BITMINE IMMERSION TECHNOLOGIES, INC.

BITMINE IMMERSION TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for shares and per share data)

NOTE 1 –NATURE OF THE BUSINESS

About Bitmine Immersion Technologies, Inc.

Bitmine Immersion Technologies, Inc. and its wholly owned subsidiary (“Bitmine” or the “Company”) operates in the digital asset industry with a strategic focus on acquiring, holding, and managing digital assets as part of its treasury management activities. During 2025, the Company refined its business strategy to emphasize digital asset treasury operations, reflecting a transition from primarily mining and hosting activities toward the long-term accumulation and optimization of digital asset holdings. Bitmine continues to maintain ancillary mining, hosting, and consulting operations; however, its primary objective is to manage digital assets as long-term strategic reserves to support liquidity, and capital formation.

During the year ending August 31, 2025, the Company completed several capital raising activities for which the proceeds were used to acquire ETH. Refer to Note 9, Stockholders Equity, for additional information regarding the Company’s capital raises.

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

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) which is the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) in the United States.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany account balances and transactions have been eliminated in the consolidated financial statements.

Reverse Stock Split

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

The Company’s consolidated financial statements in this report for the periods ended August 31, 2025, and August 31, 2024, and all references thereto have been retroactively adjusted to reflect the split.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation. Such reclassifications did not have a material effect on the Company’s financial condition or results of operations as previously reported.

NOTE 2 –SUMMARY OF SIGNIFICANT POLICIES

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.

The most significant estimates relate to the calculation of stock-based compensation, collectability of notes receivable, useful lives and recoverability of long-lived assets, depreciation methods, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. There have been no material changes to the Company’s accounting estimates since the Company’s consolidated financial statements for the fiscal year ended August 31, 2025.

Segment Reporting

The Company and its wholly owned subsidiary operate inone segment. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. All material Company operations qualify for aggregation due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company has the following revenue streams: revenues from digital currency mining, revenues from hosting, revenues from the sale of mining equipment, revenues from leasing, and revenues from consulting. A description of the revenue recognition criteria for each revenue stream is shown below:

Revenues from Digital Currency Mining

The Company participates in digital asset mining pools by executing agreements with a mining pool operator (the Luxor Mining Pool) to perform hash computation services (i.e. hashrate) for the mining pool in exchange for consideration. The mining pool applies the Full-Pay-Per-Share (“FPPS”) payout model. Under the FPPS model, the mining pool pays the Company a fixed amount for each valid share of computation it submits, regardless of whether the pool successfully mines a block on a daily basis (beginning at 0:00:00 UTC). The mining pool calculates a per-share payout based on their own calculation of expected block rewards and transaction fees, which is primarily based on the hashrate provided to the mining pool as a percentage of total network hashrate, current blockchain difficulty, and other inputs.

The Company decides when to provide hashrate to the mining pool under the agreements and the Company’s enforceable right to compensation begins only when, and lasts as long as, the Company provides hashrate to the mining pool. The only consideration due to the Company relates to the provision of hashrate. Such agreements are freely terminable at any time by the Company or by the pool operator, without penalty to either party. Providing hashrate in digital asset transaction verification services is an output of the Company’s ordinary activities and is the only performance obligation in the hash computation service agreement with mining pool operator.

The transaction consideration received, is noncash consideration in the form of BTC. Changes in the fair value of the noncash consideration after contract inception due to the form of the consideration (changes in the market price of BTC) are not included in the transaction price and, therefore, are not included in revenue. The mining pool operator charges a fee to cover the costs of maintaining the pool. These fees are deducted from amounts the Company may otherwise earn and are treated as a reduction to the consideration received.

For accounting purposes, the contract term is less than 24 hours since the agreement between the Company and the mining pool is continually renewed at the beginning of each measurement period. However, the continual renewal of the agreement does not represent a material right requiring separate performance obligations, as the FPPS formula remains the same upon each renewal.

Revenue is recognized over the contract term based on the price of BTC at the inception of the contract and the amount of BTC received at the end of the contract.

There is no significant financing component in these transactions, due to the performance obligations and settlement of the transactions being on a daily basis.

Revenues from Hosting

The Company records revenue from hosting agreements that establish enforceable rights and obligations with customers who place their mining equipment in the Company’s co-hosting facility. Under these agreements, the Company has a single performance obligation: to provide energized space and related hosting services, including electricity, infrastructure, and operational support, which enable the customer’s mining operations. The transaction price consists of fixed amounts billed in U.S. dollars for electricity and other fees, as well as a variable component based on a percentage of digital assets generated by the customer’s mining activities. Because there is only one performance obligation, the entire transaction price is allocated to hosting services. Revenue is recognized over time as the Company satisfies its performance obligation by providing continuous hosting services. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of digital assets generated by the client’s hosting activities. For amounts billed in U.S. dollars, revenue is recognized over-time as the Company provides continuous hosting services. Revenue related to the variable component, which is based on a percentage of digital assets generated by the customer’s mining activities, is recognized over time as the Company provides hosting services and the customer simultaneously benefits from those services. The amount of digital assets earned is measured daily based on the mining proceeds attributable to the customer’s operations, and settlement occurs when the Company receives its share from the mining pool. Mining proceeds are initially received into a cold wallet, and the Company remits the customer’s portion upon receipt.

