BITMINE IMMERSION TECHNOLOGIES, INC.

Previous wording

The following discussion and analysis of the results of our operations and financial condition for the three months ended November 30, 2024 and 2023, should be read in conjunction with the other sections of this Quarterly Report, including the Financial Statements and notes thereto of included in this Quarterly Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Quarterly Report as well as other matters over which we have no control. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

Current wording

The following discussion and analysis of the results of our operations and financial condition for the three and six months ended February 28, 2025 and February 29, 2024, should be read in conjunction with the other sections of this Quarterly Report, including the Financial Statements and notes thereto of included in this Quarterly Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Quarterly Report as well as other matters over which we have no control. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

Previous wording

Revenues from cryptocurrency mining, whether derived from hosting clients or from proprietary mining, are impacted significantly by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Below are changes in key metrics effecting the profitability of mining bitcoin during the three months ended November 30, 2024:

Current wording

Revenues from cryptocurrency mining, whether derived from hosting clients or from proprietary mining, are impacted significantly by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Below are changes in key metrics effecting the profitability of mining bitcoin during the six months ended February 28, 2025:

Previous wording

On November 14, 2024, we acquired 3,000 S-19j Pro computers from Luxor Technology Corporation for $1,035,000. On December 3, 2024, we entered into a hosting agreement with DVSL ComputeCo, LLC to host 2,900 miners at its location. The hosting agreement terminates on December 2, 2025, provided that the hosting agreement will continue after the termination date on a month-to-month basis if neither party sends a notice of termination at least 30 days before its scheduled termination date. The hosting agreement provides that we are obligated to reimburse the DVSL for the actual cost of the electricity used by our machines plus 1.6 cents per kWh, and pay a hosting fee equal to 50% of the net profit generated by the machines each month. All 3,000 computers were shipped to DVSL’s hosting site in Silverton, Texas, for warranty testing, with 2,900 to remain in Silverton, Texas and 100 to be shipped to our Trinidad data center upon the completion of testing. As of January 10, 2025, approximately 2,594 of the acquired miners were operating, while approximately 300 did not satisfy the warranty and will be replaced with comparable miners.

Current wording

On November 14, 2024, we acquired 3,000 S-19j Pro computers from Luxor Technology Corporation for $1,035,000. On December 3, 2024, we entered into a hosting agreement with DVSL ComputeCo, LLC to host 2,900 miners at its location. The hosting agreement terminates on December 2, 2025, provided that the hosting agreement will continue after the termination date on a month-to-month basis if neither party sends a notice of termination at least 30 days before its scheduled termination date. The hosting agreement provides that we are obligated to reimburse the DVSL for the actual cost of the electricity used by our machines plus 1.6 cents per kWh, and pay a hosting fee equal to 50% of the net profit generated by the machines each month. All 3,000 computers were shipped to DVSL’s hosting site in Silverton, Texas, for warranty testing, with 2,900 to remain in Silverton, Texas and 100 to be shipped to our Trinidad data center upon the completion of testing. As of April 9, 2025, approximately 2,597 of the acquired miners were operating, while approximately 300 did not satisfy the warranty and will be replaced with comparable miners.

Previous wording

During the three months ended November 30, 2024, we generated $1,200,830 of revenue, compared to $511,308 of revenue in the three months ended November 30, 2023.

Current wording

During the three months ended February 28, 2025, we generated $1,517,422 of revenue, compared to $891,613 of revenue in the three months ended February 29, 2024.

Previous wording

During the three months ended November 30, 2024, we generated $483,683 in bitcoin revenue from self-mining digital assets, compared to $329,723 of revenue from self-mining in the three months ended November 30, 2023. At November 30, 2024, we owned 4,640 miners that were operable, of which 1,640 were deployed for self-mining and the remainder were in transit to their ultimate deployment location. The number of undeployed miners was mainly impacted by 3,000 miners that were purchased in November 2024 and were in transit at November 30, 2024, and to a lesser extent by miners that were offline due to maintenance issues. Mining revenue should be higher in future periods as we begin to receive revenues from the 3,000 miners purchased in November 2024 that had not been installed at the quarter end. On the other hand, miner revenues could be adversely impact if the difficulty index for mining continues to increase.

