UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A10-Q

(Amendment No. 1)

(Mark One)

For the threenine months ended DecemberMarch 31, 20212023

or

For the transition period from _________ to _________

Commission File Number:333-152551 333-266766

(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. ☒ Yes ☐ No

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). ☒ Yes ☐ No

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.

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). ☐YesYes ☐ No ☒

As of February 21, 2022May 25, 2023, there were 16,169,10618,223,952 shares of the Registrant’s $0.001$0.0001 par value common stock issued and outstanding.

Securities registered under Section 12(g) of the Act:

Title of each class registered:

NoneCommon

PART II(A Nevada Corporation)

Item 6.  Exhibits.TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

T-REX ACQUISITION CORP.

March 31, 2023

The accompanying footnotes are an integral part of these consolidated financial statements.

The accompanying footnotes are an integral part of these consolidated financial statements.

The accompanying footnotes are an integral part of these consolidated financial statements.

The accompanying footnotes are an integral part of these consolidated financial statements.

T-REX ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

T-REX Acquisition Corp. (The “Company”) was formed on January 16, 2008, in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia. The Company later changed its name to Sync2 Networks Corp when the Company began to engage in software-related services. On March 20, 2014, the Company changed its name to T-REX Acquisition Corp. after the Company business operations under the Sync2 Networks branding had ceased. On June 21, 2021, the Company decided to pivot from seeking an acquisition candidate to operating a cryptocurrency mining business. On February 17, 2022, the Company began mining bitcoin at Ace Host, a Tampa, Florida located data center. On August 5, 2022, the Company changed its name to “T-REX Acquisition Corp.” 

As of March 31, 2023, the Company is a holding company with the following subsidiaries: Raptor Mining LLC, a Florida limited liability company (“Raptor Mining”); and TRXA Merger Sub, Inc., an inactive Delaware corporation (“Merger Sub”) and Megalodon Mining and Electric, LLC, a Florida limited liability company (“Megalodon”), which is also a dormant entity.  

2020 TRXA Merger Sub Inc. 

On March 13, 2020, the Company incorporated the Merger Sub to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company and Merger Sub is an inactive subsidiary of the Company. 

2021 Raptor Mining LLC and 2022 Megalodon Mining and Electric LLC

                 On July 9, 2021, the Company formed Raptor Mining to pursue the Company’s new business operating strategy to engage in cryptocurrency mining, which is used to secure decentralized network protocols and decentralized distributed ledgers. On July 1, 2022, the Company formed Megalodon to investigate and potentially pursue a cryptocurrency co-location business model. The cryptocurrency co-location business model is based on a   company, which has access to data centers and inexpensive cryptocurrency mining inputs, such as low-cost electricity supply, offering to host third-party owned cryptocurrency mining equipment in exchange for a fee, which may consist of a mix of cash and cryptocurrency consideration. Prior to the Company’s fiscal year end, the Company intends to acquire all of the assets of yet to be disclosed competitor in the crypto mining and co-location industry. The asset purchase shall include all crypto mining equipment, established co-location customers / business, intellectual property, and its physical co-location facility. The Purchase price is agreed to be $885,000 closing in two tranches, the first on or before May 30, 2023, and the second within 180 days from the initial Closing.

These unaudited interim consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end June 30, 2022, and June 30, 2021, respectively. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three and nine months ended March 31, 2023, are not necessarily indicative of results for the entire year ending June 30, 2023.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Determination of Bad Debts

The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. Once the allowance has been determined the offset is booked to bad debt expense and subsequently if the account is deemed to be a bad debt, it is written off the allowance for doubtful accounts.

Principles of Consolidation

As of March 31, 2023, the accounts include those of the Company and its 100% owned subsidiaries, Merger Sub, Raptor Mining and Megalodon Mining and Electric. These entities are inactive and without balances. As a result, there were no intercompany transactions or balances to be eliminated.

As of January 5, 2023, the Company has commenced researching the acquisition of land to begin offering co-location services to other cryptocurrency miner owners.

Use of estimates

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

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

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:

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 approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements as of March 31, 2023.

The assets and liabilities recorded on the balance sheet approximate their fair value.

Equipment

 Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. Equipment consists solely of bitcoin miners used in the operation. The equipment value is based on the cost and the potential impairment is reviewed periodically and as of June 30, 2022, there was no impairment of any of the mining equipment. The depreciation expense for the three and nine months ended March 31. 2023, was $19,307 and $55,498 respectively. Depreciation expense for the three and nine months ended March 31, 2022, was $7,956 and $7,956 respectively.

