UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the nine months ended
Or
For the transition period from _________ to _________
Commission File Number:
Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| ||
(Address of principal executive offices) |
| (Zip Code) |
( |
(Registrant’s Telephone Number, Including Area Code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
Emerging Growth Company |
If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of June 6, 2025, there were
Securities registered under Section 12(g) of the Act:
Title of each class registered: Common
T-REX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(A Nevada Corporation)
TABLE OF CONTENTS
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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| 2 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
T-REX ACQUISITION CORP.
March 31, 2025
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| F-1 |
| Table of Contents |
T-REX ACQUISITION CORP. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
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| March 31, 2025 |
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| June 30, 2024 |
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ASSETS |
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CURRENT ASSETS: |
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Cash |
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Accounts receivable, net |
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Bitcoin held |
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Prepaid consulting |
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Prepaid expense |
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TOTAL CURRENT ASSETS |
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NON CURRENT ASSETS: |
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Plant and equipment, net |
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Intangible assets, net |
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Prepaid consulting |
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Other assets |
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TOTAL NON CURRENT ASSETS |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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CURRENT LIABILITIES: |
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Accounts payable and accrued expenses |
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Due to related party- accrued compensation |
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Due to related party- advances |
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Note payable - unrelated parties (See Note. 13) |
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Interest payable - unrelated parties (See Note. 13) |
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Notes payable - related parties (See Note 11) |
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Interest payable - related parties (See Note 11) |
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Derivative liability |
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Deposit payable |
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TOTAL CURRENT LIABILITIES |
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NON-CURRENT LIABILITIES: |
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TOTAL NON-CURRENT LIABILITIES |
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TOTAL LIABILITIES |
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Commitments and Contingencies (Note 12) |
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STOCKHOLDERS' EQUITY (DEFICIT) |
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Common stock, |
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Additional paid in capital |
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Stock subscription payable |
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Accumulated deficit |
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TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
| $ |
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| $ |
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The accompanying footnotes are an integral part of these consolidated financial statements.
| F-2 |
| Table of Contents |
T-REX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
for the three and nine months ended March 31, |
(Unaudited) |
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| Three months ended |
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REVENUE |
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Mining revenue |
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Hosting revenue |
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Realized gain (loss) on sale/exchange of bitcoin |
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Total revenues |
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Cost of goods sold |
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Depreciation |
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Hosting |
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Contract labor |
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Electricity |
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Total cost of goods sold |
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Gross Loss |
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Expenses |
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Transfer agent and filing fees |
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Professional fees |
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Management and consulting fees |
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Share based compensation |
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Administration Fees |
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Total operating expenses |
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Loss from Operations |
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Other income (expense) |
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Interest expense |
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Gain (Loss) on derivative liabilities |
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Total other income (expense) |
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Loss Before Income Taxes |
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Less: Provision for Income Taxes |
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Net Loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Basic and Dilutive Net Loss Per Share |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Basic and Dilutive - Weighted average number of common shares outstanding |
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The accompanying footnotes are an integral part of these consolidated financial statements.
| F-3 |
| Table of Contents |
T-REX ACQUISITION CORP. |
CONSOLIDATED STATEMENT OF CASH FLOWS |
for the nine months ended March 31, |
|
| 2025 |
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| 2024 |
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OPERATING ACTIVITIES | ||||||||
Net Loss |
| $ | ( |
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| $ | ( |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Share based Compensation expense |
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Cost of goods sold - depreciation expense |
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Capitalization of expenses |
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Consulting services paid in shares |
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Compensation paid in form of Note payable |
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Loss (Gain) on derivative liability |
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Debt issuance costs - paid by share issuance |
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Debt issuance costs – Warrants issued |
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Debt issuance costs – Shares issued |
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Changes in assets and liabilities: |
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Change in Bitcoin Held |
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Change in prepaid expense |
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Change in other assets |
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Change in accounts receivable |
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Change in accounts payable and accrued expenses |
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Change in interest payable to third parties |
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Change in advances payable to related parties |
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Change in balances owed to related parties |
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Change in deposit payable |
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Net cash used in operating activities |
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INVESTING ACTIVITIES: |
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Purchase of Orofino Facility |
| $ | ( | ) |
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Purchase of Intangible asset |
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Net cash used in investing activities |
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FINANCING ACTIVITIES: |
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Shares issued for cash |
| $ |
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| $ |
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Proceeds from related party |
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Proceeds from issuance of note payable - related parties |
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Proceeds from issuance of note payable - unrelated parties |
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Net cash provided by financing activities |
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NET INCREASE IN CASH |
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CASH AT BEGINNING OF PERIOD |
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CASH AT END OF PERIOD |
| $ |
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Supplemental Cashflow Information |
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Interest Paid |
| $ |
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Taxes Paid |
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Supplemental Non-Cash Investing and Financing Activities |
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Purchase of intangible asset worth $210,000, of which $200,000 worth of shares issued and $10,000 paid in cash |
| $ |
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Purchase of Orofino facility worth $500,980 through issuance of Note Payables to Seller of $267,555 and paid $240,075 in cash. |
| $ |
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| $ |
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Shares issued to settle deposit payable |
| $ |
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| $ |
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Shares issued for the obligation earlier booked |
| $ |
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| $ |
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Share issued for redemption of warrants |
| $ |
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| $ |
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Share issued for conversion of Note payable |
| $ |
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| $ |
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Share issued to fulfil obligation of issuance of share |
| $ |
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| $ |
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Share issued for settlement of Advisor fee payable |
| $ |
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| $ |
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Share issued for settlement of board fee payable |
| $ |
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| $ |
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Conversion of accrued Interest to Note Payable |
| $ |
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| $ |
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The accompanying footnotes are an integral part of these consolidated financial statements.
