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 $500,000, the down payment of approximately $34,000 was paid in 2024.  Megalodon assumed operation of the facility in October 2024 as an option fee or incentive to the seller to continue the Asset Purchase Agreement. Megalodon incurred approximately $95,000 of electricity, contract labor and other costs from October to the closing date. These costs were capitalized and allocated to the Land, Building and Machinery & Equipment.

On March 31, 2025, and June 30, 2024, the balances were as follows:

Depreciation expenses amounted to $14,948 for the fiscal year ended June 30, 2024, and there was no depreciation expense in the 9 months ended March 31, 2025, as the miners were fully depreciated during the fiscal year ended June 30, 2024. The miners and computer equipment purchased in March 2025 were not placed in service on March 31, 2025. The building, also acquired at the same time incurred no material depreciation expense for the days placed in service in March 2025. 

See NOTE 12.” COMMITMENTS AND CONTINGENCIES” regarding Liens related to this mortgage.