Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as noted by use of the words "believe," "expect," "plan," "project," "estimate," and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management's current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found elsewhere in this Report and in our periodic reports filed with the U.S. Securities and Exchange Commission. The forward-looking statements included are made only as of the date of this report. Except as required by law, we have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of the report.

Business Overview

We operate a diversified financial technology services company offering multiple business units across key sectors, including a financial education division offering tools, products and content through a global network of independent distributors; a manufacturing division focused on proprietary over-the-counter aesthetics, health, nutrition and cognitive wellness products for wholesale and retail markets, with strategic plans for global expansion; an early-stage online trading platform that intends to offer self-directed retail brokerage services; and a business unit that owns and operates a sustainable blockchain business focused on bitcoin mining.

Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Revenues

		Three Months Ended June 30,								Increase
		2025				2024				(Decrease)
		(unaudited)				(unaudited)
Membership revenue, net of refunds, incentives, credits, and chargebacks		$	7,844,682			$	12,027,904			$	(4,183,222	)
Mining revenue			829,231				1,078,777				(249,546	)
Health and wellness product sales			1,311,698				-				1,311,698
Other revenue			38,307				-				38,307
Total revenue, net		$	10,023,918			$	13,106,681			$	(3,082,763	)

Total revenue, net, decreased $3,082,763, or 24%, from $13,106,681 for the three months ended June 30, 2024, to $10,023,918 for the three months ended June 30, 2025. The reduction in total revenue, net, can be attributed to a $4.2 million contraction in our membership revenue and a $250 thousand contraction in our mining revenue. The $4.2 million (35%) decrease in membership revenue was largely attributable to a combination of shifts in consumer behavior and demand following the COVID-19 pandemic as individuals re-evaluated their spending priorities, lifestyle habits, and engagement preferences, as well as broader global macroeconomic changes that have caused a general slowdown in direct sales and home-based business. This trend reflects broader market changes and has impacted overall participation and retention rates. The $250 thousand (23%) decrease in mining revenue was a result of "Bitcoin Halving" which occurred on April 19th, 2024, decreasing the reward to 3.125 Bitcoin per block solved from the previous reward rate of 6.25 Bitcoin per block solved, an increase in Bitcoin Network Difficulty and a mandated power curtailment enforced by the government-controlled utility companies in Northern Europe, partially offset by an increase in the price of Bitcoin. These decreases were offset by a $1.3 million increase in health and wellness product sales that arose from our October 2024 acquisition of the purchase of the business and assets of Renu Laboratories, Inc.

Operating Costs and Expenses

		Three Months Ended June 30,								Increase
		2025				2024				(Decrease)
		(unaudited)				(unaudited)
Cost of sales and service		$	2,462,570			$	1,303,610			$	1,158,960
Commissions			4,176,102				6,442,844				(2,266,742	)
Selling and marketing			91,555				520,013				(428,458	)
Salary and related			1,728,409				1,758,844				(30,435	)
Professional fees			407,883				378,467				29,416
Gain on disposal of assets			(91,837	)			180,223				(272,060	)
General and administrative			1,266,330				2,067,598				(801,268	)
Total operating costs and expenses		$	10,041,012			$	12,651,599			$	(2,610,587	)

Operating costs decreased $2,610,587 or (21%), from $12,651,599 for the three months ended June 30, 2024, to $10,041,012 for the three months ended June 30, 2025. The decrease can be explained by a reduction in commissions of $2.3 million, which was a result of a decrease in our membership revenue, a reduction in general and administrative expenses of $801 thousand, which was a result of decreases in credit card processing fees due to the decreases in our membership revenue, decreases in costs related to our mining operations, and a reduction in selling and marketing expenses of $428 thousand, which was due to a decrease in costs associated with promotional events iGenius held during the three months ended June 30, 2025 and 2024. These decreases were offset by an increase in cost of sales and services of $1.2 million, which was a result of an increase in our health and wellness product sales.

