TRXA.OQBT-rex Acquisition CORP
10-Q: T-REX Acquisition Corp. Faces Foreclosure, Deepening Losses
Sentiment:
Quarterly Report
T-REX Acquisition Corp. reports significant net losses, a substantial working capital deficit, and a default on its Orofino facility mortgage, raising substantial doubt about its ability to continue as a going concern.
Delay expectedThe foreclosure sale for the Orofino facility, originally scheduled for February 10, 2026, was postponed.The company has not filed federal income tax returns for the fiscal years ended June 30, 2024, and June 30, 2025.
Capital raiseManagement intends to raise additional funds by way of a public or private offering.The company intends to meet liquidity requirements and fund expansion through proceeds from the issuance of debt or equity.A consulting services agreement entered into on January 2, 2026, requires a monthly cash fee payable only upon and subject to raising $5,000,000.The company plans to purchase 275 ASIC miners, subject to financial ability and/or obtaining equity financing.
Worse than expectedNet loss for the six months ended December 31, 2025, increased significantly to $1,410,116 from $729,242 in the prior year.The company reported a substantial working capital deficit of $2,100,806 and a critically low cash balance of $1,759.The company defaulted on a secured promissory note for its Orofino facility, leading to foreclosure proceedings.Regulatory non-compliance is evident with delinquent federal income tax filings for two fiscal years.A high percentage of trade payables (42%) are outstanding for over 90 days.
Summary
- Net loss for the six months ended December 31, 2025, was $1,410,116, a significant increase from $729,242 for the same period in 2024.
- The company's accumulated deficit reached $10,969,465 as of December 31, 2025.
- A working capital deficit of $2,100,806 and a cash balance of only $1,759 were reported as of December 31, 2025, indicating severe liquidity issues.
- The company defaulted on a $267,555 secured promissory note for its Orofino, Idaho facility, leading to foreclosure proceedings and a scheduled sale on February 10, 2026, which was subsequently postponed.
- Mining revenue for the six months ended December 31, 2025, was $10,163, contributing to total revenues of $11,389.
- Total operating expenses for the six months ended December 31, 2025, were $1,202,544.
- The company has not filed federal income tax returns for the fiscal years ended June 30, 2024, or June 30, 2025.
- Approximately 42% of trade payables were outstanding for more than 90 days as of December 31, 2025, an increase from 25% as of June 30, 2025.
- Accrued compensation to related parties totaled $708,941 as of December 31, 2025.
- Outstanding principal on notes payable to related parties was $364,366, with an additional $28,028 in accrued interest.
- Series A Preferred Stock was issued to President Frank Horkey and advisor Timothy Ruggiero in exchange for the cancellation of $433,225 in combined related-party debt and interest.
- Management concluded that disclosure controls and procedures were not effective as of December 31, 2025, citing a lack of segregation of duties and a shortage of qualified accounting personnel.
Sentiment
Score: 1
Explanation: StockSavvy.ai views this filing as extremely negative due to severe liquidity issues, a significant accumulated deficit, default on a key asset's mortgage leading to foreclosure, and regulatory non-compliance, all of which raise substantial doubt about the company's ability to continue operations.
Positives
- Mining revenue increased to $10,163 for the six months ended December 31, 2025, from $0 in the prior year, indicating the resumption of mining operations at the Orofino facility.
- The company received a capital credit allocation notice from a local electrical cooperative totaling $8,127, which is ultimately refundable.
- The scheduled foreclosure sale for the Orofino facility was postponed following the company's presentation of funds and intent to satisfy the mortgage obligation.
Negatives
- Net loss significantly increased to $1,410,116 for the six months ended December 31, 2025, from $729,242 in the prior year.
- The accumulated deficit grew to $10,969,465 as of December 31, 2025.
- A working capital deficit of $2,100,806 and a cash balance of only $1,759 as of December 31, 2025, indicate severe liquidity issues.
- The company defaulted on a $267,555 secured promissory note for the Orofino facility, leading to foreclosure proceedings and an increased interest rate of 18% per annum plus a 15% late charge ($40,133).
- The company has not filed federal income tax returns for fiscal years ended June 30, 2024, and June 30, 2025, indicating regulatory non-compliance.
- Approximately 42% of trade payables were outstanding for more than 90 days as of December 31, 2025, up from 25% as of June 30, 2025.
