BITMINE IMMERSION TECHNOLOGIES, INC. 10-Q

 true 2024 FY Amendment #1 0001829311

 2024-02-29

 2024-12-06

 2024-06-01

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 WASHINGTON, DC 20549

 FORM 10-K/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended August 31, 2024

 OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission file number: 000-56220

 BITMINE IMMERSION TECHNOLOGIES, INC.

 Delaware

 84-3986354

 (State or other jurisdiction of

 (I.R.S. Employer

 incorporation or organization)

 Identification Number)

 10845 Griffith Peak Dr. #2

 Las Vegas, NV 89135

 ( 404) 816-8240

 (Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

 Securities registered pursuant to Section 12(b)
of the Act: None

 Securities registered pursuant to Section 12(g)
of the Act: Common Stock, par value $0.0001 per share

 Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No.

 Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No.

the registrant (1) has filed all reports required to be filed by Section 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.

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.

the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See definition of "large accelerated filer," "accelerated filer", "smaller reporting company",
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 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.

the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report.

any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No.

 As of February 29, 2024 (the
last trading day of the registrant's second quarter), the aggregate market value of the common stock held by non-affiliates of the
registrant, based on the $0.685 closing price of the registrant's common stock as reported on the OTC Markets on that date, was
approximately $ 16,621,967. For purposes of this computation, all officers, directors and 10% beneficial owners of the registrant are deemed
to be affiliates. Such determination should not be deemed to be an admission that such officers, directors or 10% beneficial owners are,
in fact, affiliates of the registrant.

 As of December 6,
2024, there were 39,667,607
shares of common stock of the registrant issued and outstanding.

 EXPLANATORY NOTE

 References throughout this Amendment No.
1 to the Annual Report on Form 10-K to "we," "us," the "Company" or "our company" are
to Bitmine Immersion Technologies, Inc. unless otherwise indicated.

 This Amendment No. 1 ("Amendment No.
1") to the Annual Report on Form 10-K/A amends the Annual Report on Form 10-K of Bitmine Immersion Technologies, Inc. for the fiscal
year ended August 31, 2024, as filed with the Securities and Exchange Commission (the "SEC") on December 9, 2024 (the "Original
Filing").

 The Company has determined that the financial
statements in its Original Filing under the guidelines of AS 3315 should have been presented in a non-condensed format. Additionally
the Company has expanded disclosures on accounting policies in Note 1 to the financial statements related to classification of equipment
sales under ASC 606 vs. ASC 610, and fair value of financial instruments. This Amendment No. 1 has been prepared to provide sufficient
detail in its financial statements to enable the Company to remove the verbiage "condensed" from its financial statements
and footnotes. Further, this Amendment No. 1 includes certain reclassifications and the inclusion of new line items in its Statement
of Operations which had no impact on the revenues, net operating loss, or net loss previously reported, nor on the Company's Balance
Sheets, Statements of Changes in Stockholders' Equity, Statements of Cash Flows, or Notes to the Company's financial statements.

 The sections of the Original Filing impacted
where the word "condensed" was removed are as follows:

 Part I Item IA. Risk Factors

 Part II Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

 Part II Item 8. Financial Statements and Supplementary Data

 Part II Item 9A. Controls and Procedures

 Part III Item 14. Principal Accountant Fees and Services

 Part IV Item 15. Financial Statement Schedules and Footnotes

 The Company's Principal Executive and
Principal Financial Officer have provided new certifications.

 Except as described above, no other information
included in the Original Filing is being amended or updated by this Amendment No. 1 and this Amendment No. 1 does not purport to reflect
any information or events subsequent to the Original Filing. This Amendment No. 1 continues to describe the conditions as of the date
of the Original Filing and, except as expressly contained herein, we have not updated, modified, or supplemented the disclosures contained
in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings
with the SEC subsequent to the Original Filing.

 i

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

 Item 6. Selected Financial Data

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance Directors and Executive Officers

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matter

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Item 14. Principal Accountant Fees and Services

 Item 15. Exhibits, Financial Statement Schedules

 Item 16. 10-K Summary

 INDEX TO EXHIBITS

 ii

 Unless the context otherwise requires, when
we use the words the "Company," "Bitmine," "we," "us," "our" or "our
Company" in this Form 10-K, we are referring to Bitmine Immersion Technologies, Inc., a Delaware corporation, and its subsidiaries.

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K contains certain
statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). These forward-looking statements (such as when we describe what "will," "may," or "should"
occur, what we "plan," "intend," "estimate," "believe," "expect" or "anticipate"
will occur, and other similar statements) include, but are not limited to, statements regarding future operating results, potential risks
pertaining to these future operating results, future plans or prospects, anticipated benefits of proposed (or future) acquisitions, dispositions
and new facilities, growth, the capabilities and capacities of business operations, any financial or other guidance, expected capital
expenditures and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results
and events. We make certain assumptions when making forward-looking statements, any of which could prove inaccurate, including assumptions
about our future operating results and business plans. However, the inclusion of forward-looking statements should not be regarded as
a representation by the Company or any other person that future events, plans or expectations contemplated by the Company will be achieved.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section
named "Risk Factors" as well as those disclosed in subsequent reports we file with the Securities and Exchange Commission
("SEC").

 Moreover, we operate in a very competitive and
rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can
we comprehensively assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks,
uncertainties and assumptions, the future events and trends discussed in this Current Report on Form 8-K may not occur and actual results
could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these risks and uncertainties,
the reader should not place undue reliance on these forward-looking statements.

 Further, certain information regarding market and
industry statistics contained in this Current Report on Form 8-K has been obtained from industry and other publications that we believe
to be reliable, but that are not produced for purposes of securities filings and which may contain such forward-looking statements. We
have not independently verified any market, industry or similar data presented in this Current Report on Form 8-K and cannot assure you
of its accuracy or completeness. Further, we have not reviewed or included data from all sources. Forecasts and other forward-looking
statements obtained from third-party sources are subject to the same qualifications and the additional uncertainties accompanying any
estimates of future markets or events.

 All forward-looking statements included in this
Annual Report on Form 10-K are made only as of the date of this Annual Report on Form 10-K, and we do not undertake any obligation to
publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter
become aware, except as required by law. You should read this document completely and with the understanding that our actual future results
or events may be materially different from what we expect. All forward-looking statements attributable to us are expressly qualified by
these cautionary statements.

 iii

 Item 1. Business

 Company Background

 A predecessor to the Company was incorporated in
the state of Nevada on August 16, 1995 as Interactive Lighting Showrooms, Inc. On June 30, 2004, the predecessor changed its name to Am/Tex
Oil and Gas, Inc. On January 24, 2008, the predecessor changed its name to Critical Point Resources, Inc. On February 2, 2012, the predecessor
changed its name to Renewable Energy Solution Systems, Inc. On May 18, 2012, the predecessor changed its name to RES Systems, Inc. On
May 23, 2013, the predecessor changed its name back to Renewable Energy Solution Systems, Inc.

 On April 6, 2020, the predecessor redomiciled in
the State of Delaware by merging with a Delaware subsidiary named RESS Merger Corp., which was the successor in the merger. Thereafter,
effective July 15, 2020, the predecessor and the Company effected a holding company reorganization pursuant to Section 251(g) of the Delaware
General Corporation Law (the "DGCL") under which RESS Merger Corp. merged with RESS of Delaware, Inc., a Delaware subsidiary
of RESS Merger Corp., and all shareholders of RESS Merger Corp. received one share of common stock of the Company, another Delaware subsidiary
of RESS Merger Corp., for each share that they previously held in RESS Merger Corp., and RESS of Delaware, Inc. (the successor in the
merger with RESS Merger Corp.) becoming a subsidiary of the Company.

 Effective July 17, 2020, the Company divested RESS
of Delaware, Inc. to Sterling Acquisitions I, Inc. ("Sterling"), which is owned by the chief executive officer of the Company,
pursuant to an agreement under Sterling (i) purchased Ten Million (10,000,000) common shares of the Company for an aggregate price of
Ten Dollars ($10), and (ii) was issued Ten Million (10,000,000) Class A Warrants at an aggregate price of Ten Dollars ($10), and (iii).
Ten Million (10,000,000) Class B Warrants at an aggregate price of Ten Dollars ($10). In addition, the Company agreed to pay a fee of
$1,000 to Sterling to cover the expenses associated with the maintenance of RESS of Delaware, Inc. until such time as a certificate of
dissolution is filed with the state of Delaware.

 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").
Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 32,994,999
shares of common stock in the Company's offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services,
which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them)
collectively acquired 24,893,877 shares of common stock, which represented approximately 62% of the issued and outstanding shares at the
time.

 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.

 Company Overview

 Since July 2021, our business has been as a blockchain
technology company that is building out industrial scale digital asset mining, equipment sales and hosting operations. The Company's
primary business is self-mining bitcoin for its own account, as well as hosting third-party equipment used in mining of digital asset
coins and tokens, specifically bitcoin. Our state-of-the-art facilities will be specifically designed and constructed for housing advanced
mining equipment. Our data centers will provide power, racks, proprietary thermodynamic management (heat dissipation and airflow management),
redundant connectivity, 24/7 security, as well as software which provide infrastructure management and custom firmware that boost performance
and energy efficiency.

 We plan to operate our data centers using immersion
cooling technology. Immersion cooling is the process of submerging computer components (or full servers) in a thermally, but not electrically,
conductive liquid (dielectric coolant) allowing higher heat transfer performance than air and many other benefits. Immersion cooling can
be up to 95% more efficient than standard air cooling, producing an estimated PUE (power usage effectiveness) of 1.05. This cooler environment
has been shown to extend machine lives by 30% or longer.

 Our digital asset mining operation is focused on
the generation of digital assets by solving complex cryptographic algorithms to validate transactions on specific digital asset network
blockchains, which is commonly referred to as "mining." Mining requires the use of specialized computers equipped with application-specific
integrated circuit (ASIC) chips (known as "miners") to solve complex cryptographic algorithms in support of the bitcoin blockchain
(in a process known as "solving a block") in exchange for digital asset rewards (to date, only bitcoin). Whether we are hosting
our client's computers or mining for our own account with our own computers, the miners participate in "mining pools"
organized by "mining pool operators" in which we or our clients share mining power (known as "hash rate") with
the hash rate generated by other miners participating in the pool to earn digital asset rewards. The mining pool operator provides a service
that coordinates the computing power of the independent mining enterprises participating in the mining pool. Fees are paid to the mining
pool operator to cover the costs of maintaining the pool. The pool uses software that coordinates the pool members' mining power,
identifies new block rewards, and records how much hash rate each participant contributes to the pool. Pools typically pay rewards in
different ways: as a percentage of the total reward received by the mining pool each day based on each pool participant's proportionate
share of hashing power provided that day (the "Pay-Per-Share Method"); or based on the theoretical reward the pool participant
should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the "Full-Pay-Per-Share
Method"). We only use mining pools that pay rewards under the Full-Pay-Per-Share Method.

 As the demand for digital assets increases and
digital assets become more widely accepted, there is an increasing demand for professional-grade, scalable infrastructure to support growth
of the blockchain ecosystem. We expect to continually evaluate the performance of our data centers, including our ability to access additional
megawatts of electric power and to expand our total self-mining and customer and related party hosting hash rates.

 Our digital asset self-mining activity competes
with a myriad of mining operations throughout the world to complete new blocks in the blockchain and earn the reward in the form of an
established unit of a digital asset. Revenue from digital asset mining and hosting third party digital asset miners are impacted by volatility
in bitcoin prices, as well as increases in the bitcoin blockchain's network hash rate resulting from the growth in the overall
quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure
hashing algorithm employed in solving the blocks. Gross profits from digital asset mining are primarily impacted by the market
price of bitcoin at the time of mining and the cost of electricity to operate the miners and to a lesser extent by other operating costs.
While we expect to sell or exchange a portion of the digital assets we mine to fund our growth strategies or for general corporate purposes,
we may hold our digital assets as investments in anticipation of continued adoption of digital assets as a "store of value"
and a more efficient medium of exchange than traditional fiat currencies.

 As the demand for digital assets increases and
digital assets become more widely accepted, there is an increasing demand for professional-grade, scalable infrastructure to support growth
of the blockchain ecosystem. We expect to continually evaluate the performance of our data centers, including our ability to access additional
megawatts of electric power and to expand our total self-mining and customer and related party hosting hash rates.

 We also generate revenues from the advantageous
purchase and sale of equipment used for digital asset mining and hosting. We have relationships with some suppliers that enable us to
acquire highly desired equipment at attractive prices, which we plan to resell to third parties. In most cases, resales of digital asset
mining equipment would be to our hosting customers, which have the dual benefit of generating short-term gross profits from the equipment
sale as well as growing the customer base of our hosting business.

 Trinidad Operations

 We initially decided to locate our initial facilities
in Trinidad, because it has some of the cheapest electricity in the world due to its abundant supplies of oil and gas and because some
of our technical staff is located there. We have entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited
("TSTT"), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers for hosting digital
asset miners. TSTT has up to 93 potential locations for co-location of our containers. Under the agreement, we have the option, but not
the obligation, to co-locate containers at our own pace. We pay a fixed amount per container, plus the actual electricity costs incurred
by our containers in the amount billed to TSTT by the local utility without any markup. The agreement provides that our hosting containers
will be billed for electricity usage at the local utility's standard rates, which is the greater of 3.5 cents per kwh or 75% of
the declared reserve capacity, which is equal to the customer's highest expected monthly kilovolt-ampere demand at $7.40. The term
of the agreement expires on October 14, 2031. We have the right to terminate our agreement with TSTT at any time that the price for
electricity consumption exceeds $0.05 per kwh.

 In October 2022, we completed the installation
of initial hosting containers under our agreement with TSTT. However, prior to commencing operations, TSTT advised us that the utility
refused to honor its existing agreement with TSTT with respect to electricity supplied to our pilot hosting site, and instead indicated
that the rate would be approximately $0.09 per kwh, which TSTT disputed. The dispute has been resolved, the site became operational in
October 2023, and our rate for electricity is TSTT's existing rate of 3.5 cents per kwh or 75% of the declared reserve capacity,
which is equal to the customer's highest expected monthly kilovolt-ampere demand at $7.40.

 While our TSTT site was delayed pending electrification,
we entered into a hosting agreement with a third party in Trinidad to host up to 192 miners in one immersion container until December
31, 2024. We had previously sold two containers to the third party under a long-term note secured by the containers. In July 2024, we
foreclosed on the containers as a result of a default by the third party on the note. We moved our miners to our existing TSTT site, where
we now have 440 operational miners as of December 5, 2024. We are currently evaluating other TSTT sites as a location for the two repossessed
immersion containers.

 We are also leasing space from a third party on
an at-will basis to co-host 60 miners, for which we pay a flat rate of $0.06 per kwh each month. We ultimately intend to move all of our
miners in Trinidad to our TSTT hosting facilities.

 Despite the expective favorable resolution of our
dispute in Trinidad, we are currently focusing our efforts on the development of hosting centers in the United States and Canada, both
directly and in joint ventures with third parties. We are exploring situations where medium to long-term power agreements may be available
at affordable prices, whether using traditional power sources such as coal or natural gas, as well as environmentally friendly sources
such as hydroelectric, wind and solar-backed projects, which might allow us to generate collateral revenue from the sale of excess power
to the local utility grid and from the generation of saleable carbon credits.

 Pecos, Texas Operations

arrangement with ROC Digital Mining Manager LLC ("ROC Manager") to jointly develop and operate a bitcoin mining operation
in Pecos, Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987,429 as
a capital contribution to ROC Digital Mining I, LLC (the "ROC Digital"). In return, we received 240 Class B Units of ROC Digital
pursuant to an ongoing offering of a total of 1,000 Class B Units at $4,400 per unit. An affiliate of ROC Manager also contributed an
immersion container. We simultaneously sold ROC Digital four immersion containers for $1,200,000, which is payable pursuant to a promissory
note the bears interest at 5% per annum, and is payable pursuant to monthly payments of $31,203.64 per month commencing on December 30,
2022, with any remaining principal and interest payable in full on May 31, 2026. The note is secured by the equipment that was sold. We
also obtained the right to locate one container at the location that we would be able to use for self-mining. As of August 31, 2024 the
principal amount due on the note receivable from ROC Digital was $655,277.

 Any distributions of assets by ROC Digital are
allocated as follows: i) 100% to the Class B Members until each Class B Member has received the return of its capital contributions;
ii) 100% to the Class B Members until each Class B Member has received a non-compounded preferred return of 1% per month (12% per year)
on its capital contribution, provided that a Class Member will no longer entitled to a preferred return once it has received total distributions
equal to five times its capital contributions; iii) 70% to the Class Members and 30% to the Class A Members until each Class B Member
has received total distributions equal to three times its capital contributions; (iv) 60% to the Class Members and 40% to the Class A
Members until each Class B Member has received total distributions equal to four times its capital contributions; (v) 50% to the Class
Members and 50% to the Class A Members until the seventh anniversary of the final closing of Class B Units; and (vi) thereafter, all
to the Class A Members.

 ROC Digital is managed by ROC Manager, which owns
all of the Class A Units of ROC Digital. The Class A Units have the sole right to vote on any matter that requires a vote of members,
including in the selection of the manager. We own 33 1/3% of ROC Manager. ROC Manager is managed by from one to three managers selected
by a vote of the members. We do not currently have a representative or designee serving as manager of ROC Manager. However, the operating
agreement for ROC Manager provides that ROC Manager may not take a number of actions in relation to ROC Digital without the unanimous
consent of its members, such as incurring more than $50,000 of indebtedness, approval of operating budget, filing for bankruptcy, making
any material change in ROC Digital's business, merging, consolidating or combining ROC Digital with another entity, selling off
a substantial part of ROC Digital's assets, amending the operating agreement of ROC Digital, or causing ROC Digital to enter into
any agreement with a related party.

 Day to day management of the operations of ROC
Digital is provided by ROC Digital Mining LLC ("ROC Mining"), an affiliate of ROC Manager in which we do not have an interest.
ROC Mining is entitled to a monthly management fee equal to 3% of ROC Digital's gross revenue, subject to a monthly minimum of $10,000
and a monthly maximum of $15,000. In additional ROC Mining is entitled to an acquisition fee of 1% of the cost of any assets acquired
by ROC Digital.

 ROC Manager initially expected the site would be
operational by December 31, 2022. After the site work was substantially completed, the commencement of operations was delayed as a result
of a request by the electricity provider for an additional deposit as a result of recent bankruptcies in the mining and hosting industry.
In addition, a dispute with the joint venture's vendor for ASIC miners delayed the delivery of miners for the facility.

 In April 2023, the joint venture entered into a
new one year agreement with the electricity provider, under which the site received electricity at $0.03991 per kwh for at least 95% of
the annualized hourly intervals during the period. The initial agreement had a term of four years and seven months, and supplied electricity
at $0.06896 per kwh, which the joint venture expected to reduce by reselling electricity during peak periods. The new agreement provided
the joint venture with more predictable pricing, although a new agreement will need to be negotiated after the one year term. At the same
time, we finalized a hosting agreement with the joint venture, under which we will locate one immersion container at the site for $500
per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting agreement, we also
agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier of the date the electricity
provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The hosting agreement has a term
of one year, subject to our right to renew the agreement for two one year terms after receipt of notice of the renewal terms of the joint
venture's electricity supply agreement for the upcoming year. The site became fully electrified in June 2023. As of December 5,
2024, we had deployed 96 Antminer S-19 pro miners to our hosting container at the site. The joint venture initially filled its six immersion
containers with ASIC miners provided by hosting clients, although most of the hosting clients agreements terminated in April 2024.
Currently, approximately five of the hosting containers owned by the joint venture are fully or partially occupied by clients, although
the joint venture is aggressively trying to fill the remaining capacity with hosting clients. The joint venture also owns two immersion
containers which are not installed, but will be if hosting demand warrants.

 On April 29, 2024, the joint venture executed an
energy services agreement for the site that runs from May 1, 2024 to April 30, 2025. Under the current agreement, the site will receive
electricity at the prevailing rate plus $0.0055 per kwh. The joint venture is not obligated to purchase any specific quantity of electricity,
and employs software which automatically discontinues mining operations when the prevailing rate exceeds certain levels. In April 2024,
we renewed our hosting contract with the joint venture for an additional year.

 Murray, Kentucky Operations

 On October 4, 2023, the Company purchased 1,050
used ASIC miners from Luxor Technology Corporation ("Luxor") for $488,775, and simultaneously entered into a Co-Location Services
Agreement to host the miners at a hosting facility owned by Soluna SW, LLC ("Soluna") in Murray, Kentucky. We subsequently
added 45 ASIC miners in May 2024 that we purchased from Soluna. The hosting agreement with Soluna has a term of 18 months, and provides
that the Company is obligated to reimburse Soluna for the actual cost of the electricity used by the Company's machines and pay
a hosting fee equal to 50% of the net profit generated by the machines each month. The hosting fee is payable in bitcoin. The hosting
facility has an electricity cost of $0.025 per kwh and guarantees uptime of 83% per week.

 Revenue Sources

 Our revenue will consist primarily of bitcoin generated
from our self-mining operations, and secondarily from sales of mining equipment. We also may generate revenue from hosting fees to the
extent we enter into hosting contracts with third party miners.

 Digital asset mining income. We conduct proprietary digital asset mining operations using specialized computers equipped with application-specific integrated circuit (ASIC) chips (known as "miners") to solve complex cryptographic algorithms in support of the bitcoin blockchain (in a process known as "solving a block") in exchange for digital asset rewards (to date, only bitcoin). The Company participates in "mining pools" organized by "mining pool operators" in which we share our mining power (known as "hash rate") with the hash rate generated by other miners participating in the pool to earn digital asset rewards. The mining pool operator provides a service that coordinates the computing power of the independent mining enterprises participating in the mining pool. Fees are paid to the mining pool operator to cover the costs of maintaining the pool. The pool uses software that coordinates the pool members' mining power, identifies new block rewards, and records how much hash rate each participant contributes to the pool. Pools typically pay rewards in different ways: as a percentage of the total reward received by the mining pool each day based on each pool participant's proportionate share of hashing power provided that day (the "Pay-Per-Share Method"); or based on the theoretical reward the pool participant should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the "Full-Pay-Per-Share Method"). We only use mining pools that pay rewards under the Full-Pay-Per-Share Method. Revenues from digital asset mining are impacted by volatility in bitcoin prices, as well as increases in the bitcoin blockchain's network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.

 Equipment sales to customers and related parties. Equipment sales to customers and related parties is derived from our ability to leverage our partnerships with leading equipment manufacturers to secure equipment in advance, which is then sold to our customers and related parties. Our equipment sales are typically in connection with a hosting contract, but we have sold equipment to parties that are not hosting customers where the terms are attractive.

 Hosting revenue from customers and related parties. Hosting revenue from customers and related parties is based on consumption-based contracts with our customers and related parties. Most contracts are renewable, and our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which vary from one to three years in length. Our typical agreement provides for full reimbursement of the client's share of electricity costs of the hosting facility, and a percentage of bitcoin generated by the client's activities. The percentage is negotiable on a case-by-case basis but is expected to average 25% of revenues. In addition, we may earn minor services revenue from equipment repairs and handling shipping logistics. We do not indemnify our hosting clients against loss. The agreements are normally terminable in the event of a default by either party. The agreements are often subject to suspension in the event force majeure events or when the prevailing gross margins on digital asset mining are not positive. In addition, some of our agreements may allow a client to terminate the agreement in the event the price of electricity exceeds a certain benchmark, which is negotiated on a case-by-case basis based on the location of the hosting facility. Our hosting customers may supply their own equipment or may purchase the equipment from us. Our hosting customers may select the mining pool that they want to use or use the mining pool that the Company uses for its own self-mining.

 We consider these all to be part of the same line
of business. We do not have any fixed goals regarding the percentage of our data centers that we use for hosting third party miners versus
the percentage that we use for self-mining. For mining or hosting equipment that we purchase, we also do not have any fixed goals regarding
whether we utilize the equipment for our own account, sell it to a customer or other third party or contribute it to a joint venture.
We let market conditions and overall profitability analysis guide the decisions. When we host, we look for opportunities to profitably
sell miners to the hosting client in a buy/host transaction. In some instances, we may resell data centers and electrical equipment if
we are offered an attractive price and believe that we can replace it at a lower price and by the time we may need it for our internal
operations. These decisions are dynamic and based on the overall market for all of the above.

 Our decision to utilize the data center space for
hosting versus self-mining will depend on the relative profitability of each segment at the time and whether we have the capital to invest
in new miners for mining for our own account at the time. In recent years, the prices of miners have fluctuated widely due to supply and
demand factors, and mining for our own account is less profitable when the price of miners is high due to the capital costs needed to
acquire the miners. In addition, the margins from mining have also fluctuated widely in recent years due to wide fluctuations in the price
of digital assets and the electricity prices need to mine digital assets.

 We do not generally accept digital assets as payment
for goods and services. However, we have agreed to accept digital assets as payment in some situations, and expect to enter into more
such arrangements in the future. To the extent we agree to accept digital assets as payment, we intend to only accept bitcoin. We expect
that most of our hosting contracts will provide that we receive a percentage of bitcoin mined by our hosting customers as partial payment
for our hosting services. In addition, under our hosting agreements we have the right to apply bitcoin mined by our hosting customers
toward payment of amounts invoiced in U.S. dollars if the invoiced amount is not paid by its due date; however, in such situations, the
credit that is applied to the U.S. dollar invoice is based on the actual cash proceeds received from the conversion of the bitcoin into
U.S. dollars or a discount to the spot price of bitcoin if it is not immediately converted in U.S. dollars. We have also agreed to sell
hosting containers to a third party for a note payable in bitcoin.

 We do not have a set policy in regard to how long
we hold digital assets that we receive as payment, although our practice has been to immediately sell digital assets as needed to pay
operating expenses or for capital expenditures. We do not plan to hold any digital assets that we receive as a long-term investment. We
currently hold substantially all of our digital assets at BitGo Trust, a well-known custodian. We seek to minimize the risk of a failure
of any bitcoin exchange by maintaining accounts at more than one exchange. In that regard, we have an account with Gemini Trust Company,
LLC, which is a qualified custodian regulated by the New York Department of Financial Services, to which we can transfer any digital assets
that we decide to liquidate immediately prior to their liquidation. Assets that we liquidate through Gemini are generally transferred
to Gemini from a cold storage wallet immediately prior to liquidation. We store a de minimis amount of digital assets at Gemini.

 Blockchain and Cryptocurrencies Generally

 Bitcoin was first introduced in 2008 and was first
introduced as a means of exchange in 2009. Bitcoin is a digital asset that is issued by and transmitted through an open-source protocol
collectively maintained by a peer-to-peer network of decentralized user nodes. This network hosts a public transaction ledger, known as
the bitcoin blockchain, on which bitcoin holdings and transactions in bitcoin are recorded. Balances of bitcoin are stored in individual
"wallet" functions, which associate network public addresses with a "private key" that controls the transfer of
bitcoin. The bitcoin blockchain can be updated without any single entity owning or operating the network. New bitcoin is created and allocated
by the protocol that governs bitcoin through a "mining" process that rewards users that verify transactions in the bitcoin
blockchain. The bitcoin protocol limits the total issuance of bitcoin over time to 21 million.

 Bitcoin can be used to pay for goods and services,
or it can be converted to fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on bitcoin trading
platforms, which operate 24-hours-a-day, 7-days-a-week and are not regulated in as comprehensive a manner as traditional securities exchanges.
As a result, trading on these markets is likely more subject to manipulation than on securities markets regulated by the SEC, and pricing
on these markets is likely affected by such manipulative activity. In addition to these platforms, over-the-counter markets and derivatives
markets for bitcoin also exist; however, these markets are still maturing and many are unregulated.

 We do not have a fixed policy regarding fiat currencies,
other than to immediately sell enough to cover operating expenses, to sell enough to cover capital expenses when required, and to ultimately
sell all of it when needs arise. We do not plan to leverage our balance sheet in order to hold bitcoin.

 Bitcoin exists entirely in electronic form, as
virtually irreversible public transaction ledger entries on the blockchain, and transactions in bitcoin are recorded and authenticated
not by a central repository, but by a decentralized peer-to-peer network. This decentralization avoids certain threats common to centralized
computer networks, such as denial of service attacks, and reduces the dependency of the bitcoin network on any single system. While the
bitcoin network as a whole is decentralized, the private keys used to access bitcoin balances are not widely distributed and are held
on hardware (which can be physically controlled by the holder or by a third party such as a custodian) or via software programs on third-party
servers and loss of such private keys results in an inability to access, and effective loss of, the corresponding bitcoin. Consequently,
bitcoin holdings are susceptible to all of the risks inherent in holding any electronic data, such as power failure, data corruption,
security breach, communication failure, and user error, among others. These risks, in turn, make bitcoin subject to theft, destruction,
or loss of value from hackers, corruption, or technology-specific factors such as viruses that do not affect conventional fiat currency.
In addition, the bitcoin network relies on open-source developers to maintain and improve the bitcoin protocol. Accordingly, bitcoin may
be subject to protocol design changes, governance disputes such as "forked" protocols, competing protocols, and other open
source-specific risks that do not affect conventional proprietary software.

 Distributed blockchain technology is a decentralized
and encrypted ledger that is designed to offer a secure, efficient, verifiable, and permanent way of storing records and other information
without the need for intermediaries. Cryptocurrencies serve multiple purposes. They can serve as a medium of exchange, store of value
or unit of account. Examples of cryptocurrencies include: bitcoin, bitcoin cash, and litecoin. Blockchain technologies are being evaluated
for a multitude of industries due to the belief in their ability to have a significant impact in many areas of business, finance, information
management, and governance.

 Cryptocurrencies are decentralized currencies that
enable near instantaneous transfers. Transactions occur via an open source, cryptographic protocol platform which uses peer-to-peer technology
to operate with no central authority. The online network hosts the public transaction ledger, known as the blockchain, and each cryptocurrency
is associated with a source code that comprises the basis for the cryptographic and algorithmic protocols governing the blockchain. In
a cryptocurrency network, every peer has its own copy of the blockchain, which contains records of every historical transaction - effectively
containing records of all account balances. Each account is identified solely by its unique public key (making it effectively anonymous)
and is secured with its associated private key (kept secret, like a password). The combination of private and public cryptographic keys
constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership.

 No single entity owns or operates the network.
The infrastructure is collectively maintained by a decentralized public user base. As the network is decentralized, it does not rely on
either governmental authorities or financial institutions to create, transmit or determine the value of the currency units. Rather, the
value is determined by market factors, supply and demand for the units, the prices being set in transfers by mutual agreement or barter
among transacting parties, as well as the number of merchants that may accept the cryptocurrency. Since transfers do not require involvement
of intermediaries or third parties, there are currently little to no transaction costs in direct peer-to-peer transactions. Units of cryptocurrency
can be converted to fiat currencies, such as the US dollar, at rates determined on various exchanges, such as Cumberland, Coinsquare (in
Canada), Coinbase, Bitsquare, Bitstamp, and others. Cryptocurrency prices are quoted on various exchanges and fluctuate with extreme volatility.

 We believe cryptocurrencies offer many advantages
over traditional, fiat currencies, although many of these factors also present potential disadvantages and may introduce additional risks,
including:

 acting as a fraud deterrent, as cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by a sender;

 immediate settlement;

 elimination of counterparty risk;

 no trusted intermediary required;

 lower fees;

 identity theft prevention;

 accessible by everyone;

 transactions are verified and protected through a confirmation process, which prevents the problem of double spending;

 decentralized – no central authority (government or financial institution); and

 recognized universally and not bound by government imposed or market exchange rates.

 However, cryptocurrencies may not provide all of
the benefits they purport to offer at all or at any time.

 As with many new and emerging technologies, there
are potentially significant risks. Businesses (including the Company) which are seeking to develop, promote, adopt, transact or rely upon
blockchain technologies and cryptocurrencies have a limited track record and operate within an untested new environment. These risks are
not only related to the businesses the Company pursues, but the sector and industry as a whole, as well as the entirety of the concept
behind blockchain and cryptocurrency as value. Factors such as access to computer processing capacity, interconnectivity, electricity
cost, environmental factors (such as cooling capacity) and location play an important role in "mining," which is the term
for using the specialized computers in connection with the blockchain for the creation of new units of cryptocurrency.

 Digital Asset Mining

 Specialized computers, or "miners,"
power and secure blockchains by solving complex cryptographic algorithms to validate transactions on specific digital asset networks.
In order to add blocks to the blockchain, a miner must map an input data set consisting of the existing blockchain, plus a block of the
most recent digital asset transactions and an arbitrary number called a "nonce," to an output data set of a predetermined
length using the SHA256 cryptographic hash algorithm. Solving these algorithms is also known as "solving or completing a block."
Solving a block results in a reward of digital assets, such as bitcoin, in a process known as "mining." These rewards of digital
assets currently can be sold profitably when the sale price of the digital asset exceeds the cost of "mining," which generally
consists of the cost of mining hardware, the cost of the electrical power to operate the machine, and other facility costs to house and
operate the equipment.

 Mining processing power is generally referred to
as "hashing power." A "hash" is the computation run by mining hardware in support of the blockchain. A miner's
"hash rate" refers to the rate at which it is capable of solving such computations per second. Miners with higher rated hash
rate when operating at maximum efficiency have a higher chance of completing a block in the blockchain and receiving a digital asset reward.
Currently, the likelihood that an individual mining participant acting alone will solve a block and be awarded a digital asset is extremely
low. As a result, to maximize the opportunities to receive a reward, most large-scale miners have joined with other miners in "mining
pools" where the computing power of each pool participant is coordinated to complete the block on the blockchain and mining rewards
are distributed to participants in accordance with the rules of the mining pool. Fees payable to the operator of the pool vary but are
typically as much as 2% of the reward earned and are deducted from the amounts earned by each pool participant. Mining pools are subject
to various risks including connection issues, outages and other disruptions which can impact the quantity of digital assets earned by
participants.

 Mathematically Controlled Supply

 The method for creating new bitcoins is mathematically
controlled in a manner so that the supply of bitcoins grows at a limited rate pursuant to a pre-set schedule. The number of bitcoins awarded
for solving a new block is automatically halved every 210,000 blocks. This means every block up to and including block 210,000 produced
a reward of 50 bitcoin, while blocks beginning with 210,001 produced a reward of 25 bitcoin. Since blocks are mined on average every 10
minutes, 144 blocks are mined per day on average. At 144 blocks per day, 210,000 blocks take four years to mine on average. The current
fixed reward for solving a new block is 6.25 bitcoin per block and it is anticipated that the reward will decrease by half to become 3.125
bitcoin per block in early 2024, according to estimates of the rate of block solution calculated by BitcoinClock.com. This deliberately
controlled rate of bitcoin creation means that the number of bitcoins in existence will never exceed 21 million and that bitcoins cannot
be devalued through excessive production unless the Bitcoin Network's source code (and the underlying protocol for bitcoin issuance)
is altered.

 Performance Metrics

 Hash Rate

 Miners perform computational operations in
support of digital asset blockchains measured in "hash rate" or "hashes per second." A "hash"
is the computation run by mining hardware in support of the blockchain; therefore, a miner's "hash rate" refers
to the rate at which it is capable of solving such computations. The original equipment used for mining bitcoin utilized the Central
Processing Unit ("CPU") of a computer to mine various forms of digital assets. Due to performance limitations, CPU mining
was rapidly replaced by the Graphics Processing Unit ("GPU"), which offers significant performance advantages over CPUs. General
purpose chipsets like CPUs and GPUs have since been replaced as the standard in the mining industry by ASIC chips
such as those found in the S17, S19 and S21 miners that we and our customers use to mine bitcoin. These ASIC chips
are designed specifically to maximize the rate of hashing operations.

 Network Hash Rate

 In digital assets mining, hash rate is a measure
of the processing speed by a mining computer for a specific digital asset. A participant in a blockchain network's mining function
has a hash rate total of its miners seeking to mine a specific digital asset and, system-wide, there is a total hash rate of all miners
seeking to mine each specific type of digital asset. A higher total hash rate relative to the system-wide total hash rate generally
results over time in a corresponding higher success rate in digital asset rewards as compared to mining participants with relatively
lower total hash rates.

