T-Rex Acquisition Corp. - 10-K

ITEM 1A. RISK FACTORS

General Risks

We have a history of operating losses, and we may be unable to achieve or sustain profitability.

We have a history of unprofitable operations and losses. We expect to continue to incur losses for the foreseeable future. Our losses could increase as we continue to work to develop our business. There is no assurance that we will ever become profitable or consistently sustain profitability

We have an unproven business model

We have recently shifted our focus to our blockchain and cryptocurrency mining business, and we may be unsuccessful in this business.

Prior to July 2021, we did not have any operations. In July 2021, we pursued a blockchain and cryptocurrency related business. Currently, our primary operations are focused on our cryptocurrency mining business. We have acquired a data center and certain mining equipment in Orofino, Idaho for the purposes of consolidating our present mining operations and to expand into the co-location hosting market. Our current strategy is new and unproven in an industry that is itself new and evolving and is subject to the risks discussed herein.

Although Bitcoin is presently the most prominent cryptocurrency, another cryptocurrency could supplant it as the most prominent cryptocurrency, which could have a materially negative effect on the demand for Bitcoin and, therefore, on its conversion spot price.

Emerging cryptocurrencies with advanced technology, greater efficiency, or better scalability could surpass Bitcoin in prominence. For instance, Ethereum’s smart contract capabilities or Solana’s transaction speed challenge Bitcoin’s position. Regulatory shifts or institutional adoption of competitors could further reduce Bitcoin’s demand. Additionally, environmental concerns surrounding Bitcoin’s Proof-of-Work mechanism may push users toward greener alternatives like Cardano. A loss of dominance could erode Bitcoin’s market value and diminish its network effect. Thus, Bitcoin’s continued prominence depends on its ability to adapt to evolving markets and technological trends

The demand for Bitcoin may fall for other unknown reasons

The demand for Bitcoin could decline due to unforeseen factors beyond our awareness or control. These may include technological breakthroughs rendering Bitcoin obsolete, macroeconomic shift reducing interest in digital assets, or unexpected regulatory changes that limit its use. Social trends, such as charging preferences toward cryptocurrencies or innovations like Central Bank Digital Currencies (CBDCs), could also play a role. Additionally, security vulnerabilities may contribute to declining demand. The dynamic and unpredictable nature of the cryptocurrency market underscores the need to anticipate and adapt to such potential challenges.

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We have acquired and deployed miners that make use of application-specific integrated circuit (ASIC) chips, which are currently designed exclusively for Bitcoin mining.

If the demand for Bitcoin experiences a sustained, substantial reduction, and the conversion spot price of Bitcoin falls correspondingly, we may be unable to continue to mine Bitcoin profitably and we may be forced to reconfigure our existing miners or acquire replacement miners capable of mining other, more profitable cryptocurrencies, which will materially increase our costs and may lead to additional losses

We expect to incur significant costs in connection with reconfiguration or to acquire replacement miners

We may be unable to continue to operate our miners during a reconfiguration or replacement process. These added costs and a potential interruption to our business operations could have a material adverse effect on our business, which may negatively impact our results of operations.

If our energy provider Clearwater Electric cannot supply sufficient economical electric power for us to operate our new miners, we may be required to relocate some or all of our miners to alternate co-location facilities, which may have a less advantageous cost structure, and negatively impact our results of operations.

We have made a significant capital investment in new next generation miners because we believe we will be able to operate them to mine Bitcoin and other cryptocurrencies at prices advantageous to us and purchasing our own co-location facility will provide economic advantages over our previous co-location customer model, however, if this does not result in a new cost structure that is beneficial to us, our results of operations will be negatively impacted.

Failure to effectively manage our growth could place strains on our managerial, operational, and financial resources and could adversely affect our business and operating results.

Our growth has placed, and is expected to continue to place, a strain on our managerial, operational, and financial resources and systems Any further growth or increase in the number of our strategic relationships may place additional strain on our managerial, operational, and financial resources and systems. If we fail to manage our growth effectively or to develop and expand our managerial, operational, and financial resources and systems, our business and financial results may be materially harmed.

Significant contributors to the Bitcoin network could propose amendments to its protocols and software which, if accepted and authorized, could negatively impact our business and operations.

