BMNR 10-Q
Bitmine Immersion Technologies, Inc. (BMNR)
10-Q
2026-07-14
For: 2026-05-31
View Original
Added on
July 14, 2026
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 May 31, 2026
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: 001-42675
| (Exact name of registrant as specified in its charter) | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code (203) 401-8200
(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 | ||||||||||||
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 | ☐ | ||||||||
| ☒ | 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 July 9, 2026 was 603,226,394 shares.
TABLE OF CONTENTS
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q (the "Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to future events or future financial performance of Bitmine Immersion Technologies, Inc. (the "Company," "Bitmine," "BMNR," "we," "us," or "our"), and can ordinarily be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue,” “objective,” “seek,” “strategy" or the negative of these terms or other similar words. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Some of the forward-looking statements contained in this Report include, but are not limited to, statements relating to:
•our ETH Treasury Strategy and our objective to grow our net ETH position over time, including our expectations regarding staking yields, treasury security, and capital allocation;
•our expectations regarding staking and validation operations, including staking rewards, validator participation rates, protocol parameters, and the performance of the MAVAN platform;
•our belief that we will have sufficient liquidity to fund operations for at least the next 12 months based on our current operating plan, expected cash on hand, anticipated operating cash flows, and access to capital under our shelf registration and ATM Program;
•our expectations regarding material cash requirements, including fees for digital asset management, capital expenditures, working capital requirements, public company costs, operating expenses, and dividend obligations on our Series A Preferred Stock;
•our intentions regarding the use of proceeds from our Series A Preferred Stock offering and other equity financings to support our digital asset treasury strategy, strategic investments, working capital requirements, and general corporate purposes;
•our expectations regarding the Pier Two acquisition, including the expected benefits of the acquisition and integration with the MAVAN platform, and the allocation of purchase consideration to acquired assets and liabilities;
•our expectations regarding strategic “moonshot” investments and their potential to support long-term value creation and complement our ETH-focused operating model;
•our expectations regarding the expansion of MAVAN to serve institutional investors, custodians, and ecosystem partners, and our ability to attract and retain institutional staking clients;
•our expectations regarding the remediation of material weaknesses in our internal control over financial reporting and the timing and effectiveness of remediation efforts;
•our expectations regarding ETH option strategies, the generation of option premium income, and the returns on our strategic investments, including moonshot investments;
•our expectations regarding key trends and uncertainties, including Ethereum protocol upgrades, Layer 2 activity, institutional adoption trends, regulatory developments, potential classification as an investment company under the Investment Company Act of 1940, and evolving U.S. and non-U.S. regulatory frameworks applicable to digital assets, staking, and custody.
The forward-looking statements in this Report are based on management’s current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to:
•our digital asset holdings, including price volatility in ETH, BTC and other digital assets, liquidity constraints, and the potential for significant unrealized losses or impairments;
•the evolving regulatory environment for digital assets, staking, custody, and blockchain infrastructure, including potential adverse legislation or enforcement actions;
•our ability to successfully integrate the Pier Two acquisition and achieve the anticipated benefits;
•cybersecurity, data privacy, custody arrangements, and the security of our digital asset holdings;
•counterparty credit and operational risks, including custodians, pool operators, hosting partners, and joint venture partners;
•our reliance on third-party infrastructure providers, including Ethereum Tower LLC and cloud computing providers, to operate validator nodes and provide staking services;
•our ability to access capital markets on favorable terms or at all, including through our shelf registration and ATM Program;
•our material weaknesses in internal control over financial reporting and our ability to remediate such weaknesses in a timely manner;
•Ethereum protocol developments, including protocol upgrades, changes to staking economics, and Layer 2 activity;
•the concentration of our revenue in ETH staking and validation operations conducted through MAVAN, and our ability to diversify revenue sources;
•our strategic investments, which may introduce additional sources of earnings volatility unrelated to ETH price movements;
•the impairment of goodwill and intangible assets acquired in connection with the Pier Two acquisition, including the assumptions underlying our fair value estimates and impairment testing;
•our ability to pay dividends on our Series A Preferred Stock, including staking yield volatility, ETH price fluctuations, and liquidity constraints affecting dividend coverage;
•competition, technology changes, and our ability to attract and retain qualified personnel, including key technical personnel acquired in the Pier Two acquisition; and
•other risks, including those described in Item 1A. – Risk Factors in our Annual Report on Form 10-K and those described from time to time in our other filings with the SEC.
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on our forward-looking statements.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Bitmine Immersion Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except for share and per share data)
| May 31, 2026 | August 31, 2025 | |||||||||||||
| (unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Cash collateral related to open derivative positions | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Digital assets | ||||||||||||||
| Equity investments measured at cost | ||||||||||||||
| Equity method investment measured at fair value | ||||||||||||||
| Operating lease right-of-use asset | ||||||||||||||
| Goodwill | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accrued liabilities | $ | $ | ||||||||||||
| Contract liabilities | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Operating lease liability, net of current portion | ||||||||||||||
| Deferred tax liability | ||||||||||||||
| Warrant liability | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
| Commitments and Contingencies (Note 14) | ||||||||||||||
| Stockholders' Equity: | ||||||||||||||
Preferred stock, par value $ | $ | $ | ||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated earnings (deficit) | ( | |||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Total Bitmine Immersion's stockholders' equity | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total stockholders' equity | $ | $ | ||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Bitmine Immersion Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except for share and per share data)
| Three Months Ended May 31, 2026 | Three Months Ended May 31, 2025 | Nine Months Ended May 31, 2026 | Nine Months Ended May 31, 2025 | |||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||
| Revenue from staking and validation | $ | $ | $ | $ | ||||||||||||||||||||||
| Revenue from self-mining | ||||||||||||||||||||||||||
| Revenue from consulting | ||||||||||||||||||||||||||
| Revenue from leasing | ||||||||||||||||||||||||||
| Revenue from the sale of mining equipment | ||||||||||||||||||||||||||
| Total Revenue | ||||||||||||||||||||||||||
| Cost of Sales | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Unrealized loss (gain) from the digital assets holdings | ( | |||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Change in fair value of warrant liability | ||||||||||||||||||||||||||
| Net loss on derivative contracts | ( | ( | ||||||||||||||||||||||||
| Issuance costs related to warrant offering | ( | |||||||||||||||||||||||||
| Change in the fair value of equity method investment | ( | ( | ||||||||||||||||||||||||
| Interest income (expense), net | ( | ( | ||||||||||||||||||||||||
| Other income (expense) | ( | ( | ( | ( | ||||||||||||||||||||||
| Pre-tax loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax benefit | ( | |||||||||||||||||||||||||
| Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Deemed dividend on Series A Preferred Stock | ( | |||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Less: Net loss attributable to non-controlling interest | ( | ( | ||||||||||||||||||||||||
| Net loss attributable to controlling stockholders of Bitmine Immersion Technologies, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Basic loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Diluted loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Weighted-average number of common shares outstanding - Basic | ||||||||||||||||||||||||||
2
| Weighted-average number of common shares outstanding - diluted | ||||||||||||||||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Less: Comprehensive loss attributable to the non-controlling interest | ( | ( | ||||||||||||||||||||||||
| Comprehensive loss attributable to controlling stockholders of Bitmine Immersion Technologies, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Bitmine Immersion Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, unaudited)
| Series A Preferred | Series B Preferred | Common Shares | Additional Paid-In Capital | Accumulated Earnings (deficit) | Accumulated other comprehensive income | Non- controlling interests | Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, August 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to settle liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock and liability classified warrants | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, November 30, 2025 | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to settle liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, February 28, 2026 | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance costs related to common stock offering | — | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for acquisition of Pier Two | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of non-controlling interest | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, May 31, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4
| Series A Preferred | Series B Preferred | Common Shares | Additional Paid-In Capital | Accumulated Earnings (deficit) | Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, August 31, 2024 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred -for change of vesting terms | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Series A - deemed dividend due to convert price reset | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of common stock to Preferred B stock and purchase of Preferred B Stock | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation for services | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation for services | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, November 30, 2024 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation - services | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation - services related parties | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, February 28, 2025 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation - services | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation - services related parties | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of fractional shares in reverse split | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | 0 | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, May 31, 2025 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Bitmine Immersion Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
| Nine Months Ended May 31, 2026 | Nine Months Ended May 31, 2025 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||||
| Unrealized loss / (gain) on digital assets held | ( | |||||||||||||
| Change in fair value of warrant liability | ( | |||||||||||||
| Net loss on derivative contracts | ||||||||||||||
| Deferred tax liability | ( | |||||||||||||
| Noncash revenue from mining and staking | ( | |||||||||||||
| Stock based compensation | ||||||||||||||
| Change in the fair value of equity method investment | ||||||||||||||
| Issuance costs related to warrant offering | ||||||||||||||
| Depreciation and amortization expense | ||||||||||||||
| Issuance of non-controlling interest cost | ||||||||||||||
| Other | ( | |||||||||||||
| Changes in operating assets and liabilities, net of acquisitions | ||||||||||||||
| Prepaid expenses | ( | |||||||||||||
| Accrued liabilities | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Contract liabilities | ( | ( | ||||||||||||
| Other assets | ||||||||||||||
| Net cash provided by (used in) operating activities | ( | |||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchase of digital assets | ( | |||||||||||||
| Purchase of equity investments | ( | |||||||||||||
| Collateral paid on digital asset option contracts | ( | |||||||||||||
| Premium paid on option contracts | ( | — | ||||||||||||
| Premiums received on option contracts | — | |||||||||||||
| Acquisition of Pier Two, net of cash acquired | ( | |||||||||||||
| Proceeds from sale of property and equipment | ||||||||||||||
| Purchase of property and equipment | ( | ( | ||||||||||||
| Proceeds from sale of equity investments | ||||||||||||||
| Payment of contingent consideration | ( | |||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from ATM | ||||||||||||||
6
| Proceeds from issuance of common stock and warrants | ||||||||||||||
| Issuance cost related to equity and warrant offerings | ( | |||||||||||||
| Payment of dividends | ( | |||||||||||||
| Proceeds from exercise of warrants | ||||||||||||||
| Proceeds from Series A preferred stock | ||||||||||||||
| Proceeds from Series B preferred stock | ||||||||||||||
| Repayment of related party loan | ( | |||||||||||||
| Proceeds from related party loan | ||||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net (decrease) increase in cash and cash equivalents | ( | |||||||||||||
| Effect of exchange rate changes on cash | ( | |||||||||||||
| Cash and cash equivalents at beginning of period | ||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||||||||
| Supplemental disclosure of non-cash investing and financing activity | ||||||||||||||
| Payment of liabilities in shares | ( | |||||||||||||
| Right of use assets in exchange for operating lease liabilities | ( | |||||||||||||
| Equity issuance for Pier Two acquisition | ( | |||||||||||||
| Earnout and deferred consideration for Pier Two acquisition | ( | |||||||||||||
| Issuance of noncontrolling interest | ( | |||||||||||||
| Working capital adjustment payable related to Pier Two acquisition | ( | |||||||||||||
| Special investment liability settlement of non-cash investment | ( | |||||||||||||
| Noncash digital asset investment from investment | ||||||||||||||
| Repayment of bitcoin loan in bitcoin, net | ||||||||||||||
| Purchase of equipment for loan payable | ||||||||||||||
| Deemed dividend on Series A Convertible Preferred Stock | ||||||||||||||
7
BITMINE IMMERSION TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except for shares and per share data)
NOTE 1 – NATURE OF THE BUSINESS
Bitmine Immersion Technologies, Inc. and its subsidiaries ("Bitmine" or the "Company") is a blockchain technology infrastructure company operating across institutional digital asset staking and validation services, bitcoin mining, and strategic digital asset management. The Company's primary operations focus on providing institutional-grade staking and validation infrastructure — through which it earns staking rewards and validation income — alongside bitcoin mining activities. Bitmine also holds digital assets strategically, generating yield on those holdings to support liquidity and capital formation. During 2025, the Company expanded its blockchain infrastructure capabilities, including the development and deployment of its institutional staking and validation platform. The Company's activities further include investments in early-stage blockchain opportunities ("moonshot" investments) and ancillary mining, hosting, and consulting services.
On March 24, 2026, the Company acquired all of the issued and outstanding shares of Pier Two Holdings Pty Ltd (“Pier Two”), an Australian blockchain infrastructure company, through MAVAN Holdings LLC (formerly Standard Validator LLC) ("MAVAN Holdings"), a consolidated subsidiary of the Company. Pier Two provides non-custodial staking infrastructure, validator operations, staking-as-a-service, and related technology services for Ethereum and other supported digital asset networks. The acquisition expands the Company’s operations into institutional staking infrastructure and validator services. See Note 3 – Acquisition for additional information.
In connection with the Company’s staking infrastructure strategy, the Company launched MAVAN, or Made in America Validator Network, its proprietary institutional-grade Ethereum staking platform. MAVAN is designed to provide staking infrastructure to institutional investors, custodians, and ecosystem participants, with a focus on security, performance, and resilience. Following the acquisition, Pier Two joined the MAVAN platform and began operating under the MAVAN brand. The Company expects the acquisition and the MAVAN platform to support its Ethereum treasury strategy and expand its ability to provide validator and staking infrastructure services.
NOTE 2 – SUMMARY OF SIGNIFICANT POLICIES
Basis of Presentation
These interim unaudited condensed consolidated financial statements (the “Interim Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements as certain information has been condensed or omitted. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, these Interim Statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These Interim Statements should be read in conjunction with the audited consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the period ended August 31, 2025, as filed with the SEC (“2025 Annual Report”).
