Cover
Cover - shares | 9 Months Ended | |
May 31, 2023 | Jul. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | May 31, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --08-31 | |
Entity File Number | 000-56220 | |
Entity Registrant Name | BITMINE IMMERSION TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001829311 | |
Entity Tax Identification Number | 84-3986354 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 2030 Powers Ferry Road SE | |
Entity Address, Address Line Two | Suite 212 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 404 | |
Local Phone Number | 816-8240 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,444,222 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | May 31, 2023 | Aug. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 518,425 | $ 392,550 |
Prepaid expenses | 105,000 | 5,000 |
Notes receivable-short term | 374,444 | 491,395 |
Total current assets | 997,868 | 888,945 |
Cryptocurrency | 61,226 | 21,434 |
Notes receivable - long term | 1,511,563 | 532,345 |
Investment in joint venture | 987,429 | 0 |
Fixed assets, net | 934,645 | 21,875 |
Fixed assets -not in service | 3,938,427 | 6,509,602 |
Total assets | 8,431,157 | 7,974,201 |
Current liabilities: | ||
Accounts payable | 52,730 | 84,761 |
Accrued interest -related party | 55,641 | 0 |
Loans payable-related party | 1,300,000 | 0 |
Deferred revenue | 64,645 | 232,913 |
Total current liabilities | 1,473,015 | 317,674 |
Deferred revenue long term | 437,163 | 252,322 |
Total liabilities | 1,910,178 | 569,995 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 49,444,222 and 48,606,915 shares issued and outstanding as of May 31, 2023 and August 31, 2022 respectively | 4,944 | 4,861 |
Additional paid-in capital | 10,284,331 | 9,865,866 |
Accumulated deficit | (3,768,341) | (2,466,566) |
Total stockholders' equity | 6,520,979 | 7,404,205 |
Total liabilities and equity | 8,431,157 | 7,974,201 |
Preferred Class A [Member] | ||
Stockholders' Equity: | ||
Series A Preferred Stock, $0.0001 par value, 500,000 shares authorized, 453,966 and 453,966 shares issued and outstanding as of May 31, 2023 and August 31, 2022, respectively | $ 45 | $ 45 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | May 31, 2023 | Aug. 31, 2022 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |
Preferred Stock, Shares Authorized | 20,000,000 | |
Preferred Stock, Shares Outstanding | 453,966 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 49,444,222 | 48,606,915 |
Common Stock, Shares, Outstanding | 49,444,222 | 48,606,915 |
Preferred Class A [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 500,000 | 500,000 |
Preferred Stock, Shares Issued | 453,966 | 453,966 |
Preferred Stock, Shares Outstanding | 453,966 |
Statement of Operations (Unaudi
Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Income Statement [Abstract] | ||||
Revenue from the sale of mining equipment | $ 13,647 | $ 0 | $ 138,011 | $ 344,700 |
Revenue from hosting | 0 | 16,567 | 0 | 16,567 |
Revenue from self- mining | 128,479 | 0 | 261,921 | 4,574 |
Total revenue | 142,126 | 16,567 | 399,932 | 365,841 |
Cost of sales mining equipment | 0 | 0 | 44,580 | 186,657 |
Cost of sales self-mining | 72,392 | 99,711 | 241,743 | 145,179 |
Gross profit (loss) | 69,734 | (83,144) | 113,608 | 34,005 |
Operating expenses: | ||||
General and administrative expenses | 183,610 | 141,312 | 244,723 | 182,179 |
Depreciation | 147,005 | 0 | 294,270 | 7,803 |
Professional fees | 143,580 | 75,705 | 406,383 | 742,730 |
Related party compensation | 110,712 | 109,172 | 350,536 | 213,633 |
Impairment of fixed assets | 0 | 0 | 122,950 | 0 |
Impairment of cryptocurrency | 0 | 3,775 | 3,523 | 3,775 |
Total operating expenses | 584,908 | 329,964 | 1,422,385 | 1,150,119 |
Income(loss) from operations | (515,174) | (413,108) | (1,308,776) | (1,116,115) |
Other income (expense) | ||||
Interest expense | (28,622) | (78,290) | (55,641) | (196,165) |
Gain from the sale of digital currencies | 5,659 | 0 | 18,420 | 0 |
Other income | 0 | 0 | 16,939 | 0 |
Interest income | 14,433 | 4,485 | 27,284 | 4,485 |
Other income (expense), net | (8,530) | (73,806) | 7,002 | (191,680) |
Net loss | $ (523,704) | $ (486,912) | $ (1,301,775) | $ (1,307,795) |
Statement of Operations (Unau_2
Statement of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Income Statement [Abstract] | ||||
Earnings Per Share, Basic | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) |
Earnings Per Share, Diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) |
Weighted Average Number of Shares Outstanding, Basic | 48,855,238 | 43,712,529 | 48,774,671 | 41,910,194 |
Weighted Average Number of Shares Outstanding, Diluted | 48,855,238 | 43,712,529 | 48,774,671 | 41,910,194 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Series A Preferred Stocks [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Aug. 31, 2021 | $ 4,043 | $ 817,842 | $ (461,334) | $ 360,551 | |
Shares, Outstanding, Ending Balance at Aug. 31, 2021 | 0 | 40,433,299 | |||
Common stock issued for services | $ 20 | 549,980 | 550,000 | ||
Common shares issued for services, shares | 200,000 | ||||
Net loss | (708,756) | (708,756) | |||
Ending balance, value at Nov. 30, 2021 | $ 4,063 | 1,367,822 | (1,170,090) | 201,796 | |
Shares, Outstanding, Ending Balance at Nov. 30, 2021 | 0 | 40,633,299 | |||
Beginning balance, value at Aug. 31, 2021 | $ 4,043 | 817,842 | (461,334) | 360,551 | |
Shares, Outstanding, Ending Balance at Aug. 31, 2021 | 0 | 40,433,299 | |||
Net loss | (1,307,795) | ||||
Ending balance, value at May. 31, 2022 | $ 4,409 | 2,904,781 | (1,769,129) | 1,140,061 | |