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. From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. Management is not aware of any pending, threatened or asserted litigation, petition, or claim.

Revenue recognition

The Company recognizes revenue under 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 following five steps are applied to achieve that core principle:

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, an entity must consider the effects of all of the following:

Crypto asset transaction verification is the output generated from the Company's ordinary activities. The consideration the Company receives is a bitcoin reward, which the Company measures fair value on the date received. Rewards are earned when the Company successfully places a block (by being the first to solve an algorithm). As a result, the Company receives confirmation from the mining pool of the block placed and reward/s earned. The Company uses the quoted price of the bitcoin at closing on the date the coin is mined to value its reward/s.  There is no significant financing component in these transactions. 

Expenses associated with running the digital currency mining business, such as rent, and electricity cost are also recorded as cost of revenue. Depreciation on digital currency mining equipment is recorded as a component of cost of revenue.

Digital currencies - Bitcoin

Bitcoin is included as a non-current, intangible asset in the balance sheets. It is recorded at cost less impairment. If it is determined that more likely than not an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.  The Bitcoin’s cost is accounted for using FIFO cost basis.  Rewards in bitcoin are earned for mining activity.  The reward a bitcoin miner earns changes roughly every four years, or after every 210,000 blocks are mined and gets reduced by half each time; this whole process is called bitcoin halving. The last halving occurred on May 11, 2020, and reduced the reward per block to 6.25 BTC. 

Income taxes

Federal Income taxes are not currently due since we have had losses since inception.

Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.

Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.

As of March  31, 2023, we had a net operating loss carry-forward of approximately $1,849,716 and a deferred tax asset of $388,440 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked valuation allowance of $(388,440). FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As of March 31, 2023, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.

Due to the changes the Tax Reform Act of 1986 and the Tax Cut and Jobs Act of 2017, net operating loss carryforwards for Federal Income tax reporting purposes are subject to additional limitations. Should certain changes in ownership occur, our net operating loss carryforwards may be limited to use in future years. In addition, tax rates on corporations were reduced and certain other deductions limited. These changes may affect the income tax benefit calculation and related allowance during subsequent fiscal years.

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

There were outstanding warrants that could convert into 3,285,332 shares of common stock as of March 31, 2023. At the end of all interim periods reported in the “Statements of Operation potentially dilutive shares were excluded because the effect would have been anti-dilutive.

Cash flows reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Advertising Costs

The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.

Par value of common stock

The par value of common stock was previously reported at $0.001 and was adjusted to $0.0001 resulting in an adjustment from common stock to additional paid in capital, with no change to total equity.

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 will evaluate subsequent events through the date when the financial statements are 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.

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, the Company incurred a net loss of $1,265,385 during the nine months ended March 31, 2023, and had an accumulated deficit of $5,426,142 and a working capital deficit of $293,112 as of March 31, 2023.

While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough 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 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.

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 – RELATED PARTY TRANSACTIONS

Office space

The Company leases office space from its Chief Executive Officer at a cost of $250 per month. The term of the lease is for 365 days and ends on June 30, 2023. On March 31, 2023, $2,250 of rent expense was accrued and is included in Accounts Payable and Accrued Expenses.

Due to Related Parties

For the year ended June 30, 2022, the Company issued 1,182,009 for the conversion of $118,050 in related party payables. 

As of March 31, 2023, the Company owed $245,900 due to related parties for accumulated management fees.

NOTE 5 – COMMON STOCK

 On June 25, 2022, Frank Horkey received 350,000 shares for acting in the capacity of President and sole Director since his previous contract expired December 31, 2019. On June 25^, 2022, he received an additional 250,000 shares for his board position vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333)  shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333)  shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.  

As compensation for acting on the Company’s Board of Directors, on June 25, 2022, Michael Christiansen received 250,000 shares of the Company’s common stock vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333)  shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333)  shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

On June 25, 2022, Squadron Marketing LLC received 250,000 shares of the Company common stock for acting on the Company’s Advisory Board for fiscal 2023 vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

On June 25, 2022, Lazarus Asset Management LLC - received 250,000 shares of the Company common stock for acting on the Company’s Advisory Board for fiscal 2023 vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

Shares issued that were not vested for unrestricted use resulted in Prepaid consulting expense of $304,426 (current - $76,106; non-current - $228,320) on March 31, 2023, and $456,638 (current - $47,834, non-current - $408,804) on June 30, 2022.

