UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
Or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
Commission
file number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code (
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes
The number of shares outstanding of the registrant’s common stock as of January 12, 2026 was shares.
DOCUMENTS INCORPORATED BY REFERENCE — NONE
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Bitmine Immersion Technologies, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except for share and per share data)
| November 30, | August 31, | |||||||
| 2025 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Other receivables | ||||||||
| Total current assets | ||||||||
| Digital assets | ||||||||
| Investment in equity securities | ||||||||
| Property and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities and payables | $ | $ | ||||||
| Unsettled digital asset trades | ||||||||
| Contract liabilities | ||||||||
| Total current liabilities | ||||||||
| Deferred tax liability | ||||||||
| Warrant liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding as of November 30, 2025 and August 31, 2025 respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 3 |
Bitmine Immersion Technologies, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except for share and per share data)
| Three months | Three months | |||||||
| ended | ended | |||||||
| November 30, | November 30, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue from the sale of mining equipment | $ | $ | ||||||
| Revenue from self-mining | ||||||||
| Revenue from consulting | ||||||||
| Revenue from leasing | ||||||||
| Revenue from staking | ||||||||
| Total Revenue | ||||||||
| Cost of sales mining equipment | ||||||||
| Cost of sales self-mining | ||||||||
| Cost of sales leasing | ||||||||
| Cost of sales staking | ||||||||
| Total Cost of Sales | ||||||||
| Operating expenses: | ||||||||
| General and administrative expenses | ||||||||
| Impairment of property and equipment | ||||||||
| Unrealized loss (gain) from digital assets holdings | ( | ) | ||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Unrealized gain from trading securities | ||||||||
| Change in fair value of warrant liability | ||||||||
| Loss on the extinguishment of debt | ( | ) | ||||||
| Pre-tax loss | ( | ) | ( | ) | ||||
| Income tax benefit | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Deemed dividend on Series A Preferred Stock | ( | ) | ||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic loss per common share | $ | ( | ) | $ | ( | ) | ||
| Diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted-average number of common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
Bitmine Immersion Technologies, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, unaudited)
| Series A Preferred | Series B Preferred | Common Stock | Additional Paid-in | Accumulated Deficit/Retained | Total Stockholders | |||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Value | Shares | Value |
Capital |
Earnings | Equity | ||||||||||||||||||||||||||||
| Balance, August 31, 2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Issuance of common stock | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock to settle liabilities | - | - | ||||||||||||||||||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock and liability classified warrants | - | - | ||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, November 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Additional | Total | |||||||||||||||||||||||||||||||||||
| Series A Preferred | Series B Preferred | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Shares | Value | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance, August 31,2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Series A Preferred -for change of vesting terms | – | – | – | |||||||||||||||||||||||||||||||||
| Series A - deemed dividend due to convert price reset | – | – | – | ( | ) | |||||||||||||||||||||||||||||||
| Conversion of common stock to Preferred B stock and purchase of Preferred B Stock | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Stock-based compensation for services | – | – | ||||||||||||||||||||||||||||||||||
| Stock-based compensation -related parties | – | – | ||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, November 30, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
Bitmine Immersion Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
| Three Months | Three Months | |||||||
| ended | ended | |||||||
| November 30, 2025 | November 30, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock based compensation | ||||||||
| Depreciation expense | ||||||||
| Impairment of property and equipment | ||||||||
| Amortization of note discount | ||||||||
| Unrealized loss on digital assets held | ||||||||
| Unrealized gain from trading securities | ( | ) | ||||||
| Change in fair value of warrant liabilities | ( | ) | ||||||
| Noncash staking revenue | ( | ) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Digital assets | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Accrued liabilities | ||||||||
| Deferred tax liability | ( | ) | ||||||
| Contract liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of digital assets | ( | ) | ||||||
| Purchase of equity securities | ( | ) | ||||||
| Proceeds from sale of property and equipment | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from Series A preferred stock | ||||||||
| Proceeds from Series B preferred stock | ||||||||
| Loan repayment | ( | ) | ||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from issuance of liability-classified warrants, net of issuance costs | ||||||||
| Proceeds from private placements and prefunded warrants, net of issuance costs | ||||||||
| Proceeds from ATM, net of issuance costs | ||||||||
| Proceeds from related party loan | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activity | ||||||||
| Securities purchased but not yet settled | $ | $ | ||||||
| Payment of liabilities in shares | $ | $ | ||||||
| Purchase of equipment for loan payable | $ | $ | ||||||
| Deemed dividend on Series A Convertible Preferred Stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 6 |
BITMINE IMMERSION TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except for shares and per share data)
NOTE 1 – NATURE OF THE BUSINESS
About Bitmine Immersion Technologies, Inc.
Bitmine Immersion Technologies, Inc. and its wholly owned subsidiary (“Bitmine” or the “Company”) operates in the digital asset industry with a strategic focus on acquiring, holding, and managing digital assets as part of its treasury management activities. During 2025, the Company refined its business strategy to emphasize digital asset treasury operations, reflecting a transition from primarily mining and hosting activities toward the long-term accumulation and optimization of digital asset holdings. Bitmine continues to maintain ancillary mining, leasing, and consulting operations; however, its primary objective is to manage digital assets as long-term strategic reserves to support liquidity, and capital formation.
The Company’s year-end is August 31st.
Basis of Presentation
These interim unaudited condensed consolidated financial statements (the “Interim Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements as certain information has been condensed or omitted. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, these Interim Statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These Interim Statements should be read in conjunction with the audited consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the period ended August 31, 2025, as filed with the SEC (“2025 Annual Report”).
Principles of Consolidation
The Interim Statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany account balances and transactions have been eliminated in the Interim Statements.
Reverse Stock Split
On
May 15, 2025, the Company effected a
The information in this report as of August 31, 2024 and for the period ended November 30, 2024 and all references thereto have been retroactively adjusted to reflect the split.
Reclassifications
During the current quarter, the Company revised the presentation of certain income statement captions to provide a more streamlined and consolidated view of its financial statements. Prior-period amounts have been reclassified to conform to the current presentation. Operating expense categories previously presented separately have been combined into “General and administrative expenses,” on the Condensed Statements of Operations. These changes did not have a material effect on the Company’s financial condition or results of operations as previously reported.
| 7 |
NOTE 2 – SUMMARY OF SIGNIFICANT POLICIES
The Company’s significant accounting policies are disclosed in “Note 2. Summary of Significant Accounting Policies” in our 2025 Annual Report and are supplemented by the notes included in this Quarterly Report on Form 10-Q (the “Quarterly Report”).