For purposes of clarity and ease of presentation, all dollar amounts in these financial statements have been rounded and are presented in thousands, except for share, per share data, and places noted otherwise. The totals presented may differ by a small amount due to rounding. These differences are considered immaterial and do not affect the overall financial position or results of operations.
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Principles of Consolidation
The Interim Statements include the accounts of the Company and its consolidated subsidiaries. All significant intercompany account balances and transactions have been eliminated in the Interim Statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Change in Reporting Cutoff Convention
Effective December 1, 2025, the first day of the Company's second quarter of fiscal year 2026, the Company changed its financial reporting cutoff convention from 12:00 a.m. Eastern Time ("ET") to 12:00 a.m. Coordinated Universal Time ("UTC"). The change was made in connection with the implementation of the Company's treasury sub-ledger and to better align the cutoff convention with industry practices. The Company applies the UTC reporting cutoff convention on an entity-wide basis; however, the substantive accounting impact is primarily limited to items measured using continuously traded market inputs, principally the Company's digital assets. The change has been applied prospectively and, accordingly, prior-period amounts have not been adjusted.
The Company determined that the change represents a change in financial reporting cutoff convention and that prospective application is appropriate. Accordingly, prior-period amounts have not been adjusted.
Had the Company continued to apply the ET reporting cutoff convention, the carrying value of the Company's digital assets as of February 28, 2026 would have been $225 million higher. As a result, the unrealized loss recognized on digital assets for the three and six months ended February 28, 2026 would have been $225 0.50 0.58
Reverse Stock Split
On May 15, 2025, the Company effected a 1-for-20 reverse stock split of its common stock (the “Reverse Stock Split”). No fractional shares were issued and shareholders received cash in lieu of fractional shares. All share and per-share amounts for all periods presented have been retrospectively adjusted to reflect the reverse stock split.
Reclassifications
During the current quarter, the Company revised the presentation of certain financial statement captions to provide a more streamlined and consolidated presentation. Prior-period amounts have been reclassified to conform to the current-period presentation, including the aggregation of certain captions within the condensed consolidated financial statements. These reclassifications had no effect on previously reported total assets, liabilities, stockholders' equity, net loss, or cash flows.
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Revision of Previously Reported Share Information
The number of common shares outstanding as of August 31, 2025 and November 30, 2025 has been revised from 234,712,324 shares to 232,412,324 shares and 408,578,823 shares to 405,398,823 shares, respectively. The revision was required because the Company previously included shares based on trade date instead of settlement date. This revision is not a correction of a material error requiring prior-period restatement. The revision has no effect on the basic or diluted earnings per share for the periods impacted, and does not affect consolidated results of operations, shareholders’ equity, or cash flows.
Revenue from staking and validation service
Prior to the acquisition of Pier Two and the launch of MAVAN, the Company generated staking revenue by operating validator nodes for its own account and staking its own ether (“ETH”) on the Ethereum blockchain. In its role as a validator, the Company was the principal in these arrangements and earned the full amount of staking rewards generated by the blockchain protocol in connection with its validation activities. These activities were performed using third-party infrastructure providers acting at the Company’s direction and instruction.
Following the acquisition of Pier Two and the launch of MAVAN, the Company expanded its operating model while maintaining its role as the principal node operator. Through this acquisition, the Company broadened its blockchain node operations beyond Ethereum.
The Company recognizes revenue from blockchain validation services in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), by applying the five-step model, including identifying the contract, identifying the performance obligation, determining the transaction price, allocating the transaction price to the performance obligation, and determining when to recognize revenue.
The Company earns staking rewards in the form of digital assets for performing validation services on blockchain networks. A contract with enforceable rights and obligations is deemed to exist when the Company commences validation activities on a blockchain network, which is considered the customer by analogy. The contract term corresponds to the duration of each staking epoch, which varies by blockchain protocol. The Company satisfies its single performance obligation as it successfully validates blocks or transactions, and accordingly staking rewards are recognized as revenue at a point in time as each validation event occurs.
The digital assets earned represent non-cash consideration and are measured at contract inception. As the principal node operator, the Company recognizes the full amount of staking rewards generated by the blockchain protocol as revenue, with any amounts distributed, delegators or other network participants recognized as cost of sales.
Contract Liabilities
The Company’s contract liabilities represent advance payments from customers relating to consulting and leasing activities. As of May 31, 2026 and August 31, 2025, the Company’s contract liability balance amounted to $0 and $1,067 , respectively. The entire balance as of August 31, 2025 was recognized as revenue during the nine-month period ended May 31, 2026. The changes to contract liabilities at May 31, 2026 are as follows:
| Nine Months Ended May 31, 2026 | ||||||||
| Beginning contract balances | $ | |||||||
| Revenue recognized from contract liabilities | ( | |||||||
| Advance consideration received during the period | ||||||||
| Ending contract liabilities | $ | |||||||
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Business Combinations
The Company applies the provisions of ASC 805, Business Combinations, in accounting for its acquisitions. The assets acquired and liabilities assumed are recognized at their acquisition date fair values, and goodwill is measured as the excess of consideration transferred over the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which shall not exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statements of operations and comprehensive loss.
Leases
A lease is a contract, or part of a contract, that conveys the right to both (i) obtain economic benefits from and (ii) direct the use of an identified asset for a period of time in exchange for consideration. The Company evaluates its contracts to determine if they contain a lease and classifies any lease components identified as an operating or finance lease. For each lease component, the Company recognizes a right-of-use (“ROU”) asset and a lease liability. ROU assets and lease liabilities are presented separately for operating and finance leases; however, the Company currently has no finance leases. The Company’s operating leases are primarily related to office space in the United States.
In a contract that contains a lease, a component is an item or activity that transfers a good or service to the lessee. Such contracts may be comprised of lease components, non-lease components, and elements that are not components. Each lease component represents a lessee’s right to use an underlying asset in the contract if the lessee can benefit from the right of use of the asset either on its own or together with other readily available resources and if the right of use is neither highly dependent nor highly interrelated with other rights of use. Non-lease components include items such as common area maintenance and utilities provided by the lessor. The Company has elected the practical expedient to not separate lease components from non-lease components for office space. For each lease within this asset class, the non-lease components and related lease components are accounted for as a single lease component.
Operating lease liabilities are initially and subsequently measured at the present value of unpaid lease payments, discounted at the discount rate of the lease. Operating lease ROU assets are initially measured as the sum of the initial lease liability, any initial direct costs incurred, and any prepaid lease payments, less any lease incentives received. The ROU asset is amortized over the term of the lease. The amortization of operating lease ROU assets is included in “Non-cash lease expense” within the operating activities section of the condensed consolidated statements of cash flows. A single lease expense is recorded within operating expenses in the condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term. Variable lease payments that are not included in the measurement of the lease liability are recognized in the period when the obligations for those payments are incurred.
The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its incremental borrowing rate, which is based on an estimate of the Company’s secured borrowing rate. ROU assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both ROU assets and lease liabilities
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exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants.
The Company does not recognize lease liabilities or ROU assets for any short-term leases with a non-cancellable lease term of 12 months or less. Instead, the lease payments for these short-term leases are expensed on a straight-line basis over the lease term, and any variable payments are recognized in the period when the obligations for those payments are incurred. The Company believes that, using this methodology, the expense recorded reasonably reflects the Company’s short-term lease commitments.
Derivatives – Option Contracts
During the quarter ended February 28, 2026, the Company began entering into ETH-denominated option contracts, primarily through the sale of put options, as part of its digital asset treasury strategy. These contracts meet the definition of derivative instruments under ASC 815, Derivatives and Hedging. The Company does not designate any derivative instruments as hedging instruments for accounting purposes.
The Company accounts for its ETH-referenced option contracts as derivative instruments and recognizes them on the condensed consolidated balance sheets as assets or liabilities at fair value, with subsequent changes in fair value recognized in earnings. Premiums paid or received at contract inception are included in the initial fair value of the derivative instrument. If an option contract is exercised, the related derivative asset or liability is derecognized upon settlement. If an option contract expires unexercised, the related derivative asset or liability is derecognized upon expiration. Gains and losses related to ETH option contracts, including fair value remeasurement and settlements, are recorded within other income (expense) in the condensed consolidated statements of operations and comprehensive loss.
The fair value of ETH option contracts is determined using observable market inputs where available, including quoted prices for similar instruments, ETH spot prices, implied volatility, time to expiration, and counterparty credit considerations. These inputs are classified within Level 2 of the fair value hierarchy.
The Company may be required to post cash collateral with counterparties in connection with its ETH option contracts. Cash collateral posted is accounted for separately from the related derivative instrument and is not offset against derivative assets or liabilities, regardless of the existence of a master netting arrangement. Cash collateral posted is presented separately on the condensed consolidated balance sheets and classified based on its expected release date. Cash flows associated with derivative instruments, including settlements and option premiums paid or received, are classified as investing activities in the condensed consolidated statements of cash flows. Cash collateral paid is classified as an investing activity, and cash collateral received is classified as a financing activity.
As of May 31, 2026, the Company's outstanding ETH option contracts were not designated as hedging instruments. The fair value of the Company's derivative instruments were as following:
| Derivative instrument | Balance sheet location | May 31, 2026 | ||||||||||||
| ETH option contracts | Other current liabilities | $ | ||||||||||||
Equity Security Investment
The Company accounts for its equity security investment for which it does not have significant influence under ASC 321. For investments that do not have a readily determinable fair value, the Company has elected the measurement alternative to account for the investment. Such investments are recorded at cost and subsequently measured at cost, less impairment, and adjusted for changes in the fair value of the investment for any observable transactions in orderly markets for identical or similar investments; adjustments are recognized in earnings in the period of the change. The Company evaluates these investments for impairment when indicators exist and records an impairment
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loss if the carrying amount is not recoverable. Dividends are recognized in earnings when the Company’s right to receive payment is established, and gains or losses on disposals are recognized in earnings when realized.
For equity investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not control the investee, the investment qualifies for the equity method of accounting under ASC 323, Investments—Equity Method and Joint Ventures. The ability to exercise significant influence is presumed to exist when the Company holds 20% or more of the investee’s voting common stock, and is also evaluated based on qualitative indicators, including representation on the investee’s board of directors, participation in policy-making processes, material intra-entity transactions, interchange of managerial personnel, and the extent of the Company’s ownership relative to the concentration of other shareholdings. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the Company’s share of the investee’s net earnings or losses, which are recognized in earnings, and reduced by distributions received. The carrying value of the investment is also adjusted for the Company’s share of changes in the investee’s other comprehensive income or loss. The Company evaluates equity method investments for impairment whenever indicators of impairment are present.
For an investment that qualifies for the equity method, the Company has elected the fair value option under ASC 825-10, Financial Instruments. The fair value option is elected on an instrument-by-instrument basis. The fair value option may be elected on the date the investment first becomes subject to the equity method of accounting and, once elected, is irrevocable. When the fair value option is elected, the Company measures its entire equity interest in the investee — including any additional interests subsequently acquired — at fair value in accordance with ASC 820, Fair Value Measurement, rather than under the equity method. The investment is remeasured to fair value at each reporting date, with changes in fair value (unrealized gains and losses) recognized in earnings in the period of change. Upfront costs and fees related to an item for which the fair value option is elected are recognized in earnings as incurred. Dividends are recognized in earnings when the Company’s right to receive payment is established, and realized gains and losses on disposal are recognized in earnings when realized.
Intangible Assets, net
Intangible assets are initially recorded at their estimated fair values as of the acquisition date and are amortized on a straight-line basis over their estimated useful lives. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually and more frequently if events or changes in circumstances indicate that impairment may exist. The Company may perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If necessary, the Company performs a quantitative impairment test and recognizes an impairment loss for the amount by which the carrying amount of the reporting unit exceeds its fair value, limited to the amount of goodwill allocated to the reporting unit.
Recent Accounting Pronouncements
The Company has not adopted any new accounting pronouncements since the audited consolidated financial statements for the year ended August 31, 2025. See the 2025 Annual Report for information pertaining to the effects of recently adopted and other recent accounting pronouncements.
New Accounting Standards and Accounting Standards Not Yet Adopted
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial
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statements in accordance with U.S. generally accepted accounting principles. Per the FASB, the amendment is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improves navigability of the existing interim reporting requirements. The update will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are assessing the effect of this update on our Interim Statements and related disclosures.
In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2025-01 amends the effective date of ASU No. 2024-03 to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31, referred to as non-calendar year end entities. All public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The amendments should be applied prospectively with retrospective applications also permitted. Additionally, in December 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The update improves financial reporting by requiring that public business entities disclose additional information about certain costs and expenses categories: (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization in the notes to financial statements at interim and annual reporting periods. This update is effective for fiscal years beginning after December 15, 2026, and early adoption is permitted. The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures, however, the Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position, results of operations, or cash flows.
NOTE 3 – ACQUISITION
On March 24, 2026 (the “Acquisition Date”), the Company acquired 100 % of the issued and outstanding equity interests of Pier Two pursuant to a Share Purchase Agreement. Immediately prior to closing, all outstanding options to purchase Pier Two ordinary shares were accelerated and exercised.
