AGRIFORCE GROWING SYSTEMS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended June 30, 2025 and 2024 (unaudited)

(Expressed in US Dollars, except where noted)

1. NATURE OF OPERATIONS AND BASIS OF PREPARATION

Business Overview

AgriFORCE Growing Systems Ltd. (“AgriFORCE™” or the “Company”) was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of theBusiness Corporations Act (British Columbia) on December 22, 2017. The Company’s registered and records office address is at 800 – 525 West 8 th Avenue, Vancouver, British Columbia, Canada, V5Z 1C6.

During 2024, the Company commenced operations as a sustainable bitcoin miner. It has completed two acquisitions since late November 2024 pursuant to which the Company now owns and operates three Bitcoin mining facilities, one in Alberta, Canada and two in Ohio, for a total of 1,522 BITMAIN Antminer S19j units, 81 BITMAIN Antminer S19k Pro units and 50 BITMAIN Antminer S21 XP units. These facilities are powered by sustainable energy, advancing AgriFORCE’s mission to integrate innovative technologies that promote environmental stewardship while generating significant financial returns.

The addition in 2024 of sustainable Bitcoin mining represents the first pillar in the Company’s three pillar strategy to:

Basis of Presentation

The accompanying Unaudited Condensed Consolidated Interim Financial Statements and related financial information of AgriFORCE Growing Systems Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2024 and 2023 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 7, 2025. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements.

In the opinion of management, the accompanying interim financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of June 30, 2025 and December 31, 2024, and the results of its operations and cash flows during the six months ended June 30, 2025 and 2024. Such adjustments are of a normal and recurring nature. The results for the six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2025, or for any future period.

Liquidity and Management’s Plan

The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future. As reflected in the interim financial statements for the six months ended June 30, 2025, the Company had a net loss of $8.2 million, $3.1 million of net cash used in operating activities, and the Company had a working capital deficiency of $9.7 million.

The accompanying interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the development stage of its business plan. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company’s ability to continue as a going concern. For the next twelve months from issuance of these interim financial statements, the Company plans to seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to our currently outstanding common shares. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company’s ability to raise capital, management believes that there is substantial doubt in the Company’s ability to continue as a going concern for twelve months from the issuance of these interim financial statements.

Reverse Stock Split

On July 28, 2025, the Company effected a one-for-nine reverse stock split of the Company’s issued and outstanding common shares (the “Reverse Split”). As a result of the Reverse Split, every 9 shares of the Company’s old common shares were converted into one share of the Company’s new common shares. Fractional shares resulting from the Reverse Split were sold at the then prevailing price on the open market, with the proceeds being distributed on a pro-rata basis to the impacted stockholders. The Reverse Split automatically and proportionately adjusted all issued and outstanding shares of the Company’s common shares, as well as convertible debentures, convertible features, prefunded warrants, stock options and warrants outstanding at the time of the date of the Reverse Split. The exercise price on outstanding equity-based grants was proportionately increased, while the number of shares available under the Company’s equity-based plans was proportionately reduced. Share and per share data (except par value) for the periods presented reflect the effects of the Reverse Split. References to numbers of common shares and per share data in the accompanying financial statements and notes thereto for periods ended prior to July 28, 2025 have been adjusted to reflect the Reverse Split on a retroactive basis.

2. SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Start-ups Act of 2012, (the “JOBS Act”). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

In December 2023, the FASB issued ASU 2023-09,*“Income Taxes (Topic 740): Improvements to Income Tax Disclosures.”*ASU 2023-09 requires companies to provide enhanced rate reconciliation disclosures, including disclosure of specific categories and additional information for reconciling items. The standard also requires companies to disaggregate income taxes paid by federal, state and foreign taxes. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The amendments are effective for the Company for the fiscal year ended December 31, 2025. The Company is currently evaluating the impact of adopting the standard.

In November 2024, the FASB issued ASU No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures(Subtopic 220-40): Disaggregation of Income Statement Expenses. The requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Digital assets

Bitcoin awarded to the Company through its mining activities is accounted for in connection with the Company’s revenue recognition policy.

Digital assets are classified on the Company’s condensed consolidated interim balance sheet as a current asset due to the Company’s ability to sell it in a highly liquid marketplace and its intent to liquidate a portion of its Bitcoin to support operations as needed. The Company measures digital assets at fair value with changes recognized in operating expenses in the condensed consolidated interim statement of operations. The Company tracks its cost basis of digital assets in accordance with the first-in-first-out (“FIFO”) method of accounting.

Sales of Bitcoin by the Company are typically included within the investing activities on the condensed consolidated interim statement of cash flows since such Bitcoin is typically not sold nearly immediately after being produced. The Company will monitor its cash needs and sell Bitcoin in the future to fund its cash expenditures as needed. The aggregate cost basis of the Company’s Bitcoin as of June 30, 2025 was $644,353 (December 31, 2024 - $25,246). The Company held 6.8 BTC as of June 30, 2025 (December 31, 2024 –0.3). In June 2025 the Company sold one (1) BTC for $105,941 (December 31, 2024 –nil).

The following table presents information regarding the mining operations including production and sales of mined Bitcoin,

Bitcoin had a market price of $107,135 on June 30, 2025.

Bitcoin had a market price of $82,549 on March 31, 2025.

In addition, the Company has pledged three (3) BTC as collateral for the loan as of June 30, 2025 (see Note 11).

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. To determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach or cost approach. The reversal of impairment losses is prohibited.

Inventories

Inventories consist of finished goods of milled flour and related packaging material recorded at the lower of cost or net realizable value with the cost measured using the average cost method. Inventories include all costs that relate to bringing the inventory to its present condition and location under normal operating conditions.