| F-4 |
| Table of Contents |
T-REX ACQUISITION CORP.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
As of March 31, 2025
|
| Common Stock at Par $0.0001 |
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| Number of Shares |
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| Amount |
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| Additional Paid in Capital |
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| Stock Subscription Payable |
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| Accumulated Deficit |
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| TOTAL |
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Balance June 30, 2023 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||
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Share based expense for warrants issued |
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| - |
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Note Payable obligation to issue shares |
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| - |
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Net Loss |
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| - |
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| ( | ) |
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Balance June 30, 2024 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||
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Share based expense for warrants issued |
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| - |
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Note Payable obligation to issue shares |
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| - |
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Net Loss |
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| - |
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| ( | ) |
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| ( | ) | ||
Balance September 30, 2024 (Unaudited) |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||
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Share based expense for warrants issued |
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| - |
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Adjustment to prepaid consulting/share-based expenses |
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Obligation to issue shares for cash received |
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Obligation to issue shares for services |
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| - |
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Net Loss |
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| - |
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| ( | ) |
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| ( | ) | ||
Balance December 31, 2024 (Unaudited) |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||
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Shares issued for cash received in prior quarter |
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| ( | ) |
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Shares issued for cash received in prior year and previously held as a deposit payable |
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Shares issued as incentives to enter note payable agreements - unrelated parties |
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| ( | ) |
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Shares issued as incentives to renew note payable agreements - unrelated parties |
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| ( | ) |
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Shares issued as incentives to enter note payable agreements - related parties (obligation previously waived) |
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| 52,290 |
| |||||
Shares issued as incentives to renew note payable agreements - related parties (obligation previously waived) |
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| |
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Shares issued for redemption of Warrants |
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| |
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| ( | ) |
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Conversion of Note payable to shares |
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Shares issued for consulting services |
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| |
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| |
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| ( | ) |
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| |
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Shares to be issued for purchase of Intangible Asset |
|
| - |
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| |
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| |
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| |
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| |
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Warrants issued as Noteholder incentives |
|
| - |
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Obligation to issue shares for services provided |
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| - |
|
Net Loss |
|
| - |
|
|
| |
|
|
| |
|
|
|
|
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|
| ( | ) |
|
| ( | ) |
Balance March 31, 2025 (Unaudited) |
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|
| $ |
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|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||
The accompanying footnotes are an integral part of these consolidated financial statements.
| F-5 |
| Table of Contents |
T-REX ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
T-REX Acquisition Corp. (“T-REX” or the “Company”) was incorporated on January 16, 2008, in the State of Nevada. From inception through June 2012, the Company sought various business combinations including reverse merger opportunities and operated under several names in various unsuccessful lines of business, at which point it became inactive. After a change of control in 2012, the Company again attempted several unsuccessful acquisitions. Finally, in July 2021, the Company pivoted its strategy to become an emerging technology enterprise, focusing on operations and investments in the cryptocurrency sector, particularly those related to distributed ledger technologies and associated intangible assets.
On June 1, 2022, the Company changed its name with the Nevada Secretary of State from “TREX Acquisition Corp.” to “T-REX Acquisition Corp.”
The Company is authorized to issue
Business Focus and Strategy
T-REX’s current strategic focus is securing and operating within the Bitcoin distributed ledger network, protocols, and infrastructure opportunities. Bitcoin (“BTC”) is a decentralized digital currency operating on a peer-to-peer network called the blockchain, which enables secure, trustless transactions without reliance on a central authority.
The Company began earning Bitcoin mining rewards on February 17, 2022, recognizing revenue based on the USD value of the rewards received. T-REX does not retain material Bitcoin balances at each period end and generally converts received BTC into U.S. dollars or uses it for payments to third parties.
The consolidated entity is comprised of T-REX Acquisition Corp. and its wholly owned subsidiaries:
· | TRXA Merger Sub, Inc. (“Merger Sub”) |
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|
· | Raptor Mining LLC (“Raptor”) |
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· | Megalodon Mining and Electric LLC (“Megalodon”) |
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· | Sabretooth Mining Containers LLC (“Sabretooth”) |
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· | Deinodon Mining Solutions LLC (“Deinodon”) |
| F-6 |
| Table of Contents |
Subsidiaries and Recent Developments
| · | TRXA Merger Sub, Inc. |
|
| Formed as a Delaware corporation on March 13, 2020, to facilitate a potential acquisition of a Software-as-a-Service (SaaS) business. The subsidiary is currently inactive and has no operations or reportable assets or liabilities. |
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| · | Raptor Mining LLC |
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| Formed as a Florida corporation on July 9, 2021, conducts the Company’s primary cryptocurrency mining activities. Raptor validates blockchain transactions in exchange for mining rewards and also engages in the acquisition of virtual assets. |
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| · | Megalodon Mining and Electric LLC |
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| Formed as a Florida corporation on July 1, 2022, to evaluate and enter the cryptocurrency co-location market. On March 4, 2025, Megalodon acquired a data center and co-location facility in Orofino, Idaho, which hosts services to third-party miners in exchange for cash or cryptocurrency-based service fees. |
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| · | Sabretooth Mining Containers LLC |
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| Formed as a Florida corporation on February 7, 2025, to design and fabricate modular containers equipped with electrical and racking infrastructure to support off-site cryptocurrency mining operations. |
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| · | Deinodon Mining Solutions LLC |
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| Formed as a Florida corporation on March 29, 2025, to provide software and technical resources for cryptocurrency operations. On March 31, 2025, Deinodon acquired the assets, including proprietary software and technical knowhow of Baoblock, Inc. for $ |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States if America of ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC”), and the Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB") and are expressed in US Dollars. The interim consolidated financial statements should be read in conjunction with the notes contained herein as part of the Company's quarterly filing in its Form 10-Q filing under the Securities Exchange Commission (SEC).
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.
| F-7 |
| Table of Contents |
Reclassification
Certain reclassifications have been made to prior periods to conform with the current reporting period. These reclassifications did not affect net income, total assets, liabilities or equity reported.
Accounts receivable
Accounts receivable balances are for Hosting Revenue and are reported at their net realizable value. Management individually reviews all delinquent accounts receivable balances based on an assessment of current creditworthiness, estimates the portion of potentially uncollectible balances and would indirectly write off these balances. Management considers a number of factors, including the age of the receivables, which is often less than 90 days, current economic conditions and the financial condition of customers. The policy for determining past due status is based on the contractual payment terms of each customer. Once collection efforts by the Company are exhausted, the determination for directly writing off uncollectible receivables is made.
In the quarter ended March 31, 2025, the Company assumed the operations of its Orofino co-location facility and had not yet implemented co-location agreements. The official co-location agreements will require customers to pay one month in advance for upcoming estimated power consumption. Co-location customers are permitted 7-10 business days to remit the next month’s usage payment in advance, making the maximum exposure for unpaid balances to be 7-10 days of co-location use. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated non-collectible amounts. Any required allowance is based on specific analysis of past due accounts, if determined to be non-collectible, the accounts are directly written off as bad debt expense. There was no allowance for doubtful accounts on March 31, 2025, neither was there a direct write down of accounts receivable during the quarter ended March 31, 2025. There were no accounts receivable or sale for the year ended June 30, 2024; therefore, no allowance was applicable.