On July 1, 2022, James Marshall III received 75,000 shares of the Company’s common stock for acting as the Company’s technical consultant for fiscal 2023.

On July 1, 2022, John Bennet was issued 50,000 shares for extending his accounting and consulting contract through fiscal year end 2023.

During the year ended June 30, 2022, the Company issued 1,182,009 for the conversion of $118,050 in related party payables.

During the quarter ending September 30, 2022, the Company has issued 266,666 shares of the Company’s common stock pursuant to private placement transactions described below.

On February 10, 2023, John Bennet received 100,000 shares as inducement and partial payment for assuming the position of the Company’s Chief Financial Officer for the period January 1, 2023, through June 30, 2024.

On February 10, 2023 Shawn Perez received 50,000 shares of the Company’s common stock as partial payment for acting as the Company’s in-house counsel. Beginning January 1, 2023, through June 30, 2024.

On February 16, 2023, 2023 two related party shareholders returned a combined 1,900,000 shares of the Company’s common stock to treasury.

Private Placement Transactions

The Securities Purchase Agreements

On July 22, 2022, we entered into a Securities Purchase Agreement with one private investor who is not a Selling Stockholder (defined above) to whom we sold $100,000 in aggregate principal amount for 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on September 8,, 2025. On August 8, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on September 8,, 2025.On November 28, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,334 shares of our common stock and warrants to purchase 133,334 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on November 28, 2025. As of the close of December 31, 2022, these shares were recorded as “shares to be issued” and subsequently issued on February 10, 2023. We closed the transactions noted above in reliance on Securities Purchase Agreement dated November 10, 2021, noted below. We issued the securities contemplated under the Securities Purchase Agreement in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act.  Consolidate

The Registration Rights Agreements

On November 10, 2021, in connection with the closing of the transactions contemplated by the Securities Purchase Agreement, we entered into Registration Rights Agreements with the selling stockholders who are parties to the Securities Purchase Agreement. With respect to the selling stockholders who are party to the Securities Purchase Agreement, we are obligated to file a registration statement registering the resale of (i) their Warrant Shares, (ii) any Shares issuable under the terms of the Securities Purchase Agreement, and (iii) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization, or similar event with respect to the foregoing.

Pursuant to the Registration Rights Agreements, we agreed to file the registration statement(s) no later than the earlier of (a) 180-days after an initial public offering by the Company or (b) twelve (12) months after effective date of the Registration Rights Agreement. Furthermore, we agreed to grant the parties to the Securities Purchase Agreement a “piggy-back” registration right upon at least 10-day notice prior to the Company’s filing of a registration statement (or confidential submission in draft form) with the SEC. As contemplated by the terms of the Registration Rights Agreements, the Company filed a registration statement on Form S-1, as amended, that became effective on September 8, 2022.

Company’s Registration Statement on Form S-1, as amended

On September 8, 2022, the Company’ registration statement on Form S-1, as amended, concerning the registration of 6,505,267 shares of its common stock, has been declared effective by the Securities and Exchange Commission. The registration statement relates to the possible resale, from time to time, by the selling stockholders of up to an aggregate of 6,530,267 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”), including (i) an aggregate of 747,837 shares acquired by those selling stockholders who purchased the Company’s common stock and warrants pursuant to a Securities Purchase Agreement (the “PIPE Investors”), (ii) an aggregate of 747,837 shares issuable upon the exercise in full of warrants (the “PIPE Warrant Shares”), (iii) an aggregate of 2,437,500 shares of the Company’s common stock issuable upon the exercise of warrants held by the remaining Selling Stockholders (the “Non-PIPE Warrant Shares”) (assuming the Warrants are exercised in full without regard to any exercise limitations therein), and (iii) 2,597,093 shares of common stock, including common stock owned by the Company’s long term investors and beneficially owned by certain directors and current executive officers of the Company. 

The Shares will be offered and sold by the selling stockholders at a fixed price of $1.50 per share until our common stock is quoted on OTC Market Group, Inc.’s “OTCQB” or “OTCQX” tiers, and thereafter the Shares may be sold at prevailing market prices or privately negotiated prices or in transactions that are not in the public market. Although the Company has applied for listing on the OTCQB tier, we cannot assure you that our common stock will, in fact, be quoted on the OTCQB tier. The Company will not receive any proceeds from the sale of the Shares by the selling stockholders, although the Company will receive the proceeds from any cash exercise of the Warrants. 

