UPEXI, INC. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk As a “smaller reporting company”, the Company is not required to provide the information required by this Item. 40 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data UPEXI INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 Page Report of Independent Registered Public Accounting Firm PCAOB ID 1808 F-1 Consolidated Financial Statements Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Stockholders’ (Deficit) Equity F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-6 41 Table of Contents Board of Directors and Shareholders Upexi, Inc. Report of Independent Registered Public Accounting Firm Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Upexi, Inc. (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. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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; and · 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 We have served as the Company’s auditor since 2024. Columbus, Ohio September 17, 2026 F-1 Table of Contents UPEXI, INC. CONSOLIDATED BALANCE SHEETS June 30, 2026 2025 ASSETS Current assets Cash $ 5,778,586 $ 2,975,150 Accounts receivable, net 97,244 157,515 Inventory, net 265,961 1,152,870 Due from VitaMedica transition 10,766 228,017 Prepaid expenses and other assets 988,542 350,836 Current digital assets at fair value 109,625,166 49,913,655 Purchase price receivable - VitaMedica - 2,000,000 Total current assets 116,766,265 56,778,043 Property and equipment, net 208,044 2,052,573 Intangible assets, net 86,353 163,113 Goodwill 673,854 848,854 Deferred tax asset 5,948,858 5,948,858 Digital assets at fair value, net of current 55,675,516 56,083,525 Other assets 163,223 192,123 Right-of-use asset, net 598,678 1,739,755 Total noncurrent assets 63,354,526 67,028,801 Total assets $ 180,120,791 $ 123,806,844 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 277,644 $ 1,039,370 Accrued compensation 5,277,309 3,470,296 Deferred revenue 4,519 13,155 Accrued liabilities 1,675,521 356,064 Accrued interest 2,349,162 792,449 Acquisition payable 260,652 260,652 Current portion of promissory notes - 560,000 Short-term treasury debt 57,295,723 20,000,000 Current portion of Cygnet subsidiary notes payable 3,694,721 5,380,910 Current portion of operating lease payable 295,167 691,010 Total current liabilities 71,130,418 32,563,906 Operating lease payable, net of current portion 362,235 1,145,440 Convertible notes payable 162,442,056 - Total long-term liabilities 162,804,291 1,145,440 Stockholders' equity Preferred stock, $ 0.00001 par value, 10,000,000 shares authorized, and 150,000 shares issued and outstanding 2 2 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 787 383 Additional paid in capital 252,793,813 150,640,935 Accumulated deficit ( 306,608,520 ) ( 60,543,822 ) Total stockholders' equity ( 53,813,918 ) 90,097,498 Total liabilities and stockholders' equity $ 180,120,791 $ 123,806,844 The accompanying notes are an integral part of these consolidated financial statements. F-2 Table of Contents UPEXI, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended June 30, 2026 2025 Revenue Revenue $ 7,568,822 $ 14,826,336 Digital asset revenue 17,429,206 985,009 Total revenue 24,998,028 15,811,345 Cost of revenue 2,630,320 4,943,305 Gross profit 22,367,708 10,868,040 Operating expenses Sales and marketing 2,898,473 4,001,094 Distribution costs 2,627,626 4,691,964 General and administrative 26,398,877 11,935,582 Unrealized loss (gain) on digital assets 195,059,336 ( 105,474 ) Realized loss on digital asset revenue conversion to USD 4,931,791 - Realized loss on sale of digital assets 6,773,418 - Stock-based compensation 21,895,814 2,356,862 Amortization of acquired intangible assets 76,760 76,758 Impairment on assets from manufacturing shut down 1,422,289 - Impairment on acquired intangible assets 750,000 - Depreciation 379,489 681,000 Lease Impairment (gain on settlement), Delray Beach facility - ( 269,994 ) 263,213,873 23,367,792 Loss from operations ( 240,846,165 ) ( 12,499,752 ) Other expense, net Interest expense, net ( 13,561,210 ) ( 1,173,714 ) Gain on extinguishment of debt 10,288,342 - Other expense, net ( 1,945,665 ) ( 10,743 ) Other expense, net ( 5,218,533 ) ( 1,184,457 ) Loss on operations before income tax ( 246,064,698 ) ( 13,684,209 ) Income tax benefit (expense) - - Net loss $ ( 246,064,698 ) $ ( 13,684,209 ) Basic loss per share: Loss per share $ ( 3.87 ) $ ( 1.73 ) Diluted loss per share: Loss per share $ ( 3.87 ) $ ( 1.73 ) Basic weighted average shares outstanding 63,539,613 7,914,268 Fully diluted weighted average shares outstanding 63,539,613 7,914,268 The accompanying notes are an integral part of these consolidated financial statements. F-3 Table of Contents UPEXI, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY Preferred Stock Preferred Stock Common Stock Common Stock Additional Paid Accumulated Total Stockholders' Shares* Par* ** Shares* Par * ** In Capital Deficit Equity FY 2025 Balance, June 30, 2024 25,000 $ 1 1,045,429 $ 11 $ 53,375,502 $ ( 46,859,613 ) $ 6,515,901 Stock-based compensation - - - - 2,106,862 - 2,106,862 