A small group of individuals contribute to the Bitcoin Core Project on GitHub.com, which is a leading source of quasi-governance that works to ensure that the Bitcoin blockchain remains decentralized and governed by consensus. According to its website, “Bitcoin Core is an open-source project which maintains, and releases Bitcoin client software called ‘Bitcoin Core.’ It is a direct descendant of the original Bitcoin software client released by Satoshi Nakamoto after he published the famous Bitcoin whitepaper. Bitcoin Core is powered by an open-source development community, but it is maintained by a small group of maintainers and leading contributors.

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These contributors may propose refinements or modifications to the Bitcoin network’s source code through software updates, which could change essential aspects of the Bitcoin network, such as transaction irreversibility and limits on new Bitcoin mining. Such proposals and discussions generally occur on online forums, making it challenging to anticipate or mitigate their impact in advance and could result in excessive costs and inefficiencies in operation. If these changes are accepted and implemented, they may adversely affect the value and functioning of our Bitcoin-related activities, can result in excessive costs for miners and inefficiencies in operations until more efficient systems are established.

The open-source structure of the Bitcoin network protocol may result in inconsistent or ineffective changes to the Bitcoin protocol; failed upgrades or maintenance to the protocol could damage the Bitcoin network, which could adversely affect our business and the results of our operations.

The Bitcoin network operates based on an open-source protocol maintained by contributors, largely on the Bitcoin Core project on GitHub. As an open-source project, Bitcoin is not represented by an official organization or authority. As the Bitcoin network protocol is not sold and its use does not generate revenues for contributors, contributors are generally not compensated for maintaining and updating the Bitcoin network protocol. Although the MIT Media Lab’s Digital Currency Initiative funds the current maintainer of the Bitcoin Core project on GitHub, this type of financial incentive is not typical. The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner. Changes to a digital asset network which we are mining may adversely affect our results of operations.

Our ability to adopt technology in response to changing security needs or trends poses a challenge to the safekeeping of our digital assets.

The history of digital asset exchanges has shown that exchanges and large holders of digital assets must adapt to technological change in order to secure and safeguard their digital assets. We may move our digital assets to various exchanges to exchange them for fiat currency, which will require us to rely on the security protocols of these exchanges to safeguard our digital assets. While these exchanges purport to be secure malicious actors may be able to intercept our digital assets while we are in the process of selling them via such exchanges. Given the growth in their size and their relatively unregulated nature, we believe these exchanges will become a more appealing target for malicious actors. To the extent we are unable to identify and mitigate or stop new security threats, our digital assets may be subject to theft, loss, destruction, or other attacks, which could adversely affect our results of operations.

The limited rights of legal recourse available to us and our lack of insurance protection for risk of loss of our digital assets exposes us and our shareholders to the risk of loss of our digital assets for which no person may ultimately be held liable and we may be unable to recover our losses.

The digital assets we hold are not insured. Further, banking institutions will not accept our digital assets, and they are therefore not insured by the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, we may suffer losses to our digital assets which are not covered by insurance, and we may be unable to recover any of our carried value in these digital assets if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may be negatively impacted.

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If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by “FinCEN” (Financial Crime Enforcement Network- a division of the U.S. Department of the Treasury) under the authority of the U.S. Bank Secrecy Act, or otherwise under other federal or state laws, we may incur significant compliance costs, which could be cost prohibitive; if we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations.

To the extent that our activities cause us to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.

To the extent that our activities cause us to be deemed a “money transmitter” (“MT”) or an equivalent designation, under state law in any state in which we operate, we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. We will continue to monitor developments in such legislation, guidance, or regulations.

Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses, possibly affecting an investment in the Shares in a material and adverse manner. Furthermore, we and our service providers may be incapable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs. If we are deemed to be subject to and determined not to comply with such additional regulatory and registration requirements, we may act to dissolve and liquidate or any subsidiary subject to such regulatory requirements. Any such action may adversely affect the value of an investment in our securities.

Current status of the regulation of the exchange of Bitcoin under the CEA by the CFTC is unclear; to the extent we become subject to regulation under the CFTC in connection with our exchange of Bitcoin, we may incur additional compliance costs, which may be significant.

Current legislation, including the Commodities Exchange Act of 1936, as amended (the “CEA”) is unclear with respect to the exchange of Bitcoin. Changes in the CEA or the regulations promulgated there under, as well as interpretations thereof and official promulgations by the Commodities Futures Tradition Commission (“CFTC”), which oversees the CEA, much like the SEC oversees the Securities Act and the Exchange Act, may impact the classification of Bitcoin, and therefore may subject them to additional regulatory oversight by the CFTC.