NOTE 6 – WARRANTS

On May 3, 2014, it was resolved that the Company shall offer 250,000 Units at a price of $.80 per unit. Each Unit shall consist of (a) one (1) share of common stock and (b) a combination of series A warrants (which may be exercised within three (3) years) and series B warrants exercised within five (5) years of the consummation of a merger.

On May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.

On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.

On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of one (1) share of common stock, and two (2) Series A warrants to purchase one (1) share of common stock at $.65 per share and one (1) series B warrant to purchase one (1) share of common stock at $.80. Each series A warrant expires three years from the consummation of a merger and each series B warrant expires 5 years from the consummation of a merger.

The Company may call the B Warrants at such point the quoted market closing price is at least $2.50 for 20 consecutive trading days. In the event the Company calls the Warrants, it shall immediately notify holders of the Warrants of the call. Warrants holders will be granted a period of 45 calendar days to redeem the Warrants by returning the Warrant to the Company accompanied by payment of $.80 per share. The warrants were valued using a Black Scholes calculation.

The inputs for series A used a price $.59, a strike price range of $.65 – $1.25, maturity 3 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.202. The inputs for series B used a price $.59, a strike price of .80, maturity 5 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.232.

As of the filing date of this quarterly report, 189,500 A warrants have expired leaving only 125,000 A Warrants and 62,500 B Warrants remaining effective since the Company has yet to consummate a merger.

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 $560,875 in aggregate principal amount of our common stock (747,837 shares) and C warrants to purchase shares of our common stock (which we refer to as the “PIPE Warrants”), exercisable at any time before the close of business on  September 8, 2025.  The PIPE Warrants are comprised of 747,837 warrants with an exercise price of $1.50 per share. 

Warrants Issued to Management and Consultants

On July 1, 2021, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a Class C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50.

On May 26, 2022, the Company issued to Frank Horkey a Class C warrant to purchase 250,000 shares of the Company’s common stock exercisable at any time before the close of business on September 8, 2025 at an exercise price of $1.50  as part of his executive compensation during the 2022 fiscal year. 

On May 26, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class C warrants to purchase 500,000 shares of the Company’s common stock exercisable at any time before the close of business on September 8, 2025, at an exercise price of $1.50, related to consulting services during fiscal 2022. 

On June 25, 2022, Frank Horkey and Michael Christiansen were each issued 250,000 Class D warrants to purchase 250,000 shares of the Company’s common stock exercisable at any time before the close of business on September 8, 2025, at an exercise price of $1.50 for serving on the Company’s Board of Directors for the upcoming 2023 fiscal year.  

On June 25, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class D warrants to purchase 250,000 shares of the Company’s common stock exercisable at any time before the close of business on September 8, 2025, at an exercise price of $1.50 for serving on the Company’s Advisory Board for the upcoming 2023 fiscal year. 

Certain of the shares and warrants noted above were cumulative amounts due for prior service.

In addition, certain other 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 June 30, 2022. The amounts related to restricted shares issued to board members and consultants are treated as prepaid consulting until vested at which time service periods would be satisfied.

The following is the outstanding warrant activity:

NOTE 7. DIGITAL CURRENCY - BITCOIN

The Company carries digital currencies at cost using the first in first out method.  Bitcoin activity and balances were as follows:

NOTE 8 – 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.

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation.

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.

In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China and has spread throughout the United States and the rest of the world. The World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This contagious disease outbreak, which has not been contained, and is disrupting supply chains and affecting production and sales across a range of industries in United States and other companies as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak, as well as the worldwide adverse effect to workforces, economies, and financial markets, leading to a global economic downturn. Therefore, the Company expects this matter to negatively impact its operating results. However, the related financial impact and duration cannot be reasonably estimated at this time.

RESULTS OF OPERATION

Our revenue for the three months ended March 31, 2023, was $19,944 compared to $26,305 for the same period in 2022.

Our revenue for the nine months ended March 31, 2023, was $57,731compared to $26,305 for the same period in 2022.

Our net loss for the three months ended March 31, 2023, was ($258,623) compared to a net loss of ($93,312) for the same period in 2022.