Shares, Outstanding, Ending Balance at May. 31, 2022 | 0 | 44,086,091 | |||
Beginning balance, value at Nov. 30, 2021 | $ 4,063 | 1,367,822 | (1,170,090) | 201,796 | |
Shares, Outstanding, Ending Balance at Nov. 30, 2021 | 0 | 40,633,299 | |||
Common stock issued for services | $ 0 | $ 210 | (210) | 0 | 0 |
Common shares issued for services, shares | 2,100,000 | ||||
Net loss | (112,127) | (112,127) | |||
Common shares sold in a private placement | 58 | 724,942 | 725,000 | ||
Ending balance, value at Feb. 28, 2022 | $ 4,331 | 2,108,014 | (1,282,217) | 830,128 | |
Shares, Outstanding, Ending Balance at Feb. 28, 2022 | 0 | 43,313,399 | |||
Common shares sold in a private placement, shares | 580,000 | ||||
Common stock issued for services -related party | 15,460 | 15,460 | |||
Common stock issued for services | $ 20 | 87,944 | 87,964 | ||
Common shares issued for services, shares | 200,000 | ||||
Net loss | (486,912) | (486,912) | |||
Common shares sold in a private placement | 53 | 662,447 | 662,500 | ||
Ending balance, value at May. 31, 2022 | $ 4,409 | 2,904,781 | (1,769,129) | 1,140,061 | |
Common shares sold in a private placement, shares | 42,692 | ||||
Shares, Outstanding, Ending Balance at May. 31, 2022 | 0 | 44,086,091 | |||
Common shares sold in a private placement, shares | 530,000 | ||||
Common stock issued for services -related party | $ 4 | 46,377 | 46,381 | ||
Beginning balance, value at Aug. 31, 2022 | $ 45 | $ 4,861 | 9,865,865 | (2,466,566) | 7,404,205 |
Shares, Outstanding, Ending Balance at Aug. 31, 2022 | 453,966 | 48,606,915 | |||
Common stock issued for services -related party , shares | 71,429 | ||||
Common stock issued for services | $ 10 | 43,990 | 44,000 | ||
Common shares issued for services, shares | 100,000 | ||||
Net loss | (470,665) | (470,665) | |||
Ending balance, value at Nov. 30, 2022 | $ 45 | $ 4,878 | 9,941,277 | (2,937,231) | 7,008,969 |
Shares, Outstanding, Ending Balance at Nov. 30, 2022 | 453,966 | 48,778,344 | |||
Common stock issued for services -related party | $ 7 | 31,422 | 31,429 | ||
Beginning balance, value at Aug. 31, 2022 | $ 45 | $ 4,861 | 9,865,865 | (2,466,566) | 7,404,205 |
Shares, Outstanding, Ending Balance at Aug. 31, 2022 | 453,966 | 48,606,915 | |||
Ending balance, value at Feb. 28, 2023 | $ 45 | $ 4,885 | 9,991,055 | (3,244,638) | 6,751,348 |
Shares, Outstanding, Ending Balance at Feb. 28, 2023 | 453,966 | 48,848,767 | |||
Beginning balance, value at Aug. 31, 2022 | $ 45 | $ 4,861 | 9,865,865 | (2,466,566) | 7,404,205 |
Shares, Outstanding, Ending Balance at Aug. 31, 2022 | 453,966 | 48,606,915 | |||
Net loss | (1,301,775) | ||||
Ending balance, value at May. 31, 2023 | $ 45 | $ 4,944 | 10,284,331 | (3,768,341) | 6,520,979 |
Shares, Outstanding, Ending Balance at May. 31, 2023 | 453,966 | 49,444,222 | |||
Beginning balance, value at Nov. 30, 2022 | $ 45 | $ 4,878 | 9,941,277 | (2,937,231) | 7,008,969 |
Shares, Outstanding, Ending Balance at Nov. 30, 2022 | 453,966 | 48,778,344 | |||
Common stock issued for services -related party , shares | 70,423 | ||||
Net loss | (307,407) | (307,407) | |||
Ending balance, value at Feb. 28, 2023 | $ 45 | $ 4,885 | 9,991,055 | (3,244,638) | 6,751,348 |
Shares, Outstanding, Ending Balance at Feb. 28, 2023 | 453,966 | 48,848,767 | |||
Common stock issued for services -related party | $ 7 | 49,778 | 49,785 | ||
Common stock issued for services -related party , shares | 45,455 | ||||
Common stock issued for services | $ 55 | 241,945 | 242,000 | ||
Common shares issued for services, shares | 550,000 | ||||
Net loss | (523,704) | (523,704) | |||
Ending balance, value at May. 31, 2023 | $ 45 | $ 4,944 | 10,284,331 | (3,768,341) | 6,520,979 |
Shares, Outstanding, Ending Balance at May. 31, 2023 | 453,966 | 49,444,222 | |||
Common stock issued for services -related party | $ 5 | $ 51,330 | $ 51,335 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (1,301,775) | $ (1,307,795) |
Stock based compensation | 418,549 | 699,805 |
Depreciation | 294,270 | 7,803 |
Change in balance sheet accounts | ||
Impairment of fixed assets | 122,950 | 0 |
Cryptocurrencies | (39,792) | (17,366) |
Accounts receivable other | 0 | (6,680) |
Notes receivable | (862,266) | (168,750) |
Prepaid expenses | (100,000) | (29,228) |
Accounts payable | (32,032) | 68,930 |
Deferred revenue | 16,573 | 0 |
Accrued interest - related party | 55,641 | 196,165 |
Accrued liabilities - related parties | 0 | 102,792 |
Net cash (used in) operating activities | (1,427,882) | (454,327) |
Cash flows from investing activities | ||
Investment in joint venture | (987,429) | 0 |
Sale of fixed assets | 1,558,443 | 0 |
Purchase of fixed assets | (317,257) | (2,268,811) |
Net cash provided by (used in) investing activities | 253,757 | (2,268,811) |
Cash flows from financing activities: | ||
Common shares sold in a private placement | 0 | 1,387,500 |
Related party loans - net | 1,300,000 | 1,616,813 |
Net cash provided by financing activities | 1,300,000 | 3,004,313 |
Net increase in cash and cash equivalents | 125,875 | 281,175 |
Cash and cash equivalents at beginning of period | 392,550 | 218,737 |