The estimated total consideration transferred was $27.8 million and consisted of (i) cash consideration of $6.0 million, subject to post-closing adjustment, (ii) 501,545 shares of the Company's common stock with an Acquisition Date fair value of $10.5 million, subject to a six-month lock-up with monthly releases thereafter, (iii) deferred consideration with an estimated fair value of $9.5 million, payable in twelve equal quarterly installments over 36 months, with 75 % payable in cash and 25 % payable in shares of the Company’s common stock, and (iv) contingent earnout consideration with an estimated fair value of $1.8 million, payable in shares of the Company’s common stock upon achievement of specified annual recurring revenue targets during the twelve months following the Acquisition Date. The fair value of the common stock consideration was determined based on the quoted market price of the Company's common stock on the Acquisition Sate. The undiscounted amount payable under the contingent earnout arrangement ranges from $0 to $11.8 million.
The acquisition is accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company has preliminarily allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date, with excess recorded as goodwill. Goodwill of $14.7 million primarily represents expected synergies from integrating Pier Two's staking platform and validator operations with the Company's digital asset treasury and staking operations, including operational efficiencies, expanded staking capabilities, future growth opportunities, and the value of the assembled workforce that does not qualify for separate recognition as an identifiable intangible asset. None of the goodwill recognized in connection with the acquisition is expected to be deductible for income tax purposes.
As of May 31, 2026, the purchase price allocation remains preliminary as the Company continues to evaluate the fair value of identifiable intangible assets, certain assets acquired and liabilities assumed, and contingent consideration. During the measurement period, provisional amounts may be adjusted to reflect new information about facts and circumstances that existed as of the Acquisition Date, with a corresponding adjustment to goodwill. The preliminary
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purchase price allocation, including identifiable intangible assets consisting primarily of developed technology, customer relationships, and other intangible assets, is presented below.
| Fair value of assets acquired and liabilities assumed: | ||||||||
| Cash and cash equivalents | $ | |||||||
| Other current assets | ||||||||
| Investments | ||||||||
| Digital assets | ||||||||
| Other assets | ||||||||
| Intangibles - Technology | ||||||||
| Intangibles - Customer relationships | ||||||||
| Intangibles - Trade name | ||||||||
| Goodwill | ||||||||
| Other current liabilities | ( | |||||||
| Deferred liability | ( | |||||||
| Specified investments liability | ( | |||||||
| Total net assets acquired | $ | |||||||
The Company incurred acquisition‑related costs of $381 and $438 for the three and nine months ended May 31, 2026, respectively, consisting primarily of legal, advisory, and due diligence fees. These costs are included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. The acquisition also resulted in the recognition of a noncontrolling interest of $556 as of the Acquisition Date.
Since the Acquisition Date, Pier Two contributed revenue of $3,557 1,169
The following unaudited pro forma information presents the combined results of operations as if the acquisition had occurred at the beginning of comparable prior annual period, after giving effect to certain adjustments. The pro forma results are not necessarily indicative of what would have occurred had the acquisition been completed on that date, nor are they indicative of future results.
| Three Months Ended May 31, 2026 | Three Months Ended May 31, 2025 | |||||||||||||
| Revenue | $ | $ | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Nine Months Ended May 31, 2026 | Nine Months Ended May 31, 2025 | |||||||||||||
| Revenue | $ | $ | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
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NOTE 4 – DIGITAL ASSETS
The following table sets forth the units held, cost basis, and fair value of bitcoin (“BTC”), ETH, and other digital assets held, as shown on the balance sheet as of May 31, 2026:
| Units | Cost Basis | Fair Value | ||||||||||||||||||
| Bitcoin | $ | $ | ||||||||||||||||||
| Ether | ||||||||||||||||||||
| Other digital assets | ||||||||||||||||||||
| TOTAL | $ | $ | ||||||||||||||||||
The following table presents a reconciliation of digital assets held as of May 31, 2026:
| Bitcoin | Ethereum | Other digital assets | ||||||||||||||||||||||||||||||||||||||||||
| Balance | Quantity | Balance | Quantity | Balance | Quantity | Total | ||||||||||||||||||||||||||||||||||||||
| Fair value, beginning balance - August 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Revenue received from mining and staking | ||||||||||||||||||||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||||||||||||||||||||
| Additions from acquisition | ||||||||||||||||||||||||||||||||||||||||||||
| Sales | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Cryptocurrency used to pay expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Change in the fair market value | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Fair value, ending balance - May 31, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
NOTE 5 – ACCRUED LIABILITIES
As of May 31, 2026 and August 31, 2025, accrued liabilities are composed of the following:
| May 31, 2026 | August 31, 2025 | |||||||||||||
| Accrued professional services fees | $ | $ | ||||||||||||
| Accrued digital asset management fees | ||||||||||||||
| Accrued equity management fees | ||||||||||||||
| Accrued officer compensation | ||||||||||||||
| Accrued software | ||||||||||||||
| Accrued other | ||||||||||||||
| Total | $ | $ | ||||||||||||
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NOTE 6 – INVESTMENTS
Investment in Beast Industries
During the second financial quarter of 2026, the Company completed a strategic minority investment in Beast Industries Co. (“Beast Industries”), a privately held Delaware corporation. On January 15, 2026, the Company acquired 3,974,167 shares of Series C preferred stock of Beast Industries at a purchase price of $40.26 per share, for total cash consideration of $160,000 , pursuant to a Series C Preferred Stock Purchase Agreement. In addition, on the same date, the Company acquired 709,672 shares of common stock in a secondary transaction from an existing shareholder for cash consideration of $20,000 . The common shares acquired were originally issued as Class B common stock and automatically converted into Class A common stock upon transfer to the Company in accordance with Beast Industries’ certificate of incorporation. Collectively, these transactions resulted in total cash consideration of $180,000 . As part of the investment, the Company also capitalized $6,024 of transaction costs directly related to the transaction. In connection with the Series C investment, the Company also entered into a side letter agreement pursuant to which Beast Industries has the right, exercisable for a limited period, to notify the Company of its election to sell up to $20,000 of additional preferred equity to the Company at the Series D preferred stock price, with the same rights, preferences, and priorities as the Series C preferred stock. Upon receipt of such notice, the Company has a 30-day period to elect to purchase the additional preferred equity. As of May 31, 2026, Beast Industries has not exercised its notification right, and the Company has not purchased any additional preferred equity under the agreement.
At the time of the transaction, the Company owned 4 % of the equity interest in Beast Industries, which is not a majority equity interest or otherwise control of Beast Industries. Further, the Company does not have the ability to exercise significant influence over Beast Industries’ operating or financial policies. The Series C preferred stock and Class A common stock represent equity securities within the scope of ASC 321, Investments - Equity Securities. Because the securities are not publicly traded and do not have a readily determinable fair value, the Company has elected the measurement alternative under ASC 321.
As of May 31, 2026, the investment in Beast was $186,024 and recorded as an asset within “equity investment measured at cost” in the condensed consolidated balance sheet. There was no impairment recorded for the nine months ended May 31, 2026.
Investment in Eightco
On September 8, 2025, the Company entered into a Securities Purchase Agreement as part of a private investment in public equity transaction led by Eightco Holdings Inc. (“Eightco”). Pursuant to the agreement, Bitmine invested $20,000 in Eightco through the purchase of Eightco common stock at a purchase price of $1.46 per share. The transaction closed on September 9, 2025.
At the time of the transaction, the Company owned 7 % of the equity interest in Eightco, which is not a majority equity interest or otherwise control of Eightco. The Company accounted for its ownership interest in Eightco as an equity security with a readily determinable fair value in accordance with ASC 321. Under this method, the investment is recorded at fair value with changes in fair value recognized in earnings.
On March 11, 2026, the Company entered into an Investment Commitment Letter pursuant to which it committed to purchase additional shares of Eightco common stock for an aggregate purchase price of not less than $75,000 through Eightco’s at-the-market equity program. On March 12, 2026, the Company acquired 86,956,513 additional shares of Eightco common stock in open-market transactions at a volume-weighted average price of $0.92 per share, for aggregate consideration of $80,000 , which settled on March 13, 2026. In connection with the additional investment, Thomas Lee, the Company’s Executive Chairman, was appointed to Eightco’s Board of Directors effective March 10, 2026.
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Following the additional investment, the Company beneficially owns 100,655,143 shares of Eightco common stock, representing 31.94 % of Eightco’s 315,141,681 shares of common stock outstanding as of March 16, 2026.
Because the Company’s ownership interest exceeds the 20% presumption threshold and the Company is represented on Eightco’s Board of Directors, the Company concluded that it has the ability to exercise significant influence over Eightco. Accordingly, the investment in Eightco qualifies for the equity method of accounting under ASC 323. As a result, Eightco is considered a related party of the Company. Other than the Company’s investment in Eightco and its recognition of equity method earnings or losses, the Company had no related-party transactions with Eightco during the period.
The Company elected the fair value option under ASC 825 to account for the investment in Eightco. As of May 31, 2026, the closing trading price of Eightco common stock was $0.93 per share, and the fair value of the Company’s investment in Eightco was $93,207 . For the three and nine months ended May 31, 2026, the Company recorded a change in the fair value of equity method investment of $(1,177 ) and $(6,793 ), respectively, on its investment in Eightco within other income (expense) in its condensed consolidated statements of operations and comprehensive loss.
NOTE 7 – LEASES
The Company commenced leasing an office in Norwalk, Connecticut, effective as of February 18, 2026, which serves as its corporate headquarters. Office space represents the Company’s only material class of underlying assets under operating leases, and the Company has no finance leases. The Company recorded operating lease costs within "Cost of sales" for the three and nine months ended May 31, 2026 of $40 and $46 , respectively. The Company’s operating right-of-use assets and lease liabilities are as follows:
| May 31, 2026 | August 31, 2025 | |||||||||||||
| Operating lease right-of-use assets | $ | $ | ||||||||||||
| Accumulated amortization on operating right-of-use assets | ( | |||||||||||||
| Operating lease right-of-use assets, net | $ | $ | ||||||||||||
| May 31, 2026 | August 31, 2025 | |||||||||||||
| Operating lease liabilities, current portion | $ | $ | ||||||||||||
| Operating lease liabilities, non-current portion | ||||||||||||||
| Total operating lease liabilities | $ | $ | ||||||||||||
The current portion of the Company’s operating lease liabilities are recorded within “Other current liabilities” on the condensed consolidated balance sheet. The weighted average lease term and discount rate as of May 31, 2026 and August 31, 2025 are as follows:
| May 31, 2026 | August 31, 2025 | |||||||||||||
| Weighted-average remaining lease term: | ||||||||||||||
| Operating leases | ||||||||||||||
| Weighted-average discount rate: | ||||||||||||||
| Operating leases | % | % | ||||||||||||
The following table presents other lease details for the nine months ended May 31, 2026 and 2025:
| May 31, 2026 | May 31, 2025 | |||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating cash outflows - payments on operating leases | $ | $ | ||||||||||||
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| Right-of-use assets obtained in exchange for new lease obligations | ||||||||||||||
| Operating leases | $ | $ | ||||||||||||
The following table presents the maturities of the Company’s operating lease liabilities as of May 31, 2026:
| Years Ended August 31, | May 31, 2026 | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less: amounts representing interest | ( | |||||||
| Total present value of lease liabilities | $ | |||||||
NOTE 8 – STOCKHOLDERS’ EQUITY
Common Stock
On January 15, 2026, the Company’s stockholders approved an amendment to increase the total number of shares of common stock the Company is authorized to issue from 500,000,000 shares to 50,000,000,000 shares.
On July 9, 2025, the Company entered into a Controlled Equity Offering Sales Agreement with each of Cantor Fitzgerald & Co. and ThinkEquity LLC, pursuant to which the Company, from time to time, at its option may offer and sell shares of its common stock (the “ATM Offering”). For further information regarding the ATM Offering, refer to “Note 9. Stockholders’ Equity” of the 2025 Annual Report. During the nine months ended May 31, 2026, the Company sold 340,748,312 shares of common stock pursuant to the ATM Offering and received cash proceeds of $11,869,401 net of the issuance cost of $469 .
During the nine months ended May 31, 2026, the Company paid cash dividends totaling $4,258 ($0.01 per share) to holders of common stock. No dividends were paid in the three months ended May 31, 2026. These dividends were recorded as a reduction to accumulated deficit.
Liability Classified Warrants
On September 22, 2025, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which it issued (i) 5,217,715 shares of common stock at a price of $70 per share and (ii) warrants to purchase up to 10,435,430 shares of common stock at an exercise price of $87.50 per share. The warrants are immediately exercisable and expire on March 22, 2027. The exercise price and number of shares issuable upon exercise are subject to adjustment for certain corporate events, including stock dividends, splits, and fundamental transactions. The warrants contain standard anti-dilution provisions and may be adjusted in connection with certain fundamental transactions. In the event of a fundamental transaction, the holder may be entitled to receive cash, securities, or other property, consistent with the terms of the warrant agreement.
The warrants are classified as liabilities in accordance with ASC 815, as they contain provisions that could require net cash settlement in circumstances not solely within the Company’s control. Upon issuance, the warrant liability was measured at fair value using a Black-Scholes valuation model. The warrant liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.
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At May 31, 2026, the fair value of the warrant liability was $2,087 . The fair value was determined using the Black-Scholes option pricing model, with the following key inputs:
| Stock Price | $ | |||||||
| Exercise Price | $ | |||||||
| Expected Term (in years) | ||||||||
| Risk-Free Interest Rate | % | |||||||
| Expected Volatility | % | |||||||
| Expected Dividend Yield | % | |||||||
For the three and nine months ended May 31, 2026, the Company recognized a gain of $16,488 and $264,121 , respectively related to changes in the fair value of the warrant liability. During the nine months ended May 31, 2026, no liability classified warrants were exercised and all remained outstanding as of May 31, 2026. There were no liability classified warrants held as of August 31, 2025.
