What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-09-24 compared with 2024-12-16 · 387 added, 403 removed, 708 unchanged (53% of the section changed)

31 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

GBQ Partners LLC

/s/ GBQ Partners LLC

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

Columbus, Ohio

December 16, 2024

September 24, 2025

CONSOLIDATED BALANCE SHEETS

2 unchanged sentences

Inventory, net

Due from Bloomios

Due from VitaMedica transition

Prepaid expenses and other receivables

Assets available for sale - Interactive offers current

Current digital assets at fair value

Assets available for sale - Building

Assets available for sale - VitaMedica current

Assets available for sale - E-core current

Purchase price receivable - VitaMedica

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Deferred tax asset

Discontinued assets available for sale - Interactive offers

Discontinued assets available for sale - VitaMedica

Discontinued assets available for sale - E-core

Digital assets at fair value, net of current

Right-of-use asset, net

Total other assets

$ 123,806,844

LIABILITIES AND STOCKHOLDERS' EQUITY

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Current portion of note payable

Current portion of convertible notes payable

Current portion of acquisition note payable - E-core

Current portion of related party note payable

Short-term treasury debt

Current portion of Cygnet subsidiary notes payable

Note payable on building for sale

Discontinued liabilities - Interactive offers

Discontinued liabilities - VitaMedica

Discontinued liabilities - E-core

Current portion of operating lease payable

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Convertible notes payable

Acquisition note payable - E-core

Notes payable - Cygnet subsidiary

Total long-term liabilities

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Total stockholders' equity attributable to Upexi, Inc.

Non-controlling interest in subsidiary

Total stockholders' equity

Total liabilities and stockholders' equity

$ 123,806,844

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

1 unchanged sentence

Year Ended June 30,

$ 14,826,336 $ 26,000,652

Digital asset revenue

Total revenue

15,811,345 26,000,652

Cost of revenue

4,943,305 13,176,073

10,868,040 12,824,579

Operating expenses

Sales and marketing

4,001,094 5,989,727

Distribution costs

4,691,964 8,611,702

General and administrative expenses

11,935,582 6,771,937

Realized and unrealized (gain) loss on digital assets

( 105,474 ) -

Share-based compensation

2,356,862 1,169,843

Amortization of acquired intangible assets

76,758 2,410,431

681,000 1,268,355

Impairment of long-lived asset - building

1 unchanged sentence

Impairment of intangible assets and goodwill

Lease impairment, Delray Beach facility

Loss from operations

Lease impairment (gain on settlement), Delray Beach facility

( 269,994 ) 289,969

23,367,792 35,287,018

Loss from operations

( 12,499,752 ) ( 22,462,439 )

Other income (expense), net

Change in derivative liability

Interest (expense) income, net

( 10,743 ) ( 16,443 )

Interest (expense) income, net

( 1,173,714 ) ( 3,124,723 )

1 unchanged sentence

( 1,184,457 ) ( 3,141,166 )

( 4,676,160 )

Loss on operations before income tax

( 13,684,209 ) ( 25,603,605 )

( 16,956,883 )

Income tax benefit

Net income (loss) from continuing operations

( 25,271,504 )

Income tax benefit (expense)

Net loss from continuing operations

( 13,684,209 ) ( 25,271,504 )

Gain (loss) from the sale of:

Infusionz and select assets

( 2,212,542 )

Interactive Offers

- ( 1,737,326 )

( 2,212,542 )

Income (loss) on discontinued operations

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Income (loss) income from discontinued operations

( 1,370,124 )

Net loss attributable to non-controlling interest

Net income (loss) attributable to Upexi, Inc.

$ ( 13,684,209 ) ( 23,658,438 )

$ ( 16,930,289 )

Basic income (loss) per share:

Income (loss) per share from continuing operations

$ ( 1.73 ) $ ( 24.60 )

(Loss) income per share from discontinued operations

Total income (loss) per share attributable to Upexi shareholders

$ ( 1.73 ) $ ( 23.03 )

Diluted income (loss) per share:

Income (loss) per share from continuing operations

$ ( 1.73 ) $ ( 24.60 )

(Loss) income per share from discontinued operations

Total income (loss) per share attributable to Upexi shareholders

$ ( 1.73 ) $ ( 23.03 )

Basic weighted average shares outstanding

7,914,268 1,027,232

Fully diluted weighted average shares outstanding

7,914,268 1,027,232

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

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$ ( 23,201,175 )

Amortization of common stock issuance for services

$ ( 505,147 )

Stock based compensation, restricted stock grant

Stock based compensation, amortization of stock options

Issuance of common stock for acquisition of E-Core

Issuance of common stock for interest on note payable

Common stock issued for cash, net

Issuance of stock and equity for purchase of Cygnet

Issuance of stock for conversion of debt

( 23,658,438 )

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$ ( 46,859,613 )

$ ( 505,147 )

Stock based compensation, restricted stock grant

Stock based compensation, amortization of stock options

Issuance of stock and equity for purchase of Cygnet

Issuance of stock for conversion of debt

Issuance of preferred series A stock

Issuance of stock for the conversion of debt

Capitalized interest related to convertible debt

Issuance of stock for the exercise of warrant on convertible debt

Issuance of stock for the cashless exercise of options

Issuance of stock for vested restricted stock grants

Issuance of stock for services

Issuance of stock for the exercise of cashless warrants

Issuance of common stock

( 13,684,209 )

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$ 150,640,935

$ ( 60,543,822 )

* Common stock has been restated to reflect the 1 for 20 reverse split

** Common stock par value has been adjusted to $0.00001

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

CONSOLIDATED STATEMENTS OF CASH FLOW

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended June 30,

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Depreciation and amortization

Non-cash loss on the sale of Infusionz and select assets, net

Unrealized (gain) loss on digital assets

Digital asset revenue

Gain on the sale of VitaMedica and income from discontinued operations

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Impairment of goodwill and intangible assets

Inventory write-offs

Inventory write-off

Loss on impairment of building

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Gain on sale of interactive offers

Loss on the disposal of assets

Bad debt reserve for Amazon receivable

Reduction of acquisition payable

Issuance of stock for services

Lease impairment (gain on settlement)

Change in deferred tax asset

( 3,139,227 )

Noncontrolling interest

Change in derivative

Stock based compensation

1 unchanged sentence

Accounts receivable

( 1,366,269 )

Prepaid expenses and other assets

2 unchanged sentences

Deferred revenue

Net cash used in operating activities - Continuing Operations

Net cash provided by operating activities - Continuing Operations

( 8,423,042 )

( 4,894,750 )

Net cash provided by operating activities - Discontinued Operations

Net cash (used in) provided by operating activities

Cash flows from investing activities

Acquisition of Lucky Tail

Net cash provided by (used in) operating activities - Discontinued Operations

Net cash provided by operating activities

( 8,423,042 )

Cash flows from investing activities

Proceeds from the sale of the building, net

Proceeds from the sale of VitaMedica, Inc.

Proceeds from the sale of E-core

Proceeds from the sale of Interactive Offers, net of liabilities paid

Acquisition of Cygnet Online LLC, net

Acquisition and sale of digital assets, net

( 104,910,839 )

Proceeds from the sale of Infusionz and selected assets

Acquisition of Cygnet Online LLC, net

Acquisition of property and equipment

Net cash provided by (used in) investing activities - Continuing Operations

Net cash (used in) investing activities - Discontinued Operations

( 99,293,083 )

Net cash (used in) provided by investing activities - Discontinued Operations

( 4,206,823 )

Net cash used in investing activities

Net cash provided by (used in) investing activities

( 99,293,083 )

1 unchanged sentence

Cash flows from financing activities

Repayment of the senior convertible notes payable

( 6,305,406 )

Proceeds from the issuance of stock

Payment on acquisition notes payable

Payment on convertible note

Proceeds from issuance of short-term debt

Proceeds from warrant exercise

Proceeds from issuance of stock

Issuance of preferred stock series A

Repayment of related party advance

Proceeds from related party advance

Proceeds from convertible note payable

Proceeds on note payable on building

Proceeds from issuance of convertible notes

Repayment of related party note payable

Repayment on note payable on building

Proceeds on note payable, related party

Net cash (used in) provided by financing activities - Continuing Operations

Net cash used in financing activities - Discontinued Operations

( 2,634,538 )

Net cash used in financing activities - Continuing Operations

Net cash (used in) provided by financing activities - Discontinued Operations

Net cash used in financing activities

Net decrease in cash - Continuing Operations

( 4,417,428 )

Net increase (decrease) in cash - Continuing Operations

( 4,417,427 )

Net (decrease) increase in cash - Discontinued Operations

( 1,245,615 )

Cash, beginning of period

4 unchanged sentences

Non-cash Investing and Financing Activities

Non-cash proceeds in the sale of VitaMedica

Issuance of common stock for acquisition of Cygnet

Non-cash proceeds in the sale of VitaMedica

Issuance of common stock for the repayment of convertible notes payable

Issuance of debt for acquisition of Cygnet

Bloomios non-cash payment of receivables, net

Issuance of stock for services

Issuance of stock for interest expense

Issuance of common stock for the repayment of convertible note payable

Liabilities assumed from acquisition of E-Core

$ ( 7,712,168 )

Issuance of stock for acquisition of E-Core

Assets available for sale

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

1 unchanged sentence

June 30, 2025 and 2024

As used in this annual report and unless otherwise indicated, the terms “we”, “us”, “our”, “Upexi”, and the “Company” mean Upexi, Inc., a Nevada corporation formed in 2018.

