10-Q: T-REX Acquisition Corp. Q3 2026 10-Q Filing Analysis

T-REX Acquisition Corp. reports significant operating losses and a working capital deficit in its Q3 2026 10-Q filing, with ongoing efforts to secure funding and expand operations.

Summary

• T-REX Acquisition Corp. filed its quarterly report for the period ending March 31, 2026, highlighting continued operating losses and a substantial working capital deficit.
• The company reported a net loss of $2,579,113 for the nine months ended March 31, 2026, compared to $1,122,930 for the same period in 2025.
• As of March 31, 2026, the company had a working capital deficit of $1,905,620 and a cash balance of $383.
• Management is actively seeking additional funds through public or private offerings to support operations and business plan implementation.
• The company's strategic focus remains on Bitcoin mining and exploring other distributed ledger technologies and infrastructure opportunities.
• Significant debt obligations and related-party transactions are noted, with ongoing efforts to manage these financial commitments.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as significantly negative due to substantial operating losses, a severe working capital deficit, extremely low cash reserves, and a going concern warning, despite ongoing efforts to secure funding.

Positives

• The company is actively pursuing strategies to increase revenue and secure funding, indicating a proactive approach to its financial challenges.
• Expansion into new facilities, such as the Orofino, Idaho data center, demonstrates a commitment to growing its hosting business.
• The acquisition of Baoblock, Inc. assets, including proprietary software and technical expertise, could enhance its software services segment.
• The company is exploring new business initiatives within the cryptocurrency and distributed ledger technology sectors.

Negatives

• Significant operating losses continue, with a net loss of $2,579,113 for the nine months ended March 31, 2026.
• A substantial working capital deficit of $1,905,620 exists as of March 31, 2026.
• The company's cash balance of $383 as of March 31, 2026, raises concerns about its ability to meet daily operational needs.
• The company has incurred significant stock-based compensation expenses, contributing to overall operating expenses.
• A notice of default and foreclosure proceedings were initiated by a lender for the Orofino, Idaho facility.
• The company has not filed tax returns since its 2016 filings, despite incurring losses.

Risks

• The company's ability to continue as a going concern is subject to substantial doubt due to its financial condition, including significant operating losses, accumulated deficit, and low cash balance.
• The company faces risks associated with the volatility of cryptocurrency markets, including Bitcoin price fluctuations and halving events, which impact mining revenue.
• Technological obsolescence of mining equipment due to rapid advancements in hardware poses a risk to the efficiency and profitability of mining operations.
• The company is exposed to risks related to its significant debt obligations, including convertible notes and promissory notes, which may require substantial cash outflows or equity dilution upon conversion or maturity.
• The company's reliance on related parties for various services and financing introduces potential conflicts of interest and financial risks.
• The default and foreclosure proceedings on the Orofino facility represent a significant operational and financial risk.
• The company's limited historical data and the emerging nature of the cryptocurrency industry make it challenging to accurately estimate useful economic lives of assets and future cash flows.

Future Outlook

The company expects working capital requirements to increase with business growth and intends to fund these through stock sales and revenue generation from acquisitions. Future liquidity needs will be met through debt or equity financing. The company plans to acquire 275 latest generation ASIC miners within ninety days, subject to financial ability or equity financing.

Management Comments

• 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.
• Management intends to raise additional funds by way of a public or private offering.
• The decrease in revenue is primarily attributable to refurbishment of the Orofino facility.
• The increase in the net loss is primarily attributable to a substantial increase in stock issued for services.

Industry Context

StockSavvy.ai notes that T-REX Acquisition Corp. operates in the highly volatile cryptocurrency mining and hosting sector. The company's strategic pivot towards these areas, while potentially lucrative, exposes it to significant market fluctuations, technological obsolescence, and regulatory uncertainties common in this emerging industry.

Comparison to Industry Standards

• Industry standard for mining equipment depreciation has shifted towards shorter useful lives (e.g., 1 year) due to rapid technological advancements, a practice T-REX has adopted.
• Competitors in the hosting segment often focus on securing long-term power purchase agreements and optimizing energy efficiency, areas T-REX is addressing with its Orofino facility and power supply agreement.
• The cryptocurrency mining industry is characterized by high capital expenditure for hardware and energy costs, which T-REX is attempting to manage through strategic acquisitions and financing.

Legal Proceedings

• A lender holding a lien on the Orofino, Idaho facility filed a notice of default and initiated foreclosure proceedings due to the company's default on the related note payable.

Related Party Transactions

• Significant amounts are owed to related parties for accrued compensation and advances.
• Notes payable to related parties, including those to Frank Horkey and Lazarus Asset Management LLC, are detailed with principal balances and interest.
• Office space is leased from the Company's President, Frank Horkey.
• Management advisory fees are paid to Squadron Marketing, an advisor to the Company.
• Board of directors and advisory board fees are owed to related parties including Frank Horkey, Matthew Cohen, Michael Christiansen, Timothy B. Ruggiero, Peter S. Chung, and Antonio Oliveira.

Stakeholder Impact

• Shareholders face continued dilution risk due to potential equity financing and stock-based compensation expenses, alongside the risk of the company's ability to continue as a going concern.
• Creditors and lenders face increased risk due to the company's financial distress and default on loan obligations.
• Employees and consultants may face uncertainty regarding continued operations and compensation, especially given the company's liquidity challenges.

Next Steps

• Secure additional funding through public or private offerings.
• Implement business plan to generate increased revenues.
• Acquire 275 latest generation ASIC miners within ninety days, subject to financing.
• Continue operations and investments in the cryptocurrency sector.
• Address the default and foreclosure proceedings on the Orofino facility.

Key Dates

Recommendation

The company's dire financial situation, characterized by massive operating losses, a severe working capital deficit, minimal cash reserves, and a going concern warning, coupled with a default on a key facility's loan, presents an extremely high-risk investment profile. Despite management's stated intentions to raise capital, the immediate financial distress and operational challenges make a strong sell recommendation prudent for seasoned investors.

Keywords

T-REX Acquisition Corp, 10-Q Filing, Cryptocurrency, Bitcoin Mining, Hosting Services, Financial Report, Operating Loss, Going Concern