Issuance of preferred series A stock 125,000 1 - - 324,999 - 325,000 Issuance of stock for the conversion of debt - - 742,896 7 1,749,993 - 1,750,000 Capitalized interest related to convertible debt - - - - 27,891 - 27,891 Issuance of stock for the exercise of warrant on convertible debt - - 83,334 1 249,999 - 250,000 Issuance of stock for the cashless exercise of options - - 7,278 - - - - Issuance of stock for vested restricted stock grants - - 102,583 1 ( 1 ) - - Issuance of stock for services - - 19,577 1 249,999 - 250,000 Issuance of stock for the exercise of cashless warrants - - 299,091 3 ( 3 ) - - Issuance of common stock - - 35,970,383 359 92,555,694 - 92,556,053 Net loss - - - - - ( 13,684,209 ) ( 13,684,209 ) Balance, June 30, 2025 150,000 $ 2 38,270,571 $ 383 $ 150,640,935 $ ( 60,543,822 ) $ 90,097,498 Stock-based compensation - - - - 21,895,814 - 21,895,814 Issuance of stock for the exercise of warrants - - 8,600,952 86 107,803 - 107,889 Issuance of vested stock from equity incentive plans - - 533,665 5 ( 5 ) - - Issuance of common stock, net of issuance costs - - 28,665,219 287 70,638,129 - 70,638,416 Issuance of stock for conversion of debt - - 5,526,238 55 12,285,067 - 12,285,122 Common stock repurchases - - ( 2,894,287 ) ( 29 ) ( 2,773,930 ) - ( 2,773,959 ) Net loss - - - - - ( 246,064,698 ) ( 246,064,698 ) Balance, June 30, 2026 150,000 $ 2 78,702,358 $ 787 $ 252,793,813 $ ( 306,608,520 ) $ ( 53,813,918 ) * Common stock has been restated to reflect the 1 for 20 reverse split ** Common stock par value has been adjusted to $0.00001 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents UPEXI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended June 30, 2026 2025 Cash flows from operating activities Net loss $ ( 246,064,698 ) $ ( 13,684,209 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 456,249 757,758 Unrealized loss (gain) on digital assets 195,059,336 ( 101,332 ) Realized loss on sale of digital assets 6,773,418 - Digital asset revenue ( 17,429,206 ) ( 985,009 ) Digital asset revenue conversion to USD 13,192,785 - Realized loss on digital asset revenue conversion to USD 4,931,791 - Amortization of loan costs 3,655,535 30,462 Loss on disposal of property and equipment 237,727 10,743 Gain on extinguishment of debt ( 10,288,342 ) - Inventory write-off - 748,874 Bad debt reserve for Amazon receivable - 933,950 Reduction of acquisition payable - ( 152,500 ) Lease impairment (gain on settlement) - ( 269,994 ) Impairment on assets from manufacturing shut down 1,422,289 - Impairment on acquired intangible assets 750,000 - Issuance of stock for services - 250,000 Stock-based compensation 21,895,814 2,106,862 Changes in assets and liabilities Accounts receivable 60,271 ( 484,580 ) Inventory 886,909 ( 470,188 ) Prepaid expenses and other assets ( 411,616 ) 222,005 Operating lease payable ( 26,667 ) 20,965 Accounts payable and accrued liabilities 3,950,834 2,865,251 Deferred revenue ( 8,636 ) ( 222,100 ) Net cash used in operating activities ( 20,956,207 ) ( 8,423,042 ) Cash flows from investing activities Proceeds from the sale of building - 4,005,516 Proceeds from the sale of E-core - 2,000,000 Proceeds from the sale of MW Products assets 175,000 - Proceeds from the sale of VitaMedica, Inc. 2,000,000 - Acquisition of digital assets ( 40,035,365 ) ( 104,910,839 ) Proceeds from the sale of digital assets 8,030,606 - Acquisition of royalty interest ( 750,000 ) - Acquisition of property and equipment ( 44,002 ) ( 387,760 ) Net cash used in investing activities ( 30,623,761 ) ( 99,293,083 ) Cash flows from financing activities Proceeds from issuance of common stock 75,158,289 92,556,053 Issuance of preferred stock series A - 325,000 Proceeds from exercise of warrants 107,889 250,000 Repurchases of common stock ( 2,773,959 ) - Proceeds from short-term treasury debt 5,000,000 - Repayment of short-term treasury debt ( 10,400,000 ) - Proceeds from issuance of convertible notes - 350,000 Repayment of promissory notes ( 560,000 ) - Proceeds from related party advance - 75,000 Repayment of related party advance - ( 175,000 ) Payments of equity issuance costs ( 4,519,873 ) - Payments of debt issuance costs ( 7,628,942 ) - Payment on acquisition notes payable - ( 66,655 ) Payment on convertible note - ( 150,000 ) Proceeds from issuance of short-term debt - 20,000,000 Repayment of related party note payable - ( 500,000 ) Repayment on note payable on building - ( 2,634,538 ) Net cash provided by financing activities 54,383,404 110,029,860 Net increase in cash 2,803,436 2,313,735 Cash, beginning of period 2,975,150 661,415 Cash, end of period $ 5,778,586 $ 2,975,150 Supplemental Cash Flow Disclosures Interest paid $ 8,372,056 $ 805,880 Income tax paid 11,313 - Non-cash Investing and Financing Activities Issuance of common stock for the repayment of convertible notes payable $ 12,285,122 $ 1,750,000 Issuance of convertible debt for digital assets acquired 187,131,144 - Issuance of short-term debt for digital assets acquired 42,695,723 - The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents Upexi, Inc. Notes to the Consolidated Financial Statements June 30, 2026 and 2025 Note 1. Company Information and Basis of Presentation Nature of Operations Upexi, Inc., is a Delaware corporation, originally formed as a Nevada corporation in 2018. The Company 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 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 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 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. 