The Company has eleven active subsidiaries, which include:

HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company

Gummy Labs, LLC, a Delaware limited liability company

MW Products, Inc., a Nevada corporation

Upexi Holding, LLC, a Delaware limited liability company

Upexi Pet Products, LLC, a Delaware limited liability company

Upexi Enterprise, LLC, a Delaware limited liability company

Upexi Distribution LLC, a Delaware limited liability company

Upexi Distribution Management LLC, a Delaware limited liability company

Upexi Property & Assets, LLC, a Delaware limited liability company

Upexi 17129 Florida, LLC, a Delaware limited liability company

Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company (100% owned as of September 1, 2023)

The following subsidiaries had no activity during the years ended June 30, 2024 and 2023:

Upexi CP, LLC, a Delaware limited liability company

Upexi CP / Canada Inc., a Canada corporation

Prax Products, LLC, a Florida limited liability company

Upexi Development and Marketing, LLC., a Delaware limited liability company

Trunano Labs, Inc., a Nevada corporation

The following subsidiaries were divested during the years ended June 30, 2024 and 2023:

VitaMedica, Inc.

a Nevada corporation

E-Core Technology, Inc.

a Florida corporation

Infusionz LLC, a Colorado limited liability company

Interactive Offers, LLC, a Delaware limited liability company

In addition, the Company has six wholly owned subsidiaries that had no activity during the years ended June 30, 2024 and 2023.

All of the entities were dissolved or cancelled as of June 30, 2024.

Steam Distribution, LLC, a California limited liability company

One Hit Wonder, Inc., a California corporation

One Hit Wonder Holdings, LLC, a California limited liability company

Vape Estate, Inc., a Nevada Corporation

SWCH, LLC, a Delaware limited liability company

Cresco Management, LLC, a California limited liability company

Basis of Presentation

Nature of Operations

Upexi, Inc., a Delaware corporation, originally formed as a Nevada corporation in September of 2018.

The Company has seven active subsidiaries that are part of the Company.

We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens.

We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products.

Solana Treasury Strategy.

We have recently diversified into the cryptocurrency industry and cash management of assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens.

Early in 2025, we updated and modified our cash management and treasury strategy to include holding digital currency assets directly on our balance sheet.

This was a shift from before when we held excess cash primarily in FDIC-insured interest-bearing accounts.

The change to adopt this strategy results from our intention to obtain the highest yield on excess cash.

Under our new approach, our treasury policy focuses primarily on Solana (“SOL”).

The approach involves applying a public-market treasury model to an asset that is considered earlier in its lifecycle, with respect to both development and usage, as well as institutional adoption, than Bitcoin.

Management will focus its resources to this digital asset strategy and a significant portion of the balance sheet will be allocated to holding Solana in the Company’s digital asset treasury.

Currently our treasury is exclusively dedicated to the SOL digital asset and currently we do not intend to dedicate any of the treasury allocated capital to other digital assets.

Our products are distributed in the United States of America and internationally through multiple entities and managed through our locations in Florida.

Upexi operates from our corporate location in Tampa, Florida, where direct to consumer, wholesale and Amazon sales are driven by on-site and remote teams for all brands.

The Tampa location also supports all the other locations with accounting, corporate oversight, day-to-day finances, business development and operational management operating from this location.

The Tampa, Florida location also supports all the other locations with accounting, corporate oversight, day-to-day finances, business development and operational management operating from this location.

MW Products operates from our corporate headquarters and our Tampa, Florida warehouse, managing direct to consumer, wholesale and Amazon sales for multiple brands and develops new products through our research and development team in Henderson, Nevada and Odessa, Florida.

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Upexi Distribution operates from our Tampa, Florida warehouse providing warehousing, distribution and other services in support of our product sales.

Basis of Presentation

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Interactive Offers, LLC a Delaware limited liability corporation;

VitaMedica, a Nevada corporation;

and E-Core Technology, Inc.

d/b/a New England Technology, Inc.

have been classified as discontinued operations for the year ended June 30, 2024.

All intercompany accounts and transactions have been eliminated as a result of the consolidation.

Significant Accounting Policies

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Actual results could differ from those estimates.

Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation and valuation allowance on deferred tax assets.

Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for credit losses, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation and valuation allowance on deferred tax assets.

Cash - The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents.

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Interest is not charged by the Company on past due accounts.

The carrying amount of receivables is reduced by a valuation allowance for expected credit losses, as necessary, that reflects management’s best estimate of the amount that will not be collected.

The carrying amount of receivables is reduced by an allowance for expected credit losses, as necessary, that reflects management’s best estimate of the amount that will not be collected.

This estimation takes into consideration historical experience, current conditions and as applicable, reasonable supportable forecasts.

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The net accounts receivable balances at June 30, 2025, 2024 and 2023 were $ 157,515 , $ 606,885 and $ 1,125,394 respectively.

Based on management’s review of accounts receivable, the valuation allowance was approximately $ 61,750 and $ 0 at June 30, 2024 and 2023, respectively.

Based on management’s review of accounts receivable, the allowance for credit losses was approximately $ 636,600 and $ 61,800 at June 30, 2025 and 2024, respectively.

The Company had bad debt expenses of $ 933,950 , $ 24,500 and $ 4,750 for the years ended June 30, 2025, 2024 and 2023, respectively.

The Company wrote off approximately $ 359,000 of accounts receivable balances in the year ended June 30, 2025 and no amount of accounts receivable in the year ended June 30, 2024.

The increase in the reserve is related to the eliminated recommerce business and the reserve amounts held by Amazon for over six months.

Inventory - The Company reviews the inventory level of all products and raw materials quarterly.

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Generally, obsolete inventory is sold to companies that specialize in the liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete.

Inventory consists of raw materials and finished goods and is stated at the lower of cost or net realizable value, cost is determined by the weighted average moving cost inventory method.

Inventory consists of raw materials and finished goods and is stated at the lower of cost or net realizable value.

Cost is determined by the weighted average moving cost inventory method.

Net realizable value is determined, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors.

On June 30, 2025, the Company had $ 489,574 of raw materials and $ 663,296 of finished goods inventory.

On June 30, 2023, the Company had no raw material inventory and $ 4,804,299 of finished goods inventory.

On June 30, 2024, the Company had $ 465,535 of raw material inventory and $ 966,021 of finished goods inventory.

The Company had inventory reserves at June 30, 2025 and 2024 of $ 593,569 and $ 605,470 , respectively.

Digital Assets – Pursuant to ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets:

Accounting for and Disclosure of Crypto Assets, codified into ASC subtopic 350-60, in-scope crypto assets are required to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period.

ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard.

The Company adopted this guidance effective April 1, 2025 as this was the start of the Company first holding digital assets.

SOL tokens are measured using Level 1 inputs under ASC 820, based on quoted prices from principal market.

ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability.

The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity.

The digital assets held by the Company are traded on a number of active markets globally.

The Company determines CoinMarketCap as its principal market, as it is one of the earliest and the most trusted sources by users, institutions, and media for comparing thousands of crypto assets and selected by the U.S.

The Company recognizes revenue by utilizing daily close prices obtained from CoinMarketCap.

Property and Equipment - Property and equipment is recorded at cost.

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Maintenance and repair expenditures are charged to expense as incurred.

The Company disposed of some equipment during 2024 and 2023 which resulted in gains and losses on the sales, shown in the accompanying Statements of Operations.

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting.

The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities assumed by the Company to the seller’s cash consideration and equity instruments issued.

Transaction costs directly attributable to the acquisition are expensed as incurred.

The excess of (i) the total costs of acquisition over (ii) the fair value of the identifiable net assets of the acquiree is recorded as identifiable intangible assets and goodwill.

