UPEXI, INC. 10-Q

Item 1. Financial Statements UPEXI, INC. Condensed Consolidated Financial Statements (Unaudited) Page Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and June 30, 2025 5 Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2025 and 2024 (Unaudited) 6 Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2025 and 2024 (Unaudited) 7 Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2025 and 2024 (Unaudited) 8 Notes to the Condensed Consolidated Financial Statements (Unaudited) 9 4 Table of Contents UPEXI, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, June 30, 2025 2025 (Unaudited) ASSETS Current assets Cash $ 2,237,223 $ 2,975,150 Accounts receivable, net 284,261 157,515 Inventory, net 1,035,680 1,152,870 Due from VitaMedica transition 471,380 228,017 Prepaid expenses and other receivables 1,480,227 350,836 Current digital assets at fair value 212,832,396 49,913,655 Purchase price receivable - VitaMedica 2,000,000 2,000,000 Total current assets 220,341,167 56,778,043 Property and equipment, net 1,931,498 2,052,573 Intangible assets, net 143,923 163,113 Goodwill 848,854 848,854 Deferred tax asset 5,948,858 5,948,858 Investment in digital company 750,000 - Digital assets at fair value, net of current 187,993,435 56,083,525 Other assets 200,690 192,123 Right-of-use asset, net 1,569,742 1,739,755 Total other assets 199,387,000 67,028,801 Total assets $ 419,728,167 $ 123,806,844 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 2,184,897 $ 1,039,370 Accrued compensation 3,176,969 3,470,296 Deferred revenue 51,347 13,155 Accrued liabilities 947,076 356,064 Accrued interest 1,545,481 792,449 Acquisition payable 260,652 260,652 Current portion of promissory notes 560,000 560,000 Short-term treasury debt 50,000,000 20,000,000 Current portion of Cygnet subsidiary notes payable 5,380,910 5,380,910 Current portion of operating lease payable 521,702 691,010 Total current liabilities 64,629,034 32,563,906 Operating lease payable, net of current portion 1,145,439 1,145,440 Convertible notes payable 143,161,862 - Total long-term liabilities 144,307,301 1,145,440 Stockholders' equity Preferred stock, $ 0.00001 par value, 10,000,000 shares authorized, and 150,000 and 150,000 shares issued and outstanding, respectively 2 2 Common stock, $ 0.00001 par value, 300,000,000 shares authorized, and 58,893,261 and 38,270,571 shares issued and outstanding, respectively 589 383 Additional paid in capital 204,586,941 150,640,935 Retain earnings (accumulated deficit) 6,204,300 ( 60,543,822 ) Total stockholders' equity 210,791,832 90,097,498 Total liabilities and stockholders' equity $ 419,728,167 $ 123,806,844 5 Table of Contents UPEXI, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30, 2025 2024 Revenue Revenue $ 3,156,128 $ 4,356,515 Digital asset revenue 6,083,617 - Total revenue 9,239,745 4,356,515 Cost of revenue 956,745 1,426,447 Gross profit 8,283,000 2,930,068 Operating expenses Sales and marketing 1,067,555 1,041,425 Distribution costs 887,596 1,455,725 General and administrative 9,257,208 1,367,690 Unrealized (gain) on digital assets ( 77,996,124 ) - Share-based compensation 5,756,398 141,298 Amortization of acquired intangible assets 19,190 19,190 Depreciation 135,902 239,905 ( 60,872,275 ) 4,265,233 Income (loss) from operations 69,155,275 ( 1,335,165 ) Other income (expense), net Interest expense, net ( 2,699,383 ) ( 290,412 ) Other income, net 292,230 - Other expense, net ( 2,407,153 ) ( 290,412 ) Income (loss) on operations before income tax 66,748,122 ( 1,625,577 ) Income tax benefit (expense) - - Net income (loss) from continuing operations $ 66,748,122 $ ( 1,625,577 ) Basic income (loss) per share: Income (loss) per share $ 1.21 $ ( 1.55 ) Diluted income (loss) per share: Income (loss) per share $ 0.76 $ ( 1.55 ) Basic weighted average shares outstanding 55,340,634 1,045,429 Fully diluted weighted average shares outstanding 88,479,950 1,045,429 6 Table of Contents UPEXI, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) Preferred Stock Preferred Stock Common Stock Common Stock Additional Paid Accumulated Total Stockholders' Shares* Par* ** Shares* Par* ** In Capital Deficit Equity FY 2025 Balance, June 30, 2024 25,000 $ 1 1,045,429 $ 11 $ 53,375,502 $ ( 46,859,613 ) $ 6,515,901 Stock based compensation - - - - 141,298 - 141,298 Net loss for the three months ended September 30, 2024 - - - - - ( 1,625,577 ) ( 1,625,577 ) Balance, September 30, 2024 25,000 $ 1 1,045,429 $ 11 $ 53,516,800 $ ( 48,485,190 ) $ 5,031,622 FY 2026 Balance, June 30, 2025 150,000 $ 2 38,270,571 $ 383 $ 150,640,935 $ ( 60,543,822 ) $ 90,097,498 Stock based compensation - - - - 5,756,398 - 5,756,398 Exercise of pre-funded warrants - - 7,889,266 79 7,810 - 7,889 July 2025 private placement - - 12,457,186 125 47,007,790 - 47,007,915 Issuance of stock for conversion of debt - - 276,238 2 1,174,008 - 1,174,010 Net income for the three months ended September 30, 2025 - - - - - 66,748,122 66,748,122 Balance, September 30, 2025 150,000 $ 2 58,893,261 $ 589 $ 204,586,941 $ 6,204,300 $ 210,791,832 * Common stock has been restated to reflect the 1 for 20 reverse split ** Common stock par value has been adjusted to $0.00001 7 Table of Contents UPEXI, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended September 30, 2025 2024 Cash flows from operating activities Net income (loss) from operations $ 66,748,122 $ ( 1,625,577 ) Adjustments to reconcile net income (loss) to net cash (used in) operating activities: Depreciation and amortization 155,092 259,095 Unrealized (gain) on digital assets ( 77,996,124 ) - Digital asset revenue ( 6,083,617 ) - Amortization of loan costs - 2,571 Bad debt reserve for Amazon receivable 229 - Amortization of deferred financing costs 794,681 - Stock based compensation 5,756,398 141,298 Changes in assets and liabilities Accounts receivable ( 126,975 ) ( 194,557 ) Inventory 117,190 ( 204,863 ) Prepaid expenses and other assets ( 1,381,321 ) 170,455 Operating lease assets and liabilities, net ( 7,079 ) 28,795 Accounts payable and accrued liabilities 2,204,991 ( 494,570 ) Deferred revenue 38,192 ( 57,239 ) Net cash used in operating activities ( 9,780,221 ) ( 1,974,592 ) Cash flows from investing activities Proceeds from the sale of the building, net - 4,005,516 Proceeds from the sale of E-core - 2,000,000 Acquisition of digital assets ( 29,579,741 ) - Investment in digital assets company ( 750,000 ) - Acquisition of property and