UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT DATED DECEMBER 31, 2023 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the three months ended December 31, 2023

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: 333-266766

T-REX Acquisition Corp.

(Exact name of registrant as specified in its charter)

Nevada	26-1754034
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

151 N. Nob Hill Road suite 402 Plantation, FL	33324
(Address of principal executive offices)	(Zip Code)

(954) 960-7100

(Registrant’s Telephone Number, Including Area Code)

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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. ☒ Yes    ☐ No

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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes    ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-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 Exchange Act). ☐ Yes    No ☒

As of March 18, there were 18,223,953 shares of the Registrant’s $0.0001 par value common stock issued and outstanding.

Securities registered under Section 12(g) of the Act:

Title of each class registered:

Common

TREX ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(A Nevada Corporation)

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS	F-1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 4.	CONTROLS AND PROCEDURES	27
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	29
ITEM 1A.	RISK FACTORS	29
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	29
ITEM 4.	MINE SAFETY DISCLOSURES	29
ITEM 5.	OTHER INFORMATION	29
ITEM 6.	EXHIBITS	30

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TREX ACQUISITION CORP.

December 31, 2023

Consolidated Balance Sheets	F-2
Consolidated Statements of Operations	F-3
Consolidated Statements of Stockholders’ Equity	F-4
Consolidated Statements of Cash Flows	F-5
Notes to the Consolidated Financial Statements	F-6

F-1

TREX ACQUISITION CORP.
CONSOLIDATED BALANCE SHEETS
	December 31, 2023			June 30, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	1,202		$	23,909
Prepaid consulting - current		156,880			161,546
TOTAL CURRENT ASSETS		158,082			185,455
NON-CURRENT ASSETS:
Plant and equipment		-			14,948
Prepaid consulting – non-current		76,107			152,213
Facility deposit		-			-
TOTAL NON-CURRENT ASSETS		76,107			167,161
TOTAL ASSETS	$	234,189		$	352,616
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	89,679		$	63,712
Due to related party		574,838			495,800
Notes payable - related parties		157,500			-
Note payable - unrelated parties		115,710			69,525
Deposit payable		15,000			0
TOTAL CURRENT LIABILITIES	$	952,727			629,037
TOTAL LIABILITIES	$	952,727		$	629,037
Commitments and Contingencies		-			-
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, 0.0001 par value, authorized 350,000,000 shares and 18,223,953 and 18,223,953 issued and outstanding as of December 31, 2023, and June 30, 2023, respectively		1,822			1,822
Additional paid in capital		5,848,224			5,722,283
Accumulated deficit		(6,568,584	)		(6,000,526	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(718,538	)		(276,421	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	234,189		$	352,616

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

F-2

T-REX ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended December 31,
(Unaudited)
	Three months ended						Six months ended
	2023			2022			2023			2022
REVENUE
Mining revenue	$	2,912		$	11,958		$	15,824		$	37,787
Realized gain (Loss) on sale/exchange of Bitcoin		-			-			-			-
Total revenues		2,912			11,958			15,824			37,787
Cost of goods sold
Depreciation		-			19,188			14,948			36,191
Hosting		6,943			20,963			14,162			46,495
Total cost of goods sold		6,943			40,151			29,110			82,686
Gross Profit (Loss)		(4,031	)		(28,193	)		(13,286	)		(44,899	)
Expenses
Transfer agent and filing fees		1,197			1,922			22,530			4,801
Professional fees		(2,224	)		19,439			40,776			49,687
Management and consulting fees		142,090			127,000			266,590			259,000
Share based compensation		65,857			-			206,714			635,357
Administration fees		13,241			6,259			18,162			13,017
Total expenses		220,161			154,620			554,772			961,863
Loss from operations		(224,192	)		(182,813	)		(568,058	)		(1,006,762	)
Loss before income taxes		(224,192	)		(182,813	)		(568,058	)		(1,006,762	)
Less: provision for income taxes		0			0			0			0
Net loss		(224,192	)		(182,813	)		(568,058	)		(1,006,762	)
Net loss per common share - basic & diluted	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.05	)
Weighted average number of common shares outstanding - basic & diluted		18,223,953			19,759,459			18,223,953			19,666,705