 However, as the relative market price for a digital
asset increases, more users are incentivized to mine that digital asset, which increases the network's overall hash rate.
As a result, a mining participant must increase its total hash rate in order to maintain its relative possibility
of solving a block on the network blockchain. Achieving greater hash rate power by deploying increasingly sophisticated miners in ever
greater quantities has become one of the bitcoin mining industry's great sources of competition. Our goal is to deploy a powerful
fleet of hosted- and self-miners, while operating as energy-efficiently as possible.

 Key Factors Affecting Our Performance

 Market Price of Digital Assets

 Our business is heavily dependent on the spot price
of bitcoin, as well as other digital assets. The prices of digital assets, specifically bitcoin, have experienced substantial volatility,
which may reflect "bubble" type volatility, meaning that high or low prices may have little or no relationship to identifiable
market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory
void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other digital assets) may have value based
on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.

 Our financial performance and growth depend in
large part on our ability to mine for digital assets profitably and to attract customers for our hosting services. Increases in power
costs, inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins,
impact our ability to attract customers for our services may harm our growth prospects and could have a material adverse effect on our
business, financial condition and results of operations. Over time, there has been a positive trend in the total market capitalization
of digital assets which suggests increased adoption. However, historical trends are not indicative of future adoption, and it is possible
that the adoption of digital assets and blockchain technology may slow, take longer to develop, or never be broadly adopted, which would
negatively impact our business and operating results.

 Network Hash Rate

 Our business is not only impacted by the volatility
in digital asset prices, but also by increases in cost of mining digital assets, as reflected by the blockchain's network hash rate
resulting from the growth in the overall quantity and quality of miners working to solve blocks on the blockchain and the difficulty index
associated with the secure hashing algorithm employed in solving the blocks. As more and more hash rate is needed to maintain competitiveness
on a given coin's blockchain, miners deploy more and more machines, which require electrical power to operate, both to directly
power hash rate production and also to dissipate the significant amount of heat generated by the machines' operation. Therefore,
as more hash rate is generated, more electric power is consumed, which generally increases the cost of mining a given coin. In response,
miners have attempted to achieve greater hash rate by deploying increasingly sophisticated miners in ever greater quantities. This has
become the cryptocurrency mining industry's great "arms race."

 Our current fleet of working miners has a j/TH
efficiency of 31.8. We own a small number of less efficient machines, which are primarily in storage. We also own a small number of S-21's,
with an efficiency of 18 j/TH. We hope and expect our machines in the future to be newer or current generation, with efficiency of 17-21
j/TH. We hope to slowly increase our fleet efficiency throughout calendar year 2025.

 Halving

 Further affecting the industry, and particularly
for the bitcoin blockchain, the digital asset reward for solving a block is subject to periodic incremental halving. Halving is a process
designed to control the overall supply and reduce the risk of inflation in digital assets using a proof of work consensus algorithm. At
a predetermined block, the mining reward is reduced by half, hence the term "halving." For bitcoin the reward was initially
set at 50 bitcoin currency rewards per block. The bitcoin blockchain has undergone halvings four times since its inception as follows:
(1) on November 28, 2012, at block height 210,000; (2) on July 9, 2016, at block height 420,000; (3) on May 11,
2020, at block height 630,000; and (4) on April 19, 2024, at a block height of 840,000, when the reward was reduced to its current level
of 3.125 bitcoin per block. The next halving for the bitcoin blockchain is currently anticipated to occur in 2028 at block height 1,050,000.
Halvings will continue to occur until the total amount of bitcoin currency rewards issued reaches approximately 21 million and the theoretical
supply of new bitcoin is exhausted, which is expected to occur around the year 2140. Since the price of bitcoin is not adjusted
proportionally after the halving, that means that each miner will produce exactly half the amount of bitcoin as it did prior to the halving
from the same amount of processing power. This directly impacts the profitability of a miner immediately after the halving. Historically,
these halving events have also been the impetus for the next bull market as the reduced rate of growth of bitcoin increases the perceived
scarcity of the asset.

 Electricity Costs

 Electricity cost is the major operating cost for
the mining fleet, both to power miners and to dissipate the heat generated by the miners' operations, as well as for the hosting
services provided to customers and related parties. As a result, our ability to locate and select sites for our hosting centers that are
able to supply low-cost electricity for our hosting centers is key to our success.

 Equipment Costs

 As the market value of digital assets increased
in 2020 and 2021, the demand for the newest, most efficient miners also increased, leading to scarcity in the supply of and thereby a
resulting increase in the price of miners. When the market value of digital assets declined in 2022 and 2023, the demand for all types
of mines also decreased. As a result, the cost of new machines can be unpredictable. Additionally, the demand for hosting space in 2020
and 2021 increased the demand for the equipment necessary to build and operate hosting centers, which resulted in price increases and
long lead times to acquire such equipment from manufacturers. With the decline in digital asset prices in 2022 and 2023, the market for
hosting equipment has shifted back in favor of buyers, although not as much as has been the case with mining equipment. Our ability to
secure the necessary equipment in a timely manner, while maintaining proper cost controls, will be key to our success.

 Our Customers

 Bitcoin is a global store of value and a medium
of exchange used by people across the world as an asset and to conduct daily transactions. Mining bitcoin supports the global bitcoin
blockchain and the millions of people that depend on it for economic security and other benefits. Strictly speaking, there is no customer
market for mining bitcoin but we consider our mining pool operator a customer because it compensates us for providing processing power
to the mining pool. As of December 5, 2024, approximately 85% of our mining capacity is located at third-party hosting firms and the remainder
is located at our leased facilities. We may enter into contracts with third party miners to use our hosting capacity, in which event the
third-party miners are our customers. However, we decided not to renew all of our hosting clients in our fiscal fourth quarter, and we
not actively seeking other hosting clients, as we believe it is more profitable to utilize our hosting capacity for our own miners.

 Competition

 Our business environment is constantly evolving,
and cryptocurrency miners can range from individual enthusiasts to professional mining operations with dedicated data centers. We compete
with other companies that focus all or a portion of their activities on mining activities at scale. We face significant competition in
every aspect of our business, including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining the
lowest cost of electricity, obtaining access to energy sites with reliable sources of power, and evaluating new technology developments
in the industry.

 At present, the information concerning the activities
of these enterprises may not be readily available as the vast majority of the participants in this sector do not publish information publicly
or the information may be unreliable. Published sources of information include "bitcoin.org" and "blockchain.info";
however, the reliability of that information and its continued availability cannot be assured.

 During 2023 and 2024, the bitcoin mining industry
saw record growth as the price of bitcoin increased from the lows experienced in early 2023. We believe that one reason for the increase
in the price of bitcoin starting in 2024 was due to a new source of demand, the eleven bitcoin spot Exchange Traded Funds ("ETFs")
approved to begin trading by the SEC on January 11, 2024. The ETFs, as an investment vehicle, provided a new access point for investors
to gain exposure to bitcoin through more traditional methods resulting in the ETFs seeing a combined net inflow of approximately $18.5
billion through September 30, 2024. The increasing Bitcoin price renewed opportunities to access capital markets to fund growth,
leading to unprecedent expansion in mining operations and resulting in a doubling in the size of provisioned hash calculation services
on the network, as measured by total hash rate. Many bitcoin mining companies heavily invested in infrastructure, upgrading and expanding
mining fleets in advance of the April 2024 bitcoin network halving. We expect competition within the mining industry to continue as long
as bitcoin prices remain elevated or increase further.

 Network difficulty, which is a measure of how hard
it is for miners to solve a block on the bitcoin blockchain (and, thus, earn a mining reward), is determined by the network's total
hash rate (i.e., the total computational power devoted to solving a block), which is adjusted every 2,016 blocks (with a new block being
added approximately every ten minutes). Therefore, as more miners join the network and the network's global hash rate increases,
its difficulty will increase. Accordingly, as market prices for bitcoin increase and more miners and hash rate are drawn onto the bitcoin
network, network difficulty will continue to increase, meaning existing miners like us will need to increase their hash rate to maintain
and improve their chances of earning a bitcoin mining reward. We anticipate the bitcoin network will continue to see increased competition
and that 2024 will be a period of consolidation in the bitcoin mining industry.

 Regulation

 Our financial prospects and continued growth depend
in part on our ability to continue to operate in a compliant manner with all rules and regulations. Blockchain and digital currencies
are increasingly becoming subject to governmental regulation, both in the U.S. and internationally. State and local regulations also may
apply to our activities and other activities in which we may participate in the future. Other governmental or semi-governmental regulatory
bodies have shown an interest in regulating or investigating companies engaged in the blockchain or cryptocurrency business. For instance,
the Cyber-Digital Task Force of the U.S. Department of Justice (the "DOJ") published a report entitled "Cryptocurrency:
An Enforcement Framework" in October 2020. This report provides a comprehensive overview of the possible threats and enforcement
challenges the DOJ views as associated with the use and prevalence of cryptocurrency, as well as the regulatory and investigatory means
the DOJ has at its disposal to deal with these possible threats and challenges. Further, in early March 2021, the SEC chairperson nominee
expressed an intent to focus on investor protection issues raised by bitcoin and other cryptocurrencies.

 Presently, we do not believe any U.S. or State
regulatory body has taken any action or position adverse to our main cryptocurrency, bitcoin, with respect to its production, sale, and
use as a medium of exchange; however, future changes to existing regulations or entirely new regulations may affect our business in ways
it is not presently possible for us to predict with any reasonable degree of reliability.

 Further, following the appreciation of the market
price of bitcoin in the second half of 2020, we have observed increasing media attention directed at the environmental concerns associated
with cryptocurrency mining, particularly its energy-intensive nature. While we do not believe any U.S.-based regulators have taken a position
adverse to bitcoin mining, in March 2021, the governmental authorities for the Chinese province of Inner Mongolia, which at the time represented
roughly 8% of the world's total mining power, implemented an outright ban on bitcoin mining in the province due to the industry's
intense electrical power demands and its negative environmental impacts (both in terms of the waste produced by mining the rare Earth
metals used to manufacture miners and the production of electrical power used in bitcoin mining). Later, China extended the ban to the
entire nation of China, effective as of the end of July 2021. While the bitcoin mining industry was able to relocate to other locations
outside of China, these actions serve as a stark reminder of the power of national and state governments to affect our industry through
regulator action.

 As the regulatory and legal environment evolves,
we may become subject to new laws, such as further regulation by the SEC and other agencies, which may affect our mining and other activities.
For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see the
Section entitled "Risk Factors" herein.

 Our Facilities

 We initially planned to locate our initial facilities
in Trinidad, because it has some of the cheapest electricity in the world due to its abundant supplies of oil and gas and because some
of our technical staff is located there. We have entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited
("TSTT"), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers for hosting digital
asset miners. TSTT has up to 93 potential locations for co-location of our containers. Under the agreement, we have the option, but not
the obligation, to co-locate containers at our own pace. We pay a fixed amount per container, plus the actual electricity costs incurred
by our containers in the amount billed to TSTT by the local utility without any markup. The agreement provides that our hosting containers
will be billed for electricity usage at the local utility's standard rates, which is the greater of 3.5 cents per kwh or 75% of
the declared reserve capacity, which is equal to the customer's highest expected monthly kilovolt-ampere demand at $7.40. The term
of the agreement expires on October 14, 2031. However, we have the right to terminate our agreement with TSTT at any time that the price
for electricity consumption exceeds $0.05 per kwh. Also, both parties have the right to terminate the agreement on one month notice to
the other party in either the third or sixth year of the term.

 As of December 2021, household electricity prices
in Trinidad and Tobago averaged 5.2 cents per kilowatt-hour, which is the average price among all households, which ranks it among the
lowest rates available in the world. In particular, Trinidad and Tobago ranked 34 th out of 148 countries surveyed in terms
of the affordability of its electricity prices. In comparison, the average price in the United States for households was 16.2 cents per
kwh, and in Canada was 10.7 cents per kwh. However, wholesale or bulk electricity rates, which are typically negotiated to commercial
or industrial users, are typically lower than household rates. Most countries with lower rates have either unstable political environments
or inadequate and unstable electrical infrastructure that make then unsuitable for data centers. See
The rate that we expect to pay is 3.5 cents per kwh, which is less than the average in Trinidad and Tobago, because electricity to our
facilities will be supplied through TSTT's contract with the local utility.

 Our TSTT site became operational in October 2023,
and our rate for electricity is TSTT's existing rate of 3.5 cents per kwh or 75% of the declared reserve capacity, which is equal
to the customer's highest expected monthly kilovolt-ampere demand at $7.40. While our TSTT site was delayed pending electrification,
we entered into an oral hosting agreement with a third party in Trinidad to co-host 60 miners on an at-will basis, for which we pay a
flat rate of $0.06 per kwh each month. We ultimately intend to move all of our miners in Trinidad to our new TSTT hosting facilities.

 In light of the recent developments in Trinidad,
we are focusing our efforts in the near term on developing hosting locations in the United States and Canada. We now have a hosting facility
in Pecos, Texas, and have an additional 1,095 miners hosted by a third party in Murray, Kentucky. See " Item 2. Properties "
herein. We are exploring additional situations where medium to long-term power agreements may be available at affordable prices, whether
using traditional power sources such as coal or natural gas, as well as environmentally friendly sources such as hydroelectric, wind and
solar-backed projects, which might allow us to generate collateral revenue from the sale of excess power to the local utility grid and
from the generation of saleable carbon credits.

 The Company's president allows the Company
to utilize the office space of an affiliated company for its executive offices without charge to the Company.

 Hosting Equipment

 Our focus is to build data centers using immersion
hosting containers. In 2021 and 2022, we purchased a total of ten immersion hosting containers from Submer for an average of approximately
$269,000 each. We have deployed or sold the immersion containers as follows:

 We installed two of the immersion containers at our initial co-location facility in Trinidad.

 In August 2022, we sold two immersion containers to a third party in Trinidad for $960,000, of which $910,000 was payable over twenty five months with interest at 7.5% per annum, for monthly payments of $40,950 per month. In July 2024, we repossessed the immersion containers. We are currently evaluating different TSTT locations at which to deploy these containers, and expect to reinstall them in the first calendar quarter of 2025.

 In October 2022, we sold four immersion containers to a joint venture with the ROC Digital joint venture for $1,200,000, and made an equity contribution of one immersion container. Our equity contribution also included six GE Protec 1500 KVA transformers valued at $125,000 each.

 Under our agreement with ROC Digital, we installed one container at the joint venture's hosting site, which we are using for self-mining.

 Although we originally bought our immersion containers
with the intention of using them purely for hosting third party equipment, we elected to sell or contribute six of the containers because
we were offered an attractive price for them and because we did not have a suitable location to install them in the short-term. While
we do not have any agreements to purchase additional immersion containers from Submer, we believe that additional immersion containers
are available for purchase from Submer or other vendors as we need them for additional hosting facilities.

 Mining Equipment

 Digital asset mining is dependent on specialized
digital asset mining hardware utilizing application-specific integrated circuit ("ASIC") chips to solve blocks on blockchains
using the 256-bit secure hashing algorithm. Almost all of these miners are produced outside of the United States, mostly in China and
Southeast Asia, by a few manufacturers, the largest of which is Bitmain Technologies, Ltd ("Bitmain"). Our principal supplier
for miners has been Bitmain. Our mining business is highly dependent upon digital asset mining equipment suppliers such as Bitmain providing
an adequate supply of new generation digital asset mining machines at economical prices to enable profitable mining by us and by third-party
customers intending to purchase our hosting and other solutions.

 We do not have any agreements for the acquisition
of miners. To date, we have purchased miners opportunistically as they been available for sale in the "spot" market. Based
on historical market activity, as the market value of digital assets increases, the demand for the newest, most efficient miners will
also increase, leading to scarcity in the supply, and thereby a resulting increase in the price of miners. If we need to purchase miners
in larger quantities in order to fill data center capacity, we have to enter into formal agreements with Bitmain or other suppliers. These
agreements, like those of other miner manufacturers, generally require significant refundable deposits payable months in advance of delivery
and additional advance payments in monthly installments thereafter. These agreements also contain other terms and conditions favorable
to the manufacturer.

 As of December 5, 2024, we own a total of 4,725
miners, consisting of: 121 Whatsminers, 72 Antminer T-19s, and 4532 Antminer S-19s (not including retired miners). For
our current inventory of miners, we paid an average of approximately $550 per machine, or $5.58 per terahash. The miners that we owned
as of December 5, 2024 have an average mining efficiency of 31.83 j/TH.

 Due to the significant drop in the price of miners
(70-80% since early 2021) relative to the cost of the datacenter and electrical equipment needed to host the miners has led us to focus
more on self-mining, since the capital investment needed to self-mine is significantly less than last year.

 Patents and Trademarks

 We intend to protect our intellectual property
rights through a combination of trademark, patent, copyright and trade secrets laws.

 Employees and Independent Contractors

 As of December 5, 2024, we had seven employees
and independent contractors, which do not include our officers who are performing services without a contract or compensation until we
raise capital.

 We have no collective bargaining agreements with
our employees, and believe all independent contractor and employment agreements relationships are satisfactory. We hire independent contractors
on an as-needed basis, and we may retain additional employees and consultants during the next twelve months, including additional executive
management personnel with substantial experience in development business.

 Available Information

 We make available free of charge on our Internet
website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports
as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission,
or (the "SEC"). Our corporate website is bitminetech.io. The information in this website is not a part of this report.

 Item 1A. Risk Factors

 Ownership of our securities involves a high
degree of risk. Holders of our securities should carefully consider the following risk factors and the other information contained
in this Form 10-K, including our historical financial statements and related notes included herein. The following discussion highlights
some of the risks that may affect future operating results. Additional risks and uncertainties not presently known to us, which we currently
deem immaterial or which are similar to those faced by other companies in our industry or businesses in general, may also impair our businesses
operations. If any of the following risks or uncertainties actually occur, our business, financial condition and operating results could
be adversely affected in a material way. This could cause the trading prices of our common stock to decline, perhaps significantly, and
you may lose part or all of your investment. Please see " Cautionary Note Regarding Forward-Looking Statements."

 Risk Factor Summary

 Ownership of our securities involves a high
degree of risk. Holders of our securities should carefully consider the following risk factors and the other information contained
in this Form 10-K, including our historical financial statements and related notes included herein. The following discussion highlights
some of the risks that may affect future operating results. Additional risks and uncertainties not presently known to us, which we currently
deem immaterial or which are similar to those faced by other companies in our industry or businesses in general, may also impair our businesses
operations. If any of the following risks or uncertainties actually occur, our business, financial condition and operating results could
be adversely affected in a material way. This could cause the trading prices of our common stock to decline, perhaps significantly, and
you may lose part or all of your investment. Please see " Cautionary Note Regarding Forward-Looking Statements."

 Below is a summary of the principal factors that make an investment
in our common stock speculative or risky. This summary does not address all of the risks we face. Additional discussion of the risks summarized
in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other
information included in this Annual Report.

 Risks Related to Our Business

 bitcoin prices are very volatile and this may affect our ability to effectively manage growth plans and our profitability;

 If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer.

 Fluctuations in the price of bitcoin may significantly influence the market price of our bitcoin holdings and therefore the price of
our common stock;

 Further significant disruptions in the crypto asset markets, such as those experienced in the second half of 2022, may cause further
material impairment of the value and use of our miners;

 Political or economic crises may motivate large-scale sales of digital assets, which could result in a reduction in some or all digital
assets' values and adversely affect an investment in our securities;

 Bitcoin is subject to halving and as such the reward for successfully solving a block will halve several times in the future and its
value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts, which could cause us to cease
our mining operations altogether and investors could suffer a complete loss of their investment;

 Security threats to our business could result in a loss of our digital assets, or damage to our reputation and brand, each of which could
adversely affect an investment in our securities;

 The limited rights of legal recourse against us, and our lack of insurance protection exposes us and our stockholders to the risk of
loss of our digital assets for which no person is liable;

 We rely on third-party hosting, and as such, our operations could be adversely affected by the actions or inactions of such third-parties.
Additionally, third-party hosting, among other things, often requires us to give the hosting company a first lien on the miners installed
on the site and creates business risk for us.

 Risks Related to Governmental Regulation and Enforcement

 Regulatory changes or actions may restrict the use of bitcoins or the operation of the bitcoin network in a manner that adversely affects
an investment in our securities;

 Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, they may experience
fraud, security failures or operational problems, which may adversely affect the value of our bitcoin;

 If regulatory changes or interpretations require the regulation of bitcoins under the Securities Act and the Investment Company Act of
1940, as amended (the "Investment Act") by the SEC, we may be required to register and comply with such regulations. To the
extent we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring
expenses to us. We may also decide to cease certain operations. Any disruption of our operations in response to the changed regulatory
circumstances may be at a time that is disadvantageous to investors. This would likely have a material adverse effect on us and investors
may lose their investment; and

 Changing environmental regulation and public energy policy may expose our business to new risks.

 Risks Related to Our Common Stock

 Our stock price is volatile; and

 Because there has been limited precedent set for financial accounting of bitcoin and other cryptocurrency assets, the determination that
we have made for how to account for cryptocurrency assets transactions may be subject to change.

 Risks Related to Our Business

 Bitcoin prices are highly volatile, which may affect our ability
to effectively manage growth plans and our profitability.

 The price of bitcoin is extremely volatile. In 2023 the price range
of bitcoin was approximately $16,600 to $42,800, and in 2024 the price range of bitcoin has been approximately $40,000 to $103,000 through
December 5, 2024. The cost to mine a bitcoin is independent of the then current price of bitcoin, so when prices are low, the cost per
coin to mine may consume much of our available cash, which means that there is less capital with which to invest in future company growth.
Similarly, when prices are low, our profitability is decreased on a dollar-for-dollar basis correlated to the then price of bitcoin. Given
the volatility of bitcoin, these factors render us unable to accurately predict in advance what our growth plans may be and accurately
forecast any revenue and profitability projections for any reporting period.

 The price of bitcoin may be influenced by regulatory, commercial,
and technical factors that are highly uncertain.

 Bitcoin and other digital assets are relatively novel and are subject
to various risks and uncertainties that may adversely impact their price. For example, the application of securities laws and other regulations
to such assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may create
new regulations or interpret laws in a manner that adversely affects the price of bitcoin. The growth of the digital assets industry in
general, and the use and acceptance of bitcoin in particular, may also impact the price of bitcoin and is subject to a high degree of
uncertainty. The pace of worldwide growth in the adoption and use of bitcoin could depend on the following:

 public familiarity with digital assets;

 ease of buying and accessing bitcoin;

 institutional demand for bitcoin as an investment asset;

 consumer demand for bitcoin as a means of payment; and

 the availability and popularity of alternatives to bitcoin.

 Even if growth in bitcoin adoption occurs in the near or medium-term,
there is no assurance that bitcoin usage will continue to grow over the long-term. Because bitcoin has no physical existence beyond the
record of transactions on the bitcoin blockchain, a variety of technical factors related to the bitcoin blockchain could also impact the
price of bitcoin. For example, malicious attacks by "miners" who validate bitcoin transactions, inadequate mining fees to
incentivize validating of bitcoin transactions, "hard forks" of the bitcoin blockchain, and advances in quantum computing
could undercut the integrity of the bitcoin blockchain and negatively affect the price of bitcoin. The liquidity of bitcoin may also be
reduced and damage to the public perception of bitcoin may occur, if financial institutions were to deny banking services to businesses
that hold bitcoin, provide bitcoin-related services or accept bitcoin as payment, which could also decrease the price of bitcoin.

 Fluctuations in the price of bitcoin may significantly influence
the market price of our bitcoin holdings and therefore, the price of our common stock.

 To the extent investors view the value of our common stock as linked
to the value or change in the value of our bitcoin, fluctuations in the price of bitcoin may significantly influence the market price
of our common stock.

 If we fail to grow our hash rate, we may be unable to compete,
and our results of operations could suffer.

 Generally, a bitcoin miner's chance of solving a block on the
bitcoin blockchain and earning a bitcoin reward is a function of the miner's hash rate (i.e., the amount of computing power devoted
to supporting the bitcoin blockchain), relative to the global network hash rate. As greater adoption of bitcoin occurs, we expect the
demand for bitcoin will increase further, drawing more mining companies into the industry and thereby increasing the global network hash
rate. As new and more powerful miners are deployed, the global network hash rate will continue to increase, meaning a miner's chance
of earning bitcoin rewards will decline unless it deploys additional hash rate at pace with the industry.

 Accordingly, to maintain our chances of earning new bitcoin rewards
and remaining competitive in our industry, we must seek to continually add new miners to grow our hash rate at pace with the growth in
the bitcoin global network hash rate. However, as demand miners has increased sharply, and we expect this process to continue in the future
as demand for bitcoin increases. Therefore, if the price of bitcoin is not sufficiently high to allow us to fund our hash rate growth
through new miner acquisitions and if we are otherwise unable to access additional capital to acquire these miners, our hash rate may
stagnate and we may fall behind our competitors. If this happens, our chances of earning new bitcoin rewards would decline and, as such,
our results of operations and financial condition may suffer.

 We may not be able to obtain new hosting and transaction processing
hardware or purchase such hardware at competitive prices during times of high demand, which could have a material adverse effect on our
business, financial condition and results of operations.

 Historically, an increase in interest and demand for digital assets
has led to a shortage of hosting and transaction processing hardware and increased prices. As the price of digital assets increase, the
profits that are generated from the mining those assets also increase, which causes more companies to enter the mining industry and existing
companies to expand their mining operations. When that occurs, the demand for equipment may outpace supply and create mining machine equipment
shortages. Currently, with the substantial increase in the price of bitcoin from its lows in late 2023, there is increased demand for
new and used mining and hosting equipment. While we have not seen an uptick in the price of used mining equipment so far due to an overhang
of supply on the market, we expect that prices will trend up in the near future if the bitcoin price of bitcoin remains constant or increases
from its current level. In the short-term, a substantial increase in the price of bitcoin and associated equipment prices would improve
the profitability of our existing operations, but in the long-term it could impair our ability to expand our operations or replace obsolete
equipment, which could have a material adverse effect on our business, financial condition and results of operations.

 Our business is capital intensive, and failure to obtain the
necessary capital when needed may force us to delay, limit or terminate our expansion efforts or other operations, which could have a
material adverse effect on our business, financial condition and results of operations.

 Part of our business plan is to construct, develop and operate digital
asset mining facilities, and to mine digital assets for our own account in those facilities by means of a fleet of the latest generation
mining equipment. We may also use our mining facilities to host third-party miners. However, the costs of constructing, developing, operating
and maintaining digital asset mining and hosting facilities, and owning and operating a large fleet of the latest generation mining equipment,
are substantial. We have completed our initial hosting facility in Trinidad which recently became operational. We are also a partner in
a joint venture that recently completed a facility with a capacity of 5-6 MW in Texas, which became operational in June 2023. We currently
lack the capital to open material additional facilities or materially expand our additional facilities. Without capital to construct new
mining facilities, we have focused our efforts on acquiring miners which are hosting in mining facilities owned by third parties.

 We will need to raise additional funds through equity or debt financings
in order to meet our capital needs. Additional debt or equity financing may not be available when needed or, if available, may not be
available on satisfactory terms. If our stock price declines and/or our trading volume remains low, our ability to raise capital to expand
our business will be impaired. We have retained investment bankers to assist in raising the necessary capital to expand our business,
but they can provide no assurance that capital is available on attractive terms in the current market environment. An inability to obtain
additional debt or equity financing would adversely affect our business, financial condition and results of operations.

 To the extent we host third party miners, our success will depend
in large part on our ability to provide a competitive hosting environment, and our inability to attract customers for our hosting services
could have a material adverse effect on our business, financial condition and results of operations.

 While our primary plan is to utilize our hosting facilities to mine
bitcoin for our own account, we may utilize our hosting facilities to host third-party miners where we can do so on attractive terms.
Our hosting success will depend our ability to attract hosting customers, which will depend our ability to offer competitive hosting terms
and capabilities that enable our hosting clients to operate profitably. We may not be able to attract customers to our hosting capabilities
for a number of reasons, including if:

 we are unable to find suitable locations for hosting facilities which have electricity at competitive rates;

 there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate;

 we fail to provide competitive pricing terms or effectively market them to potential customers;

 we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers' or suppliers' ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity;

 mining businesses decide to host internally as an alternative to the use of our services;

 we fail to successfully communicate the benefits of our services to potential customers;

 we are unable to strengthen awareness of our brand;

 we are unable to provide services that our existing and potential customers' desire;

 our customers are unable to secure an adequate supply of new generation digital asset mining equipment to host with us;

 we are unable to obtain deliveries of hosting equipment, including immersion containers and transformers, which have recently been in short supply; or

 we are unable to find suitable locations for hosting facilities which have electricity at competitive rates.

 Furthermore, all of the risks that exist for our mining business would
also exist for our third-party hosting clients. The inability of our hosting clients to operate profitably could adversely impact on our
hosting business, which could have a material adverse effect on our business, financial condition and results of operations.

 Significant disruptions in the crypto asset markets, such as
those experienced in the second half of 2022, may cause material impairment of the value and use of our miners.

 During the fourth quarter of 2022, the per coin price of bitcoin reached
a low of approximately $15,500 from a high of almost $21,500 earlier in the quarter. This decrease in the price of bitcoin, combined with
general market sentiment caused in large part by the collapse of FTX Trading Ltd. ("FTX") in November 2022 and various bitcoin
company-related bankruptcies and restructurings, led to a material decline in the fair value of our miners during that period. Any future
decrease in the value of bitcoin could cause us to record additional impairments in the value of our current and future assets.

 In addition, if bitcoin prices dropped to levels below that experienced
in 2022 and held at those levels for a significant period of time, it could impact our profitability such that we would possibly need
to consider whether it would be prudent to leave certain of our miners idle until the price of bitcoin recovered.

 Theoretically, there is a minimum bitcoin price that is so low that
we would be incentivized to cease our mining operations, particularly where our operating costs exceed our revenues. However, this is
a complex projection involving multiple ever-changing, dynamic variables. We have multiple mining sites and hosting partners, all with
different hosting prices, electricity prices, and contract structures. These costs would need to be compared to the current revenue being
produced by our miners.

 Adverse developments in the blockchain industry and in the blockchain
hosting market could have a material adverse effect on our business, financial condition and results of operations.

 The blockchain industry faces a number of material risks, including
those related to:

 a decline in the adoption and use of bitcoin and other similar digital assets within the technology industry or a decline in value of digital assets;

 increased costs of complying with existing or new government regulations applicable to digital assets and other factors;

 a downturn in the market for blockchain hosting space generally, which could be caused by an oversupply of or reduced demand for blockchain space;

 the rapid development of new technologies or the adoption of new industry standards that render the mining of digital assets unprofitable or obsolete, such as widespread adoption of "proof of stake" method of validating blockchain transactions instead of "proof of work;"

 a slowdown in the growth of the Internet generally as a medium for commerce and communication;

 availability of an adequate supply of new generation digital asset mining equipment to enable us to mine digital assets at scale;

 the degree of difficulty in mining digital assets and the trading price of such assets;

 an increase in political opposition to mining digital assets, for example due to concerns about its impact on climate change or its impact on the availability of affordable electricity to other consumers in the local market, the degree of difficulty in mining digital assets and the trading price of such assets; and

 a material increase in the cost of electricity needed to operate mining equipment.

 To the extent that any of these or other adverse conditions exist,
they are likely to have an adverse impact on our mining rewards, which could have a material adverse effect on our business, financial
condition and results of operations.

 Geopolitical or economic crises may create increased uncertainty
and price changes, or motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets'
values and adversely affect an investment in our securities.

 As an alternative to fiat currencies that are backed by central governments,
digital assets such as bitcoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative,
decentralized means of buying and selling goods and services. It is unclear how such supply and demand will be impacted by geopolitical
events. Nevertheless, geopolitical or economic crises may motivate large-scale acquisitions or sales of digital assets either globally
or locally. Large-scale sales of digital assets would result in a reduction in their value and could adversely affect an investment in
our securities.

 In addition, we are subject to price volatility and uncertainty due
to geopolitical crises and economic downturns. Such geopolitical crises and global economic downturns may be a result of invasion, or
possible invasion, by one nation of another, leading to increased inflation and supply chain volatility. Such crises, as well as inflation,
will likely continue to have an effect on our ability to do business in a cost-effective manner.

 Adoption of a different method of validating transactions in
bitcoin could materially impair the business of mining firms, and could even make them obsolete.

 Transactions in bitcoin are currently validated by a system called
"proof of work," where powerful computers run software that races to solve complex problems, verifying transactions in the
process. The system is widely known as "mining" because the computers earn payments in cryptocurrency as rewards for the verification
service. The system has been criticized by many because it requires substantial amounts of electricity to validate transactions. Recently,
another type of digital currency, Ethereum, implemented a different system of validation called "proof of stake," which is
expected to require 99% less energy consumption. In the event bitcoin adopts a similar system, it could make bitcoin mining substantially
less profitable and could even render the business obsolete.

 Where there is no assurance that bitcoin will not adopt a "proof
of stake" system. Even if bitcoin decided to adopt such a system, we do not believe that the adoption would occur during in the
near term, given the number of years it took Ethereum to create and implement its alternative system.

 The sale of our digital assets to pay expenses at a time of low
digital asset prices could adversely affect an investment in our securities.

 We may sell our digital assets to pay expenses on an as-needed basis,
irrespective of then-current prices. Consequently, our digital assets may be sold at a time when the prices on the respective digital
asset exchange market are low, which could adversely affect an investment in our securities.

 Supply chain and shipping disruptions have resulted in shipping
delays, a significant increase in shipping costs, and could increase product costs and result in lost sales, which may have a material
adverse effect on our business, operating results and financial condition.

 Supply chain disruptions, resulting from factors such as the COVID-19
pandemic, labor supply and shipping container shortages, have impacted, and may continue to impact, us and our third-party manufacturers
and suppliers. These disruptions have, at times, resulted in longer lead times and increased product costs and shipping expenses, including
with respect to the delivery of miners that we have purchased. While we have taken steps to minimize the impact of these increased costs
by working closely with our suppliers and customers, there can be no assurances that unforeseen events impacting the supply chain will
not have a material adverse effect on us in the future. Additionally, the impacts supply chain disruptions have on our third-party manufacturers
and suppliers are not within our control. When supply chain disruptions occur, it is often not possible to predict how long it will take
for the supply chain disruptions to cease. Prolonged supply chain disruptions impacting us and our third-party manufacturers and suppliers
could have a material adverse effect on our business, operating results and financial condition.

 We may experience difficulties in establishing relationships
with banks, leasing companies, insurance companies and other financial institutions that are willing to provide us with customary financial
products and services, which could have a material adverse effect on our business, financial condition and results of operations.

 As an early stage company with operations focused in the digital asset
transaction processing industry, we may in the future experience difficulties in establishing relationships with banks, leasing companies,
insurance companies and other financial institutions that are willing to provide us with customary leasing and financial products and
services, such as bank accounts, lines of credit, insurance and other related services, which are necessary for our operations. In particular,
a number of companies that engage in bitcoin and/or other cryptocurrency-related activities have been unable to find banks or financial
institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals
or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued
with financial institutions. To the extent that such events may happen to us, they could have a material adverse effect on our business,
prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our
own account.

 The development and acceptance of digital asset networks and
other digital assets, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.
The slowing or stopping of the development or acceptance of digital asset systems may adversely affect an investment in our securities.

 Digital assets such as bitcoin, that may be used, among other things,
to buy and sell goods and services are a new and rapidly evolving industry. The growth of the digital asset industry in general, and the
digital asset networks of bitcoin in particular, are highly uncertain. The factors affecting the further development of the digital asset
industry, as well as the digital asset networks, include:

 continued worldwide growth in the adoption and use of bitcoins and other digital assets;

 government and quasi-government regulation of bitcoins and other digital assets and their use, or restrictions on or regulation of access
to and operation of the digital asset network or similar digital assets systems;

 the maintenance and development of the open-source software protocol of the bitcoin network;

 changes in consumer demographics and public tastes and preferences;

 the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat
currencies;

 general economic conditions and the regulatory environment relating to digital assets;

 the impact of regulators focusing on digital assets and digital securities and the costs associated with such regulatory oversight; and

 a decline in the popularity or acceptance of the digital asset networks of bitcoin, or similar digital asset systems, could adversely
affect an investment in our securities.