Current wording

During the three months ended February 28, 2025, we generated $1,517,422 in bitcoin revenue from self-mining digital assets, compared to $861,613 of revenue from self-mining in the three months ended February 29, 2024. As of February 28, 2025, we owned 4,640 miners that were operable, of which 4,204 were deployed for self-mining. Of the remaining 436 miners, 403 have been delivered to our Trinidad and Silverton, Texas locations for installation and the remaining 33 were offline due to maintenance issues. The number of undeployed miners was mainly impacted by 403 miners that were purchased in November 2024 but were not installed immediately when they failed initial warranty testing and had to be replaced with conforming miners or repaired. Mining revenue should be higher in future periods as we begin to receive revenues from the miners that were not operating as of February 28, 2025. On the other hand, mining revenues will be impacted by fluctuations in the price of bitcoin and the difficulty index, which could either cause revenues to decrease or increase.

Previous wording

During the three months ended November 30, 2024 and November 30, 2023, we generated $717,147 in revenue from equipment sales, compared to $169,721 in revenue in the three months ended November 30, 2023.

Current wording

During the three months ended February 28, 2025, we generated $-0- in revenue from equipment sales, compared to $20,471 in revenue from equipment sales in the three months ended February 29, 2024.

Previous wording

The revenue from equipment sales in the three months ended November 30, 2024 were derived from the following transactions:

Current wording

Our revenue from equipment sales in the three months ended February 28, 2025 and February 29, 2024 were derived from the following transactions:

Previous wording

Under the guidelines of ASC 606, we determined that payments due under note receivable from ROC Digital were not “probable” due to the start-up nature of the customer. As a result, we report revenue from the equipment sale to ROC Digital above under the installment sale method, under which we report our gross profit on the sale as payments are received from the purchaser.

Current wording

Under the guidelines of ASC 606, we determined that payments due under notes receivable from ROC Digital and the Trinidad borrower were not “probable” due to the start-up nature of the customers and their lack of capitalization. As a result, we report revenue from the equipment sales to both parties under the installment sale method, under which we report our gross profit on the sale as payments are received from the purchaser. With regard to the note receivable from ROC Digital, we recorded revenues of $20,471 in the three months ended February 29, 2024 based on the receipt of three monthly payments, but did not record any revenues in the three months ended February 28, 2025 because we did not receive any payments on the note in that period. With regard to the note receivable from the Trinidad borrower, we did not record any revenues in the three months ended February 29, 2024 because the borrower only made interest only payments in that period, and we did not record any revenues in the three months ended February 28, 2025 because we accelerated and foreclosed on the note in the fourth quarter of 2024.

Previous wording

We generated $-0- in revenues from hosting in the three months ended November 30, 2024, as compared to $11,864 in hosting revenues in the three months ended November 30, 2023. We terminated all of our hosting clients in the fourth quarter of fiscal 2024, and did not have any hosting clients during the three months ended November 30, 2024. In the current market environment, we believe self-mining is more profitable than hosting third party miners, however we will pursue hosting opportunities on a selective basis. While we still see good opportunities to acquire mining equipment at attractive prices, the price of mining equipment has recently increased with the recent increase in the price of bitcoin.

Current wording

We generated $-0- in revenues from hosting in the three months ended February 28, 2025, as compared to $10,116 in hosting revenues in the three months ended February 29, 2024. We terminated all of our hosting clients in the fourth quarter of fiscal 2024, and did not have any hosting clients during the three months ended February 28, 2025. In the current market environment, we believe self-mining is more profitable than hosting third party miners, however we will pursue hosting opportunities on a selective basis. While we still see good opportunities to acquire mining equipment at attractive prices, the price of mining equipment has recently increased with the recent increase in the price of bitcoin.

Previous wording

Cost of sales related to mining was $410,625 in the three months ended November 30, 2024, compared to $222,942 in the three months ended November 30, 2023. Cost of sales normally includes electricity, utilities, facilities costs, and supplies where we perform mining from our own facilities. Major components of cost of sales include rent to house mining and hosting equipment, electricity, and supplies. Where our miners are hosted by third parties, major components of cost of sales include hosting fees and/or electricity costs. Cost of sales for both owned and hosted facilities does not include depreciation, which is stated separately. We believe that cost of sales as a percentage of revenues may be less in future periods as compared to prior periods if the market price of bitcoin remains at its current level or increases.