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

F-3

TREX ACQUISITION CORP.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
as of December 31, 2023
	Common Stock at Par $0.0001						Additional
	Number of Shares			Amount			Paid in Capital		Accumulated Deficit			Total
Balance June 30, 2021		14,669,106			1,467			2,818,968		(2,866,558	)		(46,123	)
Shares issued for related party debt conversion		1,500,000			150			44,850					45,000
Share based expense for warrants issued					-			770,850					770,850
Shares issued for subscriptions		747,837			75			560,800					560,875
Shares issued for services		1,475,000			148			604,601					604,749
Shares issued for debt conversion		1,182,009			118			117,932					118,050
													-
Net Loss		-			-			-		(1,294,198	)		(1,294,198	)
Balance June 30, 2022		19,573,952		$	1,958		$	4,918,002	$	(4,160,756	)	$	759,203
Shares Surrendered		(1,900,000	)		(190	)		190					-
Shares Issued for Services		150,000			15			20,985					21,000
Shares issued for cash		400,001			40			299,961					300,001
Share based expense for warrants issued					-			483,145					483,145
													-
Net Loss		-			-			-		(1,839,770	)		(1,839,770	)
Balance June 30, 2023		18,223,953			1,822			5,722,283		(6,000,526	)		(276,421	)
Share based expense for warrants issued		-			-			100,470					100,470
													-
Net loss		-			-			-		(343,866	)		(343,866	)
Balance September 30, 2023		18,223,953			1,822			5,822,753		(6,344,392	)		(519,817	)
Share based expense for warrants		-			-			25,471					25,471
Net loss		-			-			-		(224,192	)		(224,192	)
Balance December 31, 2023 (Unaudited)		18,223,953			1,822			5,848,224		(6,568,584	)		(718,538	)

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

F-4

TREX ACQUISITION CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended December 31,
(UNAUDITED)
Operating activities	2023			2022
Net Loss	$	(568,058	)	$	(1,006,762	)
Adjustments to reconcile net loss to net cash used in operating activities
Share based expense for warrants issued		206,713			-
Cost of goods sold - depreciation expense		14,948			36,191
Share issued for services and warrants issued		-			635,357
Changes in assets and liabilities
(Increase) decrease in assets
Crypto currency held		-			6,091
Facility deposit		-			10,570
Increase (decrease) in liabilities
Related Party Accruals		-			125,900
Accounts payable and accrued expenses		25,967			9,599
Deposit payable		15,000			-
Net cash used in operating activities		(305,430	)		(183,054	)
INVESTING ACTIVITIES:
Purchase of Equipment		-			(91,744	)
Net cash used in investing activities		-			(91,744	)
FINANCING ACTIVITIES:
Proceeds from common shares to be issued		-			100,000
Proceeds from common shares issued		-			200,000
Net Change in related party debt		79,038			-
Proceeds from issuance of note payable - related parties		157,500			-
Proceeds from issuance of note payable - unrelated parties		46,185			-
Net cash provided by financing activities		282,723			300,000
Net increase in cash		(22,707	)		25,202
Cash at beginning of period		23,909			104
Cash at end of period	$	1,202		$	25,306
Supplemental cashflow information
Interest paid	$	0		$	-
Taxes paid	$	0		$	-
Supplemental non-cash investing and financing activities
Share-based compensation - warrants vested	$	0			483,145
Share-based compensation - shares vested	$	0			152,212

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

F-5

TREX ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

T-REX Acquisition Corp. (The “Company”) was formed on January 16, 2008, in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia. The Company later changed its name to Sync2 Networks Corp when the Company began to engage in software-related services. On March 20, 2014, the Company changed its name to TREX Acquisition Corp. after its business operations under the Sync2 Networks’ branding had ceased. On June 21, 2021, the Company decided to pivot from seeking an acquisition candidate to operating a cryptocurrency mining business. On February 17, 2022, the Company began mining bitcoin at Ace Hosting, a Tampa, Florida located data center. On June 30, 2022, the Company changed its name to “T-REX Acquisition Corp.”

As of June 30, 2023, the Company is a holding company with the following subsidiaries: Raptor Mining LLC, a Florida limited liability company (“Raptor Mining”); and TRXA Merger Sub, Inc., an inactive Delaware corporation (“Merger Sub”). On July 1, 2022, we incorporated Megalodon Mining and Electric, LLC, a Florida limited liability company (“Megalodon”).

2020 TRXA Merger Sub Inc.

On March 13, 2020, the Company incorporated the Merger Sub in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company.

2021 Raptor Mining LLC and 2022 Megalodon Mining and Electric LLC

On July 9, 2021, the Company formed Raptor Mining in order to pursue the Company’s new business operating strategy to engage in cryptocurrency mining, which is used to secure decentralized network protocols and decentralized distributed ledgers. On July 1, 2022, the Company formed Megalodon to investigate and potentially pursue a cryptocurrency co-location business model. The cryptocurrency co-location business model is based on a company which has access to data centers and inexpensive cryptocurrency mining inputs, such as low-cost electricity supply, offering to host third-party owned cryptocurrency mining equipment in exchange for a fee, which may consist of a mix of cash and cryptocurrency consideration. As of the date of this quarterly filing, the Company has commenced researching the acquisition of land to begin offering co-location services to other cryptocurrency miner owners.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States if America of ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC”), and the Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB") and are expressed in US Dollars. The consolidated financial statements should be read in conjunction with the notes contained herein as part of the Company's quarterly filing in its Form 10-Q filing under the Securities Exchange Commission.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing, and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

F-6

Reclassification

                Certain reclassifications have been made to prior periods to conform with current reporting.

Determination of Bad Debts

The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. When there is a potential of non-collections, an allowance is booked as a contra account to accounts receivable with the offset for the entry being bad debt expense. When collections are deemed more likely than not, the accounts receivable amount is directly written off and incurred as a bad debt expense. When an allowance for potential non-collections is subsequently more likely than not non-collectible, the related allowance is reduced, and the accounts receivable balance is directly written off.

