Annual Report for Fiscal Year Ending 06-30, 2025 (Form 10-K)

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.