 The open-source structure of the bitcoin network protocol means
the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol.
A failure to properly monitor and upgrade the protocol could damage the bitcoin network and an investment in our securities.

 Digital asset networks are open-source projects and, although there
is an influential group of leaders in, for example, the bitcoin network community known as the "Core Developers," there is
no official developer or group of developers that formally controls the bitcoin network. As an open-source project, bitcoin is not represented
by an official organization or authority. The bitcoin network protocol is not sold and contributors are generally not compensated for
maintaining and updating the bitcoin network protocol. The lack of guaranteed financial incentive for contributors to maintain or develop
the bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the bitcoin network may reduce incentives
to address the issues adequately or in a timely manner. Changes to a digital asset network in which we are directing our mining efforts
may adversely affect an investment in our securities.

 The acceptance of digital asset network software patches or upgrades
by a significant, but not overwhelming, percentage of the users and miners in any digital asset network could result in a "fork"
in the respective blockchain, resulting in the operation of two separate networks until such time as the forked blockchains are merged.
The temporary or permanent existence of forked blockchains could adversely impact an investment in our securities.

 Due to bitcoin's open-source project, any individual can download
the bitcoin network software and make any desired modifications, which are proposed to users and miners on the bitcoin network through
software downloads and upgrades, and typically posted to the bitcoin development forum on GitHub.com. A substantial majority of miners
and bitcoin users must consent to those software modifications by downloading the altered software or upgrade that implements the changes.
If not, the changes do not become a part of the bitcoin network.

 Since the bitcoin network's inception, changes to the bitcoin
network have been accepted by the vast majority of users and miners, ensuring that the bitcoin network remains a coherent economic system.
However, a developer or group of developers could potentially propose a modification to the bitcoin network that is not accepted by a
vast majority of miners and users, but that is nonetheless accepted by a substantial population of participants in the bitcoin network.
In such a case, and if the modification is material and/or not backwards compatible with the prior version of bitcoin network software,
a fork in the blockchain could develop and two separate bitcoin networks could result with one running the pre-modification software program
and the other running the modified version (i.e., a second "bitcoin" network).

 Such a fork in the blockchain is typically addressed by community-led
efforts to merge the forked blockchains, and several prior forks have been so merged. This kind of split in the bitcoin network could
materially and adversely impact an investment in our securities and harm the sustainability of the bitcoin network's economy.

 As the number of digital assets awarded for solving a block in
the blockchain decreases, the incentive for miners to continue to contribute processing power to the respective digital asset network
will transition from a set reward to transaction fees. Either the requirement from miners of higher transaction fees in exchange for recording
transactions in the blockchain or a software upgrade that automatically charges fees for all transactions may decrease demand for digital
assets and prevent the expansion of the digital asset networks to retail merchants and commercial businesses, resulting in a reduction
in the price of digital assets that could adversely impact an investment in our securities.

 In order to incentivize miners to continue to contribute processing
power to any digital asset network, such network may either formally or informally transition from a set reward to transaction fees earned
upon solving for a block. This transition could be accomplished either by miners independently electing to record in the blocks they solve
only those transactions that include payment of a transaction fee or by the digital asset network adopting software upgrades that require
the payment of a minimum transaction fee for all transactions. If transaction fees paid for digital asset transactions become too high,
the marketplace may be reluctant to accept digital assets as a means of payment and existing users may be motivated to switch from one
digital asset to another digital asset or back to fiat currency. Decreased use and demand for bitcoins that we have accumulated may adversely
affect its value and may adversely impact an investment in it.

 To the extent that any miners cease to record transactions in
solved blocks, transactions that do not include the payment of a transaction fee will not be recorded on the blockchain until a block
is solved by a miner who does not require the payment of transaction fees. Any widespread delays in the recording of transactions could
result in a loss of confidence in that digital asset network, which could adversely impact an investment in our securities.

 To the extent that any miners cease to record transaction in solved
blocks, such transactions will not be recorded on the blockchain. Currently, there are no known incentives for miners to actively not
record transactions in solved blocks. However, to the extent that any such incentives arise (e.g., a collective movement among miners
or one or more mining pools forcing bitcoin users to pay transaction fees as a substitute for or in addition to the award of new bitcoins
upon the solving of a block), actions of miners solving a significant number of blocks could delay the recording and confirmation of transactions
on the blockchain. Any systemic delays in the recording and confirmation of transactions on the blockchain could result in greater exposure
to double-spending transactions and a loss of confidence in certain or all digital asset networks, which could adversely impact an investment
in our securities.

 If a malicious actor or botnet obtains control in excess of 50%
of the processing power active on any digital asset network, including the bitcoin network, it is possible that such actor or botnet could
manipulate the blockchain in a manner that adversely affects an investment in our securities.

 If a malicious actor or botnet (a volunteer or hacked collection of
computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated
to mining on any digital asset network, it may be able to alter the blockchain by constructing alternate blocks if it is able to solve
for such blocks faster than the remainder of the miners on the blockchain can add valid blocks. Within the alternate blocks, the malicious
actor or botnet could control, exclude or modify the ordering of transaction. However, it could not generate new digital assets or transactions
using such control. Using alternate blocks, the malicious actor or botnet could "double-spend" its own digital assets (i.e.,
spend the same digital assets in more than one transaction) and prevent the confirmation of other users' transactions for so long
as it maintains control. To the extent that such malicious actor or botnet does not yield its majority control of the processing power
or the digital asset community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not
be possible. Such changes could adversely affect an investment in our securities.

 The approach towards and possible crossing of the 50% threshold indicates
a greater risk that a single mining pool could exert authority over the validation of digital asset transactions. To the extent that the
digital assets ecosystems do not act to ensure greater decentralization of digital asset mining processing power, the feasibility of a
malicious actor obtaining in excess of 50% of the processing power on any digital asset network (e.g., through control of a large mining
pool or through hacking such a mining pool) will increase, which may adversely impact an investment in our securities.

 Our reliance on third-party mining pool service providers for
our mining revenue payouts may have a negative impact on our operations.

 We utilize one third party mining pool to receive our mining rewards
from a given network. Mining pools allow mining participants to combine their processing power, which increases the chances of solving
a block and getting paid by the network. The rewards are distributed by the pool operator, proportionally to our contribution to the pool's
overall mining power used to generate each block. We are dependent on the accuracy of the mining pool operator's record keeping
to accurately record the total processing power provided to the pool for a given bitcoin or other digital asset mining application in
order to assess the proportion of that total processing power we provided. While we have internal methods of tracking both our power provided
and the total power used by the pool, the mining pool operator uses its own record-keeping to determine our proportion of a given reward.
We have little means of recourse against the mining pool operator if we determine the proportion of the reward paid out to us by a mining
pool operator is incorrect, other than leaving the pool. If we are unable to consistently obtain accurate proportionate rewards from our
mining pool operators, we may experience reduced reward for our efforts, which would have an adverse effect on our business and operations.

 Bitcoin is subject to halving, and as such the reward for successfully
solving a block will halve several times in the future and its value may not adjust to compensate us for the reduction in the rewards
we receive from our mining efforts, which could cause us to cease our mining operations altogether and investors could suffer a complete
loss of their investment.

 Halving is a process designed to control the overall supply and reduce
the risk of inflation in digital assets using a Proof-of-Work consensus algorithm. In an event referred to as bitcoin "halving,"
the bitcoin reward for mining any block is cut in half. For example, the mining reward for bitcoin declined from 6.25 to 3.125 bitcoin
on April 19, 2024. This process is scheduled to occur once every 210,000 blocks. It is estimated that bitcoin will next halve in April
2028 and then approximately every four years thereafter until the total amount of bitcoin rewards issued reaches 21 million, which is
expected to occur around 2140. Once 21 million bitcoin are generated, the network will stop producing more. Currently, there are more
than 19 million bitcoin in circulation. While bitcoin prices have had a history of price fluctuations around halving events, there is
no guarantee that any such price change will be favorable or would compensate for the reduction in mining reward. If a corresponding and
proportionate increase in the price of bitcoin does not follow these anticipated halving events, the revenue from our mining operations
would decrease, and we may not have an adequate incentive to continue mining and may cease mining operations altogether, which may adversely
affect an investment in us.

 A halving reduces the block rewards from mining by exactly 50%. However,
a halving will not reduce revenues from mining by exactly 50% since part of the rewards consist of transaction fees which are not impacted
by the halving. In recent periods, transaction fees have made up an ever-increasing share of mining revenue due to the impact of "ordinals,"
which are increased transaction fees that are paid as parties have discovered ways to imbed data regarding other assets, such as art,
in the bitcoin blockchain.

 Furthermore, such reductions in bitcoin rewards for uncovering blocks
may result in a reduction in the aggregate hash rate of the bitcoin network as the incentive for miners decreases. Miners ceasing operations
would reduce the collective processing power on the network, which would adversely affect the confirmation process for transactions and
make the bitcoin network more vulnerable to malicious actors or botnets obtaining control in excess of 50% of the processing power active
on the blockchain. Such events may adversely affect our activities and an investment in our securities.

 The elimination of ordinals could have a material adverse effect
on our results of operations and financial condition.

 Since early January 2023, transaction fees have made up an ever-increasing
share of mining revenue due to the impact of "ordinals," which are increased transaction fees that are paid as parties have
discovered ways to imbed data regarding other assets, such as art, in the bitcoin blockchain. There is some concern among the parties
who manage the bitcoin blockchain as to whether ordinals should be permitted, since their inclusion tends to slow down validation of transactions
on the blockchain. If the bitcoin blockchain managers decide to eliminate ordinals, we could lose an important source of revenue from
our mining operations, which could have a material adverse effect on our results of operations and financial condition.

 To the extent that the profit margins of digital asset mining
operations are not high, operators of digital asset mining operations are more likely to immediately sell their digital assets earned
by mining in the digital asset exchange market, resulting in a reduction in the price of digital assets that could adversely impact an
investment in our securities.

 Over the past two years, digital asset mining operations have evolved
from individual users mining with computer processors, graphics processing units and first-generation miners. Currently, new processing
power brought onto the digital asset networks is predominantly added by "professionalized" mining operations. Professionalized
mining operations may use proprietary hardware or sophisticated machines.

 Professionalized mining operations require:

 the investment of significant capital for the acquisition of such hardware;

 the leasing of operating space (often in data centers or warehousing facilities);

 incurring of electricity costs; and

 the employment of technicians to operate the mining farms.

 As a result, professionalized mining operations are of a greater scale
than prior miners and have more defined, regular expenses and liabilities. These regular expenses and liabilities require professionalized
mining operations to more immediately sell digital assets earned from mining operations on the digital asset exchange market. To the contrary,
it is believed that past individual miners were more likely to hold mined digital assets for more extended periods. The immediate selling
of newly mined digital assets greatly increases the supply of digital assets on the digital asset exchange market, creating downward pressure
on the price of each digital asset.

 The extent to which the value of digital assets mined by a professionalized
mining operation exceeds the allocable capital and operating costs determines the profit margin of such operation. A professionalized
mining operation may be more likely to sell a higher percentage of its newly mined digital assets rapidly if it is operating at a low
profit margin—and it may partially or completely stop operations if its profit margin is negative.

 In a low profit margin environment, a higher percentage could be sold
into the digital asset exchange market more rapidly, potentially reducing digital asset prices. Lower digital asset prices may result
in further tightening of profit margins, particularly for professionalized mining operations with higher costs and more limited capital
reserves, creating a network effect that may further reduce the price of digital assets until mining operations with higher operating
costs become unprofitable and remove mining power from the respective digital asset network. The network effect of reduced profit margins
resulting in greater sales of newly mined digital assets could result in a reduction in the price of digital assets that could adversely
impact an investment in our securities.

 Our reliance on immersion-cooling exposes us to additional risks.

 Our business is also active in developing hosting sites that use immersion-cooling,
an emerging technology in bitcoin mining, which is not in wide-spread use in the bitcoin mining industry, and has yet to be deployed in
large scale. As such, there is a risk we may not succeed in developing or deploying immersion-cooling at such a large scale to achieve
sufficient cooling performance. Our bitcoin miners that utilize immersion-cooling technology do not primarily rely on the use of water.
All bitcoin mining infrastructure, including immersion-cooling and air-cooling, is an evolving study. Cooling of bitcoin miners in general
is a risk to achieving full potential from our hash rate.

 Potential that, in the event of a bankruptcy filing by a custodian,
bitcoin held in custody could be determined to be property of a bankruptcy estate and we could be considered a general unsecured creditor
thereof.

 Substantially all of the bitcoin we hold is held in an account at BitGo
Trust, a well-known custodian. The treatment of bitcoins held by custodians that file for bankruptcy protection is uncharted territory
in U.S. Bankruptcy law. We cannot say with certainty whether our bitcoin held in custody by BitGo, should it declare bankruptcy, would
be treated as property of the bankruptcy estate and, accordingly, whether we would be treated as a general unsecured creditor with respect
of our bitcoin held in custody by BitGo. If we are treated as a general unsecured creditor, we may not be able to recover our bitcoin
in the event of a BitGo bankruptcy or a bankruptcy of any other custodian we may use in the future. However, we mitigate our risk of a
bankruptcy by BitGo by routinely liquidating our bitcoin shortly after it is earned. When we liquidate bitcoin, we typically have the
proceeds wired to our bank account a day or two later. We also seek to minimize the risk of a failure of any bitcoin exchange by maintaining
accounts at more than one exchange. In that regard, we have an account with Gemini Trust Company, LLC, which is a qualified custodian
regulated by the New York Department of Financial Services, to which we transfer any digital assets that we decide to liquidate immediately
prior to their liquidation. Assets that we liquidate through Gemini are generally transferred to Gemini from a cold storage wallet immediately
prior to liquidation. We store a de minimis amount of digital assets at Gemini.

 Any loss or destruction of a private key required to access a
digital asset of ours is irreversible. We also may temporarily lose access to any digital assets we hold in a cold wallet account.

 Digital assets are each accessible and controllable only by the possessor
of both the unique public key and private key associated with the digital asset, wherein the public and private keys are held in an offline
or online digital wallet. To the extent a private key is lost, destroyed or otherwise compromised and no backup of the private key is
available, we will be unable to access the applicable digital asset associated with that private key and the private key cannot be restored.
As a result, any digital assets associated with such key could be irretrievably lost. Any loss of private keys relating to digital wallets
used to store the applicable digital assets could have a material adverse effect on our business, financial condition and results of operations.

 We do not currently hold any digital assets in an online wallet account.
To reduce our risk, we hold substantially all of our digital assets at BitGo and a de minimis amount at Genesis. We utilize several layers
of fraud prevention techniques offered by BitGo which make it extremely unlike that our account credentials as BitGo could be compromised.
However, there can be no assurances that any processes we have adopted or will adopt in the future are or will be secure or effective,
and we would suffer significant and immediate adverse effects if we suffered a loss of our digital currency due to an adverse software
or cybersecurity event. Finally, BitGo has insurance against the loss of assets held by it as custodian with limits that greatly exceed
any amount that we have on deposit at BitGo at any time.

 Security threats to our business could result in, a loss of our
digital assets, or damage to our reputation and our brand, each of which could adversely affect an investment in our securities.

 Security breaches, computer malware and computer hacking attacks have
been a prevalent concern in the digital asset exchange markets. A security breach caused by hacking, could include, but is not limited
to:

 efforts to gain unauthorized access to information or systems;

 efforts to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment; and

 the inadvertent transmission of computer viruses.

 A security breach by hacking could harm our operations or result in
loss of our digital assets. Any breach of our and our partners' infrastructure could result in reputational harm and erode the trust
of our partners and stockholders, which could adversely affect an investment in our securities. Furthermore, as our assets grow, we may
become a more appealing target for security threats such as hackers and malware.

 Our security system and operational infrastructure may be breached
due to the actions of outside parties, error or malfeasance of an employee, or otherwise, and, as a result, an unauthorized party may
obtain access to our private keys, data or bitcoins. Additionally, outside parties may attempt to fraudulently induce our employees to
disclose sensitive information in order to gain access to our infrastructure.

 Despite our efforts, we may be unable to anticipate these techniques
or implement adequate preventative measures since the hacking techniques used are often not recognized until launched against a target.
If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of our controls could be harmed,
which could adversely affect an investment in our securities.

 Further, in the event of a security breach, we may be subject to litigation
forced to cease operations, or suffer a reduction in assets, the occurrence of each of which could adversely affect an investment in our
securities.

 Our ability to adopt technology in response to changing security
needs or trends and our reliance on, third-party custody providers, poses a challenge to the safekeeping of our digital assets.

 The history of digital asset exchanges has shown that exchanges and
large holders of digital assets must adapt to technological change in order to secure and safeguard their digital assets. We rely on the
security solutions of third-party custodians, who we believe have developed physically secure environment based on established, industry
best practices, to safeguard our digital assets from theft, loss, destruction or other issues relating to hackers and technological attack.

 We believe we may become a more appealing target of security threats
as the size of our bitcoin holdings grow. To the extent that we, or any of our third-party custody providers, are unable to identify,
mitigate or stop new security threats, our digital assets may be subject to theft, loss, destruction or other attack, which could adversely
affect an investment in our securities. To the extent that our third-party custody providers are no longer able to safeguard our assets
due to the current banking crisis, we would be at risk of loss if safeguarding protocols fail.

 Digital asset transactions are irrevocable and stolen or incorrectly
transferred digital assets may be irretrievable. As a result, any incorrectly executed digital asset transactions could adversely affect
an investment in our securities.

 Digital asset transactions are not, from an administrative perspective,
reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority
of the processing power on that digital asset network. Once a transaction has been verified and recorded in a block that is added to the
blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable
of seeking compensation for any such transfer or theft.

 Although we regularly transfer digital assets to or from custodians,
vendors, consultants, services providers, it is possible that, through computer or human error, or through theft or criminal action, such
assets could be transferred in incorrect amounts or to unauthorized third parties.

 To the extent we are unable to seek a corrective transaction to identify
the third party which has received our digital assets through error or theft, we will be unable to revert or otherwise recover the impacted
digital assets, and any such loss could adversely affect an investment in our securities.

 The limited rights of legal recourse available to us, and our
lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets for which no person is liable.

 Our digital assets are not insured. If our digital assets are lost,
stolen or destroyed under circumstances rendering a party liable to us, the responsible party may not have the financial resources sufficient
to satisfy our claim. For example, as to a particular event of loss, the only source of recovery for us might be limited to the extent
identifiable, other responsible third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including
liability insurance coverage) to satisfy a valid claim. Furthermore, bitcoin is not subject to Federal Deposit Insurance Corporation ("FDIC")
or Securities Investor Protection Corporation protection, which is the protection afforded to depositors at banking institutions. Therefore,
a loss may be suffered with respect to our digital assets for which no recourse is available, which could adversely affect our operations
and, consequently, an investment in our securities.

 If we or our third-party service providers experience a security
breach or cyberattack and unauthorized parties obtain access to our bitcoin, we may lose some or all of our bitcoin and our financial
condition and results of operations could be materially adversely affected.

 Security breaches and cyberattacks are of particular concern with respect
to our bitcoin. Bitcoin and other blockchain-based digital assets have been, and may in the future be, subject to security breaches, cyberattacks,
or other malicious activities. A successful security breach or cyberattack could result in a partial or total loss of our bitcoin in a
manner that may not be covered by insurance or indemnity provisions of the custody agreement with a custodian who holds our bitcoin. Such
a loss could have a material adverse effect on our financial condition and results of operations.

 We rely on third-party hosting for much of our mining activity,
and as such, our operations could be adversely affected by the actions or inactions of such third-parties. Additionally, third-party hosting,
among other things, often requires us to give the hosting company a first lien on the miners installed on the site and creates business
risk for us.

 We currently rely upon third-party hosting facilities to power most
of our miners. Our third-party hosting operators host approximately 4,000 of our bitcoin miners or more than 85% of our operational hash
rate capacity. Our operations and ability to mine bitcoin could be adversely affected if operators we rely on to operate our bitcoin miners
experience general incompetence in performing their duties, experience financial difficulties or bankruptcy, or otherwise cannot operate
our bitcoin miners in accordance with their contractual obligations.

 We are dependent upon the financial viability of our third-party hosting
operators, and in 2022, several large publicly traded hosting companies met severe financial issues, including bankruptcies. Currently,
about 95% of our third-party hosting is operated by Soluna Holdings, Inc. As a result, our operations are highly dependent on these third-parties
and could be adversely affected by the actions or inactions of our third-party hosting operators.

 Furthermore, in most hosting contracts, there is a requirement that
the miner agrees to permit the hosting company to place a lien on the actual mining machines being hosted. If the hosting company files
for bankruptcy, it may take months for the liens to be lifted, while the bankruptcy court and parties litigate these contracts and resolves
issues as to ownership of assets and related areas. In these contracts, we may be required to make significant deposits against future
mining fees. If the hosting party utilizes the deposits, we could risk loss of the deposits and be left with an unsecured claim in the
bankruptcy. Lastly, as the bankruptcy process includes an automatic stay in favor of the debtor company, until the stay is lifted or a
bankruptcy plan approved, we may not be able to move our miners to a different location, even if the debtor rejects our hosting contract.

 We are subject to risk that key counterparties file bankruptcy,
enter insolvency proceedings or otherwise default on their obligations to us.

 We are subject to the risk that counterparties with whom we do business
default on their obligations to us. While we may have rights to recover damages for breach of contract in the event of a default, our
contractual remedies may not compensate us for all of our damages, including particularly legal fees or lost opportunity costs. Even if
we receive a judgment or aware that covers all of our damages, we may not be able to collect the judgment in full due to the insolvency
of the counterparty. Furthermore, the counterparty or its assets may be in a legal system where it is difficult to receive a judgment
or collect any judgment. At this time, we have two counterparties whose default could result in material losses for us. One is ROC Digital,
which owed us $655,277 as of August 31, 2024 from the sale of equipment, and for which we have also made an equity investment of approximately
$987,000 by the contribution of equipment. In the case of ROC Digital, a default could impair our ability to realize our investment in
each entity. The other is Soluna, which hosts over 4,000 miners for us. A default by Soluna could cause us to incur material costs to
repossess our miners, a disruption in our revenues during the period that the miners are not operating, and increase our costs in the
future if we are not able to enter into alternative hosting arrangements that are as attractive as of those offered by Soluna.

 Intellectual property rights claims may adversely affect the
operation of some or all digital asset networks.

 Third parties may assert intellectual property claims relating to the
holding and transfer of digital assets and their source code. Regardless of the merit of any intellectual property or other legal action,
any threatened action that reduces confidence in some or all digital asset networks' long-term viability or the ability of end-users
to hold and transfer digital assets may adversely affect an investment in our securities. Additionally, a meritorious intellectual property
claim could prevent us and other end-users from accessing some or all digital asset networks or holding or transferring our digital assets.
As a result, an intellectual property claim against us or other large digital asset network participants could adversely affect an investment
in our securities.

 Our future success depends on our ability to keep pace with rapid
technological changes that could make our current or future technologies less competitive or obsolete.

 Rapid, significant and disruptive technological changes continue to
impact our industry. The infrastructure at our hosting facilities may become less marketable due to demand for new processes and technologies,
including, without limitation: (i) new processes to deliver power to, or eliminate heat from, computer systems; (ii) customer
demand for additional redundancy capacity; (iii) new technology that permits higher levels of critical load and heat removal than
our hosting facilities are currently designed to provide; (iv) an inability of the power supply to support new, updated or upgraded
technology; and (v) a shift to more power-efficient transaction validation protocols. In addition, the systems that connect our hosting
facilities to the Internet and other external networks may become insufficient, including with respect to latency, reliability and diversity
of connectivity. We may not be able to adapt to changing technologies, identify and implement new alternatives successfully or meet customer
demands for new processes or technologies in a timely and cost-effective manner, if at all, which would have a material adverse effect
on our business, financial condition and results of operations.

 Variability in intellectual property laws may adversely affect
our intellectual property position.

 Intellectual property laws, and patent laws and regulations in particular,
have been subject to significant variability either through administrative or legislative changes to such laws or regulations or changes
or differences in judicial interpretation, and it is expected that such variability will continue to occur. Additionally, intellectual
property laws and regulations differ among states, and countries. Variations in patent laws and regulations or in interpretations of patent
laws and regulations in the United States and other countries may diminish the value of our intellectual property and may change the impact
of third-party intellectual property on our business. Accordingly, we cannot predict the scope of patents that may be granted to us, the
extent to which we will be able to enforce our patents against third parties, or the extent to which third parties may be able to enforce
their patents against us.

 We may seek to internally develop additional new inventions and
intellectual property, which would take time and be costly. Moreover, the failure to obtain or maintain intellectual property rights for
such inventions would lead to the loss of our investments in such activities.

 While we currently do not own any material intellectual property rights
that are crucial to our business, we may in the future develop proprietary intellectual property rights that are essential to our business.
These activities would require significant amounts of financial, managerial and other resources and would take time to achieve. Such activities
could also distract our management team from our present business initiatives, which could have a material and adverse effect on our business.
There is also the risk that such initiatives may not yield any viable new business or revenue, inventions or technology, which would lead
to a loss of investment in such activities.

 In addition, even if we are able to internally develop new inventions,
in order for those inventions to be viable and to compete effectively, we would need to develop and maintain a proprietary position with
respect to such inventions and intellectual property. However, there are significant risks associated with any such intellectual property
we may develop principally including the following:

 patent applications we may file may not result in issued patents or may take longer than we expect to result in issued patents;

 we may be subject to interference proceedings;

 we may be subject to opposition proceedings in the United States or foreign countries;

 any patents that are issued to us may not provide meaningful protection;

 we may not be able to develop additional proprietary technologies that are patentable;

 other companies may challenge patents issued to us;

 other companies may have independently developed and/or patented (or may in the future independently develop and patent) similar or alternative
technologies, or duplicate our technologies;

 other companies may design around technologies we have developed; and

 enforcement of our patents would be complex, uncertain and very expensive.

 We cannot be certain that patents, once issued, will provide us with
adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable
or narrowed in scope. In addition, since publication of discoveries in scientific or patent literature often lags behind actual discoveries,
we cannot be certain that we will be the first to make our additional new inventions or to file patent applications covering those inventions.
It is also possible that others may have or may obtain issued patents that could prevent us from commercializing our products or require
us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business. As to those
patents that we may acquire, our continued rights will depend on meeting any obligations to the seller and we may be unable to do so.
Our failure to obtain or maintain intellectual property rights for our inventions would lead to the loss of our investments in such activities,
which would have a material adverse effect on our securities.

 Moreover, patent application delays could cause delays in recognizing
revenue from our internally generated patents and could cause us to miss opportunities to license patents before other competing technologies
are developed or introduced into the market. We are not actively pursuing any commercialization opportunities or internally generated
patents.

 Our future success depends on our ability to expand our organization
to match the growth of our activities.

 As our operations grow, the administrative demands and scaling demands
upon us will grow, and our success will depend upon our ability to meet those demands. We require certain financial, managerial and other
resources, which could create challenges to our ability to successfully manage our subsidiaries and operations and impact our ability
to assure compliance with our policies, practices and procedures. These demands include, but are not limited to, increased executive,
accounting, management, legal services, staff support and general office services. We may need to hire additional qualified personnel
to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control. Further, we will
need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and our failure to do
so could adversely affect our business and operating results. Currently, we have limited personnel in our organization to meet our organizational
and administrative demands.

 We are highly dependent on the continued services of our small
team of executives.

 We are dependent upon the efforts and services of our small executive
team. While we have a preliminary plan for succession of certain key executive, the loss of any one of our key executives could have an
adverse effect on our operations.

 We have engaged in, and in the future may engage in, strategic
acquisitions and other arrangements that could disrupt our business, cause dilution to our stockholders, reduce our financial resources
and harm our operating results.

 In the future, we may seek additional opportunities to grow our mining
operations through strategic acquisitions, including through purchases of miners, data centers and other facilities from other operating
companies, including companies in financial distress. Our ability to grow through future acquisitions will depend on the availability
of, and our ability to identify, suitable acquisition and investment opportunities at an acceptable cost, our ability to compete effectively
to attract those opportunities and the availability of financing to complete acquisitions. Future acquisitions may require us to issue
common stock that would dilute our current stockholders' percentage ownership, assume or otherwise be subject to liabilities of
an acquired company, record goodwill and non-amortizable intangible assets that will be subject to impairment testing on a regular basis
and potential periodic impairment charges, incur amortization expenses related to certain intangible assets, incur large acquisition and
integration costs, immediate write-offs, and restructuring and other related expenses and become subject to litigation.

 The benefits of an acquisition or our expansion into may also take
considerable time to develop, and we cannot be certain that any particular acquisition will produce the intended benefits in a timely
manner or to the extent anticipated or at all. We may experience difficulties integrating the operations, technologies and personnel of
an acquired company or be subjected to liability for the target's pre-acquisition activities or operations as a successor in interest.
Such integration may divert management's attention from normal daily operations of our business. Future acquisitions may also expose
us to potential risks, including risks associated with entering markets in which we have no or limited prior experience, especially when
competitors in such markets have stronger market positions, the possibility of insufficient revenues to offset the expenses we incur in
connection with an acquisition and the potential loss of, or harm to, our relationships with employees and suppliers as a result of integration
of new businesses.

 In addition to mining and holding bitcoin, we have explored, and we
may in the future explore, opportunities to become more involved in businesses that expand or supplement those directly related to the
self-mining of bitcoin as favorable market conditions and opportunities arise. We cannot be certain that such opportunities will produce
the intended benefits in a timely manner or to the extent anticipated or at all. These opportunities could also expose us to similar risks
associated with strategic acquisitions, as discussed above.

 Increased scrutiny and changing expectations from stockholders
with respect to our environmental, social and governance ("ESG") practices and the impacts of climate change may result in
additional costs or risks.

 Companies across many industries are facing increasing scrutiny related
to their ESG practices. Investor advocacy groups, certain institutional investors, investment funds and other influential investors are
also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their
investments. In May 2021, the SEC proposed rule changes that would require public companies to include certain climate-related disclosures
in their periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on their
business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited
financial statements noting that such rule changes were proposed in response to investor demands for consistent and comparable data on
climate change. Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, may
result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away
from our operations and towards responding to such scrutiny and reassuring our employees. The implementation of the SEC's proposed
rule changes was stayed in April 2024 in response to consolidated legal challenges. However, should the rule changes ultimately become
effective, in either their current or a revised form, we, as a public company, may also face increased oversight from the SEC with respect
to our climate-related disclosures.

 In addition, the physical risks of climate change may impact the availability
and cost of materials and natural resources, sources and supplies of energy, and demand for bitcoin and other cryptocurrencies, and could
increase our insurance and other operating costs, including, potentially, to repair damage incurred as a result of extreme weather events
or to renovate or retrofit facilities to better withstand extreme weather events. If environmental laws or regulations or industry standards
are either changed or adopted and impose significant operational restrictions and compliance requirements on our operations, or if our
operations are disrupted due to physical impacts of climate change, our business, capital expenditures, results of operations, financial
condition and competitive position could be negatively impacted.

 Delays in the construction of our hosting facilities or significant
cost overruns could present significant risks to our business and could have a material adverse effect on our business, financial condition
and results of operations.

 The servers used for digital asset transaction processing and colocation
hosting require the use of facilities ("hosting facilities") with a highly specialized infrastructure and considerable, reliable
power in order to compete effectively. Our growth strategy is to build mining capacity in locations that have reliable sources of low-cost
power, and to utilize that capacity to host third-party miners and to host our own proprietary mining equipment. We have completed our
initial hosting facility in Trinidad (which only commenced operations in October 2023 due to delays in the electrification of the facility).
We are also a partner in a joint venture that recently completed a facility in Pecos, Texas. We continue to search for new locations for
hosting facilities in the United States and Canada. We may face challenges in obtaining suitable land to build new hosting facilities,
as we need to work closely with the local power suppliers and local governments of the places where our proposed hosting facilitates are
located. Delays in actions that require the assistance of such third parties, in receiving required permits and approvals or in mediations
with local communities, if any, may negatively impact our construction timelines and budget or result in any new hosting facilities not
being completed at all.

 We have mitigated the risk of delays in completing our hosting facilities
by entering into agreements with third parties to host our miners, and we may continue to enter into additional such agreements when we
encounter delays at our facilities or we otherwise are able to negotiate favorable terms.

 We are subject to risks associated with our need for significant
electrical power.

 The operation of a bitcoin mining facility requires significant amounts
of electrical power. Any mining site we currently operate or establish in the future can only be successful if we can continue to obtain
sufficient electrical power for that site on a cost-effective basis. Our mining operations are conducted across a mix of leased properties
and hosting agreements with third parties, each of which have unique power agreements. Geopolitical events including the war in Ukraine
and inflationary impacts have caused power prices to increase worldwide; if power prices continue to increase while bitcoin prices decrease,
our ability to profitability mine bitcoin would be negatively impacted.

 We may curtail the energy used by our mining operations in times of
heightened energy prices or in the case of a grid-wide electricity shortage either voluntarily or by agreement with utility providers.
We may also encounter other situations where utilities or government entities restrict or prohibit the provision of electricity to mining
operations. In these cases, our ability to produce bitcoin may be negatively affected.

 Because we also expect to expand to additional sites, there may be
significant competition for suitable locations with access to affordable power.

 Additionally, our facilities could be adversely affected by a power
outage. Although there may be limited backup power at certain sites, it would not be feasible to run miners on back-up power generators
in the event of a government restriction on electricity or a power outage. To the extent we are unable to receive adequate power supply
and are forced to reduce or cease our operations due to the availability or cost of electrical power, our business would be adversely
affected.

 We may not be able to compete effectively against our current
and future competitors, which could have a material adverse effect on our business, financial condition and results of operations.

 The digital asset mining industry is highly innovative, rapidly evolving
and characterized by healthy competition, experimentation, frequent introductions of new products and services and uncertain and evolving
industry and regulatory requirements. We expect competition to further intensify in the future as existing and new competitors introduce
new products or enhance existing products. We compete against a number of companies operating both within the United States and abroad,
that have greater financial and other resources and that focus on digital asset mining, including businesses focused on developing substantial
bitcoin mining operations. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in
response to the actions of our competitors, our business, operating results and financial condition could be adversely affected.

 Risks Related to Governmental Regulation and Enforcement

 We are subject to an extensive, highly evolving and uncertain
regulatory and business landscape and any adverse changes to, or our failure to comply with, any laws and regulations, and adverse business
reactions from counterparties could adversely affect our brand, reputation, business, operating results, and financial condition.

 Our business is subject to:

 extensive laws;

 rules, regulations;

 policies;

 orders;

 determinations;

 directives;

 treaties;

 legal and regulatory interpretations and guidance; and

 counterparty risk in the markets in which we operate.

 Counterparty risk in the markets in which we operate includes:

 regulatory aspects from financial services;

 federal energy and other regulators;

 the SEC;

 the CFTC;

 credit, crypto asset custody;

 exchange, and transfer;

 cross-border and domestic money and crypto asset transmission;

 consumer and commercial lending;

 usury;

 foreign currency exchange;

 privacy;

 data governance;

 data protection;

 cybersecurity;

 fraud detection;

 antitrust and competition;

 bankruptcy;

 tax;

 anti-bribery;

 economic and trade sanctions;

 anti-money laundering, and counter-terrorist financing;

 the same regulatory risks applicable to counterparties which are most notably hosting businesses; and

 the recent economic issues and bankruptcies befalling some in this industry.

 Many of these legal and regulatory regimes were adopted prior to the
advent of the internet, mobile technologies, crypto assets, and related technologies. As a result, some applicable laws and regulations
do not contemplate or address unique issues associated with the crypto economy, are subject to significant uncertainty, and vary widely
across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes, including the laws, rules,
and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction
to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty
surrounding the regulation of the crypto economy requires us to exercise our judgment as to whether certain laws, rules, and regulations
apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied
with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products
and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business,
operating results, and financial condition.