- Significant accrued compensation ($708,941) and notes payable ($364,366 principal, $28,028 interest) are owed to related parties.
- Disclosure controls and procedures were deemed ineffective due to a lack of segregation of duties and a shortage of qualified accounting personnel.
- Bitcoin held decreased from $17,502 (0.1626 BTC) as of June 30, 2025, to $250 (0.0029 BTC) as of December 31, 2025.
- Loss on derivative liabilities increased to $121,580 for the six months ended December 31, 2025, from $85,374 in the prior year.
Risks
- Substantial doubt exists about the company's ability to continue as a going concern due to significant operating losses, an accumulated deficit of $10,969,465, a working capital deficit of $2,100,806, and minimal cash of $1,759.
- Foreclosure proceedings are underway for the Orofino, Idaho facility due to default on a $267,555 secured promissory note, with a scheduled sale postponed but still pending.
- Regulatory and tax non-compliance, including delinquent federal income tax filings for fiscal years ended June 30, 2024, and June 30, 2025.
- A high proportion of aged trade payables (42% over 90 days) and unpaid SEC regulatory costs ($3,174) indicate operational and financial strain.
- Heavy reliance on related-party transactions for management services and debt financing, leading to significant accrued compensation and notes payable to insiders, raises corporate governance concerns.
- Ineffective disclosure controls and procedures due to a lack of segregation of duties and a shortage of qualified accounting personnel increase the risk of material misstatements in financial reporting.
- The company operates in an emerging industry (cryptocurrency mining) characterized by limited historical data, rapid technological obsolescence, and high volatility in digital asset prices.
- The ability to secure an additional 275 latest generation ASIC miners is subject to the company's financial capacity and/or its ability to obtain equity financing.
- Net operating loss carry forwards may be limited due to changes in ownership or tax laws.
Future Outlook
The company expects working capital requirements to be funded through a combination of stock sales and revenue generation from acquisitions. It intends to meet its liquidity requirements and fund business expansion, including capital expenditures for future operations, through cash flow provided by funds raised from the issuance of debt or equity. The company plans to secure an additional 275 latest generation ASIC miners over the next ninety days, contingent on its financial ability or obtaining equity financing.
Management Comments
- "Management intends to raise additional funds by way of a public or private offering."
- "Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern."
- "Our principal demands for liquidity are to increase business operations and for general corporate purposes."
- "We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity."
- "Management is currently evaluating the potential impact of this matter [Orofino default]."
- "Management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the periods covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended."
Industry Context
StockSavvy.ai notes that T-REX Acquisition Corp.'s pivot to cryptocurrency mining in 2021 aligns with broader industry trends of companies seeking to capitalize on distributed ledger technologies. However, the significant losses and reliance on debt and related-party financing highlight the capital-intensive and volatile nature of the Bitcoin mining sector, especially for smaller players facing intense competition and fluctuating crypto prices. The recent Bitcoin halving event in April 2024 further pressures mining profitability, making efficient operations and strong financial backing crucial for survival.
Comparison to Industry Standards
- StockSavvy.ai observes that T-REX Acquisition Corp.'s cash balance of $1,759 and working capital deficit of over $2.1 million are significantly below industry liquidity benchmarks for publicly traded companies, even for smaller reporting companies in the volatile crypto mining sector. For instance, larger players like Marathon Digital Holdings (MARA) or Riot Platforms (RIOT) typically maintain substantial cash reserves and positive working capital to navigate market fluctuations and fund operations.
- The company's accumulated deficit of nearly $11 million and recurring net losses are indicative of a company struggling to achieve profitability, contrasting sharply with more established or efficiently run mining operations that have demonstrated periods of positive cash flow or net income, particularly during bull markets.
- The default on a secured promissory note for its primary operational facility in Orofino, Idaho, and the subsequent foreclosure proceedings, represent a severe operational and financial distress signal, which is highly unusual for a publicly traded entity and far below the financial stability expected of industry peers.
- The high proportion of aged trade payables (42% over 90 days) suggests significant operational cash flow challenges and potential strain on supplier relationships, a metric that would typically be much lower for financially healthy companies in any industry.
