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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended February 28, 2022

 

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: 000-56220

 

BITMINE IMMERSION TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

 

Delaware   84-3986354

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

2030 Powers Ferry Road SE

Suite 212, Atlanta, Georgia

  30339
(Address of principal executive offices)   (Zip Code)

 

 

Registrant’s telephone number, including area code (404) 816-8240

 

_________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
N/A   N/A   N/A

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ 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 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, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
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 Act.) Yes  ☐    No

 

The number of shares outstanding of the registrant’s common stock as of March 31, 2022 was 43,619,399 shares.

 

DOCUMENTS INCORPORATED BY REFERENCE — NONE

 

 

 

 

   

 

 

TABLE OF CONTENTS

 

Part I – FINANCIAL INFORMATION  
     
Item 1. Financial Statements (unaudited) 4
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 17
     
Item 4. Controls and Procedures 17
     
Part II – OTHER INFORMATION  
     
Item 1. Legal Proceedings 18
     
Item 1A. Risk Factors 18
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
     
Item 3. Defaults Upon Senior Securities 18
     
Item 4. Mine Safety Disclosures 18
     
Item 5. Other Information 19
     
Item 6. Exhibits 19
     
SIGNATURES 20

 

 

 

 

 2 

 

 

 

PART I - FINANCIAL INFORMATION

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Information contained in this quarterly report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. These forward-looking statements are contained principally in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions, or strategies concerning future events, including, but not limited to: our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by any forward-looking statements. These risks, uncertainties, and other factors include but are not limited to:

 

·the risks of limited management, labor, and financial resources;

 

·our ability to establish and maintain adequate internal controls;

 

·our ability to develop and maintain a market in our securities;

 

·our ability obtain financing, if and when needed, on acceptable terms;

 

·the success of our digital currency mining and hosting activities;

 

·the volatile and unpredictable cycles in the emerging and evolving industries in which we operate, increasing difficulty rates for bitcoin mining;

 

·bitcoin halving;

 

·new or additional governmental regulation;

 

·the anticipated delivery dates of new hosting containers and miners;

 

·the ability to successfully develop and deploy new hosting facilities;

 

·the dependency on utility rate structures and government incentive programs;

 

·the expectations of future revenue growth may not be realized;

 

·ongoing demand for the Company's services;

 

·the impact of global pandemics (including COVID-19) on logistics and shipping and the demand for our products and services; and

 

·other risks described in the Company's prior press releases and in its filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K and any subsequent filings with the SEC.

 

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

 

As used in this quarterly report on Form 10-Q, “we”, “our”, “us” and the “Company” refer to Bitmine Immersion Technologies, Inc., a Delaware corporation unless the context requires otherwise.

 

 

 

 

 3 

 

 

Item 1. Financial Statements.

 

Index to Financial Statements

 

  Page
CONDENSED FINANCIAL STATEMENTS:  
   
Balance Sheets, February 28, 2022 (unaudited), and August 31, 2021 5
   
Unaudited Statements of Operations, for the Three and Six Months Ended February 28, 2022, and February 28, 2021 6
   
Unaudited Statements of Changes in Stockholders’ (Deficit), for the Six Months Ended February 28, 2022, and February 28, 2021 7
   
Unaudited Statements of Cash Flows, for the Six Months Ended February 28, 2022, and February 28, 2021 8
   
Notes to the Unaudited Interim Financial Statements 9

 

 

 

 

 

 

 

 4 

 

 

Bitmine Immersion Technologies, Inc.

Balance Sheets

(Unaudited)

 

           
   February 28,   August 31, 
   2022   2021 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $901,216   $218,737 
Cryptocurrencies   4,574     
Notes receivable   168,750     
Prepaid expenses   5,000     
Total current assets   1,079,540    218,737 
Fixed assets -not in service   1,863,997    427,296 
Total assets  $2,943,537   $646,033 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable  $25,420   $3,680 
Accrued liabilities - related party   71,500     
Accrued interest - related party   122,379    4,505 
Loans payable-related party   1,894,109    277,296 
Total current liabilities   2,113,408    285,481 
Total liabilities   2,113,408    285,481 
           
Commitments and contingencies        
           
Stockholders' Equity:          
Common stock, $0.0001 par value, 500,000,000 shares authorized; 43,313,399 and 40,433,399 issued and outstanding as of February 28, 2022 and November 10, 2021, respectively     4,331       4,043  
Additional paid-in capital   2,108,014    817,842 
Accumulated deficit   (1,282,217)   (461,334)
Total stockholders' equity   830,129    360,551 
Total liabilities and equity  $2,943,537   $646,033 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

 

 

 5 

 

 

Bitmine Immersion Technologies, Inc.

Statements of Operations

(Unaudited)

     

 

                     
   Three months   Three months   Six months   Six months 
   ended   ended   ended   ended 
   February 28,   February 28,   February 28,   February 28, 
   2022   2021   2022   2021 
Revenue from the sale of mining equipment  $344,700   $   $344,700   $ 
Revenue, net mining   4,574        4,574     
Total revenue   349,274        349,274     
Cost of sales mining equipment   186,657        186,657     
Cost of sales mining   45,468        45,468     
Gross profit   117,148        117,148     
                     
Operating expenses:                    
General and administrative expenses   20,134    5,349    48,672    22,559 
Professional fees   43,520         667,025      
Related party compensation   92,460    500    104,460    500 
Total operating expenses   156,114    5,849    820,157    23,059 
Loss from operations   (38,966)   (5,849)   (703,009)   (23,059)
Other (expense)                    
Interest expense   (73,162)   (4,519)   (117,874)   (8,286)
Other (expense)   (73,162)   (4,519)   (117,874)   (8,286)
Net loss   (112,127)   (10,368)   (820,883)   (31,345)
                     
Basic and diluted earnings (loss) per common share  $(0.00)  $(0.00)  $(0.02)  $(0.01)
                     
Weighted-average number of common shares outstanding:                    
Basic and diluted   41,417,621    2,688,400    41,006,769    2,688,400 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 6 

 

 

Bitmine Immersion Technologies, Inc.

Statements of Changes in Stockholders' Equity

(Unaudited)

 

                          
           Additional       Total 
   Common Stock   Paid-in   Retained   Stockholders' 
   Shares   Value   Capital   Earnings   Equity 
Balance, August 31,2020   2,688,400   $269   $256,751   $(307,095)  $(50,075)
                          
Net loss               (20,976)  $(20,976)
                          
Balance, November 30, 2020   2,688,400   $269   $256,751   $(328,071)  $(71,051)
                          
Net loss               (10,368)  $(10,368)
                          
Balance, February 28, 2021   2,688,400   $269   $256,751   $(338,439)  $(81,419)

 

           Additional       Total 
   Common Stock   Paid-in   Retained   Stockholders' 
   Shares   Value   Capital   Earnings   Equity 
Balance, August 31, 2021   40,433,399   $4,043   $817,842   $(461,334)  $360,551 
                          
Net loss               (708,756)   (708,756)
                          
Common shares issued for services   200,000    20    549,980        550,000 
                          
Balance, November 30, 2021   40,633,399   $4,063   $1,367,822   $(1,170,090)  $201,796 
                          
Common shares issued for services   2,100,000    210    (210)        
                          
Common shares sold in a private placement   580,000    58    724,942        725,000 
                          
Stock-based compensation -related party           15,460        15,460 
                          
Net loss               (112,127)   (112,127)
                          
Balance, February 28, 2022   43,313,399   $4,331   $2,108,014   $(1,282,217)  $830,129 

 

The accompanying notes are an integral part of the consolidated financial statements

 

 

 

 7 

 

 

Bitmine Immersion Technologies, Inc.

Statements of Cash Flows

(Unaudited)

  

 

           
   Six months   Six months 
   ended   ended 
   February 28,   February 28, 
   2022   2021 
         
         
Cash flows from operating activities          
Net loss  $(820,883)  $(31,345)
Stock-based compensation   565,460     
Gain on the sale of property   158,043     
Depreciation   7,803     
Change in balance sheet accounts         
Cryptocurrencies   (4,574)    
Notes receivable   (168,750)    
Prepaid expenses   (5,000)    
Accounts payable   21,740     
Accrued liabilities -related parties   71,500     
Accrued interest -related parties   117,874    8,286 
Net cash used in operating activities   (56,788)   (23,059)
           
Cash flows from investing activities          
Purchase of fixed assets   (1,602,546)    
Net cash used in investing activities   (1,602,546)    
           
           
Cash flows from financing activities:          
Common shares sold in a private placement   725,000     
Related party loans -net   1,616,813    24,000 
Net cash provided by financing activities   2,341,813    24,000 
           
Net increase in cash and cash equivalents   682,479    941 
Cash and cash equivalents at beginning of period   218,737    1,930 
Cash and cash equivalents at end of period  $901,216   $2,871 
           
Supplemental disclosure of cash flow information:          
Cash paid for interest  $   $ 
Cash paid for income taxes  $   $ 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

 8 

 

 

BITMINE IMMERSION TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

 

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

 

 

About Bitmine Immersion Technologies, Inc.

 

Bitmine Immersion Technologies Inc. f/k/a Sandy Springs Holdings, Inc. (“Bitmine” or the “Company”) is a Delaware corporation that commenced operations on July 16, 2020. A predecessor to the Company was incorporated in the state of Nevada on August 16, 1995, as Interactive Lighting Showrooms, Inc.

 

By a written consent dated July 16, 2021, holders of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “New O&Ds”). Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 32,994,999 shares of common stock in the Company’s offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services, which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them) collectively acquired 24,893,877 shares of common stock, which represented 57.5% of the issued and outstanding shares as of February 28, 2022.

 

The appointment of certain of the New O&Ds to the Company’s board, and issuance to the New O&Ds of a controlling interest in the Company, were made in order to enable the Company to enter the business of creating a hosting center for Bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the Bitcoin digital currency for its own account. Prior to the change of control to the New O&Ds, the Company was a shell company.

