What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-09-17 compared with 2025-09-24 · 569 added, 612 removed, 483 unchanged (71% of the section changed)

15 unchanged sentences

We have audited the accompanying consolidated balance sheets of Upexi, Inc.

(the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and related notes (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of June 30, 2026 and 2025, the related consolidated financial statements of operations, stockholders’ (deficit) equity, and cash flows for the years then ended, and related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Convertible Debt Transactions

As described in Note 10 to the consolidated financial statements, during the year ended June 30, 2026, the Company issued approximately $187.1 million of convertible notes.

The notes were issued in exchange for Solana (“SOL”) digital assets, bear contractual interest at rates ranging from 1% to 2%, and are convertible at the option of the holders into shares of the Company’s common stock at fixed conversion prices.

If the notes are not converted, the Company is required to settle the outstanding principal by delivering the applicable pro rata quantity of SOL originally received in connection with issuance of the notes.

The Company accounts for the convertible notes as a single debt instrument measured at amortized cost and concluded that no embedded features required bifurcation and separate accounting as derivative liabilities.

In reaching that conclusion, the Company determined that the SOL repayment feature did not meet the definition of a derivative because the SOL deliverable was not readily convertible to cash, and that the conversion features qualified for the scope exception for contracts involving the Company’s own equity.

We identified the accounting for the convertible notes, including management’s assessment of the embedded SOL repayment feature and embedded conversion feature, as a critical audit matter.

The principal considerations that led us to determine that this matter is a critical audit matter were the significant amount of the convertible notes, the unusual and complex settlement terms involving digital assets, and the significant judgment required to evaluate the embedded features under ASC 815, Derivatives and Hedging .

In particular, auditing management’s conclusion required significant auditor judgment in assessing:

Whether the contractual obligation to deliver a specified quantity of SOL upon nonconversion represented an embedded feature of the debt host and, if so, whether its economic characteristics and risks were clearly and closely related to the debt host;

Whether the SOL repayment feature met the definition of a derivative, including whether gross physical delivery of SOL provided a net-settlement characteristic because the applicable SOL quantity was readily convertible to cash;

The contractually deliverable quantity of SOL to use in the readily-convertible-to-cash assessment for each settlement feature, including the effect of partial conversion rights, unredeemed principal balances, and restrictions that could limit the prompt transfer or sale of SOL;

Whether the fixed-price conversion feature was indexed to the Company’s own stock and would qualify for equity classification if freestanding, including the effect of the settlement, authorized-share, registration-rights, and change-in-control provisions.

How We Addressed the Matter

Our audit procedures related to the evaluation of the Company’s accounting for these instruments included the following, among others:

We obtained and read the executed convertible note agreements to identify the terms and conditions relevant to whether embedded features required bifurcation and separate derivative accounting.

We evaluated management’s analysis of whether the SOL settlement obligation was readily convertible to cash, including the relevance of market-price and trading-volume data, executable market liquidity for the applicable settlement quantity, and restrictions affecting the availability or transferability of SOL.

We evaluated management’s determination of the appropriate unit of account by comparing the SOL quantities assessed with the contractual conversion, maturity, acceleration, and redemption provisions, including the effect of principal conversions, repayments, and retirements.

We evaluated management’s conclusion that the fixed-price conversion features qualified for the own-equity scope exception, including consideration of the conversion terms, potential cash-settlement provisions, and the availability of authorized and unissued common shares for settlement.

/s/ GBQ Partners LLC

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Due from VitaMedica transition

Prepaid expenses and other receivables

Prepaid expenses and other assets

Current digital assets at fair value

Assets available for sale - Building

Purchase price receivable - VitaMedica

Purchase price receivable - E-core

Total current assets

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Right-of-use asset, net

Total other assets

Total noncurrent assets

$ 180,120,791

$ 123,806,844

LIABILITIES AND STOCKHOLDERS' EQUITY

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Acquisition payable

Related party advances, net

Current portion of note payable

Current portion of promissory notes

Short-term treasury debt

Current portion of Cygnet subsidiary notes payable

Note payable on building for sale

Current portion of operating lease payable

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Operating lease payable, net of current portion

Related party note payable

Convertible notes payable

Total long-term liabilities

Commitments and contingencies

Stockholders' equity

Preferred stock, $ 0.00001 par value, 10,000,000 shares authorized, and 150,000 and 25,000 shares issued and outstanding, respectively

Common stock, $ 0.00001 par value, 300,000,000 shares authorized, and 38,270,571 and 1,045,429 shares issued and outstanding, respectively

Preferred stock, $ 0.00001 par value, 10,000,000 shares authorized, and 150,000 shares issued and outstanding

Common stock, $ 0.00001 par value, 1,000,000,000 shares authorized, 78,702,358 and 38,270,571 shares issued and outstanding, as of June 30, 2026 and June 30, 2025, respectively

Additional paid in capital

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( 60,543,822 )

Total stockholders' equity attributable to Upexi, Inc.

Total stockholders' equity

( 53,813,918 )

Total liabilities and stockholders' equity

$ 180,120,791

$ 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

General and administrative

Unrealized loss (gain) on digital assets

Realized loss on digital asset revenue conversion to USD

Realized loss on sale of digital assets

Stock-based compensation

Amortization of acquired intangible assets

76,758 2,410,431

681,000 1,268,355

Impairment of long-lived asset - building

Loss on the sale / abandonment of assets in relocation

Impairment of intangible assets and goodwill

Impairment on assets from manufacturing shut down

Impairment on acquired intangible assets

Lease Impairment (gain on settlement), Delray Beach facility

( 269,994 ) 289,969

23,367,792 35,287,018

Loss from operations

( 240,846,165 )

Other income (expense), net

( 12,499,752 )

Interest (expense) income, net

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

Other income (expense), net

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

Loss on operations before income tax

Other expense, net

Interest expense, net

( 13,561,210 )

Income tax benefit (expense)

Net loss from continuing operations

( 1,173,714 )

Gain (loss) from the sale of:

Interactive Offers

Gain on extinguishment of debt

Other expense, net

( 1,945,665 )

Income (loss) on discontinued operations

Interactive offers

Other expense, net

( 5,218,533 )

Income (loss) income from discontinued operations

Net income (loss) attributable to Upexi, Inc.

( 1,184,457 )

Basic income (loss) per share:

Income (loss) per share from continuing operations

Loss on operations before income tax

( 246,064,698 )

(Loss) income per share from discontinued operations

Total income (loss) per share attributable to Upexi shareholders

( 13,684,209 )

Diluted income (loss) per share:

Income (loss) per share from continuing operations

Income tax benefit (expense)

$ ( 246,064,698 )

(Loss) income per share from discontinued operations

Total income (loss) per share attributable to Upexi shareholders

$ ( 13,684,209 )

Basic loss per share:

Loss per share

Diluted loss per share:

Loss per share

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.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

Preferred Stock

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Additional Paid

Non-controlling

Stockholders'

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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

( 23,658,438 )

Balance, June 30, 2024

$ ( 46,859,613 )

Stock based compensation, restricted stock grant

Stock-based compensation

Issuance of preferred series A stock

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$ ( 60,543,822 )

Stock-based compensation

Issuance of stock for the exercise of warrants

Issuance of vested stock from equity incentive plans

Issuance of common stock, net of issuance costs

Issuance of stock for conversion of debt

Common stock repurchases

( 2,894,287 )