Principles of Consolidation
As of March 31, 2025, the accounts include those of the Company and its
Business segments
The Company uses the “management approach” to identify its reportable segments. This approach is based on the internal organizational structure used by management for making operational decisions and assessing the performance of the business. Under this approach, the Company has determined that it operates through five reportable segments. Costs specifically identifiable to each segment are allocated to that segment; all other costs are allocated to the Holding segment.
The Holding segment, represented by T-REX Acquisition Corp., seeks business opportunities to sustain and expand operations. This segment serves as the primary source of financing for the Company, and all major corporate expenses are processed through it. The Mining segment (Raptor) includes the Company’s proprietary bitcoin mining operations and holds the mining-related assets and generates revenue through the receipt of Bitcoin rewards earned from mining activities. The Hosting segment (Megalodon) generates revenue by providing third-party hosting services at the Company’s Orofino facility. This segment holds the assets related to the facility and incurs all associated operational expenses. The Software Services segment (Deinodon) consists of the entity that focuses on operations and services that can be achieved with our state-of-the-art proprietary software platform for this industry. The Company plans to utilize this platform to support future business initiatives. The fifth segment Sabretooth, is focused on the design and fabrication of modular containers outfitted with electrical and racking infrastructure to support off-site cryptocurrency mining operations. This segment has not yet commenced operations.
| F-8 |
| Table of Contents |
Segmented Information- Statements of Operations |
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2025 |
| Holding Segment |
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| Mining Segment |
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| Hosting Segment |
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| Software Services Segment |
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| Total |
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Revenue and other income |
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Mining revenue |
| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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Hosting revenue |
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Intersegment sales revenue |
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Expenses |
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Cost of Sales |
| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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Transfer agent and filing fees |
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Professional fees |
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Management and Consulting fees |
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Share based compensation |
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Administration fees |
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Interest expense |
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Gain (loss) on derivative liabilities |
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Inter-segment expenses |
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| ( | ) |
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| ( | ) | |||
Net income (loss) before income taxes |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
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| $ | ( | ) | ||
Segmented Information- Balance Sheets |
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2025 |
| Holding Segment |
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| Mining Segment |
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| Hosting Segment |
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| Software Services Segment |
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| Total |
| |||||
Total assets |
| $ |
|
| $ |
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| $ |
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| $ |
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| $ |
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Less: intersegment eliminations |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) | |
Net assets |
| $ |
|
| $ |
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| $ |
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| $ |
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| $ |
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Total liabilities by segment: |
| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| - |
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Less: intersegment eliminations |
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| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Total liabilities |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
| F-9 |
| Table of Contents |
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
The most significant estimates made by management in the preparation of the financial statements relate to the estimates used to calculate the fair value of certain liabilities, the derivative liability, present value of note payable and any impairment and the net book value of long-lived assets. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from such estimates under different assumptions and conditions.
Cash and Cash Equivalents
Cash and cash equivalents include short-term, highly liquid investments, such as cash on account with commercial banks, certificates of deposit or money market funds that are readily convertible to known amounts of cash and have original maturities of three months or less. All cash balances are held by major banking institutions.
Prepaid Expenses
Prepaid Expenses are primarily governed by ASC 340-10-25 (Other Assets and Deferred Costs- Recognition.) In accordance with this standard, payments made by the Company in cash or other forms of consideration for goods or services not yet received are classified as prepaid expenses. The Company issued shares to directors and consultants as compensation for services to be performed over a defined period. The portion of this share-based compensation allocated to the future services is recorded as “Pre-paid Consulting” on the balance sheet. These transactions are valued using the service amount specified in the service provider’s invoice or contract or at the Company’s stock price on the grant date, whichever is the better estimate for the value of service.
Allowance for Credit Losses
The Company estimates its allowance for credit losses using the Current Expected Credit Loss (CECL) model under ASC 326. The CECL model requires recognition of expected credit losses over the contractual life of financial assets held at the reporting date, considering historical experience, current conditions, and reasonable and supportable forecasts.
Financial assets subject to CECL include trade receivables. The Company groups financial assets based on shared risk characteristics and evaluates them collectively. The allowance is measured using a combination of historical loss rates, adjusted for current economic trends and forward-looking factors such as industry outlook and macroeconomic indicators (e.g., unemployment rate, GDP).
Under CECL, the carrying amount of a financial asset (net of the allowance for credit losses) represents the amount the Company expects to collect. This means that when the CECL estimate is appropriately recorded, the net reported balance of financial assets reflects management’s best estimate of collectible cash flows, based on available and supportable information.
Management reviews the adequacy of the allowance at each reporting period and updates estimates as appropriate. Changes in estimates are recorded in the income statement as a component of credit loss expense. The Company has considered the recent guidance and does not have receivables that would require this level of analysis in determining the net realizable balance of accounts receivable.
| F-10 |
| Table of Contents |
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
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Level 3 | Pricing inputs are generally unobservable inputs and not corroborated by market data. |
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| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total |
| ||||
Assets |
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| ||||
Bitcoin held |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
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| $ |
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| $ |
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| $ |
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| $ |
| ||||
Liabilities |
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Derivative liability |
| $ |
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| ||||
Note payable (related parties) |
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Note Payable (unrelated parties) |
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| ||||
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| $ |
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| $ |
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| $ |
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Fair Value Measurements as of June 30, 2024 |
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| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total |
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Liabilities |
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Derivative Liability |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Note Payable (related parties) |
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Note Payable (unrelated parties) |
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| $ |
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| $ |
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| $ |
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| $ |
| ||||
| F-11 |
| Table of Contents |
The Carrying amount of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon their present value determined from interest rates for debt obligations on March 31, 2025.
Assets and liabilities reported on the balance sheet approximate their fair value.
Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features (such as conversion features) that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. The Company had convertible notes with derivative liabilities of $
Digital currencies - Bitcoin
The Company applies accounting for digital assets in accordance with the AICPA Practice Aid "Accounting for and Auditing of Digital Assets", the guide is dated as of June 30, 2022, and the SEC issued Staff Accounting Bulletin No. 121, which is effective for periods after June 15, 2022, which are the current nonauthoritative guidance for accounting for digital assets under U.S. generally accepted accounting principles (GAAP). The AICPA Practice Aid is non-authoritative guidance that represents the views of the Digital Assets Working Group and AICPA staff. There is currently no official pronouncement or authoritative guidance on accounting for digital assets and digital asset transactions. The Company held approximately $
Plant and equipment - Crypto-currency machines
The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers are influenced by a number of factors, including the following:
| ☐ | the complexity of the transaction verification process, which is driven by the algorithms contained within the (blockchain) Bitcoin open-source software. |
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| ☐ | the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as the blockchain’s total hash rate) |
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| ☐ | technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase. |
The Company operates in an emerging industry for which limited data is available to make estimates on the useful economic lives of specialized mining equipment. The equipment could become obsolete within less time than other equipment due to it being specialized, new technology still being developed and improved. Plant and equipment, which includes mining equipment, are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Prior to the fiscal year June 30, 2023, management determined the expected useful life of mining machines as 7 years. During the fiscal year ended June 30, 2024, management reassessed that the mining machines’ useful life to
In March 2025, Megalodon consummated the purchase of a co-location data center located in Orofino, Idaho, pursuant to a previously executed letter of intent. The closing purchase consideration paid at closing was approximately $500,000. Prior to the closing, the Company commenced operations at the facility in October 2024 to incentivize the seller to maintain the terms of the letter of intent. Costs incurred during this pre-acquisition operating period totaled approximately $
| F-12 |
| Table of Contents |
Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be realizable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset's carrying value to determine if an adjustment for impairment is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and its carrying value.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company applies the following five-step model to all revenue streams within the scope of ASC 606:
| 1. | Identify the contract with a customer |
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| 2. | Identify the performance obligations in the contract |
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| 3. | Determine the transaction price |
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| 4. | Allocate the transaction price to the performance obligations |
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| 5. | Recognize revenue when (or as) the performance obligations are satisfied |
The Company derives revenue from two primary sources: (i) cryptocurrency mining activities and (ii) co-location hosting services.
Cryptocurrency Mining Revenue
The Company earns revenue by successfully validating transactions and adding blocks to the Bitcoin blockchain network. In return, the Company receives consideration in the form of cryptocurrency (i.e., newly minted Bitcoin and transaction fees). Although these rewards do not arise from a contract with a customer, the Company applies the guidance in ASC 606 by analogy, as permitted by ASC 610-20, and in accordance with PCAOB Staff Guidance on nontraditional revenue sources.
Revenue is recognized at a point in time, specifically upon confirmation of a mined block and receipt of the reward in the Company’s cryptocurrency wallet. The amount of revenue recognized is based on the fair value of the cryptocurrency received, measured using quoted market prices at the time control is obtained. Such inputs are classified as Level 1 within the fair value hierarchy under ASC Topic 820, Fair Value Measurement.
Co-location Hosting Revenue
The Company provides co-location hosting services to third-party customers, primarily digital asset mining businesses, through the provision of physical space and supporting infrastructure within its mining facility. These services generally include the allocation of rack space for customer-owned mining equipment, delivery of electrical power, internet connectivity, facility cooling, physical security, and basic operational support such as equipment monitoring and maintenance. The Company’s facilities are designed to support the high power and uptime requirements typical of cryptocurrency mining operations.
Revenue from these services is recognized over time, as the performance obligation (continuous hosting access) is satisfied. Customers typically prepay a fixed estimated fee at the beginning of each month for that month’s services; charge adjustments and credits are applied at the end of each month based on actual charges. The estimated fixed fee is determined based on the manufacturer’s stated power usage for each type of machine.
| F-13 |
| Table of Contents |
The Company applies the ASC 606 model as follows:
| · | Step 1: Contracts are established via written service agreements. |
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|
| · | Step 2: The primary performance obligation is continuous provision of hosting services. |
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| · | Step 3: The transaction price includes fixed service fees and estimated variable usage charges. |
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|
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| · | Step 4: The full transaction price is allocated to the hosting service obligation. |
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| · | Step 5: Revenue is recognized ratably over time, using a time-based output method. |
Software Development and Licensing Revenue
Through Deinodon, its subsidiary, the Company expects to generate revenue from the development and licensing of proprietary software used for the remote monitoring and management of physical operations, including real-time temperature tracking of hardware components, operational performance analytics, and predictive maintenance alerts.
Modular Infrastructure Sales
Through Sabretooth, its subsidiary, the Company expects to generate revenue through the design, fabrication, and sale of modular containers equipped with electrical and racking infrastructure to support off-site cryptocurrency mining operations.
Transaction Price Considerations
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
When determining the transaction price, the Company considers the following elements as required by ASC 606-10-32:
| · | Variable Consideration: For hosting arrangements that include usage-based components (e.g., power), the Company estimates the variable consideration using the most likely amount method. Such amounts are included in the transaction price only to the extent that it is probable a significant revenue reversal will not occur. |
|
|
|
| · | Constraining Estimates of Variable Consideration: The Company applies a constraint to variable amounts when uncertainty exists. For example, new or ramp-up contracts may have variable power consumption that cannot be reliably estimated at inception. |
|
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|
| · | Significant Financing Component: Not applicable. The Company does not offer extended payment terms or upfront payments that span more than one year. Accordingly, the Company has concluded that its contracts do not contain a significant financing component. |
|
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|
| · | Noncash Consideration: Revenue from cryptocurrency mining is received in the form of noncash consideration (i.e., Bitcoin), which is measured at fair value upon receipt, consistent with ASC 606-10-32-21. Noncash consideration is not typical in co-location contracts but would be accounted for in the same manner if applicable. |
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|
|
| · | Consideration Payable to a Customer: The Company does not offer consideration payable to customers, such as rebates or incentives. Co-location contracts are typically long-term, and any service credits are applied as reductions to future monthly charges. At contract termination, credits may be offset against final contract charges. Monthly billing estimates generally align closely with actual usage, resulting in minimal adjustments. |
| F-14 |
| Table of Contents |
Disaggregated Revenue Disclosure
The Company’s customers or sources of revenue generation were only in the United States during the period ended March 31, 2025. Below is a table of revenue by type:
|
| For period ended |
| |||||
Revenue Type |
| March 31, 2025 |
|
| June 30, 2024 |
| ||
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| ||
Mining Revenue |
| $ |
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| $ |
| ||
Hosting Revenue |
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| ||
Total Revenue |
| $ |
|
| $ |
| ||
| F-15 |
| Table of Contents |
Stock based compensation.
The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.