 

During the three months ended February 28, 2022 the Company began implementing its business plan by generating revenue from the mining of Bitcoin digital currency and from the sale of mining equipment.

 

The Company’s year-end is August 31st.

 

Basis of Presentation

 

The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2021. In the opinion of management, the unaudited interim condensed financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending August 31, 2022.

 

Reverse Stock Split

 

On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock.

 

 

 

 9 

 

 

The Company’s financial statements in this Report for the periods ended February 28, 2022, and August 31, 2021, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise.

 

Management’s Representation of Interim Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Use of Estimates

 

The preparation of financial statements in conformity with US 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 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 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.

 

Revenue Recognition

 

On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.

 

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. On February 28, 2022, and August 31, 2021, respectively, the Company’s cash equivalents totaled $901,216 and $218,737, respectively.

 

Income taxes

 

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB 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 FASB 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. FASB 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

 

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

 

 

 

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Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Stock Purchase Warrants

 

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.

 

Property and equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:

       
      Life (Years)  
Miners and mining equipment     3  
Machinery and equipment     5-7  
Office and computer equipment     3  

 

No depreciation is recorded on an asset until it is placed in service. As of February 28, 2022 and August 31, 2021 had $1,863,997 and $427,296, respectively of fixed assets not in service. During the three months ended February 28, 2022, the Company placed $187,260 of mining equipment into service, recorded $7,803 of depreciation on that equipment, and then subsequently sold the equipment to a third party on February 23, 2022 who agreed to utilize the Company to host the equipment for a three year term.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

 

We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.

 

NOTE 3 – NOTES RECEIVABLE

 

As of February 28, 2022 and August 31, 2021 the balance of notes receivable was $168,750 and $-0-, respectively. The note receivable carries a 10% interest rate. The note principal is payable in two equal installments of $84,375 on April 15, 2022 and May 15, 2022, with all accrued interest being payable upon maturity of the note. The note receivable arose from the sale of mining equipment to a third party for $337,500, in which half of the sale proceeds of $168,750 was received by the Company in cash, the remaining half was in the form of a note receivable for $168,750.

 

 

 

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NOTE 4 – LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY

 

On July 22, 2021 the Company entered into a Line of Credit Agreement with Innovative Digital Investors Emerging Technology, L.P.(“IDI), a limited partnership controlled by Jonathan Bates, the Company’s Chairman, and Raymond Mow, the Company’s Chief Financial Officer and a Director. The Line of Credit Agreement was amended and restated in its entirety on August 4, 2021, and on September 29, 2021 (as amended and restated, the “LOC Agreement”). The LOC Agreement, as most recently amended, provides for loans of up to $2,500,000 at the request of the Company to finance the purchase of equipment necessary for the operation of the Company’s business. Loans under the LOC Agreement accrue interest at fifteen percent (15%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The amount drawn, plus all accrued interest therein, was repayable in full on March 31, 2022. On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and allowed amounts to be borrowed for general working capital purposes.

 

As of February 28, 2022, and August 31, 2021, the Company owed $1,863,997 and $277,296, respectively, on the Line of Credit. Additionally, these loans accrue interest at the rate of 15% percent per annum. As of February 28, 2022, and August 31, 2021, accrued interest was $122,379 and $4,505, respectively.

 

As of February 28, 2022 and August 31, 2021, the balance of accrued liabilities related party was $71,500 and $-0- respectively. The $71,500 is comprised of accrued salary and bonus due to two company officer/directors.

 

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Stockholders’ Equity

 

The Company is authorized to issue 500,000,000 shares of Common Stock with a par value of $0.001. As of February 28, 2022, and August 31, 2021, there were 43,313,399 and 40,433,399 shares outstanding, respectively.

 

In January 2022, the Company commenced a $10.0 million Unit Offering of its common stock and warrants at a Unit price of $1.25 per Unit, comprised of one share of its common stock, one Class C-1 Warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $2.00 per share, and one Class C-2 warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $4.00 per share.

 

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Under those guidelines the Company, using Black Scholes methodology using the variables below determined that the common stock value was $0.44, the C-1 warrant was $0.41 and the C-2 warrant was $0.40.

 

           
Exercise Price         $1.25 -$4,00  
Stock Price         $1.25  
Risk-free interest rate         0.04%  
Expected volatility         223.3  
Expected life (in years)         3.00  
Expected dividend yield         $0  

 

Issuance of Shares

 

During the six months ended February 28, 2022, the Company issued the following shares:

 

·200,000 shares to an investment banking firm for investment banking services. The shares were valued at $2.75 per share, which was the closing price of the shares on the date of issuance.
·2,100,000 shares subject to vesting for services to a company employee. These common shares were valued at $0.44 per share as described above. The shares were valued at $924,000 amortized over a 60 month vesting period.
·580,000 shares were sold to accredited investors under the Unit Offering. The Unit Offering was valued at $1,25 per Unit, as described above for a total value of $725,000.

 

 

 

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Warrants

 

As of February 28, 2022, and August 31, 2021, the Company had 590,000 Class A Warrants and 590,000 Class B warrants outstanding. Both sets of warrants entitle the holder to exercise the warrants on a cash or a cashless basis until August 5, 2024. The Class A Warrants have an exercise price of $2.00 per share, and the Class B Warrants have an exercise price of $5.00 per share, but otherwise have identical terms. Also pursuant to the Company’s Unit Offering, the Company had 580,000 C-1 warrants exercisable at $2.00 per share, and 580,000 C-2 warrants exercisable at $4.00 per share, both exercisable until January 15, 2025.

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

The Company did not have any contractual commitments as of February 28, 2022, and August 31, 2021.

 

NOTE 7 – SUBSEQUENT EVENTS

 

On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and allowed amounts to be borrowed for general working capital purposes.

 

Since February 28, 2022, the Company has received additional subscriptions for $527,500 in its Unit offering.

 

 

 

 

 

 

 

 

 

 

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis of the results of operations and financial condition of the Company for the quarters ended February 28, 2022, and 2021, should be read in conjunction with the other sections of this Quarterly Report, including the Financial Statements and notes thereto of the Company included in this Quarterly Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Quarterly Report as well as other matters over which we have no control. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

  

Overview

 

By a written consent dated July 16, 2021, holders of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “New O&Ds”). Prior to July 16, 2021, Erik S. Nelson was the sole director and officer. As part of the transaction, Mr. Nelson agreed to remain on the board as a director and to serve as chief executive officer. At the same time, the board and shareholders approved the issuance of 32,994,999 shares of common stock in the Company’s offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services, which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them) collectively acquired 24,893,877 shares of common stock, which represents 57.5% of the issued and outstanding shares as of February 28, 2022.

 

The appointment of certain of the New O&Ds to the Company’s board, and issuance to the New O&Ds of a controlling interest in the Company, were made in order to enable the Company to enter the business of creating a hosting center for Bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the Bitcoin digital currency for its own account. Prior to the change of control to the New O&Ds, the Company was a shell company.

 

During the six months ended February 28, 2022 the Company began implementing its business plan by generating revenue from the mining of Bitcoin digital currency and from sale of mining equipment.

 

Results of Operations

 

Comparison of Results of Operations for the Three Months Ended February 28, 2022, and 2021.

 

Revenues and Cost of Sales

 

During the three months ended February 28, 2022 the Company generated $4,574 in Bitcoin revenue from mining. Prior to the end of the quarter, the Company sold the mining equipment that generated the Bitcoin revenue and recorded revenue on the sale of the mining equipment of $344,700. This compares to no revenue during the three months ended February 28, 2021. The Company intends to continue selling Bitmine equipment to third parties and to generate increasing levels of Bitcoin digital revenue once it receives additional equipment that is currently in transit. There can be no assurances as to this timing or the level of additional sales and revenue.

 

Cost of sales related to the sale of mining equipment was $186,657 and cost of sales on Bitcoin revenue was $45,468, respectively, for the three months ended February 28, 2022, compared to zero in the prior period when there was no revenue. For the sale on mining equipment we recorded a net profit of $158,043.

 

Since we are in the early stages of setting up our infrastructure to generate higher levels of revenues, we expect that our cost of sales to generate Bitmine digital revenue will exceed the revenue we generate, for the immediate future. These costs include electricity, utilities, facilities costs, depreciation and supplies.

 

Operating Expenses

 

During the three months ended February 28, 2022, the Company incurred $156,114 in operating expenses compared to $5,940 in operating expenses during the three months ended February 28, 2021. Operating expenses for the 2022 period were primarily comprised of $20,134 in general and administrative expenses, approximately $44,000 in legal and accounting fees, and $92,460 in related party compensation expense to two of our officers. The higher level of operating expenses in the 2022 period as compared to the 2021 period is attributable to expenses incurred to as part of the Company’s entry into the bitmine hosting business. The Company expects that operating expenses will trend materially higher in future periods as the Company begins paying regular compensation to existing officers and directors, hires additional employees, and incurs other costs associated with the commencement of operations.

 

 

 

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Other Income (Expense)

 

During the three months ended February 28, 2022, the Company incurred $73,162 in other expenses, which was comprised solely of interest expense, compared to $4,519 of interest expenses during the same three months ended February 28. 2021. The increase in interest expense is due to increased levels of borrowings by the Company under its Line of Credit in 2022 compared to the 2021 period when no Line of Credit was available.

 

Net Income (Loss)

 

As a result of the foregoing, during the three months ended February 28, 2022, the Company incurred a net loss of ($112,127), or ($0.00) per share, as compared to a net loss of ($10,368) during the three months ended February 28, 2021. The increase in the Company’s net loss in three months ended February 28, 2022, compared to the three months ended February 28, 2021 is attributable to the factors discussed above.

 

Comparison of Results of Operations for the Six Months Ended February 28, 2022, and 2021.