Revenue Recognition
Revenue from Staking
The Company operates a validator node on the Ethereum blockchain network and earns ETH as rewards. These activities include both self-staking (using the Company’s own tokens) and providing validation services to third-party delegators. The provision of services related to transaction validation on the Ethereum blockchain network (through staking reward) is an output of the Company’s ordinary activities.
The Company recognizes revenue from native staking in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) by following the five steps -- identify the contract, identify the performance obligation, determine the transaction price, allocate the transaction price to the performance obligation and determine when to recognize revenue. Revenue is recognized upon transfer of control of promised products or services (i.e., performance obligations) to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services.
The Company earns staking rewards in the form of ETH from self-staking. A contract with enforceable rights and obligations exists when the Company stakes its tokens to the validator and starts solving blocks on the Ethereum blockchain, which is the customer by analogy. The contract term is the length of each staking epoch, which is approximately 6.4 minutes. Staking rewards are recognized as revenue when the Company satisfies its performance obligations (i.e., successfully validates blocks or transactions as determined by the protocol) ratably over the contract term. The ETH earned are non-cash consideration and therefore measured at fair value at the inception of each contract.
The Company’s staking revenue is subject to cost of sales, which primarily comprises direct expenses associated with the ETH staking business, including service fees payable to the service provider.
Because the Company does unilaterally control the validator, the Company is the principal to the validation service. As such, the Company presents staking rewards as revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled.
Contract Liabilities
The
Company’s contract liabilities represent advance payments from customers relating to consulting and leasing activities. As of November
30, 2025, the Company’s contract liability balance amounted to $
| Three Months Ended November 30, 2025 | ||||
| Beginning contract liabilities | $ | |||
| Revenue recognized from contract liabilities | ( | ) | ||
| Advance consideration received during the period | ||||
| Ending contract liabilities | $ | |||
Recent Accounting Pronouncements
The Company has not adopted any new accounting pronouncements since the audited consolidated financial statements for the year ended August 31, 2025. See the 2025 Annual Report for information pertaining to the effects of recently adopted and other recent accounting pronouncements.
New Accounting Standards and Accounting Standards Not Yet Adopted
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. generally accepted accounting principles. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The update will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are assessing the effect of this update on our Interim Statements and related disclosures.
In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2025-01 amends the effective date of ASU No. 2024-03 to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31, referred to as non-calendar year end entities. All public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The amendments should be applied prospectively with retrospective applications also permitted. Additionally, in December 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The update improves financial reporting by requiring that public business entities disclose additional information about certain costs and expenses categories: (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization in the notes to financial statements at interim and annual reporting periods. This update is effective for fiscal years beginning after December 15, 2026, and early adoption is permitted. The amendments should be applied prospectively with retrospective applications also permitted. The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.
| 8 |
NOTE 3 – DIGITAL ASSETS
The Company accounts for its digital assets, which are comprised of BTC and ETH as indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles—Goodwill and Other-Crypto Assets. The Company has ownership of and control over its BTC and ETH and uses third-party custodial services at multiple locations that are geographically dispersed to store its digital assets. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at fair value, with the gain or loss associated with remeasurement of the digital assets reported in net income.
The
fair value of the Company’s digital assets is determined based on the quoted price in its principal market, CoinBase, at the time
of measurement (midnight UTC). The Company determines its principal market as the market that it has access to and has the greatest volume
and level of orderly transactions in accordance with ASC 820, Fair Value Measurement. The Company tracks the cost of its digital
assets using the first-in-first-out (FIFO) method. During the three months ended November 30, 2025 and 2024, the Company realized gains
from the sale of digital assets of $
Digital assets earned by the Company through its mining activities are included within operating activities on the accompanying Condensed Statements of Cash Flows. The sales of digital currencies are included within investing activities in the accompanying condensed statements of cash flows and any realized gains or losses from such sales are included in operating expense in the condensed statements of income and comprehensive income (loss).
The Company holds its BTC in an account at Bitgo Trust (“Bitgo”), a well-known BTC custodian, which it also uses to liquidate its BTC when necessary. The Company also has an account with Gemini Trust Company, LLC, which is regulated by the New York Department of Financial Services as a backup facility.
Additionally,
As
part of the Company’s normal operations, there are trades at month end that have been finalized and recorded but not yet
settled. As of November 30, 2025, the Company has unsettled trades totaling $
See Note 3, Digital Assets, to the Interim Statements for further information regarding the Company’s purchases and sales of digital assets.
The following table sets forth the units held, cost basis, and fair value of both BTC and ETH held, as shown on the balance sheet as of November 30, 2025:
| Units | Cost Basis | Fair Value | |||||||||||
| BTC | $ | $ | |||||||||||
| ETH | |||||||||||||
| Total | $ | $ | |||||||||||
Cost basis is equal to the cost of the digital asset, net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted digital assets prices within the Company’s principal market at the time of measurement (midnight Eastern). The following table presents a reconciliation of BTC held as of November 30, 2025 and November 30, 2024:
| November 30, 2025 | November 30, 2024 | |||||||
| Fair value, beginning balance | $ | $ | ||||||
| Additions from BTC mining and hosting activity | ||||||||
| Additions from purchases of BTC | ||||||||
| Additions from advance payments in BTC | ||||||||
| Direct payments in BTC | ( | ) | ( | ) | ||||
| Sale of BTC | ( | ) | ||||||
| Remeasurement of fair value of BTC | ( | ) | ||||||
| Fair value, ending balance | $ | $ | ||||||
The Company acquired ETH as a part of a strategic business shift during fiscal year 2025. The following table presents a reconciliation of ETH held as of November 30, 2025:
| November 30, 2025 | ||||
| Fair value, beginning balance | $ | |||
| Additions from staking activity | ||||
| Additions from the purchase of ETH | ||||
| Direct Payments in ETH | ( | ) | ||
| Realized gains | ||||
| Unrealized remeasurement of fair value | ( | ) | ||
| Fair value, ending balance | $ | |||
Note: The Company did not hold any ETH as of November 30, 2024.