Series A and B Convertible Preferred Stock
The Company is authorized to issue 500,000 shares of Series A Convertible Preferred Stock and 3,000 shares of Series B Convertible Preferred Stock. The Series A Convertible Preferred Stock carries a liquidation preference of $10 per share, plus any declared but unpaid dividends, while the Series B Convertible Preferred Stock carries a liquidation preference of $1,000 per share, plus any declared but unpaid dividends.
In the event of liquidation, the Series A Preferred Stock ranks senior to both the Series B Preferred Stock and common stock, while the Series B Preferred Stock ranks senior to the common stock. Both Series A and Series B Preferred Stock are convertible into common stock at the option of the holder.
All outstanding shares of Series A and Series B Convertible Preferred Stock were converted into common stock during the year ended August 31, 2025. No preferred shares were outstanding as of May 31, 2026.
Preferred Stock
On January 15, 2026, the Company’s stockholders approved an amendment to authorize the issuance of 20,000,000 shares of preferred stock. As of May 31, 2026, no shares of preferred stock have been issued.
Non-Controlling Interests
Non-controlling interests represent Ethereum Tower LLC's 2.0% ownership in MAVAN Holdings. The ownership interest was granted in connection with the Management Services Agreement entered into as part of the Pier Two acquisition. The non-controlling interest is presented as a separate component of stockholders' equity in the accompanying condensed consolidated balance sheets.
Net income attributable to the non-controlling interest is allocated based on the ownership percentage and is reflected separately in the condensed consolidated statements of operations and comprehensive loss.
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NOTE 9 STOCK-BASED COMPENSATION
Restricted Stock Awards (“RSAs”)
All RSAs were vested as of August 31, 2025 and the Company did not issue any additional RSAs for the nine months ended May 31, 2026.
During the three and nine months ended May 31, 2025, the Company recognized compensation expenses of $65,234 and $276,912 for RSAs, respectively. The Company did not recognize any compensation expenses for RSAs for the three and nine months ended May 31, 2026.
Restricted Stock Units (“RSUs”)
The Company’s RSUs include awards with service, performance, and market conditions. Some of the RSUs were fully vested upon issuance while other service based RSUs have a vesting period of one year . Some of the RSUs issued to one executive have performance conditions linked to the percentage of ETH holdings or market conditions related to market cap or target stock price.
The following table summarizes the Company’s time-based RSU stock activities for the periods indicated:
| RSUs (Time-based) | Weighted Average Grant Date Fair Value | |||||||||||||
| Unvested shares at August 31, 2025 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited | ( | |||||||||||||
| Unvested shares at May 31, 2026 | $ | |||||||||||||
The following table summarizes the Company’s performance-based RSU stock activities for the periods indicated:
| RSUs (Performance-based) | Weighted Average Grant Date Fair Value | |||||||||||||
| Unvested shares at August 31, 2025 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ||||||||||||||
| Forfeited | ||||||||||||||
| Unvested shares at May 31, 2026 | $ | |||||||||||||
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Stock Options
Stock options have service conditions with a vesting period of one year .
The following table summarizes the Company’s Options activities for the periods indicated:
| Options | Weighted Average Exercise Price | Average Remaining Contract Term (in Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| Outstanding - August 31, 2025 | $ | 0 | $ | — | ||||||||||||||||||||||
| Granted | 0 | — | ||||||||||||||||||||||||
| Vested | 0 | — | ||||||||||||||||||||||||
| Forfeited | 0 | — | ||||||||||||||||||||||||
| Outstanding - May 31, 2026 | $ | $ | ||||||||||||||||||||||||
Share-based compensation expense is recorded in “General and administrative expenses” in the condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended May 31, 2026, the Company recognized compensation expenses of $12,201 and $36,689 , respectively, for RSUs. During both the three and nine months ended May 31, 2026, the Company recognized compensation expenses of $1,046 and $1,162 , respectively, for Options. Additionally, the Company recognized compensation expenses of $506 for fully vested common shares issued to a director of the Board in Q1 2026.
For the three and nine months ended May 31, 2025, the Company recognized share-based compensation expenses of $648 and $1,319 , respectively.
As of May 31, 2026, unrecognized compensation expenses for time-based RSUs is $25,185 , which is expected to be amortized over an average of 1.58 years; unrecognized compensation expenses for performance-based RSUs is $103,776 , which is expected to be amortized over an average of 4.05 years; unrecognized compensation expenses for stock options is $4,857 , which is expected to be amortized over an average of 0.81 years.
Equity Classified Warrants
In June 2025, the Company issued three warrant offerings (Placement Agent Warrants, Strategic Advisor Warrants, and Representative Warrants). Each warrant offering was designated as equity classified share-based compensation in accordance with ASC 718.
During the nine months ended May 31, 2026, 0 representative warrants were exercised for a cashless exercise, and 54,263 strategic warrants were exercised at a price of $5.40 per share. As of May 31, 2026 and August 31, 2025, 2,872,929 and 3,107,114 of the warrants were outstanding, respectively. No
NOTE 10 - GOODWILL AND INTANGIBLE ASSETS
The following table presents the changes in goodwill during the nine months ended May 31, 2026.
| Total | ||||||||
| Net balance at September 1, 2025 | $ | |||||||
| Acquisition during the period | ||||||||
| Foreign currency exchange rate effect | ||||||||
| Net balance at May 31, 2026 | $ | |||||||
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Intangible assets, net as of May 31, 2026 and August 31, 2025 consist of the following:
| Asset | Estimated useful life (Years) | May 31, 2026 | August 31, 2025 | |||||||||||||||||
| Technology | $ | $ | ||||||||||||||||||
| Relationships | ||||||||||||||||||||
| Trade name | ||||||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||||||
| Gross carrying amount of intangible assets | ||||||||||||||||||||
| Accumulated amortization | ( | |||||||||||||||||||
| Intangible assets, net | $ | $ | ||||||||||||||||||
The estimated future amortization expense for each of the next five years for all identifiable intangible assets is as follows:
| May 31, 2026 | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
Amortization expense was $319
NOTE 11– INCOME TAXES
The Company accounts for income taxes in interim periods using the estimated annual effective tax rate method. Under this method, the Company estimates its annual effective tax rate for the full fiscal year and applies that rate to its year-to-date pre-tax income or loss and adjusts the provision for (or benefit from) income taxes for discrete items recorded in the period.
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NOTE 12 – LOSS PER COMMON SHARE
The following table sets forth the components used in the computation of basic and diluted loss per share for the three months ended May 31, 2026 and 2025:
| (In thousands, except share and per share data) | Three Months Ended May 31, 2026 | Three Months Ended May 31, 2025 | ||||||||||||
| Basic loss per share: | ||||||||||||||
| Numerator: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Net loss available to common stockholders - basic | $ | ( | $ | ( | ||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
| Basic loss per common share | $ | ( | $ | ( | ||||||||||
| Diluted loss per share: | ||||||||||||||
| Numerator: | ||||||||||||||
| Net loss available to common stockholders - diluted | $ | ( | $ | ( | ||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
| Add: dilutive securities | ||||||||||||||
| Warrants | ||||||||||||||
| RSAs | ||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||
| Diluted loss per common share | $ | ( | $ | ( | ||||||||||
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The following table sets forth the components used in the computation of basic and diluted loss per share for the nine months ended May 31, 2026 and 2025:
| (In thousands, except share and per share data) | Nine Months Ended May 31, 2026 | Nine Months Ended May 31, 2025 | ||||||||||||
| Basic loss per share: | ||||||||||||||
| Numerator: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Net loss available to common stockholders - basic | $ | ( | $ | ( | ||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
| Basic loss per common share | $ | ( | $ | ( | ||||||||||
| Diluted loss per share: | ||||||||||||||
| Numerator: | ||||||||||||||
| Net loss available to common stockholders - diluted | $ | ( | $ | ( | ||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
| Add: dilutive securities | ||||||||||||||
| Warrants | ||||||||||||||
| RSAs | ||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||
| Diluted loss per common share | $ | ( | $ | ( | ||||||||||
The following table summarizes the securities that were not included in the computation of diluted income per common share because their effect is anti-dilutive:
| Outstanding as of | Outstanding as of | |||||||||||||
| May 31, 2026 | May 31, 2025 | |||||||||||||
C-3 Warrants(1) | ||||||||||||||
Strategic Advisor Warrants(1) | ||||||||||||||
Representative Warrants(1) | ||||||||||||||
CVI Warrants(2) | ||||||||||||||
Options(1) & (2) | ||||||||||||||
Performance-based RSUs(3) | ||||||||||||||
RSAs (1) | ||||||||||||||
(1) | ||
(2) C-3 Warrants, CVI Warrants and | ||
(3) The performance-based RSUs have certain stock price, market cap and other market/performance conditions which were not met as of May 31, 2026. | ||
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NOTE 13 – SEGMENT REPORTING
In accordance with ASC 280-10, Segment Reporting, management has determined that the Company operates as one
The CODM reviews segment performance primarily based on consolidated operating income and does not regularly receive or review disaggregated expense information for purposes of assessing performance or allocating resources. Accordingly, no additional segment expense disclosures are required.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Commitments
During the fiscal year ended August 31, 2025, the Company entered into a Consulting Agreement with Eth Tower, a third-party service provider, to provide consulting, asset management, custody, and staking services. The Consulting Agreement has a term of ten years and may be renewed.
Under the terms of the Consulting Agreement, the Company is obligated to pay the third-party service provider a consulting fee calculated as follows:
•1.00 % per annum on digital assets managed up to $1,000,000 ;
•0.50 % per annum on digital assets managed from $1,000,000 to $5,000,000 ; and
•0.25 % per annum on digital assets managed above $5,000,000 .
The fee is earned daily and paid monthly, which may be settled in cash or digital assets. The aggregate fees to be incurred by the Company are expected to be in the range of $40,000 to $50,000 annually.
The Consulting Agreement is non-cancelable except under limited circumstances. If the Company terminates the Consulting Agreement without cause, Eth Tower is entitled to 85 % of all fees that would have accrued through the end of the term as liquidated damages.
During the three and nine months ended May 31, 2026, the Company recorded $12,759 and $37,468 , respectively, in expenses related to the consulting agreement with the third-party service provider.
In connection with the acquisition of Pier Two, the Company entered into a Management Services Agreement with Eth Tower pursuant to which Eth Tower provides management and operational services to MAVAN Holdings. The agreement has an initial term of ten years and provides for compensation consisting of a 2.0 % membership interest in MAVAN Holdings and revenue-based fees related to certain staking activities. The agreement may be terminated under specified circumstances. If terminated by the Company prior to the expiration of the term, Eth Tower may be entitled to continue receiving certain revenue participation payments or elect a lump-sum termination payment. No no amounts were accrued or payable as of May 31, 2026.
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Contingencies
From time to time, the Company is subject to legal proceedings that arise in the ordinary course of business. While any legal proceeding or claim has an element of uncertainty, the Company believes the outcome of each lawsuit, claim or legal proceeding that is pending or threatened, or all of them combined, will not have a material adverse effect on the Company’s condensed financial position or results of operations. It is possible, however, that future results of operations could be materially and adversely affected by any new developments relating to the legal proceedings and claims. As of May 31, 2026, and August 31, 2025, zero legal matters were considered probable and reasonably estimable.
NOTE 15 – SUBSEQUENT EVENTS
On June 4, 2026, the Company entered into an underwriting agreement with Moelis & Company, LLC and Cantor Fitzgerald & Co. in connection with an underwritten offering of 3,500,000 shares of the Company’s 9.50 % Series A Perpetual Preferred Stock (the "Series A Preferred Stock"), par value $0.0001 per share, at a public offering price of $80.00 per share. Net proceeds from the offering were $273.8 million after deducting underwriting discounts and offering expenses. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol “BMNP".
The Company declared cash dividends on Series A Preferred Stock of $0.32 per share and $0.11 per share on June 12, 2026 and June 30, 2026, respectively. The dividends were paid on June 22, 2026 and July 10, 2026, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under “Part II. Item 1A. Risk Factors,” among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.
Overview
We are a digital asset focused company. Beginning in the third calendar quarter of 2025, management expanded its existing digital asset business to primarily focus on the Ethereum blockchain and ETH as the digital asset. This included expanding toward an asset light operating model centered on Ethereum adjacent services (including advisory) and disciplined digital asset treasury management. Our results are now driven primarily by operating efficiency in a lower capex model and Ethereum market conditions, including their impact on client activity and the value of any ETH held in our treasury.
In June and July 2025, we strengthened our liquidity through an underwritten public offering of common stock, private placements, and the establishment of our at-the-market program permitting sales of up to $24.5 billion of our common stock from time to time (the “ATM Program”). We also uplisted our common stock to the NYSE American in June 2025 and subsequently to the New York Stock Exchange on April 9, 2026.
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Subsequent to May 31, 2026, we completed an underwritten public offering of our Series A Preferred Stock, generating net proceeds of $273.8 million. The offering further enhanced our liquidity and capital resources, and supports our digital asset treasury strategy, strategic investments and other general corporate purposes.
