SUBSEQUENT EVENTS

12 Months Ended

Aug. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

On November 4, 2024, Company entered into an amendment to its LOC Agreement with IDI. Prior to the amendment, the LOC provided for a maximum amount of $1,750,000, and the full amount was due and payable on December 1, 2024. As of August 31, 2024 the loan balance due to IDI was $1,625,000. Pursuant to the amendment, the maximum amount has been increased to $2,300,000. In addition, the Company has the right to extend the maturity for six monthly periods in consideration for an extension fee of $25,000 for each extension, which will be added to the balance due under the LOC. In addition, IDI was granted the right to convert 11,500,000 shares of common stock it owns into 2,300 shares of Series B Convertible Preferred Stock. In consideration for the above the amendments, IDI agreed to approve a new draw under the LOC of $250,000 and to purchase an additional 200 shares of Series B Convertible Preferred Stock for $200,000, for net new financing to the Company of $450,000.

On November 4, 2024, the Company approved a Certificate of Designations, Rights and Preferences of Series B Convertible Preferred Stock (the “Certificate of Designation”) with the Delaware Secretary of State, which authorized the creation and issuance of up to 3,000 shares of Series B Convertible Preferred Stock (the “Series B Preferred”). Under the Certificate of Designation, the Series B Preferred has the following rights:

Dividends: Each share of Series B Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series B Preferred were converted into shares of common stock immediately prior to the record date of the dividend declared on the common stock.

Liquidation Preference: The Series B Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $1,000 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.

Voting Rights: Each holder of Series B Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of common stock into which such share of Series B Preferred Stock would be convertible on the record date for the vote or consent of shareholders. Each holder of Series B Preferred Stock shall also be entitled to one vote per share on each submitted to a class vote of the holders of Series B Preferred Stock.

Voluntary Conversion Rights: Each share of Series B Preferred Stock is convertible into that number of shares of common stock equal to the liquidation preference of the Series B Preferred divided by a conversion price of $0.20 per share.

Rank: The Series B Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized, but ranks junior to the Series A Convertible Preferred Stock.

Redemption by Company: The Company may redeem all of the Series B Preferred at any time on twenty days notice by payment of the liquidation preference of the Series B Preferred.

Redemption by the Holders: The holders of the Series B Preferred shall not have the right to compel the Company to redeem their Series B Preferred unless the Company is in default under the terms of the Certificate of Designation..

Redemption on Fundamental Transaction: In the event the Company engages in a fundamental transaction, the Company shall be obligated to redeem all of the Series B Preferred at the closing of the transaction, provided that holders of the Series B Preferred shall be entitled to convert their shares of Series B Preferred into common stock in lieu of having them redeemed.

Right to Participate in Future Fundings: Each holder of Series B Preferred has the right to participate in future capital-raising transactions to the extent of its proportionate ownership of the Company on an as converted basis. The right extents to any issuance of common or preferred stock or debt securities convertible into common or preferred stock, except for certain exempted transactions.

Anti-Dilution Protection: The conversion price of the Series B Preferred is subject to reduction to the extent the company issues shares of common stock at a purchase price less than the then current conversion price, (ii) debt or equity securities convertible into common stock at a conversion price less than the then current conversion price, (iii) options or warrants exercisable for common stock at an exercise price less than the then current conversion price, or (iv) options or warrants to purchase convertible debt or equity securities, where the combined exercise and conversion prices would enable the holder to acquire shares of common stock for less than the then current conversion price.

In November 2024, the Company issued 2,500 shares of Series B Preferred to IDI in consideration for 11,500,000 shares of common stock owned by IDI and a cash investment of $200,000.

On November 14, 2024, the Company entered into an agreement to purchase 3,000 used S-19j Pro bitcoin miners for a total price of $1,035,000 from Luxor Technology Corporation (“Luxor”). The Company plans to engage a third party to host 2,900 miners. The Company expects to deploy the remaining 100 miners at its Trinidad location. The purchase price is payable as follows: 90% was due immediately, and 10% will be due within 60 days. Of the amount due immediately, $765,861.71 was paid from the proceeds of a Master Hashrate Purchase and Sale Agreement (the “Hashrate Sale Agreement”), and the balance will be paid from cash on hand. Under the Hashrate Sale Agreement, the Company sold 90 PH per day for 365 days at a price of 0.0005 per hashrate.

Subsequent to August 31, 2024, the Company issued 1,255,000 common shares as follows:

· 500,0000 shares each, for a total of 1,000,000 shares were issued to two executive officers as part of their compensation for fiscal 2025 officer services. These shares were valued at $0.44 each. The price of $0.44 is based upon a price indicated by a recent offering of Units by the Company for $1.25 per Unit to unrelated investors, with each Unit consisting of one share of common stock, one Class C-1 Warrant and one Class C-2 Warrant.

· 255,000 common shares were issued to various service providers in lieu of cash. These shares were valued at $0.44 each.

In May 2024, the Company brokered the sale of 20 transformers to Rykor Energy Solutions, LLC (“Rykor”). The total sales price of the transformers was approximately $1,407,000 and the company’s total cost was expected to be $1,340,000. As of August 31, 2024 the Company had received $703,500 against this order which is classified as an advance payment-related party since the order had not shipped as of August 31, 2024. Additionally, the Company made a payment of $670,000 to the supplier of the transformers. This amount is classified as a prepaid expense on the Company’s balance sheet as of August 31, 2024. Subsequent to August 31, 2024 by mutual agreement the order was reduced to 10 transformers instead of 20 transformers. These units were delivered and the Company recorded revenue of $703,500 with a cost of sales of $670,000 resulting in a profit of $33,500, which will be recorded during the Company’s first fiscal quarter ended November 30, 2024.