equipment ( 14,827 ) ( 167,410 ) Net cash (used in) provided by investing activities ( 30,344,568 ) 5,838,106 Cash flows from financing activities Payment of equity issuance costs ( 2,992,085 ) - Proceeds from issuance of stock 50,000,000 - Proceeds from exercise of pre-funded warrants 7,889 - Repayment of related party advance - ( 100,000 ) Payments of debt issuance costs ( 7,628,942 ) - Repayment on note payable on building - ( 2,634,538 ) Net cash provided by (used in) financing activities 39,386,862 ( 2,734,538 ) Net (decrease) increase in cash ( 737,927 ) 1,128,976 Cash, beginning of period 2,975,150 661,415 Cash, end of period $ 2,237,223 $ 1,790,391 Supplemental Cash Flow Disclosures Interest paid $ 1,946,351 $ 84,362 Income tax paid $ - $ - Non-cash Investing and Financing Activities Issuance of common stock for the repayment of convertible notes payable $ 1,174,010 $ - Issuance of convertible debt for digital assets acquired $ 151,169,169 $ - Issuance of short-term debt for digital assets acquired $ 30,000,000 $ - 8 Table of Contents UPEXI, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. Company Information and Basis of Presentation Nature of Operations Upexi, Inc., is a Delaware corporation, originally formed as a Nevada corporation in 2018. The Company is made up of seven active subsidiaries. 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 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 holding excess cash primarily in FDIC-insured interest-bearing accounts. We adopted this strategy to obtain the highest yield on excess cash. Under our new approach, our treasury policy focuses primarily on Solana (“SOL”) an asset that is considered earlier in its lifecycle, with respect to both development and usage, as well as institutional adoption. This strategy involves applying a public-market treasury model similar to what has been done with Bitcoin. Management will focus its resources to this digital asset strategy and a significant portion of the balance sheet will be the Company’s Solana 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. MW Products operates from our corporate headquarters , 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 distributes products through our Tampa, Florida warehouse. Lucky Tail operates from our Tampa, Florida warehouse with sales and marketing driven by on-site and remote teams that operate the Amazon sales strategy and daily business operations. HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Odessa, Florida, supporting our health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations. We have continued to manage these operations with corporate focus on larger opportunities that have warranted the majority of corporate focus and investments for the future. Upexi Distribution operates from our Tampa, Florida warehouse providing warehousing, distribution and other services in support of our product sales. Basis of Presentation and Principles of Consolidation - The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of September 30, 2025 and 2024. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. 9 Table of Contents Note 2. Significant Accounting Policies The significant accounting policies followed are: Use of Estimates - The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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. Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Accounts Receivable - Amounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within a specified time from the invoice date. The trade terms vary based on the customer and typically range from prepaid to 45 days from the invoice date. Interest is not charged by the Company on past due accounts. 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. Actual results could vary from the estimate. Accounts are charged against the allowance when management deems them to be uncollectible. The net accounts receivable balances at September 30, 2025, June 30, 2025, and June 30, 2024 were $ 284,261 , $ 157,515 , and $ 606,885 , respectively. Based on management’s review of accounts receivable, the allowance for credit losses was approximately $ 641,800 at September 30, 2025 and $ 636,600 at June 30, 2025. The Company had bad debt expense of $ 229 for the three months ended September 30, 2025 and no bad debt expense for the three months September 30, 2024. Inventory - The Company reviews the inventory level of all products and raw materials quarterly. For most products that have been in the market for one year or more, we consider inventory levels of greater than one year’s sales to be excess or other items that show slower than projected sales. Due to limited market penetration for our products, we have decided to write down 50% of the cost against certain raw materials and finished products. Products that are no longer part of the current product offering are considered obsolete. The potential for re-sale of slow-moving and obsolete inventories is based upon our assumptions about future demand and market conditions. The recorded cost of obsolete inventories is then reduced to zero. The slow-moving and obsolete inventory is written off and recorded as charges to cost of goods sold. All adjustments for obsolete inventory establish a new cost basis for that inventory as we believe such reductions are permanent declines in the market price of our products. Generally, obsolete inventory is sold to companies that specialize in 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. Net realizable value is determined, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors. 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. 10 Table of Contents 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. government. The Company recognizes revenue by utilizing daily close prices obtained from CoinMarketCap. Property and Equipment - Property and equipment is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 20 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. 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. Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill. The Company performed its annual test as of June 30, 2025 and 2024, respectively. As of September 30, 2025 and June 30, 2025, the amount in goodwill was $ 848,854 . Revenue Recognition - In accordance with ASC No. 606, Revenue from Contracts with Customers , the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon the distributors’ resale of the products. Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with inbound freight, are generally included in cost of revenue. Our business is subject to contingencies related to customer orders, including: Right of Return: A large portion of our revenue comes from the sale of consumable products, which are sold in high-volume and low quantities, and are generally maintained at stock levels of less than ninety days in our facility. Customer returns have historically represented a very small percentage of sales on an annual basis. Other product sales relate to some pet products, including small mechanical devices. Warranties: The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase. The Company accrues an allowance for refunds, returned deposits and discounts given by customer services post shipment of the product based on historical experience and management’s estimate of future expenses, including replacement, freight charges and other fulfilment expenses. 11 Table of Contents Conditions of Acceptance: Sales of our consumable products and pet products, generally do not have customer acceptance terms. Revenue by Geography and Product Source: The following table, which excludes digital asset revenue, discloses disaggregated revenue for the three months ended: September 30, 2025 September 30, 2024 Primary geographical markets United States of America $ 3,091,974 $ 4,280,593 Other 64,154 75,922 Total $ 3,156,128 $ 4,356,515 Product source: Internally manufactured $ 2,207,110 $ 2,166,341 Contract manufactured 925,070 578,316 Purchased as finished good 23,948 1,611,858 Total $ 3,156,128 $ 4,356,515 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: September 30, 2025 June 30, 2025 Deferred revenue $ 51,347 $ 13,155 We expect to recognize 100% of the deferred revenue at September 30, 2025 and June 30, 2025, as revenue in the year ended June 30, 2026. 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 as 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 the cost basis as 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. 12 Table of Contents 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. 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. 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. Equity Investment (Cost Method) – The Company follows Accounting Standards Codification (“ASC”) 321, Investments – Equity Securities, to account for its ownership interest in noncontrolled entities. Under ASC 321, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are carried at cost less impairment (i.e., cost method investments). Income is recorded for payments received to which the Company earned, such as the case in which the Company would get a certain percentage of revenues as royalties, from the noncontrolled entity subsequent to the date of investment. Payments received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. On August 28, 2025, the Company made an initial investment of $ 750,000 with Cybersyn Holdings, LLC, which hosts and owns the platform for Alpha City Exchange. Under the terms of the agreement, an initial investment of $ 750,000 into Alpha Exchange was made in exchange for a royalty equal to 14.9 % of all future gross revenue generated by the platform. For the $ 750,000 investment made, pursuant to ASC 321, Investments – Equity Securities, the Company recognized the investment at cost and presents it into the caption “Investment in digital company” on the balance sheet. As of September 30, 2025, there had been no change to terminate the agreement, any achievement of the subsequent milestones, nor gross revenue generated yet by the platform off which to accrue revenue. 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. The Company believes continual investment in advertising is critical to the development and sale of its branded products. Advertising costs of $ 639,431 and $ 194,774 were expensed as incurred during the three months ended September 30, 2025 and 2024, respectively. 13 Table of Contents Stock Based Compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options and grants of restricted shares as compensation expense in the consolidated financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately. Non-employee Stock-based Payments - The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Accounting Standards Codification (ASC) 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Stock-based payments related to non-employees are accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Fair Value Measurements - The Company accounts for financial instruments in accordance with FASB ASC 820 “Fair Value Measurement and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. The estimated fair value of certain financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, deferred revenue and debt are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Leases - The Company determines if a contract contains a lease at inception. A contract contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. 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 condensed consolidated balance sheets. GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option will result in an economic penalty. All the Company’s real estate leases are classified as operating leases. 14 Table of Contents Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional two years. The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. Income Taxes - Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. 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 that some portion or all of the deferred tax assets will not be realized. At September 30, 2025 and June 30, 2025, there was a valuation allowance of $ 10,092,765 and $ 10,092,765 , 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. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 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 September 30, 2025 or June 30, 2025. Reverse Stock Split On September 18, 2024, we filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of our 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. The Reverse Stock Split did not have any impact on the par value of common stock. 