During the current quarter, we also deployed capital into strategic moonshot investments that we believe complement our ETH-focused operating model and treasury strategy. These investments were evaluated alongside direct ETH acquisitions as part of our broader capital allocation framework and are intended to support long-term value creation rather than near-term operating income.
Unless otherwise indicated, period to period comparisons are presented for the two most recent fiscal years consistent with Item 303 of Regulation S-K, as amended.
ETH Treasury Strategy, Drivers and Outlook
Our operating model is now anchored by our ETH Treasury Strategy and capital-light ecosystem services. The key drivers of our results include (i) ETH market conditions, which affect the value of our holdings and the economics of any staking or staking-adjacent activities; (ii) client demand for Ethereum-adjacent services, including advisory; (iii) security, custody and compliance expenditures necessary to support institutional-grade treasury operations; and (iv) access to capital to opportunistically acquire ETH and invest in enabling infrastructure.
Treasury and yield framework. Our objective is to grow our net ETH position over time, subject to risk and liquidity constraints. We evaluate staking and related mechanisms based on security, liquidity, counterparty and regulatory profiles. We expect staking yields to evolve with validator participation rates, protocol parameters and market conditions. Where we deploy ETH to staking or analogous activities, we intend to size exposures conservatively, prioritize best-in-class custody and validator operations (including multi-client diversity and performance monitoring), and maintain appropriate unencumbered liquidity to meet corporate needs. We may rebalance or unwind positions in response to changes in risk, reward, or regulatory context.
Capital deployed into strategic investments is subject to similar risk discipline, liquidity considerations and governance oversight as our ETH treasury activities, and may introduce additional sources of earnings volatility unrelated to ETH price movements.
Operating expenditures and investment priorities. As an ETH-focused company, we expect a mix shift in operating expenses toward cybersecurity, custody, treasury operations, compliance and technology enablement for advisory and analytics. Capital expenditures are expected to remain modest relative to a mining-centric model. We intend to maintain a flexible cost structure aligned with services activity and treasury scale. In addition to direct ETH holdings, we may selectively pursue strategic moonshot investments in operating companies, platforms or ecosystems that we believe are aligned with Ethereum adoption, infrastructure or adjacent services. These investments are evaluated within the context of our ETH Treasury Strategy and are intended to complement, rather than replace, direct exposure to ETH.
Key trends and uncertainties. We are monitoring (i) protocol upgrades on Ethereum’s roadmap and their implications for staking yields, fee markets and network security; (ii) growth in L2 activity and cross-chain interoperability; (iii) institutional adoption trends, including tokenization initiatives and regulated market-structure developments; (iv) availability and terms of regulated custodial services; and (v) evolving U.S. and non-U.S. regulatory frameworks applicable to digital assets and staking.
Liquidity considerations. Our liquidity planning considers ETH price volatility, potential impairment charges under applicable accounting policies, the liquidity profile of any staked positions and our ability to access capital markets through our shelf registration and at-the-market program. We intend to maintain sufficient liquidity to support operations, regulatory compliance, and security investments, while seeking opportunities to increase ETH holdings when market conditions are attractive.
Known events reasonably likely to affect future results. Our future results may be materially affected by changes in ETH prices and staking economics; regulatory developments pertaining to ETH, staking and custody; counterparty
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or custodian developments; cybersecurity investments and events; and market structure changes affecting liquidity and capital access for digital-asset issuers.
Key Performance Drivers
Key performance drivers include ETH market conditions and staking economics; client demand for advisory services; and access to capital under our shelf and ATM Program. We focus on treasury security and liquidity, sizing of staking or staking adjacent activities, and maintaining flexibility to rebalance positions as risk/return or regulatory contexts evolve. Given our pivot to an asset light, ETH focused model, energy use metrics from prior mining operations are no longer decision useful and have been excluded from MD&A.
Results of Operations
Comparison of Results of Operations for the Three Months Ended May 31, 2026 and 2025.
| Three Months Ended May 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Revenue from staking and validation | $ | 45,743 | $ | — | NM | |||||||||||||||
| Revenue from self-mining | 624 | 813 | (23)% | |||||||||||||||||
| Revenue from consulting | 168 | 35 | NM | |||||||||||||||||
| Revenue from leasing | — | 1,075 | NM | |||||||||||||||||
| Revenue from the sale of mining equipment | — | 129 | NM | |||||||||||||||||
| Total Revenue | 46,535 | 2,052 | NM | |||||||||||||||||
| Cost of Sales | 5,726 | 1,742 | NM | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative expenses | 37,270 | 744 | NM | |||||||||||||||||
| Unrealized loss (gain) from the digital assets holdings | 15,404 | 34 | NM | |||||||||||||||||
| Total operating expenses | 52,674 | 778 | NM | |||||||||||||||||
| Loss from operations | (11,865) | (468) | NM | |||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Change in fair value of warrant liability | 16,488 | — | NM | |||||||||||||||||
| Net loss on derivative contracts | (92,093) | — | NM | |||||||||||||||||
| Change in the fair value of equity method investment | (1,177) | — | NM | |||||||||||||||||
| Interest income (expense), net | 5,300 | (72) | NM | |||||||||||||||||
| Other income (expense) | (248) | (83) | NM | |||||||||||||||||
| Pre-tax loss | (83,595) | (623) | NM | |||||||||||||||||
| Income tax benefit | — | — | NM | |||||||||||||||||
| Net loss | $ | (83,595) | $ | (623) | NM | |||||||||||||||
For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (“NM”).
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Revenues
During the three months ended May 31, 2026, revenues were $46,535, compared to $2,052 during the three months ended May 31, 2025. The increase in revenue was a result of the following:
•Revenue from staking and validation. During the three months ended May 31, 2026, revenue from staking and validation was $45,743, compared to $0 in the three months ended May 31, 2025. The increase was a result of the Company initiating native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year. Further, the Pier Two acquisition accounted for $3,527 in staking revenue for the three months ended May 31, 2026.
•Revenue from self-mining. During the three months ended May 31, 2026, revenue from self-mining was $624, compared to $813 in the three months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined due to the lower value of BTC for the three months ended May 31, 2026 compared to the prior year period.
•Revenue from consulting. During the three months ended May 31, 2026, revenue from consulting was $168, as compared to $35 during the three months ended May 31, 2025. The increase in consulting revenue in 2026 was derived from one consulting agreement under which the Company is obligated to provide various operational, maintenance and consulting services, which saw more activity in 2026 as compared to the prior period.
•Revenue from leasing. During the three months ended May 31, 2026, revenue from the leasing of miners was $0, as compared to $1,075 during the three months ended May 31, 2025. The machine lease agreements expired on December 31, 2025 and were not renewed. Thus, the revenue associated with this activity is no longer recognized.
•Revenue from the sale of mining equipment. During the three months ended May 31, 2026, revenue from sale of mining equipment was $0, compared to $129 in the three months ended May 31, 2025. The decrease was a result of the Company ceasing sales of mining equipment.
Cost of Sales
Major components of cost of sales include rent to house mining and hosting equipment, staking, electricity, depreciation, and supplies. During the three months ended May 31, 2026, cost of sales was $5,726 compared to $1,742 during the three months ended May 31, 2025. The increase in cost of sales was related to self-mining with more Blockfusion expense incurred in the current period compared to the third period in the prior year. Further, the Company initiated native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year, which generated more costs of sales associated with staking. The increase was partially off-set by cost of sales associated with leasing decreasing as the leasing contract ended in Q2 2026.
In addition, cost of sales as a percentage of revenue increased during the three months ended May 31, 2026 period primarily due to the acquisition of Pier Two and the resulting impact on the Company's staking and validation operations, affecting comparability to prior periods.
Operating Expenses
•General and administrative expenses. General and administrative expenses were $37,270 in the three months ended May 31, 2026, compared to $744 in the three months ended May 31, 2025. The increase is primarily related to ETH custodian fees related to treasury operations and treasury management associated
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with the strategy to shift to staking revenue being the primary source of revenue. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation.
•Unrealized loss (gain) from the digital assets holdings. During the three months ended May 31, 2026, the Company recorded an unrealized loss of $15,404 related to changes in the fair value of our digital asset holdings, as compared to a loss of $34 for the three months ended May 31, 2025. The Company acquired ETH on top of its BTC holdings as part of our business expansion during the fourth quarter of fiscal year 2025. Thus, the major purchases of ETH drove the variance between the two quarters.
Other Income (Expense)
•Change in fair value of warrant liability. The Company recognized a $16,488 gain during the three months ended May 31, 2026. This gain reflects the change in fair value of the Liability Classified Warrants, which is reflected in other income within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information.
•Net loss on derivative contracts. During the three months ended May 31, 2026, the Company recognized a net loss on derivative contracts of $(92,093), primarily attributable to losses on exercised option contracts of $14,026 and the net impact of option contracts that expired during the period of $78,601, partially offset by a gain of $534 related to changes in the fair value of open option contracts.The Company had no derivative activity during the three months ended May 31, 2025.
•Change in the fair value of equity method investment . The Company recognized a loss of $(1,177) during the three months ended May 31, 2026. This loss reflects the change in fair value of the investment in Eightco, which is reflected in “Other Income” within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information.
•Interest income (expense), net. Interest income was $5,300 in the three months ended May 31, 2026, as compared to an expense of $(72) during the three months ended May 31, 2025. The 2025 interest was related to the debt during the three months ended May 31, 2025 which was extinguished during fiscal 2025. The increase in interest income was associated with more cash from ATM capital that was placed into interest bearing bank accounts.
•Other income (expense). The Company recognized other income (expense) of $(248) during the three months ended May 31, 2026, as compared to $(83) during the three months ended May 31, 2025. The decrease in expense is because the Company had no loss on extinguishment of debt during the three months ended May 31, 2026, as compared to a loss of ($208) during the three months ended May 31, 2025. The 2025 loss was related to the Company’s Hash Rate Sale Agreement. The Company had no debt as of May 31, 2026.
Income Taxes
During the three months ended May 31, 2026, the Company recognized no income tax benefit or income tax expense.
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Comparison of Results of Operations for the Nine Months Ended May 31, 2026 and 2025.
| Nine Months Ended May 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Revenue from staking and validation | $ | 56,924 | $ | — | NM | |||||||||||||||
| Revenue from self-mining | 845 | 2,814 | (70)% | |||||||||||||||||
| Revenue from consulting | 565 | 35 | NM | |||||||||||||||||
| Revenue from leasing | 1,536 | 1,075 | 43% | |||||||||||||||||
| Revenue from the sale of mining equipment | — | 846 | NM | |||||||||||||||||
| Total Revenue | 59,870 | 4,770 | NM | |||||||||||||||||
| Cost of Sales | 8,177 | 4,393 | 86% | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative expenses | 335,662 | 2,667 | NM | |||||||||||||||||
| Unrealized loss (gain) from the digital assets holdings | 9,038,538 | (25) | NM | |||||||||||||||||
| Total operating expenses | 9,374,200 | 2,642 | NM | |||||||||||||||||
| Loss from operations | (9,322,507) | (2,265) | NM | |||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Change in fair value of warrant liability | 264,121 | — | NM | |||||||||||||||||
| Net loss on derivative contracts | (133,275) | — | NM | |||||||||||||||||
| Issuance costs related to warrant offering | (9,381) | — | NM | |||||||||||||||||
| Change in the fair value of equity method investment | (6,793) | — | NM | |||||||||||||||||
| Interest income (expense), net | 9,917 | (200) | NM | |||||||||||||||||
| Other income (expense) | (480) | (289) | 66% | |||||||||||||||||
| Pre-tax loss | (9,198,398) | (2,754) | NM | |||||||||||||||||
| Income tax benefit | 92,295 | — | NM | |||||||||||||||||
| Net loss | $ | (9,106,103) | $ | (2,754) | NM | |||||||||||||||
For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (“NM”).
Revenues
During the nine months ended May 31, 2026, revenues were $59,870, compared to $4,770 during the nine months ended May 31, 2025. The increase in revenue was a result of the following:
•Revenue from staking and validation. During the nine months ended May 31, 2026, revenue from staking and validation was $56,924, compared to $0 in the nine months ended May 31, 2025. The increase was a result of the Company initiating native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year. Further, the Pier Two acquisition accounted for $3,527 in staking revenue for the nine months ended May 31, 2026.
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•Revenue from self-mining. During the nine months ended May 31, 2026, revenue from self-mining was $845, compared to $2,814 in the nine months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined partially due to the suspension of self-mining operations during relocation in the nine months ended May 31, 2026.
•Revenue from consulting. During the nine months ended May 31, 2026, revenue from consulting was $565, as compared to $35 during the nine months ended May 31, 2025. All of the consulting revenue in 2026 was derived from its consulting agreement with KULR Technology Group, Inc., under which the Company is obligated to provide various operational, maintenance and consulting services from May 16, 2025 to May 15, 2026.
•Revenue from leasing. During the nine months ended May 31, 2026, revenue from the leasing of miners was $1,536, as compared to $1,075 during the nine months ended May 31, 2025. This was due to more activity within its leasing contracts with KULR Technology Group, Inc. for the nine month period ended May 31, 2026.
•Revenue from the sale of mining equipment. During the nine months ended May 31, 2026, revenue from the sale of mining equipment was $0, compared to $846 in the nine months ended May 31, 2025. The revenue recognized during the nine months ended May 31, 2025 was primarily related to the sale of ten transformers. No such revenue was recognized during the nine months ended May 31, 2026.