Property and Equipment

Property and equipment are initially recognized at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the Company’s management. Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses.

Depreciation is recognized on a straight-line basis to write down the cost less estimated residual value of computer equipment and furniture and fixtures.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in profit or loss within other income or other expenses.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606. The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis.

The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate.

The Company earns revenue from the production of digital assets through mining activities. This revenue represents proceeds received from participating in a third-party operated bitcoin mining pool. When the Company is a participant in a third-party operated mining pool, the Company provides a service to perform hash calculations to the third-party pool operators.

The Company is entitled to non-cash compensation in the form of bitcoin based on the pool operator’s payout model, which is the Full-Pay-Per-Share (“FPPS”) model, under which the pool pays out block rewards and transaction fees, less mining pool fees. The Company is entitled to such non-cash consideration even if a block is not successfully validated by the mining pool operators.

The Company considers the third-party mining pool operator to be its customer under ASC 606. Contract inception and the Company’s enforceable right to consideration begins when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract within 24 hours’ notice without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates.

The Company’s sole performance obligation is to provide hash calculations to the third-party pool operators. Accordingly, the entire transaction price is allocated to such performance obligation. The Company measures the non-cash consideration (bitcoin) it receives is based on the simple average daily spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin on the day of contract inception. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception.

Expenses associated with providing bitcoin transaction verification services, such as hosting fees, electricity costs, and related fees are recorded as cost of revenues. Digital assets received are recorded as digital assets. Cash flows from selling digital assets are typically included within the investing activities on the condensed consolidated interim Statement of Cash Flows.

The Company evaluates and accounts for its digital assets in accordance with ASU 2023-08,Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60), the Company measures digital assets at fair value with changes recognized in operating expenses. The Company applies the first-in-first-out method of accounting to its digital assets and tracks the cost basis of the crypto asset by wallet.

Product revenue in 2024 was limited to sales from hydroxyl generators. We recognized product revenue when we satisfied performance obligations by transferring control of the promised products or services to customers. Product revenue was recognized at a point in time when control of the promised good or service was transferred to the customer, which was at the point of shipment or delivery of the goods.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which;

(a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract;

(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and

(c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument”. Accordingly, the Company records, when necessary, discounts to convertible notes for the fair value of conversion options embedded in debt instruments. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. ASC 815 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

Foreign Currency Transactions

The financial statements of the Company and its subsidiaries whose functional currencies are the local currencies are translated into USD for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive loss” as equity in the consolidated balance sheets. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the reporting currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within non-operating expenses. As of April 1, 2025, the functional currency of the Company was changed from Canadian dollars (“CAD”) to USD due to a change in the primary economic environment in which the Company operates. The majority of the Company’s executive leadership and operations are located in the United States. The majority of revenue generation, expenditures, cash flows, financing, and contractual terms are denominated in USD.

Definite Lived Intangible Assets

Definite lived intangible assets consist of a granted patent and intangible assets acquired from an acquisition. Amortization is computed using the straight-line method over the estimated useful life of the asset (Note 7).

Loss per Common Share

The Company presents basic and diluted loss per share data for its common shares. Basic loss per common share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. The number of common shares used in the loss per shares calculation includes all outstanding common shares plus all common shares issuable for which there are no conditions to issue other than time. Diluted loss per common share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all potentially dilutive share equivalents, such as stock options and warrants and assumes the receipt of proceeds upon exercise of the dilutive securities to determine the number of shares assumed to be purchased at the average market price during the year.

Loss per common share calculations for all periods have been adjusted to reflect the reverse stock splits effected on December 5, 2024 and July 28, 2025.

Fair Value Accounting

The fair value of the Company’s accounts receivable, accounts payable and other current liabilities approximate their carrying amounts due to the relatively short maturities of these items.

As part of the issuance of debentures on June 30, 2022, January 17, 2023, October 18, 2023, November 30, 2023, February 21, 2024, April 11, 2024, May 22, 2024, January 16, 2025, and March 21, 2025 as well as the private placements on June 20, 2023 and October 15, 2024, the Company issued warrants having strike prices denominated in USD. This creates an obligation to issue shares for a price that is not denominated in the Company’s functional currency and renders the warrants not indexed to the Company’s stock, and therefore, must be classified as a derivative liability and measured at fair value at the end of each reporting period. On the same basis, the Series A Warrants and the representative warrants issued as part of the IPO are also classified as a derivative liability and measured at fair value. As of April 1, 2025, the Company changed its functional currency to USD. The strike prices of the warrants and the Company’s functional currency are both denominated in USD. The Company reassessed that the warrants met the classification criteria to be recorded as equity and the warrants were reclassified to additional-paid-in capital.

The fair value of the Company’s warrants is determined in accordance with FASB ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories:

3. ACQUISITIONS

On August 16, 2024, the Company completed the acquisition of assets of Radical Clean Solutions, Inc. (“RCS”), effectively increasing its interest from 14% to 100%, and providing the Company control over RCS. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds (“VOCs”) and allergy triggers. As the Company’s investment in RCS does not have a readily determinable fair value, the Company previously elected to account for its 14% interest in RCS at cost, less impairment. The Company recognized a loss on the investment of $97,488 during the year ended December 31, 2024.

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

The acquisition of RCS includes a contingent consideration arrangement that requires additional consideration to be paid by AgriFORCE to a previous owner of RCS who now serves as a Consultant to AgriFORCE (the “Consultant”). The Consultant is entitled to receive commissions on sales and production of RCS Units, which are payable in cash upon receipt of revenue or completed inventory by the Company. The consultant is also entitled to other manufacturing, sales and product development milestones, which are outlined below.