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 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”). All significant intercompany transactions and balances are eliminated in consolidation. F-6 Table of Contents Note 2. Significant Accounting Policies The significant accounting policies followed are: Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for credit losses, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation, fair value of digital assets, fair value of the Phantom Stock Unit compensation, and valuation allowance on deferred tax assets. Cash - The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Accounts Receivable - 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. Interest is not charged by the Company on past due accounts. The carrying amount of receivables is reduced by an allowance for expected credit losses, as necessary, that reflects management’s best estimate of the amount that will not be collected. This estimation takes into consideration historical experience, current conditions and as applicable, reasonable supportable forecasts. Actual results could vary from the estimate. Accounts are charged against the allowance when management deems them to be uncollectible. The net accounts receivable balances 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 $ 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. Products that are no longer part of the current product offering are considered obsolete. The potential for re-sale of slow-moving and obsolete inventories is based upon our assumptions about future demand and market conditions. The recorded cost of obsolete inventories is then reduced to zero. The slow-moving and obsolete inventory is written off and recorded as charges to cost of goods sold. All adjustments for obsolete inventory establish a new cost basis for that inventory as we believe such reductions are permanent declines in the market price of our products. Generally, obsolete inventory is sold to companies that specialize in the liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete. Inventory consists of raw materials and finished goods and is stated at the lower of cost or net realizable value. Cost is determined by the weighted average moving cost inventory method. Net realizable value is determined, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors. 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. F-7 Table of Contents 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. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill impairment at least annually and when one or more triggering events or circumstances indicate that the goodwill might be impaired. Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill. The Company performed its annual test as of June 30, 2026 and 2025, respectively. 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. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. 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. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer becomes obligated to pay and, where applicable, when the customer has accepted the products or upon expiration of the acceptance period. For sales to distributors, payment is due on our standard commercial terms and is not contingent upon the distributors’ resale of the products. Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with inbound freight are generally included in cost of revenue. F-8 Table of Contents Our business is subject to contingencies related to customer orders, including: Right of Return A large portion of our revenue comes from the sale of consumable products, which are sold in high-volume and low quantities, and are generally maintained at stock levels of less than ninety days in our facility. Customer returns have historically represented a very small percentage of sales on an annual basis. Other product sales relate to some pet products, including small mechanical devices. Warranties The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase. The Company accrues an allowance for refunds, returned deposits and discounts given by customer services post shipment of the product based on historical experience and management’s estimate of future expenses, including replacement, freight charges and other fulfilment expenses. Conditions of Acceptance Sales of our consumable products and pet products, generally do not have customer acceptance terms. Revenue by Geography and Product Source The following table, which excludes digital asset revenue, discloses disaggregated revenue for the year ended: Year Ended June 30, 2026 2025 Primary geographical markets: United States of America $ 7,361,175 $ 14,566,766 Other 207,647 259,570 Total $ 7,568,822 $ 14,826,336 Product source: Internally manufactured $ 4,529,886 $ 9,262,857 Contract manufactured 2,957,210 2,786,828 Purchased as finished good 81,726 2,776,651 Total $ 7,568,822 $ 14,826,336 Deferred Revenue - The Company records deposits as deferred revenue when a customer pays in advance of shipping the product. Once the product is shipped, the deposit is recorded as revenue and the related commissions are paid. All products were shipped related to deposits in deferred revenue, in less than one year. 