Other Income and Expenses

		Three Months Ended June 30,
		2025				2024				Change
		(unaudited)				(unaudited)
Gain (loss) on fair value of derivative liability		$	2,248			$	3,326			$	(1,078	)
Realized gain (loss) on digital assets			132,995				6,327				126,668
Unrealized gain (loss) on digital assets			399,442				-				399,442
Interest expense			(7,333	)			(4,675	)			(2,658	)
Interest expense, related parties			(309,670	)			(309,670	)			-
Other income (expense)			228,690				651,524				(422,834	)
Total other income (expense)		$	446,372			$	346,832			$	99,540

We recorded other income of $446,372 for the three months ended June 30, 2025, which was an increase of $99,540, or 29%, from the prior year other income of $346,832. The change is due to a realized gain on digital assets in the current period of $133 thousand compared to a gain of $6 thousand in the prior year and an unrealized gain on digital assets in the current period of $399 thousand compared to no unrealized gain or loss in the prior year due to the Company's adoption of ASU No. 2023-08, as defined above, for the year ended December 31, 2025, effective as of January 1, 2025. The change is also due to a decrease in other income in the current period of $423 thousand, as a result of a decrease in lease payments received under a structured equipment lease agreement and a decrease in ticket sales from a promotional event iGenius held during the three months ended June 30, 2024.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Revenues

		Six Months Ended June 30,								Increase
		2025				2024				(Decrease)
		(unaudited)				(unaudited)
Membership revenue, net of refunds, incentives, credits, and chargebacks		$	16,636,125			$	25,057,222			$	(8,421,097	)
Mining revenue			1,692,175				3,721,376				(2,029,201	)
Health and wellness product sales			1,680,019				-				1,680,019
Other revenue			45,651				-				45,651
Total revenue, net		$	20,053,970			$	28,778,598			$	(8,724,628	)

Total revenue, net, decreased $8,724,628, or 30%, from $28,778,598 for the six months ended June 30, 2024, to $20,053,970 for the six months ended June 30, 2025. The reduction in total revenue, net, can be attributed to a $8.4 million contraction in our membership revenue and a $2.0 million contraction in our mining revenue. The $8.4 million (34%) decrease in membership revenue was largely attributable to a combination of shifts in consumer behavior and demand following the COVID-19 pandemic as individuals re-evaluated their spending priorities, lifestyle habits, and engagement preferences, as well as broader global macroeconomic changes that have caused a general slowdown in direct sales and home-based business. This trend reflects broader market changes and has impacted overall participation and retention rates. The $2.0 million (55%) decrease in mining revenue was a result of "Bitcoin Halving" which occurred on April 19th, 2024, decreasing the reward to 3.125 Bitcoin per block solved from the previous reward rate of 6.25 Bitcoin per block solved, an increase in Bitcoin Network Difficulty and a mandated power curtailment enforced by the government-controlled utility companies in Northern Europe, partially offset by an increase in the price of Bitcoin. These decreases were offset by a $1.7 million increase in health and wellness product sales that arose from our October 2024 acquisition of the purchase of the business and assets of Renu Laboratories, Inc.

Operating Costs and Expenses

		Six Months Ended June 30,								Increase
		2025				2024				(Decrease)
		(unaudited)				(unaudited)
Cost of sales and service		$	4,006,686			$	3,445,944			$	560,742
Commissions			9,252,605				13,718,054				(4,465,449	)
Selling and marketing			186,658				531,808				(345,150	)
Salary and related			3,429,501				3,387,814				41,687
Professional fees			1,018,033				784,996				233,37
Gain on disposal of assets			(91,837	)			180,223				(272,060	)
General and administrative			2,682,498				4,404,253				(1,721,755	)
Total operating costs and expenses		$	20,484,144			$	26,453,092			$	(5,968,948	)

Operating costs decreased $5,968,948 or (23%), from $26,453,092 for the six months ended June 30, 2024, to $20,484,144 for the six months ended June 30, 2025. The decrease can be explained by a reduction in commissions of $4.5 million, which was a result of a decrease in our membership revenue, a reduction in general and administrative expenses of $1.7 million, which was a result of decreases in credit card processing fees due to the decreases in our membership revenue and decreases in costs related to our mining operations, and a reduction in selling and marketing expenses of $345 thousand, which was due to a decrease in costs associated with promotional events iGenius held during the six months ended June 30, 2025 and 2024. These decreases were offset by an increase in cost of sales and services of $561 thousand, which was a result of an increase in our health and wellness product sales.