( 2,773,930 )

( 2,773,959 )

( 246,064,698 )

Balance, June 30, 2026

$ 252,793,813

$ ( 306,608,520 )

$ ( 53,813,918 )

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

4 unchanged sentences

Cash flows from operating activities

Net loss from operations

$ ( 246,064,698 )

$ ( 13,684,209 )

Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Unrealized (gain) loss on digital assets

Unrealized loss (gain) on digital assets

Realized loss on sale of digital assets

Digital asset revenue

Gain on the sale of VitaMedica and income from discontinued operations

( 17,429,206 )

Loss on the sale of New England Technology

Digital asset revenue conversion to USD

Realized loss on digital asset revenue conversion to USD

Amortization of loan costs

Amortization of consideration discount

Impairment of goodwill and intangible assets

Loss on disposal of property and equipment

Gain on extinguishment of debt

( 10,288,342 )

Inventory write-off

Loss on impairment of building

Loss on sale of assets related to relocation of facility

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

Impairment on assets from manufacturing shut down

Impairment on acquired intangible assets

Issuance of stock for services

Stock-based compensation

Changes in assets and liabilities, net of acquired amounts

Changes in assets and liabilities

Accounts receivable

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Deferred revenue

Net cash provided by operating activities - Continuing Operations

( 8,423,042 )

Net cash used in operating activities

( 20,956,207 )

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 building

Proceeds from the sale of E-core

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

Acquisition and sale of digital assets, net

Proceeds from the sale of MW Products assets

Proceeds from the sale of VitaMedica, Inc.

Acquisition of digital assets

( 40,035,365 )

Acquisition of Cygnet Online LLC, net

( 104,910,839 )

Proceeds from the sale of digital assets

Acquisition of royalty interest

Acquisition of property and equipment

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

Net cash used in investing activities

( 30,623,761 )

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

( 99,293,083 )

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from issuance of common stock

Issuance of preferred stock series A

Proceeds from exercise of warrants

Repurchases of common stock

( 2,773,959 )

Proceeds from short-term treasury debt

Repayment of short-term treasury debt

( 10,400,000 )

Cash flows from financing activities

Proceeds from issuance of convertible notes

Repayment of promissory notes

Proceeds from related party advance

Repayment of related party advance

Payments of equity issuance costs

( 4,519,873 )

Payments of debt issuance costs

( 7,628,942 )

Payment on acquisition notes payable

1 unchanged sentence

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 issuance of convertible notes

Repayment of related party note payable

1 unchanged sentence

( 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 increase (decrease) in cash - Continuing Operations

( 4,417,427 )

Net (decrease) increase in cash - Discontinued Operations

Net cash provided by financing activities

Net increase in cash

Cash, beginning of period

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Non-cash Investing and Financing Activities

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 convertible debt for digital assets acquired

Issuance of short-term debt for digital assets acquired

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

1 unchanged sentence

June 30, 2026 and 2025

Basis of Presentation

Company Information and 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.

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

The Company conducts its operations through its subsidiaries, which may change from time to time as a result of acquisitions, dispositions, and other corporate activities.

We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused on 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.

We diversified into the cryptocurrency industry and cash management of assets through a cryptocurrency portfolio, primarily focused on 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.

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 early 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 we do not intend to dedicate any of the treasury allocated capital to other digital assets.

Our consumer 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, 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.

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.

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.

LuckyTail 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.

During December 2025, the Company decided on a course of action to exit certain manufacturing and distribution operations (see Note 17).

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

Basis of Presentation

Basis of Presentation and Principles of Consolidation

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.

All significant intercompany transactions and balances are eliminated in consolidation.

Significant Accounting Policies

2 unchanged sentences

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.

1 unchanged sentence

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.

Accounts Receivable - Accounts 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.

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Accounts are charged against the allowance when management deems them to be uncollectible.

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

The net accounts receivable balances were $ 97,244 , $ 157,515 , and $ 606,885 at June 30, 2026, 2025, and 2024, respectively.

Based on management’s review of accounts receivable, the allowance for credit losses was approximately $ 29,341 , $ 636,600 , and $ 61,800 at June 30, 2026, 2025, and 2024, respectively.

The Company had bad debt expenses of $ 18,405 , $ 933,950 and $ 24,500 for the years ended June 30, 2026, 2025, and 2024, 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.

The Company wrote off approximately $ 625,664 and $ 359,000 of accounts receivable balances for the years ended June 30, 2026 and 2025, respectively.

No such accounts receivable amounts were written off in the year ended June 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.

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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, 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:

Digital Assets - Pursuant to Accounting Standards Update (“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.

The Company measures its SOL holdings at fair value in accordance with ASC 820, Fair Value Measurement, using unadjusted quoted prices in an active market for identical assets that the Company can access at the measurement date.

The Company evaluates the principal market for SOL based on the market with the greatest volume and level of activity that is accessible to the Company.

Accordingly, the Company classifies the fair value measurement of its SOL holdings within Level 1 of the fair value hierarchy.

CoinMarketCap is used as a market-data provider to monitor and corroborate pricing information;

it is not considered a principal market or trading venue.

Property and Equipment - Property and equipment are 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.

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Maintenance and repair expenditures are charged to expense as incurred.

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.

2 unchanged sentences

The Company performed its annual test as of June 30, 2026 and 2025, 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.

There was no impairment as of June 30, 2026 and 2025.

For the year ended June 30, 2026, as a result of the Company’s disposition of certain assets associated with Moonwlkr, the Company recorded a disposal on goodwill, which decreased goodwill by $ 175,000 .

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.

1 unchanged sentence

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.

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.

During the year ended June 30, 2026, as a result of the Company’s course of action to shut down manufacturing and distribution centers, a loss on disposal of $ 1,422,289 was recognized within Impairment on assets from manufacturing shut down within the Consolidated Statements of Operations.

The Company did not recognize impairment on its long-lived assets during the year ended June 30, 2025.

Revenue Recognition - In accordance with ASC 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.

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

Year Ended June 30,

Primary geographical markets:

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

The following table discloses the deferred revenue:

Deferred revenue

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.

We expect to recognize 100% of the deferred revenue at June 30, 2026 as revenue in the year ended June 30, 2027.

All of the deferred revenue at June 30, 2025 was recognized to revenue in the year ended June 30, 2026.

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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.

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 hours or days, we recognize the cost basis as the average price paid for all tokens purchased.

The Company is able to acquire Solana tokens that are locked through direct negotiations with the owner or a third party 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 Company purchases locked SOL on the open market at negotiated discounts to the prevailing spot price.

The original purchase discount is amortized over the unlocking period.

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

1 unchanged sentence

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.

Subsequent to the acquisitions of Solana tokens, remeasurement of change in fair value is done by taking the spot price from CoinMarketCap 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.

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

The Company purchases locked SOL on the open market at negotiated discounts to the prevailing spot price.

The original purchase discount is amortized over the unlocking period.

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.

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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 Consolidated Statements of Operations.

The fair value of the Company's digital assets is measured at each reporting date as the quantity of tokens held multiplied by the quoted price of SOL in its principal market at that date, adjusted for the effect of contractual transfer restrictions on locked tokens.

The amount of gains and losses recognized for the period is the difference between that fair value and the carrying amount of the digital assets at the end of the immediately preceding reporting period, or their cost basis for digital assets acquired during the period.

Staking revenue

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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.