The Company accounts for its non-employee stock-based compensation in accordance with Update 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Through the fiscal period ended June 30, 2024, the quarter ended March 31, 2025, and through the date of filing, there have been no intervening lawsuits, claims or judgments filed. Please refer to Note 12. Commitments and Contingencies
Related Party Disclosures
Under ASC 850 “Related Party Transactions” an entity or person is considered to be a “related party” if it has control, significant influence or is a key member of management personnel. A transaction is considered to be a related party transaction when there is a transfer of resources of obligations between related parties. The Company, in accordance with the standard ASC 850, presents disclosures about related party transactions and outstanding balances with related parties, see Note 11.
Earnings per Share
The Company computes earnings (loss) per share ("EPS") in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted EPS on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants or stock options and the conversion of instruments convertible to common stock. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
As of March 31, 2025, and June 30, 2024, there were outstanding warrants that could convert into
| F-16 |
| Table of Contents |
Income taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary or permanent differences). The effect on deferred income tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.
FASB Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related matters. The Company has determined that it does not believe it has any material uncertain tax positions that require measurement The IRS requires all domestic corporations in existence for any part of the tax year to file an income tax return whether or not they have taxable income. The Company has filed its tax returns through the fiscal year ended June 30, 2015, and is in the process of filing the reaming returns t become current The Company incurred a loss for the fiscal years ended June 30, 2024, and has not filed tax returns for that year or since its 2015 filings. The Company has not received any notifications from the IRS regarding filed or unfiled returns. Reported tax benefits and valuation allowances are the Company’s best estimate of its tax positions and have not been reviewed by the taxing authority.
Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest or penalties on our consolidated balance sheets at March 31, 2025, or June 30, 2024, and have not recognized interest and/or penalties in the consolidated statement of operations for the period or year then ended.
We are subject to taxation or reporting by the U.S. Federal authorities and the state taxing authorities of Nevada, Florida and Idaho. The Company’s tax returns remain subject to potential examination by the tax authorities within 3 years from the filing date.
| F-17 |
| Table of Contents |
Cash flows reporting
The Company prepares its statements of cash flows in accordance with ASC-230, Statement of Cash Flows, using the indirect method. Cash Equivalents include investments, with original maturities of three months or less. Non-Cash investing and financing activities are disclosed separately in the supplemental section of the cash flow statement. Cash receipts from cryptocurrency mining rewards are classified as operating cash inflows. Cash purchases of property and equipment are classified as investing activities, while proceeds from debt or equity financing are included in financing activities. Some transactions were part cash and part non-cash and disclosed accordingly.
Advertising Costs
Advertising costs are expensed as incurred in accordance with ASC 720-35, Advertising Costs. These costs are included in selling, general and administrative expenses on the consolidated statements of operations. Advertising expenses were $
Equity/Shares Capital
The Company accounts for equity transactions in accordance with ASC 505, Equity. Common stock is recorded at par value, with the excess of proceeds over par value recorded as additional paid-in-capital. Equity issuance costs are charged directly to additional paid-in- capital. Shares issued for services received or non-cash consideration are measured at the fair value of the equity instruments issued on the grant date or the fair value of the service received, whichever is more reliably measurable. The Company is authorized to issue
Subsequent events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company evaluates subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Recent Accounting Pronouncements
Environmental Credits (Proposed Topic 818) - New guidance on how to account for environmental credits like carbon offsets and renewable energy certificates. Focus on consistent recognition, measurement, and disclosure. Still in proposal stage (comment period through April 2025). As no renewable energy sources are used for operations, we currently deem these credits are not applicable.
Disaggregation of Income Statement Expenses (ASU 2024-03) - Companies must break out major expense categories (e.g., labor, depreciation) in the notes to financial statements aimed at improving transparency. Effective for annual periods after Dec 15, 2026 (early adoption allowed). This is applicable to the Company but it’s not yet effective and the Company has not elected early adoption.
Income Tax Disclosure Improvements (ASU 2023-09) - Requires clearer details on income taxes paid (by federal, state, and foreign) and better breakdowns of rate reconciliations. Helps investors better understand a company’s tax situation. This standard applies to the Company but is not currently applicable to current period financials, as we have incurred losses and have no tax expense.
| F-18 |
| Table of Contents |
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company incurred a net loss of $
While the Company is attempting to generate revenues, the Company’s cash position is inadequate to support daily operations. Management intends to raise additional funds by a private or public offering and further implement its business plan to generate additional revenues, however, there can be no assurances that it will be successful in doing do and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, generate revenues, and raise capital.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4. ACCOUNTS RECEIVABLE
All accounts receivable relate to hosting revenue, below is a schedule of accounts receivable disclosing the basis for the accrual and the beginning balances:
|
| For the period ended |
| |||||
Description |
| March 31, 2025 |
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| June 30, 2024 |
| ||
Accounts receivable - revenue recognized |
| $ |
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| $ |
| ||
Allowance for doubtful accounts |
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Total accounts receivable, net |
| $ |
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| $ |
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There was no beginning accounts receivable balance on July 1, 2024.
NOTE 5. PREPAID CONSULTING
The Company issued restricted common stock shares to its directors and advisors for future services, which shares are recorded as issued and outstanding at the time they are granted and issued, and the related share-based compensation expense is incurred as services are performed. Compensation expense not incurred is accounted for as prepaid consulting expense. On June 12, 2022, the Company issued
During the quarter ended September 30, 2024, the Company expensed $
| F-19 |
| Table of Contents |
NOTE 6. OTHER ASSETS
During the period, the Company made a refundable security deposit of $
NOTE 7. BITCOIN HELD
|
| March 31, 2025 |
|
| June 30, 2024 |
| ||
Beginning balance |
| $ |
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| $ |
| ||
Increase |
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Value of bitcoin mined on the reward date |
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Realized gain (loss) on sale/exchange of bitcoin |
|
| ( | ) |
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| |
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| 932 |
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| |
Decrease |
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Bitcoin used for operational expenses (Cost basis) |
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Ending balance |
| $ |
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| $ |
| ||
NOTE 8. PROPERTY PLANT & EQUIPMENT MINING MACHINES
On August 24, 2022, the Company entered into a contract to purchase 20 Bitmain XJ S19 Pro 110 TH and their installation at Simple Mining in Iowa. During the 2024 fiscal year, the Company fully depreciated all mining equipment. Land, buildings, machinery, and mining equipment, and furniture are valued at cost. Maintenance and repair costs are charged to expenses as incurred. Gains or losses on disposition of equipment are reflected in operations. Depreciation is computed using accelerated methods for financial reporting purposes, based on the estimated useful lives of the assets.