- The reliance on related-party debt and compensation, while not uncommon for early-stage companies, is at a scale that raises corporate governance concerns and suggests difficulty in securing arms-length financing, a stark contrast to companies that can access traditional capital markets.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Board Member | Matthew Cohen | NA | 2024-12-20 | Resigned from position. |
| Director | NA | Matthew Cohn | 2025-11-15 | Newly appointed director, granted 280,000 restricted shares. |
| Board of Directors Member | NA | Katharyn Fiel | 2026-01-01 | Entered into a Board Member Service Agreement for a three-year term. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Disclosure Controls and Procedures | Management concluded that disclosure controls and procedures were not effective due to a lack of proper segregation of duties and a shortage of accounting personnel with adequate public company experience, SEC reporting, and US GAAP knowledge. | 2025-12-31 | Increases the risk of material misstatement and hinders the timely detection of financial reporting issues. |
| Internal Control Over Financial Reporting | Identified significant deficiencies and material weaknesses related to segregation of duties and qualified personnel, impacting the ability to maintain adequate controls over financial accounting and reporting processes. | 2025-12-31 | Raises concerns about the reliability of financial reporting and the preparation of financial statements. |
| Preferred Stock Designation | Filed a Certificate of Designation authorizing 10,000 shares of Series A Preferred Stock with specific rights and preferences, including cumulative dividends, 500 votes per share, and convertibility into common stock. | 2025-09-08 | Introduces a new class of equity with significant voting power and preferential rights, potentially diluting common shareholders' influence and claims. |
Legal Proceedings
- A Notice of Default was filed on September 24, 2025, by the Holder of the first mortgage of the Orofino property, initiating foreclosure proceedings due to default on the related note payable.
- A Notice of Trustees Sale was subsequently issued, scheduling a foreclosure sale for February 10, 2026, which was later postponed.
Related Party Transactions
- The company leases office space from its President, Frank Horkey, at a monthly rental cost of $250.
- Owes $708,941 in accrued compensation to related parties as of December 31, 2025.
- Owes Squadron Marketing (an advisor to the company) $248,000 for management advisory fees.
- Incurred compensation expense of $303,503, primarily related to payments to key management personnel, including Frank Horkey, Lazarus Asset Management LLC, and Antonio Oliveira.
- Owes board of director/advisory board member fees totaling $122,000.
- Has related party notes payable with a principal balance of $364,366 and accrued interest of $28,028 as of December 31, 2025.
- Issued Frank Horkey a $70,000 Senior Secured Convertible Promissory Note (extended to April 5, 2026).
- Issued Frank Horkey a $35,000 Senior Secured Convertible Promissory Note (extended to June 5, 2026).
- Issued Frank Horkey a $207,630 Senior Secured Convertible Promissory Note for the Orofino facility purchase, secured by a second lien on the property.
- Issued Lazarus Asset Management LLC a $15,000 Secured Promissory Note for management services.
- Issued Frank Horkey a $15,000 Secured Promissory Note for management services.
- Issued Lazarus Asset Management LLC a $15,000 Secured Promissory Note for management services.
- Issued Frank Horkey a $15,000 Secured Promissory Note for management services.
- Various officers advanced $19,256 for operating expenses, reported as 'Due to related party advances' (non-interest bearing, unsecured, due on demand).
- Issued 661,553 common shares to New Hudson Properties LLC (a related party) to settle the stock subscription liability for Lazarus Asset Management LLC.
- Issued 1,368 shares of Series A Preferred Stock to Frank Horkey in exchange for the cancellation of $239,571 of related-party notes and accrued interest.
- Issued 1,107 shares of Series A Preferred Stock to Timothy B. Ruggiero (or his assigns) in exchange for the cancellation of $193,654 of related-party notes and accrued interest.
Stakeholder Impact
- Shareholders face significant dilution risk from ongoing equity issuances for compensation and debt conversion. The substantial doubt about the company's going concern status and potential foreclosure pose a severe threat to shareholder value. Ineffective internal controls increase financial reporting risk.
- Creditors, particularly the primary mortgage holder of the Orofino facility, face high risk of non-payment due to the company's default and foreclosure proceedings. Other creditors also face uncertainty given the company's poor liquidity and overall financial health.
- Related parties, including management and advisors, are heavily involved in the company's financing and compensation, indicating a high degree of reliance and potential conflicts of interest. Their debt has been converted to preferred stock, granting them preferential rights.
- Employees and consultants may experience delayed or non-cash compensation, as compensation is frequently paid in shares or accrues, indicating potential cash flow issues for the company to meet its payroll obligations.