Principles of Consolidation

As of June 30, 2023, the accounts include those of the Company and its 100% owned subsidiaries, T-REX Merger Sub, Raptor Mining Megalodon Mining and Electric. All intercompany transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

.

	Leve 1		Level 2		Level 3		Total
Notes payable (unrelated parties)-June 30, 2023	$	0	$	0	$	69,525	$	69,525
Notes payable (related parties) December 31, 2023	$	0	$	0	$	157,500	$	157,500
Notes payable (unrelated parties) December 31, 2023	$	0	$	0	$	115,710	$	115,710

F-7

Digital currencies - Bitcoin

The Company applies accounting for digital assets in accordance with the AICPA Practice Aid "Accounting for and Auditing of Digital Assets", the guide is dated as of June 30, 2022, and the SEC issued Staff Accounting Bulletin No. 121, which is effective for periods after June 15, 2022, which are the current nonauthoritative guidance for accounting for digital assets under U.S. generally accepted accounting principles (GAAP). The AICPA Practice Aid is non-authoritative guidance that represents the views of the Digital Assets Working Group and AICPA staff. There is currently no official pronouncement or authoritative guidance on accounting for digital assets and digital asset transactions. Accordingly digital assets that lack physical substance meet the definition of intangible assets and are accounted for under FASB ASC 350, Intangibles-Goodwill and Other. Digital currency is recorded at cost, using the first-in-first-out (“FIFO”) valuation method, less impairment. On June 30, 2022, and December 31, 2023, no balance in bitcoin was held, therefore no impairment assessment was necessary. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The reward for a bitcoin miner changes roughly every four years, or after every 210,000 blocks are mined and gets reduced by half each time, this whole process is called bitcoin halving. The last halving occurred on May 11, 2020, and reduced the reward per block to 6.25 BTC.

Plant and equipment - Crypto-currency machines

The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers are influenced by a number of factors including the following:

· the complexity of the transaction verification process which is driven by the algorithms contained within the bitcoin open-source software.

· the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as the blockchain’s total hash rate)

· technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase.

The Company operates in an emerging industry for which limited data is available to make estimates on the useful economic lives of specialized mining equipment. The equipment could become obsolete within less time than other equipment due to it being specialized, new technology still being developed and improved. Plant and equipment, which represent mining equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Prior to the fiscal year June 30, 2023, management determined the expected useful life of mining machines as 7 years. During the fiscal year ended June 30, 2023, management has reassessed that the mining machines’ useful life to 1-year rather than 7 years, consistent with current industry research and publications on bitcoin machines. The change in the estimated useful life was accounted for prospectively by updating the accumulated depreciation and incurring the related depreciation expense in the fiscal year ended June 30, 2023. Management’s assessment takes into consideration the availability of historical data and management's expectations regarding the direction of the industry including potential changes in technology. Management will review this estimate annually and will revise such estimates as and when data becomes available.

F-8

                Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be realizable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset's carrying value to determine if an adjustment for impairment is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and it’s carrying value.

Revenue recognition

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

· Step 1: Identify the contract with the customer

· Step 2: Identify the performance obligations in the contract

· Step 3: Determine the transaction price

· Step 4: Allocate the transaction price to the performance obligations in the contract

· Step 5: Recognize revenue when the Company satisfies a performance obligation

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

When determining the transaction price, an entity must consider the effects of all of the following:

· Variable consideration

· Constraining estimates of variable consideration

· The existence of a significant financing component in the contract

· Noncash consideration

· Consideration payable to a customer

Crypto asset transaction verification is the output generated from the Company's ordinary activities under its mining pool contract. The consideration the Company receives is a bitcoin reward, which the Company measures at fair value on the date awarded. Rewards are earned when the Company successfully places a block (by being the first to solve an algorithm). As a result, the Company receives confirmation from the mining pool of the block placed and rewards earned. The Company uses the quoted price of the bitcoin at closing, on the date the coin is mined to value its reward/s. There is no significant financing component in these transactions. Expenses associated with running the digital currency mining business, such as rent, and electricity costs are also recorded as cost of revenue. Depreciation on digital currency mining equipment is recorded as a component of the cost of revenue.

F-9

Fair value of the digital asset award received is determined using the average U.S. dollar spot rate of the related digital currency on the grant date of the reward.

Expenses associated with running the digital currency mining business, such as rent, and electricity cost are also recorded as cost of revenues. Depreciation on digital currency mining equipment is recorded as a component of cost of revenues.

Additionally in its regular courses of business the Company earns a gain or incurs a loss on the trade of bitcoin awarded.

Stock based compensation.

The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.

The Company accounts for its non-employee stock-based compensation in accordance with Update 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Through the fiscal period ended June 30, 2023, quarter ended December 31, 2023, and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.