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. Digital Assets Revenue, Realized and Unrealized Gains and Losses Acquisition of Solana tokens We acquire liquid Solana tokens through purchases. In the case of liquid bulk purchases, we recognize for cost basis as the actual price paid. In the case of liquid VWAP (volume-weighted average price) or TWAP (time-weighted average price) over multiple 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. 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. At the time of unlocking, tokens can remain in the original wallet or be transferred into the wallet at our custodian or sold on an open exchange. Once the Solana is unlocked, the fair value is measured at the end of the period at the market value without a discount. F-9 Table of Contents Remeasurement on a recurring basis 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 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. The discount used by management is based on the historical purchases of locked Solana management has made on behalf of the Company. Management monitors this discount percentage and adjusts when appropriate. Per ASC 350-60-45-2, gains and losses from the remeasurement of crypto assets shall be included in net income and presented separately from changes in the carrying value of other intangible assets. Pursuant to this guidance, changes in fair value are reflected on the 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 We earn staking rewards by delegating our digital assets to third-party validators on proof-of-stake blockchain networks. These tokens remain under the Company’s control and are not derecognized, as the delegation does not constitute a transfer of control under ASC 610-20 or ASC 350-60. Rewards are recognized as income when the Company obtains control of the new tokens, typically upon receipt into its wallet. While there is no explicit guidance under GAAP for staking activities, the Company applies the principles of ASC 606, Revenue from Contracts with Customers, by analogy. Management evaluates whether a contract exists, identifies the performance obligations, and determines whether the Company acts as a principal or agent in the transaction. The transaction price is measured at the fair value of the digital assets received at the time control is obtained. Due to the evolving nature of blockchain protocols and limited regulatory guidance, management exercises significant judgment in evaluating validator reliability and the risk of slashing or forfeiture. Changes in protocol rules or accounting interpretations may materially impact how staking revenue is recognized and measured. Solana tokens held by the Company, whether liquid or locked, are eligible for staking. Staking revenue is calculated based on the number of tokens earned and the month-end spot price. This revenue is reported on the 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. F-10 Table of Contents Advertising - The Company supports its products with advertising to build brand awareness of the Company’s various products in addition to other marketing programs executed by the Company’s marketing team. The Company believes continual investment in advertising is critical to the development and sale of its branded products. Advertising costs of $ 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 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. 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 stock-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 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. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Fair Value Measurements - The Company accounts for financial instruments in accordance with ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 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. F-11 Table of Contents Leases - The Company determines if a contract contains a lease at inception. A contract contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Leases with an initial term of 12 months or less are not recorded within the accompanying Consolidated Balance Sheets. GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option will result in an economic penalty. All the Company’s real estate leases are classified as operating leases. Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional two years. The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. Income Taxes - Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. 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. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes . Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company had no material uncertain tax positions at June 30, 2026 and 2025. F-12 Table of Contents On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. 