 Additionally, various governmental and regulatory bodies, including
legislative and executive bodies, in the United States and in other countries may adopt new laws and regulations, the direction and timing
of which may be influenced by changes in the governing administrations and major events in the crypto economy. For example, following
the failure of several prominent crypto trading venues and lending platforms, such as FTX, Celsius Networks, Voyager and Three Arrows
Capital in 2022 (even though these do not directly affect our business), the U.S. Congress expressed the need for both greater federal
oversight of the crypto economy and comprehensive cryptocurrency legislation. In the near future, various governmental and regulatory
bodies, including in the United States, may introduce new policies, laws, and regulations relating to crypto assets, the crypto economy,
and crypto asset platforms. The failures of risk management and other control functions at other companies that played a role in these
events could accelerate an existing regulatory trend toward stricter oversight of crypto asset platforms and the crypto economy.

 Due to our business activities, we may be subject to ongoing examinations,
oversight, and reviews and currently are, and expect to be, subject to investigations and inquiries, by U.S. federal and state regulators,
many of which have broad discretion to audit and examine our business. Moreover, new laws, regulations, or interpretations may result
in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying it from offering
certain products or services offered by our competitors or could impact how we offer such products and services. Adverse changes to, or
our failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation, brand, business,
operating results, and financial condition.

 Regulatory changes or actions may restrict the use of bitcoins
or the operation of the bitcoin network in a manner that adversely affects an investment in our securities.

 Until recently, little or no regulatory attention has been directed
toward bitcoin and the bitcoin network by U.S. federal and state governments, foreign governments and self-regulatory agencies. As bitcoin
has grown in popularity and in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the CFTC, the SEC,
FinCEN and the Federal Bureau of Investigation) have begun to examine the operations of the bitcoin network, bitcoin users and the bitcoin
exchange market.

 Digital assets currently face an uncertain regulatory landscape in
not only the United States but also in many foreign jurisdictions, such as the European Union, China, India and Russia. While certain
governments have issued guidance as to how to treat bitcoin, most regulatory bodies have not yet issued official statements regarding
intention to regulate or determinations on regulation of bitcoin, the bitcoin network and bitcoin users. The effect of any future regulatory
change on us, bitcoins, or other digital assets is impossible to predict, but such change could be substantial and adverse to us and could
adversely affect an investment in our securities.

 Furthermore, one or more countries, such as China, India and Russia,
may take regulatory actions in the future that severely restricts the right to acquire, own, hold, sell or use digital assets or to exchange
digital assets for fiat currency. Such an action may also result in the restriction of ownership, holding or trading in the Company's
securities.

 If regulatory changes or interpretations require the regulation
of bitcoins under the Securities Act and Investment Company Act by the SEC, we may be required to register and comply with such regulations.
To the extent that we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary,
non-recurring expenses to us. We may also decide to cease certain operations. Any disruption of our operations in response to the changed
regulatory circumstances may be at a time that is disadvantageous to investors. This would likely have a material adverse effect on us
and investors may lose their investment.

 Current and future legislation and the SEC rulemaking and other regulatory
developments, including interpretations released by a regulatory authority, may impact the manner in which bitcoins are treated for classification
and clearing purposes. The SEC's July 25, 2017 Report expressed its view that digital assets may be securities depending on the
facts and circumstances. As of the date of this Annual Report, the Company is not aware of any rules that have been proposed to regulate
bitcoins as securities. We cannot be certain as to how future regulatory developments will impact the treatment of bitcoins under the
law. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an
investment in our common stock. If we determine not to comply with such additional regulatory and registration requirements, we may seek
to cease certain of our operations. Any such action may adversely affect an investment in our securities.

 To the extent that digital assets including bitcoins and other digital
assets we own or may own are deemed by the SEC to fall within the definition of a security, we may be required to register and comply
with additional regulation under the Investment Act, including additional periodic reporting and disclosure standards and requirements
and our registration as an investment company.

 Additionally, although we are not engaged in the business of investing,
reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities, we could inadvertently be
deemed an investment company under the Investment Act. If we inadvertently are deemed an investment company and cannot rely on one of
the exclusions under the Investment Act, then we would be required to register with the SEC.

 Furthermore, one or more states may conclude bitcoins and other digital
assets we own or may own are a security under state securities laws which would require registration under state laws including merit
review laws which would adversely impact us since we would likely not comply. As stated earlier in this Annual Report, some states including
California define the term "investment contract" more strictly than the SEC.

 Such additional registrations, whether from regulatory developments
or an inadvertent classification as an investment company, may result in extraordinary, non-recurring expenses for us, thereby materially
and adversely impacting an investment in our securities. If we determine not to comply with such additional regulatory and registration
requirements, we may seek to cease all or certain parts of our operations. Any such action would likely adversely affect an investment
in our securities and investors may suffer a complete loss of their investment.

 If regulatory changes or interpretations of our activities require
our registration as an MSB under the regulations promulgated by FinCEN under the authority of the BSA, or otherwise under state laws,
we may incur significant compliance costs, which could be substantial or cost-prohibitive. If we become subject to these regulations,
our costs in complying with them may have a material adverse effect on our business and the results of our operations.

 To the extent our bitcoin mining activities cause us to be deemed a
money services business (an "MSB") under the regulations promulgated by the Financial Crimes Enforcement Network ("FinCEN")
under the authority of the U.S. Bank Secrecy Act (the "BSA"), we may be required to comply with FinCEN regulations, including
those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.

 To the extent that our cryptocurrency activities cause us to be deemed
a "money transmitter" (an "MT") or be given an equivalent designation under state law in any state in which we
operate, we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may
include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. Currently,
the New York State Department of Financial Services maintains a comprehensive "BitLicense" framework for businesses that
conduct "virtual currency business activity." Effective August 2020, Louisiana enacted the Virtual Currency Businesses Act.
The implementing regulations were formally adopted in late 2022. In October 2023, California enacted the Digital Financial Assets Law,
which requires registration for certain digital financial asset business activities. We will continue to monitor for developments in
state-level legislation, guidance or regulations applicable to us.

 Such additional federal or state regulatory obligations in the United
States or obligations that could arise under the regulatory frameworks of other countries may cause us to incur significant expenses,
possibly affecting our business and financial condition in a material and adverse manner. Furthermore, we and our service providers may
not be capable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs or similar obligations in
other countries. If we are deemed to be subject to such additional regulatory oversight and registration or licensing requirements, we
may be required to substantially alter our bitcoin mining activities and possibly cease engaging in such activities. Any such action may
adversely affect our business operations and financial condition and an investment in our company.

 Current regulation regarding the exchange of bitcoins under the
CEA by the CFTC is unclear; to the extent we become subject to regulation by the CFTC in connection with our exchange of bitcoin, we may
incur additional compliance costs, which may be significant.

 The Commodity Exchange Act, as amended (the "CEA"), does
not currently impose any direct obligations on us related to the mining or exchange of bitcoins. Generally, the CFTC, the federal agency
that administers the CEA, regards bitcoin and other cryptocurrencies as commodities. This position has been supported by decisions of
federal courts.

 However, the CEA imposes requirements relative to certain transactions
involving bitcoin and other digital assets that constitute a contract of sale of a commodity for future delivery (or an option on such
a contract), a swap or a transaction involving margin, financing or leverage that does not result in actual delivery of the commodity
within 28 days to persons not defined as "eligible contract participants" or "eligible commercial entities" under
the CEA (e.g., retail persons). Changes in the CEA or the regulations promulgated by the CFTC thereunder, as well as interpretations thereof
and official promulgations by the CFTC, may impact the classification of bitcoin and, therefore, may subject bitcoin to additional regulatory
oversight by the agency. Although to date the CFTC has not enacted regulations governing non-derivative or non-financed, margined or leveraged
transactions in bitcoin, it has authority to commence enforcement actions against persons who violate certain prohibitions under the CEA
related to transactions in any contract of sale of any commodity, including bitcoin, in interstate commerce (e.g., manipulation and engaging
in certain deceptive practices).

 We cannot be certain as to how future regulatory developments will
impact the treatment of bitcoin under the law. Any requirements imposed by the CFTC related to our mining activities or our transactions
in bitcoin could cause us to incur additional extraordinary, non-recurring expenses, thereby potentially materially and adversely impacting
an investment in the Company.

 Moreover, if our mining activities or transactions in bitcoin were
deemed by the CFTC to constitute a collective investment in derivatives for our stockholders, we may be required to register as a commodity
pool operator with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring
expenses, thereby potentially materially and adversely impacting an investment in the Company. If we determine not to comply with such
additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect
an investment in the Company.

 While no provision of the CEA or CFTC rules, orders or rulings (except
as noted herein) appear to be currently applicable to our business, this is subject to change.

 It may be illegal now, or in the future, to mine, acquire, own,
hold, sell or use bitcoin or other cryptocurrencies, participate in blockchains or utilize similar cryptocurrency assets in one or more
countries, the ruling of which could adversely affect us.

 Although currently cryptocurrencies generally are not regulated or
are lightly regulated in most countries, several countries, such as China, India and Russia, may continue taking regulatory actions in
the future that could severely restrict the right to mine, acquire, own, hold, sell or use cryptocurrency assets or to exchange any such
cryptocurrency assets for local currency. For example, in China and Russia (India is currently proposing new legislation), it is illegal
to accept payment in bitcoin and other cryptocurrencies for consumer transactions and banking institutions are barred from accepting deposits
of cryptocurrencies. In addition, in March 2021, the governmental authorities for the Chinese province of Inner Mongolia banned bitcoin
mining in the province due to the industry's intense electrical power demands and its negative environmental impacts. Later, China
extended the ban on bitcoin mining to all of China. If other countries, including the U.S., implement similar restrictions, such restrictions
may adversely affect us. For example, in New York State, a moratorium on certain bitcoin mining operations that run on carbon-based power
sources was signed into law on November 22, 2022. Such circumstances could have a material adverse effect on us, which could have a material
adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or
otherwise acquire or hold for our own account, and thus harm investors.

 Changing environmental regulation and public energy policy may
expose our business to new risks.

 Our bitcoin mining operations require a substantial amount of power
and can only be successful, and ultimately profitable, if the costs we incur, including for electricity, are lower than the revenue we
generate from our operations. As a result, any mine we establish can only be successful if we can obtain sufficient electrical power for
that mine on a cost-effective basis, and our establishment of new mines requires us to find locations where that is the case. For instance,
our plans and strategic initiatives for expansion are based, in part, on our understanding of current environmental and energy regulations,
policies and initiatives enacted by federal and state regulators. If new regulations are imposed, or if existing regulations are modified,
the assumptions we made underlying our plans and strategic initiatives may be inaccurate, and we may incur additional costs to adapt our
planned business, if we are able to adapt at all, to such regulations.

 In addition, there continues to be a lack of consistent climate legislation,
which creates economic and regulatory uncertainty for our business because the bitcoin mining industry, with its high energy demand, may
become a target for future environmental and energy regulation. New legislation and increased regulation regarding climate change could
impose significant costs on us and our suppliers, including costs related to increased renewable energy requirements, capital equipment,
environmental monitoring and reporting, and other costs to comply with such regulations. Further, any future climate change regulations
could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. For example, the
recently passed legislation in the state of New York imposing a moratorium on certain bitcoin mining operations that run carbon-based
power.

 Given the political significance and uncertainty around the impact
of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition
and results of operations. Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace
about potential impacts on climate change by us or other companies in our industry could harm our reputation. Any of the foregoing could
result in a material adverse effect on our business and financial condition.

 Future developments regarding the treatment of digital assets
for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business.

 Due to the new and evolving nature of digital assets and the absence
of comprehensive legal guidance with respect to digital assets and related transactions, many significant aspects of the U.S. federal
income and applicable state, local and non-U.S. tax treatment of transactions involving digital assets, such as the purchase and sale
of bitcoin and the receipt of staking rewards and other digital asset incentives and rewards products, are uncertain, and it is unclear
what guidance may be issued in the future with respect to the tax treatment of digital assets and related transactions.

 Current Internal Revenue Service ("IRS") guidance indicates
that for U.S. federal income tax purposes digital assets such as bitcoins should be treated and taxed as property, and that transactions
involving the payment of bitcoins for goods and services should be treated in effect as barter transactions. The IRS has also released
guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to taxable income
and guidance with respect to the determination of the tax basis of digital currency. However, current IRS guidance does not address other
significant aspects of the U.S. federal income tax treatment of digital assets and related transactions. Moreover, although current IRS
guidance addresses the treatment of certain forks, there continues to be uncertainty with respect to the timing and amount of income inclusions
for various digital asset transactions, including, but not limited to, staking rewards and other digital asset incentives and rewards
products. While current IRS guidance creates a potential tax reporting requirement for any circumstance where the ownership of a bitcoin
passes from one person to another, it preserves the right to apply capital gains treatment to those transactions, which is generally favorable
for investors in bitcoin.

 There can be no assurance that the IRS will not alter its existing
position with respect to digital assets in the future or that other state, local and non-U.S. taxing authorities or courts will follow
the approach of the IRS with respect to the treatment of digital assets such as bitcoin for income tax and sales tax purposes. Any such
alteration of existing guidance or issuance of new or different guidance may have negative consequences including the imposition of a
greater tax burden on investors in bitcoin or imposing a greater cost on the acquisition and disposition of bitcoin, generally, and potentially
have a negative effect on the trading price of bitcoin or otherwise negatively impact our business. In addition, future technological
and operational developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment
of digital currencies for U.S. federal income and applicable state, local and non-U.S. tax purposes.

 Our bitcoin holdings could subject us to regulatory scrutiny.

 As digital assets, including bitcoin, have grown in popularity and
market size, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities
or fund criminal or terrorist activities, or entities subject to sanctions regimes. While we continue to maintain policies and procedures
reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only
acquire our bitcoin through entities subject to anti-money laundering regulation and related compliance rules in the United States, if
we are found to have purchased any of our bitcoin from bad actors that have used bitcoin to launder money or persons subject to sanctions,
we may be subject to regulatory proceedings and further transactions or dealings in bitcoin may be restricted or prohibited.

 Due to the unregulated nature and lack of transparency surrounding
the operations of many bitcoin trading venues, they may experience fraud, security failures or operational problems, which may adversely
affect the value of our bitcoin.

 Bitcoin trading venues are relatively new and, in some cases, unregulated.
Furthermore, there are many bitcoin trading venues which do not provide the public with significant information regarding their ownership
structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in bitcoin
trading venues, including prominent exchanges that handle a significant volume of bitcoin trading.

 Negative perception, a lack of stability in the broader bitcoin markets
and the closure or temporary shutdown of bitcoin trading venues due to fraud, business failure, hackers or malware, or government-mandated
regulation may reduce confidence in bitcoin and result in greater volatility in the prices of bitcoin. To the extent investors view our
common stock as linked to the value of our bitcoin holdings, such a negative perception of bitcoin trading venues could have a material
adverse effect on the market value of our common stock.

 Our interactions with the bitcoin network may expose us to SDN
or blocked persons or cause us to violate provisions of law that did not contemplate distributed ledger technology.

 The Office of Financial Assets Control ("OFAC") of the
Treasury requires us to comply with its sanction program and not conduct business with persons named on its specially designated nationals
("SDN") list. However, because of the pseudonymous nature of blockchain transactions, we may inadvertently and without our
knowledge engage in transactions with persons named on OFAC's SDN list. We also may not be adequately capable of determining the
ultimate identity of the persons with whom we transact.

 We have operations in Trinidad and may commence operations in
other foreign countries. Foreign countries have differing degrees of political, legal and fiscal stability. This exposes us to a wide
range of political developments that could result in changes to contractual terms, laws and regulations. In addition, we, and our joint
arrangements and associates, face the risk of litigation and disputes worldwide.

 Developments in politics, laws and regulations of foreign countries
can and do affect our operations. Potential impacts include:

 forced divestment of assets;

 expropriation of property;

 cancellation or forced renegotiation of contract rights;

 additional taxes including windfall taxes;

 restrictions on deductions and retroactive tax claims;

 antitrust claims;

 changes to trade compliance regulations;

 price controls;

 local content requirements;

 foreign exchange controls;

 changes to environmental regulations;

 changes to regulatory interpretations and enforcement; and

 changes to disclosure requirements.

 Any of these, individually or in aggregate, could have a material adverse
effect on our earnings, cash flows and financial condition.

 From time to time, social and political factors play a role in unprecedented
and unanticipated judicial outcomes that could adversely affect our business. Non-compliance with policies and regulations could result
in regulatory investigations, litigation and, ultimately, sanctions. Certain governments and regulatory bodies have, in our opinion, exceeded
their constitutional authority by:

 attempting unilaterally to amend or cancel existing agreements or arrangements;

 failing to honor existing contractual commitments; and

 seeking to adjudicate disputes between private litigants.

 Additionally, certain governments have adopted laws and regulations
that could potentially force us to violate other countries' laws and regulations, therefore potentially subjecting us to both criminal
and civil sanctions. Such developments and outcomes could have a material adverse effect on our earnings, cash flows and financial condition.

 Risks Related to Ownership of Our Common Stock

 An active trading market for our common stock may never develop
or be sustained.

 Our common stock is quoted on the OTCQX
under the symbol "BMNR." However, despite being quoted, there is currently no established market for our common stock. We
cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that
any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our common stock will
develop or be maintained, your ability to sell your shares of our common stock when desired or the prices that you may obtain for your
shares.

 The trading price of our common stock may be volatile, and you
could lose all or part of your investment.

 The trading price of our common stock is likely
to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations
could cause you to lose all or part of your investment in our common stock as you might be unable to sell your shares at or above the
price you paid for those shares. Factors that could cause fluctuations in the trading price of our common stock include the following:

 price and volume fluctuations in the overall stock market from time to time;

 volatility in the trading prices and trading volumes of technology stocks;

 volatility in the price of bitcoin and other digital assets;

 changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

 sales of shares of our common stock by us or our stockholders;

 failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

 the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;

 announcements by us or our competitors of new products, features, or services;

 the public's reaction to our press releases, other public announcements and filings with the SEC;

 rumors and market speculation involving us or other companies in our industry;

 actual or anticipated changes in our results of operations or fluctuations in our results of operations;

 actual or anticipated developments in our business, our competitors' businesses or the competitive landscape generally;

 litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;

 developments or disputes concerning our intellectual property or other proprietary rights;

 announced or completed acquisitions of businesses, products, services or technologies by us or our competitors;

 new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

 changes in accounting standards, policies, guidelines, interpretations or principles;

 any significant change in our management; and

 general economic conditions and slow or negative growth of our markets.

 In addition, in the past, following periods of
volatility in the overall market and in the market price of a particular company's securities, securities class action litigation
has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a
diversion of our management's attention and resources.

 The concentration of our capital stock ownership with insiders
will likely limit your ability to influence corporate matters.

 As of December 5, 2024, our executive officers,
directors, significant shareholders and affiliated persons and entities collectively, beneficially owned approximately 51% of our outstanding
common stock and 100% of our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock, and as a result control 74%
of the votes on any matter submitted to a vote of shareholders. As a result, these persons and entities have the ability to exercise control
over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate
transactions. Corporate action might be taken even if other stockholders oppose them. This concentration of ownership might also have
the effect of delaying or preventing a change in control of our company that other stockholders may view as beneficial.

 We have the right to designate and issue additional shares of
preferred stock. If we were to designate and/or issue additional preferred stock, it is likely to have rights, preferences and privileges
that may adversely affect the common stock.

 We are authorized to issue 20,000,000 shares of
blank-check preferred stock, with such rights, preferences and privileges as may be determined from time to time by our Board of Directors.
Our Board of Directors is empowered, without stockholder approval, to issue preferred stock in one or more series, and to fix for any
series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights and other rights,
preferences and privileges for the preferred stock.

 Currently, our Board of Directors has designated
500,000 shares as Series A Convertible Preferred Stock, of which 453,966 shares are outstanding, and 3,000 shares as Series B Convertible
Preferred Stock, of which 2,500 shares are outstanding. The Series A Convertible Preferred Stock has a stated value of $10 per share and
the Series B Convertible Preferred Stock has a stated value of $1,000 per share. Each of the series of preferred stock has a liquidation
value senior to common stock an amount equal to their stated value, are convertible into common stock at a conversion price of $0.20 per
share, are entitled to dividends on an as-converted basis and to vote on an as-converted basis, grant the holders certain rights to compel
a mandatory redemption of the shares, to participate in future offerings as well as anti-dilution protection, among other provisions.

 The issuance of shares of preferred stock, depending
on the rights, preferences and privileges attributable to the preferred stock, could reduce the voting rights and powers of our common
stock and the portion of our assets allocated for distribution to common stockholders in a liquidation event, and could also result in
dilution in the book value per share of our common stock. The preferred stock could also be utilized, under certain circumstances, as
a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of
the investors in our common stock. We cannot assure that we will not, under certain circumstances, issue additional shares of our preferred
stock.

 We incur significant costs and demands upon management and accounting
and finance resources as a result of complying with the laws and regulations affecting public companies; any failure to establish and
maintain adequate internal controls and/or disclosure controls or to recruit, train and retain necessary accounting and finance personnel
could have an adverse effect on our ability to accurately and timely prepare our financial statements and otherwise make timely and accurate
public disclosure.

 As a public company quoted in the United States,
we will incur significant additional legal, accounting and other expenses. In addition, changing laws, regulations and standards relating
to corporate governance and public disclosure, including regulations implemented by the SEC and any exchange on which we list our shares,
may increase legal and financial compliance costs and make some activities more time consuming. These laws, regulations and standards
are subject to varying interpretations, and as a result, their application in practice may evolve over time as new guidance is provided
by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment
may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating
activities to compliance activities. If, notwithstanding our efforts, we fail to comply with new laws, regulations and standards, regulatory
authorities may initiate legal proceedings against us, and our business may be harmed.

 In particular, we have needed, and continue to
need, to enhance and supplement our internal accounting resources with additional accounting and finance personnel with the requisite
technical and public company experience and expertise to enable us to satisfy such reporting obligations. Failure to comply with these
rules might also make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance,
and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar
coverage. The impact of these events would also make it more difficult for us to attract and retain qualified persons to serve on our
board of directors, on committees of our board of directors or as members of senior management.

 Section 404 of the Sarbanes-Oxley Act of 2002 requires
that we evaluate and report on our system of internal controls and, if and when we are no longer a "smaller reporting company,"
will require that we have such a system of internal controls audited. If we fail to maintain the adequacy of our internal controls, we
could be subject to regulatory scrutiny, civil or criminal penalties and/or stockholder litigation. Any inability to provide reliable
financial reports could harm our business. Furthermore, any failure to implement required new or improved controls, or difficulties encountered
in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results
or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our
reported financial information, which could have a negative effect on the trading price of our securities.

 Future sales and issuances of our capital stock or rights to
purchase capital stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price
to decline.

 We expect to raise capital to fund our business
by issuing additional shares of common stock and/or securities convertible into common stock. Future sales and issuances of our capital
stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may sell common stock,
convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time
to time. If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent
transactions could gain rights, preferences and privileges senior to those of holders of our common stock.

 Because there has been limited precedent set for financial accounting
of bitcoin and other cryptocurrency assets, the determination that we have made for how to account for cryptocurrency assets transactions
may be subject to change.

 Because there has been limited precedent set for
the financial accounting of cryptocurrencies and related revenue recognition, it is unclear how companies may, in the future, be required
to account for cryptocurrency transactions and assets and related revenue recognition. A change in regulatory or financial accounting
standards could result in the necessity to change our accounting methods and restate our financial statements. Such a restatement could
adversely affect the accounting for our newly mined cryptocurrency rewards and more generally negatively impact our business, prospects,
financial condition and results of operations. Such circumstances would have a material adverse effect on our ability to continue as a
going concern or to pursue our new strategy at all, which would have a material adverse effect on our business, prospects or operations
as well as and potentially the value of any cryptocurrencies we hold or expect to acquire for our own account and harm our investors.

 Exercise or conversion of warrants and other convertible securities,
along with new issuances of our common stock, will dilute our stockholder's percentage of ownership.

 We have issued convertible securities, options
and warrants to purchase shares of our common stock to our officers and certain investors. In the future, we may grant additional options,
warrants and convertible securities. In particular, we have issued to our chief executive officer or Innovative Digital Investors Emerging
Technology, LP, which he controls, 453,996 shares of Series A Convertible Preferred Stock, which are convertible into approximately 22.7
million shares of common stock, and 2,500 shares of Series B Convertible Preferred Stock, which are convertible into 12.5 million shares
of common stock, for a total of approximately 35.2 million shares of common stock. The exercise, conversion or exchange of outstanding
options, warrants or convertible securities, including for other securities, will substantially dilute the percentage ownership of our
common stockholders. The dilutive effect of the exercise or conversion of these securities may adversely affect our ability to obtain
additional capital. The holders of these securities may be expected to exercise or convert such options, warrants and convertible securities
at a time when it would be able to obtain additional equity capital on terms more favorable than such securities or when our common stock
is trading at a price higher than the exercise or conversion price of the securities. The exercise or conversion of outstanding warrants,
options and convertible securities will have a dilutive effect on the securities held by our stockholders. We have in the past, and may
in the future, exchange outstanding securities for other securities on terms that are dilutive to the securities held by other stockholders
not participating in such exchange.

 A significant portion of our assets are pledged to an entity
controlled by our chairman and failure to repay obligations to such entity when due will have a material adverse effect on our business
and could result in foreclosure on our assets.

 As of December 5, 2024, we owed $1,875,000 in principal,
plus interest, to an investment fund controlled by our chairman under a line of credit that permits draws by the company of up to $2,300,000.
At maturity on December 1, 2024, the amount due under the line of credit along with accrued interest will be payable in full. However,
the Company has the right to extend the maturity for six monthly periods in consideration for $25,000 for each extension, which will be
added to the loan balance. Amounts due under the line of credit are secured by our assets.

 It is necessary for us to grow our business in
order to generate free cash flow necessary to repay the principal and interest on our indebtedness. If we were to default on the amounts
owed or other terms and conditions of the convertible notes, the lender would have the right to exercise rights and remedies to collect,
which would include obtaining judgement lien on our assets and selling them to pay the judgment. A default would have a material adverse
effect on our business and our stockholders could lose their entire investment in us. We may need to raise capital in order to repay our
amounts due under the line of credit at maturity. There is no assurance that we will be able to raise such capital on terms that will
be favorable to common stockholders.

 We depend on key personnel and could be harmed by the loss of
their services because of the limited number of qualified people in our industry.

 Because of our small size, we require the
continued service and performance of our management team, all of whom we consider to be key employees. Competition for highly qualified
employees in the data storage industry is intense. Our success will depend to a significant degree upon our ability to attract, train,
and retain highly skilled directors, officers, management, business, financial, legal, marketing, sales, and technical personnel and upon
the continued contributions of such people. In addition, we may not be able to retain our current key employees. The loss of the services
of one or more of our key personnel and our failure to attract additional highly qualified personnel could impair our ability to expand
our operations and provide service to our customers.

 We currently do not have employment agreements
with most of our management and are not currently paying them any compensation. As a result, management's only incentive for continuing
to work for us is due to their stock ownership in us. Our management will not be able to work for us indefinitely without being paid.
We plan to enter into employment contracts with management, and begin paying them compensation, once we are able to raise capital to fund
our business.

 Competition for employees is intense, and we may not be able
to attract and retain the qualified and skilled employees needed to support our business, which in turn could have a material adverse
effect on our business, financial condition and results of operation.

 We believe our success depends on the efforts and
talent of our employees, including hosting facility design, construction management, operations, data processing, engineering, IT, risk
management and sales and marketing personnel. Our future success depends on our continued ability to attract, develop, motivate and retain
qualified and skilled employees. Competition for highly skilled personnel is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which
we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.

 In addition, if we fail to retain our employees,
we could incur significant expenses in hiring and training their replacements, and the quality of our services and our ability to serve
our customers could diminish, resulting in a material adverse effect on our business, financial condition and results of operations. At
this time, we lack the resources to hire all of the skilled employees that we need to properly operate our business.

 Substantial future sales of shares of our common stock could
cause the market price of our common stock to decline.

 Sales of a substantial number of shares of our
common stock in the public market following the completion of the merger, or the perception that these sales might occur, could depress
the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Many
of our existing equity holders have substantial unrecognized gains on the value of the equity they hold, and therefore they may take steps
to sell their shares or otherwise secure the unrecognized gains on those shares.

 Our common stock market price and trading volume could decline
if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business.

 The trading market for our common stock may depend
in part on the research and reports that securities or industry analysts publish about us or our business. Currently, no analysts cover
our common stock. A failure to obtain analyst coverage of our common stock may mean that our price may never achieve levels that we think
are fair and that our trading volume never achieves levels that are sufficient to attract additional investor interest.

 Even if one or more analysts begin to cover our
common stock, analysts' estimates are based upon their own opinions and are often different from the estimates or expectations of
management. Analysts could downgrade our common stock or publish inaccurate or unfavorable research about our business, which would likely
cause the price of our securities to decline. If few securities analysts commence coverage of us, or if one or more of these analysts
cease coverage of us or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the price
and trading volume of our common stock to decline.

 An inability to obtain analyst coverage for our
common stock, and expected gains in our stock price and trading volume, will impair our ability to raise capital to finance the growth
of our business, which could have a material adverse effect on or business and stock price.

 We do not intend to pay dividends for the foreseeable future.

 We have never declared nor paid cash dividends
on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we
do not expect to declare or pay any dividends in the foreseeable future. As a result, stockholders must rely on sales of their common
stock after price appreciation as the only way to realize any future gains on their investment.

 Item 1B. Unresolved Staff Comments

 As a smaller reporting company, we are not required
to provide the information required by this Item.

 Item 1C.
Cybersecurity

 We continue to augment the capabilities
of our people, processes, and technologies in order to address our cybersecurity risks. Our cybersecurity risks, and the controls designed
to mitigate those risks, are integrated into our overall risk management governance and are reviewed yearly by our Board of Directors.

 Item 2. Properties

 We have entered into an agreement with Telecommunications
Services of Trinidad & Tobago Limited ("TSTT"), the largest and oldest telecom company in Trinidad, to co-locate
up to 125 800 kw containers for hosting digital asset miners. TSTT has up to 93 potential locations for co-location of our containers.
Under the agreement, we have the option, but not the obligation, to co-locate containers at our own pace. We pay a fixed amount per container,
plus the actual electricity costs incurred by our containers in the amount billed to TSTT by the local utility without any markup. The
agreement provides that our hosting containers will be billed for electricity usage at the local utility's standard rates, which
is the greater of 3.5 cents per kwh or 75% of the declared reserve capacity, which is equal to the customer's highest expected monthly
kilovolt-ampere demand at $7.40. The term of the agreement expires on October 14, 2031. However, we have the right to terminate our agreement
with TSTT at any time that the price for electricity consumption exceeds $0.05 per kwh. Also, both parties have the right to terminate
the agreement on one month notice to the other party in either the third or sixth year of the term.

 We have entered into an oral agreement with a third
party in Trinidad to host 60 miners at their location on an at will basis. We pay a flat rate of $0.06 per kwh for the electricity used
by our miners.

 We entered into a hosting agreement with ROC Digital
dated April 7, 2023, under which we have the right to locate a hosting container on ROC's property in Pecos, Texas. The initial
term of the agreement is from May 1, 2023 to April 30, 2024, and we have the option to extend the term of the agreement for two additional
one year terms after seeing the terms of the power agreement available to the property for the next year. We elected to extend the hosting
agreement for an additional year running from May 1, 2024 to April 30, 2024. Under the agreement, we pay ROC $500 per month, plus our
pro rata share of internet service to the property and insurance, plus the cost of any electricity used by our hosting container.

 We entered into a hosting agreement with DVSL ComputeCo,
LLC ("DVSL") to host 2,880 miners at its hosting facility in Texas. Under the agreement, we are obligated to reimburse DVSL
for the actual cost of the electricity used by the Company's machines, plus 1.6 cents per kwh, and pay a hosting fee equal to 50%
of the net profit generated by the machines each month. The hosting facility has an electricity cost of $0.025 per kwh and guarantees
uptime of 95% per week. The agreement has a term of 12 months.

 We entered into a hosting agreement with DVSL ComputeCo,
LLC ("DVSL") to host 2,880 miners at its hosting facility in Texas. Under the agreement, we are obligated to reimburse
DVSL for the actual cost of the electricity used by the Company's machines, plus 1.6 cents per kwh, and pay a hosting fee equal
to 50% of the net profit generated by the machines each month. The hosting facility has an electricity cost of $0.025 per kwh and guarantees
uptime of 95% per week. The agreement has a term of 12 months.

 The Company's president allows the Company
to utilize the office space of an affiliated company for its executive offices without charge to the Company.

 Item 3. Legal Proceedings

 The Company is subject to litigation claims arising
in the ordinary course of business. The Company believes that it has adequately accrued for legal matters in accordance with the requirements
of GAAP. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as
incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.

 The Company is not a party to any legal proceedings
at this time.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common Equity, Related
Stockholder Matters, and Issuer Purchases of Equity Securities

 Market Price for Equity Securities

 Our common stock is quoted on the OTCQX under the
symbol "BMNR" The following table sets forth the quarterly high and low daily close for our common stock for the two years
ended August 31, 2024. The bids reflect inter-dealer prices without adjustments for retail mark-ups, mark-downs or commissions and may
not represent actual transactions. There is a very limited market for the Company's common stock.

 Price Range

 High

 Low

 Year ended August 31, 2024

 First Quarter

 $
 0.86

 $
 0.40

 Second Quarter

 $
 0.90

 $
 0.49

 Third Quarter

 $
 0.88

 $
 0.51

 Fourth Quarter

 $
 0.60

 $
 0.44

 Year ended August 31, 2023

 First Quarter

 $
 1.30

 $
 0.70

 Second Quarter

 $
 1.20

 $
 0.00

 Third Quarter

 $
 1.15

 $
 0.45

 Fourth Quarter

 $
 3.19

 $
 0.22

 The over the counter market does not impose listing
standards or requirements, does not provide automatic trade executions and does not maintain relationships with quoted issuers. A company
traded on the over the counter market may face loss of market makers and lack of readily available bid and ask prices for its stock and
may experience a greater spread between the bid and ask price of its stock and a general loss of liquidity with its stock. In addition,
certain investors have policies against purchasing or holding over the counter market. Both trading volume and the market value of our
securities have been, and will continue to be, materially affected by the trading on the over the counter market.

 Holders

 At December 5, 2024, the Company had 39,667,607
outstanding shares of common stock and 160 shareholders of record.

 Dividends

 Holders of common stock are entitled to receive
dividends as may be declared by the Company's Board. The Company's Board is not restricted from paying any dividends but is
not obligated to declare a dividend. No dividends have ever been declared, and it is not anticipated that dividends will be paid in the
foreseeable future. Any indebtedness the Company incurs in the future may also limit its ability to pay dividends. Investors should not
purchase the Company's common stock with the expectation of receiving cash dividends.

 Recent Sales of Unregistered Securities

 During the fourth quarter of the fiscal year covered
by this report we did not issue any shares of common stock in unregistered transactions.

 Purchase of Equity Securities by the Issuer
and Affiliated Purchasers

 We did not repurchase any securities in the fourth
quarter of the fiscal year covered by this report.

 Item 6. Selected Financial Data

 As a smaller reporting company, we are not required
to provide the information required by this Item.

 Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

 The following discussion and analysis should
be read in conjunction with the financial statements and notes thereto included elsewhere in this Form 10-K. All information
presented herein is based on the Company's fiscal year, which ends August 31. Unless otherwise stated, references to particular
years, quarters, months or periods refer to the Company's fiscal years ended in September and the associated quarters, months and
periods of those fiscal years.

 Overview

 Since July 2021, our business has been as a blockchain
technology company that is building out industrial scale digital asset mining, equipment sales and hosting operations. The Company's
primary business is hosting third-party equipment used in mining of digital asset coins and tokens, specifically bitcoin, as well as self-mining
for its own account. Our state-of-the-art facilities will be specifically designed and constructed for housing advanced mining equipment.
Our data centers will provide power, racks, proprietary thermodynamic management (heat dissipation and airflow management), redundant
connectivity, 24/7 security, as well as software which provide infrastructure management and custom firmware that boost performance and
energy efficiency.