Cash and cash equivalents at end of period | 518,425 | 499,912 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES | 9 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES About Bitmine Immersion Technologies, Inc. Bitmine Immersion Technologies Inc. f/k/a Sandy Springs Holdings, Inc. (“ Bitmine Company By a written consent dated July 16, 2021, holders of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “ New O&Ds The appointment of certain of the New O&Ds to the Company’s board, and issuance to the New O&Ds of a controlling interest in the Company, were made in order to enable the Company to enter the business of creating a hosting center for Bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the Bitcoin digital currency for its own account. Prior to the change of control to the New O&Ds, the Company was a shell company. During the fiscal year ended August 31, 2022, the Company began implementing its business plan by generating revenue from the mining of Bitcoin digital currency, hosting a third party Bitcoin miner and the sale of mining equipment. The Company’s year-end is August 31st. Basis of Presentation The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP SEC The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations. Operating results for the nine months ended May 31, 2023, are not necessarily indicative of the results that may be expected for the year ending August 31, 2023. Reverse Stock Split On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock. The Company’s financial statements in this Report for the periods ended May 31, 2023, and August 31, 2022, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise. Management’s Representation of Interim Financial Statements The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to the calculation of stock-based compensation, useful lives and impairment of fixed assets, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. There have been no material changes to the Company’s accounting estimates since the Company’s financial statements for the fiscal year ended August 31, 2022. Segment Reporting The Company operates in one segment - the cryptocurrency mining industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. All material Company operations qualify for aggregation due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes. Revenue Recognition On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. Revenues from digital currency mining The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the 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: · Step 1: Identify the contract with the customer; · Step 2: Identify the performance obligations in the contract; · Step 3: Determine the transaction price; · Step 4: Allocate the transaction price to the performance obligations in the contract; and · Step 5: Recognize revenue when the Company satisfies a performance obligation. In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. 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: · Variable consideration · Constraining estimates of variable consideration · The existence of a significant financing component in the contract · Noncash consideration · Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the market rate of the related cryptocurrency at the time of receipt. Revenues from Hosting The Company provides energized space to customers who locate their equipment within the Company’s co-hosting facility. The equipment generating the hosting revenue is owned by the customer. Currently, the Company accepts the mining proceeds daily from the mining pool into a cold wallet address in the Company’s name. The Company sends its hosting client its portion daily, as the Company receives such proceeds. All performance obligations are achieved simultaneously by providing the hosting environment for the customers’ operations. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of cryptocurrency generated by the client’s hosting activities. With regard to hosting revenues that are billed in U.S. dollars, revenues are recorded at the time of invoicing. With regard to hosting revenues that are based on a percentage of cryptocurrency generated by the customer, revenues are recorded based on the Company’s share of cryptocurrency received from the mining pool on the date of receipt. During the nine months ending May 31, 2023, the Company did not generate any revenue from hosting services. Revenues from the sale of mining equipment The Company records revenue from the resale of mining equipment it has purchased. Revenue for the sale of mining equipment is recognized under the guidelines of ASC 606. During the nine months ending May 31, 2023, the Company generated 138,011 in revenues from the sale of mining equipment. Revenues From Mining Revenues from mining cryptocurrency for its own account will be recorded at the spot price for the cryptocurrency on a daily basis based on the Company’s proportionate share of cryptocurrency earned by the mining pools in which the Company participates on the date the Company receives its share from the pool. During the nine months ending May 31, 2023, the Company generated $ 261,921 Cash and cash equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On May 31, 2023, and August 31, 2022, respectively, the Company’s cash equivalents totaled $ 518,425 392,550 Cryptocurrency Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment quarterly, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that 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. During the nine months ended May 31, 2023, the Company recorded an impairment charge of $3,523 due to a reduction in the quoted price of cryptocurrency. Subsequent reversal of impairment losses, if the price of cryptocurrency increases, is not permitted. Additionally, during the nine months ended May 31, 2023, the Company realized a gain from sale of cryptocurrency of $ 18,420 Cryptocurrency earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations and comprehensive