Presently, Bitcoin derivatives are not excluded from the definition of a “commodity future” by the CFTC. We cannot be certain as to how future regulatory developments will impact the treatment of Bitcoin under the law. Bitcoin have been deemed to fall within the definition of a commodity, and we may be required to register and comply with additional regulation under the CEA, including additional periodic report and disclosure standards and requirements. Moreover, we may be required to register as a commodity pool operator or as a commodity pool with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in us. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect an investment in us. As of the date of this prospectus, no CFTC orders or rulings are applicable to our business.

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Currently Bitcoin and other cryptocurrencies are not subject to regulation by in the United States by any federal banking or Federal Reserve regulatory agencies.

If the activity in cryptocurrency expands, it is possible that these regulatory agencies could attempt to or actually impose regulations which would substantially affect our operations. Regulation of the exchange of Bitcoin under other federal regulatory agencies is possible; to the extent we become subject to other regulation in connection with our exchange of Bitcoin, we may incur additional compliance costs, which may be significant.

Unfavorable global economic, business, or political conditions could adversely affect our business, financial condition, or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control, including the impact of health and safety concerns, such as those relating to any future COVID-19 outbreak or other similar pandemics. The most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for Bitcoin and our ability to raise additional capital when needed on acceptable terms, if at all. Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.

Our future success will depend in large part upon the value of Bitcoin; if we are unable and if we are not able to mine Bitcoin and sell it at prices favorable to us, the results of our operations will suffer.

As previously disclosed, our operating results will depend in large part upon the value of Bitcoin because it’s the primary cryptocurrency we currently mine. Specifically, revenues from our Bitcoin mining operations are based upon two factors: (1) the number of Bitcoin rewards us successfully mine and (2) the value of Bitcoin. In addition, our operating results are directly impacted by fluctuations in the value of Bitcoin, because under ASU No. 2023-08 (effective December 15, 2024, early adoption permitted), the value of Bitcoin is marked-to-market at each reporting period. We adopted this guidance in the quarter ended June 30, 2024.

Risks Related to an Investment in Our Securities

We expect to experience volatility in the price of our common stock, which could negatively affect stockholders’ investments.

The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with securities traded in those markets. Broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. All of these factors could adversely affect your ability to sell your shares of common stock or, if you are able to sell your shares, to sell your shares at a price that you determine to be fair or favorable.

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Our common stock may be categorized as “penny stock,” which may make it more difficult for investors to sell their shares of common stock due to suitability requirements.

Our common stock may be categorized as “penny stock.” The Commission has adopted Rule 15g-9 under the Exchange Act, which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our common stock is significantly less than $5.00 per share and, unless we qualify for an exception, may be considered “penny stock.” This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules, if applicable to us, would require a broker-dealer buying our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or willingness of brokers or dealers to buy or sell our common stock, either directly or on behalf of their clients, may discourage potential stockholders from purchasing our common stock, or may adversely affect the ability of stockholders to sell their shares.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock, which could depress the price of our common stock.

FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares of common stock, have an adverse effect on the market for our shares of common stock, and thereby depress our price per share of common stock.

The elimination of monetary liability against our directors, officers, and employees under Nevada law and the existence of indemnification rights for our obligations to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees.

Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for breach of a fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification obligations under any future employment agreements with our officers or indemnification agreements we have entered into with our directors. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties; and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.

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We may issue additional shares of common stock in the future, which could cause significant dilution to all stockholders.

On June 1, 2022, our Board of Directors amended our Articles of Incorporation to authorize, among other things, the issuance of up to 350,000,000 shares of common stock, with a par value of $0.0001 per share and 20,000,000 shares of blank check preferred stock with a par value of $0.001. As of June 30, 2025, we had 25,067,479 shares of common stock outstanding; however, we may issue additional shares of common stock in the future in connection with a financing or acquisition. Any issuance of additional shares of our common stock, or securities convertible into our common stock, including but not limited to, warrants, options, and convertible promissory notes, will dilute the percentage ownership interest of all stockholders, may dilute the book value per share of our common stock, and may negatively impact the market price of our common stock.

Anti-takeover effects of certain provisions of Nevada state law may hinder a potential takeover of us.