While there is no explicit guidance under 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.

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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.

This revenue is reported on the Consolidated 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 Consolidated Statements of Operations as Realized and unrealized (gain) loss on digital assets, or Unrealized (gain) loss on digital assets, if there were no realized sales in the period.

Realized gains and losses on digital assets

To the extent staking rewards are converted into U.S.

dollars, realized gains and losses are recognized for the difference between the proceeds received and the carrying value of the digital assets at the time of conversion.

These amounts are presented within operating expenses in the Consolidated Statements of Operations as realized gain (loss) on digital asset revenue conversion to USD.

To the extent digital assets are sold, realized gains and losses are recognized for the difference between the proceeds received and the carrying value of the digital assets at the time of sale.

These amounts are presented within operating expenses in the Consolidated Statements of Operations as realized gain (loss) on sale of digital assets.

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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Advertising costs of $ 1,753,191 and $ 1,830,096 were expensed as incurred during the years ended June 30, 2026 and 2025, respectively.

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 Compensation - The Company recognizes all stock-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.

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 ASC 718, Compensation-Stock Compensation , which applies to all stock-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing stock-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.

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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).

Fair Value Measurements - The Company accounts for financial instruments in accordance with ASC 820.

ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

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Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Liquid Solana tokens are measured at fair value using quoted prices from CoinMarketCap (Level 1 inputs).

The fair value of locked tokens is computed by taking the number of locked tokens and discounting the quoted prices from CoinMarketCap.

The discount, a Level 2 input, used by management is based on the Company’s historical purchases of locked Solana.

Management monitors this discount percentage and adjusts when appropriate.

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.

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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 recognized within the accompanying consolidated balance sheets.

Leases with an initial term of 12 months or less are not recorded 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 $ 10,092,765 and a $ 6,100,000 valuation allowance was recorded as of June 30, 2025 and June 30, 2024, respectively.

The Company’s valuation allowance was $ 79,802,562 and $ 10,092,765 as of June 30, 2026 and 2025, 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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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:

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 consolidated financial statements or tax returns.

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

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

The Company had no material uncertain tax positions at June 30, 2026 and 2025.

On December 22, 2017, the U.S.

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corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated (prohibited).

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”).

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.

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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.

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 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.

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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.

On October 17, 2024, Company received written notice (the “Compliance Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share.

Nasdaq notified the Company in the Compliance Notice that, from October 3, 2024 to October 16, 2024, the closing bid price of the Company’s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.

Earnings (Loss) Per Share - Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period.

The following table summarizes the computation of basic loss per share for the years ended June 30, 2026 and 2025:

Year Ended June 30,

Basic loss per share:

$ ( 246,064,698 )

$ ( 13,684,209 )

Weighted average common shares outstanding

Basic loss per share

Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares.

Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes.

For the year ended, the dilutive common shares are as follows:

Potentially dilutive common shares may include shares issuable upon the exercise or settlement of stock options, warrants and restricted stock units, and upon the conversion of preferred stock and convertible debt.

Potentially dilutive securities that were not included in the calculation of diluted net loss per share because their effect would have been antidilutive were as follows:

Stock options

Prefunded warrants

Preferred stock

Convertible debt

Restricted stock grants

Total potential dilutive weighted average shares outstanding

Restricted stock units

The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method.

Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.

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.

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.

A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date.

The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument.

The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date.

If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception.

When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.

Non-controlling Interests in Consolidated financial statements - In December 2007, the FASB issued ASC 810-10-65, “Non-controlling Interests in consolidated financial statements”.

This ASC clarifies that a non-controlling (minority) interest in subsidiaries is an ownership interest in the entity that should be reported as equity in the consolidated financial statements.

It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest.

In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiaries may exceed their interests in the subsidiary’s equity.

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.

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.

During the years ended June 30, 2026 and 2025, the Company reported a net loss, so the potential effect is not reflected in the consolidated financial statements.

Convertible Debt - The Company accounts for its convertible debt instruments in accordance with ASC 470-20, Debt with Conversion and Other Options .

Convertible debt instruments are initially accounted for as a single unit of account unless an embedded feature requires bifurcation from the host contract and separate accounting as a derivative pursuant to ASC 815, Derivatives and Hedging , or the substantial premium model in ASC 470-20 applies.

The Company evaluates the terms of each convertible debt instrument at issuance and upon modification or other events requiring reassessment to determine the appropriate classification and accounting.

Certain of the Company’s convertible notes include provisions requiring settlement of unconverted principal through the delivery of specified quantities of SOL and fixed-price conversion features.

Management evaluates the SOL settlement feature under ASC 815, including whether the feature is clearly and closely related to the debt host and whether it meets the definition of a derivative.

This evaluation includes consideration of whether the applicable contractual quantity of SOL is readily convertible to cash, based on the relevant settlement terms, transfer restrictions, market liquidity, expected price impact, and the ability of the market to absorb the applicable quantity without significantly affecting price.

Management also evaluates whether conversion features qualify for the ASC 815 scope exception for contracts involving the Company’s own equity, including whether the feature is indexed to the Company’s own stock and would be classified in stockholders’ equity if it were a freestanding instrument.

If an embedded feature is bifurcated, the Company initially records the derivative at fair value and subsequently remeasures it at fair value through earnings.

If no embedded feature requires bifurcation, the convertible debt is subsequently accounted for in accordance with the terms of the instrument, including recognition of interest expense using the applicable contractual interest rate or effective interest method, as appropriate.

For the Company’s existing notes, management concluded that the SOL repayment feature does not require bifurcation because it does not meet the derivative definition, and that the conversion feature qualifies for the own-equity scope exception.

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.

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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.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ ASU 2024-03”) 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:

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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.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets which provides for all entities with the option to elect a practical expedient that assumes that current conditions as of the balance sheet date 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.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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

ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information.

In particular, on an annual basis, companies are required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

Companies are also required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold.

The Company adopted ASU 2023-09 prospectively for its annual period ended June 30, 2026.

The adoption did not have an impact on the recognition or measurement of income taxes in the Company’s Consolidated Financial Statements and resulted in the enhanced disclosures included in Note 15.

For the year ended June 30, 2026, there have been no other recent accounting pronouncements issued but not yet adopted that are expected to be material to the Company.

Inventory, net, consisted of the following:

Raw materials

Finished goods

Inventory, net

The Company writes off the value of inventory deemed excessive or obsolete.

The Company’s inventory write offs were $ 1,887,209 and $ 748,874 for the years ended June 30, 2026 and 2025, respectively.

The Company’s inventory reserves were $ 40,454 and $ 593,539 as of June 30, 2026 and 2025, respectively.

Prepaid Expenses and Other Assets

Prepaid and other receivables consist of the following:

Prepayment to vendors

Deposits on services

Subscriptions and services being amortized over the service period

Prepaid expenses and other receivables

All prepaid expenses are expected to be expensed within one year.