Revenues from the Sale of Mining Equipment

During the fiscal year ended August 31, 2025, the Company sold and delivered transformers and other mining equipment to customers as part of its resale activities. These transactions are accounted for in accordance with ASC 606,Revenue from Contracts with Customers. Each sale represents a distinct performance obligation, which is satisfied at a point in time when control of the equipment transfers to the customer—generally upon delivery and acceptance under the terms of the purchase order. The transaction price is fixed and determinable at contract inception, and there are no variable consideration components or significant financing elements. The Company allocates the entire transaction price to the single performance obligation and recognizes revenue when the customer obtains control of the equipment.

Revenues from Leasing

During the fiscal year ended August 31, 2025, the Company entered into two machine leasing agreements with KULR Technology Group, Inc. (“KULR” or the “Lessee”). Under the terms of these agreements, the Company provides KULR the right to use 3,000 mining machines and associated operational services for a term of 228 days. This arrangement represents a single performance obligation satisfied over time. The total transaction price is $3,200,000, subject to variable consideration in the form of downtime credits. Downtime credits represent reductions in the lease fee owed by KULR if actual operational downtime exceeds the agreed threshold, calculated based on the BTC that would have been mined during the excess downtime and valued at the closing price as published by Yahoo Finance at midnight Universal Time Coordinated (UTC) on the relevant date. Downtime credits are estimated using the expected value method and are constrained until downtime occurs and can be measured reliably. The entire transaction price is allocated to the single performance obligation. Revenue is recognized over time on a straight-line basis across the 228-day term, using an output method based on time elapsed. Variable consideration is recognized only when it is probable that a significant reversal will not occur, consistent with ASC 606-10-32-12. Downtime credits, finalized after measurement, are recorded as a reduction to revenue.

Revenues from Consulting

In 2025, the Company began selling consulting services and entered into a consulting and services agreement with KULR. Under this agreement, the Company agreed to provide a variety of services related to both the miners subject to the Lease and BTC mining operations in general. Services related to leased miners include performing all commercially reasonable and necessary activities required for the miners to operate consistent with the performance guidelines in the Lease; managing relationships with hosting providers for both leased equipment and other equipment owned by the customer; managing mining pool providers; coordinating on-site and off-site miner repairs; monitoring miner performance through dashboards and troubleshooting network errors; conducting market analysis, including miner pricing and purchase/sale recommendations; and handling shipping logistics for miner imports and exports.

In addition, the Company provides treasury management services, including advice on security and custody solutions; regulatory and compliance expertise, including U.S. GAAP accounting guidance and disclosures; risk management and hedging strategies; techniques to maximize BTC exposure as a public company; customized treasury solutions; and proactive volatility management.

The agreement represents a legally enforceable contract with specified rights, payment terms, and commercial substance. The services are treated as a single performance obligation because they are closely connected and collectively provide a unified outcome for the customer. The transaction price for the agreement is fixed at $800, with no significant variable consideration identified, and no significant financing components. The entire transaction price is allocated to the combined performance obligation. Revenue is recognized over time on a straight-line basis across the 12-month term, as services are provided continuously and the customer simultaneously receives and consumes the benefits of the services. The Company determines cost of sales for consulting contracts based on each consultant’s hourly rate multiplied by the number of hours incurred in performing the related services.

Concentration of Customers

For the years ended August 31, 2025 and August 31, 2024, the Company derived approximately 37.7% and 0% of its total revenues, respectively, from one customer. Additionally, the Company notes that there were no trade accounts receivable outstanding at both August 31, 2025 and 2024, and therefore no concentration of credit risk within this population.

Contract Liabilities

Contract liabilities represent amounts received or due from customers before the Company transfers its software or services under an enforceable agreement. Revenue is recognized in the period(s) when control of the goods or services is transferred to the customer. The amounts relate to product or services based on the transaction price allocated to each performance obligation in the customer contract. It is presented as current or non-current on the consolidated balance sheets, depending on whether goods or services are expected to be delivered within the next 12 months.

The Company’s contract liabilities represent advance payments from customers relating to the sale of transformers subject to the terms of a purchase order. As of August 31, 2025 the Company’s contract liability balance amounted to $1,067. As of August 31, 2024 the Company had $790 of contract liabilities which represented advance payments from a related party to the Company.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances in deposit accounts with major financial institutions, which at times exceed federally insured limits. There have been no losses related to deposit balances held in excess of federally insured limits.

Digital Assets

The Company accounts for its digital assets, which are comprised of BTC and ETH as indefinite-lived intangible assets in accordance with ASC 350-60,Intangibles—Goodwill and Other-Crypto Assets. The Company has ownership of and control over its BTC and ETH and uses third-party custodial services at multiple locations that are geographically dispersed to store its digital assets. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at fair value, with the gain or loss associated with remeasurement of the digital assets reported in net income.