 

Revenues and Cost of Sales

 

During the six months ended February 28, 2022 the Company generated $4,574 in Bitcoin revenue from mining. Prior to the end of the quarter, the Company sold the mining equipment that generated the Bitcoin revenue and recorded revenue on the sale of the mining equipment of $344,700. This compares to no revenue during the three months ended February 28, 2021. The Company intends to continue selling Bitmine equipment to third parties and to generate increasing levels of Bitcoin digital revenue once it receives additional equipment that is currently in transit. There can be no assurances as to this timing or the level of additional sales and revenue.

 

Cost of sales related to the sale of mining equipment was $186,657 and cost of sales on Bitcoin revenue was $45,468, respectively, for the six months ended February 28th, compared to zero in the prior period when there was no revenue. For the sale on mining equipment we recorded a net profit of $158,043.

 

Since we are in the early stages of setting up our infrastructure to generate higher levels of revenues, we expect that our cost of sales to generate Bitmine digital revenue will exceed the revenue we generate, for the immediate future. These costs include electricity, utilities, facilities costs, depreciation and supp

 

Operating Expenses

 

During the six months ended February 28, 2022, the Company incurred $820,157 in operating expenses compared to $23,059 in operating expenses during the six months ended February 28, 2021. Operating expenses for the 2022 period were primarily comprised of $48,672 in general and administrative expenses, approximately $667,000 in legal, accounting, investment banking and professional fees, which includes $550,000 in non-cash stock based compensation, and $104,460 in related party compensation expense to two of our officers. The higher level of operating expenses in the 2022 period as compared to the 2021 period is attributable to expenses incurred to as part of the Company’s entry into the bitmine hosting business. The Company expects that operating expenses will trend materially higher in future periods as the Company begins paying regular compensation to existing officers and directors, hires additional employees, and incurs other costs associated with the commencement of operations.

 

Other Income (Expense)

 

During the six months ended February 28, 2022, the Company incurred $117,874 in other expenses, which was comprised solely of interest expense, compared to $8,286 of interest expenses during the six month period ended February 28. 2021. The increase in interest expense is due to increased levels of borrowings by the Company on its Line of Credit in 2022 compared to the 2021 period when no Line of Credit was available.

 

Net Income (Loss)

 

As a result of the foregoing, during the six months ended February 28, 2022, the Company incurred a net loss of ($820,883), or ($0.00) per share, as compared to a net loss of ($31,345) during the six months ended February 28, 2021. The increase in the Company’s net loss in six months ended February 28, 2022, compared to the six months ended February 28, 2021 is attributable to the factors discussed above.

 

 

 

 15 

 

 

Liquidity and Capital Resources

 

As of February 28, 2022, the Company had $901,216 in cash on hand.

 

During the six months ended February 28, 2022, the Company had a net loss of ($820,883).

 

Cash flows used in operating activities were ($56,788) for the six months ended February 28, 2022, compared to cash flows used of ($23,059) for the six months ended February 28, 2021. The increase in cash flows used in operating activities for fiscal 2022 compared to fiscal 2021 is primarily attributable to our operating loss of ($820,883), which was offset by non-cash stock-based compensation of $565,460, an increase of $11,7,874 of accrued interest, and the accrual of $71,500 of compensation to related parties during the six months ended February 28, 2022, as well as minor changes in other balance sheet accounts.

 

Cash flows used in investing activities were ($1,602,546) for the six months ended February 28, 2022, compared to cash flows used in investing activities of $-0- for the six months ended February 28, 2021. The entire increase in cash flows used by investing activities during the 2022 period compared to the 2011 period is due to the purchase of $1,602,546 bitmining equipment.

 

Cash flows provided by financing activities were $2,341,813 for the six months ended February 28, 2022, compared to cash flows provided by financing activities of $24,000 for the six months ended February 28, 2021. The increase in cash flows provided by financing activities in the 2022 period compared to the 2021 period is attributable to $1,616,813 in borrowings on our Line of Credit and $725,000 in proceeds from the sale of common stock and warrants in 2022.

 

A significant component of the Company’s current liquidity is derived from a Line of Credit Agreement with Innovative Digital Investors Emerging Technology, L.P., (“IDI”) a limited partnership controlled by Jonathan Bates, our Chairman, and Raymond Mow, our chief financial officer and a director. The Line of Credit Agreement was initially entered into on July 22, 2021, and was amended and restated in its entirety on August 4, 2021, and on September 29, 2021 (as amended and restated, the “LOC Agreement”). The LOC Agreement, as most recently amended, provides for loans of up to $2,500,000 at the request of the Company to finance the purchase of equipment necessary for the operation of the Company’s business. Loans under the LOC Agreement accrue interest at fifteen percent (15%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full.

 

On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and agreed that borrowings may be used for general working capital purposes.

 

The Company believes that the accessibility to this Line of Credit will enable it to purchase equipment it can either resell at a profit or can be used to generate revenue through the mining of Bitcoin and other crypto-currencies. Additionally, the Company believes that this revenue combined with cash on hand will provide it sufficient liquidity to fund its operations for the next 12 months. Nevertheless, in order to expedite the Company’s entry into the bitmine hosting business, and to ensure that the Company has adequate cash reserves, the Company has engaged an investment banker and is pursuing additional capital-raising alternatives, including the potential issuance of common stock in a private placement, or the issuance of convertible notes or preferred stock. There is no assurance that the Company will be able to raise additional capital or that the terms of any capital raise are not dilutive to current shareholders or carry other terms that are unfavorable to the Company and its shareholders.

 

Additionally, in January 2022 the Company began a $10 million Unit Offering of shares and warrants and raised $725,000 under the offering during the six months ended February 22, 2022. See Note 5. to the financial statements.

 

Critical Accounting Policies and Estimates

 

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

 

 

 

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

 

Off-Balance Sheet Arrangements

 

None.

  

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

 

As a smaller reporting company, we are not required to provide the information called for by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

A review and evaluation were carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q, pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that review and evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures as of February 28, 2022 are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations of control systems, not all misstatements may be detected. Those inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

 

Changes in Internal Control over Financial Reporting.

 

As of August 31, 2021, our management concluded that our internal controls over financial reporting were not effective due to the following identified material weaknesses:

 

  · We have not established and/or maintained adequately designed internal controls in order to prevent or detect and correct material misstatements to the financial statements, including internal controls related to complex or nonroutine transactions.

 

  · We lack the necessary accounting resources with sufficient SEC reporting experience, US GAAP knowledge and accounting experience.

 

Since August 31, 2021, management has reevaluated its internal controls and believes that it has sufficiently remediated its previously disclosed weaknesses in internal controls as a result of the addition of skilled personnel to its management team or as independent contractors. As of February 28, 2022 our management has concluded that our internal controls over financial reporting were effective.

 

 

 

 

 

 

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, please carefully consider the information set forth in this Quarterly Report on Form 10-Q and the risk factors discussed in Part I, Item I A. of our Annual Report on Form 10-K for the year ended September 30, 2021, which could materially affect our business, financial condition or future results. In evaluating our business, you should carefully consider the risk factors discussed in our Annual Report on Form 10-K, as updated by our subsequent filings under the Exchange Act. The occurrence of any of the risks discussed in such filings, or other events that we do not currently anticipate or that we currently deem immaterial, could harm our business, prospects, financial condition and results of operations. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. Furthermore, we add the following risk factor to the risk factors set forth in prior reports filed with the SEC:

 

Supply chain and shipping disruptions have resulted in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales, which may have a material adverse effect on our business, operating results and financial condition.

 

Supply chain disruptions, resulting from factors such as the COVID-19 pandemic, labor supply and shipping container shortages, have impacted, and may continue to impact, us and our third-party manufacturers and suppliers. These disruptions have resulted in longer lead times and increased product costs and shipping expenses, including with respect to the delivery of miners that we have purchased. While we have taken steps to minimize the impact of these increased costs by working closely with our suppliers and customers, there can be no assurances that unforeseen events impacting the supply chain will not have a material adverse effect on us in the future. Additionally, the impacts supply chain disruptions have on our third-party manufacturers and suppliers are not within our control. It is not currently possible to predict how long it will take for these supply chain disruptions to cease. Prolonged supply chain disruptions impacting us and our third-party manufacturers and suppliers could interrupt product manufacturing, increased lead times, increased product costs and result in lost sales and bitcoin production, result in a delay in the delivery of miners that we have purchased, and continue to increase shipping costs associated with the delivery of our purchased miners, which may have a material adverse effect on our business, operating results and financial condition.

  

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds.

 

During the three months ended February 28, 2022, the Company issued securities in the following private transactions:

 

·2,100,000 shares subject to vesting for services to a company employees and director. These common shares were valued at $0.44 per share, or $$924,000, and subject to vesting over a 60 month vesting period. The shares were issued pursuant to the exemption from registration under the Securities Act of 1933 provided by Section 4(a)(2) thereunder.
·580,000 Units were sold to accredited investors under the Unit Offering at $1.25 per Unit, for total proceeds received of $725,000. Each Unit consists of one share of common stock, one Class C-1 Warrant and one Class C-2 Warrant. The Units were issued pursuant to the exemption from registration under the Securities Act of 1933 provided by Rule 506(b) and Section 4(a)(2) thereunder.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 

 

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Item 5. Other Information.

 

None.

  

Item 6. Exhibits.

 

The exhibits listed on the Exhibit Index below are provided as part of this report.

 

Exhibit No.   Description

 

31.1*   Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.
31.2   Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.
32.1*   Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.
32.2   Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.
101.INS*   Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*   Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

 

* Filed herewith.

 

 

 

 

 

 19 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BITMINE IMMERSION TECHNOLOGIES, INC.  
       