- Suppliers are impacted by the high percentage of aged payables, suggesting delayed payments and potential strain on business relationships.
Next Steps
- Cure the outstanding balance on the Orofino facility mortgage to avoid foreclosure.
- Raise additional funds through public or private offerings.
- Implement its business plan to generate increased revenues.
- Secure an additional 275 latest generation ASIC miners over the next ninety days, subject to financing.
- Address regulatory non-compliance, including filing delinquent federal income tax returns.
- Improve internal controls over financial reporting, specifically addressing segregation of duties and shortage of qualified accounting personnel.
- Engage with the mortgage holder regarding the timing of the final payment for the Orofino facility.
Key Dates
| Date | Description |
|---|---|
| 2008-01-16 | Company incorporated in the State of Nevada. |
| 2020-03-13 | TRXA Merger Sub, Inc. formed in Delaware. |
| 2021-07-01 | Company pivoted its strategy to become an emerging technology enterprise, focusing on cryptocurrency. |
| 2021-07-09 | Raptor Mining LLC formed in Florida. |
| 2022-02-17 | Company began earning Bitcoin mining rewards. |
| 2022-07-01 | Company formally changed its name from TREX Acquisition Corp. to T-REX Acquisition Corp. |
| 2022-07-01 | Megalodon Mining and Electric LLC formed in Florida. |
| 2022-07-01 | Frank Horkey, Michael Christiansen, Squadron Marketing LLC, and Lazarus Asset Management LLC received 250,000 restricted common stock shares each for board/advisory board positions. |
| 2022-07-01 | John Bennet received 50,000 restricted common stock shares for extending his consulting contract. |
| 2023-02-10 | John Bennet was awarded an additional 100,000 restricted common stock shares as an incentive for accepting the CFO position. |
| 2023-03-24 | Company granted a warrant to purchase 100,000 shares of restricted common stock to a private investor in connection with a $50,000 convertible promissory note. |
| 2023-09-29 | Company issued a private investor a $25,000 180-day Senior Secured Convertible Promissory Note. |
| 2023-12-06 | Company agreed to sell 20,000 Units at $0.75 per Unit to a private investor, receiving a $15,000 deposit. |
| 2024-02-08 | Entities belonging to Peter S. Chung and Timothy B. Ruggiero accepted a Pre-Funded Common Stock Purchase Warrant to purchase three million shares of restricted common stock. |
| 2024-04-02 | The $25,000 note from September 29, 2023, was extended for 180 days. |
| 2024-04-19 | The most recent Bitcoin halving occurred, reducing the block reward from 6.25 BTC to 3.125 BTC. |
| 2024-06-30 | Company early adopted FASB ASU 2023-08, Accounting for and Disclosure of Crypto Assets. |
| 2024-07-01 | Company issued a private investor a $36,624 180-day Secured Convertible Promissory Note. |
| 2024-07-01 | Matthew Cohen received 250,000 restricted common stock shares for Board of Directors service, vesting quarterly. |
| 2024-07-01 | Antonio Oliveira received 250,000 shares for Advisory Board service, vesting quarterly. |
| 2024-09-25 | A private investor purchased 150,000 restricted common stock shares for $150,000. |
| 2024-10-02 | Company entered into a power supply agreement with Clearwater Power Company for the Orofino, Idaho facility. |
| 2024-10-04 | The $25,000 note from September 29, 2023, was extended again for 180 days. |
| 2024-10-05 | A private investor purchased 100,000 restricted common stock shares for $100,000. |
| 2024-10-11 | A private investor purchased 100,000 restricted common stock shares for $100,000. |
| 2024-10-15 | A private investor purchased 50,000 restricted common stock shares for $50,000. |
| 2024-12-20 | Matthew Cohen resigned from his position as a member of the Board of Directors. |
| 2025-01-01 | Frank Horkey received 300,000 restricted common stock shares as settlement of advisory fees. |
| 2025-01-01 | Peter Chung through Squadron Marketing LLC received 471,429 restricted common shares as settlement for advisory fees. |
| 2025-01-01 | Frank Horkey, Michael Christiansen, and Peter Chung received 60,000 restricted common stock shares each as settlement for director fees. |
| 2025-01-01 | Company entered into a service agreement with Aubyn Honeysett to manage its colocation facility in Orofino, Idaho. |