Nevada’s Business Combination Laws prohibits certain business combinations between Nevada corporations and “interested stockholders” for two years after an “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Nevada law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation or (ii) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.

The effect of Nevada’s business combination law is potentially to discourage parties interested in taking control of us from doing so if they cannot obtain the approval of our Board. Both of these provisions could limit the price investors would be willing to pay in the future for shares of our common stock.

Because we do not intend to pay any cash dividends in the foreseeable future on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Declaring and paying future dividends, if any, will be determined by our Board, based upon earnings, financial condition, capital resources, capital requirements, restrictions in our Articles of Incorporation, contractual restrictions, and such other factors as our Board deems relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward-Looking Statements

The following is management’s discussion and analysis (“|MD&A”) of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words “believes,” “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K.

Our MD&A is comprised of significant accounting estimates made in the normal course of its operations, overview of our business conditions, results of operations, liquidity and capital resources and contractual obligations. We did not have any off-balance sheet arrangements as of June 30, 2025, or 2024.

The discussion and analysis of our financial condition and results of operations is based upon its financial statements, which have been prepared in accordance with generally accepted accounting principles generally accepted in the United States (or “US GAAP”). The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities at the date of its financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Background

We have not generated any significant revenue to date, and we have incurred recurring losses. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Trends and Uncertainties

Cryptocurrencies are highly volatile, which introduces risks in asset valuation and revenue predictability. Significant price drops can impact transaction volumes and lead to liquidity challenges, especially for firms holding substantial digital assets.

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With reduced market liquidity on some centralized exchanges and the migration to decentralized exchanges, firms may face difficulty executing large transactions without significant price impacts. This liquidity risk can be especially impactful for companies that rely on large or frequent trades

Users increasingly favor DeFi protocols for financial services, reducing reliance on centralized exchanges and traditional custody providers. This shift could threaten companies that primarily operate as intermediaries.

The cryptocurrency industry is a prime target for cyberattacks, including exchange hacks, phishing schemes, and smart contract exploits. The rapidly evolving nature of blockchain technology can make systems vulnerable to new types of attacks.

The technology underpinning cryptocurrencies and DeFi protocols is still developing. Interoperability challenges across different blockchain networks, as well as the potential for bugs or failures in widely used protocols, can disrupt operations and erode user trust

Rising interest rates and inflation could impact investor demand for cryptocurrency as a speculative asset, while also influencing operational costs. Many investors view cryptocurrencies as alternative assets, so inflation or economic downturns may reduce interest in speculative investments.

Proof-of-Work cryptocurrencies (e.g., Bitcoin) face increasing scrutiny over their energy consumption. ESG concerns could lead to investor divestment or regulatory restrictions, particularly in regions aiming to meet strict carbon emissions targets.

Companies that do not adapt to environmentally friendly practices, such as moving to Proof-of-Stake models, may face reputation and compliance risks in the future as ESG considerations influence customer preferences and regulatory actions

RESULTS OF OPERATION

For the Year Ended June 30, 2025, Compared to Year Ended June 30, 2024

Revenues for the year ended June 30, 2025, were approximately $32,390 compared to $15,824 for the year ended June 30, 2024, an increase of $16,566 or 105%. The increase in revenues was primarily due to recommencing mining operations at our recently acquired co-location facility. On March 8, 2024, mining operations were suspended, and we resumed consolidated mining operations at our new facility on March 21, 2025.

Cost of revenue for the year ended June 30, 2025, was $118,592, compared to $30,258 for the year ended June 30, 2024. The $88,334 increase was primarily due to the recommencement and expansion of mining operations following the migration of equipment to the newly acquired Orofino data center in March, 2025. The Company also began offering hosting services during fiscal 2025, which contributed to higher costs and increased depreciation and amortization on the Orofino facility and mining management software. In contrast, depreciation expense was minimal in fiscal 2024, as the miners’ useful lives had been revised to one year in fiscal 2023, leaving minimal carrying value thereafter.

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Our net loss for the year ended June 30, 2025, was $2,535,552 compared to a net loss of $1,023,271 during the year ended June 30, 2024. The $1,512,281 increase in the net loss is primarily attributable to a substantial increase in stock-based compensation issued for services, equity incentives to note holders and a decline in depreciation expense from the fiscal year ended June 30, 2024, to June 30, 2025, due to its revision of the mining equipment’s estimated useful life from seven to one year.