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"). The Reverse Stock Split was approved by the Board of Directors in accordance with Nevada law. The Reverse Stock Split did not have any impact on the par value of common stock. On the Effective Date, every twenty shares of common stock issued and outstanding were automatically combined into one share of common stock, without any change in the par value per share. As the per-share par value did not change, we reclassified $ 19,860 from common stock to Additional Paid-in-Capital on the Effective Date. The exercise prices and the number of shares issuable upon exercise of outstanding stock options, equity awards and warrants, and the number of shares available for future issuance under the equity incentive plans were adjusted in accordance with their respective terms. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in our common stock. We did not issue any fractional shares in connection with the Reverse Stock Split. Instead, fractional shares were initially rounded up to the next largest whole number, resulting in the issuance of 8 shares on October 3, 2024, the Effective Date, and an additional issuance of 38 shares on October 8, 2024. On October 10, 2024, the transfer agent received additional requests to issue a total of 202,183 shares of common stock for round up of fractional shares. These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company’s transfer agent. Although the Company did receive the common stock back after issuance, the potential dilution remains a risk and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk. The Reverse Stock Split did not modify the relative rights or preferences of the common stock. Unless otherwise indicated, all issued and outstanding shares of common stock and all outstanding securities entitling their holders to purchase shares of our common stock or acquire shares of our common stock, including stock options, restricted stock units, and warrants per share data, share prices and exercise prices, as required by the terms of those securities, have been adjusted retroactively to reflect the Reverse Stock Split. Earnings (Loss) Per Share - 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, 2026 2025 Basic loss per share: Numerator: Net loss $ ( 246,064,698 ) $ ( 13,684,209 ) Denominator: Weighted average common shares outstanding 63,539,613 7,914,268 Basic loss per share $ ( 3.87 ) $ ( 1.73 ) Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. 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: June 30, 2026 2025 Stock options 664,200 621,353 Warrants 9,794,608 9,738,001 Preferred stock 138,889 138,889 Convertible debt 42,163,222 186,667 Restricted stock units 4,627,252 221,917 Total 57,388,171 10,906,827 F-13 Table of Contents 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 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. Unless otherwise discussed, the impact of recently issued standards that are applicable and not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. What follows below are accounting pronouncements adopted or issued but not yet adopted. In 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: (1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e), (2) include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements, (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. An entity is not precluded from providing additional voluntary disclosures that may provide investors with additional decision-useful information. The ASU is effective for annual periods beginning after December 15, 2026, and interim report periods beginning after December 15, 2027. Early application of the amendment is permitted. The ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the effect that ASU 2024-03 will have on its consolidated financial statements and related disclosures. F-14 Table of Contents 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. Note 3. Inventory Inventory, net, consisted of the following: June 30, 2026 2025 Raw materials $ - $ 489,574 Finished goods 265,961 663,296 Inventory, net $ 265,961 $ 1,152,870 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. Note 4. Prepaid Expenses and Other Assets Prepaid and other receivables consist of the following: June 30, 2026 2025 Insurance $ 222,288 $ 107,256 Prepayment to vendors 54,433 201,192 Deposits on services 10,000 10,000 Subscriptions and services being amortized over the service period 318,164 26,500 Other assets 383,657 5,888 Prepaid expenses and other receivables $ 988,542 $ 350,836 All prepaid expenses are expected to be expensed within one year. F-15 Table of Contents Note 5. Digital Assets 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: Liquid Locked Staking Revenue Convertible Note Total Tokens Tokens Cost Tokens Tokens Cost Tokens Tokens Cost Tokens Tokens Cost Tokens Tokens Cost Balance, June 30, 2024 - $ - - $ - - $ - - $ - - $ - SOL purchases 329,721 48,982,807 404,225 55,923,890 - - - - 733,946 104,906,697 Exchanges between locked and liquid SOL, net ( 22,090 ) ( 3,302,385 ) 25,836 3,302,385 - - - - 