| 9 |
NOTE 4 – PROPERTY AND EQUIPMENT
The following tables set forth the components of the Company’s property and equipment at November 30, 2025 and August 31, 2025:
| November 30, 2025 | August 31, 2025 | |||||||
| Miners and mining equipment | $ | |||||||
| Equipment not in-service | ||||||||
| Total property and equipment | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
For
the three months ended November 30, 2025 and November 30, 2024, the Company recorded depreciation expense of $
Additionally,
for the three months ended November 30, 2025 and 2024, the Company recognized impairment charges of $
NOTE 5 – ACCRUED LIABILITIES
As of November 30, 2025 and August 31, 2025, accrued liabilities are composed of the following:
| November 30, 2025 | August 31, 2025 | |||||||
| Accrued professional services fees | $ | $ | ||||||
| Accrued digital asset management fees | ||||||||
| Accrued equity management fees | ||||||||
| Accrued officer compensation | ||||||||
| Accrued other | ||||||||
| Total accrued liabilities and payables | $ | $ | ||||||
NOTE 6 – INVESTMENTS
Investment in Eightco
On
September 8, 2025, the Company entered into a Securities Purchase Agreement as part of a private investment in public equity (“PIPE”)
transaction led by Eightco Holdings Inc. (“Eightco”). Pursuant to the agreement, BitMine invested $
As of November 30, 2025 the trading price of Eightco was $. As a result, the Company recorded an Unrealized gain
from trading securities of $
At the time of the transaction, the Company owned approximately
NOTE 7 – STOCKHOLDERS’ EQUITY
Common Stock
As of November 30, 2025, the Company had shares of common stock outstanding.
On
July 9, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each of
Cantor Fitzgerald & Co. (“Cantor”) and ThinkEquity (each, an “Agent” and together, the “Agents”),
pursuant to which the Company, from time to time, at its option may offer and sell shares (the “ATM Shares”) of its common
stock (the “ATM Offering”). For further information regarding the ATM Offering, refer to Note 9 of the Company’s Annual
Report on Form 10-K for the year ended August 31, 2025. As of November 30, 2025, the Company sold shares of common stock
pursuant to the ATM Offering and received cash proceeds of $
| 10 |
Liability Classified Warrants
On
September 22, 2025, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which it issued
(i) shares of common stock at a price of $ per share and (ii) warrants to purchase up to
The warrants are classified as liabilities in accordance with ASC 815, as they contain provisions that could require net cash settlement in circumstances not solely within the Company’s control. Upon issuance, the warrant liability was measured at fair value using a Black-Scholes valuation model. The warrant liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.
| Stock Price | $ | |||
| Exercise Price | $ | |||
| Expected Term (in years) | ||||
| Risk-Free Interest rate | % | |||
| Expected Volatility | % | |||
| Expected Dividend Yield | % |
For
the three months ended November 30, 2025, the Company recognized a gain of $
Series A and B Convertible Preferred Stock
The
Company is authorized to issue shares of Series A and Series B Convertible Preferred Stock.
| 11 |
Restricted Stock Awards (“RSAs”)
All RSAs were vested as of August 31, 2025 and the Company did not issue any additional RSAs for the three months ended November 30, 2025.
A summary of RSA for the three months ended November 30, 2025 is presented below:
During the three months ended November 30, 2025 and 2024, the Company recognized compensation expenses of $ and $ for RSAs, respectively.
Restricted Stock Units (“RSUs”)
Awards of Restricted Stock Units (“RSUs”) are generally subject to forfeiture if employment terminates prior to vesting. The Company’s RSU’s consist of time-based units, that are settled in shares of the Company’s common stock upon vesting.
On
September 1, 2025, the Company executed employment agreements with select executives, committing to issue RSUs with a total annual fair
value of $
On September 1, 2025, the Company granted an initial tranche of Restricted Stock Units (RSUs), determined using a stock price of $ as of that date. These RSUs are scheduled to vest over the course of one year commencing on September 1, 2025. During the three months ended November 30, 2025, RSUs were forfeited and RSUs were vested. As of November 30, 2025, RSUs remain unvested. Share-based compensation expense is recorded in “General and administrative expenses” in the Condensed Consolidated Statements of Operations. During the three months ended November 30, 2025, the Company recognized compensation expenses of $ for RSUs. As of November 30, 2025, unrecognized compensation expense for the RSUs is $. There were no RSUs outstanding as of August 31, 2025.
Equity Classified Warrants
In June 2025, the Company issued three warrant offerings (Placement Agent Warrants, Strategic Advisor Warrants, and Representative Warrants). Each warrant offering was designated as equity classified share-based compensation in accordance with ASC 718. For further information regarding the initial measurement of these warrants, refer to Note 10 of the Company’s Annual Report on Form 10-K for the year ended August 31, 2025.
During
the three months ended November 30, 2025,
warrants were exercised at a price of $
NOTE 9 – INCOME TAXES
The Company accounts for income taxes in interim periods using the estimated annual effective tax rate method. Under this method, the Company estimates its annual effective tax rate for the full fiscal year and applies that rate to its year-to-date pre-tax income or loss and adjusts the provision for (or benefit from) income taxes for discrete items recorded in the period.
The
Company’s effective tax rate (“ETR”) for the three months ended November 30, 2025 and 2024 was
| 12 |
LOSS PER COMMON SHARE
| (In thousands, except share and per share data) | Three Months Ended November 30,2025 | Three Months Ended November 30, 2024 | ||||||
| Basic loss per share: | ||||||||
| Numerator: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: Deemed dividend to participating preferred stock | ( | ) | ||||||
| Less: allocation to participating preferred stock | ||||||||
| Net loss available to common stockholders — Basic | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average common shares outstanding - basic | ||||||||
| Basic loss per common share | $ | ( | ) | $ | ( | ) | ||
| Diluted loss per share: | ||||||||
| Numerator: | ||||||||
| Net loss available to common stockholders — Dilutive | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average common shares outstanding - basic | ||||||||
| Add: dilutive securities | ||||||||
| Warrants | ||||||||
| RSAs | ||||||||
| Weighted average common shares outstanding - diluted | ||||||||
| Diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
Outstanding as of November 30, 2025 | Outstanding as of November 30, 2024 | |||||||
| C-3 Warrants | ||||||||
| C-1 and C-2 Warrants | ||||||||
| Strategic Advisor and Representative Warrants | ||||||||
| CVI Warrants (1) | ||||||||
| RSAs | ||||||||
| RSUs | ||||||||
| (1) |
NOTE 11 – SEGMENT REPORTING
In
accordance with ASC 280-10, Segment Reporting, management has determined that the Company operates as
For
the three months ended November 30, 2025, the Company derived approximately
| 13 |
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Commitments
During the fiscal year ended August 31, 2025, the Company entered into a Consulting Agreement with a third-party service provider to provide consulting, asset management, custody, and staking services. The Consulting Agreement has a term of ten years and may be renewed.