During the year ended June 30, 2025, we incurred operating expenses of $2,079,851 compared to $996,327 incurred during the year ended June 30, 2024. The $1,083,524 increase was mainly due to an increase in stock-based compensation issued for services equity incentives to note holders, and a decline in depreciation expense from the fiscal year ended June 30, 2024, to June 30, 2025, due to its revision of the mining equipment’s estimated useful life from seven to one year.

During the year ended June 30, 2025, we incurred interest expense of $108,190, on notes payable, compared to $27,458 during the year ended June 30, 2024.

LIQUIDITY AND CAPITAL RESOURCES

Year Ended June 30, 2025

As of June 30, 2025, our current assets are $95,565 and our current liabilities are $1,332,539, which resulted in a working capital deficit of $1,236,974. As of June 30, 2024, our current assets are $152,249 and our current liabilities are $1,259,861, which resulted in a working capital deficit of $1,107,612.

As of June 30, 2025, and June 30, 2024, our total liabilities are $1,836,849 and $1,259,444, respectively and are comprised entirely of current liabilities, representing increased liabilities of $576,988. Of the total liabilities as of June 30, 2025, $504,310 will be satisfied by the issuance of preferred stock at a future date and is accrued as stock subscription payable for the issuance of preferred stock without designation.

Cash Flows from Operating Activities

For the year ended June 30, 2025, net cash flows used in operating activities was $763.752 compared to net cash flows used in operating activity of $614,853 for the same period in 2024, representing increased net cash flows used in operating activities of $148,899.

Cash Flows used by Investing Activities

For the year ended June 30, 2025, net cash flows used by investing activities was $370,618 and June 30, 2024, net cash flows used by investing activities was $0, representing net cash used in investing activities of $370,618.

Cash Flows from Financing Activities

For the year ended June 30, 2025, and June 30, 2024, our net cash flows provided by financing activities were $1,184,067 and $590,980, respectively, representing increased net cash flows by financing activities of $593,087.

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PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded from (a) revenues through the sales of Bitcoin and other cryptocurrency sales; and (b) sales of our restricted common stock. Our working capital requirements are expected to increase commensurate with our business growth.

Our principal demands for funding are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds rose through proceeds from the issuance of debt or equity.

MATERIAL COMMITMENTS

We, through our wholly owned subsidiary Raptor Mining, previously had contracts with two co-location cryptocurrency mining facilities. These facilities provided the Company with electricity and maintenance of our crypto miner hardware.

PURCHASE OF SIGNIFICANT EQUIPMENT

After completing the acquisition of the Orofino ID facility, we applied for lease financing for the purpose of securing 275 latest generation ASIC S21 270 TH miners. Pricing fluctuations for ASIC miners is generally related to the price of Bitcoin; as of the date of this Annual Report, these particular ASIC miners cost between $5,300 and $6,500 per miner. Our planned lease or purchase of these miners is subject to our financial ability to do so and/or to obtain equity financing to pay for the ASIC miners.

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

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OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial conditions, revenues or expenses, results of operations, liquidity capital expenditures or capital resources.

GOING CONCERN

Our consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established a source of revenue sufficient to cover our operating expenses and to allow us to continue as a going concern. We have incurred losses since inception resulting in an accumulated deficit on June 30, 2025, and 2024 of $9,559,350 and $7,023,798, respectively. Net losses for fiscal years ended June 30, 2025, and 2024 were $2,535,552 and $1,023,271, respectively. Our ability to operate as a going concern is dependent on obtaining adequate capital to fund operations until we become profitable. In its report on our financial statements for the years ended June 30, 2025, and 2024, our independent registered public accounting firm included an explanatory paragraph regarding substantial doubt of our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

RECENTLY ISSUED ACCOUNTING STANDARDS

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Under ASU No. 2023-08, effective December 15, 2024, with early adoption permitted, companies are required to mark Bitcoin and similar digital assets to market at each reporting period. This guidance ensures the Bitcoin holdings are recorded at fair market value, reflecting any unrealized gains or losses at the end of each period. The Company adopted this new accounting standard early, as of the quarter ending June 30, 2024, to enhance the transparency of its financial reporting. This adoption aligns with evolving regulatory practices surrounding digital assets and provides stakeholders with timely and relevant information on asset valuation.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.