Our net loss for the nine months ended March 31, 2023, was ($1,265,385) compared to a net loss of ($1,007,174 for the same period in 2022.

During the three months ended March 31, 2023, we incurred operating expenses of $243,668 compared to $79,963 for the same period in 2022.  The increase in expenses was mainly due to shares issued for services in 2023.

During the nine months ended March 31, 2023, we incurred operating expenses of $1,205,532 compared to $993,925 for the same period in 2022.  The increase in expenses was mainly due to shares issued for services in 2023.

During the quarter ended March 31, 2023, we incurred interest expense of $0 compared to $0 incurred during the quarter ended March 31, 2022.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2023, our current assets were $104,500 and our current liabilities were $397,612 which resulted in a working capital deficit of $293,112.

As of March 31, 2023, and 2022, our total liabilities were comprised entirely of current liabilities.

Cash Flows from Operating Activities

For the nine months ended March 31, 2023, net cash flows used in operating activities was ($418,214)(compared to ($95,346)the same period in 2022.

Cash Flows from Investing Activities

For the nine months ended March 31, 2023, net cash flows used in investing activities were $88,000 compared to $445,500 for the same period in 2022.

Cash Flows from Financing Activities

For the nine months ended March 31, 2023, net cash flows from financing activities were $506,100 compared to $560,875 for the same period in 2022.

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.

MATERIAL COMMITMENTS

Convertible Debenture

None. 

PURCHASE OF SIGNIFICANT EQUIPMENT

During the next two months, the Company intends to acquire all of the assets of yet to be disclosed competitor in the crypto mining and co-location industry. The asset purchase includes all crypto mining equipment, established co-location customers, and its physical co-location facility. The combined cost if the acquisitions has been agreed to $885,000 closing in two tranches the first half on or before May 30, 2023 and the second within 180 days from the initial Closing Date. During the next twelve months, the Company intends to acquire between fifty (50) and one hundred and fifty (150) ASIC miners per quarter. Although pricing for ASIC miners is generally directly related to the price of bitcoin, ASIC miners as of this Annual Report cost between $1,500 and $3,000 per ASIC miner. 

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.

GOING CONCERN

The independent auditors’ report accompanying our June 30, 2022, and June 30, 2021, financial statements contain an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations and have a working capital deficit. These factors raise substantial doubt about our ability to continue as a going concern. 

RECENTLY ISSUED ACCOUNTING STANDARDS

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. 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. 

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

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal controls over financial reporting as of March 31, 2023. 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:

MANAGEMENT’S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal controls over financial reporting as of March 31, 2023. 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:

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.

As a result, Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal controls over financial reporting as of March 31, 2023.

Based on that assessment, our Chief Executive Officer and Chief Financial Officer believe that, as of March 31, 2023, our internal control over financial reporting is not effective based on those criteria, due to the following:

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 (1) 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

There were no significant changes in our internal control over financial reporting during the three months ended March 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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 Annual Report on Form 10-K for the year ended June 30, 2022.

Item 2. Unregistered Sales of Equity Securities.

On July 22, 2022, we entered into a Securities Purchase Agreement with one private investor who is not a Selling Stockholder (defined above) to whom we sold $100,000 in aggregate principal amount for 133,334 shares of our common stock and warrants to purchase 133,334 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on September 8, 2025. On August 8, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,334 shares of our common stock and warrants to purchase 133,334 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on September 8, 2025. Again, on November 28, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,334 shares of our common stock and warrants to purchase 133,334 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on September 8,2025. We closed the transactions noted above in reliance on Securities Purchase Agreement dated November 10, 202, noted below. With the exception of the last 133,334 shares and warrant, we issued the securities contemplated under the Securities Purchase Agreement in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act. 

On April 20, 2023, we entered into a Securities Purchase Agreement with one private investor, who is not a Selling Stockholder (defined above), to whom we sold $200,000 in aggregate principal amount for 266,668 shares of our common stock and warrants to purchase 266,668 shares of our common stock with an exercise price of $1.50 per share and exercisable at anytime before the close of business on April 20, 2026.

Item 3. Defaults upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibit listed on the Exhibit Index (following the signatures section of this quarterly report dated December 31, 2022, on Form 10-Q are included, or incorporated by reference, in these three months ended December 31, 2021, Report on Form 10-Q.

_____________

* 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.

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.

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.