15 Table of Contents On the Effective Date, every twenty shares of Common Stock issued and outstanding were automatically combined into one share of Common Stock, without any change in the par value per share. As the per-share par value did not change, we reclassified $ 19,860 from Common Stock to Additional Paid-in-Capital on the Effective Date. The exercise prices and the number of shares issuable upon exercise of outstanding stock options, equity awards and warrants, and the number of shares available for future issuance under the equity incentive plans were adjusted in accordance with their respective terms. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in our Common Stock. We did not issue any fractional shares in connection with the Reverse Stock Split. Instead, fractional shares were initially rounded up to the next largest whole number, resulting in the issuance of 8 shares on October 3, 2024, the Effective Date, and an additional issuance of 38 shares on October 8, 2024. 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. 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. The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock. Unless otherwise indicated, all issued and outstanding shares of common stock and all outstanding securities entitling their holders to purchase shares of our common stock or acquire shares of our common stock, including stock options, restricted stock units, and warrants per share data, share prices and exercise prices, as required by the terms of those securities, have been adjusted retroactively to reflect the Reverse Stock Split. Earnings (loss) per share Three Months Ended September 30, 2025 2024 Earnings Per Share Numerator: Net income (loss) $ 66,748,122 $ ( 1,625,577 ) Denominator: Weighted average common shares outstanding 55,340,634 1,045,429 Earnings (loss) per share $ 1.21 $ ( 1.55 ) Diluted Earnings Per Share Numerator: Net income (loss) $ 66,748,122 $ ( 1,625,577 ) If-converted impact on net income 649,660 0 Net income (loss) for diluted earnings per share $ 67,397,782 $ ( 1,625,577 ) Denominator: Weighted average common shares outstanding 55,340,634 1,045,429 Weighted average effect of dilutive securities 33,139,316 0 Total dilutive common shares outstanding 88,479,950 1,045,429 Diluted earnings (loss) per share $ 0.76 $ 1.55 In the three months ended September 30, 2025, 9,478 options were excluded because they were anti-dilutive and 762,770 warrants were excluded because they were anti-dilutive. In three months ended September 30, 2024, the Company was in a net loss position and therefore, diluted EPS equaled EPS. 16 Table of Contents Convertible Debt and Securities – The Company accounts for convertible notes as a single debt instrument measured at amortized cost. The Company has not identified any embedded features contained within its notes which would require bifurcation from the debt host. As applicable, any debt discount and debt issuance costs incurred in connection with the issuance of the notes are recorded as a direct deduction from the carrying amount of the notes. These amounts are amortized to interest expense using the effective interest method over the expected term of the notes. Upon conversion, the carrying amount of the notes, including any unamortized debt issuance costs and unamortized discounts, are reduced by the amount converted, with any difference being reflected as a change in equity. 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 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. The Company qualifies as an emerging growth company, and as such, has elected to use the extended transition period for complying with new or revised accounting standards and is not subject to the new or revised accounting standards applicable to public companies during the extended transition period. The accounting standards discussed below indicate effective dates for the Company as an emerging growth company using the extended transition period. 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 has adopted 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 for the three months ended and date as of September 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. 17 Table of Contents 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. For the fiscal year beginning July 1, 2025, there have been no other recent accounting pronouncements issued but not yet adopted that are expected to be material to the Company. Note 3. Inventory Inventory consisted of the following: September 30, 2025 June 30, 2025 Raw materials $ 498,032 $ 489,574 Finished goods 537,648 663,296 $ 1,035,680 $ 1,152,870 The Company writes off the value of inventory deemed excessive or obsolete. During the three months ended September 30, 2025, and September 30, 2024, the Company wrote off inventory valued at $ 70,400 and $ 42,370 , net, respectively. The Company had inventory reserves at September 30, 2025, and June 30, 2025, of $ 593,539 . Note 4. Property and Equipment September 30, 2025 June 30, 2025 Furniture and fixtures $ 127,050 $ 127,050 Computer equipment 102,279 102,279 Internal use software 570,645 570,645 Manufacturing equipment 2,127,388 2,112,561 Leasehold improvements 852,825 852,825 Vehicles 206,501 206,501 Property and equipment, gross 3,986,688 3,971,861 Less accumulated depreciation ( 2,055,190 ) ( 1,919,288 ) $ 1,931,498 $ 2,052,573 Depreciation expense for the three months ended September 30, 2025 and 2024 was $ 135,902 and $ 239,905 , respectively. 18 Table of Contents Note 5. Digital Assets The following table summarizes the Company’s digital asset holdings as of: September 30, June 30, 2025 2025 Approximate number of Solana Tokens held 2,066,827 744,026 Digital assets, fair value $ 400,825,831 $ 105,997,180 The following table summarizes the Company’s digital asset purchases, unrealized gains (losses) on digital assets, and revenue from staking for the three months ended September 30, 2025 and 2024: Three Months Ended September 30, 2025 2024 Number of Solana tokens purchased 1,291,454 - Digital asset purchases $ 210,748,910 $ - Unrealized gains on digital assets $ 77,996,124 $ - Revenue from staking $ 6,083,617 $ - Approximate number of Solana tokens earned as revenue 31,347 - 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: September 30, June 30, 2025 2025 Number of Solana Tokens liquid 1,019,605 322,575 Number of Solana Tokens locked 1,047,222 421,451 The Company has approximately 95% of its Solana treasury staked as of September 30, 2025 and as of 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 1,047,222 tokens that are considered locked at September 30, 2025. The following table summarizes the unlocking schedule of Solana tokens currently