(a) Completion of wall mount design

(b) Completion of patent prosecution for any of the patent applications heretofore provided to Company or any new U.S. patent applications

(c) Execute distribution agreements for other countries or verticals

(d)Production of 250 RCS units

(e)Production of 500 RCS units

(f)Production of 1,000 RCS units

The Consultant is entitled to be awarded 250 restricted common shares of the Company for meeting each milestone.

The Consultant is also entitled to restricted stock units (“RSUs”) provided certain conditions are met.

The goodwill is attributable to the acquisition of the RCS technologies, synergies, access to their key vendors, and other non-quantifiable assets which are expected to create growth and diversification opportunities for the Company.

Prior to the acquisition, the Company had a preexisting relationship with RCS. The Company was a 14% investor of RCS and held a receivable of $200,000 for a secured loan note issued to RCS. As part of the acquisition terms, the receivable amount of $200,000 funded the purchase price consideration and was deemed settled.

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company accrued a loss on disposal of the RCS business, which is reflected on the condensed consolidated statement of operations as a loss on disposal of business of $904,112.

Details of the assets and liabilities of discontinued operations are as follows:

The details of the component information of the discontinued operations are disclosed under columns Radical Clean Solutions in segment reporting information in Note 18.

On November 28, 2024, the Company completed its acquisition of the Redwater Bitcoin Mining Facility, located in Alberta, Canada. (“Redwater”) for a total purchase price of approximately $1.5 million. Redwater is a Bitcoin mining facility, powered by 1.2 MW of flared natural gas energy, currently supports over 130 bitcoin mining units and has the scalability to accommodate up to 250 units. The acquisition was accounted for as an asset acquisition as, at the time of acquisition, no outputs were produced from the property, and skilled employees or contractors required for the operation of the facility were not included in the transaction. The purchase price consisted primarily of cash proceeds paid to the seller, and legal transaction costs. The acquired assets will be amortized from their acquisition date over their remaining estimated useful lives.

The purchase price was allocated based on the relative fair value of the assets acquired as follows:

The Power Purchase Agreement between the Company and Rivogenix Energy Corp (“Rivogenix”), allows the Company to obtain natural gas for its Natural Gas Power Plant. The Power Purchase Agreement was determined to be a favorable contract asset, and as such was recorded at the present value of the contractual benefit. As per the agreement, Rivogenix procures the natural gas required to generate power using the Natural Gas Power Plant and allows the Company to purchase the power generated at a rate of CAD $0.055 per kilowatt hour (KWH). The expected power cost per kilowatt hour in Alberta was determined to be CAD $0.0883, providing a discount of CAD $0.0383. The power usage required to operate each of the acquired Bitcoin Miners is 75.9KWH per day per Bitcoin Miner. The discount rate used in the present value calculation is 11.25%, and the period of the contract has been determined to be 3 years.

On January 17, 2025, the Company completed the acquisition of assets of Bald Eagle Mining (“Bald Eagle”), located in Columbiana Country, Ohio, for a total purchase price of $4,765,000. Bald Eagle is a Bitcoin mining facility, powered by 5MW of natural gas energy, which at the time of the acquisition supported over 900 bitcoin mining units. During the second quarter of 2025, the Company increased the number of mining units at the Bald Eagle mining site to 1,191.

The following pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024.

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net loss position.

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Bald Eagle to reflect the additional amortization that would have been charged assuming the fair value adjustments to the intangible assets had been applied from January 1, 2025, with the consequential tax effects.

The following table summarizes the consideration transferred to acquire Bald Eagle and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

As at June 30, 2025, the Goodwill balance was $1,535,333 (foreign exchange gain of $9,345).

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

5. INVENTORIES

As of June 30, 2025, the Company had $5,961 inventory (December 31, 2024 – $42,443) in finished goods.

6. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

Depreciation expense on property and equipment for the six months ended June 30, 2025 was $285,663 (June 30, 2024 - $329,939), for the three months ended June 30, 2025 was $164,584 (June 30, 2024 $162,941). During the six months ended June 30, 2024, the Company disposed of property and equipment which resulted in a loss of $4,252. There was no disposals in 2025.

7. INTANGIBLE ASSETS

Intangible assets include $6,938,117 (December 31, 2024 - $7,209,118) for intellectual property (“Manna IP”) acquired under an asset purchase agreement with Manna Nutritional Group, LLC (“Manna”) dated September 10, 2021. The Manna IP encompasses patented technologies to naturally process and convert grains, pulses, and root vegetables, into low-starch, low-sugar, high-protein, fiber-rich baking flour products, as well as a wide range of breakfast cereals, juices, natural sweeteners, and baking enhancers. The Company paid $1,475,000 in cash and issued 1,476 prefunded warrants valued at $12,106,677 (the “Purchase Price”). Subject to a 9.99% blocker and SEC Rule 144 restrictions, the prefunded warrants vested in tranches up until March 10, 2024, at which time all tranches were fully vested. When vested the tranches of prefunded warrants became convertible into an equal number of common shares.

The asset was available for use on January 3, 2023. The asset has a useful life of 20 years. The Company recorded $277,524 in amortization expense related to the Manna IP for the six months ended June 30, 2025 (June 30, 2024- $326,242 ), and $138,762 for the three months ended June 30, 2025 (June 30, 2024 $161,947).