income (loss). The Company accounts for its gains or losses in accordance with the moving weighted average method of accounting. The Company holds its cryptocurrencies in a cold storage wallet account in its name, and not with a custodian or other intermediary. The Company has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial Services. Currently, the Company does not store cryptocurrencies at Gemini, and only transfers cryptocurrencies that it desires to liquidate to its account at Gemini immediately prior to the liquidation. The Company uses Gemini’s multi-signature feature for account access. Income taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” Stock-based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Stock Purchase Warrants The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, we also assess whether the warrants are indexed to our common stock and whether the warrants are classified as equity under ASC 815-40 or other GAAP. After all such assessments, we conclude whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date. We do not have any liability classified warrants as of any period presented. Property and equipment Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows: Schedule of useful lives of assets Life (Years) Miners and mining equipment 2 Machinery and equipment 5 - 7 Office and computer equipment 3 No depreciation is recorded on an asset until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is properly configured to turn on the machines. As of May 31, 2023, and August 31, 2022, the Company had $ 3,938,427 6,509,602 122,950 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements Codification Improvements to Topic 842, Leases (Topic 842) Targeted Improvements, We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements. In March 2022, the SEC staff released Staff Accounting Bulletin No. 121 (“SAB 121”), which requires entities that hold crypto assets on behalf of platform users to recognize a liability to reflect the entity’s obligation to safeguard the crypto assets held for its platform users, whether directly or through an agent or another third party acting on its behalf, along with a corresponding safeguarding asset. Both the liability and corresponding safeguarding asset shall be measured at fair value. SAB 121 also requires disclosure of the nature and amount of crypto assets being safeguarded, how the fair value is determined, an entity’s accounting policy for safeguarding liabilities and corresponding safeguarding assets, and may require disclosure of other information about risks and uncertainties arising from the entity’s safeguarding activities. The Company is not in the business of holding its customer’s crypto assets for safekeeping. For crypto assets that are not maintained on our platform and for which the Company does not maintain a private key or the ability to recover a customer’s private key, these balances are not recorded, as there is no related safeguarding obligation in accordance with SAB 121. This guidance is effective from the first interim period after June 15, 2022 and should be applied retrospectively. We adopted SAB 121 during the three months ended August 31, 2022, and it did not have any impact on our financial statements. |
CRYPTOCURRENCIES
CRYPTOCURRENCIES | 9 Months Ended |
May 31, 2023 | |
Cryptocurrencies | |
CRYPTOCURRENCIES | NOTE 2 – CRYPTOCURRENCIES The following table presents additional information about the Company’s Bitcoin for the nine months ended May 31, 2023: Schedule of Cryptocurrencies Beginning balance – August 31, 2022 $ 21,434 Revenue received from mining 261,921 Revenue recorded as “other income” from the termination of hosting agreement 16,939 Proceeds from the sale of cryptocurrency (59,828 ) Cryptocurrency used to pay expenses and to purchase equipment (175,717 ) Impairment of cryptocurrencies (3,523 ) Ending balance – May 31, 2023 $ 61,226 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
May 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues: Disaggregation of revenue Three Months Ended May 31, 2023 2022 Revenues from the sale of mining equipment - net $ 13,647 $ – Revenue from hosting, net – 16,567 Revenue from self-mining 128,479 – Total revenue $ 142,126 $ 16,567 Nine months Ended May 31, 2023 2022 Revenues from the sale of mining equipment $ 138,011 $ 344,700 Revenue from hosting, net – 16,567 Revenue from self-mining 261,921 4,574 Total revenue $ 399,932 $ 365,841 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
May 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT The following table sets forth the components of the Company’s property and equipment at May 31, 2023 and August 31, 2022: Schedule of property and equipment May 31, 2023 August 31, 2022 Cost Accumulated Net Book Cost Accumulated Net Book Equipment $ 1,081,910 $ (147,265 ) $ 934,645 $ 25,000 $ (3,125 ) $ 21,875 Equipment not in service 3,938,427 – 3,938,427 6,509,602 – 6,509,602 Total fixed assets $ 5,020,337 $ (147,265 ) $ 4,873,072 $ 6,534,602 $ (3,125 ) $ 6,531,477 For the nine months ended May 31, 2023 and May 31, 2022, the Company recorded $ 294,270 7,803 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 9 Months Ended |
May 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