 We plan to operate our data centers using immersion
cooling technology. Immersion cooling is the process of submerging computer components (or full servers) in a thermally, but not electrically,
conductive liquid (dielectric coolant) allowing higher heat transfer performance than air and many other benefits. Immersion cooling can
be up to 95% more efficient than standard air cooling, producing an estimated PUE (power usage effectiveness) of 1.05. This cooler environment
has been shown to extend machine lives by 30% or longer.

 Our digital asset mining operation is focused on
the generation of digital assets by solving complex cryptographic algorithms to validate transactions on specific digital asset network
blockchains, which is commonly referred to as "mining." Mining requires the use of specialized computers equipped with application-specific
integrated circuit (ASIC) chips (known as "miners") to solve complex cryptographic algorithms in support of the bitcoin blockchain
(in a process known as "solving a block") in exchange for digital asset rewards (to date, only bitcoin). Whether we are hosting
our client's computers or mining for our own account with our own computers, the miners participate in "mining pools"
organized by "mining pool operators" in which we or our clients share mining power (known as "hash rate") with
the hash rate generated by other miners participating in the pool to earn digital asset rewards. The mining pool operator provides a service
that coordinates the computing power of the independent mining enterprises participating in the mining pool. Fees are paid to the mining
pool operator to cover the costs of maintaining the pool. The pool uses software that coordinates the pool members' mining power,
identifies new block rewards, and records how much hash rate each participant contributes to the pool. Pools typically pay rewards in
two different ways: as a percentage of the total reward received by the mining pool each day based on each pool participant's proportionate
share of hashing power provided that day (the "Pay-Per-Share Method"); or based on the theoretical reward the pool participant
should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the "Full-Pay-Per-Share
Method"). We only use mining pools that pay rewards under the Full-Pay-Per-Share Method. Even though we plan to effect our self-mining
operations in data centers that we own, we reserve the right to operate miners in third-party data centers when we receive advantageous
terms and/or do not have sufficient capacity in our own data centers.

 Our digital asset self-mining activity competes
with a myriad of mining operations throughout the world to complete new blocks in the blockchain and earn the reward in the form of an
established unit of a digital asset. Revenue from digital asset mining and hosting third party digital asset miners are impacted by volatility
in bitcoin prices, as well as increases in the bitcoin blockchain's network hash rate resulting from the growth in the overall quantity
and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm
employed in solving the blocks. Gross profits from digital asset mining are primarily impacted by the cost of electricity to operate
the miners and to a lesser extent by other operating costs. While we expect to sell or exchange a portion of the digital assets we mine
to fund our growth strategies or for general corporate purposes, we reserve the right to hold our digital assets as a long-term investment.

 As the demand for digital assets increases and
digital assets become more widely accepted, there is an increasing demand for professional-grade, scalable infrastructure to support growth
of the blockchain ecosystem. We expect to continually evaluate the performance of our data centers, including our ability to access additional
megawatts of electric power and to expand our total self-mining and customer and related party hosting hash rates.

 We also generate revenues from the advantageous
purchase and sale of equipment used for digital asset mining and hosting. We have relationships with some suppliers that enable us to
acquire highly desired equipment at attractive prices, which we plan to resell to third parties. In most cases, resales of digital asset
mining equipment would be to our hosting customers, which have the dual benefit of generating short-term gross profits from the equipment
sale as well as growing the customer base of our hosting business.

 The primary factors that will impact future hosting
revenues include: (i) the price of bitcoin, since hosting revenues are primarily a percentage of bitcoin mined by clients; (ii) the completion
of operational hosting facilities, as potential hosting clients have been reluctant to sign contracts prior to the date the Company has
a fully operational hosting facility; and (iii) the availability of attractive electricity prices, since power usage is the primary marginal
cost for any mining operation.

 The primary factors that will impact proprietary
mining revenues include: (i) the price of bitcoin; (ii) the completion of operational facilities to provide us with a cost-effective facility
to operate in; (iii) the availability of attractive electricity prices, since power usage is the primary marginal cost for any mining
operation; and (iv) the availability of mining equipment suitable for the Company's immersion hosting environment at attractive
prices and available capacity in the Company's hosting facilities.

 Revenues from cryptocurrency mining, whether derived
from hosting clients or from proprietary mining, are impacted significantly by volatility in bitcoin prices, as well as increases in the
bitcoin blockchain's network hash rate resulting from the growth in the overall quantity and quality of miners working to solve
blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.
Below are changes in key metrics effecting the profitability of mining bitcoin during the year ended August 31, 2024:

 As of August 31, 2024

 As of August 31, 2023

 Percent Change

 Network hash rate

 620.355 EH/s

 368.924 EH/s

 68.15 %

 Difficulty index

 89.47 trillion

 55.61 trillion

 60.89 %

 Bitcoin market price

 $58,969.90

 $25,931.47

 127.41 %

 The primary factors that will impact resales of
mining equipment include the availability of equipment at attractive prices and the number of participants willing to enter the mining
business or expand their existing operations, which is highly correlated to the margin from mining, as determined by the market price
of bitcoin and prevailing energy costs. Also, our resales of mining equipment will be impacted by the existence of hosting capacity with
attractive electricity rates in our hosting operations.

 Trinidad Operations

 We initially decided to locate our initial facilities
in Trinidad, because it has some of the cheapest electricity in the world due to its abundant supplies of oil and gas and because some
of our technical staff is located there. We have entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited
("TSTT"), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers for hosting digital
asset miners. TSTT has up to 93 potential locations for co-location of our containers. Under the agreement, we have the option, but not
the obligation, to co-locate containers at our own pace. We pay a fixed amount per container, plus the actual electricity costs incurred
by our containers in the amount billed to TSTT by the local utility without any markup. The term of the agreement expires on October 14,
2031. We have the right to terminate our agreement with TSTT at any time that the price for electricity consumption exceeds $0.05 per
kwh.

 In October 2022, we completed the installation
of initial hosting containers under our agreement with TSTT. Our rate for electricity is TSTT's existing rate of 3.5 cents per kwh
or 75% of the declared reserve capacity, which is equal to the customer's highest expected monthly kilovolt-ampere demand at $7.40.
See " Item 1. Business – Company Overview – Trinidad Operations " for a more complete description of our
relationship with TSTT.

 While our TSTT site was delayed pending electrification,
we entered into a hosting agreement with a third party in Trinidad to host up to 192 miners in one immersion container until December
31, 2024. We had previously sold two containers to the third party under a long-term note secured by the containers. In July 2024, we
foreclosed on the containers as a result of a default by the third party on the note. We moved our miners to our existing TSTT site, where
we now have 440 operational miners as of December 5, 2024. We are currently evaluating other TSTT sites as a location for the two repossessed
immersion containers, and expect to install them in the first calendar quarter of 2025.

 We are also leasing space from a third party on
an at will basis to co-host 60 miners, for which we pay a flat rate of $0.06 per kwh for the electricity used by our miners. We ultimately
intend to move all of our Trinidad miners to our TSTT hosting facilities.

 Despite the expective favorable resolution of our
dispute in Trinidad, we are currently focusing our efforts on the development of hosting centers in the United States and Canada, both
directly and in joint ventures with third parties. We are exploring situations where medium to long-term power agreements may be available
at affordable prices, whether using traditional power sources such as coal or natural gas, as well as environmentally friendly sources
such as hydroelectric, wind and solar-backed projects, which might allow us to generate collateral revenue from the sale of excess power
to the local utility grid and from the generation of saleable carbon credits.

 Pecos, Texas Operations

arrangement with ROC Manager to jointly develop and operate a bitcoin mining operation in Pecos, Texas. Under the joint venture, we contributed
one immersion container, six transformers and cash with a value of $987,429 as a capital contribution to ROC Digital Mining I, LLC (the
"ROC Digital"). In return, we received 240 Class B Units of ROC Digital pursuant to an ongoing offering of a total of 1,000
Class B Units at $4,400 per unit. An affiliate of ROC Manager also contributed an immersion container. We simultaneously sold ROC Digital
four immersion containers for $1,200,000, which is payable pursuant to a promissory note that bears interest at 5% per annum, and is payable
pursuant to monthly payments of $31,203.64 per month commencing on December 30, 2022, with any remaining principal and interest payable
in full on May 31, 2026. The note is secured by the equipment that was sold. We also obtained the right to locate one container at the
location that we would be able to use for self-mining. As of August 31, 2023 and August 31, 2024, the note receivable from ROC Digital
amounted to $1,029,721 and $655,277, respectively. See " Item 1. Business – Company Overview – Pecos, Texas Operations "
for a more complete description of the terms of the joint venture.

 Our joint venture partner initially expected the
site would be operational by December 31, 2022. After the site work was substantially completed, the commencement of operations was delayed
as a result of a request by the electricity provider for an additional deposit as a result of recent bankruptcies in the mining and hosting
industry. In addition, a dispute with the joint venture's vendor for ASIC miners delayed the delivery of miners for the facility.

 In April 2023, the joint venture entered into a
new one year agreement with the electricity provider, under which the site received electricity at $0.03991 per kwh for at least 95% of
the annualized hourly intervals during the period, which provided the joint venture with more predictable pricing than the initial agreement.
At the same time, we finalized a hosting agreement with the joint venture, under which we located one immersion container at the site
for $500 per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting agreement,
we also agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier of the date
the electricity provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The hosting agreement
has a term of one year, subject to our right to renew the agreement for two one year terms after receipt of notice of the renewal terms
of the joint venture's electricity supply agreement for the upcoming year. The site became fully electrified in June 2023. As of
December 5, 2024, we had deployed 145 Antminer S-19 pro miners to our hosting container at the site. The joint venture initially filled
its six immersion containers with ASIC miners provided by hosting clients, although most of the hosting clients agreements terminated
in April 2024. Currently, five of the operational hosting containers owned by the joint venture are fully or partially occupied by
clients, although the joint venture is aggressively trying to fill the remaining capacity with hosting clients. The joint venture also
owns two immersion containers which are not installed, but will be if hosting demand warrants.

 On April 29, 2024, the joint venture executed an
energy services agreement for the site that runs from May 1, 2024 to April 30, 2025. Under the current agreement, the site will receive
electricity at the prevailing rate plus $0.0055 per kwh. The joint venture is not obligated to purchase any specific quantity of electricity,
and employs software which automatically discontinues mining operations when the prevailing rate exceeds certain levels. In April 2024,
we renewed our hosting contract with the joint venture for an additional year.

 Murray, Kentucky Operations

 On October 4, 2023, the Company purchased 1,050
used ASIC miners from Luxor Technology Corporation ("Luxor") for $488,775, and simultaneously entered into a Co-Location Services
Agreement to host the miners at a hosting facility owned by Soluna SW, LLC ("Soluna") in Murray, Kentucky. We subsequently
added 45 ASIC miners in May 2024 that we purchased from Soluna. The hosting agreement with Soluna has a term of 18 months, and provides
that the Company is obligated to reimburse Soluna for the actual cost of the electricity used by the Company's machines and pay
a hosting fee equal to 50% of the net profit generated by the machines each month. The hosting fee is payable in bitcoin. The hosting
facility has an electricity cost of $0.025 per kwh and guarantees uptime of 83% per week.

 Miner Summary

 Set forth below is a summary of the Company's
ASIC miner inventory as of August 31, 2024:

 Site

 Present

 Installed

 In Transit

 Needing Repair

 Immersion/Air-cooled

 Trinidad

 –

 –

 Immersion

 Pecos, Texas

 –

 –

 Immersion

 Murray, Kentucky

 1,095

 1,095

 –

 –

 Air Cooled

 Other

 –

 –

 –

 n/a

 Total

 1,640

 1,607

 –

 Results of Operations

 Comparison of Results of Operations for Years Ended August 31, 2024
and 2023.

 Revenues

generated $3,310,348 in revenue, compared to $645,278 in revenue in the year ended August 31, 2023.

generated $3,030,910 in bitcoin revenue from self-mining digital assets, compared to $389,222 revenue in the year ended August 31, 2023.
Mining revenues were impacted somewhat by miners that were offline due to maintenance issues. Mining revenue should be higher in future
periods as we continue to add miners. We expected mining revenues to be lower in 2024 as a result of a halving that occurred in April
2024. However, the impact of the halving was offset by a rise in the price of bitcoin due to fewer miners online after the halving event,
as has historically occurred after a halving event, and by the positive impact of "ordinals," which are increased transaction
fees that occur as parties have discovered ways to imbed data regarding other assets, such as art, in the bitcoin blockchain. Mining revenues
in the year ended August 31, 2024 were also positively impacted by the resolution of operating issues at the Company's first hosting
facilities in Trinidad and Pecos, Texas, and the commencement of operations at a facility in Murray, Kentucky that is hosted by a third-party.

 Self-mining revenues were positively impacted by
4.70 bitcoin earned, with a value of $319,465, from operating 777 S-19 miners under a short-term lease from Luxor Technology Corporation
("LTC") that began on March 8, 2024 and expired when the halving occurred on April 19, 2024.

generated $231,133 in revenue from equipment sales, compared to $244,036 in revenue in the year ended August 31, 2023. The revenue from
equipment sales in the years ended August 31, 2024 and 2023 were primarily derived from the following transactions:

 In October 2022, the Company sold four hosting containers to ROC Digital, which was constructing a hosting facility in Texas, for $1,200,000. The purchase price is payable pursuant to a promissory note bearing interest at 5% per annum, and is paid by 41 equal monthly payments of $31,204 commencing December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026.

 In August 2022, the Company sold two hosting containers to a private party in Trinidad for $960,000. After a down payment of $50,000, the balance of the purchase price is payable pursuant to a promissory note bearing interest at 7.5% per annum, and is paid by 24 equal monthly payments of $40,949.62 commencing September 30, 2022. On February 1, 2023, the Company modified this agreement in conjunction with its entry into a new hosting agreement with the party, under which the Company agreed that the remaining principal balance of the note was $731,472, and that the note would be converted into an interest only note until August 31, 2024, at which time all principal and interest due is payable in full. In addition, the Company agreed to allow the note obligor to repay the note principal at a 10% discount. In March 2024, the note was further amended to extend the maturity date to December 31, 2024. Due to defaults by the borrower, the Company repossessed the collateral in July 2024.

 In June 2023, the Company sold a total of 34 Antminer S-19 miners in two transactions for gross proceeds of $70,000 cash or bitcoin.

 In October 2023, the Company sold 100 new ASIC miners to a third party for $149,250.

 Under the guidelines of ASC 606, the Company determined
that payments due to under notes receivable arrangements from certain customers was not "probable" due to the start-up nature
of the customer. As a result the Company reported revenue from equipment sales on October 2022 and August 2022, which were vendor financed
by the Company, under the installment sale method, under which the Company reports its gross profit on the sales only after payments are
received from the purchaser.

 As of February 1, 2023, the Company reached an
agreement with the obligor under the $910,000 note to convert the note into an interest only note commencing as of February 1, 2023, with
a balloon payment being due at maturity on August 31, 2024, and an agreement that the principal balance on the note was $731,472. The
maturity date was later extended to December 31, 2024. One effect of the agreement with the obligor is to materially reduce any deferred
revenue associated with the sale, as the note is scheduled to receive interest only payments until December 31, 2024. In July the Company
repossessed the collateral securing the August 2022 note as a result of a default by the obligor, and as a result the Company does not
expect to report any further revenues under this note.

 During the fiscal year ended August 31, 2024 the
Company recorded $6,824 in equipment sales on each of the twelve monthly payments of $31,204 received from ROC Digital, for a total of
$81,883 in equipment sales.

 See " Note 5. Investments and Notes Receivable "
in the accompanying financial statements for additional information about both notes.

 During the years ended August 31, 2024 and 2023,
the Company recorded $149,250 and $70,000, respectively, of revenue from isolated sales of equipment recorded under the "completed
sale" method.

 In future periods, the Company expects to generate
additional revenues from the resale of certain hosting equipment, primarily containers and transformers, and of miners in "buy/host"
transactions, in which the Company sells miners already installed in its hosting facilities to buyers that simultaneously execute a hosting
agreement for the purchased miners, and in some cases additional miners.

generated $48,305 in revenue from hosting, compared to $12,022 in revenue from hosting in the year ended August 31, 2023. In October 2022,
the Company reached an agreement to terminate its only hosting client at the time and repurchased the miners which it had previously sold
to the hosting client. In June 2023, the Company signed two new hosting clients. However, it elected not to renew both hosting contracts
in the Summer of 2024, and therefore as of August 31, 2024 it did not have any hosting clients. In the current market environment, the
Company believes that self-mining is more profitable than hosting third party miners, however we will pursue hosting opportunities on
a selective basis. While the Company still sees good opportunities to acquire mining equipment at attractive prices, the price of mining
equipment has recently increased with the recent increase in the price of bitcoin.

 The primary factors that will impact our revenues
in subsequent periods are described in the "—Overview " above.

 Cost of Sales

 Cost of sales related to bitcoin hosting and mining
revenue was $37,678 for hosting and $2,330,752 for mining, respectively in the year ended August 31, 2024, compared to $9,098 for hosting
and $326,630 for mining, respectively, in the year ended August 31, 2023. Cost of sales normally includes electricity, utilities, facilities
costs and supplies where we perform mining from our own facilities. Major components of cost of sales include rent to house mining and
hosting equipment, electricity, and supplies. Where our miners are hosted by third parties, major components of cost of sales include
hosting fees and/or electricity costs. Cost of sales for both owned and hosted facilities does not include depreciation, which is stated
separately. The Company believes that cost of sales as a percentage of revenues may be less in future periods as compared to prior periods
if the market price of bitcoin remains at its current level or increases.

 The table below describes the average cost of mining
each bitcoin for the years ended August 31, 2024 and 2023, and the total energy usage and cost per each kilowatt hour ("KWH")
utilized within both our facilities.

 For the Year Ended

 Cost of Revenues - Analysis of costs to mine one bitcoin (per bitcoin amounts are actual)

 2024

 2023

 Cost of Mining - owned facilities

 Cost of energy per bitcoin mined

 $
 23,417.85

 $
 47,157.74

 Other direct costs of mining per bitcoin mined (1)

 $
 17,057.26

 $
 8,175.10

 Depreciation expense per bitcoin mined (2)

 $
 34,083.94

 $
 30,158.13

 Financing expense per bitcoin mined (3)

 $
 - 0-

 $
 - 0-

 Cost to mine one bitcoin - owned

 $
 74,559.05

 $
 85,491.00

 Cost of Mining - hosted facilities

 Cost of energy per bitcoin mined

 $
 19,346.84

 $
 14,980.78

 Other direct costs of mining per bitcoin mined (1)

 $
 13,578.03

 $
 2,517.01

 Depreciation expense per bitcoin mined (2)

 $
 15,038.95

 $
 30,158.13

 Financing expense per bitcoin mined (3)

 $
 1,257.30

 $
 - 0-

 Cost to mine one bitcoin - hosted

 $
 49,221.12

 $
 47,655.92

 Average revenue of each bitcoin mined (4)

 $
 50,911.20

 $
 24,937.49

 Cost of mining one bitcoin as % of average bitcoin mining revenue (5)

 96.68%

 191.10%

 Statistics - owned facilities

 Total bitcoin mined

 9.398856297

 0.36491909

 Bitcoin mining revenue

 $
 482,936.12

 $
 10,109.56

 Total miners - as of the periods ended

 Total KWHs utilized

 5,287,881.49

 276915.49

 Total energy expense

 $
 220,101.04

 $
 17,208.76

 Cost per KWH

 $
 0.042

 $
 0.062

 Energy expense as % of bitcoin mining revenue, net

 45.58%

 170.22%

 Other direct costs of mining (1)

 $
 160,318.78

 $
 2,983.25

 Total depreciation expense (2)

 $
 320,348.11

 $
 11,004.75

 Total financing costs (3)

 $
 - 0-

 $
 - 0-

 Statistics - hosted facilities

 Total bitcoin mined

 40.10897465

 15.24350171

 Bitcoin mining revenue

 $
 2,037,564.911

 $
 379,112.41

 Total miners - as of the periods ended

 1,155

 Total KWHs utilized

 23,010,940.56

 4,307,982.87

 Total energy expense

 775,981.99

 228,359.54

 Cost per KWH

 $
 0.034

 $
 0.053

 Energy expense as % of bitcoin mining revenue, net

 38.08%

 60.24%

 Other direct costs of mining (1)

 $
 544,601.04

 $
 38,368.00

 Total depreciation expense (2)

 $
 603,196.89

 $
 459,700.30

 Total financing costs (3)

 $
 50,429

 $
 - 0-

 (1) Other direct costs of mining
for owned facilities consists mostly of rent for the facility, as well as minor costs such as supplies and internet. Other direct costs
of mining for hosted miners consist of hosting fees.

 (2) Depreciation expense includes depreciation of miners used in mining.
For owned facilities, it also includes depreciation of the hosting containers and corollary equipment such as transformers and switches.

 (3) Financing costs include the cost of purchase money financing for
miners, but do not include any financing costs for miners or hosting equipment acquired with general working capital, nor the cost of
hedging the price of bitcoin.

 (4) Average
revenue of each bitcoin mined is calculated by dividing the sum of bitcoin mining revenue for both owned and hosted facilities by the
total number of bitcoin mined during the respective periods. We have determined that Coinbase is the principal market for valuing bitcoin
transactions and uses the daily closing prices as the source of recording revenue.

 (5) Weighted
average cost of mining one bitcoin is calculated by dividing the sum of total energy expense, hosting expenses, other direct costs of
mining, depreciation and financing costs by the total bitcoin mined during the respective periods.

 Power prices are the most significant cost driver
for our locations, and energy costs represented 38.08% and 60.24% expressed as a percentage of bitcoin mining revenues during the years
ended August 31, 2024 and 2023, respectively.

 Energy prices can be highly volatile and global
events (including wars in Ukraine and the Middle East) may cause fuel prices, and to a lesser extent power prices, to fluctuate widely.
All of our sites are currently subject to variable prices and market rate fluctuations with respect to wholesale power costs over the
long-term, but not over the short-term where there is a fixed price power purchase agreement in place. While this renders energy prices
less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with an eye towards increasing
profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices,
which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased
rates. The average power prices we paid in our facilities for the years ended August 31, 2024 and 2023 was $0.0340 and $0.0530 per kilowatt
hour, respectively.

 Cost of sales related to sales of mining equipment
was $180,891 for the year ended August 31, 2024, compared to $87,080 for the year ended August 31, 2023. Cost of sales consisted of the
purchase price of equipment sold, plus shipping and value added tax on the equipment for equipment sales reported under the "completed
sale" method.

 Since we are in the early stages of setting up
our infrastructure to generate higher levels of revenues, we expect that our cost of sales as a percentage of revenue from hosting or
mining for our own account will be higher than we expect to incur when we achieve sufficient economies of scale by deploying more miners.
In future periods, the largest component of our cost of sales will consist of electricity costs.

 Operating Expenses

incurred $3,208,513 in operating expenses, compared to $2,635,553 in operating expenses during the year ended August 31, 2023. Major components
of operating expenses for the 2024 period as compared to the 2023 period were:

 Year ended

 Year ended

 Percentage

 August 31, 2024

 August 31, 2023

 Change %

 General and administrative expenses

 $
 164,228

 $
 45,008

 264.9%

 Marketing fees

 –

 214,550

 N/A

 Investor relations

 178,190

 –

 N/A

 Travel expenses

 27,746

 34,431

 (19.4%
)

 96.2%

 Professional fees

 615,256

 456,322

 34.8%

 Officer's compensation

 951,106

 (11.6%
)

 Director's compensation

 13,200

 300.0%

 Employee shareholder's compensation

 399,447

 345,440

 15.6%

 Impairment of fixed assets

 (2.4%
)

 Gain from sale of digital currencies

 (113,803
)

 (21,682
)

 424.9%

 Impairment of cryptocurrency

 –

 3,523

 N/A

 Total operating expenses

 $
 3,208,513

 $
 2,635,470

 21.7%

 The increase in operating expenses in the fiscal
year ended August 31, 2024 as compared to the fiscal year ended August 31, 2023 is primarily attributable to increased general and administrative
expenses, investor relations, depreciation, and professional fees in 2024 as compared to 2023, partially offset by a decrease in compensation
categories over the 2023 period. Included in operating expenses in the year ended August 31, 2024 was $1,123,138 in non-cash expenses
due to the issuance of common stock for professional services and to related parties as compensation, as compared to $1,318,044 in the
year ended August 31, 2023. The Company expects that operating expenses will trend materially higher in future periods as the Company
begins paying regular compensation to existing officers and directors, hires additional employees, and incurs other costs associated with
the expansion of its operations.

 Other Income (Expense)

incurred ($845,018) in other expenses, as compared to other expenses of ($51,801) in the year ended August 31, 2023. Other income (expense)
in the year ended August 31, 2024 was comprised of interest expense of ($268,578) and interest income of $54,617, as compared to ($97,460)
of interest expenses, $16,939 of other income and $28,720 of interest income during the year ended August 31, 2023. The increase in interest
expense and interest income in fiscal 2024 is due to an increase in the average amount borrowed by the Company under its line of credit
in fiscal 2024 compared to fiscal 2023, as well as increased interest collected on its notes receivable. Other income (expense) was materially
impacted in the fiscal year ending August 31, 2024 by a loss on extinguishment of debt of ($355,123) on a bitcoin debt arrangement with
Luxor in which the Company borrowed bitcoin and was required to repay the bitcoin debt only in bitcoin, during a period when bitcoin significantly
appreciated in value, as well as a loss on the ROC Digital joint venture investment of ($311,313), offset by gain on note settlement of
$35,379.

 Net Income (Loss)

 As a result of the foregoing, during the year ended
August 31, 2024, the Company incurred a net loss of ($3,292,503), or ($0.07) per share, as compared to a net loss of ($2,464,884) or ($0.05)
per share during the year ended August 31, 2023. The increase in the Company's net loss in the year ended August 31, 2024, compared
to the year ended August 31, 2023, is attributable to the factors discussed above.

 Liquidity and Capital Resources

 As of August 31, 2024, the Company had $499,270
in cash on hand. During the year ended August 31, 2024 the Company had a net loss of $3,292,503.

 Cash flows used in operating activities were $28,753
for the year ended August 31, 2024 compared to cash flows used in operating activities of $809,715 for the year ended August 31, 2023.
The decrease in cash used in operating activities for fiscal 2024 compared to fiscal 2023 is primarily attributable to a material decrease
in the operating loss in 2024 compared to 2023 after excluding non-cash items in both periods, which include depreciation, stock based
compensation and impairment of fixed assets and changes in balance sheet accounts, such as accounts payable, accrued expenses, accrued
interest and notes receivable.

 Cash flows used in investing activities were $67,525
for the year ended August 31, 2024 compared to cash flows used in investing activities of $612,288 for the year ended August 31, 2023.
The decrease in net cash used in investing activities during fiscal 2024 period compared to the same period in 2023 is solely due to a
decrease in cash used to purchase equipment.

 Cash flows provided by financing activities were
$325,000 for the year ended August 31, 2024 compared to cash flows provided by financing activities of $1,300,000 for the year ended August
31, 2023. All of the financing cash flows in both 2023 and 2024 were provided by related party loans.

 During the years ended August 31, 2023 and 2024,
a significant component of the Company's current liquidity was derived from the LOC Agreement with IDI. As amended, the LOC Agreement
allows the Company to borrow up to $2,300,000 thereunder until December 1, 2024. Each draw request is subject to the approval of IDI in
its sole discretion. As amended, all principal and interest due under the LOC Agreement are due and payable on December 1, 2024, provided
that the Company has the right to extend the maturity date for 6 monthly periods in consideration for an extension fee of $25,000 per
extension. As of December 5, 2024, the principal amount borrowed under the LOC Agreement was $1,875,000, and the Company had exercised
its right to extend the maturity date of the loan.

 The Company believes that cash on hand, expected
receipts from the sale of equipment, and revenue from self-mining will provide it with sufficient liquidity to fund its operations for
the next 12 months. The Company expects to receive approximately $31,000 per month from the sale of four immersion containers to the ROC
Digital joint venture. As of December 5, 2024, the Company owned approximately 4,700 miners, which includes 3,000 miners acquired after
the end of the fiscal year and which should significantly boost revenues in fiscal 2025. Other sources of revenue that the Company may
receive include equity distributions from the ROC Digital joint venture. The Company does not budget to include any proceeds from the
exercise of its outstanding warrants because it is not able to predict when or if the market price of its common stock will exceed the
exercise price of its warrants.

 Nevertheless, while the Company does not believe
it needs additional capital to maintain operations, it will need additional capital to expand its digital asset hosting and mining business,
and take advantage of opportunities in the marketplace that currently exist due to the recent decline in digital asset prices. Therefore,
the Company has engaged an investment banker and is pursuing additional capital-raising alternatives, including the potential issuance
of common stock in a private placement, the issuance of convertible notes or preferred stock, and a firm commitment offering that will
enable the Company to list its common stock on a national securities exchange. There is no assurance that the Company will be able to
raise additional capital or that the terms of any capital raise are not dilutive to current shareholders or carry other terms that are
unfavorable to the Company and its shareholders.

 Bitcoin Holdings

 At August 31, 2024, we held approximately.25731
bitcoin with a fair market value of $14,966 on the balance sheet. All of the bitcoin were classified as "Cryptocurrencies"
on the balance sheet. The quoted market value of a single bitcoin as of August 31, 2024 was approximately $58,989. During the year ended
August 31, 2023 we incurred an impairment charge on cryptocurrency of $3,523 due to the decline in the market price of cryptocurrency.

 Off-Balance Sheet Arrangements

 The Company does not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future material effect on the Company's financial condition,
changes in financial condition, and results of operations, liquidity or capital resources.

 Related Party Transactions

 Line of Credit from IDI

 On October 19, 2022, the Company entered into a
Line of Credit Agreement (the "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 LOC Agreement provided for loans of up to $1,000,000 at the request of the Company to finance the purchase of equipment
necessary for the operation of the Company's business, and related working capital. Loans under the LOC Agreement accrue interest
at twelve percent (12%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The Company had the
right to submit draw requests under the LOC Agreement until April 15, 2023. Each draw request is subject to the approval of IDI in its
sole discretion. The amount drawn, plus all accrued interest therein, was originally repayable in full on December 1, 2023.

 Effective May 13, 2023, the Company and IDI amended
the 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. Effective November 4, 2024, the Company and
IDI amended the LOC Agreement to increase the amount that the Company may borrow thereunder to $2,300,000. In addition, the Company agreed
that IDI has the right to extend the maturity date for six monthly periods in consideration for an extension fee of $25,000 for each extension,
which will be added to the balance due thereunder. In addition, IDI was granted the right to convert 11,500,000 shares of common stock
it owns into 2,300 shares of Series B Convertible Preferred Stock. In consideration for the above the amendments, IDI agreed to approve
a new draw under the line of credit of $250,000 and to purchase an additional 200 shares of Series B Convertible Preferred Stock for $200,000,
for net new financing to the Company of $450,000.

 As of December 5, 2024, the principal amount due
IDI under the LOC Agreement was $1,875,000, and the Company had exercised its right to extend the maturity date of the loan.

 Transactions with ROC Digital Mining I, LLC

arrangement with ROC Digital Mining I, LLC ("ROC Digital") to jointly develop and operate a bitcoin mining operation in Pecos,
Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987,429 as a capital
contribution to ROC Digital Mining I, LLC (the "ROC Digital"). In return, we received 240 Class B Units of ROC Digital pursuant
to an ongoing offering of a total of 1,000 Class B Units at $4,400 per unit. We simultaneously sold ROC Digital four immersion containers
for $1,200,000, which is payable pursuant to a promissory note that bears interest at 5% per annum, and is payable pursuant to monthly
payments of $31,203.64 per month commencing on December 30, 2022, with any remaining principal and interest payable in full on May 31,
2026. The note is secured by the equipment that was sold. As of August 31, 2023 and August 31, 2024, the note receivable from ROC Digital
amounted to $1,029,721 and $655,277, respectively.

 We also obtained the right to locate one container
at the location that we would be able to use for self-mining. Under our hosting agreement with ROC Digital, we located one immersion container
at the site for $500 per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting
agreement, we also agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier
of the date the electricity provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The
hosting agreement has a term of one year, subject to our right to renew the agreement for two one year terms after receipt of notice of
the renewal terms of the joint venture's electricity supply agreement for the upcoming year. In April 2024, we exercised our right
to extend the hosting agreement for an additional year running from May 2024 to April 30, 2025.

 Transactions with Rykor Energy Solutions, LLC

 In May 2024, we brokered the sale of 20 transformers
to Rykor Energy Solutions, LLC ("Rykor"). The total sales price of the transformers is approximately $1,407,000 and our total
cost is expected to be $1,340,000. Rykor owns 2,672,000 shares of our common stock and warrants to purchase an additional 5,344,000 shares,
and as a result is the beneficial owner of approximately 17.8% of our common stock. John Kelly, a principal of Rykor (who is also a principal
of ROC Mining), also serves on our board of directors. Subsequent to August 31, 2024, by mutual agreement the order was reduced to 10
transformers instead of 20 transformers. These units were delivered and the Company recorded revenue of $703,500 with a cost of sales
of $670,000 resulting in a profit of $33,500.

 Critical Accounting Estimates

 General

 Management's Discussion and Analysis of Financial
Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with U.S.
generally accepted accounting principles. The preparation of our financial statements requires management to make estimates,
assumptions and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent
assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
or conditions.

 We describe in this section certain critical accounting
policies that require us to make significant estimates, assumptions and judgments. An accounting policy is deemed to be critical if it
requires an accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made and
if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur
periodically, could materially impact the financial statements. Management believes the following critical accounting policies reflect
its most significant estimates and assumptions used in the preparation of the financial statements. For further information on the critical
accounting policies, see Note 1 of the Financial Statements.

 Basis of Presentation

 The accompanying financial statements
have been prepared in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC"), which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with generally accepted accounting principles ("GAAP")
in the United States.

 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, collectability of notes receivable, useful lives and recoverability of long-lived assets, depreciation methods,
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, 2024.

 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 –
General

 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.

 Step 1: The Company enters into a contract
with a bitcoin mining pool operator (i.e., the customer) to provide hash calculation services to the mining pool. The Company only utilizes
pool operators that determine awards under the Full Pay-Per-Share method (the "FPPS method"). The contracts are terminable
at any time by either party without penalty and the Company's enforceable right to compensation only begins when the Company starts
providing hash calculation services to the mining pool operator (which occurs daily at midnight Universal Time Coordinated (UTC)). In
general, mining revenue for industry participants consists of two parts, (1) the block reward (current bitcoin block reward is 3.125 bitcoin)
paid by the network to the miner for successfully mining a block, and (2) the transaction fees paid by the users to the miner for successfully
mining a block. When a mining pool successfully finds a block, it is awarded all of the transaction fees in that block and the reward
from the network. Under the FPPS method utilized by the Company, the Company is entitled to an award of bitcoin equal to the expected
reward per block over the measurement period of midnight-to-midnight UTC time based on the hash calculation services provided to the pool
during the measurement period. The Company is also entitled to an aware of transaction fees per block based on the average of the transaction
fees over the latest 144 blocks, each of which is about 10 minutes, and the total of 144 blocks equals one day. At the end of each day
that runs from midnight-to-midnight UTC time, the pool operator calculates the pool participant's expected block reward and transaction
fees for the day based on the hash calculation services provided by the pool participant that day, less net digital asset fees due to
the mining pool operator over the measurement period. The actual reward to the Company each day is based on the number of blocks the Company
should have hypothetically mined during the measurement period based on the hash calculation services provided to the pool by the Company
during the measurement period and the prevailing difficulty index, and is not based on the actual rewards received by the pool during
the measurement period, which may be higher or lower than the expected rewards during such period. Applying the criteria per ASC 606-10-25-1,
the contract arises at the point that the Company provides hash calculation services to the mining pool operator, which is the beginning
of each contract day at midnight UTC (contract inception), because customer consumption is in tandem with daily delivery of the hash calculation
services. Providing hash calculation services to mining pools is an output of our ordinary activities, and an enforceable right to compensation
begins when, and continues as long as, such services are provided.

 Step 2: 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).