Related Party Disclosures

Under ASC 850 “Related Party Transactions” an entity or person is considered to be a “related party” if it has control, significant influence or is a key member of management personnel. A transaction is considered to be a related party transaction when there is a transfer of resources of obligations between related parties. The Company, in accordance with the standard ASC 850, presents disclosures about related party transactions and outstanding balances with related parties, see Note 8.

Earnings per Share

The Company computes earnings (loss) per share ("EPS") in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted EPS on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants or stock options and the conversion of instruments convertible to common stock. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Equipment

Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of one (1) or two (2) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. Equipment consists solely of bitcoin miners used in the operation. The equipment value is based on the cost and the potential impairment is reviewed periodically and as of June 30, 2023, a change in the estimated useful life from 7 years to 1 year and had no impairment of mining equipment. The depreciation expense for the six months ended December 31, 2023, was $14,948. There was no impairment during the quarter ended December 31, 2023, and mining equipment became fully depreciated resulting in there being no net book value at the quarter end.

F-10

Income taxes

The Company believes there are no taxes owed from inception to December 31, 2023, as it only incurred losses. 

Income taxes are determined based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.

Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.

As of December 31, 2023, we had a net operating loss carry-forward of approximately $(6,568,584) and a deferred tax asset of $1,379,403, using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked a valuation allowance of $(1,379,403). FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. On June 30, 2023, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.

	December 31, 2023			June 30, 2023
Deferred Tax Asset	$	1,379,403		$	1,260,111
Valuation Allowance		(1,379,403	)		(1,260,111	)
Deferred Tax Asset (Net)	$	0		$	0

Due to the changes in the Tax Reform Act of 1986 and the Tax Cut and Jobs Act of 2017, net operating loss carryforwards for Federal Income tax reporting purposes are subject to additional limitations. Should certain changes in ownership occur, our net operating loss carryforwards may be limited to use in future years. In addition, tax rates on corporations were reduced and certain other deductions limited. These changes may affect the income tax benefit calculation and related allowance during subsequent fiscal years. The Company has not filed taxes from inception. Due to losses incurred over this period, it determined there would be no taxes owed. The Company has not received any notification from the Internal Revenue Service (IRS) for unpaid taxes, penalties, or fees.

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

There were outstanding warrants that could convert into 4,224,089 shares of common stock as of June 30, 2023, and on December 31, 2023, 5,384,089 At the end of both periods the potentially dilutive shares were excluded because the effect would have been anti-dilutive.

F-11

Cash flows reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flows from operating activities by adjusting net income (loss) to reconcile it to net cash flows from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Advertising Costs

The Company expenses the cost of advertising and promotional materials when incurred. The Company’s only revenue stream is bitcoin mining and advertising costs are not essential to generate these revenues.

Par value of common stock

During the fiscal year ended June 30, 2023, the par value of common stock was previously reported at $.001 and was adjusted to $.0001 resulting in an adjustment from common stock to additional paid in capital, with no change to total equity.

Subsequent events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company evaluates subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

F-12

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, the Company incurred a net loss of $568,058 during the six months ended December 31, 2023, an accumulated deficit of $ 6,568,584 and a working capital deficit of ($ 794,645) as of December 31, 2023.

While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues and raise capital.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 NOTE 4. PRE-PAID CONSULTING

The Company issued shares to its directors and advisors for services to be performed at a future date. The common shares are recorded as issued and outstanding at the time they are granted, and the related share-based compensation expense is incurred as services are performed. Compensation expense not incurred is accounted for as prepaid consulting expense. On June 12, 2022, the Company issued 1,000,000 shares of common stock to advisors and directors for services to be provided at a future date. The shares were valued at $.46 per share, resulting in a value of $456,639, to be vested over a period of three years, for their services. On January 1, 2023, the Company issued 100,000 shares of the Company’s common stock to its Chief Financial Officer for services to be provided at a future date. The shares were valued at $.14 per share, resulting in a value of $14,000, to be vested over a period of 18 months. During the fiscal year ended June 30, 2023, the Company expensed $156,880 of this amount, which resulted in a prepaid consulting balance of $313,759. For the six months ended December 31, 2023, the Company expensed $80,773, which resulted in a prepaid consulting balance of $ 232,987.

F-13

NOTE 5. CRYPTOCURRENCIES

	Six months ended December 31, 2023		Fiscal year ended, June 30, 2023
Beginning balance	$	-	$	9,211
Increase
Value of bitcoin mined on the reward date		15,824		54,607
Realized gain (loss) on sale/exchange of bitcoin		-		1,030
				64,848
Decrease
Bitcoin used for operational expenses (Cost basis)		15,824		64,848
		-		-
Ending balance	$	-	$	-

NOTE 6. PROPERTY PLANT & EQUIPMENT MINING MACHINES

On August 24, 2022, the Company entered into a contract to purchase 20 Bitmain XJ S19 Pro 110 th and installation at Simple Mining in Iowa

Depreciation expenses amounted to $14,948 and $36,191 for the six months ended December 31, 2023, and 2022, respectively. On December 31, 2023, and June 30, 2023, balances were as follows:

	Estimated Life in years		December 31, 2023		June 30, 2023
Mining equipment		1		533,500		533,500
Less: Accumulated Depreciation				533,500		518,522
Fixed assets, net				-		14,948

F-14

NOTE 7. – RELATED PARTY TRANSACTIONS

Office space

The Company leases office space from its Chief Executive Officer at a cost of $250 per month. The term of the lease is for 365 days and ends on June 30, 2024. On December 31, 2023, $1,500 of rent expense was accrued and is included in Accounts Payable and Accrued Expenses.