Dated: April 18, 2022 By: /s/ Erik Nelson  
    Erik Nelson, Chief Executive Officer (Principal Executive Officer)  
       
Dated: April 18, 2022 By: /s/ Raymond Mow  
    Raymond Mow Chief Financial Officer (Principal Financial and Accounting Officer)   

 

 

 

 

 

 

 20 

 

 

EX-31.1 2 bitmine_ex3101.htm CERTIFICATION

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Erik Nelson, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2022 of Bitmine Immersion Technologies, Inc.
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
   
  a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its  subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
     
  c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;
     
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);
   
  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
     

 

 Dated: April 18, 2022   /s/ Erik Nelson  
    Erik Nelson, CEO  
   

Chief Executive Officer

(Principal Executive Officer)

 
       

  

EX-31.2 3 bitmine_ex3102.htm CERTIFICATION

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Raymond Mow, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2022 of Bitmine Immersion Technologies, Inc.
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
   
  a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its  subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
     
  c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;
     
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);
   
  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
     

 

 Dated: April 18, 2022   /s/ Raymond Mow  
   

Chief Financial Officer

(Principal Financial and Accounting Officer)

 
       

 

EX-32.1 4 bitmine_ex3201.htm CERTIFICATION

 

EXHIBIT 32.1

 

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Bitmine Immersion Technologies, Inc. (the “Company”) for the fiscal quarter ended February 28, 2022 as filed with the Securities and Exchange Commission (the “Report”), I, Erik Nelson, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

 

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

 

Dated: April 18, 2022   /s/ Erik Nelson
    Erik Nelson
   

Chief Executive Officer

(Principal Executive Officer)

     

 

EX-32.2 5 bitmine_ex3202.htm CERTIFICATION

 

EXHIBIT 32.2

 

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Bitmine Immersion Technologies, Inc. (the “Company”) for the fiscal quarter ended February 28, 2022 as filed with the Securities and Exchange Commission (the “Report”), I, Raymond Mow, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

 

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

 

Dated: April 18, 2022   /s/ Raymond Mow
    Raymond Mow
   

Chief Financial Officer

(Principal Financial and Accounting Officer)

     

 

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Feb. 28, 2022
Mar. 31, 2022
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Entity Registrant Name BITMINE IMMERSION TECHNOLOGIES, INC.  
Entity Central Index Key 0001829311  
Entity Tax Identification Number 84-3986354  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 2030 Powers Ferry Road SE  
Entity Address, Address Line Two Suite 212  
Entity Address, City or Town Atlanta  
Entity Address, State or Province GA  
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Entity Common Stock, Shares Outstanding   43,619,399
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Balance Sheets (Unaudited) - USD ($)
Feb. 28, 2022
Aug. 31, 2021
Current assets:    
Cash and cash equivalents $ 901,216 $ 218,737
Cryptocurrencies 4,574 0
Notes receivable 168,750 0
Prepaid expenses 5,000 0
Total current assets 1,079,540 218,737
Fixed assets -not in service 1,863,997 427,296
Total assets 2,943,537 646,033
Current liabilities:    
Accounts payable 25,420 3,680
Accrued liabilities - related party 71,500 0
Accrued interest - related party 122,379 4,505
Loans payable-related party 1,894,109 277,296
Total current liabilities 2,113,408 285,481
Total liabilities 2,113,408 285,481
Commitments and contingencies
Stockholders' Equity:    
Common stock, $0.0001 par value, 500,000,000 shares authorized; 43,313,399 and 40,433,399 issued and outstanding as of February 28, 2022 and November 10, 2021, respectively 4,331 4,043
Additional paid-in capital 2,108,014 817,842
Accumulated deficit (1,282,217) (461,334)
Total stockholders' equity 830,129 360,551
Total liabilities and equity $ 2,943,537 $ 646,033
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Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Feb. 28, 2022
Aug. 31, 2021
Statement of Financial Position [Abstract]    
Common Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 500,000,000 500,000,000
Common Stock, Shares, Issued 43,313,399 40,433,399
Common Stock, Shares, Outstanding 43,313,399 40,433,399
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3 Months Ended 6 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Feb. 28, 2022
Feb. 28, 2021
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Total cost of sales 232,125 0 232,125 0
Gross profit 117,148 0 117,148 0
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Professional fees 43,520   667,025  
Related party compensation 92,460 500 104,460 500
Total operating expenses 156,114 5,849 820,157 23,059
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Other (expense) (73,162) (4,519) (117,874) (8,286)
Net loss $ (112,127) $ (10,368) $ (820,883) $ (31,345)
Basic and diluted earnings (loss) per common share $ (0.00) $ (0.00) $ (0.02) $ (0.01)
Weighted-average number of common shares outstanding:        
Basic and diluted 41,417,621 2,688,400 41,006,769 2,688,400
Revenue From Sale Of Mining Equipment [Member]        
Total revenue $ 344,700 $ 0 $ 344,700 $ 0
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Cost Of Sales Mining Equipment [Member]        
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Cost Of Sales Mining [Member]        
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Additional Paid-in Capital [Member]
Retained Earnings [Member]
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Net loss (20,976) (20,976)
Ending balance, value at Nov. 30, 2020 $ 269 256,751 (328,071) (71,051)
Shares, Outstanding, Beginning Balance at Nov. 30, 2020 2,688,400      
Net loss (10,368) (10,368)
Ending balance, value at Feb. 28, 2021 $ 269 256,751 (338,439) (81,419)
Shares, Outstanding, Beginning Balance at Feb. 28, 2021 2,688,400      
Beginning balance, value at Aug. 31, 2021 $ 4,043 817,842 (461,334) 360,551
Shares, Outstanding, Beginning Balance at Aug. 31, 2021 40,433,399      
Net loss (708,756) (708,756)
Common shares issued for services $ 20 549,980 550,000
Shares, Outstanding, Beginning Balance 200,000      
Ending balance, value at Nov. 30, 2021 $ 4,063 1,367,822 (1,170,090) 201,796
Shares, Outstanding, Beginning Balance at Nov. 30, 2021 40,633,399      
Beginning balance, value at Aug. 31, 2021 $ 4,043 817,842 (461,334) 360,551
Shares, Outstanding, Beginning Balance at Aug. 31, 2021 40,433,399      
Ending balance, value at Feb. 28, 2022 $ 4,331 2,108,014 (1,282,217) 830,129
Shares, Outstanding, Beginning Balance at Feb. 28, 2022 43,313,399      
Beginning balance, value at Nov. 30, 2021 $ 4,063 1,367,822 (1,170,090) 201,796
Shares, Outstanding, Beginning Balance at Nov. 30, 2021 40,633,399      
Net loss (112,127) (112,127)
Common shares issued for services $ 210 (210)
Shares, Outstanding, Beginning Balance 2,100,000      
Common shares sold in a private placement $ 58 724,942 725,000
Shares, Outstanding, Beginning Balance 580,000      
Stock-based compensation -related party 15,460 15,460
Ending balance, value at Feb. 28, 2022 $ 4,331 $ 2,108,014 $ (1,282,217) $ 830,129
Shares, Outstanding, Beginning Balance at Feb. 28, 2022 43,313,399      
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Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Cash flows from operating activities    
Net loss $ (820,883) $ (31,345)
Stock-based compensation 565,460 0
Gain on the sale of property 158,043 0
Depreciation 7,803 0
Change in balance sheet accounts    
Cryptocurrencies (4,574) 0
Notes receivable (168,750) 0
Prepaid expenses (5,000) 0
Accounts payable 21,740 0
Accrued liabilities -related parties 71,500 0
Accrued interest -related parties 117,874 8,286
Net cash used in operating activities (56,788) (23,059)
Cash flows from investing activities    
Purchase of fixed assets (1,602,546) 0
Net cash used in investing activities (1,602,546) 0
Cash flows from financing activities:    
Common shares sold in a private placement 725,000 0
Related party loans -net 1,616,813 24,000
Net cash provided by financing activities 2,341,813 24,000
Net increase in cash and cash equivalents 682,479 941
Cash and cash equivalents at beginning of period 218,737 1,930
Cash and cash equivalents at end of period 901,216 2,871
Supplemental disclosure of cash flow information:    
Cash paid for interest 0 0
Cash paid for income taxes $ 0 $ 0
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES
6 Months Ended
Feb. 28, 2022
Accounting Policies [Abstract]  
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

 

 

About Bitmine Immersion Technologies, Inc.

 

Bitmine Immersion Technologies Inc. f/k/a Sandy Springs Holdings, Inc. (“Bitmine” or the “Company”) is a Delaware corporation that commenced operations on July 16, 2020. A predecessor to the Company was incorporated in the state of Nevada on August 16, 1995, as Interactive Lighting Showrooms, Inc.

 

By a written consent dated July 16, 2021, holders of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “New O&Ds”). Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 32,994,999 shares of common stock in the Company’s offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services, which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&Ds (or entities controlled by them) collectively acquired 24,893,877 shares of common stock, which represented 57.5% of the issued and outstanding shares as of February 28, 2022.

 

The appointment of certain of the New O&Ds to the Company’s board, and issuance to the New O&Ds of a controlling interest in the Company, were made in order to enable the Company to enter the business of creating a hosting center for Bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the Bitcoin digital currency for its own account. Prior to the change of control to the New O&Ds, the Company was a shell company.

 

During the three months ended February 28, 2022 the Company began implementing its business plan by generating revenue from the mining of Bitcoin digital currency and from the sale of mining equipment.

 

The Company’s year-end is August 31st.

 

Basis of Presentation

 

The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2021. In the opinion of management, the unaudited interim condensed financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending August 31, 2022.

 

Reverse Stock Split

 

On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock.

 

The Company’s financial statements in this Report for the periods ended February 28, 2022, and August 31, 2021, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise.

 

Management’s Representation of Interim Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Use of Estimates

 

The preparation of financial statements in conformity with US 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 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 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.

 

Revenue Recognition

 

On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.

 

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. On February 28, 2022, and August 31, 2021, respectively, the Company’s cash equivalents totaled $901,216 and $218,737, respectively.

 

Income taxes

 

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB 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 FASB 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. FASB 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

 

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

 

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Stock Purchase Warrants

 

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.