| 2025-01-01 | Company entered into a service agreement with Bryce Greenfield to manage its co-location facility in Orofino, Idaho. |
| 2025-01-09 | Company issued a private investor a $10,000 Senior Secured Convertible Promissory Note. |
| 2025-01-10 | The $36,624 note from July 1, 2024, was renewed, and the investor advanced another $15,000. |
| 2025-02-03 | Company issued Frank Horkey a $70,000 Senior Secured Convertible Promissory Note. |
| 2025-02-07 | Sabretooth Mining Containers LLC formed in Florida. |
| 2025-03-04 | Megalodon acquired a data center and co-location facility in Orofino, Idaho. |
| 2025-03-05 | Company issued Frank Horkey a $35,000 Senior Secured Convertible Promissory Note. |
| 2025-03-05 | Company issued Frank Horkey a $207,630 Senior Secured Convertible Promissory Note for funds advanced to purchase the Orofino facility. |
| 2025-03-05 | Company issued to the seller of the Orofino facility a $267,555 Secured Promissory Note. |
| 2025-03-27 | All warrants related to the July 1, 2024, note were exercised on a cashless basis. |
| 2025-03-27 | All three warrants related to the September 29, 2023, note were redeemed through a cashless redemption. |
| 2025-03-27 | Warrants related to the January 10, 2025, note renewal were redeemed through a cashless redemption. |
| 2025-03-27 | Antonio Oliveira redeemed a warrant through cashless redemption into 62,500 restricted common stock shares. |
| 2025-03-29 | Deinodon Mining Solutions LLC formed in Florida. |
| 2025-03-31 | Deinodon acquired the assets of Baoblock, Inc. for $210,000 (600,000 shares + $10,000 cash). |
| 2025-03-31 | Issued 75,000 restricted common stock shares to Don Lopez for technical consulting services. |
| 2025-03-31 | Company issued all 24,000 shares to Aubyn Honeysett in advance of the vesting schedule. |
| 2025-03-31 | Company issued all 75,000 shares to Bryce Greenfield in advance of the vesting schedule. |
| 2025-04-01 | Private investors purchased various restricted common stock shares for cash ($10,000, $50,000, $25,000, $150,000, $100,000, $100,000). |
| 2025-04-04 | The $25,000 note from September 29, 2023, was extended again for 180 days. |
| 2025-04-05 | Frank Horkey's $70,000 note was extended to April 5, 2026. |
| 2025-04-10 | The $36,624 note from July 1, 2024, was extended again for 112 days. |
| 2025-04-10 | The $10,000 note from January 9, 2025, was extended to October 7, 2025. |
| 2025-05-05 | Frank Horkey's $35,000 note was extended to June 5, 2026. |
| 2025-05-15 | The promissory note secured by the Orofino data center matured. |
| 2025-05-23 | Aubyn Honeysett's and Bryce Greenfield's services were terminated. |
| 2025-05-25 | The $267,555 note for the Orofino facility went into default. |
| 2025-06-25 | Legal counsel was awarded 100,000 restricted common stock shares. |
| 2025-06-30 | Company issued the remaining 10,500 restricted common shares related to the July 1, 2024, note extension. |
| 2025-07-01 | Company approved a stock-based compensation arrangement for its Chief Technology Officer, Antonio Oliveira, consisting of 250,000 restricted common shares. |
| 2025-08-29 | Company issued a private investor a $10,000 Convertible Promissory Note. |
| 2025-08-29 | Company issued a private investor a $20,000 Convertible Promissory Note. |
| 2025-08-29 | Company issued a private investor a $50,000 Convertible Promissory Note. |
| 2025-09-01 | The $36,624 note from July 1, 2024, was extended for an additional 45 days. |
| 2025-09-05 | Company issued a private investor a $10,000 Convertible Promissory Note. |
| 2025-09-08 | Company filed a Certificate of Designation authorizing 10,000 shares of Series A Preferred Stock. |
| 2025-09-10 | Company issued a private investor a $10,000 Convertible Promissory Note. |
| 2025-09-24 | A Notice of Default was filed by the Holder of the first mortgage of the Orofino property. |
| 2025-09-29 | Company issued 250,000 restricted common shares to Antonio Oliveira. |
| 2025-09-29 | Company issued 661,553 common shares to New Hudson Properties LLC to settle the stock subscription liability for Lazarus Asset Management LLC. |
| 2025-09-29 | Company issued 132,000 restricted common shares to Joseph Womack. |
| 2025-09-29 | Company issued 100,000 restricted common shares to its legal counsel. |
