
Consolidated Financial Statements The consolidated financial statements for the six months ended December 31, 2024, reflect a significant strategic pivot, zero revenue, a net loss of $2.8 million, and severe liquidity challenges with negative shareholder equity Consolidated Balance Sheets As of December 31, 2024, the company's financial position significantly weakened with total assets decreasing by 39.6% and shareholders' equity turning negative to -$1.9 million Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | December 31, 2024 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $29,756 | $1,409,070 | -97.9% | | Total current assets | $4,033,749 | $6,684,745 | -39.6% | | Total assets | $4,033,749 | $6,684,745 | -39.6% | | Total liabilities | $5,932,694 | $5,775,162 | +2.7% | | Total equity | $(1,898,945) | $909,583 | Negative Turn | Consolidated Statements of Operations and Comprehensive Income (Loss) For the six months ended December 31, 2024, the company reported zero revenue and a net loss of $2.8 million, reflecting the cessation of mining operations, though an improvement from the prior year's $7.1 million loss Statement of Operations Highlights (unaudited) | Metric | Six Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total Revenues | $0 | $2,888,482 | | Gross Profit (Loss) | $0 | $(945,202) | | Loss from Operations | $(1,906,578) | $(6,751,879) | | Net Loss | $(2,819,073) | $(7,058,158) | | Loss Per Share (Basic & Diluted) | $(0.34) | $(1.99) | - The company had no cryptocurrency mining revenue in the six months ended December 31, 2024, compared to $2.9 million in the prior year period, reflecting the cessation of mining operations3 Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity declined from $0.9 million to a deficit of -$1.9 million by December 31, 2024, primarily driven by the $2.8 million net loss for the period Key Changes in Shareholders' Equity (Six Months Ended Dec 31, 2024) | Item | Amount | | :--- | :--- | | Balance, June 30, 2024 | $909,583 | | Net loss | $(2,819,073) | | Conversion of convertible debenture | $10,545 | | Exercise of warrants | $0 | | Balance, December 31, 2024 | $(1,898,945) | Consolidated Statements of Cash Flows For the six months ended December 31, 2024, the company experienced a net cash decrease of $1.4 million, with $2.9 million used in operating activities, partially offset by $1.5 million from investing activities Cash Flow Summary (unaudited) | Cash Flow Activity | Six Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,925,202) | $(4,620,364) | | Net cash provided by investing activities | $1,545,888 | $3,718,828 | | Net cash provided by financing activities | $0 | $7,773,271 | | Change in Cash and Cash Equivalents | $(1,379,314) | $6,871,735 | | Cash and Cash Equivalents, end of period | $29,756 | $6,888,009 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's strategic pivot from Bitcoin mining to hardware sales, highlight a going concern warning due to significant losses and low cash, and outline subsequent events including capital restructuring and executive changes Note 1 – Nature of business and organization This note outlines the company's business model shift from Bitcoin mining, ceased in December 2023 due to high costs, to becoming a non-exclusive sales representative for Aethir Edge miners since June 2024 - The company ceased Bitcoin mining operations in December 2023 because of high operating costs in the United States10 - Since June 2024, the company has become a non-exclusive sales representative for Aethir Edge miners, and in 2025, it entered agreements to sell 295 units10 Note 2 – Summary of significant accounting policies This note highlights the company's critical liquidity and going concern warning, with a cash balance of $30,000 and a $2.8 million operating loss, outlining management's plans for remediation through sales, public offering, and debenture conversions - The company's financial condition, with a cash balance of approximately $30,000 and a six-month operating loss of $2.8 million, raises substantial doubt about its ability to continue as a going concern13 - To remediate its financial situation, the company is focusing on selling Aethir Edge miners, planning a public offering, and converting debentures into equity1420 - For cryptocurrency miner sales, the company acts as an agent and recognizes revenue on a net basis, representing the commission earned53 - In the prior year period (six months ended Dec 31, 2023), the company recognized a significant impairment loss of $4,530,587 on long-lived assets, with no such impairment recorded in the current period31 Note 3 – Cryptocurrencies This note details the company's cryptocurrency holdings of 4.47 BTC valued at $178,687 as of December 31, 2024, which were subsequently sold in January 2025 for approximately $0.4 million, yielding a $0.2 million gain Cryptocurrency Balance (BTC) | Date | Quantity (in coins) | Amount | | :--- | :--- | :--- | | June 30, 2024 | 4.47 | $178,687 | | December 31, 2024 | 4.47 | $178,687 | - The full balance of 4.47 BTC was sold in January 2025 for approximately $0.4 million, with a gain on disposal of approximately $0.2 million recognized69 Note 8 – Convertible Debentures This note details the company's convertible debentures, with a combined remaining balance of $7.77 million as of December 31, 2024, which were subsequently fully converted into ordinary shares in early 2025 Convertible Debentures Summary | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Remaining Principal Balance | $7,770,000 | $7,780,000 | | Less: discount and issuance cost | $(2,072,929) | $(2,615,989) | | Total Net Balance | $5,697,071 | $5,164,011 | - Subsequent to the reporting period, the remaining $5.78M balance of the December 2023 debenture was fully converted into 9,477,901 ordinary shares in March 202592 - Subsequent to the reporting period, the remaining $1.99M balance of the May 2024 Exchange Note was fully converted into 2,802,200 ordinary shares in February 202596 Note 9 – Equity This note details equity changes, including executive departures of CEO Lucas Wang and President Jiaming Li, and a decrease in outstanding warrants due to 1,228,000 cashless exercises - CEO Lucas Wang resigned on April 10, 2024, and his unvested shares were forfeited99 - President Jiaming Li resigned on November 27, 2023, and the Board passed a resolution to issue his remaining unvested shares100 - During the six months ended December 31, 2024, 1,228,000 warrants were exercised on a cashless basis, resulting in the issuance of 708,424 ordinary shares103 Note 11 – Subsequent Events This note describes critical subsequent events, including shareholder approval in March 2025 of a dual-class share structure and authorization for a reverse stock split to restructure capital and potentially regain exchange compliance - In March 2025, shareholders approved a dual-class share structure, creating Class A shares (1 vote) and Class B shares (20 votes)106107 - Shareholders also approved a reverse stock split of all shares at a ratio between 1-for-2 and 1-for-200, with the final ratio at the Board's discretion107