 

Property and equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:

       
      Life (Years)  
Miners and mining equipment     3  
Machinery and equipment     5-7  
Office and computer equipment     3  

 

No depreciation is recorded on an asset until it is placed in service. As of February 28, 2022 and August 31, 2021 had $1,863,997 and $427,296, respectively of fixed assets not in service. During the three months ended February 28, 2022, the Company placed $187,260 of mining equipment into service, recorded $7,803 of depreciation on that equipment, and then subsequently sold the equipment to a third party on February 23, 2022 who agreed to utilize the Company to host the equipment for a three year term.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

 

We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.

 

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.22.1
NOTES RECEIVABLE
6 Months Ended
Feb. 28, 2022
Notes Receivable  
NOTES RECEIVABLE

NOTE 3 – NOTES RECEIVABLE

 

As of February 28, 2022 and August 31, 2021 the balance of notes receivable was $168,750 and $-0-, respectively. The note receivable carries a 10% interest rate. The note principal is payable in two equal installments of $84,375 on April 15, 2022 and May 15, 2022, with all accrued interest being payable upon maturity of the note. The note receivable arose from the sale of mining equipment to a third party for $337,500, in which half of the sale proceeds of $168,750 was received by the Company in cash, the remaining half was in the form of a note receivable for $168,750.

 

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.22.1
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY
6 Months Ended
Feb. 28, 2022
Debt Disclosure [Abstract]  
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY

NOTE 4 – LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY

 

On July 22, 2021 the Company entered into a Line of Credit Agreement with Innovative Digital Investors Emerging Technology, L.P.(“IDI), a limited partnership controlled by Jonathan Bates, the Company’s Chairman, and Raymond Mow, the Company’s Chief Financial Officer and a Director. The Line of Credit Agreement was amended and restated in its entirety on August 4, 2021, and on September 29, 2021 (as amended and restated, the “LOC Agreement”). The LOC Agreement, as most recently amended, provides for loans of up to $2,500,000 at the request of the Company to finance the purchase of equipment necessary for the operation of the Company’s business. Loans under the LOC Agreement accrue interest at fifteen percent (15%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The amount drawn, plus all accrued interest therein, was repayable in full on March 31, 2022. On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and allowed amounts to be borrowed for general working capital purposes.

 

As of February 28, 2022, and August 31, 2021, the Company owed $1,863,997 and $277,296, respectively, on the Line of Credit. Additionally, these loans accrue interest at the rate of 15% percent per annum. As of February 28, 2022, and August 31, 2021, accrued interest was $122,379 and $4,505, respectively.

 

As of February 28, 2022 and August 31, 2021, the balance of accrued liabilities related party was $71,500 and $-0- respectively. The $71,500 is comprised of accrued salary and bonus due to two company officer/directors.

 

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.1
STOCKHOLDERS’ EQUITY
6 Months Ended
Feb. 28, 2022
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Stockholders’ Equity

 

The Company is authorized to issue 500,000,000 shares of Common Stock with a par value of $0.001. As of February 28, 2022, and August 31, 2021, there were 43,313,399 and 40,433,399 shares outstanding, respectively.

 

In January 2022, the Company commenced a $10.0 million Unit Offering of its common stock and warrants at a Unit price of $1.25 per Unit, comprised of one share of its common stock, one Class C-1 Warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $2.00 per share, and one Class C-2 warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $4.00 per share.

 

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Under those guidelines the Company, using Black Scholes methodology using the variables below determined that the common stock value was $0.44, the C-1 warrant was $0.41 and the C-2 warrant was $0.40.

 

           
Exercise Price         $1.25 -$4,00  
Stock Price         $1.25  
Risk-free interest rate         0.04%  
Expected volatility         223.3  
Expected life (in years)         3.00  
Expected dividend yield         $0  

 

Issuance of Shares

 

During the six months ended February 28, 2022, the Company issued the following shares:

 

·200,000 shares to an investment banking firm for investment banking services. The shares were valued at $2.75 per share, which was the closing price of the shares on the date of issuance.
·2,100,000 shares subject to vesting for services to a company employee. These common shares were valued at $0.44 per share as described above. The shares were valued at $924,000 amortized over a 60 month vesting period.
·580,000 shares were sold to accredited investors under the Unit Offering. The Unit Offering was valued at $1,25 per Unit, as described above for a total value of $725,000.

 

Warrants

 

As of February 28, 2022, and August 31, 2021, the Company had 590,000 Class A Warrants and 590,000 Class B warrants outstanding. Both sets of warrants entitle the holder to exercise the warrants on a cash or a cashless basis until August 5, 2024. The Class A Warrants have an exercise price of $2.00 per share, and the Class B Warrants have an exercise price of $5.00 per share, but otherwise have identical terms. Also pursuant to the Company’s Unit Offering, the Company had 580,000 C-1 warrants exercisable at $2.00 per share, and 580,000 C-2 warrants exercisable at $4.00 per share, both exercisable until January 15, 2025.

 

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.1
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Feb. 28, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

The Company did not have any contractual commitments as of February 28, 2022, and August 31, 2021.

 

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.22.1
SUBSEQUENT EVENTS
6 Months Ended
Feb. 28, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 7 – SUBSEQUENT EVENTS

 

On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and allowed amounts to be borrowed for general working capital purposes.

 

Since February 28, 2022, the Company has received additional subscriptions for $527,500 in its Unit offering.

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies)
6 Months Ended
Feb. 28, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2021. In the opinion of management, the unaudited interim condensed financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending August 31, 2022.

 

Reverse Stock Split

Reverse Stock Split

 

On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock.

 

The Company’s financial statements in this Report for the periods ended February 28, 2022, and August 31, 2021, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise.

 

Management’s Representation of Interim Financial Statements

Management’s Representation of Interim Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with US 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 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 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.

 

Revenue Recognition

Revenue Recognition

 

On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.

 

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. On February 28, 2022, and August 31, 2021, respectively, the Company’s cash equivalents totaled $901,216 and $218,737, respectively.

 

Income taxes

Income taxes

 

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB 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 FASB 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. FASB 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 stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

 

Net Loss per Share

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Stock Purchase Warrants

Stock Purchase Warrants

 

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.

 

Property and equipment

Property and equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:

       
      Life (Years)  
Miners and mining equipment     3  
Machinery and equipment     5-7  
Office and computer equipment     3  

 

No depreciation is recorded on an asset until it is placed in service. As of February 28, 2022 and August 31, 2021 had $1,863,997 and $427,296, respectively of fixed assets not in service. During the three months ended February 28, 2022, the Company placed $187,260 of mining equipment into service, recorded $7,803 of depreciation on that equipment, and then subsequently sold the equipment to a third party on February 23, 2022 who agreed to utilize the Company to host the equipment for a three year term.

 

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

 

We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.

 

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Tables)
6 Months Ended
Feb. 28, 2022
Accounting Policies [Abstract]  
Estimated useful lives
       
      Life (Years)  
Miners and mining equipment     3  
Machinery and equipment     5-7  
Office and computer equipment     3  
XML 25 R15.htm IDEA: XBRL DOCUMENT v3.22.1
STOCKHOLDERS’ EQUITY (Tables)
6 Months Ended
Feb. 28, 2022
Equity [Abstract]  
Schedule of assumptions used table
           