The fair value of the Company’s digital assets is determined based on the quoted price in its principal market, CoinBase, at the time of measurement (midnight UTC). The Company determines its principal market as the market that it has access to and has the greatest volume and level of orderly transactions in accordance with ASC 820,Fair Value Measurement. The Company tracks the cost of its digital assets using the first-in-first-out (FIFO) method. During the years ending August 31, 2025 and 2024, the Company realized gains from the sale of digital assets of $3,748 and $114, respectively.

Digital assets earned by the Company through its mining activities are included within operating activities on the accompanying Consolidated Statements of Cash Flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in operating expense in the consolidated statements of income and comprehensive income (loss).

The Company holds its BTC in an account at Bitgo Trust (“Bitgo”), a well-known BTC custodian, which it also uses to liquidate its BTC when necessary. The Company also has an account with Gemini Trust Company, LLC, which is regulated by the New York Department of Financial Services as a backup facility.

Additionally, the Company has strategically invested in ETH, becoming the largest corporate holder of ETH, with over 1,875 tokens valued at approximately $8,260,607 as of August 31, 2025. These purchases were made through major OTC desks like Bitgo and Galaxy Digital. The Company views ETH as a long-term reserve asset, central to its positioning in the AI and digital asset investment cycles and aims to eventually hold 5% of the total ETH supply.

See Note 3, Digital Assets, to the Consolidated Financial Statements for further information regarding the Company’s purchases and sales of digital assets.

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives for all other property and equipment are as follows:

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. This process includes (i) identifying whether an indicator of impairment exists, (ii) assessing recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted cash flows expected to result from its use and eventual disposition, and (iii) if the asset group is not recoverable, measuring the impairment loss as the excess of the carrying amount over fair value. Actual future outcomes could result in different conclusions that could materially affect the consolidated financial statements.

No depreciation is recorded on an asset until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is properly configured to turn on the machines.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a hierarchal framework, which prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As of August 31, 2025 and 2024, the carrying amounts of the Company’s financial instruments, including cash and cash equivalents and accrued liabilities, which approximate fair value due to their short-term nature. The Company recognizes transfers between levels at the end of the reporting period as if the transfers occurred on the last day of the reporting period. There were no transfers during the years ended August 31, 2025 or 2024.

The Company holds digital assets in the form of both BTC and ETH, both of which have an active market to buy and sell. The Company’s digital assets are recorded at fair value under ASC 820 and are considered Level 1 financial instruments. The Company has designated a principal market based on the market the Company has access to that has the greatest volume and level of orderly transactions for BTC and ETH. The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become accessible, or the volume/activity in the current principal market declines.

Basic and Diluted Earnings (Loss) per Share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per Share” (“ASC 260”). As there were participating securities, including Series A and Series B Convertible Preferred Stock, outstanding during the years reported, the two-class method is utilized to compute the basic and dilutive EPS. Under the two-class method, undistributed earnings is allocated among the holders of common stock and participating securities based on their contractual participation rights. Because holders of participating securities do not have contractual obligation to share losses, losses were not allocated to holders of participating securities and, therefore, the two-class method was not used for reporting period when the Company had a net loss.

Basic EPS is computed by dividing undistributed earnings attributable to common stockholders, after allocating undistributed earnings to participating securities, by the weighted-average number of common shares outstanding during the period. Diluted impact from potential common stock instruments is calculated using the treasury stock method, if-converted method, and two-class method, unless the effect would be anti-dilutive. The dilutive EPS is determined based on the most dilutive out of the if-converted or two-class method.

Income Taxes

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

Stock-Based Compensation

The Company accounts for share-based compensation awards in accordance with ASC 718. For equity-classified share-based compensation awards, the Company recognizes compensation expenses based on their grant-date fair value. For awards with service only vesting condition, the Company recognizes compensation expenses on a straight-line basis. The impact of forfeiture is accounted for when they occur.

Recent Accounting Pronouncements

Crypto Assets

The FASB issued Accounting Standards Update (“ASU”) 2023-08,Intangibles-Goodwill and Other-Crypto Assets: Accounting for and Disclosure of Crypto Assets. The goal of this update is to require certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the consolidated statement of income each reporting period. Further, this update requires the name, cost basis, fair value, and number of units for each significant crypto asset holding. ASU 2023-08 is effective for annual periods beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08 on September 1, 2024, resulting in no cumulative effect in fair value on digital assets.

Segment Reporting

The FASB issued ASU 2023-07,*Segment Reporting, ASC 280: Improvements to Reportable Segment Disclosures.*This amendment requires enhanced disclosures about significant segment expenses and other segment items on both an annual and interim basis. The Company has applied the standard retrospectively to all periods presented in the consolidated financial statements. The adoption of ASU 2023-07 did not impact the Company’s determination of reportable segments but resulted in enhanced disclosures related to segment expense information. The adoption did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows.

