Financial Analysis

Note 10. Convertible Promissory Notes, Notes Payable, and Related Party Note Payable Convertible promissory notes, notes payable, and related party note payable outstanding as of June 30, 2025 and 2024 are summarized below: Maturity June 30, June 30, Date 2025 2024 Convertible Notes: Promissory Note, 21- month term, as amended, 18.11% interest payable with common stock and subordinate to the Convertible Notes. This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly. June 1, 2026 $ - $ 1,550,000 2025 Convertible Notes, 24 month term, 3% interest and is convertible into the Companys common stock at a per share price of $3.00 per common share. No payment of interest or principal is due until the end of the two year term if the loan is not converted. The loan also included a detachable warrant to purchase 116,668 shares of the Companys common stock at a per share price of $3.00. These notes were converted into 116,668 shares of common stock in June of 2025. March 7, 2027 $ - - Unamortized discount on convertible note $ - Less current portion of notes payable - - Notes payable, net of current portion $ - $ 1,550,000 Notes payable, Cygnet subsidiary: SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2051 $ 3,694,721 $ 3,761,376 Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.5% interest rate a …

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June 30, 2025 June 30, 2024 Primary geographical markets United States of America $ 14,566,766 $ 25,455,480 Other 259,570 545,172 Total $ 14,826,336 $ 26,000,652 Product source Internally manufactured $ 9,262,857 $ 10,553,654 Contract manufactured 2,786,828 3,098,552 Purchased as finished good 2,776,651 12,348,446 Total $ 14,826,336 $ 26,000,652

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Note 13. Stock Based Compensation The Company has established a Company an incentive plan, 2019 Equity Incentive Plan (the 2019 Plan). The plan grants incentives to select persons who can make, are making and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock. The 2019 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2019 Plan (the Committee). The Committee has full authority to administer and interpret the provisions of the 2019 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2019 Plan. On February 8, 2021, the Shareholders consented, and the Board of Directors approved, the amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder by 138,889 Shares to 277,778 Shares. On May 24, 2022, the Shareholders consented, and the Board of Directors approved the amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder by 222,222 Shares to 500,000 Shares. On September 18, 2024, the Company filed a Certificate of Change with th …

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14. Income Taxes The components of the provision for income taxes are as follows: 2025 2024 Current tax provision $ 13,558 $ 12,700 Deferred tax provision (13,558 ) (344,801 ) Provision for income taxes (benefit) $ - $ (332,101 ) The differences between income taxes calculated at the statutory US federal income tax rate and the Companys provision for income taxes are as follows: 2025 2024 Income tax provision at statutory federal and state tax rate 21 % 21 % State taxes, net of federal benefit 4.80 % 0.27 % Nondeductible expense (0.03 )% (0.05 )% Tax return to provision 0.00 % 0.00 % State tax rate change 0.25 % 0.07 % Other, net 3.81 % 5.53 % Valuation allowance 29.83 % (25.43 )% Provision for income taxes 0.00 % 1.38 % The net deferred income tax asset balance related to the following: 2025 2024 Net operating losses carry forward $ 9,601,876 $ 4,405,549 Right of use assets (28,366 ) 98,987 Inventory write off 161,146 981,758 Impairment loss (27,512 ) 3,159,477 Intangible assets 2,795,409 1,034,959 Stock options 2,770,725 2,323,784 Capital loss 271,334 - Fixed assets 306,804 - Allowance for doubtful accounts 172,844 16,797 Accrued compensation 13,784 27,540 Deferred revenue 3,572 - Other, net 7 7 Valuation allowances (10,092,765 ) (6,100,000 ) Deferred tax asset $ 5,948,858 $ 5,948,858 There were approximately $59,994,500 and $44,916,500 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely as of June 30, 2025 and June 3 …

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Note 8. Operating Leases We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, and equipment. We determine if an arrangement is a lease, or contains a lease, at inception, and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of June 30, 2025, no option to extend the lease was recognized as right-of-use (ROU) assets and lease liabilities. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our ROU assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception. During November 2019, the Company entered into a lease for a Nevada facility that commenced on November 13, 2019, and recorded a right of use asset and corresponding lease liability. The Company uses this leased facility for office, manufacturing, and warehouse space. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases. The operating lease expired during the year ended J …