locked as of September 30, 2025: June 30, 2026 351,105 June 30, 2027 456,818 June 30, 2028 239,299 1,047,222 19 Table of Contents The Company valued the Solana treasury at $ 208 .74 per liquid token and $ 179 .52 per locked token as of September 30, 2025. The Company valued the Solana treasury at $ 154 .74 per liquid token and $ 133 .07 per locked token as of June 30, 2025. The aggregate fair value of 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. $208.74 and $154.74 are the market prices from the closing price listed on coinmarketcap.com at September 30, 2025 and June 30, 2025, respectively . Note 6. Intangible Assets Intangible assets as of September 30, 2025: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 1,834,692 $ 1,834,692 $ - Trade name 5 years 383,792 239,869 143,923 Online sales channels 2 years 1,800,000 1,800,000 - Vender relationships 5 years 6,000,000 6,000,000 - $ 10,018,484 $ 9,874,561 $ 143,923 For the three months ended September 30, 2025 and 2024, the Company amortized approximately $ 19,190 and $ 19,190 , respectively. Intangible assets as of June 30, 2025: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 1,834,692 $ 1,834,692 $ - Trade name 5 years 383,792 220,679 163,113 Online sales channels 2 years 1,800,000 1,800,000 - Vendor relationships 5 years 6,000,000 6,000,000 - $ 10,018,484 $ 9,855,371 $ 163,113 Future amortization of intangible assets on September 30, 2025 is set forth below in the years then ended: June 30, 2026 $ 57,569 June 30, 2027 76,758 June 30, 2028 9,596 $ 143,923 20 Table of Contents Note 7. Prepaid Expenses and Other Receivables Prepaid and other receivables consist of the following at: September 30, 2025 June 30, 2025 Insurance $ 129,197 $ 107,256 Prepayment to vendors 171,024 201,192 Deposits on services 10,000 10,000 Subscriptions and services being amortized over the service period 1,164,776 26,500 Other receivables 5,230 5,888 Total $ 1,480,227 $ 350,836 All prepaid expenses are expected to be expensed within one year. Note 8. Operating Leases We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, and equipment. We determine if an arrangement is a lease, or contains a lease, at inception, and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years , when it is reasonably certain that we will exercise that option. As of September 30, 2025, no option to extend the lease was recognized as right-of-use (“ROU”) assets and lease liabilities. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our ROU assets and corresponding liabilities. We have elected not to present short-term leases on the condensed consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception. 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 . Lease expenses were $ 1,910 for the three months ended September 30, 2025 and 2024. On March 15, 2023, the Company entered 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 . The initial term of the lease is thirty-eight months and was not completed when the lease was signed. The Company moved into the facility in July 2023 and started operations. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain operating leases and accounted for as non-lease components and not part of the ROU. During the three months ended September 30, 2025 and 2024, the Company recognized $ 102,020 and $ 100,756 expense, respectively. On July 25, 2023, the Company entered a lease for approximately 5,700 square feet of office space, located in Tampa, Florida, to be used as the Company’s corporate headquarters . The initial term of the lease is sixty-one months. During the three months ended September 30, 2025 and 2024, the Company recognized $ 62,515 and $ 49,244 expense, respectively . On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC, which is owned by our CEO, Allan Marshall. The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month. The initial term of the lease is five years . 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. 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. Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024. During the three months ended September 30, 2025 and 2024, the Company recognized $ 79,944 and $ 79,944 expense , respectively. 21 Table of Contents 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 condensed consolidated balance sheets. As of September 30, 2025, our finance leases are not material. The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized in the condensed consolidated balance sheet as of September 30, 2025: 2026 $ 572,074 2027 504,795 2028 486,733 2029 221,715 Total undiscounted future minimum lease payments 1,785,317 Less: Imputed interest ( 118,176 ) Present value of operating lease obligation 1,667,141 Less: current portion ( 521,702 ) Long-term operating lease obligation $ 1,145,439 The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, 2025 and 2024 are: September 30, 2025 2024 Weighted average remaining lease term months 26 45 Weighted average incremental borrowing rate 5.0 % 5.0 % For the three months ended September 30, 2025 and 2024, the components of lease expense, included in general and administrative expenses and interest expense in the condensed consolidated statement of operations, are as follows: Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Finance lease expense: Amortization of ROU assets $ 190,290 $ 185,148 Interest expense 20,982 28,853 Operating lease cost 3,750 3,784 Variable lease expense 52,036 51,835 Total lease cost $ 267,058 $ 269,620 22 Table of Contents Note 9. Accrued Liabilities Accrued liabilities consist of the following at: September 30, 2025 June 30, 2025 Accrued professional fees $ 777,432 $ 300,000 Accrued sales tax 35,520 38,281 Accrued liquidated damages 120,000 - Other accrued liabilities 14,124 17,783 $ 947,076 $ 356,064 Note 10. Convertible Notes, Notes Payable, Promissory Notes, and Short-Term Debt Convertible Notes, Notes Payable and Promissory Notes outstanding are summarized below: Maturity September 30, June 30, Date 2025 2025 Convertible Notes: Convertible Notes issued for digital assets, due July 16, 2027. Interest rate per annum is 2%. Accrued interest is payable at time of maturity, to the extent of unpaid principal remaining. The Notes shall be convertible into shares of common stock of the Company at the option of the holder, at any time and from time to time. The conversion price is $4.25 per share. July 16, 2027 $ 149,996,123 $ - Unamortized deferred