The Company acquired intangible assets from RCS as part of the business combination (Note 3). The following intangible assets were acquired from RCS:

The Company recorded $30,548 (June 30, 2024 - $Nil ) in amortization expense, and a foreign exchange loss of $nil (June 30, 2024 - $Nil) related to the RCS assets for the six months ended June 30, 2025. The Company recorded $15,274 (June 30, 2024 - $Nil ) in amortization expense, and a foreign exchange loss of $Nil (June 30, 2024 - $Nil) related to the RCS assets for the three months ended June 30, 2025

As of June 30, 2025, the Company recorded the disposal of the RCS assets due to the mutual agreement to return the RCS assets to the seller which resulted in a loss on disposal of business of $904,112 (Note 3). The Company reclassified the assets and liabilities of RCS to assets held for sale and liabilities held for sale. The Company reclassified the revenues and expenses of RCS to net loss from discontinued operations.

The Company acquired an intangible asset from the acquisition of Redwater, as part of the asset acquisition (note 3). The Power Purchase Agreement between the Company and Rivogenix, allows the Company to obtain natural gas for its Natural Gas Power Plant. The Power Purchase Agreement was determined to be a favorable contract asset, and as such was recorded as an intangible asset at the present value of the contractual benefit. The period of the contract has been determined to be 3 years. As of June 30, 2025,2.5 years remain on the contract. The fair value of the Power Purchase Agreement Contract as of June 30, 2025 is $511,106 (December 31, 2024 - $625,736). The Company recognized $124,531 in amortization expense (reflected in cost of sales) during the six months ended June 30, 2025 and $62,919 for the three months ended June 30, 2025 (June 30, 2024 - $Nil) in relation to the Power Purchase Agreement.

The estimated annual amortization expense for the next five years are as follows:

8. INVESTMENT

On June 18, 2023, the Company signed a memorandum of understanding (“MOU”) with Radical Clean Solutions Ltd. (“RCS”) to purchase common shares issued by RCS. The Company paid RCS $225,000 for 14% of the issued and outstanding common shares of the Company. Under the terms of the MOU, the use of proceeds is exclusively for the advance purchase of hydroxyls generating devices for commercial sales into controlled environment agriculture, food manufacturing, warehousing and transportation verticals. The Company was to receive one of five board of director seats of RCS and had a right of first refusal to maintain an ownership percentage in RCS of not less than 10% of the total issued and outstanding common shares. On October 1, 2023 the Company and RCS signed a definitive agreement to convert the advance into a 14% ownership investment in RCS.

On August 16, 2024, the Company acquired the assets of RCS as part of a business combination. The investment in RCS was accounted for as part of the step-acquisition accounting (Note 3).

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company accrued a loss on disposal of the RCS business, which is reflected on the condensed consolidated statement of operations as a loss on disposal of business which resulted in a loss on disposal of business of $904,112.

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

10. DEBENTURES

On June 30, 2022, the Company executed the definitive agreements (the “Purchase Agreements”) with arm’s length accredited institutional investors (the “Investors”) for $14,025,000 in debentures with a 10% original issue discount for gross proceeds of $12,750,000 (“First Tranche Debentures”). The First Tranche Debentures were convertible into common shares at $11,100.00 per share. In addition, the Investors received 91 warrants at a strike price of $12,210.00, which expire on December 31, 2025 (the “First Tranche Warrants”). The First Tranche Warrants and First Tranche Debentures each have down round provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The First Tranche Warrants strike price, and the First Tranche Debenture conversion price will be adjusted down to the effective conversion price of the issued equity instruments. The transaction costs incurred in relation to first tranche were $1,634,894. The Debentures are senior to all other indebtedness or claims in right of payment, other than indebtedness secured by purchase money security interested.

The Investors had the right to purchase additional tranches of $5,000,000 each, up to a total additional principal amount of $33,000,000.

On January 17, 2023, the Investors purchased additional debentures totaling $5,076,923 with a 10% original issue discount for gross proceeds of $4,615,385 (the “Second Tranche Debenture”). The Second Tranche Debentures were convertible into common shares at $6,200.00 per share and the Investors received an additional 59 warrants at a strike price of $6,200.00, which expire on December 31, 2025 (the “Second Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First Tranche Debentures and the First Tranche Warrants to $6,200.00. The transaction costs incurred in relation to second tranche were $325,962.

On June 26, 2023, the Company entered into waiver and amendment agreements (“Debenture Modification Agreements”) with the Investors to modify terms of the Purchase Agreements. The Debenture Modification Agreements provide as follows:

On August 9, 2023, the Company entered into another waiver and amendment agreement (“Agreement”) with the Investors with respect to a certain Senior Convertible Debenture (the “Debentures”) due July 17, 2025 issued by the Company to that Investor. The Agreement provides as follows:

On October 18, 2023, the Investors purchased additional debentures totaling $2,750,000 with a 10% original issue discount for gross proceeds of $2,500,000 (the “Third Tranche Debenture”). The Third Tranche Debentures were convertible into common shares at $2,358.00 per share and the Investors received an additional 689 warrants at a strike price of $2,358.00, which expire on April 18, 2027 (the “Third Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First and Second Tranche Debentures and the First and Second Tranche Warrants to $2,358.00. The transaction costs incurred in relation to third tranche were $31,915.

On November 30, 2023, the Investors purchased additional debentures totaling $2,750,000 with a 10% original issue discount for gross proceeds of $2,500,000 (the “Fourth Tranche Debenture”). The Fourth Tranche Debentures were convertible into common shares at $810.00 per share and the Investors received an additional 2,207 warrants at a strike price of $810.00, which expire on May 30, 2027 (the “Fourth Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second and Third Tranche Debentures and the First, Second and Third Tranche Warrants to $810.00. The transaction costs incurred in relation to fourth tranche were $30,040.