Under the terms of the Consulting Agreement, the Company is obligated to pay the third-party service provider a consulting fee calculated as follows:
| ● | ||
| ● | ||
| ● |
The
fee is earned daily and paid monthly, which may be settled in cash or digital assets. The aggregate fees to be incurred by the Company
are expected to be in the range of $
The Consulting Agreement is non-cancelable except under limited circumstances. If the Company terminates the Consulting Agreement without cause, the third-party service provider is entitled to 85% of all fees that would have accrued through the end of the term as liquidated damages.
During the three months ended November, the Company recorded $
Contingencies
From time to time, the Company is subject to legal proceedings that arise in the ordinary course of business. While any legal proceeding or claim has an element of uncertainty, the Company believes the outcome of each lawsuit, claim or legal proceeding that is pending or threatened, or all of them combined, will not have a material adverse effect on the Company’s condensed financial position or results of operations. It is possible, however, that future results of operations could be materially and adversely affected by any new developments relating to the legal proceedings and claims. As of November 30, 2025, and August 31, 2025, no legal matters were considered probable and reasonably estimable.
NOTE 13 – SUBSEQUENT EVENTS
Subsequent
to November 30, 2025 and through the date of issuance of these financial statements, the Company issued shares of its
common stock for gross proceeds of approximately $
The cash dividend of $ per share on the Company’s common stock approved by the Board of Directors on November 19, 2025 was paid on December 29, 2025 with respect to shares of common stock outstanding as of the record date.
| 14 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under “Part II. Item 1A. Risk Factors,” among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.
Overview
We are a digital asset focused company. Beginning in the third calendar quarter of 2025, management expanded its existing digital asset business to primarily focus on the Ethereum blockchain and ETH as the digital asset. This included expanding toward an asset light operating model centered on Ethereum adjacent services (including advisory) and disciplined digital asset treasury management. Our results are now driven primarily by operating efficiency in a lower capex model and Ethereum market conditions, including their impact on client activity and the value of any ETH held in our treasury.
In June and July 2025, we strengthened our liquidity through an underwritten public offering of common stock, private placements, and the establishment of our at-the-market program permitting sales of up to $20,000,000 of our common stock from time to time (the “ATM Program”). As of November 30, 2025, $4,617,859 of sales relating to the ATM Program are still available. We also uplisted our common stock to the NYSE American in June 2025.
Unless otherwise indicated, period to period comparisons are presented for the two most recent fiscal years consistent with Item 303 of Regulation S-K, as amended.
ETH Treasury Strategy, Drivers and Outlook
Our operating model is now anchored by our ETH Treasury Strategy and capital-light ecosystem services. The key drivers of our results include (i) ETH market conditions, which affect the value of our holdings and the economics of any staking or staking-adjacent activities; (ii) client demand for Ethereum-adjacent services, including advisory; (iii) security, custody and compliance expenditures necessary to support institutional-grade treasury operations; and (iv) access to capital to opportunistically acquire ETH and invest in enabling infrastructure.
Treasury and yield framework. Our objective is to grow our net ETH position over time, subject to risk and liquidity constraints. We evaluate staking and related mechanisms based on security, liquidity, counterparty and regulatory profiles. We expect staking yields to evolve with validator participation rates, protocol parameters and market conditions. Where we deploy ETH to staking or analogous activities, we intend to size exposures conservatively, prioritize best-in-class custody and validator operations (including multi-client diversity and performance monitoring), and maintain appropriate unencumbered liquidity to meet corporate needs. We may rebalance or unwind positions in response to changes in risk, reward, or regulatory context.
Operating expenditures and investment priorities. As an ETH-focused company, we expect a mix shift in operating expenses toward cybersecurity, custody, treasury operations, compliance and technology enablement for advisory and analytics. Capital expenditures are expected to remain modest relative to a mining-centric model. We intend to maintain a flexible cost structure aligned with services activity and treasury scale.
Key trends and uncertainties. We are monitoring (i) protocol upgrades on Ethereum’s roadmap and their implications for staking yields, fee markets and network security; (ii) growth in L2 activity and cross-chain interoperability; (iii) institutional adoption trends, including tokenization initiatives and regulated market-structure developments; (iv) availability and terms of regulated custodial services; and (v) evolving U.S. and non-U.S. regulatory frameworks applicable to digital assets and staking.
Liquidity considerations. Our liquidity planning considers ETH price volatility, potential impairment charges under applicable accounting policies, the liquidity profile of any staked positions and our ability to access capital markets through our shelf registration and at-the-market program. We intend to maintain sufficient liquidity to support operations, regulatory compliance, and security investments, while seeking opportunities to increase ETH holdings when market conditions are attractive.
Known events reasonably likely to affect future results. Our future results may be materially affected by changes in ETH prices and staking economics; regulatory developments pertaining to ETH, staking and custody; counterparty or custodian developments; cybersecurity investments and events; and market structure changes affecting liquidity and capital access for digital-asset issuers.
Key Performance Drivers
Key performance drivers include ETH market conditions and staking economics; client demand for advisory services; and access to capital under our shelf and ATM Program. We focus on treasury security and liquidity, sizing of staking or staking adjacent activities, and maintaining flexibility to rebalance positions as risk return or regulatory contexts evolve. Given our pivot to an asset light, ETH focused model, energy use metrics from prior mining operations are no longer decision useful and have been excluded from MD&A.
| 15 |
Results of Operations
Comparison of Results of Operations for the Three Months Ended November 30, 2025 and November 30, 2024.