Cost of Sales
Major components of cost of sales include rent to house mining and hosting equipment, staking, electricity, depreciation, and supplies. During the nine months ended May 31, 2026, cost of sales was $8,177 compared to $4,393 during the nine months ended May 31, 2025. The increase in cost of sales was due in part to leasing costs resulting from the Machine Lease Agreement that Bitmine entered into with KULR Technology Group, Inc. on May 16, 2025. As part of this agreement, Bitmine is responsible for maintaining the equipment, providing a contractually agreed upon level of hash rate, and ensuring continuous operation, either directly or through third-party providers. Further, the Company initiated native staking in November 2025, with the intent for staking to become a primary yield generation strategy of the Company during the current fiscal year, which generated more cost of sales associated with staking. This was partially offset by the Company continuing its strategy of winding down its proprietary self-mining exposure and deferring new site build outs during the nine months ended May 31, 2026 and the costs incurred during the nine months ended May 31, 2025 .
Operating Expenses
•General and administrative expenses. General and administrative expenses were $335,662 in the nine months ended May 31, 2026, compared to $2,667 in the nine months ended May 31, 2025. The increase is primarily related to treasury activity associated with the Company's ETH strategy. Due to the large purchases of ETH throughout the year, the Company incurred significantly more of these treasury expenses. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation.
•Unrealized loss (gain) from the digital assets holdings. During the nine months ended May 31, 2026, the Company recorded an unrealized loss of $9,038,538 related to changes in the fair value of our digital asset holdings, as compared to a gain of $(25) for the nine months ended May 31, 2025. The Company acquired ETH on top of its BTC holdings as part of our business expansion during the last quarter of fiscal year 2025. Since the company now possesses ETH in addition to BTC, the company is more exposed to market fluctuations that result in unrealized losses or gains.
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Other Income (Expense)
•Change in fair value of warrant liability. The Company recognized a $264,121 gain during the nine months ended May 31, 2026. This gain reflects the change in fair value of the Liability Classified Warrants, which is reflected in other income within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information.
•Net loss on derivative contracts. During the nine months ended May 31, 2026, the Company recognized a net loss on derivative contracts of ($133,275), primarily attributable to losses on exercised option contracts of $79,278 and the net impact of option contracts that expired during the period of $54,512, partially offset by a $515 gain related to changes in the fair value of open option contracts. The Company had no derivative activity during the nine months ended May 31, 2025.
•Issuance costs related to warrant offering. The Company incurred an issuance cost of ($9,381) during the nine months ended May 31, 2026. These costs were incurred in connection with the warrant offering completed during the period and did not exist in the prior year.
•Change in the fair value of equity method investment . The Company recognized a $6,793 loss during the nine months ended May 31, 2026. This loss reflects the change in fair value of the investment in Eightco, which is reflected in “Other Income” within the consolidated statement of operations. See "Note 8. Stockholders' Equity" of the Interim Statements for additional information.
•Interest income (expense), net. Interest expense, net was $9,917 in the nine months ended May 31, 2026, as compared to $(200) in interest expense, net in the nine months ended May 31, 2025. The 2025 interest was related to the debt during the three months ended May 31, 2025 which was extinguished during fiscal 2025. The increase in interest income was associated with more cash from ATM capital that was placed into interest bearing bank accounts.
•Other income (expense). The Company recognized other income (expense) of $(480) during the nine months ended May 31, 2026, as compared to $(289) during the nine months ended May 31, 2025. The decrease in expense is because the Company had no loss on extinguishment of debt during the nine months ended May 31, 2026, as compared to a loss of $(289) during the nine months ended May 31, 2025. The 2025 loss was related to the Company’s Hash Rate Sale Agreement. The Company had no debt as of May 31, 2026.
Income Taxes
During the nine months ended May 31, 2026, the Company recognized an income tax benefit of $92,295, primarily attributable to the reversal of the deferred tax liabilities associated with unrealized gains on digital assets recognized in prior periods that are now in a significant unrealized loss position. These unrealized losses resulted in the recognition of deferred tax assets, against which the Company recorded a 100% valuation allowance.
Non-GAAP Financial Measures
The following tables present Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) and Adjusted Earnings Per Share (“EPS”). These are non-U.S. GAAP financial measures within the meaning of Regulation G dictated by the Securities and Exchange Commission. Adjusted EBITDA is defined as EBITDA excluding the impact of certain non-cash items for the period presented. Adjusted EPS is defined as EPS in accordance with US GAAP excluding the impact of certain non-cash items for the period presented.
The Company uses Adjusted EBITDA and Adjusted EPS in explaining its results to shareholders and the investment community and in its internal evaluation and management of its businesses. The Company’s management believes
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that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the Company’s performance using the same tools that management uses to evaluate the Company’s past performance, (b) permit investors to compare the Company with its peers, and (c) provide consistent period-to-period comparisons of the results.
While the Company believes that these measures are useful in evaluating the Company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these measurements may differ from similar measures presented by other companies. A reconciliation of Adjusted EBITDA and Adjusted EPS is detailed below.
The reconciliation of Adjusted EBITDA for the three months ended May 31, 2026 and 2025 is as follows:
| Three Months Ended May 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net Income (loss) | $ | (83,595) | $ | (623) | ||||||||||
| Interest income (expense), net | (5,300) | 72 | ||||||||||||
| Depreciation and amortization expense | 386 | 181 | ||||||||||||
| EBITDA | $ | (88,509) | $ | (370) | ||||||||||
| Adjustments | ||||||||||||||
Stock based compensation (1) | $ | 13,251 | $ | 647 | ||||||||||
Change in the fair value of equity method investment(3) | 1,177 | — | ||||||||||||
Change in fair value of warrant liability(5) | (16,488) | — | ||||||||||||
Unrealized change in fair value of ETH option contracts(6) | (515) | — | ||||||||||||
Loss on the extinguishment of debt(7) | — | 208 | ||||||||||||
Unrealized loss (gain) from the digital assets holdings(8) | 15,404 | 34 | ||||||||||||
| Adjusted EBITDA | $ | (75,680) | $ | 519 | ||||||||||
The reconciliation of Adjusted EBITDA for the nine months ended May 31, 2026 and 2025 is as follows:
| Nine Months Ended May 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net Income (loss) | $ | (9,106,103) | $ | (2,754) | ||||||||||
| Interest income (expense), net | (9,917) | 200 | ||||||||||||
| Provision for income taxes | (92,295) | — | ||||||||||||
| Depreciation and amortization expense | 631 | 539 | ||||||||||||
| EBITDA | $ | (9,207,684) | $ | (2,015) | ||||||||||
| Adjustments | ||||||||||||||
Stock based compensation (1) | $ | 38,357 | $ | 1,319 | ||||||||||
Loss on sale of property and equipment(2) | 200 | — | ||||||||||||
Change in the fair value of equity method investment(3) | 6,793 | — | ||||||||||||
Issuance costs related to warrant offering(4) | 9,381 | — | ||||||||||||
Change in fair value of warrant liability(5) | (264,121) | — | ||||||||||||
Unrealized change in fair value of ETH option contracts(6) | (515) | — | ||||||||||||
Loss on the extinguishment of debt(7) | — | 289 | ||||||||||||
Unrealized loss (gain) from the digital assets holdings(8) | 9,038,538 | (25) | ||||||||||||
One time consulting and legal fees(9) | 200,044 | — | ||||||||||||
| Adjusted EBITDA | $ | (179,007) | $ | (432) | ||||||||||
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(1) Stock based compensation represents the non-cash expense recorded for the Company's restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three and nine months ended May 31, 2026 as well as the vesting of existing awards. | ||
| (2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price. | ||
(3) Represents the change in fair value of the Company's equity held investment in Eightco's common stock for the three and nine months ended May 31, 2026. | ||
(4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity." | ||
(5) Represents the change in fair value of the Company's liability classified warrants for the three and nine months ended May 31, 2026. | ||
(6) Represents the unrealized fair value adjustment related to the Company's outstanding ETH option contracts for the three and nine months ended May 31, 2026. | ||
| (7) Represents non-recurring charges incurred in connection with the early settlement of the Company's line of credit from IDI and the Hash Rate Sale Agreement. | ||
| (8) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income. | ||
| (9) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period. | ||
The reconciliation of Adjusted EPS for the three months ended May 31, 2026 and 2025 is as follows:
| Three Months Ended May 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Pre-tax loss | $ | (83,595) | $ | (623) | ||||||||||
| Adjustments: | ||||||||||||||
Stock based compensation (1) | 13,251 | 647 | ||||||||||||
Change in the fair value of equity method investment(3) | 1,177 | — | ||||||||||||
Change in fair value of warrant liability(5) | (16,488) | — | ||||||||||||
Unrealized change in fair value of ETH option contracts(6) | (515) | — | ||||||||||||
Loss on the extinguishment of debt(7) | — | 208 | ||||||||||||
Unrealized loss (gain) from the digital assets holdings(8) | 15,404 | 34 | ||||||||||||
One time consulting and legal fees(9) | — | — | ||||||||||||
| Adjusted net income (loss) before income tax provision | $ | (70,766) | $ | 266 | ||||||||||
| Income tax benefit (as reported) | — | — | ||||||||||||
Income tax provision adjustment(10) | — | — | ||||||||||||
| Adjusted income tax benefit | $ | — | $ | — | ||||||||||
| Adjusted net income (loss) | $ | (70,766) | $ | 266 | ||||||||||
| Deemed dividend on Series A Preferred Stock | — | — | ||||||||||||
| Adjusted net income (loss) attributable to common stockholders | $ | (70,766) | $ | 266 | ||||||||||
| Diluted weighted average common shares outstanding | 551,788,656 | 2,006,202 | ||||||||||||
| Adjusted diluted net income (loss) per common share | $ | (128.25) | $ | 132.59 | ||||||||||
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The reconciliation of Adjusted EPS for the nine months ended May 31, 2026 and 2025 is as follows:
| Nine Months Ended May 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Pre-tax loss | $ | (9,198,398) | $ | (2,754) | ||||||||||
| Adjustments: | ||||||||||||||
| Stock based compensation(1) | 38,357 | 1,319 | ||||||||||||
| Loss on sale of property and equipment(2) | 200 | — | ||||||||||||
| Change in the fair value of equity method investment(3) | 6,793 | — | ||||||||||||
| Issuance costs related to warrant offering(4) | 9,381 | — | ||||||||||||
| Change in fair value of warrant liability(5) | (264,121) | — | ||||||||||||
| Unrealized change in fair value of ETH option contracts(6) | (515) | — | ||||||||||||
| Loss on the extinguishment of debt(7) | — | 289 | ||||||||||||
| Unrealized loss (gain) from the digital assets holding(8) | 9,038,538 | (25) | ||||||||||||
| One time consulting and legal fees(9) | 200,044 | — | ||||||||||||
| Adjusted net income (loss) before income tax provision | $ | (169,721) | $ | (1,171) | ||||||||||
| Income tax benefit (as reported) | (92,295) | — | ||||||||||||
| Income tax provision adjustment(10) | 35,641 | — | ||||||||||||
| Adjusted income tax benefit | $ | (56,654) | $ | — | ||||||||||
| Adjusted net income (loss) | $ | (113,067) | $ | (1,171) | ||||||||||
| Deemed dividend on Series A Preferred Stock | — | (2,961) | ||||||||||||
| Adjusted net income (loss) attributable to common stockholders | $ | (113,067) | $ | (4,132) | ||||||||||
| Diluted weighted average common shares outstanding | 443,947,604 | 2,185,206 | ||||||||||||
| Adjusted diluted net income (loss) per common share | $ | (0.25) | $ | (535.88) | ||||||||||
(1) Stock based compensation represents the non-cash expense recorded for the Company's restricted stock units and restricted stock awards. This includes the impact of the modification that occurred during the three and nine months ended May 31, 2026 as well as the vesting of existing awards. | ||
| (2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price. | ||
(3) Represents the change in fair value of the Company's equity held investment in Eightco's common stock for the three and nine months ended May 31, 2026. | ||
(4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity." | ||
(5) Represents the change in fair value of the Company's liability classified warrants for the three and nine months ended May 31, 2026. | ||
(6) Represents the unrealized fair value adjustment related to the Company's outstanding ETH option contracts for the three and nine months ended May 31, 2026. | ||
| (7) Represents non-recurring charges incurred in connection with the early settlement of the Company's line of credit from IDI and the Hash Rate Sale Agreement. | ||
| (8) Removes the impact of unrealized changes in fair value of our digital asset holdings from net income. | ||
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| (9) Represents one time capital raising, advisory, legal and other consulting fees incurred during the period. | ||
(10) The income tax provision adjustment is calculated by multiplying “Adjusted income (loss) before income tax provision” by the Company’s applicable tax rate of 21%. | ||
Known Trends, Events and Uncertainties
Business expansion. Following our July 2025 and ongoing financings, we have pivoted to a services-led model and reduced proprietary mining exposure, including by redeploying/retiring less-efficient machines, concentrating hash rate at lower-cost sites and phasing capex. In the second half of calendar 2025, we further reduced exposure to halving-driven volatility by pivoting to a services-led, capital-light model and by winding down new proprietary mining investments. We discuss the implications for liquidity, capital needs and accounting estimates under “Liquidity and Capital Resources” and “Critical Accounting Estimates.”
This reduces direct exposure to network difficulty and power prices but increases reliance on client demand for advisory and leasing services. We expect services mix and pricing to be key drivers of variability.
Ethereum market dynamics. ETH price levels influence client activity and the value of any ETH held in treasury. Increased adoption or volatility can raise demand for advisory services; conversely, sustained price declines could dampen client spending.
Capital markets and liquidity. We believe our June and July 2025 transactions, shelf registration and ATM Program provide flexibility to access equity capital opportunistically to support working capital and selective investments aligned with a capital-light strategy. Adverse market conditions or unfavorable industry sentiment could constrain our ability to raise capital on acceptable terms.
Regulatory environment. Evolving U.S. and foreign regulations related to digital assets, data center operations, financial markets and custody may impose new compliance obligations or restrictions.
Management updates. On November 20, 2025, the Company entered into an employment agreement with Chi Tsang to serve as the Company’s Chief Executive Officer. Additionally, on January 7, 2026, the Company entered into an employment agreement with Young Kim to serve as the Company’s Chief Financial Officer and Chief Operating Officer.
Liquidity and Capital Resources
Current liquidity position
As of May 31, 2026, the Company had $340,289 in cash on hand and working capital of $433,123.
The Company's primary sources of liquidity during the nine-months ended May 31, 2026, were proceeds from equity financing transactions, including the September 2025 issuance of common stock and warrants, and proceeds generated through its ATM equity program. During the period, the Company generated gross proceeds of $12,235,110 from equity financing transactions, consisting of (i) $11,869,870 in gross proceeds from the sale of 340,748,312 shares of common stock pursuant to the ATM Offering and (ii) $365,240 in gross proceeds from the September 2025 issuance of common stock and warrants.
Subsequent to May 31, 2026, the Company completed an underwritten public offering of 3,500,000 shares of its Series A Preferred Stock at a public offering price of $80.00 per share, generating net proceeds of $273.8 million after deducting underwriting discounts and offering expenses. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol "BMNP."
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The Company intends to use available liquidity to support its digital asset treasury strategy, strategic investments, working capital requirements and general corporate purposes. Management continues to evaluate capital allocation opportunities, including direct digital asset acquisitions and investments in blockchain-related businesses and technologies that complement the Company's Ethereum-focused strategy.
Sources and uses of cash
| Nine Months Ended May 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | (287,592) | $ | 1,366 | ||||||||||
| Net cash provided by (used in) investing activities | (12,102,446) | (18) | ||||||||||||
| Net cash provided by (used in) financing activities | 12,218,362 | (374) | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | (171,676) | $ | 974 | ||||||||||
Net cash used in operating activities was $(287,592) for the nine months ended May 31, 2026, compared to net cash provided by operating activities of $1,366 for the nine months ended May 31, 2025. The change was driven primarily by a net loss of $9,106,084 for the current period, which included $9,038,538 of unrealized losses on the Company's ETH treasury holdings recognized through net income. On a cash basis, operating outflows increased due to one time capital raising, advisory, legal, and other consulting fees. The increase is also related to expenses associated with the Consulting Agreement. This increase in cash outflow was offset by an increase in cash received from the Company’s revenue generating activities.
Net cash used in investing activities was $(12,102,446) for the nine months ended May 31, 2026, compared to $(18) for the nine months ended May 31, 2025. The increase in investing cash outflow was primarily driven by the $(11,687,493) purchase of ETH. The remaining investing cash outflow was driven by the purchases of the Company’s investments in Beast Industries and Eightco Holdings.
Net cash provided by financing activities was $12,218,362 for the nine months ended May 31, 2026, compared to the $(374) used in financing activities for the nine months ended May 31, 2025. This increase was primarily driven by the $11,869,870 of proceeds received from the ATM Offering. Refer to "Note 8. Stockholder’s Equity" within the financial statements for further details regarding these offerings.
Material cash requirements and known liquidity risks
We expect the following material cash requirements over the next 12 months under our capital-light model:
•fees payable to industry-experienced third parties for managing the Company’s ETH holdings which are expected to be in the range from approximately $40,000 to $50,000 annually. The Company expects these costs to be more than offset by staking rewards generated from its ETH holdings. However, there can be no assurances that such staking rewards will be realized at anticipated levels;
•ongoing revenue participation payments under the Management Services Agreement with Eth Tower, which are based on the level of staking activity and related revenues generated by MAVAN Holdings;
•modest capital expenditures of approximately $1,500, primarily related to the for maintenance of existing technology platforms and infrastructure supporting the Company's operations;
•working capital requirements for general operations, approximately $1,000 per month at current run-rate activity levels; and
•public company costs, including audit and compliance, of approximately $4,000 annually.
•general operating and overhead costs of approximately $83,016 annually.
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•dividend obligations associated with the Company's outstanding Series A Preferred Stock of approximately $33,250 annually.
Our liquidity is now less sensitive to network difficulty and power price volatility than under a mining-centric model, though ETH and BTC price levels can influence client demand and the value of any digital assets held in treasury. We mitigate liquidity risks by (i) maintaining a flexible cost structure aligned with services activity, (ii) limiting new capex commitments, and (iii) preserving access to equity capital via our shelf and ATM facilities. We believe, based on our current operating plan, expected cash on hand, anticipated operating cash flows and access to capital under our shelf/ATM, that we will have sufficient liquidity to fund operations for at least the next 12 months. Beyond 12 months, our ability to fund growth and meet obligations will depend on market conditions, client demand for services, and access to capital on acceptable terms.
Counterparty and market developments. We monitor counterparties in the digital asset ecosystem for credit and operational risks, including custodians, pool operators, hosting partners and joint venture partners. We currently do not have material assets with bankrupt or suspended counterparties, and we assess custody practices, insurance and operational controls at our partners. Disruptions in digital asset markets, regulatory developments or power market dislocations could adversely affect our liquidity, capital access and operational continuity.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, and results of operations, liquidity or capital resources. Legacy commitments under power, site control and joint-venture agreements are being evaluated in light of our strategic shift; any remaining obligations (e.g., minimums or deposits) are included in our liquidity planning. We do not expect to enter into new long-term power purchase or build-to-suit arrangements absent clear, low-risk returns.
Critical Accounting Estimates
Our financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenues, expenses and related disclosures. We consider the following to be our critical accounting estimates because they involve significant judgment, are subject to uncertainty, and could materially impact our financial results if actual results differ from our estimates. This discussion supplements, and should be read together with, the summary of significant accounting policies in our financial statement notes.
Business Combinations. Business combinations are recorded using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values as of the acquisition date, with any excess recorded as goodwill.
The determination of the fair value of assets acquired and liabilities assumed requires management to make significant estimates and assumptions. The most significant judgments relate to the identification and valuation of acquired intangible assets, including estimates of future cash flows, discount rates, customer attrition rates, technology obsolescence, and the determination of useful lives used to calculate amortization expense. Changes in these assumptions could materially affect the amounts assigned to identifiable intangible assets and goodwill, as well as future amortization and impairment expense. For significant acquisitions, the Company engages third-party valuation specialists to assist management in determining the fair value of acquired intangible assets and certain acquired assets and liabilities.
Goodwill and Intangible Assets Impairment. The Company records goodwill and identifiable intangible assets in connection with business combinations. As of May 31, 2026, the Company recorded goodwill of $15.0 million and intangible assets, net, of $11.1 million, primarily related to the Pier Two acquisition. Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate that impairment may exist, at the reporting unit level. Based on management’s assessment under ASC 280 and ASC 350, the Company has identified one reporting unit for purposes of goodwill impairment testing. Definite-lived intangible assets are amortized over
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their estimated useful lives and reviewed for impairment when indicators of impairment are present. These assessments require significant judgment, including estimates of future cash flows, discount rates, revenue growth, useful lives, and market participant assumptions. Management did not identify any impairment of goodwill or definite-lived intangible assets during the three and nine months ended May 31, 2026.
Staking and validation services revenue recognition. The Company recognizes revenue from blockchain validation and staking services in accordance with ASC 606. Revenue is earned in the form of digital assets received for validating blockchain transactions and providing staking services. The Company recognizes revenue when its performance obligation is satisfied through the successful validation of blocks or transactions on the applicable blockchain network.
Significant judgment is required in evaluating the application of ASC 606 to blockchain validation arrangements, including the identification of the customer and contract by analogy, determining when performance obligations are satisfied, and assessing whether the Company acts as principal or agent in generating staking rewards. The Company recognizes revenue on a gross basis when it controls the validation services provided to the blockchain network and is primarily responsible for fulfilling the related performance obligation. Changes in these judgments could materially affect the amount and timing of revenue recognized.
Stock-based compensation. We measure equity awards at grant-date fair value under ASC 718 using observable market prices and, where applicable, option-pricing models. Inputs include volatility, expected term and risk-free rates.
Fair value of derivative liabilities and financing instruments. Certain financing arrangements contain embedded features accounted for as derivatives measured at fair value with changes recognized in earnings. We estimate fair value using market-based models that require assumptions about volatility, discount rates and probability-weighted outcomes.
Accounting policies and estimates are reviewed periodically for consistency with SEC guidance, including the 2003 MD&A Guidance and the 2020 amendments to Item 303. We will update our critical accounting estimates as our operations evolve and additional trends and data become reasonably available.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Certain quantitative and qualitative market risk disclosures are described in our Annual Report on Form 10-K for the year ended August 31, 2025. Through May 31, 2026, there have been no material changes in the quantitative and qualitative market risk disclosures described in such Annual Report.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of May 31, 2026, our disclosure controls and procedures were not effective due to the identification of material weaknesses in our internal control over financial reporting.
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We are in the process of implementing measures designed to improve our internal controls over financial reporting and remediate the deficiencies that led to the material weaknesses discussed above.
Changes in Internal Control over Financial Reporting
In connection with the preparation of our consolidated financial statements for the year ended August 31, 2025, management identified material weaknesses in our internal control over financial reporting (“ICFR”). For further information regarding the material weakness identified, refer to Item 9A. Controls and Procedures of the 2025 Annual Report.
During the quarter ended May 31, 2026, management has continued the implementation of remediation plans to address the previously identified material weaknesses, including enhancements to internal controls over financial reporting and SOX compliance processes. These efforts include adding internal accounting resources and engaging third-party specialists to provide support related to accounting, technical accounting, tax, and SOX implementation. The material weaknesses will not be considered remediated until the relevant controls have operated for a sufficient period of time and management has concluded, through testing, that the controls are designed and operating effectively.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We may be involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Legal expenses associated with any contingency are expensed as incurred. Our officers and directors are not aware of any threatened or pending litigation to which we are a party.
Item 1A. Risk Factors.
The following risk factors supplement the Company’s existing Item 1A disclosures included in the Company’s previous filings with the SEC. These supplemental risk factors should be read in conjunction with the other information contained in this Report and the Company’s other filings with the SEC, including, but not limited to, the Company’s Rule 424(b)(5) prospectus supplement dated June 5, 2026 filed with the Securities and Exchange Commission.
Risks Related to Our Series A Preferred Stock
Staking yield volatility may materially and adversely affect our ability to pay dividends on the Series A Preferred Stock.
A significant portion of our revenue is derived from staking rewards earned on our Ethereum holdings. Staking rewards are not fixed and are subject to substantial fluctuation based on a variety of factors, many of which are beyond our control. These factors include changes in the total amount of Ethereum staked across the network, modifications to the Ethereum protocol’s reward mechanisms through network upgrades or governance decisions, fluctuations in network transaction volume and associated priority fees, changes in the rate of new validator participation, and broader macroeconomic and cryptocurrency market conditions. As the total amount of Ethereum staked on the network increases, the per-validator reward rate generally decreases, which could result in a material reduction in the yield we earn on our staked assets over time.
Because we rely on staking income as a primary source of cash generation, any sustained decline or period of heightened volatility in staking yields could materially impair our ability to meet our operating expenses, service any outstanding indebtedness, and maintain dividend payments on our Series A Preferred Stock at current or anticipated levels. Our board of directors retains discretion over the declaration and payment of dividends, and there can be no assurance that dividends will be declared or paid in any particular amount or at all. A reduction or suspension of
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dividends resulting from diminished staking yields could adversely affect the market price of our securities, including the Series A Preferred Stock, and may make our securities less attractive to income-oriented investors.
In addition, the yield earned through Ethereum staking is denominated in ETH, the value of which is itself subject to significant price volatility. Even if staking yields remain stable in terms of the quantity of ETH earned, the fiat-currency equivalent of those rewards may fluctuate materially due to changes in the market price of ETH. A decline in the price of ETH concurrent with a decline in staking yield rates would compound the adverse impact on our cash flow and our ability to fund dividend payments on the Series A Preferred Stock. Conversely, even if ETH prices appreciate, a sufficient decline in staking yield rates could still result in reduced revenue in absolute terms if the rate of yield compression outpaces any price appreciation.
Furthermore, the Ethereum network and its proof-of-stake consensus mechanism remain subject to ongoing development and potential protocol changes. Future upgrades to the Ethereum network, including changes to issuance schedules, reward distribution mechanisms, or the introduction of new staking paradigms, could alter the economics of staking in ways that are difficult to predict. Regulatory developments in the United States and abroad may also affect our ability to stake Ethereum or the economic terms on which staking is conducted, including the potential classification of staking activities or staking rewards as securities transactions, which could subject us to additional compliance obligations or restrict our staking operations. Any such changes could further reduce the yields available to us, which may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock. There can be no assurance that staking yields will remain at levels sufficient to support our current business model or dividend policy, and investors should not place undue reliance on historical staking yields as indicative of future performance.
Ongoing issuance of new ETH may adversely affect the price of ETH and our ability to cover dividend payments on the Series A Preferred Stock.