| 2025-09-29 | Company issued 200,000 restricted common shares to a third-party consultant. |
| 2025-09-29 | Company issued 10,000 restricted shares of common stock to a private investor as inducement equity (August 29, 2025 financing). |
| 2025-09-29 | Company issued 10,000 restricted shares of common stock to a private investor as inducement equity (September 10, 2025 financing). |
| 2025-09-29 | Company issued 20,000 restricted shares of common stock to a private investor as inducement equity (August 29, 2025 financing). |
| 2025-09-29 | Company issued 10,000 restricted shares of common stock to a private investor as inducement equity (September 5, 2025 financing). |
| 2025-09-29 | Company issued 10,000 restricted shares of common stock to a private investor as inducement equity (August 29, 2025 financing). |
| 2025-09-29 | The Board of Directors approved the issuance of 1,368 shares of Series A Preferred Stock to Frank Horkey and 1,107 shares of Series A Preferred Stock to Timothy B. Ruggiero. |
| 2025-09-30 | Company issued Lazarus a $15,000 Secured Promissory Note as compensation for management services. |
| 2025-09-30 | Company issued Horkey a $15,000 Secured Promissory Note as compensation for management services. |
| 2025-10-01 | Company issued Lazarus a $15,000 Secured Promissory Note as compensation for management services. |
| 2025-10-29 | Company issued a private investor a $25,000 Convertible Promissory Note. |
| 2025-11-15 | Company approved a stock-based compensation arrangement for its newly appointed director, Matthew Cohn (280,000 restricted shares). |
| 2025-11-24 | Company issued a private investor a $10,000 Convertible Promissory Note. |
| 2025-12-01 | The $20,000 note from August 29, 2025, was renewed, with a new face amount of $23,000. |
| 2025-12-01 | The $10,000 note from September 5, 2025, was renewed, with a new face amount of $11,500. |
| 2025-12-15 | Company issued 280,000 restricted common shares to Matthew Cohn. |
| 2025-12-15 | Company issued an aggregate of 20,000 shares of common stock to two consultants as payment of bonuses. |
| 2025-12-15 | Company entered into an investor relations and financial public relations agreement with a third party, issuing 50,000 restricted shares. |
| 2025-12-31 | The $25,000 note from September 29, 2023, was renewed, with a new face amount of $26,696. |
| 2025-12-31 | The $36,624 note from July 1, 2024, was renewed, with a new face amount of $57,175. |
| 2025-12-31 | The $10,000 note from January 9, 2025, was renewed, with a new face amount of $15,879. |
| 2025-12-31 | The $10,000 note from August 29, 2025, was renewed, with a new face amount of $11,500. |
| 2025-12-31 | The $50,000 note from August 29, 2025, was renewed, with a new face amount of $51,937. |
| 2025-12-31 | Company issued Horkey a $15,000 Secured Promissory Note as compensation for management services. |
| 2026-01-01 | Company entered into a Board Member Service Agreement with Katharyn Fiel for a three-year term. |
| 2026-01-02 | Company entered into a Consulting Services Agreement with an unrelated third party, issuing 1,250,000 shares. |
| 2026-02-10 | A foreclosure sale for the Orofino facility was scheduled. |
| 2026-02-23 | Date of filing of the 10-Q report. |
Recommendation
strong sellThe company faces an existential threat with a severe liquidity crisis, an accumulated deficit exceeding $10 million, and a working capital deficit of over $2 million. The default on its primary operational facility's mortgage, leading to foreclosure proceedings, is a critical red flag. Compounding these issues are regulatory non-compliance (delinquent tax filings), ineffective internal controls, and a heavy reliance on related-party financing and compensation, which raises significant governance concerns. Despite some revenue generation, the net loss has widened substantially, and the company's ability to continue as a going concern is in substantial doubt. These factors collectively indicate an extremely high-risk investment with a high probability of further value erosion.
Keywords
cryptocurrency mining, Bitcoin, SEC 10-Q, financial results, going concern, foreclosure, debt default, related party transactions, working capital deficit, liquidity, Orofino facility, ASIC miners, regulatory non-compliance, internal controls
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