| Three Months Ended November 30, | ||||||||||||
| 2025 | 2024 | % Change | ||||||||||
| Revenue from the sale of mining equipment | $ | - | $ | 717 | NM | |||||||
| Revenue from self-mining | 2 | 484 | NM | |||||||||
| Revenue from consulting | 199 | - | NM | |||||||||
| Revenue from leasing | 1,112 | - | NM | |||||||||
| Revenue from staking | 980 | - | NM | |||||||||
| Total Revenue | 2,293 | 1,201 | 91 | % | ||||||||
| Cost of sales mining equipment | - | 670 | NM | |||||||||
| Cost of sales self-mining | 86 | 541 | -84 | % | ||||||||
| Cost of sales leasing | 909 | - | NM | |||||||||
| Cost of sales staking | 29 | - | NM | |||||||||
| Total Cost of Sales | 1,024 | 1,211 | -18 | % | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative expenses | 223,436 | 959 | NM | |||||||||
| Impairment of property and equipment | 200 | - | NM | |||||||||
| Unrealized loss (gain) from the digital assets holding | 5,247,925 | (85 | ) | NM | ||||||||
| Total operating expenses | 5,471,561 | 874 | NM | |||||||||
| Loss from operations | (5,470,292 | ) | (884 | ) | NM | |||||||
| Other income (expense): | ||||||||||||
| Interest expense | (200 | ) | (68 | ) | NM | |||||||
| Interest income | - | 1 | NM | |||||||||
| Unrealized gain from trading securities | 15,890 | - | NM | |||||||||
| Change in fair value of warrant liability | 158,212 | - | NM | |||||||||
| Loss on the extinguishment of debt | - | (23 | ) | NM | ||||||||
| Pre-tax loss | (5,296,390 | ) | (974 | ) | NM | |||||||
| Income tax benefit | (92,295 | ) | - | NM | ||||||||
| Net loss | $ | (5,204,095 | ) | $ | (974 | ) | NM | |||||
For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (“NM”).
| 16 |
Revenues
During the three months ended November 30, 2025, revenues were $2,293, compared to $1,201 during the three months ended November 30, 2024. The increase in revenue was a result of the following:
| ● | Revenue from the sale of mining equipment. During the three months ended November 30, 2025, revenue from the sale of mining equipment was $0, compared to $717 in the three months ended November 30, 2024. The revenue recognized during the three months ended November 30, 2024 was primarily related to the sale of ten transformers. No such revenue was recognized during the three months ended November 30, 2025. | |
| ● | Revenue from self-mining. During the three months ended November 30, 2025, revenue from self-mining was $2, compared to $484 in the three months ended November 30, 2024. The Company continued its strategy of winding down its proprietary self-mining exposure and deferring new site buildouts during the three months ended November 30, 2025 resulting in nominal self-ming revenue. | |
| ● | Revenue from consulting. During the three months ended November 30, 2025, revenue from consulting was $199, as compared to $0 during the three months ended November 30, 2024. All of the consulting revenue in 2025 was derived from one consulting agreement under which the Company is obligated to provide various operational, maintenance and consulting services from May 16, 2025 to May 15, 2026 for aggregate consideration of $800, of which half was paid on May 16, 2025. | |
| ● | Revenue from leasing: During the three months ended November 30, 2025, revenue from the leasing of miners was $1,112, as compared to $0 during the three months ended November 30, 2024. Under the March 2025 machine lease agreement which expired on December 31, 2025, the lessee paid $850 for all revenues generated from 2,500 of our miners from March 8, 2025 to May 7, 2025. Under the May 2025 machine lease agreement, the lessee agreed to pay $3,200 for all revenues generated from 3,000 of our miners from May 16, 2025 to December 31, 2025. | |
| ● | Revenue from staking. During the three months ended November 30, 2025, revenue from staking was $980, compared to $0 in the three months ended November 30, 2024. The increase was a result of the Company initiating both native staking and liquid staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year. |
Cost of Sales
Major components of cost of sales include rent to house mining and hosting equipment, electricity, depreciation, and supplies. During the three months ended November 30, 2025, cost of sales was $1,024 compared to $1,211 during the three months ended November 30, 2024. The increase in cost of sales was a result of the following:
| ● | Cost of sales mining equipment. Cost of sales related to sales of mining equipment was $0 for the three months ended November 30, 2025, compared to $670 for the three months ended November 30, 2024. The costs incurred during the three months ended November 30, 2024 was related to the sale of the ten transformers noted above. No such costs were incurred during the three months ended November 30, 2025. | |
| ● | Cost of sales self-mining. Cost of sales related to self-mining remained was $86 in the three months ended November 30, 2025, compared to $541 in the three months ended November 30, 2024. The Company continued its strategy of winding down its proprietary self-mining exposure and deferring new site buildouts during the three months ended November 30, 2025. | |
| ● | Cost of sales leasing. Cost of sales related to leasing was $909 for the three months ended November 30, 2025, compared to $0 during the three months ended November 30, 2024. The increase in cost of sales leasing is a result of the Machine Lease Agreement Bitmine entered with KULR Technology Group, Inc. on May 16, 2025. As part of this agreement, Bitmine is responsible for maintaining the equipment, providing a contractually agreed upon level of hash rate, and ensuring continuous operation, either directly or through third-party providers. | |
| ● | Cost of staking. Cost of sales related to revenue from staking was $29 for the three months ended November 30, 2025, compared to $0 for the three months ended November 30, 2024. Cost of sales primarily comprises direct expenses associated with the ETH staking business, including service fees payable to the service provider. |
Operating Expenses
| ● | General and administrative expenses. General and administrative expenses were $223,436 in the three months ended November 30, 2025, compared to $959 in the three months ended November 30, 2024. The increase is primarily related to one time capital raising, advisory, legal, and other consulting fees. The increase is also related to expenses associated with the Consulting Agreement. Estimated fees that will be incurred from industry-experienced third parties to manage the Company’s multi-billion dollar ETH portfolio are expected to be in the range of $40,000 to $50,000 annually. The Company expects these fees to be significantly offset and exceeded in the future by projected staking fees earned from the same ETH portfolio, although there can be no assurances that the Company will be successful in doing so. See Note 13 of the Interim Statements for additional information. | |
| ● | Impairment of property and equipment. Impairment of fixed assets was $200 in the three months ended November 30, 2025, as compared to $0 in the three months ended November 30, 2024, reflecting our review of under-utilized or obsolete equipment and site-specific assets. | |
| ● | Unrealized gain/loss from digital assets holding. During the three months ended November 30, 2025, The Company recorded an unrealized loss of $5,247,925 related to changes in the fair value of our digital asset holdings. This is compared to a $85 gain for the three months ended November 30, 2024. The Company acquired ETH on top of its BTC holdings as part of our business expansion during fiscal year 2025. As of November 30, 2025, the total fair value of ETH and BTC holdings amounted to $10,544,339 and $17,450, respectively. As of November 30, 2024, the total fair value of BTC holdings amounted to $150. No ETH was held as of November 30, 2024. |
| 17 |
Other Income (Expense)
| ● | Interest expense. Interest expense related solely to ETH activity was $200 in the three months ended November 30, 2025, as compared to $68 in interest expense related to debt in the three months ended November 30, 2024. | |
| ● | Interest income. Interest income was $0 in three months ended November 30, 2025, as compared to $1 in three months ended November 30, 2024. | |
| ● | Unrealized gain from trading securities. The Company recognized a $15,890 gain during the three months ended November 30, 2025. This gain reflects the change in fair value of the Investment in Eightco, which is reflected in “Other Income” within the consolidated statement of operations. See Note 6 of the Interim Statements for additional information. | |
| ● | Change in fair value of warrant liability. The Company recognized a $158,212 gain during the three months ended November 30, 2025. This gain reflects the change in fair value of the Liability Classified Warrants, which is reflected in other income within the consolidated statement of operations. See Note 7 of the Interim Statements for additional information. | |
| ● | Loss on the extinguishment of debt. The Company had no debt as of November 30, 2025. The loss on the extinguishment of its debt was $0 during the three months ended November 30, 2025, as compared to $23 during the three months ended November 30, 2024. The decrease is due to the equity proceeds raised by the Company enabling the paydown of debt. |
Income Taxes
During the three months ended November 30, 2025, the Company recognized the full valuation allowance that was recorded against the Company’s deferred tax assets as a discrete item. This resulted in a $92,295 income tax benefit for the period.