Business Combinations - Joint Venture Formations

The FASB issued ASU 2023-05*, Business Combinations – Joint Venture Formations (Subtopic 805-60)*. The amendments in this Update address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. The objectives of the amendments are to (1) provide decision-useful information to investors and other allocators of capital (collectively, investors) in a joint venture’s financial statements and (2) reduce diversity in practice. The amendments in this Update are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Additionally, a joint venture that was formed before January 1, 2025, may elect to apply the amendments retrospectively if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. The Company does not expect ASU 2023-05 to have a material impact, as it has no new joint ventures expected to be formed after the effective date of January 1, 2025.

Leases

The FASB issued ASU 2023-01,Leases, ASC 842: Common Control Arrangements. This pronouncement requires entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The adoption of ASU 2023-01 did not have a significant impact on the Company’s consolidated financial statements.

Liabilities – Supplier Finance Programs

The FASB issued ASU 2023-04,Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The ASU requires additional disclosures about supplier finance program obligations to enhance transparency of their effects on working capital and liquidity. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years*.*The Company does not utilize supplier finance programs. While the Company has previously entered into derivative instruments in the normal course of business, no such instruments were outstanding as of August 31, 2025. Accordingly, adoption of ASU 2023-04 is not expected to have a material impact on the Company’s consolidated financial statements.

**NOTE 3 –DIGITAL ASSETS **

The following table sets forth the units held, cost basis, and fair value of both BTC and ETH held, as shown on the balance sheet as of August 31, 2025:

Cost basis is equal to the cost of the digital asset, net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted digital assets prices within the Company’s principal market at the time of measurement (midnight Eastern).

The following table presents a reconciliation of BTC held as of August 31, 2025 and 2024:

The Company acquired ETH as a part of a strategic business shift during fiscal year 2025 and therefore only held an ETH balance as of August 31, 2025. The following table presents a reconciliation of ETH held as of August 31, 2025:

NOTE 4 –PROPERTY AND EQUIPMENT

The following tables set forth the components of the Company’s property and equipment at August 31, 2025 and 2024:

For the years ended August 31, 2025 and 2024, the Company recorded depreciation expense of $761 and $924, respectively, recorded within “cost of sales self-mining”.

Additionally, for the years ended August 31, 2025 and 2024, the Company recognized impairment charges of $1,912 and $120 recorded within impairment of property and equipment in the consolidated statement of operations.

Loss on Sale of Equipment

The Company previously had operation in Trinidad which is decided to dispose of during fiscal year 2025. As such, the Company sold all property and equipment at their physical locations in Trinidad which was comprised of $1,928. In exchange, the Company received $400 in cash resulting in $1,528 recorded in the loss on sale of equipment within the consolidated statement of operations. Refer to Note 6, Investments and Notes Receivable, which discusses the sale of the Company’s related interest held in ROC Digital Mining I, LLC.

NOTE 5 –ACCRUED LIABILITIES

As of August 31, 2025 and 2024, accrued liabilities are composed of the following:

NOTE 6 –INVESTMENTS AND NOTES RECEIVABLES

Transaction with ROC Digital

In October 2022, the Company entered into an agreement with ROC Digital Mining I, LLC (the “ROC Digital” or “ROC”), to jointly develop and operate a BTC mining operation in Pecos, Texas. Under the Agreement, the Company contributed one immersion container, six transformers and cash, with a fair value of $987,429, as a capital contribution to ROC Digital Mining and this investment was accounted for under the equity method in accordance with ASC 323. In return, the Company received 240 Class B Units of ROC Digital pursuant to an ongoing offering of a total of 1,000 Class B Units at $4,400 per unit.

The Company simultaneously sold ROC Digital four immersion containers for $1,200, which is payable pursuant to a promissory note that bears interest at 5% per annum and is payable pursuant to monthly payments of $31,204 per month commencing on December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026. The note was secured by the equipment that was sold. The Company also obtained the right to locate one container at the location that the Company would be able to use for self-mining.

On January 17, 2025, and in connection with the sale of interests in the investment, the Company settled the remaining $600 of notes receivable from ROC Digital Mining I, LLC by executing an agreement with Innovative Digital Investors (“IDI”) to apply the notes receivable from ROC Digital to amounts attributable to IDI under a line of credit agreement (LOC) entered into by the Company in 2022. Refer to Note 7, Loans Payable, for further details surrounding this loan. As a result of this agreement, there are no notes receivable as of August 31, 2025.

Investment in Joint Venture

In October 2022, we entered into a joint venture arrangement with ROC Digital Mining Manager LLC (“ROC Manager”) to jointly develop and operate a BTC mining operation in Pecos, Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987 as a capital contribution to ROC Digital Mining I LLC (“ROC Digital”). An affiliate of ROC Manager also contributed an immersion container. We simultaneously sold ROC Digital four immersion containers for $1,200, which is payable pursuant to a promissory note that bears interest at 5% per annum, and provides for monthly amortizing payments through May 31, 2026. The note is secured by the equipment that was sold. We own approximately 30% of ROC Digital. Day to day management of the operations of ROC Digital was provided by ROC Digital Mining LLC (“ROC Mining”), an affiliate of ROC Manager in which we do not have an interest.