Due to Related Parties

 As of December 31, 2023, and June 30, 2023, the company owed $390,000 and $132,000 respectively, due to related parties for Management fees.

As of December 31, and June 30, 2023, the Company owed Compensation payable of $112,838 and $351,800 respectively.

As of December 31, and June 30, 2023, the Company owed Board of Director fees of $ 72,000 and $12,000, respectively.

On January 30, 2023, entities affiliated with Timothy B. Ruggiero and Peter Chung each cancelled 900,000 and 1,000,000 shares respectively to treasury.

On July 1, 2023, the Company issued Frank Horkey a $75,000 Senior Secured Convertible Promissory Note bearing an interest rate of 10% per annum which was convertible at $.50 per share to settle amounts owed as compensation for management services.  As further inducement to settle these amounts owed as compensation, the Company agreed with Mr. Horkey to issue 75,000 shares of the Company’s restricted common stock and a warrant to purchase 150,000 shares of the Company’s restricted common stock at $.75 per share any time prior to July 1, 2026.The balance owed on December 31, 2023, is $78,750. The shares from this transaction have not been issued as of the date of this report.

On July 1, 2023, the Company issued Lazarus Asset Management LLC a $75,000 Senior Secured Convertible Promissory Note bearing an interest rate of 10% per annum which was convertible at $.50 per share to settle amounts owed as compensation for management services. As further inducement to settle these amounts owed as compensation, the Company agreed with Lazarus to issue 75,000 shares of the Company’s restricted common stock and a warrant to purchase 150,000 shares of the Company’s restricted common stock at $.75 per share any time prior to July 1, 2026.The balance owed on December 31, 2023, is $78,750. The shares from this transaction have not been issued as of the date of this report.

F-15

Legal contingencies

From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. Management is not aware of any pending, threatened or asserted claims.

Notes payable

On March 24, 2023, the Company issued to a private investor a $50,000 Convertible Promissory Note bearing an interest rate of 5% per annum which was convertible at $.50 per share on June 30, 2023, at the discretion of the Company. As further inducement to purchase this Note, the investor received a warrant to purchase 100,000 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to March 24, 2026.The Company agreed with the noteholder to convert the note into 100,000 shares of restricted common stock. However, the note payable was not converted into shares as of the date of this report. Nevertheless, the Company agreed with noteholder that the debt would cease incurring interest after June 30, 2023.

On May 15, 2023, the Company issued to a private investor a $19,375 Convertible Promissory Note bearing an interest rate of 5% per annum which was convertible at $.50 per share on June 30, 2023, at the discretion of the Company. As further inducement to purchase this Note, the investor received a warrant to purchase 38,750 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to May 15, 2026. The Company agreed with the noteholder to convert the note into 100,000 shares of restricted common stock. However, the note payable was not converted into shares as of the date of this report. Nevertheless, the Company agreed with noteholder that the debt would cease incurring interest after June 30, 2023.

On September 25, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of 10% for $20,000, which may be converted at $.50 per share at any time during the period. As further inducement to purchase this Note, the Company agreed with Investor to issue 25,000 shares of the Company’s restricted common stock and a warrant to purchase 40,000 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to September 25, 2026. The shares from this transaction have not been issued as of the date of this report.

On October 2, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of 10% for $25,000, which may be converted at $.50 per share at any time during the period. As further inducement to purchase this Note, the Company agreed with Investor to issue 25,000 shares of the Company’s restricted common stock and a warrant to purchase 50,000 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to October2, 2026. The shares from this transaction have not been issued as of the date of this report.

See due to related parties section in Note 8 for additional information on senior secured convertible promissory notes issued on July 1, 2023, to Frank Horkey and Lazarus Asset Management, LLC.

F-16

NOTE 8 – COMMON STOCK

On August 6, 2021, the Company issued 450,000 shares of its common stock in exchange for the conversion of $45,000 of unpaid advisory compensation due to related Parties. In addition, as satisfaction of an external Settlement Agreement between Peter Simone/Corporate Capital Group International, LTD and the related Parties, the Company issued 1,050,000 Founder’s shares.