Non-GAAP Financial Measures
The following tables present Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) and Adjusted Earnings Per Share (“EPS”). These are non-U.S. GAAP financial measurements within the meaning of Regulation G dictated by the Securities and Exchange Commission. Adjusted EBITDA is defined as EBITDA excluding the impact of certain non-cash items for the period presented. Adjusted EPS is defined as EPS in accordance with US GAAP excluding the impact of certain non-cash items for the period presented.
The Company uses Adjusted EBITDA and Adjusted EPS in explaining its results to shareholders and the investment community and in its internal evaluation and management of its businesses. The Company’s management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the Company’s performance using the same tools that management uses to evaluate the Company’s past performance, (b) permit investors to compare the Company with its peers, and (c) provide consistent period-to-period comparisons of the results.
While the Company believes that these measures are useful in evaluating the Company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these measurements may differ from similar measures presented by other companies. A reconciliation of Adjusted EBITDA and Adjusted EPS are detailed below.
The reconciliation of Adjusted EBITDA for the three months ended November 30, 2025 and 2024 is as follows:
| Three Months Ended November 30, | ||||||||
| 2025 | 2024 | |||||||
| Net loss | $ | (5,204,095 | ) | $ | (974 | ) | ||
| Interest expense, net | (200 | ) | (67 | ) | ||||
| Provision for income taxes | (92,295 | ) | - | |||||
| Depreciation expense | 124 | 131 | ||||||
| EBITDA | (5,296,466 | ) | (910 | ) | ||||
| Adjustments | ||||||||
| Stock based compensation(1) | 677 | 471 | ||||||
| Impairment of property and equipment(2) | 200 | - | ||||||
| Unrealized gain from trading securities(3) | (15,890 | ) | - | |||||
| Change in fair value of warrant liability(4) | (158,212 | ) | - | |||||
| Loss on the extinguishment of debt(5) | - | 23 | ||||||
| Unrealized loss (gain) from the digital assets holding(6) | 5,247,925 | (85 | ) | |||||
| One time consulting and legal fees(7) | 200,051 | - | ||||||
| Adjusted EBITDA | $ | (21,715 | ) | $ | (501 | ) | ||
(1) Stock based compensation represents the non-cash expense recorded for the Company’s restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three months ended November 30 2025 as well the vesting of existing awards.
(2) Represents a non-cash charges recorded during the period to reduce the carrying value of certain assets to their estimated fair value.
(3) Represents the change in fair value of the company’s held investment in Eightco’s common stock for the three months ended November 30, 2025.
(4) Represents the change in fair value of the company’s liability classified warrants for the three months ended November 30, 2025.
(5) Represents non-recurring charges incurred in connection with the early settlement of the Company’s loan with a third-party lender and the Hash Rate Sale Agreement.
(6) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income.
(7) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period.
| 18 |
The reconciliation of Adjusted EPS for the three months ended November 30, 2025 and 2024 is as follows:
| Three Months Ended November 30, | ||||||||
| 2025 | 2024 | |||||||
| Pre-tax loss | (5,296,390 | ) | (974 | ) | ||||
| Adjustments: | ||||||||
| Stock based compensation(1) | 677 | 471 | ||||||
| Impairment of property and equipment(2) | 200 | - | ||||||
| Unrealized gain from trading securities(3) | (15,890 | ) | - | |||||
| Change in fair value of warrant liability(4) | (158,212 | ) | - | |||||
| Loss on the extinguishment of debt(5) | - | 23 | ||||||
| Unrealized loss (gain) from the digital assets holding(6) | 5,247,925 | (85 | ) | |||||
| One time consulting and legal fees(7) | 200,051 | - | ||||||
| Adjusted loss before income tax provision | (21,639 | ) | (565 | ) | ||||
| Income tax benefit (as reported) | (92,295 | ) | - | |||||
| Income tax provision adjustment(8) | 88,188 | - | ||||||
| Adjusted income tax benefit | (4,107 | ) | - | |||||
| Adjusted net loss | (17,532 | ) | (565 | ) | ||||
| Deemed dividend on Series A Preferred Stock | - | (2,961 | ) | |||||
| Adjusted net loss attributable to common stockholders | (17,532 | ) | (3,526 | ) | ||||
| Diluted weighted average common shares outstanding | 325,665,565 | 2,371,103 | ||||||
| Adjusted diluted loss per common shares | $ | (0.05 | ) | $ | (0.24 | ) | ||
(1) Stock based compensation represents the non-cash expense recorded for the Company’s restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three months ended November 30 2025 as well the vesting of existing awards.
(2) Represents a non-cash charges recorded during the period to reduce the carrying value of certain assets to their estimated fair value.
(3) Represents the change in fair value of the company’s held investment in Eightco’s common stock for the three months ended November 30, 2025.
(4) Represents the change in fair value of the company’s liability classified warrants for the three months ended November 30, 2025.