NOTES RECEIVABLE | NOTE 5 – NOTES RECEIVABLE Notes receivable consist of notes received as partial consideration for the sale of mining equipment, and are collateralized by the mining equipment that was the subject of the sale. As of May 31, 2023 and August 31, 2022, notes receivable consist of the following: Schedule of notes receivable As of As of Note receivable with an amended principal amount of $ 731,472 5.0 $ 731,472 $ 1,023,741 Note receivable in original principal amount of $ 1,200,000 5.0 1,154,535 – Total 1,886,007 1,023,741 Less: Non-current portion (1,511,563 ) (532,345 ) Notes receivable – short-term $ 374,444 $ 491,395 As of May 31, 2023 and August 31, 2022 the balance of notes receivable was $ 1,886,007 1,023,741 27,284 |
LOANS PAYABLE AND ACCRUED LIABI
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY | 9 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY | NOTE 6 – LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY On October 19, 2022, the Company entered into a Line of Credit Agreement (the “2022 LOC Agreement”) with Innovative Digital Investors Emerging Technology, L.P. (“IDI), a limited partnership controlled by Jonathan Bates, the Company’s Chairman, and Raymond Mow, the Company’s Chief Financial Officer and a Director. The 2022 LOC Agreement provided for loans of up to $ 1,000,000 12 Effective May 13, 2023, the Company and IDI amended the 2022 LOC Agreement to increase the amount that the Company may borrow thereunder to $1,750,000, extended the date by which the Company could borrow funds thereunder to December 1, 2023, and extended the maturity date to December 1, 2024. Simultaneous with the extension, the Company borrowed an additional $500,000, primarily to fund the purchase of ASIC miners. As of May 31, 2023, the amount of principal and interest due to related party was $ 1,300,000 55,641 0 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
May 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY Stockholders’ Equity The Company is authorized to issue 500,000,000 0.0001 20,000,000 0.0001 49,444,222 48,606,915 500,000 453,966 Issuance of Shares During the nine months ended May 31, 2023, the Company issued the following shares: · 71,429 31,429 · 70,423 30,986 · 45,455 20,000 · 100,000 44,000 · 200,000 · 250,000 The Company estimates the fair value of stock-based compensation based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). The Company attributes compensation to expense using the straight-line method. Since the Company’s common stock is thinly traded, the Company utilizes the value, or an estimate thereof, paid by third parties for common stock in arms-length transactions with the Company. Warrants As of May 31, 2023, and August 31, 2022, the Company had the following warrants outstanding: Schedule of warrants outstanding Class Amount Outstanding Exercise Price Expiration Date Class A Warrants 590,000 $ 2.00 August 5, 2024 Class B Warrants 590,000 $ 5.00 August 5, 2024 Class C-1 Warrants 4,147,600 $ 2.00 January 15, 2025 Class C-2 Warrants 4,147,600 $ 4.00 January 15, 2025 Class C-3 Warrants 25,600 $ 1.25 June 27, 2027 Total 9,500,800 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES As of May 31, 2023 and August 31, 2022, the Company had no contractual commitments. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
May 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS In October 2022, the Company entered into a joint venture arrangement whereby it contributed one immersion container and six transformers, and sold four immersion containers, to a joint venture with a third party that has procured a location and a power purchase agreement in Pecos, Texas. We also obtained the right to locate one container at the location that we would be able use for self-mining. The joint venture partner initially expected the site would be operational by December 31, 2022. After the site work was substantially completed, a dispute arose with the electricity provider as a result of its request for substantial additional deposit as a result of recent bankruptcies in the mining and hosting industry, which delayed the commencement of operations at the location. In April 2023, the joint venture entered into a new one year agreement with the electricity provider. In June 2023, the site became fully electrified. As of June 30, 2023, the Company has deployed 96 75 The Company has completed certain improvements requested by the local electric utility in Trinidad that were necessary to commence the delivery of electricity to the Company’s first hosting location there, and has been informed that the site will be fully electrified by August 1, 2023. The Company plans to locate two immersion containers there initially. The Company expects to use the site for self-mining, and to sell installed, operational miners in “buy/host” transactions. Subsequent to May 31, 2023, the Company sold 34 S-19 ASCI miners in two “buy/host" transactions. One sale was of 24 S-19s for $2,000 each. The purchase price was paid in Bitcoin. The second sale was for 10 S-19 miners for $2,200 each for cash. In both cases, the buyers simultaneously executed a hosting agreement with the Company. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies) | 9 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP SEC The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations. Operating results for the nine months ended May 31, 2023, are not necessarily indicative of the results that may be expected for the year ending August 31, 2023. |
Reverse Stock Split | Reverse Stock Split On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock. The Company’s financial statements in this Report for the periods ended May 31, 2023, and August 31, 2022, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise. |