Frank Horkey received 350,000 shares for acting in the capacity of President and sole Director since his previous contract expired December 31, 2019 and 250,000 shares for his board position vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

Michael Christiansen received 250,000 shares of the Company’s common stock vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

Squadron Marketing LLC received 250,000 shares of the Company common stock for acting on the Company’s Advisory Board for fiscal 2023 vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

Lazarus Asset Management LLC - received 250,000 shares of the Company common stock for acting on the Company’s Advisory Board for fiscal 2023 vesting as follows: eighty-three thousand three hundred thirty-three (83,333) shares upon signing as of July 1, 2022; eighty three thousand three hundred thirty three (83,333) shares for year two to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter; and eighty three thousand three hundred thirty three (83,333) shares for year three to vest quarterly at the rate twenty thousand eight hundred thirty three (20,833) shares per quarter.

John Bennet received 50,000 shares for extending his consulting contract through fiscal year end 2023. On February 10, 2023, as incentive to accept the position of the Company’s Chief Financial Officer for the period of January 1, 2023- the end of fiscal year 2025, Mr. Bennet was awarded an additional 100,000 of the Company’s restricted common stock that vest at 16,666 shares per quarter.

James Marshall III received 75,000 shares of the Company’s common stock for acting as the Company’s technical consultant for fiscal 2023. His shares are now deemed to be vested. Mr. Marshall’s contract was not renewed.

Shawn Perez Esq. was awarded 50,000 shares of the Company’s restricted common stock as inducement for acting as the Company’s in-house counsel beginning January 1, 2023, through fiscal year end 2025.

F-17

NOTE 9 – WARRANTS

Warrants Issued for Investment

On May 5, 2022, the Company issued shares and warrants related to that certain Securities Purchase Agreement dated November 10, 2021with certain of the selling stockholders referenced in our most recent registration statement pursuant to which we sold to such selling stockholders $560,875 in aggregate principal amount of our common stock (747,837 shares) and warrants to purchase shares of our common stock (which we refer to as the “PIPE Warrants”), exercisable at any time before the close of business on May 5, 2023. The PIPE Warrants are comprised of 747,837 warrants with an exercise price of $1.50 per share.

On July 28, 2022, August 1, 2022, and November 28, 2022, an investor purchased 400,001 Units consisting of one shares of the Company’s restricted common stock and one Class C warrant to purchase one shares of the Company’s restricted common stock at an exercise price of $1.50 per share for a period of three years.

On October 2, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of 10% for $25,000, which may be converted at $.50 per share at any time during the period. As further inducement to purchase this Note, the Company agreed with Investor to issue 25,000 shares of the Company’s restricted common stock and a warrant to purchase 50,000 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to October 2, 2026. The shares from this transaction have not been issued as of the date of this report.

On December 6, 2023, the Company agreed to sell to a private investor 20,000 Units at a price of $.75 per Unit. Each Unit consists of one share of the Company’s restricted common stock and a warrant to purchase an additional share of the Company’s restricted common stock at a price of $1.50 any time prior to December 6, 2026. The shares from this transaction have not been issued as of the date of this report.

See due to related parties and notes payable section in Note 8 for additional information on convertible promissory notes issued with warrants on March 24, 2023, May 15, 2023, July 1, 2023, and September 25, 2023.

Warrants Issued for Management and Consulting Services

On July 1, 2021, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a Class C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50.

On May 26, 2022, the Company issued to Frank Horkey Class a C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50 as part of his executive compensation during the 2022 fiscal year. These warrants vested on July 1,2022.

On May 26, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class C warrant to purchase 500,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50 related to consulting services during fiscal 2022.This warrant vested on July 1, 2022.

On June 12, 2022, Frank Horkey and Michael Christiansen were each issued 250,000 class C warrants to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50. Exercise of these warrants commenced upon the effective date of the Company’s registration statement for serving on the Company’s Board of Directors.

On June 12, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a class C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50. Exercise of these warrants commenced upon the effective date of the Company’s registration statement for serving on the Company’s Advisory Board.

On July 1, 2023, Squadron Marketing LLC, Lazarus Asset Management LLC, and Frank Horkey were each issued a class C warrant to purchase 250,000 shares of the Company’s restricted common stock at an exercise price of $1.50 any time prior to June 30, 2026, for consulting services.

Certain of the shares and warrants noted above were issued to Board Members, Advisory Board Members and Consultants for services to be rendered for periods subsequent to December 31, 2023. Amounts related to shares issued as compensation for services not yet performed are treated as prepaid consulting (current and non-current). The amounts will be recognized in subsequent periods as they are earned according to the Agreements.

F-18

The following is the outstanding warrant activity: 

		Warrants - Common Share Equivalents		Weighted Average Exercise price		Warrants exercisable - Common Share Equivalents		Weighted Average Exercise price
Outstanding June 30, 2021			187,500	$	0.75		187,500	$	0.75
Additions	Granted		3,497,833		1.50		1,247,833		1.50
Expired	Expired		-	$	-		-		-
	Exercised		-		-		-		-
Outstanding June 30, 2022			3,685,333	$	1.47		1,435,333	$	1.47
Additions	Granted		400,002		1.50		1,983,335		1.50
Additions	Granted		138,750		0.75		138,750		0.75
	Rounding Adjustment		4		1.47		4		1.47
Additions
Expired	Expired		-	$	-		-		-
	Exercised		-		-		-		-
Outstanding June 30, 2023			4,224,089	$	1.47		3,557,422	$	1.47
Additions	Granted		750,000		1.50		833,333		1.50
Additions	Granted		340,000		0.75		340,000		0.75
	Vested		-		-		-		-
Expired	Expired		-	$	-		-		-
	Exercised		-		-		-		-
Outstanding September 30, 2023			5,314,089	$	1.43		4,730,756	$	1.42
Additions	Granted		20,000	$	1.50		103,333	$	1.50
Additions	Granted		50,000		0.75		50,000		0.75
Expired	Expired		-	$	-		-	$	-
	Exercised		-		-		-		-
Outstanding December 31, 2023			5,384,089	$	1.42		4,884,089	$	1.41