In March 2025, Megalodon purchased a co-location facility and some legacy crypto miners, pursuant to an Asset Purchase Agreement, from an unaffiliated third party for $
On March 31, 2025, and June 30, 2024, the balances were as follows:
|
| Estimated Life in Years |
|
| March 31, 2025 |
|
| June 30, 2024 |
| |||
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| |||
Land |
|
| N/A |
|
| $ |
|
| $ |
| ||
Building |
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| |||
Machinery & mining equipment |
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Computer equipment |
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Less: Accumulated Depreciation |
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| ||
Fixed asset, net |
|
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| $ |
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| $ |
| ||
Depreciation expenses amounted to $
See NOTE 12.” COMMITMENTS AND CONTINGENCIES” regarding Liens related to this mortgage.
| F-20 |
| Table of Contents |
NOTE 9. INTANGIBLE ASSETS
On March 31, 2025, the Company acquired the intangible assets of Baoblock, Inc for $
NOTE 10. ACCOUNTS PAYABLE AND ACCURED LIABILITIES
|
| March 31, 2025 |
|
| June 30, 2024 |
| ||
Vendor Payables |
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| ||
Marketing and promotions costs |
| $ |
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| $ |
| ||
SEC regulatory cost |
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Professional fees |
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Crypto operations costs |
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Purchase of Intangible asset |
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Other |
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Vendor Payables (related parties) |
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Expense Reimbursement |
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Compensation |
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Vendor Accruals |
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Environmental cost |
|
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| ||
Accounts Payable &Accrued Liabilities |
| $ |
|
| $ |
| ||
The Company’s trade payables are generally short term, due on demand or with an obligation to pay within less than 365 days. Approximately 32.5% of trade payables are outstanding for more than 90 days.
| F-21 |
| Table of Contents |
NOTE 11. – RELATED PARTY TRANSACTIONS
Office space
The Company leases office space from its President for $
Due to Related Parties-accrued compensation
As of March 31, 2025, and June 30, 2024, the Company owed $
As of March 31, 2025, and June 30, 2024, the Company owed compensation payable of $
As of March 31, 2025, and June 30, 2024, the Company owed board of director fees of $
Notes Payable – Related Parties
Related parties’ notes payable consist of various convertible and non-convertible notes payable with a principal balance on March 31, 2025, and June 30, 2024, of $
These notes do not require regular monthly payments, but rather they are to be settled by the maturity date if not converted. Lazarus Management Limited and Sparta Road are related parties as these entities share a Founder (Timothy Ruggiero) member with T-REX.
(a) Convertible Notes Payable - Related Parties
On July 1, 2023, as compensation for unpaid management services, the Company issued Frank Horkey (“Horkey”) a $
| F-22 |
| Table of Contents |
On July 1, 2023, as compensation for unpaid management services, the Company issued Lazarus Asset Management LLC (“Lazarus”) a $
On February 9, 2024, the Company issued Sparta Road Ltd (“Sparta Road”) a $
On April 1, 2024, as compensation for unpaid management services, the Company issued Horkey a $
On April 1, 2024, as compensation for unpaid management services, the Company issued Lazarus a $
On July 1, 2024, as compensation for unpaid management services the Company issued Horkey a $
| F-23 |
| Table of Contents |
On October 1, 2024, as compensation for unpaid management services the Company issued Horkey a $
On January 1, 2025, as compensation for unpaid management services the Company issued Horkey a $
On July 1, 2024, as compensation for unpaid management services the Company issued Lazarus a $
On October 1, 2024, as compensation for unpaid management services the Company issued Lazarus a $
On January 1, 2025, as compensation for unpaid management services the Company issued Lazarus a $
The Company agreed with related party debt holders, Frank Horkey and Lazarus Asset Management, LLC to waive its obligations to issue shares it was obligated to issue as incentives in the note payable agreements, for compensation. The parties considered the issuance of prepaid warrants or other equity incentives, yet no obligation was determined at the time the obligations were waived. In March 2025, shares of restricted common stock shares were issued for note payable incentives as the parties determined these issuances would settle note payable incentives that were waived.
Total convertible notes payable related parties included principal balance on March 31, 2025, and June 30, 2024, were $
(b) Notes Payable – Related Parties
On February 3, 2025, for cash proceeds the Company issued Horkey a $
On March 5, 2025, for cash proceeds, the Company issued Horkey a $
On March 5, 2025, the Company issued Frank Horkey a $
Total non-convertible notes payable principal balance on March 31, 2025, were $
Other Related Party Debt
In addition to notes payable owed by related parted parties, various shareholders advanced funds for operating expenses. These amounts are reported on the balance sheet as “Due to related party -advances” on March 31, 2025, and June 30, 2024, in amount of $
On January 30, 2023, entities affiliated with Timothy B. Ruggiero and Peter Chung each cancelled
| F-24 |
| Table of Contents |
NOTE 12. COMMITMENTS AND CONTINGENCIES
Legal contingencies
From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of business. Management is not aware of any pending, threatened or asserted claims.
On September 9, 2024, the Company entered into a non-binding agreement with Veterans Capital Corp. (“Veterans”) to lease ASIC crypto miners, valued at $
On September 19, 2024, the Company entered into an agreement with Del Cielo LLC for the introduction of potential leasing companies and institutional investment banking firms. The agreement required an initial payment of $
On October 20, 2024, the Company entered into an agreement with Clearwater Power Company “Clearwater”) for the provision of electric power and facilities to support its cryptocurrency mining operations in Orofino, Idaho. As part of this contract, the Company deposited approximately $
See other commitments and contingencies under “NOTE 11. RELATED PARTY TRANSACTIONS”, “NOTE 13. NOTES PAYABLE” and NOTE 16. SUBSEQUENT EVENTS”.
NOTE 13. NOTES PAYABLE- UNRELATED THIRD PARTIES
Unrelated parties note payable consists of convertible and non-convertible notes payable with a principal balance on March 31, 2025, and June 30, 2024, of $
These notes do not require regular monthly payments, but rather they are to be settled by the maturity date if not converted.