financing costs on Convertible Notes ( 6,834,261 ) - Convertible Notes, net $ 143,161,862 Less: current portion - - Convertible Notes, net of current portion $ 143,161,862 $ - Notes Payable, Cygnet subsidiary: SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2051 $ 3,694,721 $ 3,694,721 Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business June 30, 2027 1,000,290 1,000,290 GF Note, 6 annual payments, with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business November 7, 2026 685,899 685,899 Total $ 5,380,910 $ 5,380,910 Notes payable, Cygnet subsidiary, current $ 5,380,910 $ 5,380,910 Promissory Notes: Promissory Notes, 12% interest rate that is paid in cash monthly, and maturity date of June 1, 2026. These Promissory Notes are subordinate to the Convertible Notes. These Promissory Notes are convertible into shares of common stock at the option of the holders, at any time and from time to time. The conversion price is $3.00 per share. June 1, 2026 $ 560,000 $ 560,000 Promissory Notes, current $ 560,000 $ 560,000 Total Convertible Notes, Notes Payable (Cygnet) and Promissory Notes $ 149,102,772 $ 5,940,910 23 Table of Contents Future payments on notes payable are set forth below: For the year ended June 30: Total 2026 – Notes Payable (Cygnet) and Promissory Notes $ 5,940,910 2027 - 2028 – Convertible Notes* 149,996,123 Total principal payments 155,937,033 Unamortized deferred financing costs on Convertible Notes ( 6,834,261 ) Total $ 149,102,772 * The convertible notes cannot be repaid in cash; the convertible notes can only be converted into approximately 35,293,206 of the Company’s common stock at a per share price of $4.25 or repaid at the end of the term of the note with approximately 962,955 SOL tokens. Convertible Notes On July 16, 2025, the Company entered into securities purchase agreements with certain investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering (the “Note Offering”) secured convertible notes (the “Notes”) in exchange for locked and spot Solana in the aggregate, original principal amount of $ 151,169,169 . The total principal amount arising out of the Notes Offering was $ 151,169,169 . The maturity date on the Notes is the two-year anniversary from the date of the closing of the Notes Offering, or July 16, 2027. The applicable interest rate is an annual rate equal to 2.0 %. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, and accrues daily commencing on the Issue Date, or July 16, 2025, until payment in full of the outstanding principal, together with accrued and unpaid interest, liquidated damages, and other amounts which may become due. At the maturity date of the Notes, the holders of the Notes are entitled to an amount equal to the accrued and unpaid interest and liquidated damages (if any) and, to the extent unpaid principal remains, the return of the Subscription Amount (pro-rated to the extent principal was paid down) in the form of Digital Assets paid to the Company. At any time after the Issue Date until the Notes are no longer outstanding, the Notes shall be convertible into shares of Common Stock of the Company at the option of the holder, at any time and from time to time. The conversion price is $ 4.25 per share. Furthermore, the Company may deliver forced conversion notices. Under the terms of the forced conversion, if after the legend removal date, the volume-weighted average price for each of the 30 consecutive trading days exceeds $6.37, the Company may within five trading days deliver a notice to the holders to cause the holder to convert all or part of then outstanding principal on the Notes . The Company accounts for convertible notes as a single debt instrument measured at amortized cost. The Company has not identified any embedded features contained within its notes which would require bifurcation from the debt host. As applicable, any debt discount and debt issuance costs incurred in connection with the issuance of the notes are recorded as a direct deduction from the carrying amount of the notes. These amounts are amortized to interest expense using the effective interest method over the expected term of the notes. Upon conversion, the carrying amount of the notes, including any unamortized debt issuance costs and unamortized discounts, are reduced by the amount converted, with any difference being reflected as a change in equity. Maturity September 30, June 30, Date 2025 2025 Short-Term Debt: BitGo Credit Facility, 11.5% interest rate per annum. The term of the credit facility is for one year and is renewable for successive one-year options. N/A $ 50,000,000 $ 20,000,000 Total Short-Term Debt $ 50,000,000 $ 20,000,000 24 Table of Contents Short-Term 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 $ 50,000,000 for the purchase of digital assets 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 September 30, 2025 and June 30,2025, the outstanding balance of the credit facility was $ 50,000,000 and $ 20,000,000 , respectively. The credit facility was used for the purchase of SOL. Note 11. 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 a $ 400,000 related party advance. There are no advances due to Allan Marshall at September 30, or 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. The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $ 20,060 per month on a triple net basis. The initial term of the lease is five years. 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. Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024. 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. 25 Table of Contents Note 12. Equity Transactions Convertible Preferred Stock The Company has 150,000 shares of Preferred Stock issued and outstanding to Allan Marshall, CEO. 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. Common Stock During the three months ended September 30, 2025: All, 7,889,226 Pre-Funded Warrants were exercised. As a result, 7,889,226 shares of common stock were issued to investors. These Pre-Funded Warrants were issued in connection with the Private Placement offering occurring in April 2025 in which the Company issued 35,970,383 shares of common stock at an offering price of $ 2.28 per share. In connection with a private placement offering of equity in July 2025, 12,457,186 shares of common stock were issued. In connection with the notice of a conversion relating to convertible debt in July 2025, 276,238 shares of common stock were issued. Stock Split The Company effectuated a reverse stock split, at a rate of 20 to 1 , effective at 12:01 am ET, October 3, 2024. The total issued and outstanding shares of the Company’s common stock, post reverse stock split was 1,040,886 . The Depository Trust Company (“DTC”) has requested an additional 202,183 shares of the Company’s common stock to round up, pursuant to the terms of the reverse stock split, the holdings of DTC’s beneficial holders. 