| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY
OF SIGNIFICANT POLICIES About Bitmine Immersion Technologies, Inc. Bitmine Immersion Technologies Inc. f/k/a Sandy
Springs Holdings, Inc. (“ Bitmine Company By a written consent dated July 16, 2021, holders
of a majority of the Company’s issued and outstanding common stock approved a resolution to appoint Jonathan Bates, Raymond Mow,
Michael Maloney, and Seth Bayles to the board of directors of the Company, and to appoint Jonathan Bates as Chairman, Seth Bayles as Corporate
Secretary, Raymond Mow as Chief Financial Officer, and Ryan Ramnath as Chief Operating Officer (collectively, the “ New O&Ds The appointment of certain of the New O&Ds
to the Company’s board, and issuance to the New O&Ds of a controlling interest in the Company, were made in order to enable
the Company to enter the business of creating a hosting center for bitcoin mining computers primarily utilizing immersion cooling
technology, as well mining the bitcoin digital currency for its own account. Prior to the change of control to the New O&Ds, the Company
was a shell company. During the fiscal year ended August 31, 2022,
the Company began implementing its business plan by generating revenue from the mining of bitcoin digital currency, hosting a third party
bitcoin miner and the sale of mining equipment. The Company’s year-end is August 31st. Basis of Presentation The accompanying financial statements have been
prepared in accordance with the Financial Accounting Standards Board (“ FASB Codification GAAP Reverse Stock Split On June 25, 2020, the Board of Directors and the
shareholders of the Company approved a 1 for 40,000 reverse split, with all fractional shares rounded up to the nearest whole share, and
immediately after the completion of the reverse split, effected a 200 for 1 forward stock split. The net effect of the splits was a 1
for 200 reverse split of the Company’s common shares. The stock splits were effective April 27, 2021. No fractional shares of common
stock were issued in connection with the Reverse Split. If, as a result of the Reverse Split, a shareholder would have otherwise held
a fractional share, the shareholder received, instead of the issuance of such fractional share, one whole share of common stock. The Company’s condensed financial statements
in this Report for the periods ended August 31, 2024, and August 31, 2023, and all references thereto have been retroactively adjusted
to reflect the split unless specifically stated otherwise. Use of Estimates The preparation of condensed financial statements
in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure
of contingent assets and liabilities at the date of the condensed financial statements. The most significant estimates relate to the calculation
of stock-based compensation, calculation of the Company’s derivative liability, collectability of notes receivable, useful lives
and recoverability of long-lived assets, depreciation methods, income taxes and contingencies. The Company bases its estimates on historical
experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information
available as of the date of these condensed financial statements. The results of these assumptions provide the basis for making estimates
about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from
these estimates. There have been no material changes to the Company’s accounting estimates since the Company’s condensed financial
statements for the fiscal year ended August 31, 2024. Segment Reporting The Company operates in one segment - the cryptocurrency
mining industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision
maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating
resources and assessing performance for the entire Company. All material Company operations qualify for aggregation due to their similar
customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution
processes. Revenue Recognition On July 1, 2018, the Company adopted Accounting
Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting
periods beginning after January 1, 2018, are presented under ASC 606. Revenues from digital currency mining The Company recognizes revenue under ASC 606,
Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be
entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
· Step 1: Identify the contract with the customer;
· Step 2: Identify the performance obligations in the contract;
· Step 3: Determine the transaction price;
· Step 4: Allocate the transaction price to the performance obligations in the contract; and
· Step 5: Recognize revenue when the Company satisfies a performance obligation. Step 1: Step 2
· The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and
· The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). Based on these criteria, the Company has a single
performance obligation in providing hash calculation services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance
obligation of hash calculation services is fulfilled daily over-time, as opposed to a point in time, because the Company provides the
hashrate throughout the day and the customer simultaneously obtains control of it and uses the asset to produce bitcoin. The Company has
full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing
power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the hash calculation services provided to the
customer will be reduced. Step 3
· The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the hash calculations that the Company provides to the Customer as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period.
· The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards we earned for the same period noted above.