(5) Represents non-recurring charges incurred in connection with the early settlement of the Company’s loan with a third-party lender and the Hash Rate Sale Agreement.
(6) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income.
(7) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period.
(8) The income tax provision adjustment is calculated by multiplying “Adjusted income (loss) before income tax provision” by the Company’s applicable tax rate of 21%.
Known Trends, Events and Uncertainties
Business expansion. Following our July 2025 and ongoing financings, we have pivoted to a services-led model and reduced proprietary mining exposure, including by redeploying/retiring less-efficient machines, concentrating hashrate at lower-cost sites and phasing capex. In the second half of calendar 2025, we further reduced exposure to halving-driven volatility by pivoting to a services-led, capital-light model and by winding down new proprietary mining investments. We discuss the implications for liquidity, capital needs and accounting estimates under “Liquidity and Capital Resources” and “Critical Accounting Estimates.”
This reduces direct exposure to network difficulty and power prices but increases reliance on client demand for advisory and leasing services. We expect services mix and pricing to be key drivers of variability.
Ethereum market dynamics. ETH price levels influence client activity and the value of any ETH held in treasury. Increased adoption or volatility can raise demand for advisory services; conversely, sustained price declines could dampen client spending.
Capital markets and liquidity. We believe our June and July 2025 transactions, shelf registration and ATM Program provide flexibility to access equity capital opportunistically to support working capital and selective investments aligned with a capital-light strategy. Adverse market conditions or unfavorable industry sentiment could constrain our ability to raise capital on acceptable terms.
Regulatory environment. Evolving U.S. and foreign regulations related to digital assets, data center operations, financial markets and custody may impose new compliance obligations or restrictions.
Management updates. On November 20, 2025, the Company entered into an employment agreement with Chi Tsang to serve as the Company’s Chief Executive Officer. Additionally, on January 7, 2026, the Company entered into an employment agreement with Young Kim to serve as the Company’s Chief Financial Officer and Chief Operating Officer.
| 19 |
Liquidity and Capital Resources
Current liquidity position
As of November 30, 2025, the Company had $887,678 in cash on hand and working capital of $751,900. Our primary sources of liquidity during the three months ended November 30, 2025 included:
| ● | net proceeds of $7,726,810 from our Registration Statement on Form S-3ASR filed July 9, 2025 and an equity sales agreement with Cantor Fitzgerald & Co. and ThinkEquity LLC, providing the ability, at our discretion and subject to market conditions, to sell up to $20 billion of our common stock from time to time in our ATM Program | |
| ● | net proceeds of $365,240 from our September 2025 issuance of (i) 5,217,715 shares of common stock at a price of $70 per share and (ii) warrants to purchase up to 10,435,430 shares of common stock at an exercise price of $87.50 per share |
In connection with the June offering, the Company issued common stock purchase warrants to a placement agent (the “Placement Agent Warrants”) on July 8, 2025 in exchange for services. The Placement Agent Warrants are exercisable immediately upon issuance to purchase up to 1,231,945 shares of the Company’s common stock at an exercise price of $5.40 per share. The warrants were fully vested upon issuance and have a contractual term of five years. The total grant-date fair value of the Placement Agent Warrants is $134,654, which was treated as the issuance cost, net against the cash proceeds from the June offering.
On July 8, 2025, the Company entered into a Strategic Advisor Agreement with a third-party service provider (the “Strategic Advisor”) pursuant to which the Company engaged the Strategic Advisor to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the digital asset technology sector. As compensation for services rendered by the Strategic Advisor under the Strategic Advisor Agreement, the Company issued to the Strategic Advisor warrants to purchase 3,192,620 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”) at an exercise price of $5.40 per share. The Strategic Advisor Warrants were fully vested upon issuance and have a contractual term of five years. The total grant-date fair value of the Strategic Advisor Warrants is $348,959, which was immediately expensed and included in operating expense in the consolidated statement of income (loss).
In connection with the share offering on June 4, 2025, the Company issued to ThinkEquity warrants to purchase up to 129,375 shares of Common Stock at an exercise price of $10 per share (the “Representative’s Warrants”) in exchange for services. The Representative’s Warrants were fully vested upon issuance, but are not exercisable until December 1, 2025. The warrants have a contractual term of approximately five years. The total grant-date fair value of the Representative’s Warrants is $852, which was treated as the issuance cost, net against the cash proceeds from the capital raise.
The IDI obligations were addressed via restructuring as disclosed in the Company’s Registration Statement on Form S-1 and the Company’s Registration Statement on Form S-3ASR. We also expanded related party disclosures to include the largest aggregate principal outstanding and amounts of principal and interest paid under the IDI line during the applicable periods.
Sources and uses of cash
| Three months ended November 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (228,356 | ) | $ | (96 | ) | ||
| Net cash used in investing activities | (7,422,439 | ) | (18 | ) | ||||
| Net cash provided by financing activities | 8,026,474 | 412 | ||||||
| Net increase in cash and cash equivalents | $ | 375,679 | $ | 298 | ||||
Net cash used in operating activities was $228,356 for the three months ended November 30, 2025, compared to $96 for the three months ended November 30, 2024. The increase is primarily related to one time capital raising, advisory, legal, and other consulting fees. The increase is also related to expenses associated the Consulting Agreement. This increase in cash outflow was offset by an increase in cash received from the Company’s revenue generating activities.
Net cash used in investing activities was $7,422,439 for the three months ended November 30, 2025, compared to $18 for the three months ended November 30, 2024. The increase in investing cash outflow was almost entirely driven by the $7,527,221 purchase of ETH.
Net cash provided by financing activities was $8,026,474 for the three months ended November 30, 2025, compared to $412 for the three months ended November 30, 2024. This increase was primarily driven by the $7,664,380 of proceeds received from the Company’s ATM Offering. Refer to Note 7 – Stockholder’s Equity within the financial statements for further details regarding these offerings.