The Company disposed of certain equipment during the year ended June 30, 2024 upon relocation of a manufacturing facility from Nevada to Florida leading to a loss as reflected in the Statement of Operations.

Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill impairment at least annually and when one or more triggering events or circumstances indicate that the goodwill might be impaired.

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The Company performed its annual test as of June 30, 2025 and 2024, respectively.

There was no impairment as of June 30, 2025.

It was determined by management that the goodwill related to Cygnet was completely impaired at June 30, 2024 based on the strategic decision to exit the recommerce business.

An impairment of goodwill in the amount of $ 3,594,745 was recorded at June 30, 2024 eliminating all of the goodwill related to Cygnet.

It was determined by management that the goodwill related to Interactive Offers was completely impaired at June 30, 2023 based on the sale of the business at September 1, 2023.

An impairment of goodwill in the amount of $ 2,889,158 was recorded at June 30, 2023 eliminating all of the goodwill related to Interactive Offers.

Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable.

The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment.

When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.

The Company recognized an impairment on its building of $ 336,434 during the year ended June 30, 2024, based on the fair market value of the building’s pending sale, completed on July 8, 2024.

The Company recognized a $ 569,195 loss on the sale of assets that were either liquidated or abandoned in the move of its manufacturing facility from Nevada to Florida.

In addition, the Company recognized an impairment of intangible assets of $ 4,274,680 for the year ended June 30, 2024.

$ 974,680 of the impairment is related to LuckyTail’s rapid decline of direct-to-consumer sales and $ 3,300,000 of the impairment is related to the unamortized vendor list of Cygnet, as the Company no longer purchases products from the majority of the original vendors Cygnet was using when the Company purchased Cygnet.

Revenue Recognition - In accordance with ASC No.

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Sales of our consumable products and pet products, generally do not have customer acceptance terms.

Contract Assets

A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer.

ASC 606, Revenue from Contracts with Customers, distinguishes between a contract asset and a receivable based on whether receipt of the consideration is conditional on something other than the passage of time.

When the Company transfers control of goods or services to a customer before the customer pays consideration, the Company records either a contract asset or a receivable depending on the nature of the Company’s right to consideration for its performance.

The point at which a contract asset becomes an account receivable may be earlier than the point at which an invoice is issued.

The Company assesses a contract asset for impairment in accordance with ASC 310, Receivables.

Revenue by Geography and Product Source:

The following table, which excludes digital asset revenue, discloses disaggregated revenue for the year ended:

Primary geographical markets

United States of America

Product source

Internally manufactured

Contract manufactured

Purchased as finished good

Deferred Revenue - The Company records deposits as deferred revenue when a customer pays in advance of shipping the product.

Once the product is shipped, the deposit is recorded as revenue and the related commissions are paid.

All products were shipped related to deposits in deferred revenue, in less than one year.

The following table discloses the deferred revenue:

Deferred revenue

The deferred revenue or also referred to as funded backlog was $ 235,255 , $ 0 and $ 0 at June 30,2024, June 30, 2023 and June 30, 2022, respectively.

Deferred revenue, also referred to as funded backlog, was $ 13,155 , $ 235,255 and $ 0 at June 30, 2025, June 30, 2024, and June 30, 2023, respectively.

We expect to recognize approximately 100% of the deferred revenue as revenue in the year ended June 30, 2026.

There was no opening liability balance at June 30, 2023 to be recognized in the year ended June 30, 2024.

Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable.

The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment.

The Company recognized an impairment on its building of $ 336,434 during the year ended June 30, 2024, based on the fair market value of the building's pending sale, completed on July 8, 2024.

The Company recognized a $ 569,195 loss on the sale of assets that were either liquidated or abandoned in the move of its manufacturing facility from Nevada to Florida.

In addition, the Company recognized an impairment of intangible assets of $ 4,274,680 for the year ended June 30, 2024.

The Company recognized an impairment on its long-lived assets during the year ended June 30, 2023, of $ 857,143 on the assets held for sale, related to Interactive Offers, leaving $ 716,944 of Interactive’s original intangible assets classified as assets available for sale.

All of the deferred revenue at June 30, 2024 was recognized to revenue in the year ended June 30, 2025.

Digital Assets Revenue, Realized and Unrealized Gains and Losses

Acquisition of Solana tokens

We acquire liquid Solana tokens through purchases.

In the case of liquid bulk purchases, we recognize for cost basis the actual price paid.

In the case of liquid VWAP (volume-weighted average price) or TWAP (time-weighted average price) over multiple hour or days, we recognize for cost basis the average price paid for all tokens purchases.

The Company is able to acquire Solana tokens that are locked through direct negotiations with the owner or a third part at a discounted price from the Solana market value price.

These locked tokens will unlock over a period of time and once unlocked can be sold on several Solana exchanges.

With the purchase of locked Solana, we recognize the cost basis as the actual price paid.

While the tokens remain locked, the Solana is marketed to fair value based on a 14% discount to the end of the period market price and the unrealized gain or loss is recognized.

The unlocking of the purchased Solana occurs over a series of dates as prescribed by the purchase agreement.

At the time of unlocking, tokens can remain in the original wallet or be transferred into the wallet at our custodian or sold on an open exchange.

Once the Solana is unlocked, the fair value is measured at the end of the period at the market value without a discount.

Per ASC 350-60-45-2, gains and losses from the remeasurement of crypto assets shall be included in net income and presented separately from changes in the carrying value of other intangible assets.

Pursuant to this guidance, changes in fair value are reflected on the income statement in the line item “Realized and unrealized (gain) loss on digital assets” in the operating expense section of the consolidated statements of operations.

We measure changes in fair value as the difference between the cost basis and the prevailing market price of the digital asset at the date of measurement, multiplied by the quantity held of the digital asset.

Our policy on prevailing market price is the last trading price prior to midnight.

Remeasurement on a recurring basis

Subsequent to the acquisitions of Solana tokens, remeasurement of change in value fair is done by taking the spot price from coinmarketcap.com at the end of a month.

Our tokens are bifurcated between liquid and locked tokens.

In the case of liquid tokens, the aggregate fair value is computed by taking the number of liquid tokens and multiplying by the month-end spot price.

In the case of locked tokens, the aggregate fair value is computed by taking the number of locked tokens, discounted by 14%, and multiplying by the month-end spot price.

As locked tokens become unlocked over time, they will be added to the count of liquid tokens and accordingly, make up less of that discount percentage over time when computing aggregate fair value on locked tokens.

The discount used by management is based on the historical purchases of locked Solana management has made on behalf of the Company.

Management monitors this discount percentage and adjusts when appropriate.

Per ASC 350-60-45-2, gains and losses from the remeasurement of crypto assets shall be included in net income and presented separately from changes in the carrying value of other intangible assets.

Staking revenue

We earn staking rewards by delegating our digital assets to third-party validators on proof-of-stake blockchain networks.

These tokens remain under the Company’s control and are not derecognized, as the delegation does not constitute a transfer of control under ASC 610-20 or ASC 350-60.

Rewards are recognized as income when the Company obtains control of the new tokens, typically upon receipt into its wallet.

While there is no explicit guidance under U.S.

GAAP for staking activities, the Company applies the principles of ASC 606, Revenue from Contracts with Customers, by analogy.

Management evaluates whether a contract exists, identifies the performance obligations, and determines whether the Company acts as a principal or agent in the transaction.

The transaction price is measured at the fair value of the digital assets received at the time control is obtained.

Due to the evolving nature of blockchain protocols and limited regulatory guidance, management exercises significant judgment in evaluating validator reliability and the risk of slashing or forfeiture.

Changes in protocol rules or accounting interpretations may materially impact how staking revenue is recognized and measured.

Solana tokens held by the Company, whether liquid or locked, are eligible for staking.

Staking revenue is calculated based on the number of tokens earned and the month-end spot price.

This revenue is reported on the Statements of Operations under the line item “Digital Asset Revenue.” Changes in fair market value of the staking revenue after the initial Digital Asset Revenue is recognized are reflected on the income statement as “Realized and unrealized (gain) loss on digital assets”.

Realized sales of the digital assets

To the extent such digital assets may be sold, unrealized gain (or loss) shall reverse and realized gain (or loss) shall be recorded for the difference between price at which the digital asset sold and cost basis.

Advertising - The Company supports its products with advertising to build brand awareness of the Company’s various products in addition to other marketing programs executed by the Company’s marketing team.

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Management only reassesses its determination if the terms and conditions of the contract are changed.

Leases with an initial term of 12 months or less are not recorded within the accompanying consolidated balance sheets.

Leases with an initial term of 12 months or less are not recognized within the accompanying consolidated balance sheets.

GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes.

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A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

A $ 6,100,000 valuation allowance was recorded at June 30, 2024 and no valuation allowance at June 30, 2023.