Exercise Price         $1.25 -$4,00  
Stock Price         $1.25  
Risk-free interest rate         0.04%  
Expected volatility         223.3  
Expected life (in years)         3.00  
Expected dividend yield         $0  
XML 26 R16.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details)
6 Months Ended
Feb. 28, 2022
Miners And Mining Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
Machinery and Equipment [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Machinery and Equipment [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 7 years
Office Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
XML 27 R17.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($)
3 Months Ended
Feb. 28, 2022
Aug. 31, 2021
Accounting Policies [Abstract]    
Cash and Cash Equivalents, at Carrying Value $ 901,216 $ 218,737
Fixed assets and non service 1,863,997 $ 427,296
Mining equipment services 187,260  
Depreciation, Depletion and Amortization, Nonproduction $ 7,803  
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.22.1
NOTES RECEIVABLE (Details Narrative) - USD ($)
6 Months Ended
Feb. 28, 2022
May 15, 2022
Apr. 15, 2022
Aug. 31, 2021
Subsequent Event [Line Items]        
Note receivable $ 168,750     $ 0
Interest rate 10.00%      
Proceeds from Sale of Productive Assets $ 168,750      
Subsequent Event [Member]        
Subsequent Event [Line Items]        
Face amount   $ 84,375 $ 84,375  
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.22.1
LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY (Details Narrative) - USD ($)
6 Months Ended
Feb. 28, 2022
Aug. 31, 2021
Line of Credit Facility [Line Items]    
Accrued liabilities related party $ 71,500 $ 0
Innovative Digital Investors [Member]    
Line of Credit Facility [Line Items]    
Maturity date May 31, 2022  
Borrowing amount $ 3,000,000  
Line of credit $ 1,863,997 277,296
Line of credit interest rate 15.00%  
Interest Payable $ 122,379 $ 4,505
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.22.1
STOCKHOLDERS EQUITY (Details)
3 Months Ended 6 Months Ended
Feb. 28, 2022
USD ($)
$ / shares
Feb. 28, 2022
USD ($)
$ / shares
shares
Stock Price | $ / shares $ 1.25 $ 1.25
Risk-free interest rate   0.04%
Expected volatility   223.30%
Expected life   3 years
Expected dividend yield   0.00%
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture $ 15,460  
Stock Issued During Period, Value, New Issues $ 725,000  
Unit Offering [Member]    
Stock Issued During Period, Shares, New Issues | shares   580,000
Stock Issued During Period, Value, New Issues   $ 725,000
Company Employee [Member]    
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture | shares   2,100,000
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture   $ 924,000
Investment Banking Firm [Member]    
Number of shares issued | shares   200,000
Minimum [Member]    
Stock Price | $ / shares $ 1.25 $ 1.25
Maximum [Member]    
Stock Price | $ / shares $ 4.00 $ 4.00
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.22.1
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jan. 31, 2022
Feb. 28, 2022
Feb. 28, 2022
Aug. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Common Stock, Shares Authorized   500,000,000 500,000,000 500,000,000
Common Stock, Shares, Issued   43,313,399 43,313,399 40,433,399
Common Stock, Shares, Outstanding   43,313,399 43,313,399 40,433,399
Offering cost   $ 725,000    
Share price $ 1.25      
Warrants and Rights Outstanding, Maturity Date   Aug. 05, 2024 Aug. 05, 2024  
Common Stock [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Offering cost $ 10,000,000.0      
Class A Warrants [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Class of Warrant or Right, Outstanding   590,000 590,000 590,000
Exercise price   $ 2.00 $ 2.00  
Class B Warrants [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Class of Warrant or Right, Outstanding   590,000 590,000 590,000
Exercise price   $ 5.00 $ 5.00  
Warrant Exercisable C 1 [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Exercise price   2.00 $ 2.00  
Number of shares issued     580,000  
Warrant Exercisable C 2 [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Exercise price   $ 4.00 $ 4.00  
Number of shares issued     580,000  
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(“<span style="text-decoration: underline">Bitmine</span>” or the “<span style="text-decoration: underline">Company</span>”) is a Delaware corporation that commenced operations on July 16, 2020. A predecessor to the Company was incorporated in the state of Nevada on August 16, 1995, as Interactive Lighting Showrooms, Inc.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">By a written consent dated July 16, 2021, holders of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow, Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “<span style="text-decoration: underline">New O&amp;Ds</span>”). Erik S. Nelson remained a director and the chief executive officer. At the same time, the shareholders approved the issuance of 32,994,999 shares of common stock in the Company’s offering of common stock at $0.015 per share, and the grant of 4,750,000 shares for services, which were valued at $0.015 per share. As a result of the foregoing stock issuances, the New O&amp;Ds (or entities controlled by them) collectively acquired 24,893,877 shares of common stock, which represented 57.5% of the issued and outstanding shares as of February 28, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The appointment of certain of the New O&amp;Ds to the Company’s board, and issuance to the New O&amp;Ds of a controlling interest in the Company, were made in order to enable the Company to enter the business of creating a hosting center for Bitcoin mining computers primarily utilizing immersion cooling technology, as well mining the Bitcoin digital currency for its own account. Prior to the change of control to the New O&amp;Ds, the Company was a shell company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended February 28, 2022 the Company began implementing its business plan by generating revenue from the mining of Bitcoin digital currency and from the sale of mining equipment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s year-end is August 31st.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_ziczy17xJv7b" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_866_zpd5BNK6MsG3">Basis of Presentation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“<span style="text-decoration: underline">GAAP</span>”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“<span style="text-decoration: underline">SEC</span>”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2021. In the opinion of management, the unaudited interim condensed financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating results for the six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending August 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_ecustom--ReverseStockSplitPolicyTextBlock_zCF31rDtqhqe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_869_zDv2sPDkWhf1">Reverse Stock Split</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s financial statements in this Report for the periods ended February 28, 2022, and August 31, 2021, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_840_ecustom--ManagementsRepresentationOfInterimFinancialStatementsPolicyTextBlock_zHjmHn6B9CKf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_863_zfu7mwRbteKh">Management’s Representation of Interim Financial Statements</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p id="xdx_845_eus-gaap--UseOfEstimates_zzk7lXfqjxdf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zmDOXSCqRQY3">Use of Estimates</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in conformity with US 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 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 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84E_eus-gaap--RevenueRecognitionPolicyTextBlock_zz1injgSgiPh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_868_zwdITbxiXgZh">Revenue Recognition</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zxlf1nGp26Xk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_863_zpaYxjHizucc">Cash and cash equivalents</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On February 28, 2022, and August 31, 2021, respectively, the Company’s cash equivalents totaled $<span id="xdx_901_eus-gaap--CashAndCashEquivalentsAtCarryingValue_c20220228_pp0p0" title="Cash and Cash Equivalents, at Carrying Value">901,216</span> and $<span id="xdx_906_eus-gaap--CashAndCashEquivalentsAtCarryingValue_c20210831_pp0p0" title="Cash and Cash Equivalents, at Carrying Value">218,737</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--IncomeTaxPolicyTextBlock_zHM8iBhrSfg2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86C_zNbPw9k27GOc">Income taxes</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for income taxes under FASB ASC 740, <i>“Accounting for Income Taxes”</i>. Under FASB 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 FASB 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. FASB ASC 740-10-05, <i>“Accounting for Uncertainty in Income Taxes”</i> 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_843_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zPbkkIrJ4oVa" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zRFzy2O9G6l4">Stock-based Compensation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84A_eus-gaap--EarningsPerSharePolicyTextBlock_zJUWWuTcEWa6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_866_zhlwW5sh2eq5">Net Loss per Share</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_ecustom--StockPurchaseWarrantsPolicyTextBlock_zN3ShLEcCYB7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i><span style="text-decoration: underline"><span id="xdx_868_zwtgfCfQZg96">Stock Purchase Warrants</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, <i>Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p id="xdx_849_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zYfUt73YNQY8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i><span style="text-decoration: underline"><span id="xdx_86D_zC9mJpOyYAB5">Property and equipment</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:</p> <table cellpadding="0" cellspacing="5" id="xdx_885_ecustom--PropertyPlantAndEquipmentEstimatedUsefulLivesTableTextBlock_zpYsVsF5Qnt4" style="font: 10pt Times New Roman, Times, Serif; width: 100%" summary="xdx: Disclosure - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8BC_zxKuHBVBFQOe" style="display: none">Estimated useful lives</span></td> <td> </td> <td> </td> <td style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 21%; text-align: center"><span style="font-size: 10pt">Life (Years)</span></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td><span style="font-size: 10pt">Miners and mining equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_907_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MinersAndMiningEquipmentMember_zz2s9mu3huTb" title="Estimated useful life">3</span></span></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="font-size: 10pt">Machinery and equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_906_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_z4qAFnvRAtng">5</span>-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zq0xTMrxkSjk">7</span></span></td> <td> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: bottom"><span style="font-size: 10pt">Office and computer equipment</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--OfficeEquipmentMember_z58alpKJHYF7">3</span></span></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No depreciation is recorded on an asset until it is placed in service. As of February 28, 2022 and August 31, 2021 had $<span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentNet_iI_c20220228_zXRd9opgvKc4" title="Fixed assets and non service">1,863,997</span> and $<span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentNet_iI_c20210831_zHW1bZBYKvAj">427,296</span>, respectively of fixed assets not in service. During the three months ended February 28, 2022, the Company placed $<span id="xdx_900_eus-gaap--EquipmentExpense_c20211201__20220228_z5h83wsOqRjk" title="Mining equipment services">187,260</span> of mining equipment into service, recorded $<span id="xdx_906_eus-gaap--DepreciationAndAmortization_c20211201__20220228_zCrvG9gYzsCa">7,803</span> of depreciation on that equipment, and then subsequently sold the equipment to a third party on February 23, 2022 who agreed to utilize the Company to host the equipment for a three year term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p id="xdx_842_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zgeymgElZcyg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86F_zOXBSCmRxGcc">Recent Accounting Pronouncements</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases (Topic 842)</i>, which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, <i>Codification Improvements</i>, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, <i>Codification Improvements to Topic 842, Leases</i> in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases <i>(Topic 842) Targeted Improvements,</i> which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_ziczy17xJv7b" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_866_zpd5BNK6MsG3">Basis of Presentation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“<span style="text-decoration: underline">GAAP</span>”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“<span style="text-decoration: underline">SEC</span>”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended August 31, 2021. In the opinion of management, the unaudited interim condensed financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating results for the six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending August 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_ecustom--ReverseStockSplitPolicyTextBlock_zCF31rDtqhqe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_869_zDv2sPDkWhf1">Reverse Stock Split</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2020, the Board of Directors and the shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1 for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common stock were issued connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s financial statements in this Report for the periods ended February 28, 2022, and August 31, 2021, and all references thereto have been retroactively adjusted to reflect the split unless specifically stated otherwise.