Due to losses incurred on the Joint Venture, on August 29, 2025, the Company elected to sell its investment in ROC Digital. At the time of the disposal, the Company’s investment in ROC Digital was $668. The Company decided to dispose of their interest in ROC Digital inclusive of a select property and equipment, primarily comprised of $720 in unfinished Rykor Containers that were classified as fixed assets not in service. The Company settled on $110 of cash in exchange for the sale of its investment resulting in $1,278 recorded in loss on sale of investment within the consolidated statement of operations. The amount remained outstanding and was held within other receivables as of August 31, 2025.

Notes Receivable

Notes receivable consists of notes received as partial consideration for the sale of mining equipment and are collateralized by the mining equipment that was the subject of the sale with ROC Digital mentioned above. As of August 31, 2025 and 2024, notes receivable consists of the following:

The note receivable is primarily settled through an agreement between IDI and ROC Digital to use the receivable amount from ROC Digital to settle the Company’s loan of $600 due to IDI.

During the years ended August 31, 2025 and 2024, the Company recorded $1 and $55, respectively, in interest income on these notes.

NOTE 7 –LOANS PAYABLE

Line of Credit from IDI

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

Effective May 13, 2023, the Company and IDI amended the LOC Agreement to increase the amount that the Company may borrow thereunder to $1,750, extended the date by which the Company could borrow funds thereunder to December 1, 2023, and extended the maturity date to December 1, 2024. Simultaneously with the extension, the Company borrowed an additional $500.

On November 4, 2024, the Company and IDI amended the LOC Agreement to further increase the amount that the Company may borrow thereunder to $2,300. In addition, the Company has the right to extend the maturity for six monthly periods, in consideration for an extension fee of $25 for each extension, which will be added to the balance due under the LOC.

During the fiscal year ended August 31, 2025, all outstanding loans, including principal and accrued interest, owed to IDI were repaid through a combination of cash payments, issuance of approximately 100,000 shares of common stock at the price of $8 per share, and an agreement with Jonathan Bates to exchange receivables due to Bitmine from ROC Digital (see Note 6, Investments and Notes Receivable) for a $600 reduction in the outstanding LOC balance. The extinguishment resulted in a gain of $143, which was accounted for as a capital contribution from a related party and recognized in additional paid-in capital. For the fiscal year ended August 31, 2024, the amount of principal and interest due to related party was $1,625 and $316.

Hash Rate Sale Agreement

In November 2024, the Company entered into an agreement to purchase 3,000 S-19j Pro BTC miners for a total price of $1,035 from Luxor Technology Corporation. At the time of the purchase, the Company entered into a Hashrate Sale Agreement to finance part of the transaction. Per the requirements of the Hashrate Sale Agreement, the Company sold 90 PH per day for 365 days at a price of 0.0005 per hashrate. In May 2025, the Company settled the Hashrate Sale Agreement loan in cash of $949 and delivered hashrate of $375, resulting in a loss on the extinguishment of debt of $289.

NOTE 8 –RELATED PARTY TRANSACTIONS

Transactions with IDI and ROC Digital

As described in Note 7, Loans Payable, the Company had a loan payable to IDI under a LOC agreement with principal and interest due of $1,625 and $316 at August 31, 2024 which represents related party transactions. These transactions included a new draw on the LOC, cash payments, the issuance of shares to IDI, and the exchange of receivables from ROC Digital Mining I, L.P. outlined in Note 6, Investments and Notes Receivable. As a result of the transactions set forth in Notes 6 and 7, the amount of principal and interest due to IDI was $0 and $0 as of August 31, 2025.

Transactions with Rykor Energy Solutions, LLC

Rykor owned 133,600 shares of the Company’s common stock and 267,200 warrants, and as such is the beneficial owner of approximately 17.8% of the Company’s common stock. A principal of Rykor (who is also a principal of ROC Mining) also serves on the Board.

In May 2024, the Company entered into a transaction to sell 20 transformers to Rykor Energy Solutions, LLC (“Rykor”). The total sales price of the transformers was approximately $1,407 and the Company’s total cost was approximately $1,340. As a result of this transaction, as of August 31, 2024, the Company recognized $704 in Advanced Payments from Rykor and $670 in Prepaid Expenses, for related supplies, on the consolidated balance sheets.

During the year-ended August 31, 2025, by mutual agreement, the sale transaction was reduced to 10 transformers. These transformers were delivered and the Company recorded revenue of $704 within revenue from the sale of mining equipment with a cost of sales of $670 recorded in cost of sales mining equipment resulting in a profit of $34 within the Consolidated Statement of Income (loss). Accordingly, as of August 31, 2025, this transaction was completed and no balances remain on the Company’s consolidated balance sheet with Rykor.