The rate at which new ETH are issued and put into circulation is expected to vary. Unlike bitcoin, which has a hard-coded maximum supply of 21 million coins, the Ethereum network has no formal cap on the total supply of ETH. New ETH is issued to validators as staking rewards on a continuing basis, and continued net issuance of ETH may introduce sustained downward pressure on the price of ETH, particularly if a meaningful portion of newly minted ETH is sold by validators. Sustained pressure on the price of ETH may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock.
Our ETH holdings are less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity to fund dividends on the Series A Preferred Stock.
Historically, the ETH market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. Staked ETH may not be immediately available for withdrawal or sale. As part of the “activating” and “exiting” processes of staking, staked ETH will be inaccessible for a variable period of time determined by a range of factors, including network congestion. These delays may be unpredictable and could occur during periods of market stress or declining ETH prices, limiting our ability to use staked ETH as a source of liquidity to fund dividends on the Series A Preferred Stock.
Further, during times of market instability, we may not be able to sell our ETH at favorable prices or at all. For example, a number of ETH trading venues temporarily halted deposits and withdrawals in 2022, although the Coinbase exchange (our principal market for ETH) has, to date, not done so. As a result, our ETH holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
Further, ETH we hold with our custodians do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered ETH or otherwise generate funds using our ETH holdings, including during times of market instability or when the price of ETH has declined significantly. If we are unable to sell our ETH, enter into additional capital raising transactions, including capital raising transactions using ETH as collateral, or otherwise generate funds using our ETH holdings, or if we are forced to sell our ETH at a significant
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loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted and our ability to fund dividend payments on the Series A Preferred Stock could be materially impaired.
Regulatory treatment of digital assets could cause us to be deemed an “investment company,” which could materially harm the trading price of the Series A Preferred Stock.
There is a risk that changing regulatory treatment of ETH, other digital assets we hold, or activities in which we are engaged could cause us to be deemed to be an “investment company” within the meaning of the Investment Company Act of 1940, as amended, which would impose substantial regulatory burdens, restrict our ability to operate our business as currently conducted, and could require us to liquidate or restructure our holdings. If we were deemed to be an investment company, we could be required to register as such under the Investment Company Act, which would subject us to significant regulatory requirements and restrictions, including limitations on leverage, affiliate transactions, and our ability to pursue our current digital asset treasury strategy. The costs and administrative burden of compliance with the Investment Company Act could be substantial and could materially affect our profitability and operations. Adverse regulatory developments concerning the classification of digital assets and related activities under the Investment Company Act or other federal securities laws could materially harm our business and the trading prices of our securities, including the Series A Preferred Stock.
Our option strategies and strategic investments expose us to additional volatility and counterparty risks that could impair our ability to cover dividend payments on the Series A Preferred Stock.
We generate ETH option premium income from option strategies on our ETH holdings. These strategies expose us to mark-to-market volatility, counterparty risk, and the risk that ETH could be called away at unfavorable prices. We also hold strategic “moonshot” investments, including a stake in Beast Industries Co. valued at $186 million (recorded as an equity investment measured at cost) and a stake in Eightco Holdings Inc. valued at $93 million as of May 31, 2026 (recorded as an equity method investment measured at fair value), which are subject to substantial volatility, illiquidity, and concentration risks. If any of the foregoing risks were to materialize, it could reduce the yield generated from our ETH holdings and/or our future revenues, which could have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock.
We may be unable to access capital markets on acceptable terms, which could increase the cost of issuing parity or junior preferred stock and adversely affect our ability to maintain dividends on the Series A Preferred Stock.
Our digital asset acquisition strategy depends on our continued ability to access capital markets, including through issuances of equity, preferred, and debt securities. Adverse capital markets conditions, regulatory developments, declines in the price of ETH or our common stock, or perceptions about our creditworthiness could limit our ability to raise capital and could increase our cost of capital, including our cost of issuing additional parity stock or junior stock. If we are unable to access the capital markets on acceptable terms, we may be unable to fund our digital asset treasury strategy, meet our operating obligations, or maintain dividend payments on the Series A Preferred Stock, any of which could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.
Risks Related to Our Staking and Validator Operations
Our staking and validator operations conducted through MAVAN are subject to significant risks, including slashing, lock-up periods, smart contract vulnerabilities, liquidity constraints, counterparty exposure, and operational failures, any of which could result in a partial or total loss of staked ETH or a material reduction in staking revenue.
We generate substantially all of our revenue from native ETH staking conducted through MAVAN. Staking requires continuous operational reliability, adherence to Ethereum protocol rules, and the maintenance of high-availability validator infrastructure. Validators that act maliciously, produce conflicting attestations, or suffer extended downtime may be “slashed” by the Ethereum network, resulting in an irrecoverable partial loss of staked principal. As of May 31, 2026, the Company held 5,416,945 ETH with a fair value of $10.9 billion, a substantial portion of which is staked through MAVAN, and any slashing event could result in a material loss of digital assets. In addition, staking involves unbonding or lock-up periods during which staked ETH cannot be withdrawn or sold; these periods may be unpredictable and may coincide with periods of market stress, reducing our ability to respond to adverse price movements or meet liquidity needs. Our staking operations also involve exposure to smart contract risk—the
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underlying protocols, liquid staking mechanisms, and restaking integrations on which MAVAN relies are governed by code that may contain undiscovered vulnerabilities exploitable by malicious actors. Where staking is conducted through or in conjunction with third-party custodians, infrastructure providers, or staking protocols, we face counterparty and operational risk that could result in delayed access to staked assets, loss of staking rewards, or in extreme cases, loss of principal. Any of the foregoing risks, if realized, could have a material adverse effect on our financial condition and results of operations.
Our recent strategic transactions, including the acquisition of Pier Two and the launch of MAVAN, may not be successfully integrated or generate the anticipated benefits, and our projected staking revenue figures are based on assumptions that may prove incorrect.
We completed the acquisition of Pier Two Holdings Pty Ltd in March 2026 for total preliminary consideration of $27.8 million and launched MAVAN later that month. The integration of Pier Two’s non-custodial staking infrastructure and personnel into MAVAN involves substantial execution risks, including risks related to the integration of technology systems and operational workflows, retention of key technical employees, regulatory compliance across multiple jurisdictions (including Australian and U.S. regulatory regimes), validator performance optimization, and our ability to attract and retain institutional staking customers. If we are unable to successfully integrate Pier Two’s operations or retain key personnel, we may not realize the anticipated benefits of the acquisition, which could impair the carrying value of the goodwill and intangible assets recognized in connection with the transaction. Furthermore, the annualized staking revenue figures and yield assumptions we have disclosed in connection with MAVAN’s operations are based on assumptions regarding staking yield rates, the proportion of our ETH holdings that are staked at any given time, validator uptime, and Ethereum network conditions—all of which are subject to change. Actual results may differ materially from these assumptions, and there can be no assurance that MAVAN will achieve the revenue levels or operational performance we anticipate.
Our revenue is highly concentrated in ETH staking and validation operations conducted through MAVAN, and any disruption to those operations, decline in staking yields, or adverse protocol change would have a disproportionate impact on our results of operations and financial condition.
For the three months ended May 31, 2026, revenue from staking and validation was $45.7 million, representing 98% of total revenue of $46.5 million for the quarter. For the nine months ended May 31, 2026, revenue from staking and validation was $56.9 million, representing 95% of total revenue of $59.9 million for the nine-month period. This extraordinary concentration of revenue in a single operating activity—Ethereum staking conducted principally through MAVAN—means that any disruption to MAVAN’s validator performance, any decline in Ethereum staking yield rates, or any adverse change to the Ethereum protocol’s reward mechanisms could result in a disproportionate and material decline in our total revenue, operating income, and cash flow from operations. Unlike a diversified revenue base, our reliance on a single yield-generation mechanism affords limited ability to offset declines in staking economics with revenue from other sources. In addition, because staking revenue is denominated in ETH, fluctuations in the market price of ETH directly affect the U.S. dollar-equivalent revenue recognized by the Company, compounding the impact of any reduction in yield rates. There can be no assurance that our revenue concentration in staking will decrease over time, and investors should consider that our results of operations are substantially dependent on the continued performance of MAVAN and favorable Ethereum staking economics.
Regulatory uncertainty regarding the classification and treatment of staking activities and staking rewards in the United States and abroad may subject us to additional compliance obligations, restrict our staking operations, or require changes to MAVAN’s business model as it expands to serve institutional clients.
The regulatory treatment of staking activities and staking rewards under U.S. federal and state securities laws, banking regulations, money transmission laws, and tax laws remains uncertain and continues to evolve. Regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and various state regulators, have not provided definitive guidance on whether staking activities or staking rewards constitute securities transactions, commodity transactions, or money services business activities. If staking activities or staking rewards are classified as securities or are otherwise subject to registration, licensing, or reporting obligations, we could be required to register as a broker-dealer, investment adviser, money services business, or similar regulated entity, to modify MAVAN’s operations, or to curtail or cease certain staking activities. These risks are amplified as MAVAN expands beyond supporting our own ETH treasury to offering staking services to institutional investors, custodians, and ecosystem partners—an expansion that may subject the Company to additional or different regulatory regimes applicable to staking service providers, including fiduciary, custody, and consumer protection
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requirements not previously applicable to our operations. Regulatory developments in foreign jurisdictions, including Australia (where Pier Two is domiciled and operates), may similarly affect our ability to conduct staking operations or the economic terms on which staking is offered. Any adverse regulatory development could materially impair our staking revenue or require us to restructure MAVAN’s operations at significant cost.
We rely on third-party infrastructure providers and key personnel, including Ethereum Tower LLC under a long-term Management Services Agreement, to operate MAVAN’s validator nodes, and any failure of performance, termination of arrangements, or loss of key personnel could materially disrupt our staking operations.
MAVAN’s validator operations depend on the continued performance of third-party infrastructure providers and key personnel. Pursuant to a ten-year Management Services Agreement dated March 24, 2026, Ethereum Tower LLC provides management and operating services to MAVAN Holdings LLC in exchange for an irrevocable 2.00% membership interest in MAVAN Holdings LLC and a monthly fee calculated as a percentage of the Company’s native staking rewards attributable to ETH staked through MAVAN Holdings LLC. If Ethereum Tower LLC fails to perform its obligations, experiences operational failures, or is unable to retain qualified personnel, our validator operations could be disrupted, resulting in reduced staking rewards, increased risk of slashing events, or reputational harm. In addition, much of MAVAN’s technical expertise was obtained through the Pier Two acquisition, and there can be no assurance that we will be able to retain key technical and operational personnel acquired in that transaction, particularly given the competitive market for blockchain infrastructure talent. MAVAN also relies on third-party cloud computing, co-location, and network infrastructure providers for the hosting and connectivity of its validator nodes; any failure, security breach, or service interruption by such providers could result in extended validator downtime, slashing, or loss of staking rewards. We do not control the operations of these third parties and may have limited contractual remedies if they fail to perform.
MAVAN’s planned expansion from an internally-focused staking platform to a commercial staking-services provider serving third-party institutional investors, custodians, and ecosystem partners introduces new customer acquisition, competitive, service-level, and reputational risks not previously applicable to the Company’s business.
MAVAN was originally developed to support the Company’s own Ethereum treasury operations and has operated principally as an internal staking platform since its launch in March 2026. The Company has publicly disclosed its intention to expand MAVAN to serve institutional investors, custodians, and other ecosystem partners seeking institutional-grade staking infrastructure. This expansion introduces risks that were not previously applicable to the Company’s business, including the need to develop and maintain commercial-grade service-level agreements, manage customer onboarding and support, compete with established institutional staking service providers (including Coinbase Cloud, Figment, Kiln, and others), and protect the Company’s reputation in a market where validator downtime or slashing events affecting client assets could result in significant liability, loss of customer confidence, and competitive harm. The Company has limited operating history as a commercial staking-services provider, and there can be no assurance that MAVAN will successfully attract or retain institutional staking clients on terms favorable to the Company, or at all. Failure to successfully execute this expansion could limit the Company’s revenue diversification, impair the return on investment from the Pier Two acquisition, and adversely affect our competitive position in the rapidly evolving blockchain infrastructure services market.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On March 24, 2026, in connection with the closing of the acquisition of Pier Two Holdings Pty Ltd (“Pier Two”), the Company issued 501,545 shares of its common stock, par value $0.0001 per share, to the sellers of Pier Two as partial consideration for the acquisition. The shares were issued at a price of $20.93 per share, for aggregate stock consideration of $10,500. The shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder, based on the limited number of offerees and their status as sophisticated investors. The issuance was previously reported on the Company’s Current Report on Form 8-K filed with the SEC on March 30, 2026.
Item 3. Defaults Upon Senior Securities.
None.
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Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the quarter ended May 31, 2026, no director or officer of the Company adopted terminated
Item 6. Exhibits.
The exhibits listed on the Exhibit Index below are provided as part of this report.
| Exhibit No. | Description | |||||||
| 1.1 | ||||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 10.4 | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1* | ||||||||
| 32.2* | ||||||||
| 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.
SIGNATURES
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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: | ||||||||
| July 14, 2026 | By: | /s/ Chi Tsang | ||||||
Chi Tsang, Chief Executive Officer (Principal Executive Officer) | ||||||||
| Dated: | ||||||||
| July 14, 2026 | By: | /s/ Young Kim | ||||||
Young Kim, Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||||
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