Convertible Note Payable - Unrelated Parties
On March 24, 2023, the Company issued to a private investor, a $
| F-25 |
| Table of Contents |
On May 15, 2023, the Company issued a private investor a $
On September 25, 2023, the Company issued a private investor a $
On September 29, 2023, the Company issued a private investor a $
On March 12, 2024, the Company issued a private investor a $
On May 23, 2024, the Company issued to a private investor a $
On July 1, 2024, the Company issued a $
On July 1, 2024, the Company issued to a private investor a $
Note Payable-Unrelated Parties
On January 9, 2025, the Company issued to a private investor a $
On March 5, 2025, the Company issued to the seller of the Orofino facility a $
| F-26 |
| Table of Contents |
NOTE 14. DERIVATIVE LIABILITIES
The Company has various convertible notes outstanding that require derivative liability considerations for its conversion features. Total derivative liability on March 31, 2025, was $
For the period ended March 31, 2025, the Company recorded a loss of $
The following table summarizes the weighted average key inputs used in the Black-Scholes model for all outstanding conversion feature derivative liabilities as of the measurement dates:
Input |
| Weighted Avg at Inception Date |
|
| Weighted Avg on December 31, 2024 |
| ||
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Stock price |
| $ |
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| $ |
| ||
Exercise Price (conversion price |
| $ |
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| $ |
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Risk-free interest rate |
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| % |
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| % | ||
Expected term (years) |
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Expected volatility |
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| % |
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| % | ||
Dividend yield |
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| % |
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| % | ||
Description |
| March 31, 2025 |
| |
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| |
Derivative liability beginning balance |
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Initial Recognition of derivatives |
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Change in fair value |
|
| ( | ) |
Settlements/conversions |
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Derivative liability ending balance |
| $ |
| |
NOTE 15 – COMMON STOCK
Frank Horkey received
| F-27 |
| Table of Contents |
On July 1, 2022, Michael Christiansen received
On July 1, 2022, Squadron Marketing LLC received
On July 1, 2022, Lazarus Asset Management LLC received
On July 1, 2022, John Bennet received
On July 1, 2022, James Marshall III received
On April 20, 2023, Shawn Perez Esq. was awarded
On September 25, 2024, a private investor purchased
On October 5, 2024, a private investor purchased
On October 11, 2024, a private investor purchased
On October 15, 2024, a private investor purchased
| F-28 |
| Table of Contents |
On December 6, 2023, the Company agreed to sell to a private investor,
On January 1, 2025, Frank Horkey received
On January 1, 2025, Peter Chung through Squadron Marketing LLC received
On January 1, 2025, Frank Horkey, Michael Christiansen and Peter Chung received
On July 1, 2024, Matthew Cohen received
On July 1, 2024, Antonio Oliveira received
On March 31, 2025, issued
On January 1, 2025, the Company entered into a service contract with Aubyn Honeysett to manage its co-location facility in Orofino Idaho. Pursuant to the terms of the agreement, Ms. Honeysett was awarded
On January 1, 2025, the Company entered into a service contract with Bryce Greenfield in connection with his role managing the Company’s co-location facility in Orofino, Idaho. As part of his agreement, Mr. Greenfield was granted
| F-29 |
| Table of Contents |
NOTE 16 – WARRANTS
Warrants Issued for Investment
On May 5, 2022, the Company issued shares and warrants related to that certain Securities Purchase Agreement dated November 10, 2021 with certain of the selling stockholders referenced in our most recent registration statement pursuant to which we sold to such selling stockholders $
On July 28, 2022, August 1, 2022, and November 28, 2022, an investor purchased 400,001 Units consisting of one share of the Company’s restricted common stock and one Class C warrant to purchase one share of the Company’s restricted common stock at an exercise price of $
On September 29, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of
On December 6, 2023, the Company agreed to sell to a private investor
On February 8, 2024, entities belonging to Peter S. Chung and Timothy B. Ruggiero, collectively, accepted a Pre-Funded Common Stock Purchase Warrant to purchase three million shares of the Company’s restricted common stock at $
See NOTE. 11 “Related Party Transactions”, Note Payable section for details on convertible promissory notes issued with warrants on March 24, 2023, May 15, 2023, September 25, 2023, September 2023, April 1 2024, and July 1, 2024
| F-30 |
| Table of Contents |
Warrants Issued for Management and Consulting Services
On July 1, 2021, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a Class C warrant to purchase
On May 26, 2022, the Company issued to Frank Horkey a Class C warrant to purchase
On May 26, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class C warrant to purchase
On June 12, 2022, Messrs. Horkey and Christiansen were issued
On June 12, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a class C warrant to purchase
On July 1, 2023, Squadron Marketing LLC and Lazarus Asset Management LLC were issued a class C warrant to purchase
On July 1, 2023, Mr. Horkey was issued a class C warrant to purchase
| F-31 |
| Table of Contents |
On July 1, 2024, Squadron Marketing LLC and Sparta Road LTD were each issued a class C warrant to purchase
On July 1, 2024, Mr. Horkey was issued a class C warrant to purchase
On July 1, 2024, Antonio Oliveira’ was issued a Class C warrant to purchase
On July 1, 2024, Matthew Cohen was issued a warrant to purchase
Certain of the shares and warrants noted above were issued to Board Members, Advisory Board Members and Consultants for services to be rendered for periods subsequent to March 31, 2025. Amounts related to shares issued as compensation for services not yet performed are treated as prepaid consulting (current and non-current). The amounts will be recognized in subsequent periods as they are earned according to the Agreements.
| F-32 |
| Table of Contents |
The following are changes and balances for common share equivalent due to outstanding warrants.:
|
|
| Warrants -Common Share Equivalents |
|
| Weighted Average Exercise Price |
|
| Warrants exercisable Common Share Equivalents |
|
| Weighted Average Exercise Price |
| |||||
Outstanding June 30, 2023 |
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Additions |
| Granted |
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Additions |
| Vested |
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Additions |
| Granted |
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Additions |
| Granted |
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Outstanding June 30, 2024 |
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Additions |
| Granted |
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Additions |
| Granted |
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Cancellations |
| Cancelled |
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Additions |
| Vested |
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| - |
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| - |
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| - |
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| - |
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Outstanding September 30, 2024 |
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| $ |
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Additions |
| Granted |
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Additions |
| Granted |
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Cancellations |
| Cancelled |
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| ( | ) |
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| ( | ) |
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Additions |
| Vested |
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| - |
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| - |
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| - |
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| - |
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Outstanding December 31, 2024 |
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Outstanding March 31, 2025 |
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As of March 31, 2025, the weighted average remaining contractual life of the warrants was
These warrants were valued using a Black Scholes calculation applying the following factors: a stock price of $
| F-33 |
| Table of Contents |
NOTE 17. INCOME TAXES
The components of income tax balances for the periods ended March 31, 2025, and June 30, 2024, are as follows:
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NOTE 18 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that the following subsequent event needed to be disclosed.