On February 21, 2024, the Investors purchased additional debentures totaling $1,100,000 with a 10% original issue discount for gross proceeds of $1,000,000 (the “Fifth Tranche Debenture”). The Fifth Tranche Debentures were convertible into common shares at $192.60 per share and the Investors received an additional 3,712 warrants at a strike price of $211.86, which expire on August 21, 2027 (the “Fifth Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third and Fourth Tranche Debentures and the First, Second, Third and Fourth Tranche Warrants to $211.86. The transaction costs incurred in relation to fifth tranche were $50,000.

On April 11, 2024, the Investors purchased additional debentures totaling $550,000 with a 10% original issue discount for gross proceeds of $500,000 (the “Sixth Tranche Debenture”). The Sixth Tranche Debentures were convertible into common shares at $146.70 per share and the Investors received an additional 2,437 warrants at a strike price of $162.00, which expire on October 11, 2027 (the “Sixth Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third, Fourth and Fifth Tranche Debentures and Warrants to $162.00. The transaction costs incurred in relation to sixth tranche were $31,309.

On May 22, 2024, the Investors purchased additional debentures totaling $833,000 with a 10% original issue discount for gross proceeds of $750,000 (the “Seventh Tranche Debenture”). The Seventh Tranche Debentures were convertible into common shares at $90.00 per share and the Investors received an additional 6,016 warrants at a strike price of $11.00, which expire on November 22, 2027 (the “Seventh Tranche Warrants”). The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third, Fourth, Fifth and Sixth Tranche Debentures and the First, Second, Third, Fourth, Fifth and Sixth Tranche Warrants to $90.00. The transaction costs incurred in relation to seventh tranche were $3,154.

On January 16, 2025, institutional investors purchased additional debentures totaling $7,700,000 with a 10% original issue discount for gross proceeds of $7,000,000 (the “January 2025 Debenture”). The January 2025 Tranche Debentures were convertible into common shares at $23.58 per share and the Investors received an additional 212,256 warrants at a strike price of $25.938 (the “January 2025 Warrants”). The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Warrants to $23.58. The transaction costs incurred in relation to January 2025 tranche were $290,000 ($145,000 paid as of June 30, 2025).

On March 21, 2025, Investors purchased an additional tranche of $1,320,000 with a 10% original issue discount for gross proceeds of $1,188,000 (the “March 2025 Tranche Debenture”). The March 2025 Tranche Debentures were convertible into common shares at $1.99 per share and the Investors received an additional 47,906 warrants at a strike price of $17.91 (the “March 2025 Warrants”). The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, Seventh, and January 2025 Tranche Warrants to $17.91.

On May 21, 2025, an investor purchased an additional tranche of $110,000 with a 10% original issue discount for gross proceeds of $100,000 (the “May 2025 Tranche Debenture”). The May 2025 Tranche Debentures were convertible into common shares at $17.91 per share and the Investors received an additional 4,889 warrants at a strike price of $17.91 (the “May 2025 Warrants”).

The First, Second, Third, Fourth, Fifth, Sixth and Seventh Tranche Debentures (the “Debentures”) have an interest rate of 5% for the first 12 months, 6% for the subsequent 12 months, and 8% per annum thereafter. Principal repayments will be made in 25 equal installments which began on September 1, 2022 for the First Tranche Debentures, July 1, 2023 for the Second Tranche Debentures, January 1, 2024 for the Third Tranche Debentures, May 1, 2024 for the Fourth Tranche Debentures, August 1, 2024 for the Fifth Tranche Debentures, October 1, 2024 for the Sixth Tranche Debentures and November 1, 2024 for the Seventh Tranche Debentures. The Debentures may be extended by nine months at the election of the Company by paying a sum equal to nine months’ interest on the principal amount outstanding at the end of the 18 th month, at the rate of 8% per annum.

The January 2025, March 2025, and May 2025 Tranche Debentures (the “2025 Debentures”) have an interest rate of 5% for the first 12 months, and 8% per annum thereafter. Principal repayments will be made in 25 equal installments which begin on April 1, 2025 for the January 2025 Tranche, July 1, 2025 for the March 2025 Tranche Debenture, and September 1, 2025 for the May 2025 Tranche. The maturity dates are January 17, 2026, March 21, 2026, and May 21, 2026 for the January 2025 tranche, March 2025, and May 2025 tranche respectively, at which time the outstanding debt balance is due. The 2025 Debentures may be extended by six months to July 16, 2026 for the January 2025 Tranche Debentures, September 21, 2026 for the March 2025 Tranche Debentures, and November 21, 2025 for the May 2025 debentures at the election of the Company by paying a sum equal to six months interest at the principal amount outstanding at the end of the 12 th month, at the rate of 8% per annum.

On April 22, 2025, the Company issued a promissory note (the “April 2025 Note”) with an arm’s length accredited investor (the “Holder”) for $290,000 in debentures with a $40,000 original issue discount for gross proceeds of $250,000. The interest rate is 12% applied on the issuance date to the principal amount of $290,000.

The following table summarizes our outstanding debentures as of the dates indicated:

During the six months ended June 30, 2025, the Investors converted $2,420,492 of the Debentures into shares of the Company. The conversions were determined to be an extinguishment of the existing debt and issuance of new debt. As a result, the Company recorded a loss on debt extinguishment in the amount of $4,730,640.

During the six months ended June 30, 2024, the Investors converted $5,467,932 of the Debentures into shares of the Company. The conversions were determined to be an extinguishment of the existing debt and issuance of new debt for the remaining First and Second Tranches. As a result, the Company recorded a loss on debt extinguishment in the amount of $2,298,369.