Current wording

Cost of sales related to mining was $1,212,706 in the three months ended February 28, 2025, compared to $556,849 in the three months ended February 29, 2024. Cost of sales normally includes electricity, utilities, facilities costs, and supplies where we perform mining from our own facilities. Major components of cost of sales include rent to house mining and hosting equipment, electricity, and supplies. Where our miners are hosted by third parties, major components of cost of sales include hosting fees and/or electricity costs. Cost of sales for both owned and hosted facilities does not include depreciation, which is stated separately.

Previous wording

Energy prices can be highly volatile and global events (including the war in Ukraine and the resulting natural gas shortage) have caused fuel prices, and to a lesser extent power prices, to fluctuate widely over the past year. All of our sites are currently subject to relatively fixed rates during the term of their current power supply agreements, but variable prices and market rate fluctuations with respect to wholesale power costs over the long-term. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with an eye towards increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates.

Current wording

Energy prices can be highly volatile and global events (including the wars in Ukraine and the Middle East) and political events (including the U.S. governments regulation of cryptocurrencies or its imposition of tariffs on foreign trade) may cause fuel prices, and to a lesser extent power prices, to fluctuate widely. All of our sites are currently subject to relatively fixed rates during the term of their current power supply agreements, but variable prices and market rate fluctuations with respect to wholesale power costs over the long-term. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with an eye towards increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms and polar vortices, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates.

Previous wording

Cost of sales related to hosting was $-0- in the three months ended November 30, 2024, compared to $3,393 in the three months ended November 30, 2023. Cost of sales normally includes utilities, facilities costs, and supplies. Unlike the cost of sales from mining, cost of sales from hosting does not include electricity costs, as such costs are passed on to the hosting client.

Current wording

Cost of sales related to hosting was $-0- in the three months ended February 28, 2025, compared to $11,142 in the three months ended February 29, 2024. Cost of sales normally includes utilities, facilities costs, and supplies. Unlike the cost of sales from mining, cost of sales from hosting does not include electricity costs, as such costs are passed on to the hosting client.

Previous wording

During the three months ended November 30, 2024, we incurred $1,004,224 in operating expenses, compared to $715,962 in operating expenses during the three months ended November 30, 2023. Major components of operating expenses for the 2024 period as compared to the 2023 period were:

Current wording

During the three months ended February 28, 2025, we incurred $,1218,339 in operating expenses, compared to $972,362 in operating expenses during the three months ended February 29, 2024. Major components of operating expenses for the 2025 period as compared to the 2024 period were:

Previous wording

The higher level of operating expenses in the 2024 period as compared to the 2023 period is primarily attributable to increased related party compensation as we issued two of our officers 500,000 shares of common stock each as partial compensation for fiscal 2025 officer services, and began accruing additional compensation for our officers as of September 1, 2024, which will be paid when we have sufficient liquidity. Operating expenses were also impacted by increased general and administrative expenses and increased professional fees. However, operating expenses were positively impacted by lower depreciation expense on our equipment. We expect that operating expenses will trend materially higher in future periods as we begin paying regular compensation to existing officers and directors, hire additional employees, and incur other costs, such as increased depreciation expense due to the addition of new mining equipment and the completion of the buildout of the operating facilities.

Current wording

We expect that operating expenses will trend materially higher in future periods as we begin paying regular compensation to existing officers and directors, hire additional employees, and incur other costs, such as increased depreciation expense due to the addition of new mining equipment.

Previous wording

During the three months ended November 30, 2024 and 2023, we recorded $703,500 and $149,250 of revenue, respectively, from isolated sales of equipment recorded under the “completed sale” method.

Current wording

During the six months ended February 28, 2025 and February 29, 2024, we recorded $703,500 and $149,250, respectively, from sales of equipment recorded under the “completed sale” method from the transactions described above.

Previous wording

The table below describes the average cost of mining each bitcoin for the three months ended November 30, 2024 and November 30, 2023, and the total energy usage and cost per each kilowatt hour (“KWH”) utilized within both of our facilities.

Current wording

The table below describes the average cost of mining each bitcoin for the six months ended February 28, 2025 and February 29, 2024, and the total energy usage and cost per each kilowatt hour (“KWH”) utilized within both of our facilities.

Previous wording

Cost of sales related to sales of mining equipment was $670,000 for the three months ended November 30, 2024, compared to $180,891 in the three months ended November 30, 2023. Cost of sales from equipment sales includes the purchase price of equipment sold, plus shipping and value added tax on the equipment for sales reported under the completed sales method. There is no cost of sales associated with equipment sales reported under the installment sales method. Cost of sales from equipment sales in the three months ended November 30, 2024 and 2023 were higher as a result of a significant brokered transaction of ten transformers that we closed in the three months ended November 30, 2024.