On April 3, 2025, the Company received $
On April 7, 2025, the Company received $
On April 16, 2025, the Company received $
On May 7, 2025, the Company received $
On May 12, 2025, the Company was approved for uplisting from the OTC Pink Market to the OTCQB Venture Market, having met all eligibility requirements. As a result, investors now have access to real time Level 2 quotes for the Company’s securities. enhancing market visibility and transparency.
On May 31, 2025, the Company received $
| F-34 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation.
T-Rex Acquisition Corp is hereinafter referred to as “we”, “our”, or “us”.
FORWARD-LOOKING STATEMENTS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
| 3 |
| Table of Contents |
RESULTS OF OPERATION
Quarter Ended March 31, 2025, Compared to Quarter Ended March 31, 2024
Revenues for the quarter ended March 31, 2025, was $ 8,226 compared to $0 for the quarter ended March 31, 2024, an increase of $8,226 or 100%. The increase in revenues is primarily attributable to commencement of mining and co-location operation at our Orofino co-location facility.
Our net loss for the quarter ended March 31, 2025, was $393,688 compared to a net loss of $247,713 during the quarter ended March 31, 2024. The $147,975 increase in the net loss is primarily attributable to an increase in share-based compensation and the increase in revenues noted above.
During the three months ended March 31, 2025, we incurred operating expenses of $375,255 compared to $235,762 for the same period in 2024. This decrease in expenses was mainly due to decreases in share-based compensation and administration fees.
During the quarter ended March 31, 2025, we incurred interest expense of $16,246 compared to $9,951 incurred during the quarter ended March 31, 2024.
LIQUIDITY AND CAPITAL RESOURCES
Quarter Ended March 31, 2025
As of March 31, 2025, our current assets were $114,775 and our current liabilities were $1,902,443 which resulted in a working capital deficit of $1,787,668.
Cash Flows from Operating Activities
For the nine months ended March 31, 2025, net cash flows used in operating activities was $506,679 compared to $486,495 for the same period in 2024.
Cash Flows from Investing Activities
For the nine months ended March 31, 2025, and 2024, cash used by investing activities was $251,553 and $0 for the same period in 2024.
Cash Flows from Financing Activities
For the nine months ended March 31, 2025, and 2024, net cash flow by financing activities was $759,067 and $462,599 for the same period, respectively.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity 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 raised through proceeds from the issuance of debt or equity.
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| Table of Contents |
MATERIAL COMMITMENTS
The Company, through its 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. In March 2025, the Company consolidated it mining operations in the newly acquired co-location facility in Orofino, Idaho. The Company issued approximately $474,000 debt, of which approximately $267,000 which is due May 15, 2025.
CONVERTIBLE NOTES PAYABLE
See Note.11 “Related Parties” Note Payable section and Note.13 “Notes Payable-Unrelated Third Parties” for additional information on convertible promissory notes.
PURCHASE OF SIGNIFICANT EQUIPMENT
As part of the acquisition of the Orofino facility in March 2025, we acquired transformers, panels and distribution equipment and 33 miscellaneous crypto currency miners. The value of all the equipment is $165,563
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.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
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| Table of Contents |
GOING CONCERN
As reflected in the accompanying financial statements, the Company incurred a net loss of $1,122,930 during the nine months ended March 31, 2025, and had accumulated deficit of $8,146,728, and a working capital deficit of $1,787,688 as of March 31, 2025. While the Company is attempting to generate greater revenues, the Company’s cash position is inadequate to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is a substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues and raise capital.
Item 3. Quantitative and Qualitative Disclosure about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 4. Controls and Procedures.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the periods covered by this report, our chief executive officer/chief financial officer concluded that our disclosure controls and procedures were not effective.
MANAGEMENT’S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our Chief Executive Officer/Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
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| Table of Contents |
| Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
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| Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and, |
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| Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our Chief Executive Officer/Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of March 31, 2025. In making this assessment, management used the criteria set forth by the 1992 Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO”) in Internal Control — Integrated Framework.
Based on our assessment, our Chief Executive Officer/Chief Financial Officer believes that, as of March 31, 2025, our internal control over financial reporting is not effective based on those criteria, due to the following:
| Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties, and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including accounting personnel. t. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources. |
In light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the periods covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only Management’s Report in this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
Through March 31, 2025, there were no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 7 |
| Table of Contents |
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company’s consolidated financial position or results of operations.
Item 1A. Risk Factors.
There have been no material changes in the Company’s risk factors from those previously disclosed in our Restated Annual Report on Form 10-K for the year ended June 30, 2024.
Item 2. Unregistered Sales of Equity Securities.
For equity disclosures, see Note. 9, 11(a), 13, 15, and 16 of the accompanying unaudited financial statements, which are incorporated by reference herein.
Item 3. Defaults upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
None.
| 8 |
| Table of Contents |
Item 6. Exhibits.
The exhibit listed on the Exhibit Index (following the signatures section of this quarterly report dated March 31, 2025, on Form 10-Q are included, or incorporated by reference, in this nine-months ended March 31, 2025, Report on Form 10-Q.
Exhibit No. |
| Description |
| ||
| ||
| ||
| ||
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101.INS |
| XBRL Instance Document** |
101.SCH |
| XBRL Taxonomy Schema** |
101.CAL |
| XBRL Taxonomy Calculation Link base** |
101.DEF |
| XBRL Taxonomy Definition Linkbase** |
101.LAB |
| XBRL Taxonomy Label Linkbase** |
101.PRE |
| XBRL Taxonomy Presentation Linkbase** |
_____________
* Filed herewith.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| 9 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| T-REX Acquisition Corp. a Nevada corporation | ||
| |||
June 6, 2025 | By: | /s/ Frank Horkey | |
| Frank Horkey | ||
| Its: | Chief Financial Officer | |
| |||
June 6, 2025 | By: | /s/ Frank Horkey | |
| Frank Horkey | ||
| Its: | President | |
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
June 6, 2025 | By: | /s/ Frank Horkey | |
| Frank Horkey | ||
| Its: | Chief Financial Officer |
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