NOTE 9 –STOCKHOLDERS’ EQUITY

Common Stock and Pre-Funded Warrants

On June 4, 2025, the Company entered into an underwriting agreement with ThinkEquity LLC (“ThinkEquity”) to sell 2,250,000 shares of common stock at a discount to the public offering price of $7.40 per share (92.5% of the public offering price of $8.00 per share) and granted the Underwriter a 45-day over-allotment option to purchase up to 337,500 additional shares of common stock. The offering closed on June 6, 2025. The Company sold 2,587,500 shares of common stock and received net proceeds of $18,771 from the sale, after deducting the underwriting discounts and commissions and other estimated offering expenses.

On June 30, 2025, the Company entered into securities purchase agreement with certain accredited investors to sell and issue an aggregate of (i)36,309,592 shares of the Company’s common stock, par value $0.0001 per share, at an offering price of $4.50 per share, and (ii) pre-funded warrants to purchase up to aggregate of 11,006,444 shares of common stock at an offering price of $4.4999 per pre-funded warrant (the “June Offering”). Each of the pre-funded warrants is exercisable for one share of common stock at the exercise price of $0.0001 per share, immediately exercisable, and may be exercised at any time until all of the pre-funded warrants are exercised in full, subject to certain beneficial ownership limitations set forth therein. The transaction closed in July 2025, and the Company received aggregated cash proceeds of $211,519, net of cash issuance cost.

On June 30, 2025, the Company also entered into securities purchase agreement with certain accredited investors to sell and issue an aggregate of 8,804 shares of common stock, at an offering price of $4.50 per share, for ETH or BTC. The transaction closed in July 2025, and the Company received in-kind contribution in the form of ETH and BTC with an aggregated fair value of $39,619.

On July 9, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each of Cantor Fitzgerald & Co. (“Cantor”) and ThinkEquity (each, an “Agent” and together, the “Agents”), pursuant to which the Company, from time to time, at its option may offer and sell shares (the “ATM Shares”) of its common stock, par value $0.0001 per share, to or through Cantor, acting as principal and/or the sole designated sales agent having an aggregate sales price of up to $2,000,000 (the “ATM Offering”). On July 24, 2025, the Company filed a supplement to the prospectus with the SEC to increase the number of Shares that may be sold in the ATM Offering pursuant to the Sales Agreement to up to $4,500,000 (the “ATM Sales Increase”). Subject to the terms and conditions of the Sales Agreement, Cantor will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the ATM Shares from time to time, based upon the Company’s instructions. The Company has provided the Agents with customary indemnification and contribution rights in favor of the Agents, and the Agents will be entitled to a commission of up to 3.0% of the gross proceeds from each sale of the ATM Shares pursuant to the Sales Agreement. As of August 31, 2025, the Company sold 170,695,568 shares of common stock pursuant to the ATM offering and received cash proceeds of $7,717,761, net of the commission of $114,277. Additional net cash proceeds of $101,170 were received on September 2, 2025.

Series A and B Convertible Preferred Stock

The Board had authorized the issuance of two series of preferred stock, the Series A Convertible Preferred Stock (the “Series A Preferred Stock”) for 25,000 shares, of which 22,698 shares were issued; and Series B Convertible Preferred Stock (the “Series B Preferred Stock”) for 150 shares, of which,125 shares were issued. All outstanding shares of Series A Preferred Stock and Series B Preferred Stock were converted during the year ended August 31, 2025. As of August 31, 2025, there wereno shares of Series A Preferred Stock and Series B Preferred Stock outstanding. As of August 31, 2024, there were 22,698 shares of Series A Preferred Stock outstanding.

In November 2024, the Company issued 125 shares of Series B Convertible Preferred Stock to IDI in consideration for $200 cash and 575,000 shares of common stock owned by IDI, in connection with the amendment made to the Company’s LOC with IDI. The Series B Convertible Preferred Stock has a conversion price of $4.00 per share. This issuance of the Series B Convertible Preferred Stock triggered a down-round adjustment per the certificate of incorporation, lowering the conversion price of Series A Convertible Preferred Stock from $11.500 to $4.00. The adjustment resulted in an increase of $2,961 to the fair value of Series A Convertible Preferred Stock, which was accounted for as a deemed dividend.

Following the close of the June Offering in July 2025,22,698 shares of Series A Convertible Preferred Stocks and 125 shares of Series B Convertible Preferred Stocks were converted to 1,759,915 shares of the Company’s common stock.

Series A Convertible Preferred Stock has the following rights:

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

Liquidation Preference: The Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $10 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock. The aggregate amount of liquidation preference for Series A Convertible Preferred Stock is $4,560.

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

Directors: The Series A Preferred Stock has the exclusive right to nominate and vote on two (2) members of the Board.

Voluntary Conversion Rights: Each share of Series A Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series A Preferred divided by a conversion price of $0.20 per share.