Current wording

Cost of sales related to sales of mining equipment was $670,000 for the six months ended February 28, 2025, as compared to $180,891 for the six months ended February 29, 2024. Cost of sales from equipment sales includes the purchase price of equipment sold, plus shipping and value added tax on the equipment for sales reported under the completed sales method. There is no cost of sales associated with equipment sales reported under the installment sales method.

Previous wording

As a result of the foregoing, during the three months ended November 30, 2024, we incurred a net loss attributable to common stockholders of $3,935,386, or $(0.08) per share, as compared to a net loss attributable to common stockholders of $929,870 or $(0.02) per share during the three months ended November 30, 2023. The substantial increase in our net loss in the three months ended November 30, 2024, compared to the three months ended November 30, 2023, is attributable to the factors discussed above, as well as a one-time deemed dividend that we incurred during the three months ended November 30, 2024 as a result of the reduction in the conversion price of the Series A Convertible Preferred Stock to $0.20 per share from $0.575 per share. The reduction of the conversion price of the Series A Preferred resulted in the holders thereof being entitled to an additional 14,803,239 shares of common stock if all of the Series A Preferred were converted into common stock. As a result, under the guidelines of ASC 470 we recorded a one-time deemed dividend charge of $2,960,648 for the value of the extra shares issuable under the Series A Preferred, all of which were valued at $0.20 per share based upon a valuation study performed by an accredited third party valuation firm.

Current wording

As a result of the foregoing, during the six months ended February 28, 2025, we incurred a net loss attributable to common stockholders of $5,092,277, or $(0.12) per share, as compared to a net loss attributable to common stockholders of $1,830,522, or $(0.04) per share during the six months ended February 29, 2024. The increase in our net loss in the six months ended February 28, 2025, compared to the six months ended February 29, 2024, is attributable to the factors discussed above, as well as a one-time deemed dividend that we incurred during the six months ended February 28, 2025 as a result of the reduction in the conversion price of the Series A Convertible Preferred Stock to $0.20 per share from $0.575 per share. The reduction of the conversion price of the Series A Preferred resulted in the holders thereof being entitled to an additional 14,803,239 shares of common stock if all of the Series A Preferred were converted into common stock. As a result, under the guidelines of ASC 470 we recorded a one-time deemed dividend charge of $2,960,648 for the value of the extra shares issuable under the Series A Preferred, all of which were valued at $0.20 per share based upon a valuation study performed by an accredited third party valuation firm.

Previous wording

We believe that these measures provide useful information to investors, and include these measures in other communications to investors. For each of these non-GAAP financial measures, we are providing a reconciliation of the difference between the non-GAAP measure and the comparable GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to investors. Thesenon-GAAP measures and reconciliation, which can be found in our Management’s Discussion and Analysis of Financial Condition and Results of Operations section, should be viewed as addition to, and not in lieu of, the comparable GAAP measure.

Current wording

We have included in some of our press releases, measures of financial performance that are not defined by GAAP. We believe that these measures provide useful information to investors. For each of these non-GAAP financial measures, we provide a reconciliation of the difference between the non-GAAP measure and the comparable GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to investors.

Previous wording

As of November 30, 2024, we had $797,310 in cash on hand.

Current wording

Liquidity: As of February 28, 2025, we had $482,951 in cash on hand. During the six months ended February 28, 2025, we had a net loss of ($2,131,629) and a net loss attributable to common stockholders of ($5,092,277) due to a one-time deemed dividend of $2,960,648 to our Series A Convertible Preferred Stockholders as a result of a resetting of its conversion terms. Our primary requirements for liquidity and capital are working capital, capital expenditures, loan payments, public company costs and general corporate needs. We expect these needs to continue as we further develop and grow our business. For the year ended August 31, 2024, and the six months ended February 28, 2025, our primary sources of liquidity came from existing cash and cash equivalents, bitcoin and proceeds, loans received under two equipment financing transactions with Luxor, and loans received under a line of credit with IDI, as described in “Note 6 — Related Party Transactions – Line of Credit from IDI” of the financial statements included in Item 1 herein.