Management’s Representation of Interim Financial Statements | Management’s Representation of Interim Financial Statements The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to the calculation of stock-based compensation, useful lives and impairment of fixed assets, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. There have been no material changes to the Company’s accounting estimates since the Company’s financial statements for the fiscal year ended August 31, 2022. |
Segment Reporting | Segment Reporting The Company operates in one segment - the cryptocurrency mining industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. All material Company operations qualify for aggregation due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes. |
Revenue Recognition | Revenue Recognition On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. |
Revenues from digital currency mining | Revenues from digital currency mining The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the 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: · Step 1: Identify the contract with the customer; · Step 2: Identify the performance obligations in the contract; · Step 3: Determine the transaction price; · Step 4: Allocate the transaction price to the performance obligations in the contract; and · Step 5: Recognize revenue when the Company satisfies a performance obligation. In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. 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: · Variable consideration · Constraining estimates of variable consideration · The existence of a significant financing component in the contract · Noncash consideration · Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the market rate of the related cryptocurrency at the time of receipt. |
Revenues from Hosting | Revenues from Hosting The Company provides energized space to customers who locate their equipment within the Company’s co-hosting facility. The equipment generating the hosting revenue is owned by the customer. Currently, the Company accepts the mining proceeds daily from the mining pool into a cold wallet address in the Company’s name. The Company sends its hosting client its portion daily, as the Company receives such proceeds. All performance obligations are achieved simultaneously by providing the hosting environment for the customers’ operations. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of cryptocurrency generated by the client’s hosting activities. With regard to hosting revenues that are billed in U.S. dollars, revenues are recorded at the time of invoicing. With regard to hosting revenues that are based on a percentage of cryptocurrency generated by the customer, revenues are recorded based on the Company’s share of cryptocurrency received from the mining pool on the date of receipt. During the nine months ending May 31, 2023, the Company did not generate any revenue from hosting services. |
Revenues from the sale of mining equipment | Revenues from the sale of mining equipment The Company records revenue from the resale of mining equipment it has purchased. Revenue for the sale of mining equipment is recognized under the guidelines of ASC 606. During the nine months ending May 31, 2023, the Company generated 138,011 in revenues from the sale of mining equipment. |
Revenues From Mining | Revenues From Mining Revenues from mining cryptocurrency for its own account will be recorded at the spot price for the cryptocurrency on a daily basis based on the Company’s proportionate share of cryptocurrency earned by the mining pools in which the Company participates on the date the Company receives its share from the pool. During the nine months ending May 31, 2023, the Company generated $ 261,921 |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On May 31, 2023, and August 31, 2022, respectively, the Company’s cash equivalents totaled $ 518,425 392,550 |
Cryptocurrency | Cryptocurrency Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment quarterly, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that 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. During the nine months ended May 31, 2023, the Company recorded an impairment charge of $3,523 due to a reduction in the quoted price of cryptocurrency. Subsequent reversal of impairment losses, if the price of cryptocurrency increases, is not permitted. Additionally, during the nine months ended May 31, 2023, the Company realized a gain from sale of cryptocurrency of $ 18,420 Cryptocurrency earned by the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the consolidated statements of operations and comprehensive income (loss). The Company accounts for its gains or losses in accordance with the moving weighted average method of accounting. The Company holds its cryptocurrencies in a cold storage wallet account in its name, and not with a custodian or other intermediary. The Company has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial Services. Currently, the Company does not store cryptocurrencies at Gemini, and only transfers cryptocurrencies that it desires to liquidate to its account at Gemini immediately prior to the liquidation. The Company uses Gemini’s multi-signature feature for account access. |
Income taxes | Income taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. |
Net Loss per Share | Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. |
Stock Purchase Warrants | Stock Purchase Warrants The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, we also assess whether the warrants are indexed to our common stock and whether the warrants are classified as equity under ASC 815-40 or other GAAP. After all such assessments, we conclude whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date. We do not have any liability classified warrants as of any period presented. |