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

Redemption by Company: The Company may redeem all of the Series A Preferred at any time on twenty days notice by payment of the liquidation preference of the Series A Preferred.

Redemption by the Holders: Any holder of Series A Preferred may request that some or all of its Series A Preferred be redeemed to the extent of 30% of the liquid net assets of the Company in excess of $2.0 million. To the extent any holder requests redemption under this provision, the Company is required to send a notice to all other Series A Preferred holders, who will be entitled to request redemption of some or all of their shares as well. Each holder is required to redeem at least the lesser of 10,000 shares or the number of shares of Series A Preferred held by the holder.

Redemption on Fundamental Transaction: In the event the Company engages in a fundamental transaction, a majority of the holders of Series A Preferred may require the Company to redeem all of the Series A Preferred at the closing of the transaction.

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

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

Series B Convertible Preferred Stock has the following rights:

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

Liquidation Preference: The Series B Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $1,000 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock. The aggregate amount of liquidation preference for Series B Convertible Preferred Stock is $2,500.

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

Voluntary Conversion Rights: Each share of Series B Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series B Preferred divided by a conversion price of $0.20 per share.

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

Redemption by Company: The Company may redeem all of the Series B Preferred at any time on twenty days’ notice by payment of the liquidation preference of the Series B Preferred.

Redemption by the Holders: The holders of the Series B Preferred shall not have the right to compel the Company to redeem their Series B Preferred unless the Company is in default under the terms of the Certificate of Designation.

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

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

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

As of August 31, 2025, there were no shares of preferred A or B outstanding.

NOTE 10 –STOCK-BASED COMPENSATION

Restricted Stock Awards

The Company issued restricted stock awards (“RSA”) to one executive and directors in exchange for services. RSAs had time vesting period ranging from 2 to 5 years.

A summary of RSA for the fiscal year ended August 31, 2025 is presented below:

One executive held 135,360 shares of RSAs. On August 29, 2025, the Company reached an agreement with the executive to accelerate all of his unvested RSAs. The Company recognized a total compensation expense of $928 in connection with the modification. The remaining RSAs become fully vested on January 15, 2025 according to their original vesting condition.

During the years ended August 31, 2025 and 2024, the Company recognized compensation expenses of $2,425 and $1,123 for RSAs, respectively, inclusive of the modification compensation expense noted above.

Warrants

In connection with the June Offering, the Company issued common stock purchase warrants to a placement agent (the “Placement Agent Warrants”) on July 8, 2025 in exchange for services. The Placement Agent Warrants are exercisable immediately upon issuance to purchase up to 1,231,945 shares of the Company’s common stock at an exercise price of $5.40 per share. The warrants were fully vested upon issuance and have a contractual term offive years. The total grant-date fair value of the Placement Agent Warrants is $134,654, which was treated as the issuance cost, net against the cash proceeds from the June Offering.

On July 8, 2025, the Company entered into a Strategic Advisor Agreement with Ethereum Tower LLC (the “Strategic Advisor”) pursuant to which the Company engaged the Strategic Advisor to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the digital asset technology sector. As compensation for services rendered by the Strategic Advisor under the Strategic Advisor Agreement, the Company issued to the Strategic Advisor warrants to purchase 3,192,620 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”) at an exercise price of $5.40 per share. The Strategic Advisor Warrants were fully vested upon issuance and have a contractual term offive years. The total grant-date fair value of the Strategic Advisor Warrants is $348,959, which was immediately expensed and included in operating expense in the consolidated statement of income (loss).

In connection with the share offering on June 4, 2025, the Company issued to ThinkEquity warrants to purchase up to 129,375 shares of Common Stock at an exercise price of $10 per share (the “Representative’s Warrants”) in exchange for services. The Representative’s Warrants were fully vested upon issuance, but are not exercisable until December 1, 2025. The warrants have a contractual term of approximately five years. The total grant-date fair value of the Representative’s Warrants is $852, which was treated as the issuance cost, net against the cash proceeds from the capital raise.

All warrants are accounted for as equity classified share-based compensation award in accordance with ASC 718. Following is a summary of the activities of warrants for the period ended August 31, 2025:

The Company estimated the fair value of warrants using the Black-Scholes option-pricing model, which requires assumptions, including volatility, the expected term of the warrants, the risk-free interest rate for a period that approximates the expected term of the warrants, and expected dividend yield. Volatility is estimated based on the historical volatility of the guideline public companies over a period approximately equal to the expected term. The contractual term of the warrants is used as the expected term since the warrant holders are nonemployees and expected to hold the warrants to expiration to maximize the value of the warrants.

The table below summarizes the key assumption inputs used for the valuation for the fiscal year ended August 31, 2025:

NOTE 11 –INCOME TAXES

The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to the Company’s pre-tax income (loss) as follows:

The provision for income taxes consisted of the following for the periods ended August 31, 2025 and 2024:

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows for the periods ended August 31, 2025 and 2024:

The Company has $10,600 in U.S. Federal income tax NOL carryforwards as of August 31, 2025, that can be carried forward indefinitely and $3,600 of U.S. Federal income tax NOL carryforwards as of August 31, 2025. In addition, the Company has $244 of Section 163(j) interest expense limitation that can be carried forward indefinitely.