3,746 - SOL revenue - - - - 6,334 985,009 - - 6,334 985,009 SOL unlocked 8,610 ( 582,498 ) ( 8,610 ) 582,498 - - - - - - Balance, June 30, 2025 316,241 $ 45,097,924 421,451 $ 59,808,773 6,334 $ 985,009 - $ - 744,026 $ 105,891,706 SOL purchases 401,687 70,614,726 73,211 12,116,362 - - 1,236,143 187,131,144 1,711,041 269,862,232 SOL sales ( 100,000 ) ( 14,804,024 ) - - ( 137,729 ) ( 18,124,576 ) - - ( 237,729 ) ( 32,928,600 ) Exchanges between locked and liquid SOL, net 79,878 13,771,277 ( 92,461 ) ( 13,771,277 ) - - - - ( 12,583 ) - SOL revenue - - - - 135,395 17,429,206 - - 135,395 17,429,206 SOL unlocked 138,679 18,568,230 ( 138,679 ) ( 18,568,230 ) - - - - - - SOL tokens released from convertible note security 62,946 8,664,187 89,021 12,051,494 - - ( 151,967 ) ( 20,715,681 ) - - Balance, June 30, 2026 899,431 $ 141,912,320 352,543 $ 51,637,122 4,000 $ 289,639 1,084,176 $ 166,415,463 2,340,150 $ 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: Fair Value Digital assets, June 30, 2024 $ - Purchases of digital assets 104,906,697 Digital asset revenue 985,009 Unrealized gain on digital assets 105,474 Digital assets, June 30, 2025 $ 105,997,180 Purchases of digital assets 269,862,232 Proceeds from sales of digital assets ( 21,223,391 ) Digital asset revenue 17,429,206 Realized loss on sale of digital assets ( 11,705,209 ) Unrealized loss on digital assets ( 195,059,336 ) Digital assets, June 30, 2026 $ 165,300,682 F-16 Table of Contents 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. Although the tokens undergo a bonding process with validators, the Company retains the ability to initiate unbonding at any time. Upon notification to the validator, the unbonding process begins, which typically takes up to two days. During this period, the tokens remain unavailable for transfer or sale on the open market. Validators do not gain control over the tokens in a manner that meets derecognition criteria. They cannot sell, pledge, or otherwise dispose of the tokens. As such, the Company continues to recognize the delegated SOL tokens as part of its digital asset holdings. 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 573,114 June 30, 2028 276,010 Total 849,124 Note 6. Property and Equipment Property and equipment, net, consisted of the following: June 30, 2026 2025 Furniture and fixtures $ 141,729 $ 127,050 Computer equipment 18,037 102,279 Internal use software - 570,645 Manufacturing equipment 13,775 2,112,561 Leasehold improvements 22,833 852,825 Vehicles 206,501 206,501 Property and equipment, gross 402,875 3,971,861 Less accumulated depreciation ( 194,831 ) ( 1,919,288 ) Property and equipment, net $ 208,044 $ 2,052,573 F-17 Table of Contents Depreciation expense was $ 379,489 and $ 681,000 for the years ended June 30, 2026 and 2025, respectively. Note 7. Intangible Assets Intangible assets consisted of the following: June 30, 2026 Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ - $ - $ - Trade name 5 years 383,792 297,439 86,353 Online sales channels 2 years - - - Vendor relationships 5 years - - - Intangible assets $ 383,792 $ 297,439 $ 86,353 June 30, 2025 Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 1,834,692 $ 1,834,692 $ - Trade name 5 years 383,792 220,679 163,113 Online sales channels 2 years 1,800,000 1,800,000 - Vendor relationships 5 years 6,000,000 6,000,000 - Intangible assets $ 10,018,484 $ 9,855,371 $ 163,113 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. F-18 Table of Contents 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 $ 76,758 June 30, 2028 9,595 Total $ 86,353 Note 8. 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. 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 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: 2027 $ 319,932 2028 329,051 2029 42,027 Total undiscounted future minimum lease payments 691,010 Less: Imputed interest ( 33,608 ) Present value of operating lease payable 657,402 Less: current portion of operating lease payable ( 295,167 ) Operating lease payable, net of current portion $ 362,235 The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2026 and 2025 are: June 30, 2026 2025 Weighted average remaining lease term months 26 26 Weighted average incremental borrowing rate 5.0 % 5.0 % F-19 Table of Contents 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, 2026 2025 Lease expense: Amortization of ROU assets $ 620,412 $ 741,745 Interest expense 62,723 103,805 Operating lease cost 7,640 15,029 Variable lease expense 163,302 293,292 Total lease expense $ 854,077 $ 1,153,871 Note 9. Accrued Liabilities and Acquisition Payable Accrued liabilities consist of the following: June 30, 2026 2025 Accrued professional fees $ 353,815 $ 300,000 Accrued sales tax 3,620 38,281 Accrued services 1,314,213 - Other accrued liabilities 3,873 17,783 Accrued liabilities $ 1,675,521 $ 356,064 Acquisition payable consists of the following: June 30, 2026 2025 Payable accrued related to the acquisition of Cygnet $ 260,652 $ 260,652 Acquisition payable $ 260,652 $ 260,652 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. F-20 Table of Contents Note 10. 