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_840_ecustom--ManagementsRepresentationOfInterimFinancialStatementsPolicyTextBlock_zHjmHn6B9CKf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_863_zfu7mwRbteKh">Management’s Representation of Interim Financial Statements</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p id="xdx_845_eus-gaap--UseOfEstimates_zzk7lXfqjxdf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zmDOXSCqRQY3">Use of Estimates</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in conformity with US 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 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 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84E_eus-gaap--RevenueRecognitionPolicyTextBlock_zz1injgSgiPh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_868_zwdITbxiXgZh">Revenue Recognition</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zxlf1nGp26Xk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_863_zpaYxjHizucc">Cash and cash equivalents</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On February 28, 2022, and August 31, 2021, respectively, the Company’s cash equivalents totaled $<span id="xdx_901_eus-gaap--CashAndCashEquivalentsAtCarryingValue_c20220228_pp0p0" title="Cash and Cash Equivalents, at Carrying Value">901,216</span> and $<span id="xdx_906_eus-gaap--CashAndCashEquivalentsAtCarryingValue_c20210831_pp0p0" title="Cash and Cash Equivalents, at Carrying Value">218,737</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 901216 218737 <p id="xdx_84D_eus-gaap--IncomeTaxPolicyTextBlock_zHM8iBhrSfg2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86C_zNbPw9k27GOc">Income taxes</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for income taxes under FASB ASC 740, <i>“Accounting for Income Taxes”</i>. Under FASB 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 FASB 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. FASB ASC 740-10-05, <i>“Accounting for Uncertainty in Income Taxes”</i> 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_843_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zPbkkIrJ4oVa" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zRFzy2O9G6l4">Stock-based Compensation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84A_eus-gaap--EarningsPerSharePolicyTextBlock_zJUWWuTcEWa6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_866_zhlwW5sh2eq5">Net Loss per Share</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_ecustom--StockPurchaseWarrantsPolicyTextBlock_zN3ShLEcCYB7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i><span style="text-decoration: underline"><span id="xdx_868_zwtgfCfQZg96">Stock Purchase Warrants</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, <i>Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p id="xdx_849_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zYfUt73YNQY8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i><span style="text-decoration: underline"><span id="xdx_86D_zC9mJpOyYAB5">Property and equipment</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for all other property and equipment are as follows:</p> <table cellpadding="0" cellspacing="5" id="xdx_885_ecustom--PropertyPlantAndEquipmentEstimatedUsefulLivesTableTextBlock_zpYsVsF5Qnt4" style="font: 10pt Times New Roman, Times, Serif; width: 100%" summary="xdx: Disclosure - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8BC_zxKuHBVBFQOe" style="display: none">Estimated useful lives</span></td> <td> </td> <td> </td> <td style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 21%; text-align: center"><span style="font-size: 10pt">Life (Years)</span></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td><span style="font-size: 10pt">Miners and mining equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_907_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MinersAndMiningEquipmentMember_zz2s9mu3huTb" title="Estimated useful life">3</span></span></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="font-size: 10pt">Machinery and equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_906_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_z4qAFnvRAtng">5</span>-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zq0xTMrxkSjk">7</span></span></td> <td> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: bottom"><span style="font-size: 10pt">Office and computer equipment</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--OfficeEquipmentMember_z58alpKJHYF7">3</span></span></td> <td> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No depreciation is recorded on an asset until it is placed in service. As of February 28, 2022 and August 31, 2021 had $<span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentNet_iI_c20220228_zXRd9opgvKc4" title="Fixed assets and non service">1,863,997</span> and $<span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentNet_iI_c20210831_zHW1bZBYKvAj">427,296</span>, respectively of fixed assets not in service. During the three months ended February 28, 2022, the Company placed $<span id="xdx_900_eus-gaap--EquipmentExpense_c20211201__20220228_z5h83wsOqRjk" title="Mining equipment services">187,260</span> of mining equipment into service, recorded $<span id="xdx_906_eus-gaap--DepreciationAndAmortization_c20211201__20220228_zCrvG9gYzsCa">7,803</span> of depreciation on that equipment, and then subsequently sold the equipment to a third party on February 23, 2022 who agreed to utilize the Company to host the equipment for a three year term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <table cellpadding="0" cellspacing="5" id="xdx_885_ecustom--PropertyPlantAndEquipmentEstimatedUsefulLivesTableTextBlock_zpYsVsF5Qnt4" style="font: 10pt Times New Roman, Times, Serif; width: 100%" summary="xdx: Disclosure - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8BC_zxKuHBVBFQOe" style="display: none">Estimated useful lives</span></td> <td> </td> <td> </td> <td style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 21%; text-align: center"><span style="font-size: 10pt">Life (Years)</span></td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td><span style="font-size: 10pt">Miners and mining equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_907_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MinersAndMiningEquipmentMember_zz2s9mu3huTb" title="Estimated useful life">3</span></span></td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><span style="font-size: 10pt">Machinery and equipment</span></td> <td> </td> <td> </td> <td style="text-align: center"><span style="font-size: 10pt"><span id="xdx_906_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_z4qAFnvRAtng">5</span>-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zq0xTMrxkSjk">7</span></span></td> <td> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: bottom"><span style="font-size: 10pt">Office and computer equipment</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210901__20220228__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--OfficeEquipmentMember_z58alpKJHYF7">3</span></span></td> <td> </td></tr> </table> P3Y P5Y P7Y P3Y 1863997 427296 187260 7803 <p id="xdx_842_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zgeymgElZcyg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86F_zOXBSCmRxGcc">Recent Accounting Pronouncements</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases (Topic 842)</i>, which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, <i>Codification Improvements</i>, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, <i>Codification Improvements to Topic 842, Leases</i> in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases <i>(Topic 842) Targeted Improvements,</i> which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We adopted ASC 842 on July 16, 2020. The adoption of this guidance did not have any impact on our financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_808_ecustom--NoteReceivablePolicyTextBlock_zTWiZCQHSQb9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 – <span id="xdx_82B_zs1NRiOl1Ffd">NOTES RECEIVABLE</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of February 28, 2022 and August 31, 2021 the balance of notes receivable was $<span id="xdx_908_eus-gaap--ReceivablesNetCurrent_iI_c20220228_zoPVIsrKQ69b" title="Note receivable">168,750</span> and $-<span id="xdx_901_eus-gaap--ReceivablesNetCurrent_iI_c20210831_z0jH9jQdAd5h">0</span>-, respectively. The note receivable carries a <span id="xdx_90D_eus-gaap--ReceivableWithImputedInterestEffectiveYieldInterestRate_dp_c20210901__20220228_z1XZOnBxUOBk" title="Interest rate">10</span>% interest rate. The note principal is payable in two equal installments of $<span id="xdx_90C_ecustom--NoteReceivableInstallmentAmount_iI_c20220415__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z5lkyqtKjLcf" title="Face amount"><span id="xdx_90D_ecustom--NoteReceivableInstallmentAmount_iI_c20220515__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zeCHwAqeuf4a">84,375</span></span> on April 15, 2022 and May 15, 2022, with all accrued interest being payable upon maturity of the note. The note receivable arose from the sale of mining equipment to a third party for $337,500, in which half of the sale proceeds of $<span id="xdx_90B_eus-gaap--ProceedsFromSaleOfProductiveAssets_c20210901__20220228_zdfY6eX5vlec">168,750</span> was received by the Company in cash, the remaining half was in the form of a note receivable for $168,750.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> 168750 0 0.10 84375 84375 168750 <p id="xdx_80E_eus-gaap--DebtDisclosureTextBlock_zPFwc873v4Y8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 4 – <span id="xdx_82E_zjngHNhRv2O1">LOANS PAYABLE AND ACCRUED LIABILITIES, RELATED PARTY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 22, 2021 the Company entered into a Line of Credit Agreement with Innovative Digital Investors Emerging Technology, L.P.(“IDI), a limited partnership controlled by Jonathan Bates, the Company’s Chairman, and Raymond Mow, the Company’s Chief Financial Officer and a Director. The Line of Credit Agreement was amended and restated in its entirety on August 4, 2021, and on September 29, 2021 (as amended and restated, the “<span style="text-decoration: underline">LOC Agreement</span>”). The LOC Agreement, as most recently amended, provides for loans of up to $2,500,000 at the request of the Company to finance the purchase of equipment necessary for the operation of the Company’s business. Loans under the LOC Agreement accrue interest at fifteen percent (15%) per annum, compounded on a 30/360 monthly basis until the loans have been repaid in full. The amount drawn, plus all accrued interest therein, was repayable in full on March 31, 2022. On March 30, 2022, IDI extended the maturity date on the LOC Agreement to <span id="xdx_907_eus-gaap--LineOfCreditFacilityExpirationDate1_dd_c20210901__20220228__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_zj3PoiRCwGcl" title="Maturity date">May 31, 2022</span>, increased the amount of borrowing available for $2,500,000 to $<span id="xdx_90A_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_c20220228__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_znrvRkOvI4ni" title="Borrowing amount">3,000,000</span>, and allowed amounts to be borrowed for general working capital purposes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of February 28, 2022, and August 31, 2021, the Company owed $<span id="xdx_908_eus-gaap--LineOfCredit_iI_pp0p0_c20220228__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_zW8NnvVPnMxd" title="Line of Credit">1,863,997</span> and $<span id="xdx_90D_eus-gaap--LineOfCredit_iI_pp0p0_c20210831__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_zt6nIBBFCLMc" title="Line of credit">277,296</span>, respectively, on the Line of Credit. Additionally, these loans accrue interest at the rate of <span id="xdx_905_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_dp_c20210901__20220228__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_z9uQGGY0mfGj" title="Line of credit interest rate">15</span>% percent per annum. As of February 28, 2022, and August 31, 2021, accrued interest was $<span id="xdx_906_eus-gaap--InterestPayableCurrentAndNoncurrent_iI_pp0p0_c20220228__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_zXCBWnUQJQag" title="Interest Payable">122,379</span> and $<span id="xdx_904_eus-gaap--InterestPayableCurrentAndNoncurrent_iI_pp0p0_c20210831__us-gaap--LineOfCreditFacilityAxis__custom--InnovativeDigitalInvestorsMember_z3C6YUU2u1ke">4,505</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of February 28, 2022 and August 31, 2021, the balance of accrued liabilities related party was $<span id="xdx_906_eus-gaap--AccountsPayableRelatedPartiesCurrentAndNoncurrent_iI_c20220228_zXDCSXTiZvJd" title="Accrued liabilities related party">71,500</span> and $-<span id="xdx_90E_eus-gaap--AccountsPayableRelatedPartiesCurrentAndNoncurrent_iI_c20210831_zU3jxADIrYZ7">0</span>- respectively. The $71,500 is comprised of accrued salary and bonus due to two company officer/directors. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> 2022-05-31 3000000 1863997 277296 0.15 122379 4505 71500 0 <p id="xdx_808_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zKl3cPG7WNz" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 5 – <span id="xdx_828_z8jgZMtJ2lya">STOCKHOLDERS’ EQUITY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration: underline">Stockholders’ Equity</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is authorized to issue<span id="xdx_90C_eus-gaap--CommonStockSharesAuthorized_iI_c20220228_zp9QlpEbGXi6" title="Common Stock, Shares Authorized"> <span id="xdx_900_eus-gaap--CommonStockSharesAuthorized_iI_c20210831_zG9YZBPzQvij" title="Common Stock, Shares Authorized">500,000,000</span></span> shares of Common Stock with a par value of $0.001. As of February 28, 2022, and August 31, 2021, there were<span id="xdx_90E_eus-gaap--CommonStockSharesIssued_iI_c20220228_zShWR4N4M2V5" title="Common Stock, Shares, Issued"> <span id="xdx_905_eus-gaap--CommonStockSharesOutstanding_iI_c20220228_zy4EyG1dZVkg" title="Common Stock, Shares, Outstanding">43,313,399</span></span> and <span id="xdx_908_eus-gaap--CommonStockSharesIssued_iI_c20210831_zBIwjYRvRJs6" title="Common Stock, Shares, Issued"><span id="xdx_90F_eus-gaap--CommonStockSharesOutstanding_iI_c20210831_zFAbfR47bQvc" title="Common Stock, Shares, Outstanding">40,433,399</span> </span>shares outstanding, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In January 2022, the Company commenced a $<span id="xdx_904_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pp0n3_dm_c20220101__20220131__us-gaap--AwardTypeAxis__us-gaap--CommonStockMember_zmmcwwoYqvFc" title="Offering cost">10.0</span> million Unit Offering of its common stock and warrants at a Unit price of $<span id="xdx_900_eus-gaap--SharePrice_iI_c20220131_zyWN2CctbYl3" title="Share price">1.25</span> per Unit, comprised of one share of its common stock, one Class C-1 Warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $2.00 per share, and one Class C-2 warrant which is exercisable to purchase one share of the Company’s common stock until January 15, 2025 at an exercise price of $4.00 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, <i>Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. </i>Under those guidelines the Company, using Black Scholes methodology using the variables below determined that the common stock value was $0.44, the C-1 warrant was $0.41 and the C-2 warrant was $0.40.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <table cellpadding="0" cellspacing="0" id="xdx_88A_eus-gaap--ScheduleOfAssumptionsUsedTableTextBlock_zB1zIcx5AEmf" style="font: 10pt Times New Roman, Times, Serif; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS EQUITY (Details)"> <tr style="background-color: White"> <td style="vertical-align: top"><span id="xdx_8B8_z9q17ZjfuEZh" style="display: none">Schedule of assumptions used table</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top; width: 83%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exercise Price</span></td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="vertical-align: bottom; width: 12%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_909_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228__srt--RangeAxis__srt--MinimumMember_zwgbyWsfhf5c" title="Exercise Price">1.25</span> -$<span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228__srt--RangeAxis__srt--MaximumMember_zTAUrva1TTCc">4,00</span></span></td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock Price</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228_zB5cMTnF1JEk" title="Stock Price">1.25</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk-free interest rate</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_dp_c20210901__20220228_z14Ov647iqB3" title="Risk-free interest rate">0.04</span>%</span></td> <td style="vertical-align: bottom"><span style="font-size: 10pt"> </span></td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected volatility</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_dp_c20210901__20220228_zP5RL80HPEQb" title="Expected volatility">223.3</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected life (in years)</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1_dtY_c20210901__20220228_zbi7zlSi8M2h" title="Expected life">3.00</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected dividend yield</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_dp_c20210901__20220228_zJVucW5m8ce1" title="Expected dividend yield">0</span></span></td> <td style="vertical-align: bottom"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration: underline">Issuance of Shares</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the six months ended February 28, 2022, the Company issued the following shares:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.25in"/><td style="width: 0.25in"><span style="font-family: Symbol">·</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesIssuedForServices_c20210901__20220228__srt--CounterpartyNameAxis__custom--InvestmentBankingFirmMember_zrAVWNzxaF39" title="Number of shares issued">200,000</span> shares to an investment banking firm for investment banking services. The shares were valued at $2.75 per share, which was the closing price of the shares on the date of issuance.</span></td></tr> <tr style="vertical-align: top"> <td style="width: 0.25in"/><td style="width: 0.25in"><span style="font-family: Symbol">·</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesShareBasedCompensationGross_c20210901__20220228__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--CompanyEmployeeMember_zXdORpmtu1O8">2,100,000</span> shares subject to vesting for services to a company employee. These common shares were valued at $0.44 per share as described above. The shares were valued at $<span id="xdx_904_eus-gaap--StockIssuedDuringPeriodValueShareBasedCompensation_c20210901__20220228__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--CompanyEmployeeMember_zUg3g913Vw0e">924,000</span> amortized over a 60 month vesting period.</span></td></tr> <tr style="vertical-align: top"> <td style="width: 0.25in"/><td style="width: 0.25in"><span style="font-family: Symbol">·</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span id="xdx_904_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20210901__20220228__us-gaap--SecuritiesFinancingTransactionAxis__custom--UnitOfferingMember_zuClF13WiTfe">580,000</span> shares were sold to accredited investors under the Unit Offering. The Unit Offering was valued at $1,25 per Unit, as described above for a total value of $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueNewIssues_c20210901__20220228__us-gaap--SecuritiesFinancingTransactionAxis__custom--UnitOfferingMember_zCybAhOFAxH1">725,000</span>.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration: underline">Warrants</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of February 28, 2022, and August 31, 2021, the Company had <span id="xdx_909_eus-gaap--ClassOfWarrantOrRightOutstanding_c20220228__us-gaap--AwardTypeAxis__custom--ClassAWarrantsMember_pdd" title="Class of Warrant or Right, Outstanding"><span id="xdx_90A_eus-gaap--ClassOfWarrantOrRightOutstanding_c20210831__us-gaap--AwardTypeAxis__custom--ClassAWarrantsMember_pdd" title="Class of Warrant or Right, Outstanding">590,000</span></span> Class A Warrants and <span id="xdx_908_eus-gaap--ClassOfWarrantOrRightOutstanding_c20220228__us-gaap--AwardTypeAxis__custom--ClassBWarrantsMember_pdd" title="Class of Warrant or Right, Outstanding"><span id="xdx_909_eus-gaap--ClassOfWarrantOrRightOutstanding_c20210831__us-gaap--AwardTypeAxis__custom--ClassBWarrantsMember_pdd" title="Class of Warrant or Right, Outstanding">590,000</span></span> Class B warrants outstanding. Both sets of warrants entitle the holder to exercise the warrants on a cash or a cashless basis until <span id="xdx_906_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20220228_znoeMuhpswfc" title="Warrants and Rights Outstanding, Maturity Date">August 5, 2024</span>. The Class A Warrants have an exercise price of $<span id="xdx_905_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20220228__us-gaap--AwardTypeAxis__custom--ClassAWarrantsMember_pdd" title="Class of Warrant or Right, Exercise Price of Warrants or Rights">2.00</span> per share, and the Class B Warrants have an exercise price of $<span id="xdx_90B_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20220228__us-gaap--AwardTypeAxis__custom--ClassBWarrantsMember_pdd" title="Class of Warrant or Right, Exercise Price of Warrants or Rights">5.00</span> per share, but otherwise have identical terms. Also pursuant to the Company’s Unit Offering, the Company had <span id="xdx_90C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedInPeriod_c20210901__20220228__us-gaap--AwardTypeAxis__custom--WarrantExercisableC1Member_z33uEwBi9RG7" title="Number of shares issued">580,000</span> C-1 warrants exercisable at $<span id="xdx_90E_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20220228__us-gaap--AwardTypeAxis__custom--WarrantExercisableC1Member_zWgkDeHKfyVg" title="Exercise price">2.00</span> per share, and <span id="xdx_908_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedInPeriod_c20210901__20220228__us-gaap--AwardTypeAxis__custom--WarrantExercisableC2Member_zgL7wwfZyVH9">580,000</span> C-2 warrants exercisable at $<span id="xdx_90D_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20220228__us-gaap--AwardTypeAxis__custom--WarrantExercisableC2Member_zpX8VC8kVULd">4.00</span> per share, both exercisable until January 15, 2025.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 500000000 500000000 43313399 43313399 40433399 40433399 10000000.0 1.25 <table cellpadding="0" cellspacing="0" id="xdx_88A_eus-gaap--ScheduleOfAssumptionsUsedTableTextBlock_zB1zIcx5AEmf" style="font: 10pt Times New Roman, Times, Serif; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS EQUITY (Details)"> <tr style="background-color: White"> <td style="vertical-align: top"><span id="xdx_8B8_z9q17ZjfuEZh" style="display: none">Schedule of assumptions used table</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top; width: 83%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exercise Price</span></td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="vertical-align: bottom; width: 12%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_909_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228__srt--RangeAxis__srt--MinimumMember_zwgbyWsfhf5c" title="Exercise Price">1.25</span> -$<span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228__srt--RangeAxis__srt--MaximumMember_zTAUrva1TTCc">4,00</span></span></td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock Price</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_c20220228_zB5cMTnF1JEk" title="Stock Price">1.25</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk-free interest rate</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_dp_c20210901__20220228_z14Ov647iqB3" title="Risk-free interest rate">0.04</span>%</span></td> <td style="vertical-align: bottom"><span style="font-size: 10pt"> </span></td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected volatility</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_dp_c20210901__20220228_zP5RL80HPEQb" title="Expected volatility">223.3</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(238,238,238)"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected life (in years)</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1_dtY_c20210901__20220228_zbi7zlSi8M2h" title="Expected life">3.00</span></span></td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: White"> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected dividend yield</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_dp_c20210901__20220228_zJVucW5m8ce1" title="Expected dividend yield">0</span></span></td> <td style="vertical-align: bottom"> </td></tr> </table> 1.25 4.00 1.25 0.0004 2.233 P3Y 0 200000 2100000 924000 580000 725000 590000 590000 590000 590000 2024-08-05 2.00 5.00 580000 2.00 580000 4.00 <p id="xdx_803_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zfxddS6XJQBj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 6 – <span id="xdx_821_zDGSOQwtQbv">COMMITMENTS AND CONTINGENCIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company did not have any contractual commitments as of February 28, 2022, and August 31, 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p id="xdx_80E_eus-gaap--SubsequentEventsTextBlock_zH7OTXul8VYg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 7 – <span id="xdx_829_zBOGWtuyClT5">SUBSEQUENT EVENTS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 30, 2022, IDI extended the maturity date on the LOC Agreement to May 31, 2022, increased the amount of borrowing available for $2,500,000 to $3,000,000, and allowed amounts to be borrowed for general working capital purposes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Since February 28, 2022, the Company has received additional subscriptions for $527,500 in its Unit offering.</p> <p style="font: 10pt Times New Roman, Times, Serif; 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