· The sum of the block reward and transaction fees earned by the Company
is reduced by mining pool fees charged by the Customer for operating the mining pool based on a rate schedule per the mining pool
contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with
the Customer’s payout formula during the continuously renewed contract periods beginning mid-night UTC and ending 23:59:59 UTC
daily. During the year ending August 31, 2024, the Company utilized one mining pool for its self-mining operations, which
charges 0.3% of the bitcoin payable to the Company as a pool management fee. This amount represents consideration paid to the
Customer and is thus reported as a reduction in revenue as the Company does not receive a distinct good or service from the mining
pool operator in exchange. There are no other forms of variable considerations,
such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items. The above non-cash consideration is variable in
accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, since the amount of block reward earned depends on the amount of hash calculations
we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour
period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction
fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, the Company has the ability
to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal.
The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue
recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on
the same day that control of the service is transferred, which is the same day as contract inception. The Company measures the non-cash consideration
based on the spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin at mid-night UTC on the day
of contract inception. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred
to the pool operator, which is the same day as the contract inception. Step 4 Step 5 In exchange for providing hash calculation services,
the Company is entitled to the expected bitcoin awards earned over the measurement period, plus the expected global transaction fee rewards
for the respective measurement period, less net digital asset fees due to the mining pool operator over the measurement period. The transaction
consideration the Company receives is non-cash consideration, in the form of bitcoin. Prior to March 1, 2024, the Company measured the
bitcoin at the closing U.S. dollar spot rate at the end of the date earned (midnight UTC). As of March 1, 2024, the Company began measuring
the bitcoin at the opening U.S. dollar spot rate at the beginning of the date earned (midnight UTC). The change in method of calculating
revenues from bitcoin mining did not result in material change in the revenues reported. There are no deferred revenues or other liability
obligations recorded by the Company since there are no payments in advance of the performance. At the end of the 24 hour “midnight-to-midnight”
period, there are no remaining performance obligations. During the year ending August 31, 2024, the Company utilized one mining
pool for its self-mining operations, which charges 0.3% of the bitcoin payable to the Company as a pool management fee. During the year
ended August 31, 2024, the Company generated $ 3,030,910 389,222 Revenues from Hosting The Company provides energized space to customers
who locate their equipment within the Company’s co-hosting facility. The equipment generating the hosting revenue is owned by the
customer. The Company gives hosting customers the option of having all mining proceeds paid into a cold wallet address in the Company’s
name, which case the Company pays the hosting client its share of mining awards on a daily basis, or having all mining awards sent to
an account of the customer, in which case the Company bills the customer monthly for any hosting fee that is contingent on the amount
of the client’s award. All performance obligations are achieved simultaneously by providing the hosting environment for the customers’
operations. Hosting revenues consist of amounts billed in U.S. dollars for electricity and other fees, and a percentage of cryptocurrency
generated by the client’s hosting activities. With regard to hosting revenues that are billed in U.S. dollars, revenues are recorded
at the time of invoicing. With regard to hosting revenues that are based on a percentage of cryptocurrency generated by the customer,
revenues are recorded based on the Company’s share of cryptocurrency received from the mining pool on the date of receipt or invoicing. During the year ending August 31, 2024, the Company
generated $ 48,305 Revenues from the sale of mining equipment The Company records revenue from the resale of
mining equipment it has purchased. Revenue for the sale of mining equipment is recognized under the guidelines of ASC 606. During the
year ended August 31, 2024, the Company generated $ 231,133 Cash and cash equivalents The Company considers all highly liquid temporary
cash investments with an original maturity of three months or less to be cash equivalents. On August 31, 2024, and August 31, 2023, respectively,
the Company’s cash equivalents totaled $ 499,270 270,547 Cryptocurrency Cryptocurrencies held are accounted for as intangible
assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment
quarterly events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired.
Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency
at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment
to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that
an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform
a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset.