11. LOAN

In May 2025, the Company entered into a Master Loan Agreement (the “loan”) with BitGo Prime, LLC for a total of $200,000, collateralized by three (3) BTC. The loan bears interest at a rate of 11% per annum, with maturity date of August 31, 2025.

As of June 30, 2025, the aggregate outstanding balance on the loan was $200,000, The loan includes provisions requiring the collateral to be balanced against the outstanding borrowings.

12. LONG TERM LOAN

During the year ended December 31, 2020, the Company entered into a loan agreement with Alterna Bank for a principal amount of $27,824 (CAD$40,000) (December 31, 2024 - $27,799 (CAD$40,000)) under the Canada Emergency Business Account Program (the “Program”).

The Program, as set out by the Government of Canada, requires that the funds from this loan shall only be used by the Company to pay non-deferrable operating expenses including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

In April 2021, the Company applied for an additional loan with Alterna Bank under the Program and received $13,912 (CAD$20,000) (December 31, 2024 - $13,900 (CAD$20,000)). The expansion loan is subject to the original terms and conditions of the Program.

The loan was interest free for an initial term that ended on January 18, 2024. Any outstanding loan after initial term carries an interest rate of 5% per annum, payable monthly during the extended term i.e. January 19, 2024 to December 31, 2025. The loan is due December 31, 2026.

The balance as of June 30, 2025 was $41,736 (CAD $60,000) (December 31, 2024 was $41,699 (CAD $60,000)).

13. DERIVATIVE LIABILITIES

Warrant Liabilities

As of April 1, 2025, the Warrant Liabilities consisting of 91 First Tranche Warrants,59 Second Tranche Warrants,689 Third Tranche Warrants,2,207 Fourth Tranche Warrants,3,712 Fifth Tranche Warrants,2,437 Sixth Tranche Warrants,6,016 Seventh Tranche Warrants,212,256 January 2025 Tranche Warrants, 47,907 March 2025 Tranche Warrants, and 44,000 May 2025 Tranche Warrants (“Debenture Warrants”) were reclassified to equity due to the change in the Company’s functional currency (Note 2).

As of June 30, 2025, the First Tranche Warrants had a fair value that amounted to $761 recorded in additional paid-in capital (December 31, 2024 - $24,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the First Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 105.0% (December 31, 2024 –90.0%), risk free rate of return 3.90% (December 31, 2024 –4.16%), and expected term of 0.75 years (December 31, 2024 – expected term of 1 year).

As of June 30, 2025, the Second Tranche Warrants had a fair value that amounted to $591 recorded in additional paid-in capital (December 31, 2024 - $15,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Second Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 – nil), expected volatility 105.0% (December 31, 2024 –95.0%), risk free rate of return 3.72% (December 31, 2024 –4.21%), and expected term of 1.80 years (December 31, 2024 – expected term of 1.55 years).

As of June 30, 2025, the Third Tranche Warrants had a fair value that amounted to $4,230 recorded in additional paid-in capital (December 31, 2024 - $192,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Third Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 105.0% (December 31, 2024 –95.0%), risk free rate of return 3.89% (December 31, 2024 –4.26%), and expected term 2.05 years (December 31, 2024 – expected term of 2.30 years).

As of June 30, 2025, the Fourth Tranche Warrants had a fair value that amounted to $12,380 recorded in additional paid-in capital (December 31, 2024 - $724,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Fourth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 100.0% (December 31, 2024 –90.0%), risk free rate of return 3.89% (December 31, 2024 –4.20%), and expected term of 2.17 years (December 31, 2024 – expected term of 2.42 years).

As of June 30, 2025, the Fifth Tranche Warrants had a fair value that amounted to $22,560 recorded in additional paid-in capital (December 31, 2024 - $111,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Fifth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 105.0% (December 31, 2024 –95.0%), risk free rate of return 3.89% (December 31, 2024 –4.26%), and expected term of 2.39 years (December 31, 2024 – expected term of 2.64 years).

As of June 30, 2025 the Sixth Tranche Warrants had a fair value that amounted to $15,670 recorded in additional paid-in capital (December 31, 2024 - $73,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Sixth Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 – $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 105.0% (December 31, 2024 –95.0%), risk free rate of return 3.89% (December 31, 2024 –4.27%), and expected term of 2.53 years (December 31, 2024 – expected term of 2.78 years).

As of June 30, 2025, the Seventh Tranche Warrants had a fair value that amounted to $36,620 recorded in additional paid-in capital (December 31, 2024 - $170,000 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Seventh Tranche Warrants using the following assumptions: stock price $1.10 (December 31, 2024 – $2.37), dividend yield –nil (December 31, 2024 –nil), expected volatility 105.0% (December 31, 2024 –95.0%), risk free rate of return 3.89% (December 31, 2024 –4.27%), and expected term of 2.64 years (December 31, 2024 – expected term of 2.89 years).

As of June 30, 2025, the January 2025 Tranche Warrants had a fair value that amounted to $1,364,830 recorded in additional paid-in capital (January 16, 2025 - $3,722,310 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Eighth Tranche Warrants using the following assumptions: stock price $1.10 (January 16, 2025 – $2.63), dividend yield –nil (January 16, 2025 –nil), expected volatility 100.0% (January 16, 2025 –100.0%), risk free rate of return 3.90% (January 16, 2025 –4.32%), and expected term of 3.30 years (January 16, 2025 – expected term of 3.50 years).