A $ 10,092,765 and a $ 6,100,000 valuation allowance was recorded as of June 30, 2025 and June 30, 2024, respectively.

The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority.

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ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

There are no material uncertain tax positions at June 30, 2024 or June 30, 2023.

There were no material uncertain tax positions at June 30, 2025 or June 30, 2024.

On December 22, 2017, the U.S.

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On October 10, 2024, the transfer agent received additional requests to issue a total of 202,183 shares of common stock for round up of fractional shares.

These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company’s transfer agent.

These shares were issued on October 23, 2024.

On October 30, 2024 we were notified that the shares were returned to the Company’s transfer agent.

Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk.

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Stock options

Prefunded warrants

Preferred stock

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During the year ended June 30, 2025 and 2024, the Company reported a net loss, so the potential effect is not reflected in the consolidated financial statements.

Deferred Revenue - The Company records deposits as deferred revenue when a customer pays in advance of shipping the product.

Once the product is shipped, the deposit is recorded as revenue and the related commissions are paid.

All products were shipped related to deposits in deferred revenue, in less than one year.

Convertible Debt and Securities - The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt.

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The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance.

Reclassifications - Certain reclassifications have been made to the consolidated financial statements as of and for the year ended June 30, 2023 to conform to the presentation as of and for the year ended June 30, 2024.

During the year ended June 30, 2024, the purchase of all remaining ownership of Cygnet resulted in no remaining non-controlling interests in the consolidated financial statements.

Recent Accounting Pronouncements – From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (“FASB”), or other standard setting bodies and adopted by us as of the specified effective date.

Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

The Company has considered all other recently issued accounting pronouncements, including the new provisions of ASC 326 (“Financial Instruments – Credit Losses”) pertaining to “current expected credit losses.

ASC 326 was adopted for fiscal year 2024 and did not have a material effect to the accompanying consolidated financial statements.

Cygnet Online, LLC

The Company acquired 55 % of Cygnet Online, LLC, on April 1, 2022.

The purchase price was $ 5,515,756 , as amended.

The following table summarizes the consideration transferred to acquire Cygnet and the amount of identified assets acquired, and liabilities assumed at the acquisition date.

Fair value of consideration transferred:

Convertible note payable, convertible at $6.00 per common share

Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022.

Recognized amounts of identifiable assets acquired and liabilities assumed:

Accounts receivable

Prepaid expenses

Property and equipment

Right to use asset

Online sales channels

Vendor relationships

Accrued liabilities

Notes payable

( 7,298,353 )

Operating lease

Total identifiable net assets

55% of the business was acquired through a stock purchase agreement on March 31, 2022.

The purchase agreement provided for an increase in the purchase price of up to $ 700,000 based on the attainment of certain sales threshold in the first year.

Our management believed that the attainment of those sales threshold at the time of acquisition was unlikely and valued the contingency at $ 0 .

The sales thresholds were not met, and no consideration was recorded for the contingency.

The equity interest purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company.

The purchase price was decreased by $ 950,000 and was repaid to the Company with the reduction in the loan to the seller.

The 55% purchase price allocation is final and is no longer subject to change.

On September 1, 2023, the Company completed the acquisition of the remaining 45 % interest for structured cash payments equaling $ 800,000 , the forgiveness of advances of $ 89,416 and 4,505 shares of the Company’s common stock valued at $ 162,727 .

As of June 30, 2024, the Company has not released the 4,505 shares or paid the remaining $ 300,000 owed related to this additional acquisition.

The seller had access to one of the Company’s bank accounts and withdrew $ 39,348 and refused to return the funds.

The Company recorded this as a reduction of the $300,000, although there is no right of offset in the purchase agreement.

The acquisition of Cygnet provided the Company with the opportunity to expand its operations as an Amazon and eCommerce seller.

The resulting combination increased Cygnet’s product offerings through the Company’s distributors and partnerships as it continues to focus on over-the-counter supplements and beauty products.

Cygnet will be the anchor company for Upexi’s Amazon strategy.

These are the factors of goodwill recognized in the acquisition.

An impairment of $ 3,300,000 , related to the Cygnet vendor list, was recorded as the Company no longer purchases products from the majority of the original vendors Cygnet was using at the time purchased Cygnet.

In addition, it was determined by management that the goodwill related to Cygnet was completely impaired at June 30, 2024 based on the strategic decision to exit the recommerce business.

An impairment of goodwill in the amount of $ 3,594,745 was recorded at June 30, 2024 eliminating all of the goodwill related to Cygnet.

On August 13, 2022, the Company acquired the pet product brand and the rights to the products of LuckyTail from GA Solutions, LLC.

The following table summarizes the consideration transferred to acquire LuckyTail and the amount of identified assets acquired, and liabilities assumed at the acquisition date.

Fair value of consideration transferred:

Cash payment, 90 days after close

Cash payment, 180 days after close

Contingent consideration

Cash payment, working capital adjustment

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Customer list

Total identifiable net assets

The business was acquired through an asset purchase agreement, that acquired all elements of a business, including all of the tangible and intangible assets of the LuckyTail business.

The purchase agreement provided for an increase in the purchase price based on the attainment of certain sales thresholds in the first six months.

The Company estimated the value of this at approximately $ 150,000 at the time of purchase.

The sales calculated to a $ 112,685 payout and the purchase price was adjusted.

The asset purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company.

The purchase price was increased by $ 460,901 for the excess working capital that was transferred in the business and the final purchase price allocation was completed by an independent consulting firm and is no longer subject to change.

The acquisition of LuckyTail provided the Company with a foothold in the pet care industry and a strong presence on Amazon and its eCommerce store, offering nutritional and grooming products domestically and internationally.

The acquisition provided both top line growth and improved EBITDA for the Company.

These are the factors of goodwill recognized in the acquisition.

The purchase price allocation was performed by a third party and is no longer subject to change.

The Company’s consolidated financial statements for the year ended June 30, 2023, include the actual results of LuckyTail from August 13, 2022 through June 30, 2023.

The Company recorded interest on the consideration of $ 63,282 during the year ended June 30, 2023 and no interest was recorded for the year ended June 30, 2024.

Management determined a $ 974,680 impairment was necessary based on the rapid decline of the direct-to-consumer during the year ended June 30, 2024.

Revenue from acquisitions included in the consolidated financial statements.

Net revenue included in the consolidated financial statements:

Consolidated pro-forma unaudited consolidated financial statements.

The following unaudited pro forma combined financial information is based on the historical consolidated financial statements of the Company and LuckyTail after giving effect to the Company’s acquisitions as if the acquisitions occurred on July 1, 2022.

The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions occurred on July 1, 2022, nor is the financial information indicative of the results of future operations.

The following table represents the unaudited consolidated pro forma results of operations for the year ended June 30, 2023, as if the acquisitions occurred on July 1, 2022.

The results of operations for LuckyTail are included in the year ended June 30, 2024 and the results of operations for LuckyTail are included from August 13, 2022 to June 30, 2023.

Operating expenses have been increased for the amortization expense associated with the fair value adjustment of definite lived intangible assets of LuckyTail at $44,620 per month.

Pro Forma, Unaudited

Year ended June 30, 2023

Cost of sales

Operating expenses

Net income (loss) from continuing operations

Unless otherwise discussed, the impact of recently issued standards that are applicable and not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

What follows below are accounting pronouncements adopted or issued but not yet adopted.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

The amendments expand income tax disclosure requirements by requiring an entity to disclose (i) specific categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, and (iii) the amount of taxes paid disaggregated by jurisdiction.

The standard is effective for annual reporting periods beginning after December 15, 2024.

The Company will adopt this guidance effective for the annual reporting period beginning July 1, 2025 (fiscal year ended June 30, 2026).

The adoption of ASU 2023-09 will impact the Company’s disclosures but will not impact financial position nor results of operations.

In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) , which establishes accounting guidance for crypto assets meeting certain criteria.

Solana meets these criteria.

The amendments require crypto assets meeting the criteria to be recognized at fair value with changes recognized in net income each reporting period.

Upon adoption, a cumulative-effect adjustment was made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption.

ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted.

The Company elected to early adopt ASU 2023-08 for the year ended June 30, 2025, effective as of July 1, 2024.

As a result of the adoption, the Company did not have a cumulative-effect adjustment as the Company did not have any Crypto Assets prior to January 1, 2025.

In the current year ended and date as of June 30, 2025, SOL, the token of Solana blockchain, is recognized at fair value.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures.” The ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses.

The amendments require that at each interim and annual reporting period an entity:

(1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (“DD&A”) (or other amounts of depletion expense) included in each relevant expense caption.