Material cash requirements and known liquidity risks
We expect the following material cash requirements over the next 12 months under our capital-light model:
| ● | estimated fees that will be incurred from industry-experienced third parties to manage the Company’s multi-billion dollar ETH portfolio are expected to be in the range of $40,000 to $50,000 annually. The Company expects these fees to be significantly offset and exceeded by projected staking fees earned from the same ETH portfolio, although there can be no assurances that the Company will be successful in doing so; | |
| ● | modest capital expenditures of approximately $1,500 primarily for maintenance of existing equipment and technology platforms’ supporting services; | |
| ● | working capital to support services delivery, equipment leasing, and advisory engagements of approximately $1,000 per month at current run-rate activity levels; and | |
| ● | public company costs, including audit and compliance, of approximately $4,000 annually. | |
| ● | general operating and overhead costs of approximately $83,016 annually. |
| 20 |
Our liquidity is now less sensitive to network difficulty and power price volatility than under a mining-centric model, though BTC price levels can influence client demand and the value of any BTC held in treasury. We mitigate liquidity risks by (i) maintaining a flexible cost structure aligned with services activity, (ii) limiting new capex commitments, and (iii) preserving access to equity capital via our shelf and ATM facilities. We believe, based on our current operating plan, expected cash on hand, anticipated operating cash flows and access to capital under our shelf/ATM, that we will have sufficient liquidity to fund operations for at least the next 12 months. Beyond 12 months, our ability to fund growth and meet obligations will depend on market conditions, client demand for services, and access to capital on acceptable terms.
Counterparty and market developments. We monitor counterparties in the digital asset ecosystem for credit and operational risks, including custodians, pool operators, hosting partners and joint venture partners. We currently do not have material assets with bankrupt or suspended counterparties, and we assess custody practices, insurance and operational controls at our partners. Disruptions in digital asset markets, regulatory developments or power market dislocations could adversely affect our liquidity, capital access and operational continuity.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, and results of operations, liquidity or capital resources. Legacy commitments under power, site control and joint-venture agreements are being evaluated in light of our strategic shift; any remaining obligations (e.g., minimums or deposits) are included in our liquidity planning. We do not expect to enter into new long-term power purchase or build-to-suit arrangements absent clear, low-risk returns.
Critical Accounting Estimates
Our financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenues, expenses and related disclosures. We consider the following to be our critical accounting estimates because they involve significant judgment, are subject to uncertainty, and could materially impact our financial results if actual results differ from our estimates. This discussion supplements, and should be read together with, the summary of significant accounting policies in our financial statement notes.
ASU 2023-08, Intangibles-Goodwill and Other Digital Assets: Accounting for and Disclosure of Digital Assets. In fiscal year 2025, we account for eligible digital assets at fair value with changes in fair value recognized in net income, consistent with ASU 2023-08. We present digital assets separately on the balance sheet and disclose changes in their carrying amounts. This accounting may increase the volatility of our reported results relative to prior impairment-based accounting.
Digital assets—impairment recognition. We recognize digital assets received from operations pursuant to ASC 606 and subsequently account for the assets under our policy supported by applicable GAAP. Management monitors digital asset balances for impairment indicators and measures impairment when required. The carrying amount is subject to market price volatility, and our estimates of impairment depend on the timing and frequency of measurement. We performed analyses, including those requested by the SEC staff, to assess the materiality of alternative impairment measurement methods and concluded that differences were not material for the periods presented. Key inputs include observable market prices and timing of acquisitions/disposals.
Revenue recognition—services and equipment leasing. Under ASC 606, we identify our customer, performance obligations and transaction price for consulting/advisory services, and equipment/container leasing. Revenue is recognized as services are provided (over time) or upon transfer of control (point-in-time) for equipment leasing. For leasing arrangements within the scope of ASC 842, we assess lease classification and recognize lease income over the lease term. Estimates include variable consideration (e.g., success-based fees), collectability, and principal-versus-agent considerations.
Property and equipment—useful lives, impairment and recoverability. We depreciate miners, containers and related site equipment over estimated useful lives of 2–10 years. With our shift to a capital-light model, we evaluate long-lived assets for impairment when indicators arise (e.g., reduced utilization or obsolescence) and assess recoverability at the asset group level. Key inputs include expected service lives, secondary market values and expected cash flows from any continued use or disposition.
Stock-based compensation. We measure equity awards at grant-date fair value under ASC 718 using observable market prices and, where applicable, option-pricing models. Inputs include volatility, expected term and risk-free rates.
Fair value of derivative liabilities and financing instruments. Certain financing arrangements contain embedded features accounted for as derivatives measured at fair value with changes recognized in earnings. We estimate fair value using market-based models that require assumptions about volatility, discount rates and probability-weighted outcomes.
Collectability of receivables; warranty and returns for equipment sales. Where we provide services or sell equipment on credit, we assess collectability considering customer creditworthiness, collateral and payment history, and we establish allowances for expected credit losses based on historical experience and current conditions. For equipment transactions with warranty obligations, we estimate reserves based on observed failure rates, supplier warranties and repair logistics.
Accounting policies and estimates are reviewed periodically for consistency with SEC guidance, including the 2003 MD&A Guidance and the 2020 amendments to Item 303. We will update our critical accounting estimates as our operations evolve and additional trends and data become reasonably available.
| 21 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of November 30, 2025, our disclosure controls and procedures were not effective due to the identification of material weaknesses in our internal control over financial reporting.
We are in the process of implementing measures designed to improve our internal controls over financial reporting and remediate the deficiencies that led to the material weaknesses discussed above.
Changes in Internal Control over Financial Reporting
In connection with the preparation of our consolidated financial statements for the year ended August 31, 2025, management identified material weaknesses in our internal control over financial reporting (“ICFR”). For further information regarding the material weakness identified, refer to Item 9A. Controls and Procedures of the Company’s Annual Report on Form 10-K for the year ended August 31, 2025.
During the quarter ended November 30, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We may be involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Legal expenses associated with any contingency are expensed as incurred. Our officers and directors are not aware of any threatened or pending litigation to which we are a party.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds.
None.
| 22 |
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During
the quarter ended November 30, 2025, no director or officer of the Company
Item 6. Exhibits.
The exhibits listed on the Exhibit Index below are provided as part of this report.
| Exhibit No. | Description | |
| 10.1* | Employment Agreement by and between the Company and Chi Tsang, dated November 20, 2025. | |
| 31.1* | Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | |
| 31.2* | Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | |
| 32.1* | Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | |
| 32.2* | Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | |
| 101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101). |
* Filed herewith.
| 23 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BITMINE IMMERSION TECHNOLOGIES, INC. | ||
| Dated: January 13, 2026 | By: | /s/ Chi Tsang |
Chi Tsang, Chief Executive Officer (Principal Executive Officer) |
||
| Dated: January 13, 2026 | By: | /s/ Raymond Mow |
Raymond Mow, Chief Financial Officer (Principal Financial and Accounting Officer) |
||
| 24 |