As of June 30, 2025, the March 2025 Tranche Warrants had a fair value that amounted to $329,850 recorded in additional paid-in capital (March 21, 2025 - $428,350 in derivative liabilities). As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the Ninth Tranche Warrants using the following assumptions: stock price $1.10 (March 21, 2025 – $1.42), dividend yield –nil (March 21, 2025 –nil), expected volatility 100.0% (March 21, 2025 –100.0%), risk free rate of return 3.91% (March 21, 2025 –3.94%), and expected term of 3.47 years (March 21, 2025 – expected term of 3.49 years).

Debenture Convertible Feature

As of June 30, 2025, the fair value of the First Tranche Debentures’ convertible feature amounted to $2,057 recorded in additional paid-in capital (December 31, 2024 – $164,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 - $0.47), dividend yield – nil (December 31, 2024 –nil), expected volatility 100.0% (December 31, 2024 –100.0%), risk free rate of return 3.82% (December 31, 2024 –5.03%), discount rate 12.25% (December 31, 2024 –17.50%), and expected term of 0.15 year (December 31, 2024 –1 year).

As of June 30, 2025 the fair value of the Second Tranche Debentures’ convertible feature amounted to $1,714 recorded in additional paid-in capital (December 31, 2024 – $429,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 – $0.47), dividend yield –nil (December 31, 2024 –nil), expected volatility 100.0% (December 31, 2024 –105.0%), risk free rate of return 3.82% (December 31, 2024 –4.51%), discount rate 12.25% (December 31, 2024 –17.50%), and expected term of 0.15 years (December 31, 2024 –1.55 years).

As of June 30, 2025, the fair value of the Fourth Tranche Debentures’ convertible feature amounted to $91,000 recorded in additional paid-in capital (December 31, 2024 – $317,000 in derivative liabilities). As of April 1, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (December 31, 2024 - $2.37), dividend yield –nil (December 31, 2024 – nil), expected volatility 100.0% (December 31, 2024 –90%), risk free rate of return 4.01% (December 31, 2024 –4.20%), discount rate 11.25% (December 31, 2024 –11.25%), and expected term of 1.17 years (December 31, 2024 –1.42 years).

As of June 30, 2025, the fair value of the January 2025 Tranche Debentures’ convertible feature amounted to $728,000 recorded in additional paid-in capital (January 16, 2025 - $1,012,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (January 16, 2025 – $2.63), dividend yield –nil (January 16, 2025 –nil), expected volatility 100.0% (January 16, 2025 –100.0%), risk free rate of return 4.11% (January 16, 2025 – 4.18%), discount rate 11.25% (January 16, 2025 –10.75%), and expected term of 0.79 years (January 16, 2025 –1.00 years).

As of June 30, 2025, the fair value of the March 2025 Tranche Debentures’ convertible feature amounted to $165,000 recorded in additional paid-in capital (March 21, 2025 - $171,000 in derivative liabilities). As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model for valuing the convertible feature using the following assumptions: stock price $1.10 (March 21, 2025 – $1.42), dividend yield – nil (March 21, 2025 – nil), expected volatility 100.0% (March 21, 2025 –100.0%), risk free rate of return 4.04% (March 21, 2025 –4.04%), discount rate 11.25% (March 21, 2025 –11.00%), and expected term of 0.98 years (March 21, 2025 –1.00 years).

During the six months ended June 30, 2025, a debt extinguishment of $115,384 occurred for the increase in principal of Tranche 4 of 15%.

As of June 30, 2025, the IPO Warrants, Rep Warrants, and Private Placement Warrants (the “Equity Warrants”) are classified as equity due to the Company changing its functional currency to USD as of April 1, 2025. The strike prices of the warrants and the Company’s functional currency are both denominated in USD. The Company reassessed that the warrants met the classification criteria to be recorded as equity and the warrants were reclassified to additional-paid-in capital.

As of December 31, 2024, the IPO Warrants, Rep Warrants, and Private Placement Warrants (the “Equity Warrants”) are classified as Level 1 financial instruments, while the Debenture Warrants and Debenture Convertible Feature are classified as Level 3 financial instruments.

Changes in the fair value of the Company’s financial instruments for the six months ended June 30, 2025 and 2024 were as follows:

14. SHARE CAPITAL

On June 17, 2024, the Company’s Board of Directors authorized a share repurchase program (the “Repurchase Program”) under which the Company may repurchase up to $1 million of its outstanding common shares, for a period of six months, subject to contractual requirements. No shares were repurchased under the Repurchase Program. As of June 30, 2025, the Company owed $44,214 worth of stock-based compensation to a former officer of the Company. The balance issuable was classified as anObligation to issue shares.

Basic and diluted net loss per share represents the loss attributable to shareholders divided by the weighted average number of shares and prefunded warrants outstanding during the period on an as converted basis.

15. REVENUE

For the six months ended June 30, 2025, the Company sold hydroxyl generating devices and participated in bitcoin mining activities. The Company’s revenue is as follows:

16. LEASES

The components of lease expenses were as follows:

17. COMMITMENTS AND CONTINGENCIES

Debenture principal repayments

The following table summarizes the future principal payments related to our outstanding debt as of June 30, 2025:

Contingencies

Litigation

On August 11, 2023, AgriFORCE’s former CEO, Ingo Wilhelm Mueller filed a Notice of Civil Claim in which he alleges that AgriFORCE wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. Mr. Mueller alleges to have suffered damages including, among other things, a loss of base salary of $473,367 CAD per annum and damages from not receiving common stock of AgriFORCE equivalent in value to $468,313 CAD. AgriFORCE’s position is that Mr. Mueller was terminated for ‘just cause’ because he breached his fiduciary duty to act in AgriFORCE’s best interest by, among other things, submitting a sizeable bid for the acquisition of a company without first obtaining Board approval. In doing so, Mr. Mueller misrepresented AgriFORCE’s financial standing and forged, or instructed others to forge, a document by affixing the electronic signature of AgriFORCE’s CFO.