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. 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. The Reverse Stock Split did not modify the relative rights or preferences of the Common Stock. Note 13. Stock Based Compensation 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 shares of common stock. The options are exercisable for a period of up to 10 years from the date of the grant. A summary of stock option activity for the three months ended September 30, 2025 is as follows: Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at June 30, 2025 621,353 $ 3.39 5.66 $ 374,500 Exercised - - - - Forfeited ( 1,875 ) 83.14 - - Granted - - - - Options outstanding at September 30, 2025 619,478 $ 3.15 5.40 $ 2,040,400 Options exercisable at September, 2025 (vested) 616,287 $ 3.15 5.39 $ 2,040,400 26 Table of Contents A summary of stock option activity for the three months ended September, 2024 is as follows: Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at June 30, 2024 200,714 $ 57.40 5.83 $ 0.00 Exercised - - - - Forfeited - - - - Granted - - - - Options outstanding at September 30, 2024 200,714 $ 57.40 5.57 $ 0.00 Options exercisable at September 30, 2024 (vested) 197,610 $ 58.10 5.59 $ 0.00 The closing market price per common share on September 30, 2025 was $ 5.77 . Stock-based compensation attributable to stock options was $ 39,360 and $ 141,298 for the three months ended September 30, 2025, and 2024, respectively. As of September 30, 2025, there was approximately $ 19,680 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 0.04 years. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. 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 6,554,778 shares available for issuance as of September 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 $ 5,448,425 for the three months ended September 30, 2025 and $ 0 for the three months ended September 30, 2024. Pursuant to the 2019 Plan, restricted stock units may be granted. As of September 30, 2025, there was approximately $ 363,000 of unrecognized compensation expense related to 1,220,416 restricted stock units. The weighted-average term remaining on the unvested shares was approximately 0.35 years. Shares Weighted- Average Grant Date Fair Value Outstanding as of June 30, 2024 7,500 $ 9.82 Granted - - Cancelled or Forfeited - - Vested - - Outstanding as of September 30, 2024 7,500 $ 9.82 Outstanding as of June 30, 2025 221,917 $ 2.48 Granted 2,475,000 3.14 Cancelled or Forfeited - - Issued - - Outstanding as of September 30, 2025 2,696,917 $ 3.08 27 Table of Contents At September 30, 2025, there were approximately 1,476,501 vested RSUs that are included in the 2,696,917 RSU’s outstanding above as they are not included in the Company’s issued and outstanding common stock. The components of stock-based compensation are as follows for the three months ended September 30: 2025 2024 Stock options amortization $ 39,360 $ 141,298 Restricted stock units amortization 5,409,065 - Warrants amortization granted to asset manager 307,973 - Total stock-based compensation $ 5,756,398 $ 141,298 Note 14. Phantom Stock Appreciation Plan The Company established a Phantom Stock Appreciation Plan on July 1, 2025 to motivate and reward key employees of the Company by providing incentive compensation opportunities based on the increase in the Company value and the value increase to our shareholders, thereby increasing the long-term value of the Company. The Company recognizes the estimated compensation cost related to the awards and expected to be awarded during the year in its consolidated financial statements in accordance with ASC 718. The Company estimated the cost of compensation related to the plan during the three month period ended September 30, 2025 as $ 1,441,987 and recognized this expense as a general and administrative compensation expense and accrued this on the balance sheet as accrued compensation. As of the date of this report, there has been no compensation paid to the participants related to this Plan. Phantom Stock Appreciation Plan Only July 1, 2025 the Board of Directors with the recommendation of the Compensation Committee approved the Upexi, Inc. Phantom Stock Appreciation Plan (the “Plan”). The Plan permits the granting of an award to any employee of the Company who is selected and approved by the Board of Directors, upon such criteria determined by the Board of Directors. Except as otherwise provided in a Participant’s employment or award agreement, the Phantom Stock Unit (“PSU”) will vest on each June 30 th following the date of grant, provided the Participant is employed by the Company or an Affiliate on such date. The Company shall credit to each Participant’s Account by means of a bookkeeping entry the number of Phantom Stock Appreciation Units awarded. On an annual basis, as of the end of each Plan Year (June 30), the Account for each Participant shall be equal to the excess of (a) the Payment Date Value at the end of the Plan Year (or such other determination date selected by the Company if the Payment Date is not July 1); over (b) the Grant Date Value or the Rollover Date Value as applicable, multiplied by (c) the number of PSUs in a Participant’s Account. Such amount shall be paid to a Participant. The PSUs in the Account shall be valued each year and such process shall continue until the earliest to occur of the date a Participant has terminated employment, the date of a Change of Control as defined by the Company, and the date the Plan has terminated or the Company has terminated one or more awards for a Participant. If the per unit value of PSU at the end of the Plan Year is less than the per unit value of the PSU at the beginning of such Plan Year, no amount shall be payable to a Participant under the Plan for such Plan Year. The Payment Date Value is the 30-day average closing price of Upexi, Inc. common stock on NASDAQ between June 1 st and June 30 th immediately preceding the Payment Date. If the Payment Date is other than July 1 st , then the Payment Date Value shall be the 30/31-day average closing price of Upexi, Inc. common stock on NASDAQ for the full month immediately preceding the designated payment date as determined by the Company. A Participant must be employed on June 30 th to receive the Account value for such Plan Year except as otherwise determined by the Company. The Account value as determined in Section 5.1 shall be paid in a lump sum payment no later than September 15 th following the end of each Plan Year. Payment will be made in cash. The Company may also elect to pay up to 50 % of the Account value prior to June 30 of each year with a true up made for the Payment Date Value on June 30 if applicable. 