Property and equipment | Property and equipment Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows: Schedule of useful lives of assets Life (Years) Miners and mining equipment 2 Machinery and equipment 5 - 7 Office and computer equipment 3 No depreciation is recorded on an asset until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is properly configured to turn on the machines. As of May 31, 2023, and August 31, 2022, the Company had $ 3,938,427 6,509,602 122,950 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements Codification Improvements to Topic 842, Leases (Topic 842) Targeted Improvements, We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements. In March 2022, the SEC staff released Staff Accounting Bulletin No. 121 (“SAB 121”), which requires entities that hold crypto assets on behalf of platform users to recognize a liability to reflect the entity’s obligation to safeguard the crypto assets held for its platform users, whether directly or through an agent or another third party acting on its behalf, along with a corresponding safeguarding asset. Both the liability and corresponding safeguarding asset shall be measured at fair value. SAB 121 also requires disclosure of the nature and amount of crypto assets being safeguarded, how the fair value is determined, an entity’s accounting policy for safeguarding liabilities and corresponding safeguarding assets, and may require disclosure of other information about risks and uncertainties arising from the entity’s safeguarding activities. The Company is not in the business of holding its customer’s crypto assets for safekeeping. For crypto assets that are not maintained on our platform and for which the Company does not maintain a private key or the ability to recover a customer’s private key, these balances are not recorded, as there is no related safeguarding obligation in accordance with SAB 121. This guidance is effective from the first interim period after June 15, 2022 and should be applied retrospectively. We adopted SAB 121 during the three months ended August 31, 2022, and it did not have any impact on our financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Tables) | 9 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of useful lives of assets | Schedule of useful lives of assets Life (Years) Miners and mining equipment 2 Machinery and equipment 5 - 7 Office and computer equipment 3 |
CRYPTOCURRENCIES (Tables)
CRYPTOCURRENCIES (Tables) | 9 Months Ended |
May 31, 2023 | |
Cryptocurrencies | |
Schedule of Cryptocurrencies | Schedule of Cryptocurrencies Beginning balance – August 31, 2022 $ 21,434 Revenue received from mining 261,921 Revenue recorded as “other income” from the termination of hosting agreement 16,939 Proceeds from the sale of cryptocurrency (59,828 ) Cryptocurrency used to pay expenses and to purchase equipment (175,717 ) Impairment of cryptocurrencies (3,523 ) Ending balance – May 31, 2023 $ 61,226 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
May 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Disaggregation of revenue Three Months Ended May 31, 2023 2022 Revenues from the sale of mining equipment - net $ 13,647 $ – Revenue from hosting, net – 16,567 Revenue from self-mining 128,479 – Total revenue $ 142,126 $ 16,567 Nine months Ended May 31, 2023 2022 Revenues from the sale of mining equipment $ 138,011 $ 344,700 Revenue from hosting, net – 16,567 Revenue from self-mining 261,921 4,574 Total revenue $ 399,932 $ 365,841 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
May 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Schedule of property and equipment May 31, 2023 August 31, 2022 Cost Accumulated Net Book Cost Accumulated Net Book Equipment $ 1,081,910 $ (147,265 ) $ 934,645 $ 25,000 $ (3,125 ) $ 21,875 Equipment not in service 3,938,427 – 3,938,427 6,509,602 – 6,509,602 Total fixed assets $ 5,020,337 $ (147,265 ) $ 4,873,072 $ 6,534,602 $ (3,125 ) $ 6,531,477 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 9 Months Ended |
May 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of notes receivable | Schedule of notes receivable As of As of Note receivable with an amended principal amount of $ 731,472 5.0 $ 731,472 $ 1,023,741 Note receivable in original principal amount of $ 1,200,000 5.0 1,154,535 – Total 1,886,007 1,023,741 Less: Non-current portion (1,511,563 ) (532,345 ) Notes receivable – short-term $ 374,444 $ 491,395 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
May 31, 2023 | |
Equity [Abstract] | |
Schedule of warrants outstanding | Schedule of warrants outstanding Class Amount Outstanding Exercise Price Expiration Date Class A Warrants 590,000 $ 2.00 August 5, 2024 Class B Warrants 590,000 $ 5.00 August 5, 2024 Class C-1 Warrants 4,147,600 $ 2.00 January 15, 2025 Class C-2 Warrants 4,147,600 $ 4.00 January 15, 2025 Class C-3 Warrants 25,600 $ 1.25 June 27, 2027 Total 9,500,800 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details) | 9 Months Ended |
May 31, 2023 | |
Miners And Mining Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 - 7 |
Office And Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Accounting Policies [Abstract] | |||||
Revenue from sale of mining equipment | $ 13,647 | $ 0 | $ 138,011 | $ 344,700 | |
Revenue from self-mining | 128,479 | 0 | 261,921 | 4,574 | |
Cash and Cash Equivalents, at Carrying Value | 518,425 | 518,425 | $ 392,550 | ||