A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e), (2) include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements, (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

An entity is not precluded from providing additional voluntary disclosures that may provide investors with additional decision-useful information.

The ASU is effective for annual periods beginning after December 15, 2026, and interim report periods beginning after December 15, 2027.

Early application of the amendment is permitted.

The ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements.

The Company is evaluating the effect that ASU 2024-03 will have on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, which provides for all entities with the option to elect a practical expedient that assumes that current conditions as of the balance sheet do not change for the remaining life of an asset, with respect to estimates of expected credit losses.

This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted and application of guidance prospectively.

We are currently evaluating the effect of this pronouncement.

Digital Assets

The following table summarizes the Company’s digital asset holdings as of:

Approximate number of Solana Tokens held

Digital assets, fair value

$ 105,997,180

The following table summarizes the Company’s digital asset purchases, losses (gains) on digital assets, and revenue from staking for the year ended June 30, 2025 and 2024:

Approximate number of Solana Tokens purchased

Digital asset purchases

$ 104,910,839

Basic income (loss) per common share

Weighted average shares outstanding

The Company estimated the annual LuckyTail amortization expense at $ 535,428 annually and $ 44,620 monthly, based on the purchase price allocation.

For the year ended June 30, 2023, the proforma adjustment included $ 66,930 of amortization expense for one and a half months.

Acquisition-related costs are included in the general and administrative expenses on the Company’s condensed consolidated statements of operations.

These costs are primarily external legal, accounting and consulting services directly related to completed acquisitions, due diligence, and review of possible target acquisitions.

Unrealized (loss) on digital assets

Revenue from staking

Cost basis is reflected in the above table as “Digital asset purchases”.

The following table summarizes the composition of Solana tokens held broken out by liquid and locked as of:

Approximate number of Solana Tokens liquid

Approximate number of Solana Tokens locked

The Company has approximately 95% of its Solana treasury staked at June 30, 2025.

The Company maintains control over the delegated SOL tokens throughout the staking period.

Although the tokens undergo a bonding process with validators, the Company retains the ability to initiate unbonding at any time.

Upon notification to the validator, the unbonding process begins, which typically takes up to two days.

During this period, the tokens remain unavailable for transfer or sale on the open market.

Validators do not gain control over the tokens in a manner that meets derecognition criteria.

They cannot sell, pledge, or otherwise dispose of the tokens.

As such, the Company continues to recognize the delegated SOL tokens as part of its digital asset holdings.

The Company has 421,451 tokens that are considered locked at June 30, 2025.

The following table summarizes the unlocking schedule of Solana tokens currently locked as of June 30, 2025:

June 30, 2026

June 30, 2027

June 30, 2028

The Company did not sell any of its Solana in its Digital Asset Treasury during the year ended June 30, 2025 or 2024.

The Company valued the Solana treasury at $ 154 .74 per liquid token and $ 133 .07 per locked token.

The aggregate fair value of our locked tokens is computed by taking the number of locked tokens and discounting the month-end spot price by 14%.

The discount used by management is based on the historical purchases of locked Solana management has made on behalf of the Company.

Management monitors this discount percentage and adjusts when appropriate.

The $154.74 is the market price from the closing price listed on coinmarketcap.com for June 30, 2025 .

Inventory consisted of the following:

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( 1,919,288 )

Less building classified as available for sale

( 1,238,288 )

Less building classified as available for sale

( 4,005,516 )

Depreciation expense for the years ended June 30, 2025 and 2024 was $ 681,000 and $ 1,268,355 , respectively.

For the period ended June 30, 2025 there was a $ 10,743 loss on the disposal of assets.

Intangible Assets

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Online sales channels

Vender relationships

Vendor relationships

For the years ended June 30, 2025 and 2024, the Company amortized approximately $ 76,758 , and $ 2,410,400 , respectively.

For the year ended June 30, 2024 the Company impaired approximately $ 3,300,000 related to the vendor relationships of Cygnet and impaired approximately $ 974,700 related to the customer relationships of LuckyTail.

For the year ended June 30, 2025 and 2024, the Company impaired approximately $ 0 and $ 3,300,000 , respectively, related to the vendor relationships of Cygnet and impaired approximately $ 0 and $ 974,000 related to the customer relationships of LuckyTail.

Intangible assets as of June 30, 2024:

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Vender relationships

The following intangible assets were added during the year ended June 30, 2023, from the acquisitions noted below:

Customer relationships

Intangible Assets from Purchase

Future amortization of intangible assets at June 30, 2024 are as follows:

June 30, 2025

Future amortization of intangible assets at June 30, 2025 is set forth below:

June 30, 2026

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Subscriptions and services being amortized over the service period

Other deposits

Stock issued for prepaid interest on convertible note payable

Other prepaid expenses

Other receivables

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The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases.

Lease expenses for the year ended June 30, 2023 was approximately $ 723,000 and are included discontinued operations.

The operating lease expired during the year ended June 30, 2023 and the Company continued to occupy the facility and pays rent on a month-to-month basis.

During the year ended June 30, 2024 the Company used the facility for ongoing operations and recognized approximately $ 670,200 of expense during the year.

During the year ended June 30, 2025 there were no expenses incurred for this facility and for the year ended June 30, 2024 the Company used the facility for ongoing operations and recognized approximately $ 670,200 of expense during the year.

The Company moved out of the facility in July 2024.

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The Company uses this leased facility for additional warehouse space.

The minimum lease payments were $ 95,548 and $ 111,796 for the years ended June 30, 2024 and 2023, respectively.

The lease expense, including all additional lease expenses was approximately $ 106,100 and $ 134,700 , respectively.

The Company moved out of the facility April of 2024 when the lease term ended.

The minimum lease payments were $ 95,548 for the year ended June 30, 2024.

The lease expense, including all additional lease expenses was approximately $ 106,100 .

The Company moved out of the facility April of 2024 when the lease term ended, there were no expenses related to this facility for the year ended June 30, 2025.

During November 2018, the Company entered into a lease for equipment that commenced on November 1, 2018, and recorded a right of use asset and corresponding lease liability.

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The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases and accounted for as non-lease components and not part of the ROU.

Lease expenses were $ 43,180 and $ 102,228 for the years ended June 30, 2024 and 2023, respectively.

The Company abandoned the facility in October of 2023 and recognized a lease impairment of $ 289,969 .

Lease expense was $ 43,180 for the year ended June 30, 2024.

The Company abandoned the facility in October of 2023.

On March 15, 2023, the Company entered into a lease for approximately 20,400 square feet of warehouse and office space, located in Tampa, Florida, to be used as the Company’s distribution center .

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The initial term of the lease is sixty-one months.

During the year ended June 30, 2024, the Company recognized approximately $ 140,658 of expense and no expense for the year ended June 30, 2023.

During the year ended June 30, 2024, the Company recognized approximately $ 140,658 of expense and approximately $ 232,350 of expense for the year ended June 30, 2025.

On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC, which is owned by our CEO, Allan Marshall.

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The Company spent $ 611,768 in leasehold improvements to prepare the facility for product manufacturing, which will be amortized over the five year lease term.

At June 30, 2024 there was $ 100,004 accrued for the deposit, three months rent, and three months estimated expenses, that was paid in July 2024 and is now kept current.

Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024.

During the year ended June 30, 2024 the Company recognized approximately $ 79,950 of expense.

During the years ended June 30, 2025 and 2024 the Company recognized approximately $ 320,050 and $ 79,950 of expense, respectively.

Operating leases are included in operating ROU assets, current and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Balance Sheets.

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current portion

( 1,031,714 )

Present value of operating lease obligation

The liability for the Cygnet lease is included in the undiscounted future minimum lease payments for 2025.

The Company continues to work with the lessor to resolve the disputed lease payments.

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2025 are:

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For the years ended June 30, 2025 and 2024, the components of lease expense, included general and administrative expenses and interest expense in the condensed consolidated statement of operations, are as follows:

June 30, 2024

June 30, 2023

Finance lease expense:

Operating lease expense:

Amortization of ROU assets

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Accrued sales tax

Accrued expenses from sale of manufacturing operations

Other accrued liabilities

Acquisition Payable consists of the following:

Payments related to the acquisition of Cygnet

Payable accrued related to the acquisition of Cygnet

These payables are amounts estimated by management that are due to the sellers of the acquisition and include the original purchase price installment payments not represented with a debt, equity, or other instrument, estimates of excess or deficiencies in working capital and estimates of future earnout payments.

Convertible Promissory Notes and Notes Payable

Convertible promissory notes and notes payable outstanding as of June 30, 2024 and 2023 are summarized below:

Convertible Promissory Notes, Notes Payable, and Related Party Note Payable

Convertible promissory notes, notes payable, and related party note payable outstanding as of June 30, 2025 and 2024 are summarized below:

Convertible Notes:

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This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly.