These warrants were valued using a Black Scholes calculation applying the following factors: a stock price of $.16, an exercise price of $1.50, a volatility of 160% and a risk-free interest rate of 5%.

F-19

Private Placement Transactions

The Securities Purchase Agreements

On July 22, 2022, we entered into a Securities Purchase Agreement with one private investor who is not a Selling Stockholder (defined above) to whom we sold $100,000 in aggregate principal amount for 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on December 31, 2025. On August 8, 2022, the same private investor has committed to purchasing another $100,000 in aggregate principal amount for an additional 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on December 31, 2025. On January 30, 2023, the same investor purchased 133,334 shares of restricted common stock, indicating all terms of these issuances as well. We closed the transactions contemplated by the Securities Purchase Agreement. We issued the securities contemplated under the Securities Purchase Agreement in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act. 

No shares were issued in the quarter ended December 31, 2023.

The Registration Rights Agreements

On November 10, 2021, in connection with the closing of the transactions contemplated by the Securities Purchase Agreement, we entered into Registration Rights Agreements with the selling stockholders who are parties to the Securities Purchase Agreement. With respect to the selling stockholders who are party to the Securities Purchase Agreement, we are obligated to file a registration statement registering the resale of (i) their Warrant Shares, (ii) any Shares issuable under the terms of the Securities Purchase Agreement, and (iii) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization, or similar event with respect to the foregoing.

Pursuant to the Registration Rights Agreements, we agreed to file the registration statement(s) no later than the earlier of (a) 180-days after an initial public offering by the Company or (b) twelve (12) months after effective date of the Registration Rights Agreement. Furthermore, we agreed to grant the parties to the Securities Purchase Agreement a “piggy-back” registration right upon at least 10-day notice prior to the Company’s filing of a registration statement (or confidential submission in draft form) with the SEC. As contemplated by the terms of the Registration Rights Agreements, the Company filed a registration statement on Form S-1, as amended, that became effective on September 8, 2022.

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there are no subsequent events that require disclosure.

F-20

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation.

FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China and has spread throughout the United States and the rest of the world. The World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This contagious disease outbreak, which has not been contained, and is disrupting supply chains and affecting production and sales across a range of industries in United States and other companies as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak, as well as the worldwide adverse effect to workforces, economies, and financial markets, leading to a global economic downturn. Therefore, the Company expects this matter to negatively impact its operating results. However, the related financial impact and duration cannot be reasonably estimated at this time.

24

RESULTS OF OPERATION

Quarter Ended December 31, 2023, Compared to Quarter Ended December 31, 2022

Our revenue for the three months ended December 31, 2023, was $2,912 compared to $11,958 for the same period in 2022.

Our revenue for six months ended December 31, 2023, was $15,824 compared to $37,787 for the same period.

Our net loss for the three months ended December 31, 2023, was ($224,192) compared to a net loss of ($182,813) for the same period in 2022.

Our net loss for the six months ended December 31, 2023, was ($568,058) compared to a net loss of ($1,006,762) for the same period in 2022.

During the three months ended December 31, 2023, we incurred operating expenses of $220,161 compared to $154,620 for the same period in 2022.  The increase in expenses was mainly due to an increase in shares issued for services and an increase in management and consulting fees.

During the six months ended December 31, 2023, we incurred operating expenses of $554,772 compared to $961,863 for the same period in 2022. The increase in expenses was mainly due to an increase in shares issued for services and an increase in management and consulting fees.

During the quarter ended December 31, 2023, we incurred interest expenses of $4,879 compared to $0 incurred during the quarter ended December 31, 2022.

LIQUIDITY AND CAPITAL RESOURCES

Quarter Ended December 31, 2023

As of December 31, 2023, our current assets were $158,082 and our current liabilities were $952,727, which resulted in a working capital deficit of ($794,645).

As of December 31, 2023, and 2022, our total liabilities were comprised entirely of current liabilities.

Cash Flows from Operating Activities

For the six months ended December 31, 2023, net cash flows used in operating activities was ($305,430) compared to ($183,054) for the same period in 2022.

Cash Flows from Investing Activities

For the six months ended December 31, 2023, net cash flows used in investing activities were $0 compared to $91,744 for the same period in 2022.

Cash Flows from Financing Activities

For the six months ended December 31, 2023, net cash flows from financing activities were $(282,723) compared to ($300,000) for the same period in 2022.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.

Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.

25

MATERIAL COMMITMENTS

Convertible Debentures

See due to related parties and notes payable section in Note 8 for additional information on convertible promissory note issued on March 24, 2023, May 15, 2023, July 1, 2023, September 25, 2023 and October 2, 2023.

PURCHASE OF SIGNIFICANT EQUIPMENT

During the next twelve months, the Company intends to acquire between one hundred fifty (150) and two hundred (200) ASIC miners per quarter. Although pricing for ASIC miners is generally directly related to the price of bitcoin, ASIC miners as of this quarterly filing cost between $1,500 and $4,000 per ASIC miner. 

CRITICAL ACCOUNTING POLICIES 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management. 

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

26

GOING CONCERN 

As reflected in the accompanying financial statements, the Company incurred a net loss of $568,058 during the six months ended  December 31, 2023, an accumulated deficit of $6,568,584, and a working capital deficit of ($794,645) as of December 31, 2023. While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is a substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues and raise capital.

RECENTLY ISSUED ACCOUNTING STANDARDS 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management. 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. 

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

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 4. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the periods covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.

MANAGEMENT’S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our Chief Executive Officer and our Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

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· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our Chief Executive Officer and our Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the 1992 Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO”) in Internal Control — Integrated Framework.

Based on our assessment, our Chief Executive Officer and our Chief Financial Officer believe that, as of December 31, 2023, our internal control over financial reporting is not effective based on those criteria, due to the following:

· Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties, and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including our accounting personnel. Deficiencies in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.

In light of this conclusion and as part of the preparation of this report, we have applied compensation procedures and processes as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the periods covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only Management’s Report in this report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no significant changes in our internal control over financial reporting during the six months ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company’s consolidated financial position or results of operations.

Item 1A. Risk Factors.

There have been no material changes in the Company’s risk factors from those previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2023.

Item 2. Unregistered Sales of Equity Securities.

On July 1, 2023, the Company issued Frank Horkey a $75,000 Senior Secured Convertible Promissory Note bearing an interest rate of 10% per annum which was convertible at $.50 per share to settle amounts owed as compensation. The Company agreed with Mr. Horkey to issue 75,000 shares of the Company’s restricted common stock and a warrant to purchase 159,000 shares of the Company’s restricted common stock at $.75 per share at any time prior to July 1, 2026. The balance owed on December 31, 2023, is $76,875. The shares from this transaction have not been issued as of the date of this report.

On July 1, 2023, the Company issued Lazarus Asset Management, LLC a $75,000 Senior Secured Convertible Promissory Note bearing an interest rate of 10% per annum which was convertible at $.50 per share to settle amounts owed as compensation. The Company agreed with Lazarus to issue 75,000 shares of the Company’s restricted common stock and a warrant to purchase 159,000 shares of the Company’s restricted common stock at $.75 per share at any time prior to July 1, 2026. The balance owed on December 31, 2023, is $76,875. The shares from this transaction have not been issued as of the date of this report.

On December 6, 2023, the Company agreed to sell to a private investor 20,000 Units at a price of $.75 per Unit. Each Unit consists of one share of the Company’s restricted common stock and a warrant to purchase an additional share of the Company’s restricted common stock at a price of $1.50 anytime prior to December 6, 2026. The shares from this transaction have not been issued as of the date of this report.

On October 2, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of 10% for $25,000, which may be converted at $.50 per share at any time during the period. As further inducement to purchase this Note, the Company agreed with Investor to issue 25,000 shares of the Company’s restricted common stock and a warrant to purchase 50,000 shares of the Company’s restricted common stock exercisable at $.75 per share any time prior to October 2, 2026. The shares from this transaction have not been issued as of the date of this report.

Item 3. Defaults upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

The exhibit listed on the Exhibit Index (following the signatures section of this quarterly report dated December 31, 2022, on Form 10-Q are included, or incorporated by reference, in this three months ended December 31, 2023, Report on Form 10-Q.

Exhibit No.	Description
3.1	Articles of Incorporation incorporated by reference to Exhibit 3.1 of our Registration Statement on Form S-1 filed on July 25, 2008
3.3	Bylaws, incorporated by reference to Exhibit 3.3 of our Registration Statement on Form S-1/A filed on August 31, 2022
31.1	Certification of Principal Executive Officer and Principal Financial Officer Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Schema**
101.CAL	XBRL Taxonomy Calculation Linkbase**
101.DEF	XBRL Taxonomy Definition Linkbase**
101.LAB	XBRL Taxonomy Label Linkbase**
101.PRE	XBRL Taxonomy Presentation Linkbase**

_____________

* Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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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.

	TREX Acquisition Corp. a Nevada corporation
March 18, 2024	By:	/s/ John Bennet
		John Bennet
	Its:	Chief Financial Officer
March 18, 2024	By:	/s/ Frank Horkey
		Frank Horkey
	Its:	President

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

March 18, 2024	By:	/s/ John Bennet
		John Bennet
	Its:	Chief Financial Officer

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