 Based on these criteria, the Company has a single
performance obligation in providing hash calculation services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance
obligation of hash calculation services is fulfilled daily over-time, as opposed to a point in time, because the Company provides the
hashrate throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin. The Company has
full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing
power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the hash calculation services provided to the
customer will be reduced.

 Step 3: The transaction consideration the
Company earns is non-cash digital consideration in the form of bitcoin, which is based on the Full-Pay-Per-Share ("FPPS")
payout method under the contract with the pool operator. According to the customer contract, daily settlements are calculated from midnight-to-midnight
UTC time, and the amount due in bitcoin is credited to the Company's account shortly thereafter on the following day. The amount
of bitcoin the Company is entitled to for providing hash calculations to the Customer's mining pool under the FPPS payout method is made
up of block rewards and transaction fees less mining pool fees determined as follows:

 The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the hash calculations that the Company provides to the Customer as a percent of the Bitcoin Network's implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period.

 The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards we earned for the same period noted above.

 The sum of the block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the Customer for operating the mining pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the Customer's payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC daily. During the year ending August 31, 2024, the Company utilized one mining pool for its self-mining operations, which charges 0.3% of the bitcoin payable to the Company as a pool management fee. This amount represents consideration paid to the Customer and is thus reported as a reduction in revenue as the Company does not receive a distinct good or service from the mining pool operator in exchange.

 There are no other forms of variable considerations, such as discounts,
rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

 The above non-cash consideration is variable in
accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, since the amount of block reward earned depends on the amount of hash calculations
we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour
period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction
fees in accordance with the pool operator's agreement. While the non-cash consideration is variable, the Company has the ability
to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal.
The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue
recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on
the same day that control of the service is transferred, which is the same day as contract inception.

 The Company measures the non-cash consideration
based on the spot rate of bitcoin determined using the Company's primary trading platform for bitcoin at mid-night UTC on the day
of contract inception. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred
to the pool operator, which is the same day as the contract inception.

 Step 4: The transaction price is allocated
to the single performance obligation upon verification for the provision of hash calculation services to the mining pool operator. There
is a single performance obligation (i.e., hash calculation services or hashrate) for the contract; therefore, all consideration from the
mining pool operator is allocated to this single performance obligation.

 Step 5: The Company's performance
is complete in transferring the hash calculation services over-time (midnight to midnight UTC) to the customer and the customer obtains
control of that asset.

 In exchange for providing hash calculation services,
the Company is entitled to the expected bitcoin awards earned over the measurement period, plus the expected global transaction fee rewards
for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The transaction
consideration the Company receives is non-cash consideration, in the form of bitcoin. Prior to March 1, 2024, the Company measured the
bitcoin at the closing U.S. dollar spot rate at the end of the date earned (midnight UTC). As of March 1, 2024, the Company began measuring
the bitcoin at the opening U.S. dollar spot rate at the beginning of the date earned (midnight UTC). The change in method of calculating
revenues from bitcoin mining did not result in material change in the revenues reported.

 There are no deferred revenues or other liability
obligations recorded by the Company since there are no payments in advance of the performance. At the end of the 24 hour "midnight-to-midnight"
period, there are no remaining performance obligations.

 During the year ending August 31, 2024, the Company
utilized one mining pool for its self-mining operations, which charges 0.3% of the bitcoin payable to the Company as a pool management
fee.

 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. The Company gives hosting customers the option of having all mining proceeds paid into a cold wallet address in the Company's
name, which case the Company pays the hosting client its share of mining awards on a daily basis, or having all mining awards sent to
an account of the customer, in which case the Company bills the customer monthly for any hosting fee that is contingent on the amount
of the client's award. 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 or invoicing.

 Classification of revenues from the sale of mining equipment under
ASC 606 vs. ASC 610

 The
Company records revenue from the resale of mining equipment it has purchased. The Company evaluated
the sale of mining equipment under ASC 606, "Revenue from Contracts with Customers," and concluded that these transactions constitute
revenue from ordinary activities as part of its ongoing operations. The sales are not incidental or peripheral activities but are integral
to the Company's core business model of providing mining equipment and hosting services. Under ASC 606-10-15-3, the Company determined
that these transactions do not meet the scope of ASC 610, which applies to sales of nonfinancial assets outside an entity's ordinary activities.

 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.

 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. Subsequent
reversal of impairment losses, if the price of cryptocurrency increases, is not permitted. The Company classifies cryptocurrencies as
current assets because it reasonably expects to sell or exchange all cryptocurrencies within one quarter.

 Cryptocurrency earned by the Company through its
mining activities are included within operating activities on the accompanying statements of cash flows. The sales of digital currencies
are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales
are included in other income (expense) in the 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 an account
at Bitgo Trust ("Bitgo"), a well-known bitcoin custodian, which it also uses to liquidate its bitcoin when necessary. The
Company also has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial
Services as a backup facility, and may hold bitcoin from time to time in a cold storage wallet. The Company uses Bitgo's multi-signature
feature for account access.

 Fair value of financial instruments

 The Company follows
paragraph ASC 825-10-50-10 for disclosures about fair value of its financial instruments.

 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 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 levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 As of August 31, 2024, the carrying value of
notes receivable was $655,277. Fair value was determined using a discounted cash flow model based on observable market interest rates
for similar instruments (Level 2 inputs). The note receivable is interest bearing at 5% per annum with monthly payments through May
31, 2026.

 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 ASC for disclosure about stock-based compensation.
This section requires a public entity to measure the cost of employee and non-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 service is provided. No compensation cost is recognized for equity instruments for which service is not provided or rendered.

 Related party transactions

 The Company follows ASC 850, Related Party
Disclosures, for the identification of related parties and disclosure of related party transactions. In accordance with ASC 850, the Company's financial statements include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation
of the financial statements.

 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 ASC Topic 260, "Earnings per Share."
Basic earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of
common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income (loss)
by the weighted average number of common shares and dilutive common share equivalents outstanding. As of August 31, 2024 there were no
common stock equivalents that were dilutive.

 Income Taxes

 Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to
differences between depreciation which is deductible for tax purposes prior to being deductible for book purposes. The deferred tax assets
and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset
future taxable income.

 From time to time, the Company may have differences
in computing the book and tax bases of property and equipment; reserves for bad debts; capitalized overhead included in inventories; bonus
plan payables, and accrued wages to shareholders/employees. Deferred tax expense or benefit is the result of the changes in the deferred
tax assets, net of the valuation reserve, and liabilities.

 The Company accounts for income taxes in accordance
with Financial Accounting Standards Board Accounting Standards Codification Topic 740 ("FASB ASC 740"), Income Taxes, which
clarifies the accounting and disclosure requirements for uncertainty in tax positions. It requires a two-step approach to evaluate tax
positions and determine if they should be recognized in the financial statements. The two-step approach involves recognizing
any tax positions that are "more likely than not" to occur and then measuring those positions to determine if they are recognizable
in the financial statements. Management regularly reviews and analyzes all tax positions and has determined that no uncertain
tax positions requiring recognition have occurred.

 In general, the Company's income tax returns
are subject to examination by the taxing authorities for three years after they were filed. The Company has not filed any tax returns.

 Recent Accounting Pronouncements

 All other newly issued accounting pronouncements,
but not yet effective, have been deemed either immaterial or not applicable.

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 As a smaller reporting company, we are not required
to provide the information required by this Item.

 Item 8. Financial Statements and Supplementary Data

 Our financial statements and related
notes required by this item are set forth as a separate section of this Report. See Part V, Item 15 of this Form 10-K.

 Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

 None.

 Item 9A. Controls and Procedures

 (a)

 Evaluation of Disclosure Controls and Procedures

 Our Principal Executive Officer and Principal Financial
Officer, with the assistance of management, conducted an evaluation of the effectiveness of our disclosure controls and procedures as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this Annual
Report on Form 10-K. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure
controls and procedures were effective as of August 31, 2024. These controls are designed to ensure that information required to be disclosed
in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission ("SEC"), and that such information is accumulated
and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, to allow timely decisions
regarding required disclosure.

 (b)

 Management's Annual Report on Internal Control Over Financial Reporting

 Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management
conducted an evaluation of the effectiveness of our internal control over financial reporting as of August 31, 2024 based on the framework
in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on this assessment, management concluded that the Company's internal control over financial reporting was effective as of August
31, 2024 based on those criteria.

 Our internal control over financial reporting is
a process designed under the supervision of our Principal Executive Officer and Principal Financial Officer to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes
in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that receipts and expenditure are being made only in accordance with authorizations of our management and directors; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

 (c)

 Changes in Internal Control Over Financial Reporting

 During the fourth quarter of 2024, there were no
changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

 Inherent Limitations Over Internal Controls

 Management, including our Principal Executive Officer
and Principal Financial Officer, does not expect that disclosure controls and internal controls will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives
of the control system are met. Further, the design of a control system must reflect the fact that there are no resource constraints, and
the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
These inherent limitations include the realities that judgements in decision-making can be faulty, and that breakdowns can occur because
of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or
more people or by management override of the controls.

 Item 9B. Other Information

 During the quarter ended August 31, 2024, no
director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term
is defined in Item 408(a) of Regulation S-K.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections

 None.

 Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers

 Our directors and executive officers and their
ages at November 30, 2023, are listed in the following table:

 Name

 Age

 Title

 Jonathan Bates

 Chairman of the Board and Chief Executive Officer

 Erik S. Nelson

 President and Director

 Raymond Mow

 Chief Financial Officer and Director

 Seth Bayles

 Corporate Secretary and Director

 Director

 Ryan Ramnath

 Chief Operating Officer

 Lori Love

 Director

 John Kelly

 Director

 Jonathan Bates has served as our Chairman of
the Board since July 2021. With more than 25 years of financial industry experience, Mr. Bates has spent his career analyzing the
interrelations of a vast number of different markets. He has developed a deep understanding of institutional trading environments
and multi-asset portfolios is a critical resource to the operations he oversees. In addition to his role as chairman of the Company,
Mr. Bates is also the Chief Investment Officer and General Partner of Progression Asset Management (an affiliate of Integrated Advisors
Network, LLC) since January 2019, and its subsidiary, Innovative Digital Investors, LLC, which is the general partner of Innovative Digital
Investors Emerging Technology L.P., a private investment fund. From November 2017 to January 2019, Mr. Bates served as a Managing Partner
of Boustead Capital Partners, LLC, registered broker dealer. Mr. Bates has twice served as a Managing Director of J.P. Morgan Securities,
LLC, from 2009 to July 2012 and from July 2015 to November 2017. In between his stints at J.P. Morgan, from July 2012 to July 2015, Mr.
Bates served as a Director at Barclays Wealth U.S. Over the course of his career, Mr. Bates has, at different times, held the Series 7,
9, 10 and 65 licenses. At Innovative Digital, Mr. Bates has helped drive several private companies from early stages to public markets
in both the U.S. and Canada. We believe that Mr. Bates is highly qualified to serve on our board due to his knowledge and experience
technology startups, which should be instrumental as the Company grows its business and pursues a listing of its common stock on the NASDAQ
Capital Market or the NYSE. Mr. Bates graduated from the University of Texas at Austin in 1992 with a degree in Business Finance.

 Erik S. Nelson has served as our Chief Executive
Officer and a director since July 2020. In addition to his role as Chief Executive Officer of the Company, Mr. Nelson is also the
Corporate Secretary and a member of the Board of Nocera, Inc. since 2011, and was previously its President from 2017 to 2019. Mr. Nelson
was the sole officer (CEO, President, and CFO) and sole Director of Vinings Holdings, Inc. (October 2019 – February 2021) Mr. Nelson
is also the President of Coral Capital Advisors, LLC. An advisory services firm founded in 1995 that provides services to privately held
and publicly traded companies. Since September 2012, Mr. Nelson has been President of Mountain Share Transfer, LLC, an SEC registered
stock transfer agent. Mr. Nelson is a graduate of the University of Colorado (1989) with a Bachelor of Science in Business Administration
degree, with an emphasis in Finance. We believe that Mr. Nelson is highly qualified to serve on our board due to his extensive experience
with the public markets and companies.

 Mountain Share Transfer and Erik Nelson consented
to an SEC Order in 2015 related to failure to file an updated correct TA-1 Form and other administrative violations and disclosure matters
of the Transfer Agent, Mountain Share Transfer (Administrative Proceeding file no. 3-16378, 34 Act Rel. no. 74226).

 Raymond Mow has served as our Chief Financial
Officer and a director since July 2021. With more than 30 years of financial industry experience, Mr. Mow has spent his career managing
and analyzing fixed income mutual funds and institutional portfolios. He has developed a broad knowledge of various asset classes
as well as interpreting and forecasting domestic and international economic measures. In addition to his role as Chief Financial Officer
of the Company, Mr. Mow also serves as Chief Investment Officer and Chief Compliance Officer of Progression Asset Management, as position
he has held since January 2020, and Portfolio Manager of its subsidiary, Innovative Digital Investors, LLC, which is the general
partner of Innovative Digital Investors Emerging Technology L.P., a private investment fund specializing in equity investments in cutting
edge technology companies. From March 2018 to March 2019, Mr. Mow held the position of Managing Director of Fixed Income at First Foundation
Advisers overseeing $2.3 billion. As a member of the investment policy committee, Mr. Mow collaborated on asset allocation policy and
portfolio construction. From 1995-2018, Mr. Mow was Senior Portfolio Manager at Highmark Capital Management, overseeing $2 billion in
fixed income assets. Mr. Mow currently holds a Series 65 license. Mr. Mow graduated in 1989 from University of Hawaii, Manoa with a BBA-Finance
degree. We believe that Mr. Mow is highly qualified to serve on our board due to his extensive experience financial analysis and reporting.

 Michael Maloney has served as a director since
July 2021. Mr. Maloney is digital currency and blockchain technology expert who has been active in the space since 2011. He serves as
an advisor to several industry leading companies, and is regularly featured as an industry commentator and educator at public events.

 Mr. Maloney most recently served as the CFO for
Coinmint, LLC from July 2019 to October 2021. At Coinmint, he developed partnerships with several large public companies and high-net
worth private institutions that made Coinmint one of the largest cryptocurrency mining operations in North America. Under his tenure,
hashrate increased from 1.3EH to over 7EH (~5% of the bitcoin network), all from increased co-hosting contracts. He was able to grow revenues
by over 600% over this same period. Since August 2019, Mr. Maloney has also served as an Adjunct Professor at Fordham Law School and
Fordham Gabelli Business, teaching "Blockchain, Virtual Currencies, and Tokens: Business and Legal Issues." Mr. Maloney helps
coordinate the Fordham Law Blockchain Regulatory Symposium which draws US and international regulators and financial experts together
to discuss industry trends.

 From November 2017 to September 2018, Mr. Maloney
co-founded Galaxy Digital, the first merchant bank to serve the blockchain space, as the Managing Director. In this position, he directed
both the Digital Strategy and Transaction Advisory practices to assist clients in the build and financing of blockchain technologies.
Mr. Maloney also supported the development of trade and compliance technologies and provided technical critiques for the venture group.

 Mr. Maloney co-founded Themys, a blockchain insurance
and risk management protocol in October 2018. There he wrote and patented the first Blockchain Derived Hashrate Bond developed to assist
cryptocurrency miners finance ASIC purchases. He left in July 2019 to join Coinmint. Mr. Maloney was a founding member of Ernst &
Young's (EY) Distributed Ledger Technology group, and led global blockchain development for the firm. From June 2013 to September
2017, he assisted in the development of numerous blockchain applications for clients across a variety of industries, including: digital
goods and games trading, supply chain management, anti-money laundering and KYC regulatory compliance, and language processing and machine
learning marketplaces.

 Since September 2016, Mr. Maloney has also served
as CTO for a blockchain based non-profit organization, eduDAO. eduDAO currently assists non-profits in exploring blockchain and assessing
the viability of DAOs for the funding needs. Mr. Maloney has a B.A. degree from Fordham University.

 We believe that Mr. Maloney is highly qualified
to serve on our board due to his extensive experience in the blockchain and bitcoin mining operations.

 Seth Bayles has served as our Corporate Secretary
and a director since July 2021. Mr. Bayles is a Corporate Attorney with over 15 years of experience practicing in the areas of entertainment,
finance, technology, and commercial contracts. He has negotiated and drafted complex commercial agreements including multimedia, vendor,
union, talent, channel, and technology-related agreements. Since 2017, he has served as the general counsel of Hospitality International
Group, Inc. From 2016 to 2021, he served as general counsel and chief compliance officer of Credit Key, Inc. From 2015 to 2016, he served
as director, legal affairs and business development, with ZestFinance, Inc. Prior to joining the corporate world, he worked as an associate
at Weil, Gotshal & Manges, LLC in its Washington, DC office, and King & Spalding, LLP in its Washington, DC's office. He
has his B.A. in Economics and History from Brandeis University, a J.D. from the Emory University School of Law, and an L.L.M. from the
Georgetown University Law Center. We believe that Mr. Bayles is highly qualified to serve on our board due to his extensive experience
as a corporate attorney and in regulatory affairs.

 Ryan Ramnath has served as our Chief Operating
Officer since July 2021. Ryan Ramnath currently holds the role as Chief Executive Officer (CEO) of Bitflair Mining Corp. ("Bitfair"),
a Canadian owned Trinidad-operated liquid cooled bitcoin mine. Mr. Ramnath co-founded Bitflair in 2017 and was instrumental in navigating
the local Trinidad environment to successfully launch the first liquid-cooled bitcoin mine in the Caribbean. Since 2014, Mr. Ramnath has
worked in various engineering capacities in the upstream and downstream energy sectors. Mr. Ramnath worked for the National Gas Company
of Trinidad and Tobago from June 2014 to August 2014 as reliability engineer intern. Mr. Ramnath worked for Imperial Oil Company as a
pipeline engineer from September 2015 to April 2016. Mr. Ramnath worked for BHP Billiton has a drilling engineering Intern from June 2016
to August 2016. Mr. Ramnath has worked for Royal Dutch Shell since January 2018 to the present, first as a wellsite operations engineer
from until July 2019, and thereafter as drilling engineer. As the CEO of Bitflair Mining Corp, Mr. Ramnath has developed special skills
in the design, engineering and implementation of solutions in the liquid-cooled hosting business. Mr. Ramnath was appointed as the Chief
Operating Officer (COO) of Bitmine Immersion Technologies in 2021 due to his comprehensive understanding of the liquid-cooled bitcoin
mining infrastructure and ability to build, fix and repair any mechanical issues which may arise. Mr. Ramnath graduated from the University
of Toronto with a Mechanical Engineering – High 5 Distinction.

 Lori Love has served as a director since August
2023. Lori Love is a licensed CPA and an experienced finance professional with 20+ years of experience in accounting, finance and
risk management, both in public accounting and in the private sector. Her experience includes "C" level positions in cryptocurrency,
energy, healthcare technology, financial services and consulting services. Since June 2022 to the present, Ms. Love has served as a Senior
Manager for Eide Bailly's outsourced managed services group. From October 2019 to December 2021, Ms. Love served as chief financial
officer of CleanSpark, Inc., a NASDAQ listed company, where she was responsible for financial strategy, SEC financial reporting, and internal
controls. From July 2015 to September 2019, Ms. Love was self-employed as a consultant where she provided out-sourced accounting services
to various companies, including acting as chief financial officer for P2K Labs, LLC. Prior to 2015, Ms. Love served in the role of Senior
Vice President of Finance at Provident Trust Group for over two years and as Vice President of Finance and Operations at WorldDoc, Inc.
where she also served as a director. Prior to her work in the private sector, Ms. Love was an auditor with RSM McGladrey, where she focused
primarily on financial services engagements. Ms. Love obtained her Bachelor of Business Administration (BBA) in Accounting from University
of Nevada, Las Vegas and carries the CPA designation.

 John Kelly has served as a director since January
2024. John Kelly has started numerous successful businesses in Heavy Construction, Site Development, Real Estate Development, Car
Dealership construction., and Bitcoin Mining Site development. He has helped develop over 100 Car Dealerships, has owned and constructed
over 3 million square feet of industrial buildings, and has overseen the construction of over 10,000 individual housing units. His clients
include Amazon, Siemens, RK Centers, Group1 Automotive, and Eversource. He is currently President or Principal of three separate companies,
including Rykor Energy Solutions. Rykor Energy Solutions produces a proprietary immersion datacenter primarily used for Bitcoin Mining.
Mr. Kelly is a principal of ROC Digital Mining Manager, LLC, which manages ROC Digital Mining I, LLC, hosting and mining enterprise in
which the Company is a major investor. Mr. Kelly is very qualified to serve on the board given his deep understanding of the construction
and engineering which goes into the development and maintenance of a Bitcoin Mining site. Furthermore, he designed and developed his own
immersion datacenter product, which provides valuable insight to our existing operations. Mr. Kelly holds numerous Contractor licenses
related to Industrial, Commercial, and Residential Construction. Mr. Kelly graduated from Boston College in 1991 with a degree in Political
Science.

 None of the directors and executive officers share
any familial relationship with any other executive officers or key employees.

 None of the directors and executive officers has
been involved in any legal proceedings as listed in Regulation S-K, Item 401(f), except as disclosed above.

 Director Nomination Process

 Our board has not formed a separate
nominating committee; instead, our full board is responsible for overseeing the selection of persons to be nominated to serve on our
board. The board believes that nominating decisions are best determined by the entire board. The board does not have a formal policy
on board candidate qualifications. The board may consider those factors it deems appropriate in evaluating director nominees made
either by the board or stockholders, including judgment, skill, strength of character, experience with businesses and organizations
comparable in size or scope to the Company, experience and skill relative to other board members, and specialized knowledge or
experience. Depending upon the current needs of the board, certain factors may be weighed more or less heavily. In considering
candidates for the board, the directors evaluate the entirety of each candidate's credentials and do not have any specific
minimum qualifications that must be met. "Diversity," as such, is not a criterion that the board considers. The
directors will consider candidates from any reasonable source, including current board members, stockholders, professional search
firms or other persons. The directors will not evaluate candidates differently based on who has made the recommendation.

 The board nomination process is designed to ensure
that the board fulfills its responsibility to recommend candidates who are properly qualified to serve the Company for the benefit of
all of its stockholders, consistent with the standards established by the board under our corporate governance principles. There have
been no material changes to the procedures by which shareholders may recommend nominees to our board of directors.

 Audit Committee Functions

 The Company has an Audit Committee established
in accordance with Section 3(a)(58)(a) of the Exchange Act, although it is not in compliance with Rule 10A-3 promulgated thereunder because
not all of its members are disinterested. The members of the audit committee are Jonathan Bates, Lori Love and Michael Maloney. The Audit
Committee is responsible for oversight of the quality and integrity of the accounting, auditing and reporting practices of the Company.
More specifically, it assists the board of directors in fulfilling its oversight responsibilities relating to (i) the quality and integrity
of our financial statements, reports and related information provided to stockholders, regulators and others, (ii) our compliance
with legal and regulatory requirements, (iii) the qualifications, independence and performance of our independent registered public accounting
firm, (iv) the internal control over financial reporting that management and the board have established, and (v) the audit, accounting
and financial reporting processes generally. The Audit Committee is also responsible for the review and approval of related-party transactions.
The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from the Company for, outside
legal, accounting or other advisors as it deems necessary to carry out its duties.

 Audit Committee Financial Expert

 The board has determined that Lori Love qualifies
as an "audit committee financial expert" within the meaning of SEC rules.

 Audit Committee Report

 The Audit Committee oversees the Company's
financial reporting process on behalf of our Board. Management has the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited
financial statements in the Company's annual report with management, including a discussion of any significant changes in the selection
or application of accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements,
and the effect of any new accounting pronouncements.

 The Audit Committee reviewed with the Company's
independent registered public accounting firm, which is responsible for expressing opinions on the conformity of the Company's audited
financial statements with generally accepted accounting principles and effectiveness of the Company's internal control over financial
reporting, its judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters
as are required to be discussed with the Audit Committee under the applicable requirements of the Public Company Accounting Oversight
Board and the SEC. In addition, the Audit Committee has discussed with the Company's independent registered public accounting firm
its independence from management and the Company, has received from the Company's independent registered public accounting firm
the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding
the independent registered public accounting firm's communications with the Audit Committee concerning independence, and has considered
the compatibility of non-audit services with the auditor's independence.

 The Audit Committee met with the Company's
independent registered public accounting firm to discuss the overall scope of its services, the results of its audit and reviews, and
the overall quality of the Company's financial reporting. The Company's independent registered public accounting firm also
periodically updates the Audit Committee about new accounting developments and their potential impact on the Company's reporting.
The Audit Committee's meetings with the Company's independent registered public accounting firm were held with and without
management present. The Audit Committee is not employed by the Company, nor does it provide any expert assurance or professional certification
regarding the Company's financial statements. The Audit Committee relies, without independent verification, on the accuracy and
integrity of the information provided, and representations made, by management and the Company's independent registered public accounting
firm.

 In reliance on the reviews and discussions referred
to above, the Audit Committee has recommended to the Board that the audited financial statements of the Company be included in its Annual
Report on Form 10-K for the fiscal year ended August 31, 2024. The Audit Committee and the Board also have recommended that the ratification
of the appointment of Bush and Associates CPA, as the Company's independent registered public accounting firm for the fiscal year
ending August 31, 2025, be submitted as a proposal at the annual meeting.

 The Audit Committee reviews and assesses the adequacy
of its charter on an annual basis. While the Audit Committee believes that the charter in its present form is adequate, it may in the
future recommend to the Board of Directors amendments to the charter as it may deem necessary or appropriate.

 Respectfully submitted,

 The Audit Committee of the Board of Directors

 Lori Love (Chairman)

 Jonathan Bates

 This report of the Audit Committee is not "soliciting
material," shall not be deemed "filed" with the SEC, and shall not be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing,
except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such
Acts.

 Code of Ethics

 The Company has adopted a Code of Ethics applicable
to its principal executive, financial and accounting officers and persons performing similar functions, as well as all directors and employees
of the Company. A copy of the Code of Ethics is filed as an exhibit to this report, and posted on the Company's website, bitminetech.io.
In addition, the Company will provide a copy of the Code of Ethics to any shareholder who submits a written request in writing to our
chief executive officer at Bitmine Immersion Technologies, Inc., 10845 Griffith Peak Dr., #2, Las Vegas, NV 89135; e-mail: enelson@bitminetech.io.

 Communication with the Board of Directors

 Our stockholders and other interested parties may
send written communications directly to the board or to specified individual directors, including the Chairman or any other non-management
directors, by sending such communications to our corporate headquarters. Such communications will be reviewed by our outside legal counsel
and, depending on the content, will be:

 forwarded to the addressees or distributed at the next scheduled board meeting;

 if they relate to financial or accounting matters, forwarded to the audit committee or distributed at the next scheduled audit committee meeting;

 if they relate to executive officer compensation matters, forwarded to the compensation committee or discussed at the next scheduled compensation committee meeting;

 if they relate to the recommendation of the nomination of an individual, forwarded to the full board or discussed at the next scheduled board meeting; or

 if they relate to our operations, forwarded to the appropriate officers of our company, and the response or other handling of such communications reported to the board at the next scheduled board meeting.

 Section 16(a) Beneficial Ownership Reporting Compliance

 Section 16(a) of the Exchange Act requires directors,
executive officer and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial
reports of ownership and reports or changes in ownership of such equity securities. Such persons are also required to furnish us with
copies of all Section 16(a) forms that they file. Based upon a review of the copies of the forms furnished to us and written representations
from certain reporting persons, we believe that, during the year ended August 31, 2024, none of our executive officers, directors or beneficial
owners of more than 10% of any class of registered equity security failed to file on a timely basis any such report.

 Item 11. Executive Compensation

 The following identifies the elements of compensation
for fiscal years 2023 and 2022 with respect to our "named executive officers," which term is defined by Item 402 of the SEC's
Regulation S-K to include (i) all individuals serving as our principal executive officer at any time during fiscal year 2024, (ii) our
two most highly compensated executive officers other than the principal executive officer who were serving as executive officers at August
31, 2024 and whose total compensation (excluding nonqualified deferred compensation earnings) exceeded $100,000, and (iii) up to two additional
individuals for whom disclosure would have been provided pursuant to the foregoing item (ii) but for the fact that the individual was
not serving as an executive officer of the Company at August 31, 2024.

 Based on our compensation for the fiscal year ended
August 31, 2024, Jonathan Bates and Raymond Mow constitute our only "named executive officers" pursuant to Item 402 of Regulation
S-K.

 Summary Compensation Table

 Fiscal

 Stock

 All Other

 Name and Principal Position

 Year

 Salary

 Compensation

 Compensation

 Total

 Jonathan Bates (1)

 2024

 $
 –

 $
 622,120

 $
 –

 $
 622,120

 Chief Executive Officer

 2023

 $
 –

 $
 622,120

 $
 –

 $
 622,120

 Raymond Mow (1)

 2024

 $
 –

 $
 155,115

 $
 –

 $
 155,115

 Chief Financial Officer

 2023

 $
 –

 $
 155,115

 $
 –

 $
 155,115

 (1)

 Mr. Bates has served as our chief executive officer from May 2022 to the present. Mr. Bates did not receive any cash compensation for his service. On August 31, 2022 Mr. Bates was awarded 150,000 Series A Preferred Shares, which vest on January 15, 2025 if Mr. Bates is employed by the Company at that time. Each Preferred Share was valued at its liquidation preference of $10 per share for a total value of $1,500,000, and will be amortized to expense by the Company pro rata from the period from September 1, 2022 through January 15, 2025.

 (2)

 Mr. Mow has served our chief financial officer from July 16, 2020 to the present. Mr. Mow did not receive any cash compensation for his services for either the 2022 or 2023 fiscal years. On August 31, 2022 Mr. Mow was awarded 850,000 shares of common stock, which vest on January 15, 2025 if Mr. Mow is employed by the Company at the time. These shares were valued at $0.44 for a total value of $374,000, and will be amortized to expense by the Company pro rata from the period from September 1, 2022 through January 15, 2025.

 (a) The assumptions used to value the stock compensation is
as follows:

 The Company's common stock is very thinly traded and not indicative of the fair market value of the common stock;

 During the fiscal year ended August 31, 2022 the Company conducted a Unit Offering of common stock and two warrants and sold $5,152,500 worth of the Unit Offering at a price of $1.25 per Unit;

 The Company used this offering as an indication of the fair market value of its common stock and performed a Black Scholes analysis to determine the respective values of the common stock and warrants included in the Unit Offering. The Black Scholes analysis yield a value of $0.44 per share for the common stock.

 The Company does not provide its officers or employees
with pension, stock appreciation rights, long-term incentive or other plans. The Company does not have a defined benefit, pension, profit
sharing plan, or a 401(k) plan. We did not grant any stock options or stock appreciation rights to our named executive officers in the
last fiscal year. We did not reprice any options or stock appreciation rights during the last fiscal year. We did not waive or modify
any specified performance target, goal or condition to payout with respect to any amount included in any incentive plan compensation included
in the summary compensation table.

 Compensation Philosophy

 The board is responsible for creating and reviewing
the compensation of our executive officers, as well as overseeing our compensation and benefit plans and policies and administering our
equity incentive plans. We believe in providing a competitive total compensation package to its executives through a combination of base
salary, annual performance bonuses, and long-term equity awards. The executive compensation program is designed to achieve the following
objectives:

 provide competitive compensation that will help attract, retain and reward qualified executives;

 align executives' interests with our success by making a portion of the executive's compensation dependent upon corporate performance; and

 align executives' interests with the interests of stockholders by including long-term equity incentives.

 The board believes that our executive compensation
program should include annual and long-term components, including cash and equity-based compensation, and should reward consistent performance
that meets or exceeds expectations. The board evaluates both performance and compensation to make sure that the compensation provided
to executives remains competitive relative to compensation paid by companies of similar size and stage of development operating in the
payment processing industry and taking into account our relative performance and its own strategic objectives.

 Notwithstanding the above, the Company is not currently
paying any compensation to its executive officers on a cash basis until it raises additional capital to fund its business and capital
expenditure needs.

 Outstanding Equity Awards At Fiscal Year-End

 The following table sets forth information regarding
all outstanding equity awards held by the named executive officers at August 31, 2024. There are no outstanding option awards. Outstanding
restricted stock grants have been approved by our Board.

 Stock Awards

 Name
 (a)

 Number of Shares or Units of Stock that have not Vested
 (#)
 (g)

 Market Value of Shares of Units of
 Stock that Have not Vested
 ($)
 (h)

 Equity Incentive
 Plan Awards:
 Number of Unearned Shares, Units or Other Rights that have not Vested
 (#)
 (i)

 Equity Incentive
 Plan Awards:
 Market or Payout Value of Unearned
 Shares, Units or other Rights that have not Vested
 ($)
 (j) (1)

 Jonathan Bates (2)

 –

 –

 150,000

 $
 1,500,000

 Raymond Mow (3)

 –

 –

 850,000

 $
 374,000

 (1)

 The value of the unearned awards of common stock is based upon the estimated value of our common
 stock on August 31, 2024, which was $0.44 per share, based on the value estimated for the common stock in a $1.25 Unit offering
 completed shortly before the issuance of the awards. The value of the unearned awards of Series A Preferred Stock is based upon the
 liquidation preference of $10 for each share of Series A Preferred Stock

 (2)

 The restricted stock grant consisted of 150,000 shares of Series A Preferred Stock issued as of
 August 31, 2022, which vest on January 15, 2025 in the event the executive is still employed by us as of that date. The Series A
 Preferred Shares are convertible into 2,608,696 shares of common stock. None of the shares had vested as of August 31,
 2024.

 (3)

 The restricted stock grant consisted of 850,000 shares of common stock issued as of August 23,
 2022, which vest on January 15, 2025 in the event the executive is still employed by us as of that date. None of the shares had
 vested as of August 31, 2024.

 Employment Agreements

 The Company does not have any written employment
agreements with any of its named executive officers. Beginning September 1, 2024, the Company orally agreed to accrue compensation at
the rate of $25,000 per month for Mr. Bates and $10,000 per month for Mr. Mow, which will be paid when the Company has sufficient liquidity.

 Severance and Change of Control Benefits

 The Company does not currently have any agreements
with its named executive officers or directors which provide for severance or change of control benefits.

 Employee Benefit Plans and Pension Benefits

 The Company does not provide its officers or employees
with pension, stock appreciation rights, long-term incentive or other plans. The Company does not have a defined benefit, pension, profit-sharing
plan or 401(k) plan.

 Nonqualified Deferred Compensation

 None of our named executive officers are covered
by a deferred contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.

 Director Compensation

 The following table details the total compensation
earned by our non-employee directors during the year ended August 31, 2024.

 Name

 Fee Earned
 or Paid in
 Cash ($) (1)

 Restricted
 Stock
 Awards
 ($) (2)

 All Other
 Compensation
 ($)

 Total
 ($)

 $
 –

 $
 –

 $
 –

 $
 –

 Seth Bayles

 $
 –

 $
 –

 $
 –

 $
 –

 Erik Nelson (2)

 $
 –

 $
 63,870

 $
 –

 $
 63,870

 Lori Love (3)

 $
 –

 $

 $
 –

 $
 52,400

 John Kelly

 $
 –

 $
 –

 $
 –

 $
 –

 (1)

 Excludes travel expense reimbursements.

 (2)

 Includes 350,000 shares of restricted issued to Mr. Nelson. The shares were valued at $154,000, or
 $0.44 per share, which is the price at which the Company sold shares for cash in a contemporaneous offering to third parties as
 described in the Summary Compensation Table above for Executive Officers. These shares vest on January 15, 2025 if Mr. Nelson is
 employed by the Company at that time and are amortized to expense by the Company pro rata for the period from September 1, 2022
 through January 15, 2025. None of the shares had vested as of August 31, 2024.

 (3)

 Ms. Love was issued 150,000 shares of common stock which
 vest at the rate of 10,000 shares per month as of the last day of each calendar month beginning on August 31, 2023. As of August 31,
 2024, 130,000 shares had vested.

 There were no options outstanding to directors
as of August 31, 2024.

 Our board does not have a current compensation
policy for its directors. However, we reimburse our directors for reasonable travel and other related expenses. Once we raise capital,
we intend to develop a board compensation plan that is consistent with market norms for similar sized companies.

 Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters

 The following table sets forth, as of December 5, 2024, certain information concerning the beneficial ownership of our common stock by (i) each person known by us to own beneficially
five percent (5%) or more of the outstanding shares of each class, (ii) each of our directors and named executive officers,
and (iii) all of our executive officers and directors as a group.

 The number of shares beneficially owned by each 5%
stockholder, director or executive officer is determined under the rules of the Securities & Exchange Commission, or SEC, and the
information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes
any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual
or entity has the right to acquire within 60 days after December 5, 2024 through the exercise of any stock option, warrant or other right,
or the conversion of any security. As of December 5, 2024 there were 39,667,607 shares outstanding. Unless otherwise indicated, each person
or entity has sole voting and investment power (or shares such power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial
ownership of those shares.

 Name

 Shares Beneficially Owned

 Percent of Common Stock (1)

 5% Stockholders

 Jonathan Bates (2)

 39,399,800

 52.6%

 Innovative Digital Investors Emerging Technology, LP (2)

 27,699,800

 41.1%

 Rykor Energy Solutions, LLC (3)

 8,016,000

 17.8%

 Sam Jorgensen (4)

 6,887,754

 17.4%

 BFAM Partners, LLC (2)

 4,200,000

 10.6%

 4,000,000

 10.1%

 Abed Equities (5)

 3,650,000

 9.2%

 BitFlair Mining Corp. (6)

 3,443,877

 8.7%

 Chris Moses

 3,041,299

 7.7%

 Erik S. Nelson (7)

 2,655,000

 6.7%

 Raymond Mow

 2,600,000

 6.6%

 Directors and Named Executive Officers

 Jonathan Bates (2)

 39,399,800

 52.6%

 John Kelly (3)

 8,016,000

 17.8%

 4,000,000

 10.1%

 Ryan Ramnath (8)

 3,443,877

 8.7%

 Erik S. Nelson (7)

 2,655,000

 6.7%

 Raymond Mow

 2,600,000

 6.6%

 Seth Bayles

 500,000

 1.3%

 Lori Love

 150,000

 0.4%

 Officers and Directors as a Group

 60,764,677

 75.8%

 (1)

 Based on 39,667,607 shares of common stock issued and outstanding as of December 5, 2024.

 (2)

 Includes (i) 12,500,000 shares that Innovative Digital Investors Emerging Technology, LP ("Innovative") has the right to acquire upon the conversion of 2,500 shares of Series B Convertible Preferred Stock, (ii) 15,199,800 shares that Innovative has the right to acquire upon the conversion of 303,966 shares of Series A Convertible Preferred Stock, (iii) 4,200,000 shares owned by BFAM Partners, LLC ("BFAM"), of which Mr. Bates is the 100% owner, and (iv) 7,500,000 shares that Mr. Bates has the right to acquire upon the conversion of 150,000 shares of Series A Convertible Preferred Stock. Mr. Bates has sole voting and investment power of any shares owned by Innovative by virtue of his ownership of its general partner. Mr. Bates has sole voting and investment power of any shares owned by BFAM. BFAM and an individual retirement account established by Mr. Bates own approximately 10.03% of Innovative. Mr. Bates owns 90% of BFAM, and a trust established for his children on the remaining 10%. Mr. Bates disclaims beneficial ownership of any shares owned by Innovative beyond his percentage interest in such entity.

 (3)

 Includes (i) 2,672,000 shares held outright, (ii) 2,672,000 Class C-1 Warrants which are exercisable immediately, and (iii) 2,672,000 Class C-2 Warrants which are exercisable immediately. John Kelly and Nick Marrocco have shared voting and investment power over the securities owned by Rykor Energy Solutions, LLC.

 (4)

 Includes (i) 3,443,877 shares owned by Mr. Jorgensen and (ii) 3,443,877 shares owned by BitFlair Mining Corp. ("BitFlair"), of which Mr. Jorgensen has shared voting and investment power. Mr. Jorgenson disclaims beneficial ownership of shares held by BitFlair beyond his 40% percentage interest therein.

 (5)

 Gabriel Abed has sole voting and investment power over any shares owned
by Abed Equities.

 (6)

 Ryan Ramnath and Sam Jorgenson have shared voting and investment power over
any shares owned by Bitflair Mining Corp.

 (7)

 Includes (i) 1,100,000 shares owned by Mr. Nelson, (ii) 1,505,000 shares
owned by Coral Investment Partners, LP ("Coral"), as to which Mr. Nelson, in his capacity as owner of the general partner,
has sole voting and investment power, and (iii) 50,000 shares owned by Sterling Acquisitions 1, Inc. ("Sterling"). Mr. Nelson
disclaims beneficial ownership of shares held by Coral beyond his 40% ownership interest therein. Mr. Nelson does not have an interest
in Sterling, but his spouse and children own 80% of Sterling, and Mr. Nelson's spouse shares the power to vote and dispose of any
shares owned by Sterling.

 (8)

 Includes 3,443,877 shares owned by BitFlair Mining Corp. ("BitFlair"), of which Mr. Ramnath has shared voting and investment power. Mr. Ramnath disclaims beneficial ownership of shares held by BitFlair beyond his percentage interest in Bitflair of 40%.

 EQUITY COMPENSATION PLAN INFORMATION

 The following table provides information as of
August 31, 2024 about the securities issued, or authorized for future issuance, under our equity compensation plans.

 Plan Category

 Number of
 securities to be issued upon exercise of outstanding options, warrants
 and rights
 (a)

 Weighted-average exercise price of outstanding options, warrants and rights
 (b)

 Number of securities remaining available for future issuance
 (c)

 Equity compensation plans approved by security holders

 –

 –

 –

 Equity compensation plans not approved by security holders

 –

 –

 –

 2023 Restricted Common Stock Grant to Director (1)

 150,000

 $
 0.44

 –

 2022 Restricted Common Stock Grants to Officers (2)

 3,550,000

 $
 0.44

 –

 2022 Restricted Common Stock Bonus Grants to Officer (3)

 101,516

 $
 0.44

 –

 2023 Restricted Common Stock Bonus Grants to Officer (3)

 258,735

 $
 0.44

 –

 2024 Restricted Common Stock Bonus Grants to Officer (3)

 246,958

 $
 0.44

 2022 Restricted Preferred Stock Grant to Officer (4)

 7,500,000

 $
 0.44

 –

 2021 Restricted Common Stock Grant to Officer (5)

 4,500,000

 $
 0.015

 –

 Total

 16,307,209

 $
 0.33

 –

 (1)

 In August 2023, we granted 150,000 shares of restricted common stock to Lori Love. The shares were
 valued at $66,000 on the date of the award, based on a value of $0.44 per share. The shares vest at the rate of 10,000 shares per
 month, beginning on August 31, 2023.

 (2)

 Consists of the following transactions:

 a.

 In February 2022, we granted 2,100,000 shares of restricted common stock to Chris Moses. The shares were valued at $924,000 on the date of the award, based on a value of $0.44 per share. The shares vest on January 15, 2027.

 b.

 In August 2022, we granted 850,000 shares of restricted common stock to Raymond Mow. The shares were valued at $374,00 on the date of the award, based on a value of $0.44 per share. The shares vest on January 15, 2025.

 c.

 In August 2022, we granted 600,000 shares of restricted common stock to Erik S. Nelson. The shares were valued at $264,000 on the date of the award, based on a value of $0.44 per share. 250,000 of the shares were for past services and vested immediately. The remaining 350,000 shares vest on January 15, 2025.

 (3)

 In February 2022, we entered into an employment agreement with Chris Moses, under which we are
 obligated to issue quarterly bonuses payable in shares of common stock equal to $50,000 divided by the closing price on the last day
 of each calendar quarter. During the fiscal year ended August 31, 2022, we issued Mr. Moses 101,516 shares of common stock as
 quarterly bonuses, which we valued at $0.44 per share rather than the closing price for common stock. During the fiscal year ended
 August 31, 2023, we issued Mr. Moses 258,735 shares of common stock as quarterly bonuses, which we valued at $0.44 per share rather
 than the closing price for common stock. During the fiscal year ended August 31, 2024, we issued Mr. Moses 246,958 shares of common
 stock as quarterly bonuses, which we valued at $0.44 per share rather than the closing price for common stock.

 (4)

 In August 2022, we granted 150,000 shares of restricted Series A Convertible Preferred Stock to Jonathan Bates. The shares were valued at $1,500,000 on the date of the award. The shares vest on January 15, 2025. The shares are convertible into common stock at the stated value of $10 per share divided by $0.20, which would result in the issuance of 7,500,000 shares of common stock on conversion.

 (5)

 In August 2021, we granted 4,000,000 shares to Michael Maloney and 500,000 shares issued to Seth Bayles as compensation for agreeing to join the board of directors. The shares were valued at $0.015, which is the price at which the Company sold shares for cash in a contemporaneous offering to third parties.

 Item 13. Certain Relationships and Related Transactions, and Director
Independence

 Certain Relationships and Related Transactions

 Line of Credit from IDI

 On October 19, 2022, the Company entered into a
Line of Credit Agreement (the "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 LOC Agreement provided for loans of up to $1,000,000 at the request of the Company to finance the purchase of equipment
necessary for the operation of the Company's business, and related working capital. Loans under the LOC Agreement accrue interest
at twelve percent (12%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The Company had the
right to submit draw requests under the LOC Agreement until April 15, 2023. Each draw request is subject to the approval of IDI in its
sole discretion. The amount drawn, plus all accrued interest therein, was originally repayable in full on December 1, 2023.

 Effective May 13, 2023, the Company and IDI amended
the 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. Effective November 4, 2024, the Company and IDI amended the LOC Agreement to increase the
amount that the Company may borrow thereunder to $2,300,000. In addition, the Company agreed that IDI has the right to extend the maturity
date for six monthly periods in consideration for an extension fee of $25,000 for each extension, which will be added to the balance due
thereunder. In addition, IDI was granted the right to convert 11,500,000 shares of common stock it owns into 2,300 shares of Series B
Convertible Preferred Stock. In consideration for the above the amendments, IDI agreed to approve a new draw under the line of credit
of $250,000 and to purchase an additional 200 shares of Series B Convertible Preferred Stock for $200,000, for net new financing to the
Company of $450,000. The Company exercised its right to extend the maturity date of the loan on December 1, 2024.

 As of December 5, 2024, the principal amount due
IDI under the LOC Agreement was $1,875,000.

 Transactions with ROC Digital Mining I, LLC

arrangement with ROC Digital Mining I, LLC ("ROC Digital") to jointly develop and operate a bitcoin mining operation in Pecos,
Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $987,429 as a capital
contribution to ROC Digital Mining I, LLC (the "ROC Digital"). In return, we received 240 Class B Units of ROC Digital pursuant
to an ongoing offering of a total of 1,000 Class B Units at $4,400 per unit. We simultaneously sold ROC Digital four immersion containers
for $1,200,000, which is payable pursuant to a promissory note that bears interest at 5% per annum, and is payable pursuant to monthly
payments of $31,203.64 per month commencing on December 30, 2022, with any remaining principal and interest payable in full on May 31,
2026. The note is secured by the equipment that was sold. As of August 31, 2023 and August 31, 2024, the note receivable from ROC Digital
amounted to $1,029,721 and $655,277, respectively.

 We also obtained the right to locate one container
at the location that we would be able to use for self-mining. Under our hosting agreement with ROC Digital, we located one immersion container
at the site for $500 per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting
agreement, we also agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier
of the date the electricity provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The
original hosting agreement has a term of one year, subject to our right to renew the agreement for two one year terms after receipt of
notice of the renewal terms of the joint venture's electricity supply agreement for the upcoming year. We elected to renew the hosting
agreement for an additional one year term in April 2024.

 Transactions with Rykor Energy Solutions, LLC

 In May 2024, we brokered the sale of 20 transformers
to Rykor Energy Solutions, LLC ("Rykor"). The total sales price of the transformers is approximately $1,407,000 and our total
cost is expected to be $1,340,000. Rykor owns 2,672,000 shares of our common stock and warrants to purchase an additional 5,344,000 shares,
and as a result is the beneficial owner of approximately 17.8% of our common stock. John Kelly, a principal of Rykor (who is also a principal
of ROC Mining), also serves on our board of directors. Subsequently, the brokered sale was reduced to 10 transformers. The contract has
been fully performed, and we generated a profit of $33,500 on the transaction.

 Director Independence

 Our current board consists of Erik Nelson, Jonathan
Bates, Raymond Mow, Seth Bayles, Michael Maloney, Lori Love and John Kelly. Our common stock is currently quoted on the over the counter
market. Since the over the counter market does not have its own rules for director independence, we use the definition of independence
established by the NASDAQ Stock Market. Under applicable NASDAQ Stock Market rules, a director will only qualify as an "independent
director" if the director has not, at any time in the past three years, (a) been employed by us, (b) received more than $120,000
in compensation from us, other than for board services, (c) had a family member who was employed as an executive officer of us, (d) been,
or had a family member that was, a partner, controlling shareholder or executive officer of any organization that received payments for
property or services that exceeded the greater of 5% of the recipient's gross revenues or $200,000, (e) been, or had a family member
that was, employed as an executive officer of another entity during the past three years where any of the executive officers of us serve
on the compensation committee, or (f) been, or had a family member that was, a partner in our auditor at any time in the past three years.
At this time, we have determined that we have two independent directors: Michael Maloney and Lori Love.

 The only committee of the board is the Audit Committee.

 Policies with Respect to Transactions with Related Persons

 The board has adopted a Code of Ethics, which is
available at bitminetech.io, that sets forth various policies and procedures intended to promote the ethical behavior of the Company's
employees, officers and directors. The Code of Ethics describes our policy on conflicts of interest.

 The executive officers and the board are also required
to complete a questionnaire on an annual basis which requires them to disclose any related person transactions and potential conflicts
of interest. The responses to these questionnaires are reviewed by outside corporate counsel, and, if a transaction is reported by an
independent director or executive officer, the questionnaire is submitted to the Audit Committee, or the independent directors if there
is no Audit Committee. If necessary, the Audit Committee or the independent directors, as applicable, will determine whether the relationship
is material and will have any effect on the director's independence. After making such determination, the Audit Committee or independent
directors, as applicable, will report its recommendation on whether the transaction should be approved or ratified by the entire board.

 Item 14. Principal Accountant Fees and Services.

 The following table presents fees for professional
services provided by Bush and Associates CPA for the years ended August 31, 2024 and 2023, respectively:

 The following table shows the fees billed aggregate
to the Company for the periods shown:

 Fiscal Year
 2024

 Fiscal Year
 2023

 Audit Fees (1)

 $
 196,000
 (2)

 $

 303,500

 (2)

 Total Fees

 $
 180,000

 $

 303,500

 (1)

 Audit Fees. Audit services include work performed for the audit of our financial statements and the review of financial statements included in our quarterly reports, as well as work that is normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings. The fees for fiscal 2023 include $50,000 in re-audit fees.

 (2)

 Audit fees for 2023 include $50,000 for the re-audit of our fiscal 2023
 financial statements by our current auditors, Bush and Associates, necessitated by the SEC's permanent disqualification of our
 previous auditor, BF Borgers. BF Borgers audit fees for 2024 and 2023 included in the audit fee totals above were, $66,000 and
 $253,500, respectively.

 Audit fees represent amounts invoiced for professional
services rendered for the audit of the Company's annual financial statements, including the Form 10-K report, and the
reviews of the quarter ending financial statements included in the Company's Form 10-Q reports.

 Pre-Approval Policy and Procedures

 The Audit Committee also pre-approves, on an annual
basis, other audit services, and audit-related and tax services set forth in the policy, subject to estimated fee levels, on a project
basis and aggregate annual basis, which have been pre-approved by the board. All other services performed by the auditor that are not
prohibited non-audit services under SEC or other regulatory authority rules must be separately pre-approved by the Audit Committee. Amounts
in excess of pre-approved limits for audit services, audit-related services and tax services require separate pre-approval of the Audit
Committee. All of the services reflected in the above table were approved by the Audit Committee. We have not engaged our auditor to perform
any services other than audit services.

 Item 15. Exhibits, Financial Statement Schedules.

 The following documents are
filed as part of this report:

 (1)

 Financial Statements

 Report of Independent Registered Public Accounting Firm;

 Balance Sheets as of August 31, 2023 and August 31, 2024;

 Statements of Operations for the Years Ended August 31, 2023 and 2024;

 Statements of Stockholders' Equity for the Years Ended August 31, 2023 and 2024;

 Statements of Cash Flows for the Years Ended August 31, 2023 and 2024.

 (3)

 Exhibits

 The accompanying Index to Exhibits is
incorporated herein by reference.

 Item 16. 10-K Summary

 None.

 INDEX TO EXHIBITS

 Exhibit No.

 Description

 3.1

 Amended and Restated Certificate of Incorporation (incorporated by reference from Form 8-K filed September 6, 2022).

 3.2

 Certificate of Designations, Rights and Preferences of Series A Convertible Preferred Stock (incorporated by reference from Form 8-K filed September 6, 2022).

 3.3

 Certificate of Designations, Rights and Preferences of Series B Convertible Preferred Stock (incorporated by reference from Form 8-K filed November 7, 2024).

 3.4

 Certificate of Merger (incorporated by reference from Form 10 filed October 27, 2020).

 3.5

 Bylaws of Sandy Springs Holdings, Inc. (incorporated by reference from Form 10 filed October 27, 2020).

 4.4

 Form of Class C-1 Warrant (incorporated by reference from Form S-1, File No. 333-266348, filed July 27, 2022).

 4.5

 Form of Class C-2 Warrant (incorporated by reference from Form S-1, File No. 333-266348, filed July 27, 2022).

 4.6

 Form of Class C-3 Warrant (incorporated by reference from Form S-1, File No. 333-266348, filed July 27, 2022).

 10.1

 Employment Agreement between the Company and Ryan Ramnath dated July 19, 2021 (incorporated by reference from Form 8-K/A filed September 9, 2021).

 10.2

 Master Services Agreement between Telecommunications Services of Trinidad and Tobago Limited and the Company for Colocation Services dated October 21, 2021 (incorporated by reference from Form S-1/A filed November 14, 2022).

 10.3

 Statement of Work No. 1 Colocation Services by and between the Company and Telecommunications Services of Trinidad and Tobago Limited dated June 17, 2022 (incorporated by reference from Annual Report on Form 10-K filed December 14, 2023).

 10.4

 Form of Restricted Stock Agreement (incorporated by reference from Form S-1/A filed November 14, 2022).

 10.5

 Amended and Restated Line of Credit Agreement between the Company and Innovative Digital Investors Emerging Technology, L.P. dated May 13, 2023 (incorporated by reference from Annual Report on Form 10-K filed December 14, 2023).

 10.6

 Promissory Note executed by ROC Digital Mining I LLC dated October 13, 2022 (incorporated by reference from Form 8-K filed October 19, 2022).

 10.7

 Security Agreement executed by ROC Digital Mining I LLC and the Company dated October 13, 2022 (incorporated by reference from Form 8-K filed October 19, 2022).

 10.8

 Transfer, Bill of Sale and Assignment executed by ROC Digital Mining I LLC and the Company dated October 13, 2022 (incorporated by reference from Form 8-K filed October 19, 2022).

 10.9

 Limited Liability Company Operating Agreement of ROC Digital Mining I LLC dated July 27, 2022 (incorporated by reference from Form 8-K filed October 19, 2022).

 10.10

 Limited Liability Company Operating Agreement of ROC Digital Mining Manager LLC dated July 27, 2022 (incorporated by reference from Form 8-K filed October 19, 2022).

 10.11

 Colocation Services Agreement between Bitmine Immersion Technologies, Inc. and Soluna SW, LLC dated October 9, 2023 (incorporated by reference from Annual Report on Form 10-K filed December 14, 2023).

 10.12

 Amendment
 of Line of Credit Agreement between the Company and Innovative Digital Investors Emerging Technology, L.P. dated
 November 4, 2024 (incorporated by reference from Form 8-K filed November 7, 2024).

 10.13

 Master Hashrate Purchase and Sale Agreement between the Company and Luxor Technology Corporation dated November 14, 2024. (incorporated by reference from Annual Report on Form 10-K filed
 December 9, 2024).

 10.14

 Unit Lien Agreement between the Company and Luxor Technology Corporation dated November 14, 2024. (incorporated by reference from Annual Report on Form 10-K filed
 December 9, 2024).

 Code
 of Ethics (incorporated by reference to the Annual Report on Form 10-K filed December 9, 2021).

 List of Subsidiaries (incorporated by reference from Annual Report on Form 10-K filed
 December 9, 2024).

 31.1*

 Rule 13a-14(a) Certification of Principal Executive Officer.

 31.2*

 Rule 13a-14(a) Certification of Principal Accounting Officer.

 32.1*

 Section 1350 Certification of Principal Executive Officer.

 32.2*

 Section 1350 Certification of Principal Financial Officer.

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *

 Filed herewith.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) 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.

 BITMINE IMMERSION TECHNOLOGIES, INC.

 Dated: April 3, 2025

 By:

 /s/ Jonathan Bates

 Jonathan Bates, Chief Executive Officer

 (Principal Executive Officer)

 Dated: April 3, 2025

 By:

 /s/ Raymond Mow

 Raymond Mow, Chief Financial Officer

 (Principal Financial and Accounting Officer)

 Pursuant to the requirements
of 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 date indicated.

 Signature

 Title

 Date

 /s/ Jonathan Bates

 Chairman, Director and Chief Executive Officer

 Jonathan Bates

 /s/ Erik S. Nelson

 Director and President

 Erik S. Nelson

 /s/ Raymond Mow

 Director and Chief Financial Officer

 Raymond Mow

 /s/ Lori Love

 Director

 Lori Love

 INDEX TO FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm

 Balance Sheets as of August 31, 2023 and 2024

 Statements of Operations for the Years Ended August 31, 2023 and 2024

 Statements of Changes in Stockholders' Equity for Years ended August 31, 2023 and 2024

 Statements of Cash Flows for the Years Ended August 31, 2023 and 2024

 Notes to Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Shareholders and the Board of Directors of

 Bitmine Immersion Technologies, Inc.

 OPINION ON THE FINANCIAL STATEMENTS

 We have audited the accompanying balance sheet of Bitmine Immersion
Technologies, Inc. (the "Company") as of August 31, 2024, and 2023, and the related statements of operations, changes in stockholders'
equity and cash flows for the years then ended, including the revision of prior period financial statements as described in Note 9, and
the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of August 31, 2024, and 2023, and the results of its operations
and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 BASIS FOR OPINION

 These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are
a public accounting firm registered with the Public Company Accounting Oversight Board ("PCAOB") and are required
to be independent with respect to the Company in accordance with U.S. federal securities laws and applicable SEC and
PCAOB regulations.

 We conducted our audit in accordance with PCAOB standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud.

 Our audit included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. This included specific procedures to evaluate the
effects of the revision restatement described in Note 9, which we determined had no material impact on prior or current
period results. We believe that our audit provides a reasonable basis for our opinion.

 RESTATEMENT CONSIDERATIONS

 The Company revised prior-period financial statements to:

 1.

 Remove the "condensed" presentation designation to comply
with SEC Regulation S-X Article 8

 2.

 Enhance disclosures regarding cryptocurrency mining revenue components

 3.

 Reclassify certain line items for improved period-to-period comparability

 Our audit procedures confirmed:

 No material misstatement in prior periods under SEC Staff Accounting
Bulletin 99 criteria

 $0 impact on reported revenues, net loss, total equity, or cash
flows across all restated periods

 Compliance with ASC 250-10-50-7 requirements for revision restatements

 Revisions had no affect on total assets/liabilities (immaterial
under SAB 99 quantitative thresholds)

 Reclassifications represent a change in presentation vs. correction
of errors

 These changes constitute a revision restatement under ASC 250-10-50-7,
which does not require reissuance of prior financial statements or Item 4.02(a) Form 8-K disclosure.

 F- 2

 CRITICAL AUDIT MATTERS

 Critical Audit Matter: Timing and Completeness of Cryptocurrency Mining
Revenue Recognition

 Description of the Matter

 The Company generates significant revenue from Bitcoin mining activities,
which involves the validation of transactions on the Bitcoin blockchain and the subsequent receipt of newly minted Bitcoins. The revenue
recognition of these Bitcoin mining activities is complex due to:

 The decentralized nature of the blockchain,

 The requirement to assess transaction finality thresholds,

 Mining pool fee reconciliations across multiple platforms, and

 Automated systems processing over thousands of daily transactions.

 These complexities required significant auditor judgment to evaluate
the timing and completeness of revenue recognition.

 How the Critical Audit Matter Was Addressed in the Audit:
Our audit procedures related to the timing and completeness of cryptocurrency mining revenue recognition included the following:

 We evaluated the design of controls over the process for recording
Bitcoin transactions.

 We traced randomly selected mined blocks to publicly available blockchain
explorers to verify transaction finality.

 We obtained evidence of ownership by verifying the Company's control
over the public addresses associated with its Bitcoin holdings.

 We tested mining pool fee calculations for major pools to ensure
accurate net revenue recognition.

 We performed procedures to test the completeness and accuracy of
the Bitcoin transaction data used in the Company's accounting records.

 We assessed reconciliation processes for transaction completeness
by comparing mining pool reports to recorded revenues in the Company's accounting records.

 Auditor's Evaluation:
Our procedures confirmed that management's application of ASC 606 revenue recognition criteria remained consistent across periods.
Timing differences identified during our testing were immaterial, representing 0.35% of annual revenue. Disclosures in Note 2 explicitly
state the six-confirmation threshold used for recognizing Bitcoin mining revenue, ensuring compliance with ASC 606. Additionally, we verified
that the restatement adjustments described in Note 9 were properly classified as voluntary presentation changes under ASC 250-10-50-7,
with no material impact on prior or current period results.

 /s/ Bush & Associates CPA LLC

 We have served as the Company's auditor since 2024.

 Henderson, Nevada

 PCAOB ID Number 6797

 F- 3

 Bitmine Immersion Technologies, Inc.

 Balance Sheets

 2024

 2023

 ASSETS

 Current assets:

 Cash and cash equivalents

 $
 499,270

 $
 270,547

 Prepaid expenses

 675,000

 105,000

 Cryptocurrency

 14,966

 129,469

 Notes receivable related party - short term

 374,444

 374,444

 Total current assets

 1,563,679

 879,460

 Notes receivable - long term

 –

 731,472

 Notes receivable - related party long term

 280,834

 655,277

 Investment in joint venture

 667,707

 987,429

 Fixed assets, net of accumulated depreciation

 1,699,744

 495,702

 Fixed assets - not in service

 3,071,565

 4,453,466

 Total assets

 $
 7,283,529

 $
 8,202,806

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable and accrued liabilities

 $
 400,584

 $
 74,904

 Accrued interest - related party

 315,609

 97,460

 Customer advances - related party

 703,500

 –

 Loans payable - related party

 1,625,000

 1,300,000

 Deferred revenue - short term

 86,193

 86,193

 Total current liabilities

 3,130,885

 1,558,557

 Deferred revenue long term

 64,645

 386,884

 Total liabilities

 3,195,530

 1,945,441

 Commitments and contingencies

 –

 –

 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 August 31, 2024 and August 31, 2023, respectively

 Common stock, $ 0.0001 par value, 500,000,000 shares authorized; 49,912,607 and 49,665,649 shares issued and outstanding as of
 August 31, 2024 and August 31, 2023, respectively

 4,991

 4,967

 Additional paid-in capital

 12,306,833

 11,183,803

 Accumulated deficit

 ( 8,223,870
)

 ( 4,931,450
)

 Total stockholders' equity

 4,087,999

 6,257,365

 Total liabilities and equity

 $
 7,283,529

 $
 8,202,806

 The accompanying notes are an integral part of these financial statements.

 F- 4

 Bitmine Immersion
Technologies, Inc.

 Statements
of Operations

 Year

 Year

 Ended

 Ended

 2024

 2023

 Restated

 Restated

 Revenue from the sale of mining equipment

 $
 231,133

 $
 244,036

 Revenue from hosting

 48,305

 12,020

 Revenue from self-mining

 3,030,910

 389,222

 Total revenue

 3,310,348

 645,278

 Cost of sales mining equipment

 180,891

 87,080

 Cost of sales self-mining

 2,330,752

 326,630

 Cost of sales hosting

 37,678

 9,098

 Gross profit

 761,027

 222,469

 Operating expenses:

 General and administrative expenses

 164,228

 45,008

 Marketing expense

 –

 214,550

 Investor relations

 178,190

 –

 Travel expense

 27,746

 34,431

 Professional fees

 615,256

 456,323

 Officer's compensation

 951,106

 Director's compensation

 13,200

 Employee shareholder's compensation

 399,447

 345,440

 Impairment of fixed assets

 Realized gain from the sale of bitcoin

 ( 113,803
)

 ( 21,682
)

 Impairment of cryptocurrency

 –

 3,523

 Total operating expenses

 3,208,513

 2,635,553

 Loss from operations

 ( 2,447,485
)

 ( 2,413,083
)

 Other income (expense)

 Interest expense

 ( 268,578
)

 ( 97,460
)

 Loss on the extinguishment of debt

 ( 355,123
)

 –

 Loss on investment in joint venture

 ( 311,313
)

 –

 Gain on note settlement

 35,379

 –

 Other income

 –

 16,939

 Interest income

 54,617

 28,720

 Other (expense), net

 ( 845,018
)

 ( 51,801
)

 $
)

 $
)

 Basic and diluted (loss) per common share

 $
 ( 0.07
)

 $
 ( 0.05
)

 Weighted-average number of common shares outstanding:

 Basic and diluted

 49,878,610

 49,055,973

 The accompanying notes are an integral part of these financial statements.

 F- 5

 Bitmine Immersion Technologies, Inc.

 Statements
of Changes in Stockholders' Equity

 Additional

 Total

 Series A Preferred

 Common Stock

 Paid-in

 Accumulated

 Stockholders'

 Shares

 Value

 Shares

 Value

 Capital

 Deficit

 Equity

 Balance, August 31, 2022

 453,966

 $

 48,606,915

 $
 4,861

 $
 9,865,865

 $
 ( 2,466,566
)

 $
 7,404,205

 Common stock issued for services -related party

 –

 –

 408,735

 190,897

 –

 190,938

 Common shares issued for services

 –

 –

 650,000

 285,935

 –

 286,000

 Stock based compensation -related party

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

)

)

 Balance, August 31, 2023

 453,966

 $

 49,665,649

 $
 4,967

 $
 11,183,803

 $
 ( 4,931,450
)

 $
 6,257,365

 Additional

 Total

 Series A Preferred

 Common Stock

 Paid-in

 Accumulated

 Stockholders'

 Shares

 Value

 Shares

 Value

 Capital

 Deficit

 Equity

 Balance, August 31, 2023

 453,966

 $

 49,665,649

 $
 4,967

 $
 11,183,803

 $
 ( 4,931,450
)

 $
 6,257,365

 Miscellaneous reclassification adjustment

 –

 –

 –

 –

 ( 83
)

 –

 Stock based compensation -related parties

 –

 –

 246,958

 1,123,114

 –

 1,123,138

 –

 –

 –

 –

 –

)

)

 Balance, August 31, 2024

 453,966

 $

 49,912,607

 $
 4,991

 $
 12,306,833

 $
 ( 8,223,870
)

 $
 4,087,999

 The accompanying notes are an integral part of these financial statements.

 F- 6

 Bitmine Immersion
Technologies, Inc.

 Statements of Cash Flows

 Year

 Year

 Ended

 Ended

 2024

 2023

 Cash flows from operating activities

 $
)

 $
)

 Stock based compensation

 1,123,138

 1,318,044

 Gain on note settlement

 ( 35,379
)

 –

 Loss on the sale of equipment

 31,641

 –

 Loss on investment in joint venture

 311,313

 –

 Change in balance sheet accounts

 Impairment of fixed assets

 Cryptocurrencies

 ( 225,021
)

 ( 108,035
)

 Notes receivable

 374,443

 ( 123,938
)

 Prepaid expenses

 ( 570,000
)

 ( 100,000
)

 Accounts payable and accrued expenses

 374,616

 ( 9,858
)

 Customer advances

 703,500

 –

 Deferred revenue

 ( 86,193
)

 ( 12,158
)

 Accrued interest - related party

 218,149

 97,460

 Net cash (used in) operating activities

 ( 28,753
)

 ( 809,715
)

 Cash flows from investing activities

 Return of capital on joint venture

 8,408

 –

 Purchase of fixed assets

 ( 75,934
)

 ( 612,288
)

 Net cash (used in) investing activities

 ( 67,525
)

 ( 612,288
)

 Cash flows from financing activities:

 Related party loans

 325,000

 1,300,000

 Net cash provided by financing activities

 325,000

 1,300,000

 Net increase (decrease) in cash and cash equivalents

 228,723

 ( 122,003
)

 Cash and cash equivalents at beginning of period

 270,547

 392,550

 Cash and cash equivalents at end of period

 $
 499,270

 $
 270,547

 Supplemental disclosure of non-cash investing and financing activity

 Proceeds received from bitcoin loan

 $
 577,934

 $
 –

 Repayment of bitcoin loan in bitcoin

 $
 577,934

 $
 –

 Purchase of equipment with bitcoin

 $
 339,525

 $
 –

 Repossession of equipment to satisfy notes receivable

 $
 530,805

 $
 –

 Payment of an accrued liability to a related party with
 equipment

 $
 48,938

 $
 –

 Sale of fixed assets for note receivable

 $
 –

 $
 613,514

 Property contributed to joint venture

 $
 –

 $
 987,429

 The accompanying notes are an integral part of these financial statements.

 F- 7

 BITMINE IMMERSION TECHNOLOGIES, INC.

 NOTES TO FINANCIAL STATEMENTS

 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 " or the " Company ") is a Delaware corporation that commenced operations
on July 16, 2020. A predecessor to the Company was incorporated in the state of Nevada on August 16, 1995, as Interactive Lighting Showrooms,
Inc.

 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 ").
Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 32,994,999
shares of common stock in the Company's offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services,
which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them)
collectively acquired 24,893,877 shares of common stock, which represented approximately 62% of the issued and outstanding shares at the
time.

 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 accompanying financial statements have been
prepared in accordance with the Financial Accounting Standards Board (" FASB ") "FASB Accounting Standard Codification "
(the " Codification ") which is the source of authoritative accounting principles recognized by the FASB to be applied
by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (" GAAP ")
in the United States.

 F- 8

 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 in 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 August 31, 2024, and August 31, 2023, and all references thereto have been retroactively adjusted
to reflect the split unless specifically stated otherwise.

 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, calculation of the Company's derivative liability, collectability of notes receivable, useful lives
and recoverability of long-lived assets, depreciation methods, 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, 2024.

 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.

 F- 9

 Step 1: The Company enters into a contract
with a bitcoin mining pool operator (i.e., the customer) to provide hash calculation services to the mining pool. The Company only utilizes
pool operators that determine awards under the Full Pay-Per-Share method (the "FPPS method"). The contracts are terminable
at any time by either party without penalty and the Company's enforceable right to compensation only begins when the Company starts
providing hash calculation services to the mining pool operator (which occurs daily at midnight Universal Time Coordinated (UTC)). In
general, mining revenue for industry participants consists of two parts, (1) the block reward (current bitcoin block reward is 3.125 bitcoin)
paid by the network to the miner for successfully mining a block, and (2) the transaction fees paid by the users to the miner for successfully
mining a block. When a mining pool successfully finds a block, it is awarded all of the transaction fees in that block and the reward
from the network. Under the FPPS method utilized by the Company, the Company is entitled to an award of bitcoin equal to the expected
reward per block over the measurement period of midnight-to-midnight UTC time based on the hash calculation services provided to the pool
during the measurement period. The Company is also entitled to an aware of transaction fees per block based on the average of the transaction
fees over the latest 144 blocks, each of which is about 10 minutes, and the total of 144 blocks equals one day. At the end of each day
that runs from midnight-to-midnight UTC time, the pool operator calculates the pool participant's expected block reward and transaction
fees for the day based on the hash calculation services provided by the pool participant that day, less net digital asset fees due to
the mining pool operator over the measurement period. The actual reward to the Company each day is based on the number of blocks the Company
should have hypothetically mined during the measurement period based on the hash calculation services provided to the pool by the Company
during the measurement period and the prevailing difficulty index, and is not based on the actual rewards received by the pool during
the measurement period, which may be higher or lower than the expected rewards during such period. Applying the criteria per ASC 606-10-25-1,
the contract arises at the point that the Company provides hash calculation services to the mining pool operator, which is the beginning
of each contract day at midnight UTC (contract inception), because customer consumption is in tandem with daily delivery of the hash calculation
services. Providing hash calculation services to mining pools is an output of our ordinary activities, and an enforceable right to compensation
begins when, and continues as long as, such services are provided.