2025 Convertible Notes, 24 month term, 3% interest and is convertible into the Company’s common stock at a per share price of $3.00 per common share.

No payment of interest or principal is due until the end of the two year term if the loan is not converted.

The loan also included a detachable warrant to purchase 116,668 shares of the Company’s common stock at a per share price of $3.00.

These notes were converted into 116,668 shares of common stock in June of 2025.

March 7, 2027

Unamortized discount on convertible note

Less current portion of notes payable

Notes payable, net of current portion

Acquisition Notes:

Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company

October 31, 2025

Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company

October 31, 2024

Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company

October 31, 2024

Acquisition notes payable

Discount on acquisition notes payable, current

Acquisition notes payable, current

Discount on acquisition notes payable, long-term

( 1,644,915 )

Acquisition notes payable, net of current and discount

Notes payable, Cygnet subsidiary:

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Notes payable, long term, net

Total convertible notes payable, acquisition notes payable, notes payable and related party note payable

Future payments on notes payable are as follows:

Total convertible notes payable, notes payable and related party note payable

Future payments on notes payable are set forth below:

For the year ended June 30:

Related Party Note Payable

Convertible Notes

Cygnet Subsidiary Notes Payable

Note original discount

On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $ 1,050,000 , as adjusted, (“Cygnet Note”) which can be converted into common stock of the Company at a price of $ 120.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023.

In June 2022, the Company entered into a securities purchase agreement with two accredited investors pursuant to which the Company could receive up to $ 15,000,000 during the following twelve months of the agreement.

The Company received $ 6,678,506 for Convertible Notes in the original principal amount of $ 7,500,000 (the “Convertible Notes”), representing the original purchase amount, less fees, costs, and a $ 500,000 holdback by the investors.

In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the “Warrants”) to acquire an aggregate of 2,813 shares of common stock.

The Warrants are exercisable for five years at an exercise price of $ 88.80 per share, provide for customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $ 250,000 .

There was a loss of $ 3,540 for the change in the derivative liability for the period ended December 31, 2022.

On October 31, 2022, the Company entered into a letter agreement with the accredited investors in which all amounts owed were paid in full, and the related convertible notes and all security interests were canceled.

Additionally, the Company terminated the related Form S-3 registration statement.

In June 2022, the Company executed a promissory note with Allan Marshall, the Company’s Chief Executive Officer, in the original principal amount of $ 1,500,000 (“Marshall Loan”).

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Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025.

The principal currently outstanding is $ 500,000 .

No principal is currently outstanding as of June 30, 2025 .

In addition to this, the Company issued Mr.

Marshall a warrant to purchase up to 18,750 shares of the Company’s common stock for five years at a per share price of $ 22.00 .

The note has been classified as long-term in the consolidated financial statements.

$ 1,000,000 of the promissory note was used by the investor in the purchase of VitaMedica.

12 unchanged sentences

In addition to this, the Company issued the investor a warrant to purchase up to 6,250 shares of the Company’s common stock for five years at a per share price of 22.00 .

The note has been classified as long-term in the consolidated financial statements.

The note has been classified as current in the consolidated financial statements.

On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $ 2,150,000 .

In November of 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12-month period, starting in June of 2025 .

The principal currently outstanding is $ 2,150,000 .

No principal is currently outstanding as of June 30, 2025.

In addition to this, the Company issued the investor a warrant to purchase up to 25,000 shares of the Company’s common stock at a per share price of $ 22.00 .

In addition, $ 100,000 of the promissory note was used by the investor in the purchase of VitaMedica.

The note has been classified as long-term in the consolidated financial statements.

On March 7, 2025, the Company executed a convertible note with two investors, in the original principal amount of $350,000.

The term of the note is two (2) years and has an interest rate of three (3) percent.

There are no interest or principal payments due during the term of the note.

All principal and interest not converted during the term of the note is payable on March 7, 2027 .

The convertible note and interest is convertible into the Company’s common stock at $3.00 per common share.

Additionally, there were 116,668 warrant shares issued associated with these debt agreements.

The warrants are classified as equity instruments and are not subject to remeasurement.

At the time of issuance, the market price of the Company’s common stock was $ 2.74 per share.

In accordance with ASC 470-20, the Company allocated the proceeds between the debt, beneficial conversion feature (BCF) and the warrants based on their relative fair values.

The fair value of the BCF and the warrants were calculated using the Black-Scholes option pricing model and had the following assumptions:

expected volatility of 253 %, risk-free interest rate of 3.99 %, expected term of 2 years, and no expected dividends.

The intrinsic values of the BCF and warrants were $ 107,262 and $ 115,865 , respectively.

These balances were recorded as a debt discount, with a corresponding credit to Additional Paid-In Capital.

The discounts are being amortized over the two-year term of the notes.

As of June 30, 2025, the two convertible notes have been converted into 116,668 shares of common stock.

There was $ 27,891 of the debt discount amortized prior to the conversion of the debt.

The $ 27,891 was expensed during the period as interest expense.

Short-term Treasury Debt

The Company entered into a credit facility with BitGo Prime, LLC (“BitGo”).

Pursuant to a Master Loan Agreement (the “Agreement”) the Company may borrow up to $ 20,000,000 of Digital Currency or United States Dollars with interest at the rate of 11.5 % per year.

The term of the credit facility is for one year and is renewable for successive one year options .

Each individual loan under the facility is negotiable as to the amount, term prepayment or recall (payment demand).

The loans shall be collateralized by the Company’s treasury assets, already held at BitGo, the initial availability is based on 260% collateral level and a margin call level of 175% .

There are no requirements or fees for non-use of the credit facility and the facility can be increased in the future based on the value of the assets BitGo is the custodian of for the Company.

At June 30,2025, the outstanding balance of the credit facility was $ 20,000,000 .

Subsequent to June 30, 2025 the credit facility increased to $ 50,000,000 .

The $ 50,000,000 credit facility is outstanding as of the date of this report and was used for the purchase of Solana.

Related Party Transactions

In March 2025, Allan Marshall purchased 125,000 shares of Series A preferred shares from the Company at a per share price of $ 2.60 per preferred share.

This purchase was settled through the cancellation of the $ 400,000 advance previously mentioned.

At March 31, 2025 there was $ 75,000 of this advance remaining and was paid subsequent to the period end, March 31, 2025.

In June 2024, Allan Marshall, the Company’s CEO advanced the Company $ 100,000 to enable the Company to purchase equipment needed for the new warehouse facility.

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$ 1,000,000 of the principal was used as part of the VitaMedica purchase price.

The principal outstanding and accrued interest at June 30, 2024 was $ 500,000 and $ 169,662 , respectively.

The principal outstanding and accrued interest at June 30, 2025 and 2024 was $ 0 and $ 500,000 , respectively.

The accrued interest was paid in July of 2024.

1 unchanged sentence

Marshall a warrant to purchase up to 18,750 shares of the Company’s common stock for five years at a per share price of $ 22.00 .

The note has been classified as long-term in the consolidated financial statements.

On April 23, 2025, the Company entered into an Asset Management Agreement (the “Asset Management Agreement”) with GSR Strategies LLC (the “Asset Manager”), pursuant to which the Asset Manager shall provide discretionary investment management services with respect to the Company’s cryptocurrency treasury (the “Account Assets”).

The Company shall pay the Asset Manager an asset-based fee (the “Asset-based Fee”) equal to 1.75% per annum, of the assets under the Asset Manager’s management, which shall be calculated and paid in advance as of the first business day of each calendar month, as determined by the Asset Manager in a commercially reasonable manner.

The Company issued warrants (the “GSR Warrants”) to the Asset Manager to purchase 2,192,982 shares of Common Stock at various prices per share of common stock as follows:

(i) 877,193 shares of Common Stock at an exercise price of $2.28 per share of Common Stock;

(ii) 438,596 shares of Common Stock at an exercise price of $3.42 per share of Common Stock;

(iii) 438,596 shares of Common Stock at an exercise price of $4.56 per share of Common Stock;

(iv) 438,597 shares of Common Stock at an exercise price of $5.70 per share of Common Stock.

The Asset Management Agreement will, unless early terminated in accordance with its terms, continue in effect until the twentieth (20th) anniversary of April 23, 2025 .

The Asset Management Agreement may be terminated by the Company without cause solely upon a two-thirds majority vote of the Company’s common stockholders.