Other Income and Expenses

		Six Months Ended June 30,
		2025				2024				Change
		(unaudited)				(unaudited)
Gain (loss) on fair value of derivative liability		$	153			$	3,400			$	(3,247	)
Realized gain (loss) on digital assets			119,743				282,554				(162,811	)
Unrealized gain (loss) on digital assets			179,258				-				179,258
Interest expense			(11,956	)			(9,350	)			(2,606	)
Interest expense, related parties			(618,414	)			(619,340	)			926
Other income (expense)			512,815				989,159				(476,344	)
Total other income (expense)		$	181,599			$	646,423			$	(464,824	)

We recorded other income of $181,599 for the six months ended June 30, 2025, which was a decrease of $464,824, or 72%, from the prior year's other income of $646,423. The change is due to a realized gain on digital assets in the current period of $120 thousand compared to a gain of $283 thousand in the prior year and a decrease in other income in the current period of $476 thousand, as a result of a decrease in lease payments received under a structured equipment lease agreement and a decrease in ticket sales from a promotional event iGenius held during the six months ended June 30, 2024. These decreases were offset by an unrealized gain on digital assets in the current period of $179 thousand compared to no unrealized gain or loss in the prior year due to the Company's adoption of ASU No. 2023-08 for the year ended December 31, 2025, effective as of January 1, 2025.

Liquidity and Capital Resources

During the six months ended June 30, 2025, we met our short-and long-term working capital and capital expenditure requirements. At June 30, 2025, we had a total of $16.2 million in cash and cash equivalents, which we believe is sufficient to meet our debt service, preferred stock dividend payments and all other obligations in a timely manner and be able to meet our objectives.

During the six months ended June 30, 2025, we recorded net loss from operations of $430,174 and net loss of $259,575. As of June 30, 2025, we have unrestricted cash of $16,162,133. Also, as of June 30, 2025, our current assets exceeded our current liabilities to result in working capital of $14,111,544 and our digital asset balance was reported at a fair value of $2,860,812. Management does not believe there are any liquidity issues as of June 30, 2025.

Critical Accounting Policies

Basis of Accounting

Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the "SEC") and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the six months ended June 30, 2025, are not necessarily indicative of the operating results that may be expected for our year ending December 31, 2025, as will be included in the filing of our Annual Report on Form 10-K for the year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2024 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Digital Assets

Digital assets are included in non-current assets on the Consolidated Balance Sheets due to the Company's intent to retain and hold bitcoin. Proceeds from the sale of digital assets and the purchase of digital assets are included within investing activities in the accompanying Consolidated Statement of Cash Flows. Digital Assets awarded to the Company through its mining activities and collected for membership revenue are accounted for in connection with the Company's revenue recognition policy. Following the adoption of Accounting Standards Update ("ASU") 2023-08 effective January 1, 2025, the Company measures digital assets at fair value with changes recognized in other income (expense) in the Consolidated Statement of Operations. The Company tracks its cost basis of digital assets by-wallet in accordance with the first-in-first-out ("FIFO") method of accounting. Refer to "NOTE 5 - DIGITAL ASSETS", for further information regarding the Company's impact of the adoption of ASU 2023-08, as defined below.

Intangible Assets

We account for our intangible assets in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 350-30"). ASC 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Under ASC 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.

Impairment of Long-Lived Assets

We have adopted ASC Subtopic 360-10, Property, Plant and Equipment ("ASC 360-10"). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by us be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.

We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value. During the six months ended June 30, 2025, and 2024, no impairment was recorded.

Revenue Recognition

Membership Revenue

Most of our revenue is generated by membership sales and payment is received at the time of purchase. We recognize membership revenue in accordance with ASC Subtopic 606-10, Revenue from Contracts with Customers ("ASC 606-10"), where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide our tools, products, and content over a fixed membership period; therefore, we recognize revenue ratably over the membership period and deferred revenue is recorded for the portion of the membership period subsequent to each reporting date. Additionally, we offer a designated trial period to first-time membership customers, during which a full refund can be requested if a customer does not wish to continue with the membership. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks. As of June 30, 2025, and December 31, 2024, our deferred revenues for membership revenue were $1,480,598 and $1,905,734, respectively.

Mining Revenue

We generate revenue from mining bitcoin. The Company has entered into a digital asset mining pool by executing a contract, as amended from time to time, with the mining pool operator to provide computing power to the mining pool. The contract is terminable at any time by either party without penalty. Further, since the contract is continuously renewing, second by second, the mining contract is considered to have a duration of less than 24 hours for accounting purposes. The Company's enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, we are entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which calculates our share of block rewards, transaction fees, and mining pool operator fees. We are entitled to consideration even if a block is not successfully placed by the mining pool operator.