The Company recorded a valuation allowance of $0 and $3,200 at August 31, 2025 and 2024, respectively. The Company released the valuation allowance in 2025.

Valuation allowances have been established where the Company has concluded that it is more likely than not that such deferred tax assets are not realizable. The Company’s ability to realize its remaining deferred tax assets as of August 31, 2025, is primarily dependent upon generating sufficient taxable income of the proper character in future years. Management has concluded that there is sufficient positive evidence to support the expected realization of these deferred tax assets primarily due to the fact that the excess market value of the Company’s ETH over the cost basis of the Company’s ETH as of August 31, 2025 is a source of future taxable income that is expected to allow all of the Federal income tax net deferred tax assets to be realized. As part of the assessment of the amount of the valuation allowance, the Company considered that it has the ability and intent to execute tax planning strategies if necessary, including selling ETH with a built-in-gain.

After consideration of all available evidence, the Company has concluded that, as of August 31, 2025, it is more likely than not that its deferred tax assets will be realized. If the market value of ETH declines in future periods, the Company would need to assess other sources of forecasted taxable income of proper character, which could result in additional valuation allowances being recorded.

NOTE 12 –EARNINGS PER SHARE

EARNINGS (LOSS) PER COMMON SHARE

The following table sets forth the components used in the computation of basic and diluted income per share:

22,698 shares of Series A Preferred Stock and 125 shares of Series B Preferred Stock were outstanding during the period ended August 31, 2025 but were excluded from diluted earnings per share computation as they were anti-dilutive.

The following table summarizes the securities that were not included in the computation of diluted income per common share:

NOTE 13 –SEGMENT REPORTING

In accordance with ASC 280-10, Segment Reporting, management has determined that the Company operates as one operating segment and one reportable segment. This conclusion reflects the manner in which the Chief Executive Officer, who serves as the Company’s Chief Operating Decision Maker (“CODM”), reviews financial performance and allocates resources, particularly focusing on Operating Income in their assessment of performance. The CODM regularly reviews consolidated financial results in their entirety rather than discrete financial information by line of business, geography, or asset type. Accordingly, management concluded that the Company’s operations represent a single operating and reportable segment. Given that the Company has identified one operating and reportable segment, the segment results correspond directly to the consolidated financial statements.

NOTE 14 –COMMITMENTS AND CONTINGENCIES

Commitments

During the fiscal year ended August 31, 2025, the Company entered into a Consulting Agreement with Ethereum Tower LLC (“ETH Tower”) to provide consulting, asset management, custody, and staking services. The Consulting Agreement has a term of ten years and may be renewed.

Under the terms of the Consulting Agreement, the Company is obligated to pay ETH Tower a consulting fee calculated as follows:

The fee is earned daily and paid monthly, which may be settled in cash or digital assets. The aggregate fees to be incurred by the Company are expected to be in the range of $40,000 to $50,000 annually.

The Consulting Agreement is non-cancelable except under limited circumstances. If the Company terminates the Consulting Agreement without cause, ETH Tower is entitled to 85% of all fees that would have accrued through the end of the term as liquidated damages.

Contingencies

From time to time, the Company is subject to legal proceedings that arise in the ordinary course of business. While any legal proceeding or claim has an element of uncertainty, the Company believes the outcome of each lawsuit, claim or legal proceeding that is pending or threatened, or all of them combined, will not have a material adverse effect on the Company’s consolidated financial position or results of operations. It is possible, however, that future results of operations could be materially and adversely affected by any new developments relating to the legal proceedings and claims. As of August 31, 2025, and 2024, no legal matters were considered probable and reasonably estimable.

NOTE 15 –SUBSEQUENT EVENTS

On November 19, 2025, the Board approved a dividend of $0.01 per share for the Company’s common stock. The dividend will be paid to stockholders of record on December 8, 2025.

Through November 20, 2025, the Company sold stock and private placements of $7,160,917,802.08 through the ATM Program which permits sales of up to $20,000,000 of the Company’s common stock.

On September 8, 2025, the Company made a $20,000 cash investment into the common stock of Eightco Holdings Inc. (NASDAQ: OCTO).

On September 22, 2025, the Company entered into a securities purchase agreement with an institutional investor related to the offer and sale of 5,217,715 shares of the Company’s common stock, par value $0.0001 per share at a price of $70.00 per share, and warrants to purchase up to 10,435,430 shares of the common stock at an exercise price of $87.50 per share in a registered direct offering transaction. At $70.00 per share, the common stock purchase price represents a premium of approximately 14% to the closing price on September 19, 2025. The warrants will be exercisable upon issuance and expire on March 22, 2027. Prior to and including the date of expiration, the warrants may be exercised, in whole or in part, in exchange for cash payment of the exercise price.