If the Company terminates the Asset Management Agreement for any other reason other than for cause, the Company shall pay the Asset Manager an early termination fee (the “Termination Fee) in the amount equal or greater of (i) five (5) times the aggregate amount of the management fees paid by the Company to the Asset Manager over the prior ten (10) year period, or (ii) $ 15 million.

The Asset Management Agreement may be terminated for Cause (i) by the Company upon at least thirty (30) days prior written notice to the Asset Manager and (ii) by the Asset Manager upon at least sixty (60) days prior written notice to the Company.

GSR Growth Investments LP, a related party of the Asset Manager, holds shared voting power over 4,006,210 shares of common stock, or approximately 7.45%, of the Company’s outstanding common stock.

The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties.

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The Company has 150,000 shares of Preferred Stock issued and outstanding to Allan Marshall, CEO.

The preferred stock is convertible into the Company’s common stock at a ratio of 1.8 shares of preferred stock for a single share of the Company’s common stock at the holder’s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.

The preferred stock is convertible into 138,889 shares of the Company’s common stock at the holder’s option , has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.

During the year ended June 30, 2025:

The Company issued 62,370 shares of common stock for the acquisition of E-Core Technologies Inc., a Florida corporation, valued at $ 6,000,000 .

The Company issued 6,700 shares of common stock for prepayment of interest on a note payable.

The shares were valued at $ 607,020 or $90.60 per common share and recorded as prepaid interest as the shares were issued at that time.

The Company agreed to sell 100,061 shares of common stock for a purchase price of approximately $7,000,000.

After deducting the underwriter’s commissions, discounts, and offering expenses payable by the company, the Company expects to receive net proceeds of approximately $6,060,000.

In addition, the Company issued warrants to purchase approximately 8,450 shares of the Company’s common stock at a purchase price of $95.48 per common share.

On April 24, 2025, the Company issued:

(i) 35,970,383 shares of Common Stock, at an offering price of $ 2.28 per share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 7,889,266 shares of Common Stock (the “Pre-Funded Warrant Shares”) at an offering price of $ 2.279 per Pre-Funded Warrant.

Each of the Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $ 0.001 per Pre-Funded Warrant Share, are immediately exercisable, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

At the time of this report, all of the Pre-funded warrants have been exercised and issued to the investors.

The Company issued 742,896 shares of common stock in return for termination of a Promissory Note with a principal balance owed of $ 1,750,000 as per below:

In June of 2025, the Company issued 116,668 shares of common stock as repayment of $ 400,000 of the Company’s debt.

The shares were valued at $ 400,000 or $ 3.43 per share.

In April of 2025, the Company issued 241,228 shares of common stock as repayment of $ 550,000 of the Company’s debt.

The shares were valued at $ 550,000 or $ 2.28 per share.

In February of 2025, the Company issued 125,000 shares of common stock to two different investors for the repayment of $ 250,000 of outstanding debt.

The average share price for the repayment of debt was approximately $ 2.00 per common share issued.

In January of 2025, the Company issued 260,000 shares of common stock to two different investors for the repayment of $ 550,000 of outstanding debt.

The weight average share price for the repayment of debt was approximately $ 2.12 per common share issued.

The Company issued 102,583 shares of common stock upon vesting for restricted stock units to certain employees in connection with the Company’s 2019 Equity Incentive Plan.

The Company issued 7,278 for the cashless exercise of options in connection with the Company’s 2019 Equity Incentive Plan.

The Company issued 382,425 shares from the exercise of warrants.

The Company issued 19,577 shares in exchange for services from consultants.

During the year ended June 30, 2024:

In September of 2023, the Company issued 4,505 shares of common stock for the purchase of the remaining 45% of Cygnet Online, LLC.

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On May 24, 2022, the Shareholders consented, and the Board of Directors approved the amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder by 222,222 Shares to 500,000 Shares.

On September 18, 2024, the Company filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of its common stock at a rate of 1-for-20 (the “Reverse Stock Split”), which became effective as of October 3, 2024 (the “Effective Date”).

The Reverse Stock Split was approved by the Board of Directors in accordance with Nevada law.

Concurrently, the Company’s shareholders consented to, and the Board of Directors approved, an amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder to 500,000 Shares, as adjusted for the 1 for 20 reverse stock split.

Additionally, subsequent to a vote that was approved by shareholders, the 2019 Plan was amended to increase the number of shares issuable pursuant to awards granted under the 2019 Plan from 500,000 shares to 10,000,000 shares .

The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares.

The options are exercisable for a period of up to 10 years from the date of the grant.

The following table reflects the continuity of stock options for the years ended June 30, 2024 and 2023:

The following table reflects the activity of stock options for the years ended June 30, 2025 and 2024:

A summary of stock option activity is as follows:

Outstanding at June 30, 2023

Forfeited or Cancelled

Outstanding at June 30, 2024

Forfeited or Cancelled

Outstanding at June 30, 2025

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The average fair value of stock options granted was estimated to be $ 2.36 per share for the period ended June 30, 2025, and the closing stock price on June 30, 2025, was $ 2.98 per common share.

The average fair value of stock options granted was estimated to be $ 92.60 per share for the period ended June 30, 2023, and the closing stock price on June 30, 2023, was approximately $ 45.00 per common share.

The average fair value of stock options granted was estimated to be $ 3.40 per share for the period ended June 30, 2024, and the closing stock price on June 30, 2024, was $ 7.20 per common share.

Stock-based compensation expense attributable to stock options was approximately $ 1,409,916 and $ 957,095 for the years ended June 30, 2025 and 2024, respectively.

As of June 30, 2024, there was approximately $ 265,200 unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 2 years.

As of June 30, 2025, there was approximately $ 59,000 unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately 0.28 years.

The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended June 30, 2025 and 2024:

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Based on historical experience of forfeitures, the Company estimated forfeitures at 0 % for each of the years ended June 30, 2025 and 2024, respectively.

There were 213,214 shares available for issuance as of November 11, 2024, under the 2019 Plan as amended.

In the year ended June 30, 2025, in light of the 1-20 reverse split, certain grants were cancelled and re-issued.

The estimate of forfeitures relating to terminations is still 0%.

There were 9,027,903 shares available for issuance as of June 30, 2025, under the 2019 Plan as amended.

The Plan contains an “evergreen” provision pursuant to which shares authorized for issuance may be automatically replenished.

Restricted Stock Units

Stock-based compensation from RSUs was approximately $ 696,946 for the year ended June 30, 2025 and $ 212,748 for the year ended June 30, 2024.

Pursuant to the 2019 Plan, restricted stock units may be granted.

As of June 30, 2025, there was approximately $ 363,000 of unrecognized compensation expense related to 188,584 restricted stock units.

The weighted-average term remaining on the unvested shares was approximately 0.48 years.

Weighted-Average Grant Date Fair Value

Outstanding as of June 30, 2023

Cancelled or Forfeited

Outstanding as of June 30, 2024

Cancelled or Forfeited

Outstanding as of June 30, 2025

At June 30, 2025, there were approximately 33,333 vested RSUs that are included in the 221,917 RSU’s outstanding above as they are not included in the Company’s issued and outstanding common stock.

The components of the stock compensation are as follows:

Stock option amortization

Restricted stock units amortization

Total stock based compensation

The components of the provision for income taxes are as follows:

1 unchanged sentence

Deferred tax provision

( 3,601,298 )

Provision for income taxes (benefit)

$ ( 332,101 )

$ ( 3,049,293 )

The differences between income taxes calculated at the statutory US federal income tax rate and the Company’s provision for income taxes are as follows:

18 unchanged sentences

( 10,092,765 )

( 6,100,000 )

Deferred tax asset

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The Company determined that it is more likely than not that the Company will have future taxable income.

The Company used $ 2,506,514 of the federal net operating loss carryover during the year ended June 30, 2022.

During the years ended June 30, 2024 and June 30, 2023 the federal net operating loss increased significantly and management recorded a valuation reserve of $ 6,100,000 .

During the years ended June 30, 2025 and June 30, 2024 the federal net operating loss increased significantly and management recorded a valuation reserve of $ 10,092,765 and $ 6,100,000 , respectively.

We file federal and state income tax returns in jurisdictions with varying statutes of limitations.

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If these uncertainties continue, they may have an adverse effect upon the introduction of our products in different markets.

Discontinued Operations – Sale of Infusionz to Bloomios

On October 28, 2022, the Company determined that the best course of action related to Infusionz, LLC and certain manufacturing business was to accept an offer to sell those operations.

The Company received from Bloomios, Inc.(OTCQB:BLMS), the purchaser (i) $5,500,000 paid at closing;

(ii) a convertible secured subordinated promissory note in the original principal amount of $ 5,000,000 ;

(iii) 85,000 shares of Series D convertible preferred stock, with a total stated value of $ 8,500,000 ;

(iv) a senior secured convertible debenture with a subscription amount of $ 4,500,000 , after original issue discount of $ 779,117 ;

and (v) a common stock purchase warrant to purchase up to 2,853,910 shares of Bloomios’s common stock.