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: Maturity June 30, Date 2026 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. Maturity $ 57,295,723 $ 20,000,000 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: Maturity June 30, Date 2026 2025 Cygnet Subsidiary Notes Payable: SBA note payable, 30-year term note, 10.25% interest rate and collateralized with all assets of the Company October 6, 2031 $ 3,694,721 $ 3,694,721 Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.50% interest rate and no security interest in the assets of the business June 30, 2027 - 1,000,290 GF Note, 6 annual payments, with first payment due December 31, 2022, 3.50% interest rate and no security interest in the assets of the business November 7, 2026 - 685,899 Total 3,694,721 5,380,910 Current portion of Cygnet subsidiary notes payable 3,694,721 5,380,910 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. June 1, 2026 - 560,000 Current portion of promissory notes - 560,000 Total Cygnet Subsidiary Notes Payable and Promissory Notes $ 3,694,721 $ 5,940,910 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. F-21 Table of Contents 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: Maturity June 30, Date 2026 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 146,022,716 - 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 16,419,340 - Total Convertible Notes 162,442,056 Less: 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: Outstanding SOL Tokens Principal Balance Convertible Notes Maturity Date Deliverable at Maturity* (Historical USD Value)* Convertible Notes July 2025 Issuance July 16, 2027 962,955 $ 149,996,123 Convertible Note January 2026 Issuance January 9, 2028 121,221 16,419,340 __________________ * 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 . F-22 Table of Contents 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. Note 11. Related Party Transactions In March 2025, Allan Marshall purchased 125,000 shares of Series A preferred shares from the Company at a per share price of $ 2.60 per preferred share. This purchase was settled through the cancellation of a $ 400,000 related party advance. There are no advances due to Allan Marshall at 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. 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. Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024. 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. F-23 Table of Contents 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 $ 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. Note 12. Equity Transactions Convertible Preferred Stock The Company has 150,000 shares of preferred stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into 138,889 shares of the Company’s common stock at the holder’s option , has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock. Common Stock During the year ended June 30, 2026: 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. F-24 Table of Contents 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. Stock Split The Company effectuated a reverse stock split, at a rate of 20 to 1 , effective at 12:01 am ET, October 3, 2024. The total issued and outstanding shares of the Company’s common stock, post reverse stock split was 1,040,886 . The Depository Trust Company (“DTC”) has requested an additional 202,183 shares of the Company’s common stock to round up, pursuant to the terms of the reverse stock split, the holdings of DTC’s beneficial holders. These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company’s transfer agent. Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk. The Reverse Stock Split did not modify the relative rights or preferences of the common stock. F-25 Table of Contents Note 13. Stock-Based Compensation 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: Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at June 30, 2024 200,714 $ 57.40 5.83 $ - Granted 620,000 2.36 - - Forfeited or cancelled ( 192,083 ) 55.13 - - Exercised ( 7,278 ) 3.46 - - Outstanding at June 30, 2025 621,353 $ 3.39 5.66 $ 374,500 Granted 125,000 4.63 - - Forfeited or cancelled ( 82,153 ) 10.74 - - Exercised - - - - Outstanding at June 30, 2026 664,200 $ 2.64 4.64 $ - Options exercisable at June 30, 2026 (vested) 637,450 2.63 4.65 - Options exercisable at June 30, 2025 (vested) 600,311 3.42 5.52 - The average fair value of stock options granted was estimated to be $ 4.18 per share for the period ended June 30, 2026, and the closing stock price on June 30, 2026, was $ 0.78 per common share. The average fair value of stock options granted was estimated to be $ 2.36 per share for the period ended June 30, 2025, and the closing stock price on June 30, 2025, was $ 2.98 per common share. Stock-based compensation expense attributable to stock options was approximately $ 124,514 and $ 1,409,916 for the years ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was approximately $ 56,196 unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately 0.43 years. The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended June 30, 2026 and 2025: Year Ended June 30, 2026 2025 Dividend rate - - Risk free interest rate 3.64 %- 3.75 % 3.95 %- 4.61 % Expected term 5 years 5 - 10 years Expected volatility 144 %- 145 % 146 %- 151 % Grant date stock price $ 2.91 - 5.77 $ 2.28 - 3.46 F-26 Table of Contents The basis for the above assumptions are as follows: the dividend rate is based upon the Company’s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company’s historical pattern of options granted and the period of time they are expected to be outstanding; and expected volatility was calculated based upon historical trends in the Company’s stock prices. 