Digital Assets

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

Approximate number of Solana Tokens held

Digital assets, fair value

The following table summarizes the changes in the Company’s SOL holdings, on a historical cost basis, for the years ended June 30, 2026 and 2025:

Staking Revenue

Convertible Note

Balance, June 30, 2024

SOL purchases

Exchanges between locked and liquid SOL, net

( 3,302,385 )

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

Balance, June 30, 2025

$ 105,891,706

SOL purchases

( 14,804,024 )

( 18,124,576 )

( 32,928,600 )

Exchanges between locked and liquid SOL, net

( 13,771,277 )

( 18,568,230 )

SOL tokens released from convertible note security

( 20,715,681 )

Balance, June 30, 2026

$ 141,912,320

$ 166,415,463

$ 360,254,544

The following table summarizes the changes in the Company’s SOL holdings, at fair value, for the years ended June 30, 2026 and 2025:

Digital assets, June 30, 2024

Purchases of digital assets

Digital asset revenue

Unrealized gain on digital assets

Digital assets, June 30, 2025

Purchases of digital assets

Proceeds from sales of digital assets

( 21,223,391 )

Digital asset revenue

Realized loss on sale of digital assets

( 11,705,209 )

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.

( 195,059,336 )

Digital assets, June 30, 2026

As of June 30, 2026, management valued liquid SOL at $ 73.52 per token based on the closing market prices of SOL.

The closing market prices of SOL reported by CoinMarketCap as of June 30, 2026 and 2025 were $73.52 and $154.74, respectively .

The Company purchases locked SOL on the open market at negotiated discounts to the prevailing spot price.

The original purchase discount is amortized over the unlocking period.

As of June 30, 2026, the Company had 263,522 locked SOL tokens that were purchased with an unamortized original purchase discount of approximately $ 2.4 million.

As of June 30, 2025, the Company had 421,451 locked SOL tokens that were purchased with an unamortized original purchase discount of approximately $ 9.1 million.

The resulting purchase discount is recognized over the unlocking period based on the contractual token unlocking schedule, which ends in January 2028.

As of June 30, 2026, management estimated the fair value of the Company’s locked SOL that was acquired through the issuance of convertible debt at approximately 90% of the corresponding SOL spot price, or $66.17 per locked token.

As of June 30, 2026, the Company had 585,602 locked SOL tokens that were acquired through the issuance of convertible debt.

There were no such amounts held as of June 30, 2025 .

The Company had approximately 95 % of its Solana treasury staked as of June 30, 2026 and 2025.

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

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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

As of June 30, 2026, the Company held 849,124 tokens subject to lock up restrictions.

The following table summarizes the unlocking schedule of these Solana tokens:

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:

Raw materials

Finished goods

The Company writes off the value of inventory deemed excessive or obsolete.

During the years ended June 30, 2025 and 2024, the Company wrote off inventory valued at $ 748,874 and $ 1,812,319 , respectively.

The Company had inventory reserves at June 30, 2025 and 2024 of $ 593,539 and $ 605,470 , respectively.

Property and Equipment

Property and equipment consist of the following:

Property and equipment, net, consisted of the following:

Furniture and fixtures

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( 1,919,288 )

( 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.

Property and equipment, net

Depreciation expense was $ 379,489 and $ 681,000 for the years ended June 30, 2026 and 2025, respectively.

Intangible Assets

Intangible assets as of June 30, 2025:

Intangible assets consisted of the following:

June 30, 2026

Customer relationships

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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, 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:

Intangible assets

June 30, 2025

Customer relationships

Online sales channels

Vender relationships

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

June 30, 2026

Vendor relationships

Intangible assets

Amortization expense was $ 76,760 and $ 76,758 for the years ended June 30, 2026 and 2025, respectively.

During the year ended June 30, 2026, the Company disposed of fully amortized intangible assets with an original cost of approximately $ 9.6 million.

As the intangible assets had no remaining net book value, the disposals did not result in a gain or loss.

On August 28, 2025, the Company entered into an agreement with Cybersyn Holdings, LLC, which hosts and owns the platform for Alpha City Exchange.

Under the terms of the agreement, the Company paid $ 750,000 to acquire a contractual royalty interest equal to 14.90 % of all future gross revenue generated by the platform.

The agreement provides for two additional potential investments of $ 250,000 each:

(i) upon completion of the platform and achievement of 10,000 active users, which would increase the Company’s royalty interest to 19.90% of gross revenue, and (ii) upon the achievement of 25,000 active users.

Upon achievement of the second milestone, the Company may elect to either maintain its 19.90% royalty interest in perpetuity or convert a portion of its royalty interest into a 9.99% equity ownership in Alpha City Exchange on a fully diluted basis.

As the royalty interest has no contractual termination and extends in perpetuity, the Company accounts for the initial $750,000 investment as an indefinite-lived intangible asset.

The royalty interest is not amortized and is evaluated for impairment at least annually or more frequently if indicators of impairment arise.

As of June 30, 2026, the agreement remains in effect and the platform has not generated gross revenue from which the Company would be entitled to amounts under the royalty interest.

During the year ended June 30, 2026, management determined that the carrying amount of the royalty interest exceeded its estimated fair value and recognized a full impairment charge of $ 750,000 .

As a result, the royalty interest had no remaining carrying value as of June 30, 2026.

Future amortization of intangible assets as of June 30, 2026 is set forth below for the years then ended:

June 30, 2027

June 30, 2028

Prepaid Expense and Other Current Assets

Prepaid and other receivables consist of the following:

Prepayment to vendors

Deposits on services

Prepaid monthly rent

Subscriptions and services being amortized over the service period

Stock issued for prepaid interest on convertible note payable

Other receivables

All prepaid expenses will be expensed during the following 12 months.

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 June 30, 2026, 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 Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

During November 2019, the Company entered into a lease for a Nevada facility that commenced on November 13, 2019, and recorded a right of use asset and corresponding lease liability.

The Company uses this leased facility for office, manufacturing, and warehouse space.

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

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, 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.

During May 2021, the Company entered into a lease for an additional Nevada facility that commenced on May 1, 2021, and recorded a right of use asset and corresponding lease liability.

The Company uses this leased facility for additional warehouse space.

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.

Lease expenses were $ 7,640 and $ 7,640 for the years ended June 30, 2025 and June 30, 2024, respectively.

On April 1, 2022, the Company acquired Cygnet which had entered into a lease for a Florida facility that commenced on October 8, 2021, and Cygnet had recorded a right of use asset and corresponding lease liability.

The lease expires on October 8, 2026 .

The Company uses this leased facility for warehouse and office space.

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 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 .

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 of the operating leases and accounted for as non-lease components and not part of the ROU.

During the year ended June 30, 2025, the Company recognized approximately $ 391,100 of expense and approximately $ 374,500 for the year ended June 30, 2024.

On July 25, 2023, the Company entered into 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 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.

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 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.

As of June 30, 2025, our finance leases are not material.

We have elected not to present short-term leases in the Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

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 in the Consolidated Balance Sheets.

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 Consolidated Balance Sheet as of June 30, 2026:

1 unchanged sentence

Imputed interest

current portion

Present value of operating lease obligation

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

Weighted average remaining lease term

Weighted average incremental borrowing rate

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2024 are:

Weighted average remaining lease term

Present value of operating lease payable

current portion of operating lease payable

Operating lease payable, net of current portion

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2026 and 2025 are:

Weighted average remaining lease term months

Weighted average incremental borrowing rate

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:

Operating lease expense:

For the years ended June 30, 2026 and 2025, the components of lease expense, included in general and administrative expenses and interest expense in the Consolidated Statement of Operations, are as follows:

Year Ended June 30,

Lease expense:

Amortization of ROU assets

1 unchanged sentence

Operating lease cost

Short-term lease expense

Variable lease expense

Total lease cost

Total lease expense

Accrued Liabilities and Acquisition Payable

2 unchanged sentences

Accrued sales tax

Accrued services

Other accrued liabilities

Accrued liabilities

Acquisition payable consists of the following:

Payable accrued related to the acquisition of Cygnet

Acquisition payable

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, 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:

Promissory Note, 21- month term, as amended, 18.11% interest payable with common stock and subordinate to the Convertible Notes.