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Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (FASB), or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are applicable and not yet effective will not have a material impact on the Companys financial position or results of operations upon adoption. What follows below are accounting pronouncements adopted or issued but not yet adopted. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (ASU 2023-09). The amendments expand income tax disclosure requirements by requiring an entity to disclose (i) specific categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, and (iii) the amount of taxes paid disaggregated by jurisdiction. The standard is effective for annual reporting periods beginning after December 15, 2024. The Company will adopt this guidance effective for the annual reporting period beginning July 1, 2025 (fiscal year ended June 30, 2026). The adoption of ASU 2023-09 will impact the Companys disclosures but will not impact financial position nor results of operations. In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (ASU 2023-08) , which establishes account …

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Note 11. Related Party Transactions In March 2025, Allan Marshall purchased 125,000 shares of Series A preferred shares from the Company at a per share price of $2.60 per preferred share. This purchase was settled through the cancellation of the $400,000 advance previously mentioned. At March 31, 2025 there was $75,000 of this advance remaining and was paid subsequent to the period end, March 31, 2025. In June 2024, Allan Marshall, the Companys CEO advanced the Company $100,000 to enable the Company to purchase equipment needed for the new warehouse facility. This advance was paid in July 2024. No interest or other fees were paid related to this transaction. On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC, which is owned by our CEO, Allan Marshall. The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month on a triple net basis. The initial term of the lease is five years. The Company spent $611,768 in leasehold improvements to prepare the facility for product manufacturing, which will be amortized over the five year lease term. At June 30, 2024 there was $100,004 accrued for the deposit, 3 months rent, and 3 months estimated expenses, this was paid in July 2024 and is now kept current. Product manufacturing was at full capacity and fully moved from the Nevada facility as of August 1, 2024. On June 13, 2024, the Company entered into a Stock Purchase Agreement (SPA) p …

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Note 2. Significant Accounting Policies The significant accounting policies followed are: Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the Companys reported financial position and results of operations include the allowance for credit losses, useful lives of property and equipment, impairment of long-lived assets, inventory valuation, fair value of stock-based compensation and valuation allowance on deferred tax assets. Cash - The Company considers all highly liquid investment instruments with a maturity of three months or less to be cash equivalents. Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Accounts Receivable - Amounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within a specified time from the invoice date. The trade terms vary based on the customer and typically range from prepaid to 45 days fr …

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Note 12. Equity Transactions Convertible Preferred Stock The Company has 150,000 shares of Preferred Stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into 138,889 shares of the Companys common stock at the holders option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock. Common Stock During the year ended June 30, 2025: On April 24, 2025, the Company issued: (i) 35,970,383 shares of Common Stock, at an offering price of $2.28 per share, and (ii) pre-funded warrants (the Pre-Funded Warrants) to purchase 7,889,266 shares of Common Stock (the Pre-Funded Warrant Shares) at an offering price of $2.279 per Pre-Funded Warrant. Each of the Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $0.001 per Pre-Funded Warrant Share, are immediately exercisable, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. At the time of this report, all of the Pre-funded warrants have been exercised and issued to the investors. The Company issued 742,896 shares of common stock in return for termination of a Promissory Note with a principal balance owed of $1,750,000 as per below: In June of 2025, the Company issued 116,668 shares of common stock as repayment of $400,000 of the Companys deb …

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Note 19. Subsequent Events On July 11, 2025 the Company closed on a private placement offering to sell 12,457,186 shares of the Companys common stock at an offering price of $4.00 per share. The Company received approximately $37,077,000, net of broker fees, the fees on the convertible debt offering completed on July 16, 2025, legal fees, filing fees and other expenses incurred for the private placement. On July 16, 2025, the Company closed on a private placement offering a secured convertible note in exchange for locked and liquid Solana with an original principal amount of $151,169,169. The note matures on the second anniversary of the closing and bears interest at a rate of 2% per annum and may not be prepaid by the Company. The principal of the note can be converted at any time by the holders into the Companys common stock at a conversion price of $4.25 per share. The notes are secured by a first priority lien on the digital assets exchanged for the secured convertible note. If any of the principal remains at the end of the two year term, the Company would repay the note on a pro-rata basis for the remaining principal to the digital assets exchanged for the secured convertible note. The agreements contain other customary terms, conditions and covenants for similar agreements. …

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