28 Table of Contents At September 30, 2025 the Board of directors had awarded the following PSU’s with the following Grant Value: 2025 Phantom Stock Units with a grant value of $2.89 1,153,996 Phantom Stock Units with a grant value of $4.00 311,430 Phantom Stock Units with a grant value of $4.25 6,906 Total Phantom Stock Units granted 1,472,332 The awards from the plan are earned and paid on an annual basis and the Company estimates the annual expected compensation expense for the Plan year and recognizes 1/12 th of the estimated expense each month. This estimate is updated on a quarterly basis for variable components of the plan, including all of the awards that will be issued during the year, the expected grant value of those awards and the estimated Payment Date value. At September 30, 2025 management used the following criteria in the estimate of the compensation related to the Plan: 2025 Phantom Stock Units with a grant value of $2.89 1,153,996 Phantom Stock Units with a grant value of $4.00 311,430 Phantom Stock Units with a grant value of $4.25 889,236 Total Phantom Stock Units used for annual compensation estimate 2,354,662 The Upexi, Inc. common stock price at September 30, 2025 was $ 5.77 per common share. Management determined that it should use $ 6.00 per share as the Payment Date Value for estimating the annual compensation. Based on the above criteria, management determined that the annual compensation for the Plan will be approximately $ 5,767,948 and accrued compensation expense of $ 1,441,987 for the three months ended September 30, 2025. All of the outstanding phantom unit awards at September 30, 2025 met the criteria to be treated under liability classification in accordance with ASC 718, given that these awards will settle in cash on the vesting date. Compensation expense for the Plan Awards is based on the fair value of the units as of the balance sheet date as further discussed above, and such costs are recognized ratably over the service period of the awards. As the fair value of liability awards is required to be re-measured each period end, stock compensation expense amounts recognized in future periods for these awards will vary. The estimated future cash payments of these awards are presented as a liability within “Accrued compensation” in the Condensed Consolidated Balance Sheets. Note 15. Income Taxes The Company computed the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. For the three months ended September 30, 2025, the Company’s effective tax rate was 0.0 % due to the significant unrealized gains on the Company’s digital assets and timing differences between book and tax. For the three months ended September 30, 2024, the Company reserved 100 % of the benefit calculated as income tax benefit. The estimated effective tax rate is subject to fluctuation based on the mix of earnings and losses by tax jurisdiction and the relative impact of permanent book to tax differences. Each quarter, a cumulative adjustment is recorded for any fluctuations in the estimated annual effective tax rate as compared to the prior quarter. As a result of these factors, and due to potential changes in the Company’s period-to-period results, fluctuations in the Company’s effective tax rate and respective tax provisions or benefits may occur. For the three months ended September 30, 2025, the difference between the U.S. statutory rate and the Company’s effective tax rate is due to the significant unrealized gains on the Company’s digital assets and timing differences between book and tax for an effective tax rate of approximately 0.0%. The income tax benefit for the three months ended September 30, 2024, was primarily attributable to federal and state income taxes and non-deductible expenses for an effective tax rate of approximately 24.5 %. 29 Table of Contents Deferred tax assets and liabilities resulting from temporary differences in the recognition of income and expenses for tax and financial reporting purposes. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred taxes. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. On June 30, 2025, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. The Company determined that it is more likely than not that the Company will have future taxable income. As of September 30, 2025 and June 30, 2025 the Company had a valuation reserve of $ 10,092,765 . The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations. Income tax returns generally remain subject to examination by federal and most state tax authorities. The Company is not currently under examination in any federal or state jurisdiction. Note 16. Risks and Uncertainties There is substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the scope of operation of Farm Bill-compliant hemp programs relative to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the U.S. Drug Enforcement Administration, or DEA, and/or the FDA and the extent to which manufacturers of products containing Farm Bill-compliant cultivators and processors may engage in interstate commerce. The uncertainties cannot be resolved without further federal, and perhaps even state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules. If these uncertainties continue, they may have an adverse effect upon the introduction of our products in different markets. The Company holds a significant portion of its assets in cryptocurrencies, which are subject to substantial market volatility, evolving regulatory frameworks, liquidity constraints, cybersecurity threats, and technological risks. These factors may cause material fluctuations in the fair value of the Company’s holdings and could adversely affect its financial condition and results of operations. 30 Table of Contents