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

Notes payable, Cygnet subsidiary:

Short-Term Treasury Debt, Cygnet Subsidiary Notes Payable, Promissory Notes, and Convertible Notes

Short-Term Treasury Debt

The following table summarizes the Company’s short-term treasury debt as of June 30, 2026 and 2025:

Short-Term Treasury Debt:

BitGo Credit Facility, 11.50% interest rate per annum.

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

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

Pursuant to a Master Loan Agreement, as of June 30, 2026, there was no remaining availability under the credit facility, which bears interest at a rate of 11.50 % 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 a 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, 2026 and 2025, the outstanding balance of the credit facility was $ 57,295,723 and $ 20,000,000 , respectively.

The credit facility was used for the purchase of SOL.

Cygnet Subsidiary Notes Payable and Promissory Notes

The following table summarizes the Company’s Cygnet subsidiary notes payable and acquisition payable as of June 30, 2026 and 2025:

Cygnet Subsidiary Notes Payable:

SBA note payable, 30-year term note, 10.25% interest rate and collateralized with all assets of the Company

4 unchanged sentences

November 7, 2026

Notes payable, Cygnet subsidiary, current

Notes payable, Cygnet subsidiary, net of current

Notes Payable on Building for sale:

Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building

September 26, 2032

Note Payable:

Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes.

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.

Notes payable, current

Discount on notes payable, current

Notes payable, current net of discount

Notes payable, long-term

Discount on notes payable, long-term

Notes payable, long-term, net

Related Notes Payable:

Marshall Loan, 2-year term note, 12% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes.

November of 2023 extended to June 1, 2026 and interest was adjusted to 12% cash interest, paid monthly

Discount on related party note payable, current

Notes payable, current, net of discount

Discount on related party note payable, long term

Notes payable, long term, net

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:

Cygnet Subsidiary Notes Payable

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”).

The promissory note has a 2-year term and bears cash interest at the rate of 8.5 % per annum with an additional PIK of 3.5 % per annum.

The promissory note provides for monthly payments of principal, on an even line 36-month basis, plus cash interest, with a balloon payment of all outstanding principal, cash interest, and PIK interest at maturity.

The Company received and deposited the principal amount on July 31, 2022.

On November 15, 2023, the Company executed an amendment to the promissory note with Mr.

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.

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 .

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

On October 19, 2022, Upexi, Inc.

(the “Company”) and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement, promissory note and related agreements with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N.

Clearwater, Florida.

The Company received $ 3,000,000 in connection with the transaction.

The principal is to be repaid to Professional Bank over a term of ten years.

The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC in the amount of $ 2,780,200 .

As of March 31, 2023, the Company was not in compliance with the debt service ratio.

The Company received a forbearance agreement from the bank until June 30, 2024 to return to compliance of the debt service ratio of 1.25 to 1, until that time the Company will pay an interest rate of 10% instead of the contractual terms of 4.8% and has paid the original principal and adjusted interest through this report.

The building was sold for $ 4,300,000 on July 8, 2024.

On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $ 560,000 .

On November 15, 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 $ 560,000 .

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 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 .

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.

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.

Current portion of Cygnet subsidiary notes payable

Promissory Notes:

Promissory Notes, 12.00% 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.

Current portion of promissory notes

Total Cygnet Subsidiary Notes Payable and Promissory Notes

As of June 30, 2026, the entire approximate $ 3.7 million outstanding balance of the SBA note payable is classified as current because scheduled payments are past due.

The SBA note payable maturity date of October 6, 2031 presented above reflects the original contractual maturity date.

During March 2026, an arbitration ruling resulted in the extinguishment of certain debt obligations from the counterparty.

In connection with the ruling, the Company extinguished (i) an inventory consignment note with an outstanding principal balance of approximately $ 1.0 million, (ii) a GF Note with an outstanding principal balance of approximately $ 0.7 million, and (iii) the elimination of approximately $ 0.2 million of accrued interest associated with these obligations.

As a result, the Company recognized a gain on extinguishment of debt of approximately $ 1.9 million during the year ended June 30, 2026.

During February 2023, the Company executed a promissory note with an investor in the original principal amount of $ 560,000 .

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

The $ 560,000 principal balance was repaid in full during the year ended June 30, 2026.

Convertible Notes

The following table summarizes the Company’s convertible notes as of June 30, 2026 and 2025:

Convertible Notes:

Convertible Notes – July 2025 Issuance, issued in exchange for digital assets, due July 16, 2027.

Interest rate per annum is 2.00%.

Accrued interest is payable quarterly.

At any time prior to maturity, the notes are convertible, at the option of the holder, into shares of the Company’s common stock at a conversion price of $4.25 per share;

if a note is not converted prior to maturity, the Company will settle the obligation through the return of the digital assets originally received in exchange for that note.

July 16, 2027

$ 149,996,123

Unamortized deferred financing costs on Convertible Notes – July 2025 Issuance

( 3,973,407 )

Convertible Notes – July 2025 Issuance, net

Convertible Note – January 2026 Issuance, issued in exchange for digital assets, due January 9, 2028.

Interest rate per annum is 1.00%.

Accrued interest is payable quarterly.

At any time prior to maturity, the note is convertible, at the option of the holder, into shares of the Company’s common stock at a conversion price of $2.39 per share;

if the note is not converted prior to maturity, the Company will settle the obligation through the return of the digital assets originally received in exchange for the note.

January 9, 2028

Total Convertible Notes

current portion

Convertible notes payable

$ 162,442,056

The following table summarizes the outstanding principal balances and contractual settlement terms of the Company’s convertible notes as of June 30, 2026:

Principal Balance

Convertible Notes

Maturity Date

Deliverable at Maturity*

(Historical USD Value)*

Convertible Notes July 2025 Issuance

July 16, 2027

$ 149,996,123

Convertible Note January 2026 Issuance

January 9, 2028

__________________

* The convertible notes are not repayable in cash.

If a holder does not elect conversion into shares of the Company’s common stock before maturity, the Company is required to settle the outstanding principal balance through delivery of the contractually specified quantity of SOL, reduced proportionately for any principal previously converted.

The Company evaluated the SOL settlement provisions and the conversion features under ASC 815, Derivatives and Hedging.

The Company concluded that the SOL settlement provisions do not require bifurcation because they do not meet the definition of a derivative, including the net-settlement criterion.

The Company further concluded that the fixed-price conversion features qualify for the scope exception for contracts involving the Company’s own equity and, therefore, do not require separate derivative accounting.

Accordingly, no embedded derivative assets or liabilities were recognized in connection with the convertible notes.

The outstanding principal balances represent the historical U.S.

dollar values assigned at issuance and do not represent the fair value of the associated SOL as of June 30, 2026 or the value of SOL that may ultimately be delivered at settlement.

On July 16, 2025, the Company entered into securities purchase agreements with certain investors, pursuant to which the Company agreed to sell and issue to the investors in a private placement offering secured convertible notes (the “Convertible Notes – July 2025 Issuance”) in exchange for locked and spot Solana in the aggregate, original principal amount of approximately $ 151.2 million, with a maturity date of July 16, 2027.

