Note 16. Exit of Manufacturing and Distribution Operations

During December 2025, the Company decided on a course of action to shut down certain manufacturing and distribution centers supporting the Company’s health and wellness products, including those products manufactured with hemp ingredients and certain related distribution operations, which it completed during February 2026.

The exit reflects the Company’s strategic decision to focus resources on its digital asset treasury strategy and other business initiatives aligned with its broader operating priorities. The Company concluded that the exit did not represent a discontinued operation because the exited activities did not constitute a component of the Company that was disposed of or classified as held for sale and did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results. Accordingly, the related operating results and impairment charge are presented within continuing operations.

During the year ended June 30, 2026, as a result of the Company’s course of action to shut down these manufacturing and distribution centers, a loss on disposal of $1,422,289 was recognized within Impairment on assets from manufacturing shut down within the Consolidated Statements of Operations. No such loss was recognized during the year ended June 30, 2025.

As of June 30, 2026, the Company had 10 full-time employees. As of June 1, 2026, the Company no longer leases warehouse space, with all brand distributions activities to be handled by third-party providers.