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, 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. The estimate of forfeitures relating to terminations is still 0 %. There were 19,046,056 shares available for issuance as of June 30, 2026, under the 2019 Plan as amended. The 2019 Plan contains an “evergreen” provision pursuant to which shares authorized for issuance may be automatically replenished. 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. Shares Weighted- Average Grant Date Fair Value Outstanding as of June 30, 2024 7,500 $ 9.82 Granted 447,000 2.86 Cancelled or forfeited ( 130,000 ) 3.37 Issued ( 102,583 ) 3.53 Outstanding as of June 30, 2025 221,917 $ 2.48 Granted 4,939,000 4.49 Cancelled or forfeited - - Issued ( 533,665 ) 3.49 Outstanding as of June 30, 2026 4,627,252 $ 4.51 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, 2026 2025 Stock options amortization $ 124,514 $ 1,409,916 Restricted stock units amortization 17,049,029 696,946 Warrants amortization granted to asset manager 4,722,271 - Total stock-based compensation $ 21,895,814 $ 2,106,862 F-27 Table of Contents 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. Note 14. 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: Units Phantom Stock Units with a grant value of $1.17 158,425 Phantom Stock Units with a grant value of $1.91 1,760,000 Phantom Stock Units with a grant value of $2.89 1,153,997 Phantom Stock Units with a grant value of $3.04 82,238 Phantom Stock Units with a grant value of $4.00 311,432 Phantom Stock Units with a grant value of $4.25 6,908 Total Phantom Stock Units granted 3,473,000 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. Note 15. Income Taxes The components of income tax benefit (expense) for the years ended June 30, 2026 and 2025 are as follows: Year Ended June 30, 2026 2025 Current tax provision $ 13,558 $ 13,558 Deferred tax provision ( 13,558 ) ( 13,558 ) Income tax benefit (expense) $ - $ - F-28 Table of Contents 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: Amount Percentage U.S. federal statutory income tax $ ( 51,629,649 ) 21.00 % State and local income taxes, net of federal benefit ( 13,871,476 ) 5.65 % Foreign tax effects - - % Effect of changes in tax laws or rates - - % Effect of cross-border tax laws - - % Tax credits - - % Changes in valuation allowance 69,709,798 ( 28.36 )% Nontaxable or nondeductible items 29,670 ( 0.01 )% Changes in unrecognized tax benefits - - % Other, net ( 4,238,343 ) 1.72 % 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, 2026 2025 U.S. federal statutory income tax rate 21.00 % 21.00 % State taxes, net of federal benefit 5.47 % 4.80 % Nondeductible expenses ( 0.01 )% ( 0.03 )% Return-to-provision adjustment - % - % State tax rate change 0.18 % 0.25 % Other, net 1.72 % 3.81 % Valuation allowance ( 28.36 )% ( 29.83 )% Effective income tax rate - % - % The components of the Company’s net deferred tax asset as of June 30, 2026 and 2025 are as follows: June 30, 2026 2025 Net operating loss carryforwards $ 23,452,438 $ 9,601,876 Right-of-use assets 434,706 ( 28,366 ) Inventory write-offs 91,164 161,146 Unrealized loss (gain) on digital assets 54,432,275 ( 27,512 ) Intangible assets 149,517 2,795,409 Stock-based compensation 5,961,672 2,770,725 Capital loss carryforwards 277,873 271,334 Property and equipment 55,684 306,804 Allowance for credit losses 68,602 172,844 Accrued compensation 783,181 13,784 Operating lease payable ( 264,143 ) - Deferred revenue 1,262 3,572 Other, net 307,189 7 Valuation allowance ( 79,802,562 ) ( 10,092,765 ) Deferred tax asset $ 5,948,858 $ 5,948,858 F-29 Table of Contents The following table presents income taxes paid (net of refunds received) for the year ended June 30, 2026: Income Taxes Paid Federal $ - State and local 11,313 Foreign - Income tax paid $ 11,313 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. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income during the periods in which the temporary differences reverse or the net operating loss carryforwards are available. As of June 30, 2026 and 2025, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. 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. 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. Note 16. 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. F-30 Table of Contents 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. Note 17. Risks and Uncertainties 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. Note 18. 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. Note 19. Subsequent Events 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. F-31 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.