report.

**Item 1A. Risk Factors**

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

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

The Company had the following sales of unregistered securities during the six months ended June 30, 2025:

On January 16, 2025, investors purchased $7,700,000 in convertible debentures. The convertible debt and warrants were issued with an exercise price of $23.58 and $25.938 respectively. The issuance of the additional tranche triggered the round down provision, adjusting the exercise prices of the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Debentures and the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Warrants to $23.58.

On April 22, 2025, an Investor purchased a promissory note of $290,000. The promissory note has an original issue discount of $40,000 and a one-time interest charge of 12% ($34,800).

On July 21, 2025, Investors purchased an additional tranche of debt of $833,333 with a 10% original issue discount for gross proceeds of $750,000 (the "July 2025 Debentures") due July 21, 2026. The Debentures were convertible into common shares at $6.741 per share The Debentures have round down provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, and March 2025 Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, and March 2025 Tranche Warrants to $6.741.

**Critical Accounting Estimates**

We are not aware of any material changes to our critical accounting estimates set forth under the caption "Critical Accounting Estimates" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 7, 2025, (our "Annual Report"), which is incorporated herein by reference, as well as in the other public filings we make with the U.S. Securities and Exchange Commission (the "SEC").

**Recent Accounting Pronouncements** 

See Note 2 **–** Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements for a discussion of recent accounting standards and pronouncements.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

None.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| 31.1 | [Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\*](ex31-1.htm) |
| 31.2 | [Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\*](ex31-2.htm) |
| 32.1 | [Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\*](ex32-1.htm) |
| 32.2 | [Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\*](ex32-2.htm) |
| 99.1 | [Amendment to the ATM Agreement](ex99-1.htm) |
| 101.ins | Inline XBRL Instance Document\*\* |
| 101.sch | Inline XBRL Taxonomy Schema Document\*\* |
| 101.cal | Inline XBRL Taxonomy Calculation Document\*\* |
| 101.def | Inline XBRL Taxonomy Linkbase Document\*\* |
| 101.lab | Inline XBRL Taxonomy Label Linkbase Document\*\* |
| 101.pre | Inline XBRL Taxonomy Presentation Linkbase Document\*\* |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Furnished herewith <br> \*\* Filed herein

**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.

---

| | | |
|:---|:---|:---|
|  | **AGRIFORCE GROWING SYSTEMS, LTD.** | **AGRIFORCE GROWING SYSTEMS, LTD.** |
| Date: August 14, 2025 | By: | */s/ Jolie Kahn* |
|  | Name: | Jolie Kahn |
|  | Title: | Chief Executive Officer (Principal Executive Officer) |
| Date: August 14, 2025 | By: | */s/ Chris Polimeni* |
|  | Name: | Chris Polimeni |
|  | Title:&nbsp;&nbsp;&nbsp;&nbsp; | Chief Financial Officer (Principal Financial and Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Jolie Kahn, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of AgriFORCE Growing Systems, Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this quarterly 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 quarterly report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;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 consolidated subsidiaries, is made known to us by others
 within those entities, particularly for the period in which this quarterly 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal
 control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;a) all
 significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

b) any
 fraud, whether material, that involves management or other employees who have a significant role in the registrant's internal
 controls over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: August 14, 2025 | By: | */s/ Jolie Kahn* |
|  |  | Jolie Kahn |
|  |  | Chief Executive Officer (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Chris Polimeni, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of AgriFORCE Growing Systems, Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this quarterly 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 quarterly report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;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 consolidated subsidiaries, is made known to us by others
 within those entities, particularly for the period in which this quarterly 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal
 control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;a) all
 significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

b) any
 fraud, whether material, that involves management or other employees who have a significant role in the registrant's internal
 controls over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: August 14, 2025 | By: | */s/ Chris Polimeni* |
|  |  | Chris Polimeni |
|  |  | Chief Financial Officer (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**

About the Quarterly Report of AgriFORCE Growing Systems, Ltd. (the "Company") on Form 10-Q for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Jolie Kahn, Chief Executive Officer (Principal Executive Officer) of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;(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.

---

| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | */s/ Jolie Kahn* |
|  |  | Jolie Kahn |
|  |  | Chief Executive Officer (Principal Executive Officer) |

---

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## 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**

About the Quarterly Report of AgriFORCE Growing Systems, Ltd. (the "Company") on Form 10-Q for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Chris Polimeni, Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;(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.

---

| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | */s/ Chris Polimeni* |
|  |  | Chris Polimeni |
|  |  | Chief Financial Officer (Principal Financial and Accounting Officer) |

---

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)