Previous wording

During the three months ended August 31, 2023 and 2024, a significant component of our current liquidity was derived from the LOC Agreement with IDI (as described below). As amended, the LOC Agreement allows us to borrow up to $2,300,000 thereunder until December 1, 2024. Each draw request is subject to the approval of IDI in its sole discretion. As amended, all principal and interest due under the LOC Agreement are due and payable on December 1, 2024, provided that we have the right to extend the maturity date for six monthly periods in consideration for an extension fee of $25,000 per extension. As of November 30, 2024, the principal amount borrowed under the LOC Agreement was $1,875,000. We exercised our right to extend the maturity date of the loan on December 1, 2024 and January 1, 2025.

Current wording

As amended, the LOC Agreement allows us to borrow up to $2,350,000 thereunder until December 1, 2024. Each draw request is subject to the approval of IDI in its sole discretion. As amended, all principal and interest due under the LOC Agreement was due and payable on December 1, 2024, provided that we have the right to extend the maturity date for six monthly periods in consideration for an extension fee of $25,000 per extension. We exercised our right to extend the maturity date of the loan on December 1, 2024, January 1, 2025, February 1, 2025, March 1, 2025 and April 1, 2025. As of February 28, 2025, the amount due under the LOC Agreement was $1,875,000 in principal and approximately $444,540 in interest and extension fees.

Previous wording

We believe that cash on hand, expected receipts from the sale of equipment, and revenue from self-mining will provide us with sufficient liquidity to fund our operations for the next 12 months. We expect to receive approximately $31,000 per month from the sale of four immersion containers to the ROC Digital joint venture. As of January 10, 2025, we owned approximately 4,700 miners, which includes 3,000 miners acquired in November 2024 that were not delivered until after the quarter end. The deployment of those miners should significantly boost our revenues in fiscal 2025. Other sources of revenue that we may receive include equity distributions from the ROC Digital joint venture. We do not budget to include any proceeds from the exercise of its outstanding warrants because we are not able to predict when or if the market price of our common stock will exceed the exercise price of our warrants.

Current wording

We believe that cash on hand, expected receipts from the sale of equipment, and revenue from self-mining will provide us with sufficient liquidity to fund our operations for the next 12 months. As of the date of this prospectus, we owned approximately 4,700 miners, which includes 3,000 miners acquired during the first quarter of fiscal 2025, which should significantly boost revenues in fiscal 2025 over 2024 levels. Other potential sources of revenue that we may receive include equity distributions from the ROC Digital joint venture.

Previous wording

Nevertheless, while we do not believe we need additional capital to maintain operations, we will need additional capital to expand our digital asset hosting and mining business and take advantage of opportunities in the marketplace that currently exist due to the recent decline in digital asset prices. Therefore, we have engaged an investment banker and are pursuing additional capital-raising alternatives, including the potential issuance of common stock in a private placement, the issuance of convertible notes or preferred stock, and this offering. There is no assurance that we will be able to raise additional capital or that the terms of any capital raise are not dilutive to current shareholders or carry other terms that are unfavorable to us and our shareholders.

Current wording

Nevertheless, while we do not believe we need additional capital to maintain operations as they currently exist, we will need additional capital to begin paying market compensation to our officers and employees, and expand our digital asset hosting and mining business and take advantage of opportunities in the marketplace that currently exist due to the recent decline in digital asset prices. In case the ThinkEquity-led public offering is not successful, we are also exploring alternatives, including the potential issuance of common stock in a private placement, and the issuance of convertible notes or preferred stock. There is no assurance that we will be able to raise additional capital or that the terms of any capital raise are not dilutive to current shareholders or carry other terms that are unfavorable to us and our shareholders.

Previous wording

Cash flows used in operating activities were $95,934 for the three months ended November 30, 2024, compared to cash flows used in operating activities were $45,290 for the three months ended November 30, 2023. The increase in cash flows used in operating activities for the three months ended November 30, 2024 was primarily attributable a change in various balance sheet accounts in 2024 compared to 2023. Major factors that positively impacted our cash flow from operations in 2024 as compared to 2023 included an increase in non-cash stock-based compensation to $471,122 in the 2024 period, as compared to $279,497 in the 2023 period; an increase in accrued officer compensation of $372,735 in the 2024 period, as compared to $0 in the 2023 period. Major factors that negatively impacted our cash flow from operations in 2024 as compared to 2023 included a reduction in depreciation to $130,625 in the 2024 period from $222,530 in the 2023 period; reductions in accounts payable and accrued expenses of $100,482, as compared to an increase in accounts payable and accrued expenses of $127,610 in the 2023 period; and non-cash charges taken in 2023 for a change in a derivative liability of $152,612 and a loss on our investment in ROC Digital of $43,214 which did not occur in the 2024 period.