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as "solving a block") is an output of the Company's ordinary activities. The provision of providing such computing power is the only performance obligation in the Company's contract with the mining pool operator. The transaction consideration the Company receives is net of a contractually agreed upon mining pool operator fee charged and kept by the mining pool operator and is noncash, in the form of Bitcoin. Given that the contract is continuously renewing, and the duration is considered to be less than 24 hours, the Company measures the transaction consideration at fair value on the date Bitcoin is received. The consideration is variable. The amount of consideration recognized is constrained to the amount of consideration received, which is when it is probable a significant reversal will not occur. There is no significant financing component or risk of a significant revenue reversal in these transactions due to the performance obligations and settlement of the transactions being on a daily basis.

Health and Wellness Product Sales and Other Revenue

Through our wholly owned subsidiary, Renu Laboratories LLC, we generate revenue by manufacturing and selling health, beauty and wellness products. We recognize health and wellness product sales revenue in accordance with ASC 606-10. The Company's performance obligation is complete when control of the promised goods is transferred to a customer, at which time the Company recognizes revenue in an amount that reflects the consideration the Company expects to receive in exchange for those goods. The Company terms for the sale are based on free on board (FOB) shipping point, where the control passes to the customer once the product leaves our warehouse. The Company determines collectability by requiring certain customers to pay before control is transferred and by performing ongoing credit evaluations and monitoring customer accounts receivable balances. As of June 30, 2025, and December 31, 2024, deposits collected from customers for orders to be filled at a future date were $1,069,187 and $1,014,164, respectively, which are recorded as deferred revenue in the Consolidated Balance Sheets.

Shipping and direct costs charged to customers, along with fees collected from customers for storing their products in our warehouse facility located in Warminster, Pennsylvania are included in revenue as Other Revenue. Shipping and direct costs incurred by the Company are included in Cost of Sales and Service.

Revenue generated for the three months ended June 30, 2025, was as follows:

		Membership revenue				Mining revenue				Health and wellness product sales				Other Revenue				Total
Gross billings/receipts		$	8,199,283			$	829,231			$	1,311,747			$	38,307			$	10,378,568
Refunds, incentives, credits, and chargebacks			(354,601	)			-				(49	)			-				(354,650	)
Net revenue		$	7,844,682			$	829,231			$	1,311,698			$	38,307			$	10,023,918

Foreign revenues for the three months ended June 30, 2025 were approximately $6.7 million while domestic revenue for the three months ended June 30, 2025 was approximately $3.3 million.

Revenue generated for the three months ended June 30, 2024, was as follows:

		Membership Revenue				Mining Revenue				Total
Gross billings/receipts		$	12,706,234			$	1,078,777			$	13,785,011
Refunds, incentives, credits, and chargebacks			(678,330	)			-				(678,330	)
Net revenue		$	12,027,904			$	1,078,777			$	13,106,681

Foreign revenues for the three months ended June 30, 2024 were approximately $11.1 million while domestic revenue for the three months ended June 30, 2024 was approximately $2.0 million.

Revenue generated for the six months ended June 30, 2025, was as follows:

		Membership revenue				Mining revenue				Health and wellness product sales				Other Revenue				Total
Gross billings/receipts		$	17,639,140			$	1,692,175			$	1,680,190			$	45,651			$	21,057,156
Refunds, incentives, credits, and chargebacks			(1,003,015	)			-				(171	)			-				(1,003,186	)
Net revenue		$	16,636,125			$	1,692,175			$	1,680,019			$	45,651			$	20,053,970

Foreign revenues for the six months ended June 30, 2025 were approximately $14.4 million while domestic revenue for the six months ended June 30, 2025 was approximately $5.7 million.

Revenue generated for the six months ended June 30, 2024, was as follows:

		Membership Revenue				Mining Revenue				Total
Gross billings/receipts		$	26,557,528			$	3,721,376			$	30,278,904
Refunds, incentives, credits, and chargebacks			(1,500,306	)			-				(1,500,306	)
Net revenue		$	25,057,222			$	3,721,376			$	28,778,598

Foreign revenues for the six months ended June 30, 2024 were approximately $22.9 million while domestic revenue for the six months ended June 30, 2024 was approximately $5.9 million.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"). The amendments in ASU 2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity's crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08 for the year ended December 31, 2025, effective as of January 1, 2025, which had a material impact on the financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024; early adoption is permitted. The Company adopted the ASU for the year ended December 31, 2025. The amendments only impact disclosures and are not expected to have an impact on the Company's financial condition and results of operations.

In December 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company did not elect early adoption and is evaluating the impact the updated guidance will have on its disclosures in 2026.

We have noted no other recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.