 Step 2: 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).

 Based on these criteria, the Company has a single
performance obligation in providing hash calculation services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance
obligation of hash calculation services is fulfilled daily over-time, as opposed to a point in time, because the Company provides the
hashrate throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin. The Company has
full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing
power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the hash calculation services provided to the
customer will be reduced.

 F- 10

 Step 3: The transaction consideration the
Company earns is non-cash digital consideration in the form of bitcoin, which is based on the Full-Pay-Per-Share ("FPPS")
payout method under the contract with the pool operator. According to the customer contract, daily settlements are calculated from midnight-to-midnight
UTC time, and the amount due in bitcoin is credited to the Company's account shortly thereafter on the following day. The amount
of bitcoin the Company is entitled to for providing hash calculations to the Customer's mining pool under the FPPS payout method is made
up of block rewards and transaction fees less mining pool fees determined as follows:

 The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the hash calculations that the Company provides to the Customer as a percent of the Bitcoin Network's implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period.

 The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards we earned for the same period noted above.

 The sum of the block reward and transaction fees earned by the Company
 is reduced by mining pool fees charged by the Customer for operating the mining pool based on a rate schedule per the mining pool
 contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with
 the Customer's payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC
 daily. During the year ending August 31, 2024, the Company utilized one mining pool for its self-mining operations, which
 charges 0.3% of the bitcoin payable to the Company as a pool management fee. This amount represents consideration paid to the
 Customer and is thus reported as a reduction in revenue as the Company does not receive a distinct good or service from the mining
 pool operator in exchange.

 There are no other forms of variable considerations,
such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

 The above non-cash consideration is variable in
accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, since the amount of block reward earned depends on the amount of hash calculations
we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour
period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction
fees in accordance with the pool operator's agreement. While the non-cash consideration is variable, the Company has the ability
to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal.
The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue
recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on
the same day that control of the service is transferred, which is the same day as contract inception.

 The Company measures the non-cash consideration
based on the spot rate of bitcoin determined using the Company's primary trading platform for bitcoin at mid-night UTC on the day
of contract inception. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred
to the pool operator, which is the same day as the contract inception.

 F- 11

 Step 4: The transaction price is allocated
to the single performance obligation upon verification for the provision of hash calculation services to the mining pool operator. There
is a single performance obligation (i.e., hash calculation services or hashrate) for the contract; therefore, all consideration from the
mining pool operator is allocated to this single performance obligation.

 Step 5: The Company's performance
is complete in transferring the hash calculation services over-time (midnight to midnight UTC) to the customer and the customer obtains
control of that asset.

 In exchange for providing hash calculation services,
the Company is entitled to the expected bitcoin awards earned over the measurement period, plus the expected global transaction fee rewards
for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The transaction
consideration the Company receives is non-cash consideration, in the form of bitcoin. Prior to March 1, 2024, the Company measured the
bitcoin at the closing U.S. dollar spot rate at the end of the date earned (midnight UTC). As of March 1, 2024, the Company began measuring
the bitcoin at the opening U.S. dollar spot rate at the beginning of the date earned (midnight UTC). The change in method of calculating
revenues from bitcoin mining did not result in material change in the revenues reported.

 There are no deferred revenues or other liability
obligations recorded by the Company since there are no payments in advance of the performance. At the end of the 24 hour "midnight-to-midnight"
period, there are no remaining performance obligations.

 During the year ending August 31, 2024, the Company utilized one mining
pool for its self-mining operations, which charges 0.3% of the bitcoin payable to the Company as a pool management fee. During the year
ended August 31, 2024, the Company generated $ 3,030,910 in revenues from mining cryptocurrency. the year ended August 31, 2023, the Company
generated $ 389,222 in revenues from mining cryptocurrency.

 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. The Company gives hosting customers the option of having all mining proceeds paid into a cold wallet address in the Company's
name, which case the Company pays the hosting client its share of mining awards on a daily basis, or having all mining awards sent to
an account of the customer, in which case the Company bills the customer monthly for any hosting fee that is contingent on the amount
of the client's award. 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 or invoicing.

 During the year ending August 31, 2024, the Company
generated $ 48,305 in revenues 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
year ended August 31, 2024, the Company generated $ 231,133 in revenues from the sale of mining equipment.

 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 August 31, 2024, and August 31, 2023, respectively,
the Company's cash equivalents totaled $ 499,270 and $ 270,547, respectively.

 F- 12

 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 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.
Subsequent reversal of impairment losses, if the price of cryptocurrency increases, is not permitted. During the years ending August
31, 2024 and 2023, the Company realized impairment losses of $- 0 -
and $ 3,523, respectively. During
the years ending August 31, 2024 and 2023, the Company realized gains from the sale of cryptocurrency of $ 113,803
 and $ 21,682, respectively.
The Company classifies cryptocurrencies as current assets because it reasonably expects to sell or exchange all cryptocurrencies within
one quarter.

 Cryptocurrency earned by the Company through its
mining activities are included within operating activities on the accompanying statements of cash flows. The sales of digital currencies
are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales
are included in other income (expense) in the 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 an account
at Bitgo Trust ("Bitgo"), a well-known bitcoin custodian, which it also uses to liquidate its bitcoin when necessary. The
Company also has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial
Services as a backup facility, and may hold bitcoin from time to time in a cold storage wallet. The Company uses Bitgo's multi-signature
feature for account access.

 Prepaid expenses

 Prepaid expenses are amounts paid to secure the
use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are
eventually consumed, they are charged to expense. Prepaid expenses are recorded at fair market value. As of August 31, 2024, and August
31, 2023, the balances of prepaid expenses were $ 675,000 and $ 105,000 respectively.

 Customer
 advances

 The Company defers revenues when cash payments
are received in advance of the Company's performance obligation required under the guidelines of ASC 606. Customer advances
of $ 703,500 as of August 31, 2024 relate solely to an advance cash payment received from the Company's customer for the delivery
by the Company of certain transformers subject to the terms of a purchase order.

 Income taxes

 The Company accounts for income taxes under FASB
ASC 740, "Accounting for Income Taxes". Under FASB ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05,
 "Accounting for Uncertainty in Income Taxes" prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to
be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized
is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company
assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen
that might cause it to change its judgment regarding the likelihood of a tax position's sustainability under audit.

 F- 13

 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. We determine the accounting classification
of warrants we issue, as either liability or equity classified, by first assessing whether the warrants meet liability classification
in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, then
in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's
Own Stock. Under ASC 480, warrants are considered liability classified if the warrants are mandatorily redeemable, obligate us to settle
the warrants or the underlying shares by paying cash or other assets, and warrants that must or may require settlement by issuing variable
number of shares. If warrants do not meet the liability classification under ASC 480-10, we assess the requirements under ASC 815-40,
which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value,
irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature.

 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 estimated useful lives of property and equipment

 Life (Years)

 Miners and mining equipment

 Machinery and equipment

 5 - 10

 Office and computer equipment

 F- 14

 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 August 31, 2024, and August 31, 2023, the Company had $ 3,071,565 and
$ 4,453,466, respectively, of fixed assets
not in service. During the years ended August 31, 2024 and 2023, the Company performed an analysis of the carrying cost of its
mining equipment compared to the current market price for the same equipment. As a result, the Company determined that its fixed
assets had been impaired by an amount of $ 120,000
and $ 122,950 in the years ending
August 31, 2024 and 2023, respectively. This amount was recorded as an "impairment of fixed assets" on its statements of
operations for the year ended August 31, 2023.

 Recent Accounting Pronouncements

 In February 2016, the FASB issued ASU No. 2016-02,
 Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize
assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The
amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early
adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the
new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the
FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new
lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective
date and transition requirements as the new lease standard.

 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 year ended
August 31, 2022, and it did not have any impact on our financial statements.

 In December 2023, the FASB issued Accounting Standards
Update No. 2023-08, Accounting for and Disclosure of Crypto Assets ("ASC 350-60"). ASC 350-60 requires entities with certain
crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income (loss) in each reporting
period. Crypto assets that meet all the following criteria are within the scope of ASC 350-60:

 (1)
 meet the definition of intangible assets as defined in the Codification;

 (2)
 do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or
other assets;

 (3)
 are created or reside on a distributed ledger based on blockchain or similar technology;

 (4)
 are secured through cryptography;

 (5)
 are fungible; and

 (6)
 are not created or issued by the reporting entity or its related parties. In addition, entities are required
to provide additional disclosures about the holdings of certain crypto assets.

 bitcoin, which is the sole crypto asset mined
by the Company, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after
December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual
financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim
period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company has elected to early
adopt the new guidance effective September 1, 2024 resulting in a $-0- cumulative-effect change to adjust the Company's bitcoin held on
September 1, 2024.

 F- 15

 NOTE 2 – CRYPTOCURRENCIES

 The following table presents additional dollar
information about the Company's bitcoin activity for the years ended August 31, 2024 and 2023:

 Schedule of cryptocurrencies

 BTC

 Beginning balance – August 31, 2022

 $
 21,434

 1.1

 Revenue received from mining and hosting

 401,242

 15.4

 Revenue recorded as "other income" from the termination of hosting agreement

 16,939

 1.0

 Sales of equipment with proceeds received in cryptocurrency

 56,730

 1.9

 Cash proceeds from the sale of cryptocurrency, net of fees

 ( 149,435
)

 ( 3.0
)

 Cryptocurrency used to pay expenses and to purchase equipment

 ( 213,918
)

 ( 11.4
)

 Realized gain (loss) from the sale of bitcoin

 ( 3,523
)

 –

 Ending balance – August 31, 2023

 $
 129,469

 5.0

 Beginning balance – August 31, 2023

 129,469

 5.0

 Revenue received from mining and hosting

 3,079,215

 58.4

 Loan proceeds received in cryptocurrency

 527,506

 19.0

 Distribution from joint venture

 8,408

 0.2

 Purchase of equipment with cryptocurrency

 ( 339,525
)

 ( 12.2
)

 Payments of loan with cryptocurrency

 ( 882,629
)

 ( 20.8
)

 Cash proceeds from the sale of cryptocurrency, net of fees

 ( 2,137,738
)

 ( 40.2
)

 Cryptocurrency used to pay expenses and to purchase equipment

 ( 483,543
)

 ( 9.1
)

 Realized gain (loss) from the sale of bitcoin

 113,803

 –

 Ending balance – August 31, 2024

 $
 14,966

 0.3

 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:

 Schedule of disaggregation of revenue

 Year Ended August 31,

 2024

 2023

 Revenues from the sale of mining equipment

 $
 231,133

 $
 244,036

 Revenue from hosting, net

 48,305

 12,020

 Revenue from self-mining

 3,030,910

 389,222

 Total revenue

 $
 3,310,348

 $
 645,278

 F- 16

 NOTE 4 – PROPERTY AND EQUIPMENT

 The following table sets forth the components of the Company's
property and equipment at August 31, 2024 and August 31, 2023:

 Schedule of property and equipment

 August 31, 2024

 August 31, 2023

 Cost

 Accumulated

 Net Book
 Value

 Cost

 Accumulated

 Net Book
 Value

 Equipment

 $
 3,094,076

 $
 ( 1,394,332
)

 $
 1,699,744

 $
 966,407

 $
 ( 470,705
)

 $
 495,702

 Equipment not in service

 3,071,565

 –

 3,071,565

 4,453,466

 –

 4,453,466

 Total fixed assets

 $
 6,165,641

 $
 ( 1,394,332
)

 $
 4,771,309

 $
 5,419,873

 $
 ( 470,705
)

 $
 4,949,168

 Equipment not in service as of August 31, 2024
was comprised of the following:

 Schedule of equipment not in service

 Transformers

 $
 1,820,760

 Immersion containers

 1,250,805

 Total

 $
 3,071,565

 For the years ended August 31, 2024 and August
31, 2023, the Company recorded $ 923,545 and $ 470,705, respectively, in depreciation expense.

 During the year ended August 31, 2024, material
acquisitions and dispositions of equipment include:

 Repossession of two immersion containers and related equipment
valued at $ 530,805 due to the foreclosure of a note receivable, which was added back to equipment. See " Note 5. Investments
and Notes Receivables."

 Impairment of $ 120,000 of immersion fluid.

 Purchase of 1,241 miners for $ 564,709.

 Of equipment not in service at August 31, 2023, during the six
months ended February 29, 2024, the Company:

 o
 placed $851,726 of equipment in service at its Pecos, Texas location;

 o
 sold 100 S19 Pro+/117/220 to Luxor for $ 149,250,
 which had a cost basis of $ 180,891,
 for a loss of $ 31,641
 on the sale; and

 o
 placed $892,042 of equipment in service at its Trinidad location;

 NOTE 5 – INVESTMENTS AND NOTES
RECEIVABLES

 Policy on Doubtful Accounts

 We evaluate notes receivable for impairment under
the guidelines of ASC 310-10-35-41. We establish an allowance for doubtful accounts when we determine that collectability of the note
is in question.

 Investment in Joint Venture

arrangement with ROC Digital Mining to jointly develop and operate a bitcoin mining operation in Pecos, Texas. Under the joint venture,
we contributed one immersion container, six transformers and cash with a value of $ 987,429 as a capital contribution to ROC Digital Mining
I, LLC (the "ROC Digital"). In return, we received 240 Class B Units of ROC Digital pursuant to an ongoing offering of a total
of 1,000 Class B Units at $ 4,400 per unit. We simultaneously sold ROC Digital four immersion containers for $ 1,200,000, which is payable
pursuant to a promissory note the bears interest at 5 % per annum, and is payable pursuant to monthly payments of $31,204 per month commencing
on December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026. The note is secured by the equipment
that was sold. We also obtained the right to locate one container at the location that we would be able to use for self-mining.

 F- 17

 ROC Digital is managed by ROC Digital Mining
Manager LLC ("ROC Manager"), which owns all of the Class A Units of ROC Digital. The Class A Units have the sole right
to vote on any matter that requires a vote of members, including in the selection of the manager. We own 33 1/3% of ROC Manager. ROC
Manager has no financial activity and has no impact on our financial statements. ROC Manager is managed by from one to three
managers selected by a vote of the members. We do not currently have a representative or designee serving as manager of ROC Manager.
However, the
operating agreement for ROC Manager provides that ROC Manager may not take a number of actions in relation to ROC Digital without
the unanimous consent of its members, such as incurring more than $50,000 of indebtedness, approval of operating budget, filing for
bankruptcy, making any material change in ROC Digital's business, merging, consolidating or combining ROC Digital with another
entity, selling off a substantial part of ROC Digital's assets, amending the operating agreement of ROC Digital, or causing
ROC Digital to enter into any agreement with a related party.

 Day to day management of the operations of ROC
Digital is provided by ROC Digital Mining LLC ("ROC Mining"), an affiliate of ROC Manager in which we do not have an interest.
ROC Mining is entitled to a monthly management fee equal to 3% of ROC Digital's gross revenue, subject to a monthly minimum of $ 10,000
and a monthly maximum of $ 15,000. In additional ROC Mining is entitled to an acquisition fee of 1% of the cost of any assets acquired
by ROC Digital. A principal of ROC Mining serves on our board of directors.

 As of August 31, 2024 the joint venture arrangement
was classified as a long term asset on the Company's balance sheet with a value of $ 667,707. The site became electrified in June
2023. The reduction in the value of the investment of $ 311,313 during the year ending August 31, 2024 represents the Company's approximate
30.3% portion of the ROC Digital's operating losses during the year. This loss was recorded as "loss on investment" on
the Company's Statements of Operations for the year ended August 31, 2024. During the year ended August 31, 2024, the
Company received an in-kind distribution of.01992 bitcoin, valued at $8,408, as a return of capital from the joint venture.

 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 August 31, 2024 and August 31, 2023, notes receivable consist of the following:

 Schedule of notes receivable

 As of
 August 31, 2024

 As of
 August 31, 2023

 Note receivable with an amended principal amount of $ 731,472, bearing interest at 5.0 % per annum payable monthly. Principal due in one payment on August 31, 2024. Borrower has right to prepay principal with a 10% discount.

 $
 –

 $
 731,472

 Note receivable-related party in original principal amount of $ 1,200,000, bearing interest at 5.0 % per annum, payable in 41 equal monthly payments of $31,204 commencing December 30, 2022

 655,277

 1,029,721

 Total

 655,277

 1,761,193

 Less: Non-current portion

 ( 280,834
)

 ( 1,386,749
)

 Notes receivable – short-term

 $
 374,444

 $
 374,444

 As of August 31, 2024 and August 31, 2023 the
balance of notes receivable was $ 655,277 and $ 1,761,193, respectively. During the years ended August 31, 2024 and 2023, the Company recorded
$ 54,617 and $ 28,720, respectively, in interest income on these notes.

 During the year ending August 31, 2024, the Company
declared a default under the $ 731,472 note and foreclosed on the collateral securing the note. As a result of the foreclosure, the Company
recovered equipment valued at $ 530,805 at the location. Net of the write-off of the $ 731,472 note receivable, and reversal of $ 236,046
in deferred revenue associated with this note, the Company recorded a gain of $ 35,379 due to the foreclosure.

 F- 18

 NOTE 6 – LOANS PAYABLE AND ACCRUED LIABILITIES,
RELATED PARTY

 Line of Credit from IDI

 On October 19, 2022, the Company entered into
a Line of Credit Agreement (the "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 LOC Agreement provided for loans of up to $ 1,000,000 at the request of the Company to finance the purchase
of equipment necessary for the operation of the Company's business, and related working capital. Loans under the LOC Agreement accrue
interest at twelve percent ( 12 %) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The Company
had the right to submit draw requests under the LOC Agreement until April 15, 2023. Each draw request is subject to the approval of IDI
in its sole discretion. The amount drawn, plus all accrued interest therein, was repayable in full on December 1, 2023.

 Effective May 13, 2023, the Company and IDI amended
the 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. As of August 31, 2024, the amount of principal and interest due to related party was $ 1,625,000
and $ 315,609, respectively, as compared to $ 1,300,000 and $ 97,460 at August 31, 2023.

 Transactions with ROC Digital Mining I, LLC

arrangement with ROC Digital Mining I, LLC ("ROC Digital") to jointly develop and operate a bitcoin mining operation in Pecos,
Texas. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $ 987,429 as a capital
contribution to ROC Digital Mining I, LLC (the "ROC Digital"). In return, we received 240 Class B Units of ROC Digital pursuant
to an ongoing offering of a total of 1,000 Class B Units at $ 4,400 per unit. We simultaneously sold ROC Digital four immersion containers
for $ 1,200,000, which is payable pursuant to a promissory note that bears interest at 5 % per annum, and is payable pursuant to monthly
payments of $31,203.64 per month commencing on December 30, 2022, with any remaining principal and interest payable in full on May 31,
2026. The note is secured by the equipment that was sold. As of August 31, 2023 and August 31, 2024, the note receivable from ROC Digital
amounted to $ 1,029,721 and $ 655,277, respectively.

 We also obtained the right to locate one container
at the location that we would be able to use for self-mining. Under our hosting agreement with ROC Digital, we located one immersion container
at the site for $500 per month, plus payment of our pro rata share of electricity, internet and insurance for the site. Under the hosting
agreement, we also agreed to contribute $100,000 toward the electricity deposit for the site, which is refundable to us at the earlier
of the date the electricity provider releases the deposit or 90 days after the expiration or termination of the hosting agreement. The
hosting agreement has a term of one year, subject to our right to renew the agreement for two one year terms after receipt of notice of
the renewal terms of the joint venture's electricity supply agreement for the upcoming year.

 See "Note 5 – Investment in Joint
Venture," for more information about ROC Digital.

 Transactions with Rykor Energy Solutions, LLC

 In May 2024, the Company brokered the sale of
20 transformers to Rykor Energy Solutions, LLC ("Rykor"). The total sales price of the transformers is approximately $1,407,000
and the Company's total cost is expected to be $1,340,000. As of August 31, 2024 the Company had received $ 703,500
 against this order which is classified as an advance payment-related party since the order had not shipped as of August 31, 2024.
Additionally, the Company made a payment of $ 670,000
 to the supplier of the transformers. This amount is classified as a prepaid expense on the Company's balance sheet as of
August 31, 2024. After August 31, 2024, the transaction was consummated. See " Note 10. Subsequent Events. " Rykor owns
2,672,000 shares of our common stock and warrants to purchase an additional 5,344,000 shares, and as a result is the beneficial owner
of approximately 17.8% of our common stock. A principal of Rykor (who is also a principal of ROC Mining) also serves on our board of
directors.

 F- 19

 NOTE 7 – STOCKHOLDERS' EQUITY

 Stockholders' Equity

 The Company is authorized to issue 500,000,000
shares of Common Stock with a par value of $ 0.0001 per share, and 20,000,000 shares of preferred stock with a par value of $ 0.0001 per
share. As of August 31, 2024, and August 31, 2023, there were 49,912,607 and 49,665,649 shares of common stock outstanding, respectively.

 Series A Convertible Preferred Stock

 As of August 31, 2024 and August 31, 2023, our
board of directors had authorized the issuance of one series of preferred stock, the Series A Convertible Preferred Stock (the "Series
A Preferred"), for 500,000 shares, of which 453,966 shares had been issued. The Series A Preferred has the following rights:

 Dividends: Each share of Series
A Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have
received if such share of Series A Preferred were converted into shares of common stock immediately prior to the record date of the dividend
declared on the common stock.

 Liquidation Preference: The
Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $ 10 per
share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior
security, including the common stock.

 Voting Rights: Each holder of
Series A Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event
it shall have the number of votes equal to the number of shares of common stock into which such share of Series A Preferred Stock would
be convertible on the record date for the vote or consent of shareholders. Each holder of Series A Preferred Stock shall also be entitled
to one vote per share on each submitted to a class vote of the holders of Series A Preferred Stock.

 Directors: The Series A Preferred
Stock has the exclusive right to nominate and vote on two (2) members of the board of directors.

 Voluntary Conversion Rights:
Each share of Series A Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of
the Series A Preferred divided by a conversion price of $ 0.575 per share.

 Rank: The Series A Preferred
ranks senior to the common stock and any other class or series of preferred stock that may be authorized.

 Redemption by Company:
The Company may redeem all of the Series A Preferred at any time on twenty days notice by payment of the liquidation preference of the
Series A Preferred.

 Redemption by the Holders: Any
holder of Series A Preferred may request that some or all of its Series A Preferred be redeemed to the extent of 30 % of the liquid net
assets of the Company in excess of $ 2 million. To the extent any holder requests redemption under this provision, the Company is required
to send a notice to all other Series A Preferred holders, who will be entitled to request redemption of some or all of their shares as
well. Each holder is required to redeem at least the lesser of 10,000 shares or the number of shares of Series A Preferred held by the
holder.

 F- 20

 Redemption on Fundamental Transaction:
In the event the Company engages in a fundamental transaction, a majority of the holders of Series A Preferred may require the Company
to redeem all of the Series A Preferred at the closing of the transaction.

 Right to Participate in Future Fundings:
Each holder of Series A Preferred has the right to participate in future capital raising transactions to the extent of its proportionate
ownership of the Company on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible
into common or preferred stock, except for certain exempted transactions.

 Anti-Dilution Protection: The
conversion price of the Series A Preferred is subject to reduction to the extent the company issues shares of common stock at a purchase
price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price
less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the
then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise
and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.

 Issuance of Shares

issued the following shares:

 83,056 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 36,545, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 72,993 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 32,117, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 90,909 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 40,000, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 During the year ended August 31, 2023, the Company
issued the following shares:

 71,429 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 31,429, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 70,423 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 30,986, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 F- 21

 45,455 shares were issued to an officer pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The shares were valued at $ 20,000 or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering. The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance to January 15, 2027.

 100,000 shares were issued to a third party for investor relations services. The shares were valued at $ 44,000, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering.

 200,000 shares were issued to an investment banking firm as an annual renewal of an investment banking agreement. The shares were valued at $0.44 per share.

 71,429 shares were issued to an officer
 pursuant to the terms of his employment contract, which entitle the officer to a quarterly bonus payable in shares of common stock. The
 shares were valued at $ 31,429, or $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering.
 The bonus shares vest on January 15, 2027 if the officer is still employed with us on that date, and are amortized from the date of issuance
 to January 15, 2027.

 150,000 shares were issued to a Director pursuant to the terms of her Director appointment. The shares vest prorate over a 15 month period at the rate of 10,000 shares per month commencing on August 31, 2023. These shares were valued at $0.44 per share, based on the value indicated by the Company's recently completed Unit Offering.

 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 August 31, 2024, the Company had the following
warrants outstanding:

 Schedule of warrants outstanding

 Class

 Amount Outstanding

 Exercise Price

 Expiration Date

 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

 8,320,800

 NOTE 8 – COMMITMENTS AND CONTINGENCIES

 As of August 31, 2024 and August 31, 2023, the
Company had no contractual commitments.

 F- 22

 NOTE
9 - RESTATEMENT DETAILS

 The Company revised prior-period financial statements to enhance comparability
and transparency, including the following changes:

 1.

 Removal of "condensed" designation

 The Company removed the "condensed" presentation terminology to align with SEC Regulation S-X Article 8 requirements for full
financial statement presentation.

 2.

 Expanded revenue disclosures

 The Company disaggregated cryptocurrency mining revenue components to provide greater transparency into revenue streams. This resulted
in the addition of new line items in the Statement of Operations.

 Materiality Assessment

 The Company determined that these revisions do not represent corrections
of material errors but rather voluntary presentation enhancements under ASC 250-10-50-7. The following factors were considered in making
this determination:

 Quantitative immateriality: The changes did not affect total assets, liabilities, or equity
and had no impact on reported revenues, net loss, or cash flows across all periods presented.

 Qualitative immateriality: These revisions did not alter trends in liquidity, capital
resources, or operating results and would not influence investor decisions under SEC Staff Accounting Bulletin (SAB) 99 criteria.

 Impact on Financial Statements

 The revisions:

 Do not alter previously reported revenues, net loss, equity, or cash flows.

 Were voluntarily adopted to enhance financial statement comparability and usability for investors.

 Conclusion

 These changes constitute a revision restatement under ASC 250-10-50-7.
As such:

 1.

 Comparative periods have been adjusted to reflect consistent application of the revised presentation
standards.

 2.

 Reissuance of prior financial statements is not required.

 3.

 No notification of non-reliance under Item 4.02(a) of Form 8-K is necessary.

 The following presents a reconciliation of the
Statement of Operations for prior years ended August 31, 2024 and 2023 as previously reported to the restated amounts.

 F- 23

 Bitmine Immersion Technologies, Inc.

 Statements of Operations

 Schedule of
 reconciliation statement of operations

 As Reported

 As Restated

 As Reported

 As Restated

 Year

 Year

 Year

 Year

 ended

 ended

 ended

 ended

 Restatement

 Restatement

 2024

 Adjustment

 2024

 2023

 Adjustment

 2023

 Revenue from the sale
 of mining equipment

 $
 231,133

 $
 –

 $
 231,133

 $
 244,036

 $
 –

 $
 244,036

 Revenue from hosting

 48,305

 –

 48,305

 12,020

 –

 12,020

 Revenue from self-mining

 3,030,910

 –

 3,030,910

 389,222

 –

 389,222

 Total revenue

 3,310,348

 –

 3,310,348

 645,278

 –

 645,278

 Cost of sales mining equipment

 180,891

 –

 180,891

 87,080

 –

 87,080

 Cost of sales self-mining

 2,330,752

 –

 2,330,752

 326,630

 –

 326,630

 Cost of sales hosting

 37,678

 –

 37,678

 9,098

 –

 9,098

 Gross profit

 761,027

 –

 761,027

 222,469

 –

 222,469

 Operating expenses:

 General and administrative expenses

 370,163

 ( 205,936
)

 164,228

 293,989

 ( 248,981
)

 45,008

 Marketing fees

 –

 –

 –

 214,550

 214,550

 Investor relations

 –

 178,190

 178,190

 –

 –

 Travel expense

 –

 27,746

 27,746

 34,431

 34,431

 –

 –

 Professional fees

 615,256

 –

 615,256

 456,323

 –

 456,323

 Related party compensation

 1,293,353

 ( 1,293,353
)

 1,309,746

 ( 1,309,746
)

 Officers compensation

 –

 –

 951,106

 951,106

 Directors compensation

 –

 –

 13,200

 13,200

 Employee shareholder compensation

 –

 399,447

 399,447

 –

 345,440

 345,440

 Impairment of fixed assets

 –

 –

 Realized gain from the sale of bitcoin

 ( 113,803
)

 –

 ( 113,803
)

 ( 21,682
)

 –

 ( 21,682
)

 Impairment of cryptocurrency

 –

 –

 –

 3,523

 –

 3,523

 Total operating expenses

 3,208,514

 ( 0
)

 3,208,513

 2,635,553

 ( 0
)

 2,635,553

 Loss from operations

 ( 2,447,487
)

 –

 ( 2,447,485
)

 ( 2,413,083
)

 –

 ( 2,413,083
)

 Other income (expense)

 Interest expense

 ( 268,578
)

 –

 ( 268,578
)

 ( 97,460
)

 –

 ( 97,460
)

 Loss on the extinguishment of debt

 ( 355,123
)

 –

 ( 355,123
)

 –

 –

 –

 Loss on investment

 ( 311,313
)

 –

 ( 311,313
)

 –

 –

 –

 Gain on note settlement

 35,379

 –

 35,379

 –

 –

 –

 Other income

 –

 –

 –

 16,939

 –

 16,939

 Interest income

 54,617

 –

 54,617

 28,720

 –

 28,720

 Other income (expense), net

 ( 845,018
)

 –

 ( 845,018
)

 ( 51,801
)

 –

 ( 51,801
)

 $
 ( 3,292,504
)

 $
 –

 $
)

 $
)

 –

 $
)

 –

 Basic and diluted (loss) per common
 share

 $
 ( 0.07
)

 –

 $
 ( 0.07
)

 $
 ( 0.05
)

 $
 –

 $
 ( 0.05
)

 Weighted-average number of common
 shares outstanding:

 Basic and diluted

 49,878,610

 –

 49,878,610

 49,055,973

 49,055,973

 F- 24

 NOTE 10 – SUBSEQUENT EVENTS

 On November 4, 2024, Company entered into an amendment
to its LOC Agreement with IDI. Prior to the amendment, the LOC provided for a maximum amount of $1,750,000, and the full amount was
due and payable on December 1, 2024. As of August 31, 2024 the loan balance due to IDI was $1,625,000. Pursuant to the amendment, the
maximum amount has been increased to $2,300,000. In addition, the Company has the right to extend the maturity for six monthly periods
in consideration for an extension fee of $25,000 for each extension, which will be added to the balance due under the LOC. In addition,
IDI was granted the right to convert 11,500,000 shares of common stock it owns into 2,300 shares of Series B Convertible Preferred Stock.
In consideration for the above the amendments, IDI agreed to approve a new draw under the LOC of $250,000 and to purchase an additional
200 shares of Series B Convertible Preferred Stock for $200,000, for net new financing to the Company of $450,000.

 On November 4, 2024, the Company approved a Certificate
of Designations, Rights and Preferences of Series B Convertible Preferred Stock (the "Certificate of Designation") with the
Delaware Secretary of State, which authorized the creation and issuance of up to 3,000 shares of Series B Convertible Preferred Stock
(the "Series B Preferred"). Under the Certificate of Designation, the Series B Preferred has the following rights:

 Dividends: Each share of Series
B Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have
received if such share of Series B Preferred were converted into shares of common stock immediately prior to the record date of the dividend
declared on the common stock.

 Liquidation Preference: The
Series B Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $1,000
per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any
junior security, including the common stock.

 Voting Rights: Each holder of
Series B Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event
it shall have the number of votes equal to the number of shares of common stock into which such share of Series B Preferred Stock would
be convertible on the record date for the vote or consent of shareholders. Each holder of Series B Preferred Stock shall also be entitled
to one vote per share on each submitted to a class vote of the holders of Series B Preferred Stock.

 Voluntary Conversion Rights:
Each share of Series B Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of
the Series B Preferred divided by a conversion price of $0.20 per share.

 Rank: The Series B Preferred
ranks senior to the common stock and any other class or series of preferred stock that may be authorized, but ranks junior to the Series
A Convertible Preferred Stock.

 Redemption by Company: The Company
may redeem all of the Series B Preferred at any time on twenty days notice by payment of the liquidation preference of the Series B Preferred.

 Redemption by the Holders: The
holders of the Series B Preferred shall not have the right to compel the Company to redeem their Series B Preferred unless the Company
is in default under the terms of the Certificate of Designation..

 Redemption on Fundamental Transaction:
In the event the Company engages in a fundamental transaction, the Company shall be obligated to redeem all of the Series B Preferred
at the closing of the transaction, provided that holders of the Series B Preferred shall be entitled to convert their shares of Series
B Preferred into common stock in lieu of having them redeemed.

 F- 25

 Right to Participate in Future Fundings:
Each holder of Series B Preferred has the right to participate in future capital-raising transactions to the extent of its proportionate
ownership of the Company on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible
into common or preferred stock, except for certain exempted transactions.

 Anti-Dilution Protection: The
conversion price of the Series B Preferred is subject to reduction to the extent the company issues shares of common stock at a purchase
price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price
less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the
then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise
and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.

 In November 2024, the Company issued 2,500 shares
of Series B Preferred to IDI in consideration for 11,500,000 shares of common stock owned by IDI and a cash investment of $200,000.

 On November 14, 2024, the Company entered into
an agreement to purchase 3,000 used S-19j Pro bitcoin miners for a total price of $1,035,000 from Luxor Technology Corporation (" Luxor ").
The Company plans to engage a third party to host 2,900 miners. The Company expects to deploy the remaining 100 miners at its Trinidad
location. The purchase price is payable as follows: 90% was due immediately, and 10% will be due within 60 days. Of the amount due immediately,
$765,861.71 was paid from the proceeds of a Master Hashrate Purchase and Sale Agreement (the " Hashrate Sale Agreement "),
and the balance will be paid from cash on hand. Under the Hashrate Sale Agreement, the Company sold 90 PH per day for 365 days at a price
of 0.0005 per hashrate.

 Subsequent to August 31, 2024, the Company issued
1,255,000 common shares as follows:

 500,0000 shares each, for a total of 1,000,000 shares were issued
to two executive officers as part of their compensation for fiscal 2025 officer services. These shares were valued at $0.44 each. The
p rice of $0.44 is based upon a price indicated by a recent offering of Units by the Company for
$1.25 per Unit to unrelated investors, with each Unit consisting of one share of common stock, one Class C-1 Warrant and one Class C-2
Warrant.

 255,000 common shares were issued to various service providers
in lieu of cash. These shares were valued at $0.44 each.

 In May 2024, the Company brokered the sale of
20 transformers to Rykor Energy Solutions, LLC ("Rykor"). The total sales price of the transformers was approximately $1,407,000
and the company's total cost was expected to be $1,340,000. As of August 31, 2024 the Company had received $703,500 against this
order which is classified as an advance payment-related party since the order had not shipped as of August 31, 2024. Additionally, the
Company made a payment of $670,000 to the supplier of the transformers. This amount is classified as a prepaid expense on the Company's
balance sheet as of August 31, 2024. Subsequent to August 31, 2024 by mutual agreement the order was reduced to 10 transformers instead
of 20 transformers. These units were delivered and the Company recorded revenue of $703,500 with a cost of sales of $670,000 resulting
in a profit of $33,500, which will be recorded during the Company's first fiscal quarter ended November 30, 2024.

 F- 26