The applicable interest rate is an annual rate equal to 2.00 %.

Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, and accrues daily commencing on July 16, 2025, with interest paid quarterly.

At the maturity date, 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 the outstanding principal on the notes .

On January 9, 2026, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company issued to the investor a secured convertible note (the “Convertible Note – January 2026 Issuance”) in the original principal amount of approximately $ 36.0 million, in exchange for the transfer and contribution of 265,500 units of Solana in the form of locked Solana, with a maturity date of January 9, 2028.

The note bears interest at a rate of 1.00 % per annum, payable quarterly in cash.

At maturity, or upon acceleration following an event of default, to the extent the note has not been converted in full, the investor is entitled to receive a pro rata return of the digital assets corresponding to the outstanding principal balance of the note at such time.

The principal amount of the note is convertible, in whole or in part, at the option of the investor at any time, into shares of the Company’s common stock at a fixed conversion price of $ 2.39 per share, subject to customary adjustments, ownership limitations, and other conditions set forth in the agreement.

Furthermore, the Company may deliver forced conversion notices.

The note also provides for forced conversion under certain circumstances, subject to satisfaction of specified conditions, including trading price and liquidity thresholds, the effectiveness of a resale registration statement covering the shares issuable upon conversion, and the absence of events of default.

Following the June 2026 partial extinguishment, the outstanding principal balance of the January 2026 Convertible Note was $ 16.4 million as of June 30, 2026.

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 convertible notes that would require bifurcation from the debt host.

As applicable, any debt discount and debt issuance costs incurred in connection with the issuance of the convertible notes are recorded as a direct deduction from the carrying amount of the convertible notes.

These amounts are amortized to interest expense using the effective interest method over the expected term of the convertible notes.

Upon conversion, the carrying amount of the convertible 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.

During July 2025, the Company issued 276,238 shares of common stock upon conversion of a portion of the Convertible Notes – July 2025 Issuance, resulting in a reduction of the outstanding principal balance of $ 1,173,046 and accrued interest of $ 964 .

During June 2026, the Company issued 5,250,000 shares of common stock and 6,992,300 pre-funded common stock purchase warrants to purchase up to 6,992,300 shares of common stock for aggregate purchase price of $ 19,542,635 .

The aggregate purchase price was satisfied through the retirement and cancellation of $ 19,542,635 of the outstanding principal under the Company’s Convertible Note – January 2026 Issuance.

In connection with the partial extinguishment of the convertible note, the Company recognized a gain on extinguishment of debt of approximately $ 8.4 million.

The note otherwise remains in full force and effect in accordance with its terms, and the conversion price thereunder is unaffected by the transaction.

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.

This advance was paid in July 2024.

No interest or other fees were paid related to this transaction.

This purchase was settled through the cancellation of a $ 400,000 related party advance.

There are no advances due to Allan Marshall at June 30, 2026 and 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 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 what we include in ROU assets.

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, 3 months’ rent, and 3 months estimated expenses, this 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.

On June 13, 2024, the Company entered into a Stock Purchase Agreement (“SPA”) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the “Interests”) of its wholly owned subsidiary VitaMedica, Inc.

During the years ended June 30, 2026 and 2025, the Company recognized lease expense related to this lease of $ 186,536 and $ 320,050 , respectively.

As a result of the Company’s course of action to terminate the CBD gummy and other operations, a loss on disposal of leasehold improvements of approximately $ 477,000 was recorded during the year ended June 30, 2026.

No such loss was recognized during the year ended June 30, 2025.

As of June 30, 2026, the Company no longer leases this facility or has obligations related to this facility.

On June 13, 2024, the Company entered into a Stock Purchase Agreement pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity of its wholly owned subsidiary VitaMedica, Inc.

to three investors (the “Buyers”).

One of the minority interest Buyers is Allan Marshall, the Company’s CEO.

The purchase price for the stock was Six Million Dollars ($ 6,000,000 ), subject to certain customary post-closing adjustments.

The proceeds of the transaction will be used for working capital, the reduction of debt and the reduction of other liabilities currently outstanding.

In June 2022, the Company entered into a promissory note with a member of management.

The loan was for $ 1,500,000 and has a two-year term with an interest rate of 8.5 % per annum with an additional PIK of 3.5 % per annum.

On November 15, 2023, the Company executed an amendment to the promissory note with Mr.

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 .

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

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.

In addition, 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 .

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 purchase price for the stock was $ 6,000,000 , subject to certain customary post-closing adjustments.

The proceeds of the transaction were used for working capital, the reduction of debt and the reduction of other liabilities.

At June 30, 2026, there was no outstanding purchase price receivable related to the transaction.

At June 30, 2025, the outstanding purchase price receivable was $ 2,000,000 .

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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During the year ended June 30, 2026:

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.

The shares were valued at $ 162,727 or $ 36.12 per common share.

These shares were held due to a dispute with the seller.

On January 18, 2024, the Company issued 25,081 shares of common stock as repayment of $ 500,000 of the Company’s long-term debt.

The shares were valued at $ 500,000 or $ 19.94 per common share.

On March 18, 2024, the Company issued 5,000 shares of common stock as an incentive-restricted stock grant to certain employees.

The shares were valued at $ 85,000 or $ 17 per common share.

7,889,266 pre-funded warrants were exercised for 7,889,266 shares of common stock 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 conversion relating to convertible debt in July 2025, 276,238 shares of common stock were issued.

In connection with the cashless exercises of warrants, 678,352 shares of common stock were issued.

In connection with the exercise of warrants for cash, 33,334 shares of common stock were issued.

In connection with the vesting of restricted stock units, 533,665 shares of common stock were issued.

In connection with the Company’s at-the-market offering program, the Company issued 6,581,559 shares of common stock for aggregate gross proceeds of approximately $ 7.7 million.

In connection with a private placement offering of equity in November 2025, the Company issued 3,289,474 shares of common stock and 3,289,474 common stock purchase warrants to purchase up to 3,289,474 shares of common stock for aggregate gross proceeds of $ 10.0 million, representing an effective purchase price of $ 3.04 per share of common stock and accompanying warrant.

Each warrant is exercisable for one share of common stock.

In connection with the February 2026 private placement, the Company amended the warrants issued in November 2025 to reduce the exercise price from $ 4.00 to $ 2.83 per share.

In connection with a private placement financings completed in February 2026, the Company issued 6,337,000 shares of common stock and 6,337,000 common stock purchase warrants issued in a private placement that generated aggregate gross proceeds of approximately $ 7.4 million, representing an effective purchase price of $ 1.17 per share of common stock and accompanying warrant.

Each such warrant is exercisable for one share of common stock at an exercise price of $ 1.50 per share.

In June 2026, the Company entered into a privately negotiated debt-for-equity exchange in which it issued 5,250,000 shares of common stock and 6,992,300 pre-funded common stock purchase warrants to purchase up to 6,992,300 shares of common stock for aggregate purchase price of approximately $ 19.5 million, representing an effective purchase price of $ 1.60 per share of common stock and accompanying warrant.

The aggregate purchase price was satisfied through the retirement and cancellation of $ 19.5 million of the outstanding principal under the Company’s Convertible Note – January 2026 Issuance.

Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $ 0.00001 per share.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging .

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.

Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured.

Warrants that do not meet the required criteria for equity classification are classified as liabilities.