Current wording

Our mining and hosting operations generate non-cash revenue in the form of bitcoin, which we have historically sold to pay operating expenses or conveyed in kind to certain vendors to pay expenses. Cash flows used in operating activities were $310,144 for the six months ended February 28, 2025, compared to cash flows used in operating activities of $204,304 for the six months ended February 29, 2024. The increase in cash flows used in operating activities for the six months ended February 28, 2025 was primarily attributable a change in various balance sheet accounts in 2025 compared to 2024. Major factors that positively impacted our cash flow from operations in 2025 as compared to 2024 included an increase in non-cash stock-based compensation to $671,779 in the 2025 period, as compared to $554,931 in the 2024 period; an increase in accrued officer compensation of $745,470 in the 2025 period, as compared to $-0- in the 2024 period; a bad debt expense of $124,815 relating to our note receivable from ROC Digital in the 2025 period, as compared to $-0- in the 2024 period; an increase in accounts payable and accrued expenses of $360,000 in the 2025 period as compared to an increase in accounts payable and accrued expenses of $328,835 in the 2024 period. Major factors that negatively impacted our cash flow from operations in 2025 as compared to 2024 included a reduction in depreciation to $358,319 in the 2025 period from $457,901 in the 2024 period; and non-cash charges taken in 2024 for a change in a derivative liability of $114,835 and a loss on our investment in ROC Digital of $111,773 which did not occur in the 2025 period.

Previous wording

Cash flows used in investing activities were $18,000 for the three months ended November 30, 2024, compared to cash flows used in investing activities of $79,728 for the three months ended November 30, 2023. Cash flows used in investing activities consisted of purchases of equipment in the 2024 and 2023 periods.

Current wording

Cash flows used in investing activities were $18,000 for the six months ended February 28, 2025, compared to cash flows used in investing activities of $48,946 for the six months ended February 29, 2024. Cash flows used in investing activities primarily consisted of purchases of equipment in the 2025 and 2024 periods, offset by a distribution of $8,408 received from ROC Digital in the 2024 period.

Previous wording

Cash flows provided by financing activities were $411,973 for the three months ended November 30, 2024, compared to cash flows provided by financing activities of $325,000 for the three months ended November 30, 2023. The cash flows provided by financing activities in both periods in both the 2024 and 2023 periods included $250,000 and $325,000, respectively, of advances under a line of credit with Innovative Digital Investors Emerging Technology, L.P. (“IDI”), a limited partnership controlled by Jonathan Bates, our Chairman, and Raymond Mow, our chief financial officer. In the three months ended November 30, 2024, we also received $200,000 from an investment by IDI in our Series B Convertible Preferred Stock and a $25,000 payment made to accelerate the vesting date of 150,000 shares of Series A Convertible Preferred Stock that had been issued for officer services.

Current wording

Cash flows provided by financing activities were $311,825 for the six months ended February 28, 2025, compared to cash flows provided by financing activities of $325,000 for the six months ended February 29, 2024. The cash flows provided by financing activities in both periods in both the 2025 and 2024 periods included $250,000 and $325,000, respectively, of advances under a line of credit with Innovative Digital Investors Emerging Technology, L.P. (“IDI”), a limited partnership controlled by Jonathan Bates, our Chairman, and Raymond Mow, our chief financial officer. In the six months ended February 28, 2025, we also received $200,000 from an investment by IDI in our Series B Convertible Preferred Stock and a $25,000 payment made to accelerate the vesting date of 150,000 shares of Series A Convertible Preferred Stock that had been issued for officer services. In the six months ended February 28, 2025, cash flows from financing activities were negatively impacted by loan repayments of $163,175 under a financing agreement with Luxor.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of our financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

Our significant accounting policies are fully described in Note 1 to our condensed financial statements appearing elsewhere in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our condensed financial statements.

Current wording

Our significant accounting policies are fully described in Note 1 to our financial statements appearing elsewhere in this Quarterly Report. We describe in Note 1 to our financial statements certain critical accounting policies that require us to make significant estimates, assumptions and judgments. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. We believes such critical accounting policies reflect our most significant estimates and assumptions used in the preparation of the financial statements. For further information on the critical accounting policies, see Note 1 of the Financial Statements.