The parties are in the discovery stage of litigation. AgriFORCE has produced relevant documents to Mr. Mueller, and is awaiting Mr. Mueller’s production of relevant documents. The parties are also in the process of scheduling examinations for discovery. Management is instructing counsel to advance the matter given the relative strength of AgriFORCE’s case.

The likelihood of an unfavorable outcome is not probable given the facts supporting AgriFORCE’s ‘for cause’ termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial.

On September 31, 2023, Stronghold filed a Complaint with the Superior Court of California for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered in relation to the purchase and sale agreement for the Coachella property. Stronghold alleges that AgriFORCE breached the PSA by failing to deposit certain stocks certificates into Escrow, failing to pay amounts owed for its costs incurred in connection with the Sellers Work, and for terminating the PSA despite Stronghold’s performance of the Sellers Work. Stronghold is claiming $451,684.00 plus interest in damages based on invoices it provided. AgriFORCE will dispute, among other things, the amount and invoices, estimating approximately $230,000 as Stronghold’s true expenses that may be claimed. The Company filed their answer on February 26, 2024. On January 17, 2025, the Company settled the complaint with Stronghold and agreed to pay Stronghold $20,833 monthly for 12 months beginning February 1, 2025.

On March 27, 2024, BV Peeters Advocaten-Avocats (“Peeters”) summoned the Company to appear on May 31, 2024 at the First Chamber of the Dutch-Speaking Division of the Business Court in Brussels. Peeters is seeking payment for €467,249 of unpaid bills for legal services plus penalties and interest. The Company believes that Peeters performed actions that were not in the Company’s best interest. The Company does not intend to pay the outstanding legal bills and intends to vigorously defend its position in court. The parties are currently in mediation.

On July 11, 2024, AgriFORCE’s former General Counsel filed a Notice of Civil Claim with the Supreme Court of British Columbia, in which he alleges that AgriFORCE wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. On January 6, 2025, the Company settled the Civil Claim with the Company’s former General Counsel and agreed to pay a settlement amount of $160,000 CAD to the Company’s former General Counsel. This settlement has been paid in full.

18. SEGMENTED INFORMATION

The Company has chosen to organize its operating segments based on products or services offered. Each operating segment is also a reportable segment (i.e. operating segments have not been aggregated). The Company’s operating and reportable segments at June 30, 2025 , include Bitcoin Mining; Unthink Food, which produces high protein baking flour; and Radical Clean Solutions, which sells its patented hydroxyl devices. All other activities, including financing, are carried out through the corporate entity. At June 30, 2025, Bitcoin Mining operations were conducted at the Redwater Property in Alberta, Canada, and the Bald Eagle Property in Ohio, USA, which reflects the manner in which the Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, reviews and assesses the performance of the business and allocates resources.

The information used by the CODM to assess performance and allocate resources includes various measures of segment profit, however, for the purposes of the disclosures required by ASC 280, Segment Reporting and ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company has determined that the measure most consistent with the measurement principles used in measuring the corresponding amounts in the condensed consolidated unaudited financial statements is net income. Segment financial information is used to monitor forecast versus actual results in order to make key operating decisions for each segment. The CODM evaluates the performance or allocate resources for each segment based on the Company’s assets or liabilities.

The following discloses key financial information including the significant segment expenses, in the context of deriving net income, that are regularly provided to and reviewed by the CODM reconciled to the segment’s net income:

Other segment items consists of loss on disposition of property, plant and equipment, change in fair value of derivatives, impairment loss, interest income, and foreign exchange (loss) gain, as reported on the condensed consolidated unaudited income statements.

The following table summarizes the additions to long-lived assets, total long-lived assets, and total assets by segment, used by the CODM to assess segment performance.

The following tables summarize revenue, assets, and property, plant, and equipment by geographic area based on the location of the underlying action activity or rendering of services and location of the underlying assets :

The revenues for the Radical Clean Solutions segment were generated from one customer for the periods ended June 30, 2025 and 2024.

The revenues for the Bitcoin mining segment were generated from Bitcoin pools.

19. SUBSEQUENT EVENTS

On July 21, 2025, Investors purchased an additional tranches of debt of $833,333 with a 10% original issue discount for gross proceeds of $750,000 (the “July 2025 Debentures”) due July 21, 2026. The Debentures were convertible into common shares at $6.741 per share The Debentures have round down provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, March 2025, and May 2025 Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, Seventh, January 2025, March 2025, and May 2025 Tranche Warrants to $6.741

On July 1, 2025, the Company and the previous owner of RCS mutually agreed to settle legal claims, resulting in the return of the RCS Assets acquired on August 16 th, 2024. The company has accrued for the disposal of the RCS business as of June 30, 2025, and recorded a Loss on disposal of business of $904,112 in Other expenses on its condensed consolidated statement of comprehensive loss.

From July 1, 2025, through August 14, 2025, the Company issued 759,189 common shares upon conversion of convertible debt and conversion of convertible debt in lieu of repayment in cash (principal and interest totaling $4,005,822).

From July 1, 2025, through August 14, 2025, the Company issued shares for cash under its at-the-market offering (“ATM”). In total 125,941 shares were issued for gross proceeds of $402,168.

From July 1, 2025, through August 14, 2025, the Company issued 3,566 shares to consultants for services.