The Company evaluated the warrants and concluded that they met the criteria to be classified within stockholders’ equity within additional paid-in-capital.

The warrants are equity classified because they (1) are freestanding financial instruments that are legally detachable and separately exercisable from the common stock, (2) are immediately exercisable, (3) do not embody an obligation for the Company to repurchase its shares, (4) permit the holder to receive a fixed number of shares of common stock upon exercise, (5) are indexed to the Company's common stock and (6) meet the equity classification criteria.

As of June 30, 2026, the Company had 3,289,474 warrants outstanding related to the November 2025 private placement offering, 6,337,000 warrants outstanding related to the February 2026 private placement offering, 6,992,300 warrants outstanding related to the June 2026 private placement offering, and an additional 168,134 warrants outstanding related to various prior period issuances.

Stock Repurchase Program

In November 2025, the Company’s Board of Directors authorized a share repurchase program of up to $ 50.0 million of common stock .

The timing, manner, price, and amount of repurchases will be determined at management’s discretion, based on factors such as share price, market conditions, and available liquidity.

The program does not obligate the Company to acquire any specific number of shares and may be suspended or discontinued at any time.

During the year ended June 30, 2026, the Company repurchased 2,894,287 shares of common stock at a weighted-average price, including fees, of $ 0.96 per share, for total consideration of approximately $2.8 million.

As of June 30, 2026, all repurchased shares have been retired and are not reflected as treasury stock in the Consolidated Balance Sheets.

The Company effectuated a reverse stock split, at a rate of 20 to 1 , effective at 12:01 am ET, October 3, 2024.

5 unchanged sentences

Stock-Based Compensation

The Company has established a Company an incentive plan, 2019 Equity Incentive Plan (the “2019 Plan”).

The plan grants incentives to select persons who can make, are making and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock.

The 2019 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2019 Plan (the “Committee”).

The Committee has full authority to administer and interpret the provisions of the 2019 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2019 Plan.

On February 8, 2021, 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 138,889 Shares to 277,778 Shares.

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 activity of stock options for the years ended June 30, 2025 and 2024:

A summary of stock option activity is as follows:

The Company maintains the 2019 Equity Incentive Plan (the “2019 Plan”), which provides for the grant of stock-based awards to employees, officers, directors, consultants, and other service providers.

The 2019 Plan is administered by the Compensation Committee of the Board of Directors (or such other committee designated by the Board of Directors), which has authority to determine the recipients and terms and conditions of awards granted under the 2019 Plan.

Awards may include stock options, restricted stock units, and other stock-based awards authorized under the 2019 Plan.

As of June 30, 2026, 25,000,000 shares of the Company’s common stock were authorized for issuance under the 2019 Plan.

Stock Options

A summary of stock option activity for the years ended June 30, 2026 and 2025 is as follows:

Outstanding at June 30, 2024

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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, 2026 and 2025:

June 30, 2025

June 30, 2024

Year Ended June 30,

Dividend rate

12 unchanged sentences

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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

Based on historical experience of forfeitures, the Company estimated forfeitures at 0 % for each of the years ended June 30, 2026 and 2025.

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

3 unchanged sentences

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.

Stock-based compensation from restricted stock units (“RSUs”) was approximately $ 17,049,029 and $ 696,946 for the years ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, there was approximately $ 3,982,176 of unrecognized compensation expense related to 1,494,337 RSUs.

The weighted-average term remaining on the unvested shares was approximately 0.45 years.

Weighted-Average Grant Date Fair Value

Outstanding as of June 30, 2024

3 unchanged sentences

Outstanding as of June 30, 2026

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

At June 30, 2026, there were approximately 3,132,915 vested RSUs that are included in the 4,627,252 RSUs outstanding above as they are not included in the Company’s issued and outstanding common stock.

The components of stock-based compensation for the years ended June 30, 2026 and 2025 are as follows:

Year Ended June 30,

Stock options amortization

Restricted stock units amortization

Warrants amortization granted to asset manager

Total stock-based compensation

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

As a result of the termination of the Company’s Asset Management Agreement, the Company expensed all remaining unamortized costs associated with the warrants granted to the asset manager, which was approximately $ 4.7 million for the year ended June 30, 2026.

No such expense was recognized during the year ended June 30, 2025.

These expenses are included within Stock-based compensation in the Consolidated Statements of Operations.

Phantom Stock Appreciation Plan

On 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 Phantom Stock Unit (“PSU”) awards to employees selected and approved by the Board of Directors.

The PSU awards vest on June 30 following the grant date, provided the participant remains employed by the Company on such date.

The value of each PSU equals the excess of (a) the 30-day average closing price of Upexi, Inc.

common stock for the period June 1 to June 30 immediately preceding the payment date, over (b) the grant date value.

The PSU award value is settled in cash to the participant subsequent to June 30.

As the PSU awards are settled in cash, they are classified as liability awards under ASC 718.

At June 30, 2026, the Board of Directors had awarded the following PSUs with the following grant date values:

Phantom Stock Units with a grant value of $1.17

Phantom Stock Units with a grant value of $1.91

Phantom Stock Units with a grant value of $2.89

Phantom Stock Units with a grant value of $3.04

Phantom Stock Units with a grant value of $4.00

Phantom Stock Units with a grant value of $4.25

Total Phantom Stock Units granted

The Company recognizes the estimated compensation cost related to the PSU awards in its consolidated financial statements in accordance with ASC 718.

Compensation cost is recognized over the requisite service period, with the liability remeasured at fair value at each reporting date.

Changes in the estimated fair value are recognized in General and administrative expense in the Consolidated Statement of Operations and the related liability is presented within Accrued compensation in the Consolidated Balance Sheets.

Management’s estimate of the fair value of the PSU awards at the reporting date is based on a combination of valuation approaches designed to reflect the expected settlement value of the awards.

In determining this estimate, the Company considered multiple inputs and methodologies, including valuations derived from Black-Scholes option pricing model, the Company’s common stock price as of the reporting date, and management’s estimate of the PSU award value.

Management evaluated these approaches and selected the methodology it believes best reflects the value of the liability as of the balance sheet date consistent with the cash settlement features of the Plan.

During the years ended June 30, 2026 and 2025, the Company recognized no compensation expense related to the Plan.

The components of income tax benefit (expense) for the years ended June 30, 2026 and 2025 are as follows:

Year Ended June 30,

Current tax provision

Deferred tax provision

Provision for income taxes (benefit)

Income tax benefit (expense)

The reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate for the year ended June 30, 2026 is as follows:

federal statutory income tax

$ ( 51,629,649 )

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:

Income tax provision at statutory federal and state tax rate

State and local income taxes, net of federal benefit

( 13,871,476 )

Foreign tax effects

Effect of changes in tax laws or rates

Effect of cross-border tax laws

Changes in valuation allowance

Nontaxable or nondeductible items

Changes in unrecognized tax benefits

( 4,238,343 )

Income tax benefit (expense)

The reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate for the years ended June 30, 2026 and 2025 is as follows:

Year Ended June 30,

federal statutory income tax rate

State taxes, net of federal benefit

Nondeductible expense

Tax return to provision

Nondeductible expenses

Return-to-provision adjustment

State tax rate change

Valuation allowance

Provision for income taxes

The net deferred income tax asset balance related to the following:

Net operating losses carry forward

Effective income tax rate

The components of the Company’s net deferred tax asset as of June 30, 2026 and 2025 are as follows:

Net operating loss carryforwards

Right-of-use assets

Inventory write off

Impairment loss

Inventory write-offs

Unrealized loss (gain) on digital assets

Intangible assets

Stock options

Allowance for doubtful accounts

Stock-based compensation

Capital loss carryforwards

Property and equipment

Allowance for credit losses

Accrued compensation

Operating lease payable

Deferred revenue

Valuation allowances

Valuation allowance

( 79,802,562 )

1 unchanged sentence

Deferred tax asset

There were approximately $ 59,994,500 and $ 44,916,500 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely as of June 30, 2025 and June 30, 2024, respectively.