The Company recorded the consideration received at the estimated value at the time of the transaction and as part of that estimate valued the additional warrants to purchase Bloomios shares of common stock at $ 8,500,000 and a valuation allowance of $ 8,500,000 .

The assets transferred were recorded at their respective book values, the accrued and incurred expenses estimated by management were recorded and the consideration received was recorded at managements estimated fair value based on the balance sheet on October 26, 2022, the effective closing date.

Tangible assets, inventory / working capital*

$ ( 1,344,000 )

Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation*

( 2,413,814 )

Intangible assets, net of accumulated amortization

Accrued and incurred expenses related to the transaction and additional working capital*

( 2,051,500 )

Consideration received, including cash, debt and equity, net

Total gain recognized

*During the continuing transition period, all of the inventory or working capital was not moved from the Henderson, Nevada location to the buyers location in Daytona, Florida.

At closing, the Company provided working capital, in the form of inventory, in excess of the working capital agreement and during the transition period, there are certain expenses and purchases incurred that are to be netted against funds collected on behalf of the buyer.

At June 30, 2023, there was a receivable balance from the buyer of 845,443 , net of a reserve of $ 1,179,498 .

Advance for payroll

Operating expense

Management fees

Excess working capital

Accrued Interest

Subtotal due from Bloomios

Total due from Bloomios

For several reasons, including but not limited to the non-payment per the terms of several agreements and the continuous delay in getting the business transitioned, the Company notified Bloomios of its termination of the transition agreement.

Management accrued a reserve on the receivable balance of $1,179,498 leaving a receivable balance of $845,443 on June 30, 2023.

Accrued interest and the gain from the original issue discount were reversed and the remaining balance was expensed to loss from discontinued operations during the year ended June 30, 2023.

For the year ended June 30, 2024, the Company had accrual for wind down expenses of employee compensation, travel expenses and others for the expected shutdown of the facility in Henderson, Nevada after the transition was completed to Bloomios.

The final reconciliation of all these accrued expenses resulting in and over accrual of $ 71,976 and was recognized as income from discontinued operations for the year ended June 30, 2024.

Summary of discontinued operations:

Years ended June 30,

Discontinued Operations

Cost of sales

Sales, general and administrative expenses

Depreciation and amortization

Income (loss) from discontinued operations, net of tax

$ ( 338,418 )

The investments originally recorded at the date of the sale were fully reserved as of June 30, 2023.

Investments - Bloomios:

Senior secured convertible debenture, net of unamortized original issue discount

Series D convertible preferred stock

Convertible Secured Subordinate Promissory Note

Reserve on Investments - Bloomios

( 18,718,209 )

Total Investments - Bloomios

Senior Secured convertible debenture:

The Company received a senior secured convertible debenture of $ 4,500,000 , net of the original issue discount.

The Debentures have a maturity date of October 26, 2024 , an interest rate of 10 % and are convertible into shares of Bloomios common stock.

The debenture contains customary representations, warranties and indemnification provisions.

The Debentures are secured by a senior security interest in all assets of the Company and its subsidiaries.

In addition, the Company received a warrant to purchase shares of Bloomios common stock.

The Company did not place any value on this warrant.

Bloomios has agreed to use commercially reasonable efforts to complete a Qualified Offering within six months of October 26, 2022, to file a registration statement covering the resale of the warrant shares and the underlying shares convertible with the debenture.

Series D convertible preferred stock

We received 85,000 shares of Series D preferred stock.

The preferred shares have a stated value per share of $100 and we are to receive dividends equal to 8.5% per year on a monthly basis, 30 days in arrears , for each month during which the Series D Preferred shares remain outstanding.

The preferred stock shall not receive the declared dividends until the senior secured debentures are all repaid in full for all investors, including the debentures held by the Company.

Convertible Secured Subordinate Promissory Note

The note has an interest rate of eight and one-half percent ( 8.5 %) per annum and requires Bloomios to make a prepayment to the note in the amount equal to 40 % of the net proceeds received by Bloomios in connection with any offering of securities conducted in connection with an up listing.

Interest is due monthly and the note is convertible, at the Company’s option, into shares of Bloomios common stock at a conversion price of $ 5.00 per share subject to adjustments.

The full principal and interest is due on or before October 26, 2024.

The note is secured by a subordinated security interest in all assets of Infusionz pursuant to a certain pledge and security agreement, dated as of October 26, 2022, which security interest shall rank junior to all liens and security interests granted by Bloomios to the senior secured convertible note, which the Company is a holder of a portion of this security.

Discontinued Operations – Sale of Interactive Offers

On August 31, 2023, the Company sold Interactive offers to Amplifyir Inc.

The purchase price is $ 1,250,000 with a provision to adjust the final purchase price based on the business being transferred to Amplifyer Inc.

On August 31, 2023, the Company sold Interactive Offers, LLC (“Interactive”) to Amplifyir Inc.

(the “Buyer”).

The purchase price was $ 1,250,000 with a provision to adjust the final purchase price based on the business being transferred to Amplifyer Inc.

with a net zero working capital.

In addition, the Buyer is obligated to pay the Company two-and-one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing .

Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented.

Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations for all periods presented.

Summary of discontinued operations:

5 unchanged sentences

$ ( 187,003 )

$ ( 1,729,636 )

Accounts receivable net of allowance for doubtful accounts

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Discontinued operations of VitaMedica included in the consolidated financial statements ended June 30, 2024 are for the period from July 1, 2023 to May 31, 2024.

Summary of discontinued operations:

5 unchanged sentences

Income (loss) from discontinued operations

$ ( 382,449 )

Accounts receivable net of allowance for doubtful accounts

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Discontinued Operations – Sale of E-Core

E-Core, Technology Inc.

and its subsidiaries

On October 21, 2022, the Company acquired E-Core Technology, Inc.

(“E-Core”) d/b/a New England Technology, Inc., a Florida corporation (“New England Technology”).

The following table summarizes the consideration transferred to acquire E-Core and the amount of identified assets acquired, and liabilities assumed at the acquisition date.

Fair value of consideration transferred:

Cash payment, 120 days

Note payable 2

Convertible note payable, convertible at $4.81 per common share

Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Accounts receivable

Prepaid expenses

Customer relationships

Accrued liabilities

Line of credit

( 7,201,079 )

Total identifiable net assets

The business was acquired through membership interest purchase agreement on October 21, 2022.

There was no contingent consideration payable under the asset purchase agreement, although a provision was used to adjust the purchase price based on the final working capital transferred to the Company.

The purchase price was decreased by $ 33,803 , net and was repaid to the Company with an adjustment to the $ 3,000,000 cash payment.

The final purchase price allocation was completed by an independent consulting firm and is no longer subject to change.

The three notes payable were discounted by $ 2,707,393 .

The discount amortization for the year ended June 30, 2024 and June 30, 2023 was $ 1,112,676 and $ 969,098 , respectively.

On August 1, 2024, the Company closed a sale transaction in which, effective as of June 30, 2024, it sold 100 % of the outstanding stock of its wholly owned subsidiary E-Core Technology, Inc., a Florida corporation (d/b/a New England Technology, Inc.) (“E-core”), to E-Core Holdings, LLC, a Florida limited liability company (the “Buyer”) pursuant to the terms of an Agreement to Unwind Securities Purchase Agreement dated July 31, 2024 (the “Agreement”).

25 unchanged sentences

Loss on sale of E-core

Subsequent Events

On July 11, 2025 the Company closed on a private placement offering to sell 12,457,186 shares of the Company’s common stock at an offering price of $ 4.00 per share.

The Company received approximately $ 37,077,000 , net of broker fees, the fees on the convertible debt offering completed on July 16, 2025, legal fees, filing fees and other expenses incurred for the private placement.

On July 16, 2025, the Company closed on a private placement offering a secured convertible note in exchange for locked and liquid Solana with an original principal amount of $ 151,169,169 .

The note matures on the second anniversary of the closing and bears interest at a rate of 2 % per annum and may not be prepaid by the Company.

The principal of the note can be converted at any time by the holders into the Company’s common stock at a conversion price of $ 4.25 per share.

The notes are secured by a first priority lien on the digital assets exchanged for the secured convertible note.

If any of the principal remains at the end of the two year term, the Company would repay the note on a pro-rata basis for the remaining principal to the digital assets exchanged for the secured convertible note.

The agreements contain other customary terms, conditions and covenants for similar agreements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk