SUMMARY OF SIGNIFICANT POLICIES (Policies)

12 Months Ended

Aug. 31, 2025

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.

The most significant estimates relate to the calculation of stock-based compensation, collectability of notes receivable, useful lives and recoverability of long-lived assets, depreciation methods, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. There have been no material changes to the Company’s accounting estimates since the Company’s consolidated financial statements for the fiscal year ended August 31, 2025.

Segment Reporting

Segment Reporting

The Company and its wholly owned subsidiary operate in one segment. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. All material Company operations qualify for aggregation due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company has the following revenue streams: revenues from digital currency mining, revenues from hosting, revenues from the sale of mining equipment, revenues from leasing, and revenues from consulting. A description of the revenue recognition criteria for each revenue stream is shown below:

Revenues from Digital Currency Mining

The Company participates in digital asset mining pools by executing agreements with a mining pool operator (the Luxor Mining Pool) to perform hash computation services (i.e. hashrate) for the mining pool in exchange for consideration. The mining pool applies the Full-Pay-Per-Share (“FPPS”) payout model. Under the FPPS model, the mining pool pays the Company a fixed amount for each valid share of computation it submits, regardless of whether the pool successfully mines a block on a daily basis (beginning at 0:00:00 UTC). The mining pool calculates a per-share payout based on their own calculation of expected block rewards and transaction fees, which is primarily based on the hashrate provided to the mining pool as a percentage of total network hashrate, current blockchain difficulty, and other inputs.

The Company decides when to provide hashrate to the mining pool under the agreements and the Company’s enforceable right to compensation begins only when, and lasts as long as, the Company provides hashrate to the mining pool. The only consideration due to the Company relates to the provision of hashrate. Such agreements are freely terminable at any time by the Company or by the pool operator, without penalty to either party. Providing hashrate in digital asset transaction verification services is an output of the Company’s ordinary activities and is the only performance obligation in the hash computation service agreement with mining pool operator.

The transaction consideration received, is noncash consideration in the form of BTC. Changes in the fair value of the noncash consideration after contract inception due to the form of the consideration (changes in the market price of BTC) are not included in the transaction price and, therefore, are not included in revenue. The mining pool operator charges a fee to cover the costs of maintaining the pool. These fees are deducted from amounts the Company may otherwise earn and are treated as a reduction to the consideration received.

For accounting purposes, the contract term is less than 24 hours since the agreement between the Company and the mining pool is continually renewed at the beginning of each measurement period. However, the continual renewal of the agreement does not represent a material right requiring separate performance obligations, as the FPPS formula remains the same upon each renewal.

Revenue is recognized over the contract term based on the price of BTC at the inception of the contract and the amount of BTC received at the end of the contract.

There is no significant financing component in these transactions, due to the performance obligations and settlement of the transactions being on a daily basis.

Revenues from Hosting

The Company records revenue from hosting agreements that establish enforceable rights and obligations with customers who place their mining equipment in the Company’s co-hosting facility. Under these agreements, the Company has a single performance obligation: to provide energized space and related hosting services, including electricity, infrastructure, and operational support, which enable the customer’s mining operations. The transaction price consists of fixed amounts billed in U.S. dollars for electricity and other fees, as well as a variable component based on a percentage of digital assets generated by the customer’s mining activities. Because there is only one performance obligation, the entire transaction price is allocated to hosting services. Revenue is recognized over time as the Company satisfies its performance obligation by providing continuous hosting services. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of digital assets generated by the client’s hosting activities. For amounts billed in U.S. dollars, revenue is recognized over-time as the Company provides continuous hosting services. Revenue related to the variable component, which is based on a percentage of digital assets generated by the customer’s mining activities, is recognized over time as the Company provides hosting services and the customer simultaneously benefits from those services. The amount of digital assets earned is measured daily based on the mining proceeds attributable to the customer’s operations, and settlement occurs when the Company receives its share from the mining pool. Mining proceeds are initially received into a cold wallet, and the Company remits the customer’s portion upon receipt.

Revenues from the Sale of Mining Equipment

During the fiscal year ended August 31, 2025, the Company sold and delivered transformers and other mining equipment to customers as part of its resale activities. These transactions are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. Each sale represents a distinct performance obligation, which is satisfied at a point in time when control of the equipment transfers to the customer—generally upon delivery and acceptance under the terms of the purchase order. The transaction price is fixed and determinable at contract inception, and there are no variable consideration components or significant financing elements. The Company allocates the entire transaction price to the single performance obligation and recognizes revenue when the customer obtains control of the equipment.

Revenues from Leasing

During the fiscal year ended August 31, 2025, the Company entered into two machine leasing agreements with KULR Technology Group, Inc. (“KULR” or the “Lessee”). Under the terms of these agreements, the Company provides KULR the right to use 3,000 mining machines and associated operational services for a term of 228 days. This arrangement represents a single performance obligation satisfied over time. The total transaction price is $3,200,000, subject to variable consideration in the form of downtime credits. Downtime credits represent reductions in the lease fee owed by KULR if actual operational downtime exceeds the agreed threshold, calculated based on the BTC that would have been mined during the excess downtime and valued at the closing price as published by Yahoo Finance at midnight Universal Time Coordinated (UTC) on the relevant date. Downtime credits are estimated using the expected value method and are constrained until downtime occurs and can be measured reliably. The entire transaction price is allocated to the single performance obligation. Revenue is recognized over time on a straight-line basis across the 228-day term, using an output method based on time elapsed. Variable consideration is recognized only when it is probable that a significant reversal will not occur, consistent with ASC 606-10-32-12. Downtime credits, finalized after measurement, are recorded as a reduction to revenue.

Revenues from Consulting

In 2025, the Company began selling consulting services and entered into a consulting and services agreement with KULR. Under this agreement, the Company agreed to provide a variety of services related to both the miners subject to the Lease and BTC mining operations in general. Services related to leased miners include performing all commercially reasonable and necessary activities required for the miners to operate consistent with the performance guidelines in the Lease; managing relationships with hosting providers for both leased equipment and other equipment owned by the customer; managing mining pool providers; coordinating on-site and off-site miner repairs; monitoring miner performance through dashboards and troubleshooting network errors; conducting market analysis, including miner pricing and purchase/sale recommendations; and handling shipping logistics for miner imports and exports.

In addition, the Company provides treasury management services, including advice on security and custody solutions; regulatory and compliance expertise, including U.S. GAAP accounting guidance and disclosures; risk management and hedging strategies; techniques to maximize BTC exposure as a public company; customized treasury solutions; and proactive volatility management.

The agreement represents a legally enforceable contract with specified rights, payment terms, and commercial substance. The services are treated as a single performance obligation because they are closely connected and collectively provide a unified outcome for the customer. The transaction price for the agreement is fixed at $800, with no significant variable consideration identified, and no significant financing components. The entire transaction price is allocated to the combined performance obligation. Revenue is recognized over time on a straight-line basis across the 12-month term, as services are provided continuously and the customer simultaneously receives and consumes the benefits of the services. The Company determines cost of sales for consulting contracts based on each consultant’s hourly rate multiplied by the number of hours incurred in performing the related services.

Concentration of Customers

Concentration of Customers

For the years ended August 31, 2025 and August 31, 2024, the Company derived approximately 37.7% and 0% of its total revenues, respectively, from one customer. Additionally, the Company notes that there were no trade accounts receivable outstanding at both August 31, 2025 and 2024, and therefore no concentration of credit risk within this population.

Contract Liabilities

Contract Liabilities

Contract liabilities represent amounts received or due from customers before the Company transfers its software or services under an enforceable agreement. Revenue is recognized in the period(s) when control of the goods or services is transferred to the customer. The amounts relate to product or services based on the transaction price allocated to each performance obligation in the customer contract. It is presented as current or non-current on the consolidated balance sheets, depending on whether goods or services are expected to be delivered within the next 12 months.

The Company’s contract liabilities represent advance payments from customers relating to the sale of transformers subject to the terms of a purchase order. As of August 31, 2025 the Company’s contract liability balance amounted to $1,067. As of August 31, 2024 the Company had $790 of contract liabilities which represented advance payments from a related party to the Company.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances in deposit accounts with major financial institutions, which at times exceed federally insured limits. There have been no losses related to deposit balances held in excess of federally insured limits.

Digital Assets

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 years ending August 31, 2025 and 2024, the Company realized gains from the sale of digital assets of $3,748 and $114, respectively.

Digital assets earned by the Company through its mining activities are included within operating activities on the accompanying Consolidated Statements of Cash Flows. The sales of digital currencies are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in operating expense in the consolidated 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, the Company has strategically invested in ETH, becoming the largest corporate holder of ETH, with over 1,875 tokens valued at approximately $8,260,607 as of August 31, 2025. These purchases were made through major OTC desks like Bitgo and Galaxy Digital. The Company views ETH as a long-term reserve asset, central to its positioning in the AI and digital asset investment cycles and aims to eventually hold 5% of the total ETH supply.

See Note 3, Digital Assets, to the Consolidated Financial Statements for further information regarding the Company’s purchases and sales of digital assets.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives for all other property and equipment are as follows:

	Life (Years)
Miners and mining equipment	2 - 10

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. This process includes (i) identifying whether an indicator of impairment exists, (ii) assessing recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted cash flows expected to result from its use and eventual disposition, and (iii) if the asset group is not recoverable, measuring the impairment loss as the excess of the carrying amount over fair value. Actual future outcomes could result in different conclusions that could materially affect the consolidated financial statements.

No depreciation is recorded on an asset until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is properly configured to turn on the machines.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a hierarchal framework, which prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:

● Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: Inputs are observable inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

● Level 3: Inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As of August 31, 2025 and 2024, the carrying amounts of the Company’s financial instruments, including cash and cash equivalents and accrued liabilities, which approximate fair value due to their short-term nature. The Company recognizes transfers between levels at the end of the reporting period as if the transfers occurred on the last day of the reporting period. There were no transfers during the years ended August 31, 2025 or 2024.

The Company holds digital assets in the form of both BTC and ETH, both of which have an active market to buy and sell. The Company’s digital assets are recorded at fair value under ASC 820 and are considered Level 1 financial instruments. The Company has designated a principal market based on the market the Company has access to that has the greatest volume and level of orderly transactions for BTC and ETH. The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become accessible, or the volume/activity in the current principal market declines.

Basic and Diluted Earnings (Loss) per Share

Basic and Diluted Earnings (Loss) per Share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per Share” (“ASC 260”). As there were participating securities, including Series A and Series B Convertible Preferred Stock, outstanding during the years reported, the two-class method is utilized to compute the basic and dilutive EPS. Under the two-class method, undistributed earnings is allocated among the holders of common stock and participating securities based on their contractual participation rights. Because holders of participating securities do not have contractual obligation to share losses, losses were not allocated to holders of participating securities and, therefore, the two-class method was not used for reporting period when the Company had a net loss.

Basic EPS is computed by dividing undistributed earnings attributable to common stockholders, after allocating undistributed earnings to participating securities, by the weighted-average number of common shares outstanding during the period. Diluted impact from potential common stock instruments is calculated using the treasury stock method, if-converted method, and two-class method, unless the effect would be anti-dilutive. The dilutive EPS is determined based on the most dilutive out of the if-converted or two-class method.

Income Taxes

Income Taxes

The Company accounts for income taxes under ASC 740, Accounting for Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC 740-10-05, Accounting for Uncertainty in Income Taxes, prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for share-based compensation awards in accordance with ASC 718. For equity-classified share-based compensation awards, the Company recognizes compensation expenses based on their grant-date fair value. For awards with service only vesting condition, the Company recognizes compensation expenses on a straight-line basis. The impact of forfeiture is accounted for when they occur.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Crypto Assets

The FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles-Goodwill and Other-Crypto Assets: Accounting for and Disclosure of Crypto Assets. The goal of this update is to require certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the consolidated statement of income each reporting period. Further, this update requires the name, cost basis, fair value, and number of units for each significant crypto asset holding. ASU 2023-08 is effective for annual periods beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08 on September 1, 2024, resulting in no cumulative effect in fair value on digital assets.

Segment Reporting

The FASB issued ASU 2023-07, Segment Reporting, ASC 280: Improvements to Reportable Segment Disclosures. This amendment requires enhanced disclosures about significant segment expenses and other segment items on both an annual and interim basis. The Company has applied the standard retrospectively to all periods presented in the consolidated financial statements. The adoption of ASU 2023-07 did not impact the Company’s determination of reportable segments but resulted in enhanced disclosures related to segment expense information. The adoption did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows.

Business Combinations - Joint Venture Formations

The FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60). The amendments in this Update address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. The objectives of the amendments are to (1) provide decision-useful information to investors and other allocators of capital (collectively, investors) in a joint venture’s financial statements and (2) reduce diversity in practice. The amendments in this Update are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Additionally, a joint venture that was formed before January 1, 2025, may elect to apply the amendments retrospectively if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. The Company does not expect ASU 2023-05 to have a material impact, as it has no new joint ventures expected to be formed after the effective date of January 1, 2025.

Leases

The FASB issued ASU 2023-01, Leases, ASC 842: Common Control Arrangements. This pronouncement requires entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The adoption of ASU 2023-01 did not have a significant impact on the Company’s consolidated financial statements.

Liabilities – Supplier Finance Programs

The FASB issued ASU 2023-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The ASU requires additional disclosures about supplier finance program obligations to enhance transparency of their effects on working capital and liquidity. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not utilize supplier finance programs. While the Company has previously entered into derivative instruments in the normal course of business, no such instruments were outstanding as of August 31, 2025. Accordingly, adoption of ASU 2023-04 is not expected to have a material impact on the Company’s consolidated financial statements.