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.

The following table presents income taxes paid (net of refunds received) for the year ended June 30, 2026:

Income Taxes Paid

State and local

Income tax paid

As of June 30, 2026 and 2025, the Company had aggregate gross temporary differences and tax carryforwards of $ 305,954,591 and $ 59,994,500 , respectively.

Of these amounts, federal net operating loss carryforwards as of June 30, 2026 and 2025 were $ 82,825,775 and $ 36,275,274 , respectively.

The remaining amounts consisted of other gross temporary differences and tax carryforwards of $ 223,128,816 and $ 23,719,226 , respectively.

The Company’s federal net operating loss carryforwards may be carried forward indefinitely, subject to applicable limitations.

As of June 30, 2026 and 2025, the Company performed an evaluation to determine whether a valuation allowance was needed.

1 unchanged sentence

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.

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.

Based on the weight of the available evidence, the Company determined that it is more likely than not that a portion of its deferred tax assets will not be realized.

Accordingly, the Company recorded valuation allowances as of June 30, 2026 and 2025 of $ 79,802,562 and $ 10,092,765 , respectively.

The Company had no unrecognized tax benefits as of June 30, 2026 and 2025.

The Company recognized no interest or penalties related to uncertain tax positions during the years ended June 30, 2026 and 2025, and no amounts of interest or penalties were accrued as of June 30, 2026 and 2025.

We file 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.

We are not currently under examination in any federal or state jurisdiction.

The Company is currently under examination by the Internal Revenue Service with respect to its federal income tax return for the year ended December 31, 2023.

Exit of Manufacturing and Distribution Operations

During December 2025, the Company decided on a course of action to shut down certain manufacturing and distribution centers supporting the Company’s health and wellness products, including those products manufactured with hemp ingredients and certain related distribution operations, which it completed during February 2026.

The exit reflects the Company’s strategic decision to focus resources on its digital asset treasury strategy and other business initiatives aligned with its broader operating priorities.

The Company concluded that the exit did not represent a discontinued operation because the exited activities did not constitute a component of the Company that was disposed of or classified as held for sale and did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

Accordingly, the related operating results and impairment charge are presented within continuing operations.

During the year ended June 30, 2026, as a result of the Company’s course of action to shut down these manufacturing and distribution centers, a loss on disposal of $ 1,422,289 was recognized within Impairment on assets from manufacturing shut down within the Consolidated Statements of Operations.

No such loss was recognized during the year ended June 30, 2025.

As of June 30, 2026, the Company had 10 full-time employees.

As of June 1, 2026, the Company no longer leases warehouse space, with all brand distributions activities to be handled by third-party providers.

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.

Discontinued Operations – Sale of Interactive Offers

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 for all periods presented.

Summary of discontinued operations:

Discontinued Operations

Cost of sales

Sales, general and administrative expenses

Depreciation and amortization

Loss from discontinued operations

$ ( 187,003 )

Accounts receivable net of allowance for doubtful accounts

Fixed assets, net of accumulated depreciation

Total liabilities

Discontinued Operations – Sale of VitaMedica

On June 13, 2024, the Company sold VitaMedica, Inc.

to three investors and had an effective day of June 1, 2024.

One of the minority interest investors is Allan Marshall, the Company’s Chief Executive Officer.

The purchase price for the stock was $ 6,000,000 , subject to certain customary post-closing adjustments.

In addition, the Buyers are obligated to pay the Company for services provided according to the Transition Services Agreement.

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.

Summary of discontinued operations:

Discontinued Operations

Cost of sales

Sales, general and administrative expenses

Depreciation and amortization

Other expenses

Income (loss) from discontinued operations

Accounts receivable net of allowance for doubtful accounts

Fixed assets, net of accumulated depreciation

Total liabilities

Fair value of consideration the Company was paid:

Reduction of liabilities

Working capital payment

Recognized amounts of identifiable assets, liabilities and intangible assets transferred:

Accounts receivable

Prepaid expenses

Total identifiable assets

Total goodwill and intangible assets

Total assets transferred

Purchase price

Gain on sale of VitaMedica

Discontinued Operations – Sale of E-Core

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”).

The principals of the Buyer are the three individuals from whom the Company acquired E-core in October 2022.

The purchase price in the transaction was $ 2,000,000 paid by the Buyer to the Company at closing.

In addition, in connection with the closing of the transaction (i) the Company was released as a guarantor from E-core’s commercial loan facility, and (ii) all subordinated promissory notes issued by the Company in connection with the Company’s initial acquisition of E-core were cancelled and any outstanding principal and interest thereunder was deemed paid in full.

The Agreement contains standard representations and warranties, conditions to closing, and covenants, for a transaction of this nature.

Summary of discontinued operations:

Discontinued Operations

Cost of sales

Sales, general and administrative expenses

Depreciation and amortization

Other expenses

Income from discontinued operations

Accounts receivable net of allowance for doubtful accounts

Fixed assets, net of accumulated depreciation

Total liabilities

Fair value of consideration the Company was paid:

Acquisition payable, paid August 5, 2024

Assumption of debt and accrued interest

Recognized amounts of identifiable assets, liabilities and intangible assets transferred:

Accounts receivable

Prepaid expenses

( 3,428,549 )

Total identifiable assets

Total goodwill and intangible assets

Total assets transferred

Purchase price

Loss on sale of E-core

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.

Segment Information

The Company operates as one operating segment and has one reportable segment.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”).

The Company’s reportable segment includes its digital asset treasury activities and consumer products operations.

The accounting policies of the reportable segment are the same as those described in Note 2.

Financial information is provided to the CODM on a consolidated basis.

The CODM uses consolidated revenue and net loss to assess the Company’s performance, make operating decisions, and allocate resources.

The CODM is regularly provided with the consolidated expense information presented in the Company’s consolidated statements of operations.

Accordingly, the Company’s segment revenue, significant segment expenses, and net loss are the same as the corresponding amounts presented in the consolidated statements of operations.

The Company has no additional significant segment expense categories that are regularly provided to the CODM and included in the measure of segment profit or loss.

The CODM also reviews the Company’s assets on a consolidated basis.

Accordingly, segment assets are the same as total assets reported in the Consolidated Balance Sheets.

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.

During August 2026, subsequent to the year ended June 30, 2026, in connection with the Company’s at-the-market offering program, the Company issued approximately 2.5 million shares of common stock for aggregate gross proceeds of approximately $ 2.5 million.

During September 2026, subsequent to the year ended June 30, 2026, the Company amended the terms of its existing credit facility with BitGo.

Pursuant to the amendment, the interest rate on the outstanding borrowings was reduced from 11.50 % to 7.50 % per year.

At the time of the amendment, approximately $ 57.3 million was outstanding under the credit facility.

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