Gain from sale of cryptocurrency | 5,659 | 0 | 18,420 | 0 | |
Fixed assets and non service | 3,938,427 | 3,938,427 | $ 6,509,602 | ||
Asset Impairment Charges | $ 0 | $ 0 | $ 122,950 | $ 0 |
CRYPTOCURRENCIES (Details)
CRYPTOCURRENCIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Cryptocurrencies | ||||
Beginning balance | $ 21,434 | |||
Revenue received from mining | $ 128,479 | $ 0 | 261,921 | $ 4,574 |
Revenue recorded as other income from the termination of hosting agreement | 16,939 | |||
Proceeds from the sale of cryptocurrency | (59,828) | |||
Cryptocurrency used to pay expenses | (175,717) | |||
Impairment of cryptocurrencies | 0 | $ (3,775) | (3,523) | $ (3,775) |
Ending balance | $ 61,226 | $ 61,226 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenues from the sale of mining equipment | $ 13,647 | $ 0 | $ 138,011 | $ 344,700 |
Revenue from hosting, net | 0 | 16,567 | 0 | 16,567 |
Revenue from self-mining | 128,479 | 0 | 261,921 | 4,574 |
Total revenue | $ 142,126 | $ 16,567 | $ 399,932 | $ 365,841 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | May 31, 2023 | Aug. 31, 2022 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,081,910 | $ 25,000 |
Accumulated depreciation | (147,265) | (3,125) |
Property and equipment net | 934,645 | 21,875 |
Common stock issued for services, related party, shares | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 3,938,427 | 6,509,602 |
Accumulated depreciation | 0 | 0 |
Property and equipment net | 3,938,427 | 6,509,602 |
Fixed Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 5,020,337 | 6,534,602 |
Accumulated depreciation | (147,265) | (3,125) |
Property and equipment net | $ 4,873,072 | $ 6,531,477 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 294,270 | $ 7,803 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | May 31, 2023 | Dec. 30, 2022 | Aug. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total | $ 1,886,007 | $ 1,023,741 | |
Less: Non-current portion | (1,511,563) | (532,345) | |
Notes receivable short-term | 374,444 | 491,395 | |
Note Receivable 1 [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Note receivable face amount | $ 731,472 | ||
Note receivable stated interest rate | 5% | ||
Total | $ 731,472 | 1,023,741 | |
Note Receivable 2 [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Note receivable face amount | $ 1,200,000 | ||
Note receivable stated interest rate | 5% | ||
Total | $ 1,154,535 | $ 0 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||
Total notes receivable | $ 1,886,007 | $ 1,886,007 | $ 1,023,741 | ||
Interest and Other Income | $ 14,433 | $ 4,485 | $ 27,284 | $ 4,485 |
LOANS PAYABLE AND ACCRUED LIA_2
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY (Details Narrative) - 2022 LOC Agreement [Member] - USD ($) | 1 Months Ended | |||
Feb. 28, 2023 | May 31, 2023 | Oct. 19, 2022 | Aug. 31, 2022 | |
Line of Credit Facility [Line Items] | ||||
Line of credit facility | $ 1,000,000 | |||
Line of credit interest rate | 12% | |||
Line of credit | $ 1,300,000 | $ 0 | ||
Interest payable | $ 55,641 | $ 0 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) | 9 Months Ended |
May 31, 2023 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 9,500,800 |
Class A Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 590,000 |
Exercise price | $ / shares | $ 2 |
Expiriation date | Aug. 05, 2024 |
Class B Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 590,000 |
Exercise price | $ / shares | $ 5 |
Expiriation date | Aug. 05, 2024 |
Class C 1 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 4,147,600 |
Exercise price | $ / shares | $ 2 |
Expiriation date | Jan. 15, 2025 |
Class C 2 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 4,147,600 |
Exercise price | $ / shares | $ 4 |
Expiriation date | Jan. 15, 2025 |
Class C 3 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant outstanding | 25,600 |
Exercise price | $ / shares | $ 1.25 |
Expiriation date | Jun. 27, 2027 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
May 31, 2023 | Nov. 30, 2022 | May 31, 2022 | Feb. 28, 2022 | Nov. 30, 2021 | Feb. 28, 2023 | May 31, 2023 | Aug. 31, 2022 | |
Class of Stock [Line Items] | ||||||||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common Stock, Shares Authorized | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||||||
Common Stock, Shares, Outstanding | 49,444,222 | 49,444,222 | 48,606,915 | |||||
Number of value issued for service | $ 242,000 | $ 44,000 | $ 87,964 | $ 0 | $ 550,000 | |||
Officer Employment Contract [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for compensation | 71,429 | |||||||
Number of value issued for compensation | $ 31,429 | |||||||
Officer Employment Contract One [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for compensation | 70,423 | |||||||
Number of value issued for compensation | $ 30,986 | |||||||
Officer Employment Contract Two [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for compensation | 45,455 | |||||||
Number of value issued for compensation | $ 20,000 | |||||||
Investor Relations Services [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for consultant | 100,000 | |||||||
Number of value issued for service | $ 44,000 | |||||||
Investment Banking Firm [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for consultant | 200,000 | |||||||
Consultant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for consultant | 250,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred Stock, Shares Authorized | 500,000 | 500,000 | 500,000 | |||||
Preferred Stock, Shares Issued | 453,966 | 453,966 | 453,966 |