Subsequent reversal of impairment losses, if the price of cryptocurrency increases, is not permitted. During the years ending August
31, 2024 and 2023, the Company realized impairment losses of $- 0 3,523 113,803
21,682 Cryptocurrency earned by the Company through its
mining activities are included within operating activities on the accompanying statements of cash flows. The sales of digital currencies
are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales
are included in other income (expense) in the statements of operations and comprehensive income (loss). The Company accounts for its gains
or losses in accordance with the moving weighted average method of accounting. The Company holds its cryptocurrencies in an account
at Bitgo Trust (“Bitgo”), a well-known bitcoin custodian, which it also uses to liquidate its bitcoin when necessary. The
Company also has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial
Services as a backup facility, and may hold bitcoin from time to time in a cold storage wallet. The Company uses Bitgo’s multi-signature
feature for account access. Prepaid expenses Prepaid expenses are amounts paid to secure the
use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are
eventually consumed, they are charged to expense. Prepaid expenses are recorded at fair market value. As of August 31, 2024, and August
31, 2023, the balances of prepaid expenses were $ 675,000 105,000 Customer
advances The Company defers revenues when cash payments
are received in advance of the Company’s performance obligation required under the guidelines of ASC 606. Customer advances
of $ 703,500 Income taxes The Company accounts for income taxes under FASB
ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” Stock-based Compensation The Company accounts for stock-based compensation
using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure
about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for
an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually
the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Net Loss per Share Net loss per common share is computed by dividing
net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260,
“Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income
by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations
are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Stock Purchase Warrants The Company accounts for warrants issued to purchase
shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. If the warrants do not require liability classification
under ASC 815-40, in order to conclude equity classification, we also assess whether the warrants are indexed to our common stock and
whether the warrants are classified as equity under ASC 815-40 or other GAAP. After all such assessments, we conclude whether the warrants
are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial
issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only
require fair value accounting at issuance with no changes recognized subsequent to the issuance date. We do not have any liability classified
warrants as of any period presented. Property and equipment Property and equipment are stated at cost and
depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for leasehold improvements
are typically the lesser of the estimated useful life of the asset or the life of the term of the lease. The estimated useful lives for
all other property and equipment are as follows:
Schedule of estimated useful lives of property and equipment
Life (Years)
Miners and mining equipment 2
Machinery and equipment 5 10
Office and computer equipment 3 No depreciation is recorded on an asset
until it is placed in service. Due to the nature of the equipment, it can only be placed in service when the hosting site is
properly configured to turn on the machines. As of August 31, 2024, and August 31, 2023, the Company had $ 3,071,565 4,453,466 120,000 122,950 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02,
Leases (Topic 842) Codification Improvements Codification Improvements to Topic 842, Leases (Topic 842) Targeted Improvements, We adopted ASC 842 on July 16, 2020. The adoption
of this guidance did not have any impact on our condensed financial statements. In March 2022, the SEC staff released Staff Accounting
Bulletin No. 121 (“SAB 121”), which requires entities that hold crypto assets on behalf of platform users to recognize a liability
to reflect the entity’s obligation to safeguard the crypto assets held for its platform users, whether directly or through an agent
or another third party acting on its behalf, along with a corresponding safeguarding asset. Both the liability and corresponding safeguarding
asset shall be measured at fair value. SAB 121 also requires disclosure of the nature and amount of crypto assets being safeguarded, how
the fair value is determined, an entity’s accounting policy for safeguarding liabilities and corresponding safeguarding assets,
and may require disclosure of other information about risks and uncertainties arising from the entity’s safeguarding activities.
The Company is not in the business of holding its customer’s crypto assets for safekeeping. For crypto assets that are not maintained
on our platform and for which the Company does not maintain a private key or the ability to recover a customer’s private key, these
balances are not recorded, as there is no related safeguarding obligation in accordance with SAB 121. This guidance is effective
from the first interim period after June 15, 2022 and should be applied retrospectively. We adopted SAB 121 during the year ended
August 31, 2022, and it did not have any impact on our condensed financial statements. In December 2023, the FASB issued Accounting Standards
Update No. 2023-08, Accounting for and Disclosure of Crypto Assets (“ASC 350-60”). ASC 350-60 requires entities with certain
crypto assets to subsequently measure such assets at fair value, with changes in fair value recorded in net income (loss) in each reporting
period. Crypto assets that meet all the following criteria are within the scope of ASC 350-60:
(1) meet the definition of intangible assets as defined in the Codification;
(2) do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or
other assets;
(3) are created or reside on a distributed ledger based on blockchain or similar technology;
(4) are secured through cryptography;
(5) are fungible; and
(6) are not created or issued by the reporting entity or its related parties. In addition, entities are required
to provide additional disclosures about the holdings of certain crypto assets. bitcoin, which is the sole crypto asset mined
by the Company, meets each of these criteria. For all entities, the ASC 350-60 amendments are effective for fiscal years beginning after
December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual
financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim
period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company has elected to early
adopt the new guidance effective September 1, 2024 resulting in a $-0- cumulative-effect change to adjust the Company's bitcoin held on
September 1, 2024. |
