v3.25.3
ACQUISITIONS
 9 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS

3. ACQUISITIONS

 

  (a) Radical Clean Solutions Acquisition

 

On August 16, 2024, the Company completed the acquisition of assets of Radical Clean Solutions, Inc. (“RCS”), effectively increasing its interest from 14% to 100%, and providing the Company control over RCS. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds (“VOCs”) and allergy triggers. As the Company’s investment in RCS does not have a readily determinable fair value, the Company previously elected to account for its 14% interest in RCS at cost, less impairment. The Company recognized a loss on the investment of $97,488 during the year ended December 31, 2024.

 

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company accrued a loss on disposal of the RCS business, which is reflected on the condensed consolidated statement of operations as a loss on disposal of business of $880,482.

 

Details of the assets and liabilities of discontinued operations are as follows:

  

   September 30, 2025   December 31, 2024 
Carry amounts of major classes of assets included as part of discontinued operations          
Current          
Prepaid expenses and other current assets  $       -   $245,019 
Inventories   -    36,482 
Total current assets in discontinued operations   -    281,501 
           
Non-current          
Intangible assets, net   -    494,114 
Goodwill   -    294,941 
Total long-term assets in discontinued operations  $-   $789,055 
           
Carry amounts of major classes of liabilities included as part of discontinued operations   -      
Current          
Accounts payable and accrued liabilities  $-   $99,111 
Total current liabilities in discontinued operations   -    99,111 
           
Non-current          
Other liabilities   -    98,864 
Long-term liabilities in discontinued operations  $-    98,864 

 

Cash used in operating activities from discontinued operations was $0.3 million for the nine months ended September 30, 2025 (September 30, 2024 - $0.2 million). There were no cash flows related to investing or financing activities of discontinued operations for the nine months ended September 30, 2025 or September 30, 2024.

 

The details of the component information of the discontinued operations are disclosed under columns Radical Clean Solutions in segment reporting information in Note 18.

 

  (b) Redwater Acquisition

 

On November 28, 2024, the Company completed its acquisition of the Redwater Bitcoin Mining Facility, located in Alberta, Canada (“Redwater”) for a total purchase price of approximately $1.5 million. The acquisition was accounted for as an asset acquisition as, at the time of acquisition, no outputs were produced from the property, and skilled employees or contractors required for the operation of the facility were not included in the transaction. The purchase price consisted primarily of cash proceeds paid to the seller, and legal transaction costs. The acquired assets are amortized commencing on the acquisition date over the remaining estimated useful lives thereof.

 

The purchase price was allocated based on the relative fair value of the assets acquired as follows:

 

Assets Acquired:  Fair Value 
S19J Pro Bitmain ASIC Miners  $102,812 
Natural Gas Power Plant   566,009 
Power Purchase Agreement   673,769 
Bitcoin Mining Facility and Infrastructure   171,116 
Total assets acquired  $1,513,706 

 

 

The Power Purchase Agreement between the Company and Rivogenix Energy Corp (“Rivogenix”), allows the Company to obtain natural gas for its Natural Gas Power Plant. The Power Purchase Agreement was determined to be a favorable contract asset, and as such was recorded at the present value of the contractual benefit. As per the agreement, Rivogenix procures the natural gas required to generate power using the Natural Gas Power Plant and allows the Company to purchase the power generated at a rate of CAD $0.055 per kilowatt hour (KWH). The expected power cost per kilowatt hour in Alberta was determined to be CAD $0.0883, providing a discount of CAD $0.0383. The power usage required to operate each of the acquired Bitcoin Miners is 75.9KWH per day per Bitcoin Miner. The discount rate used in the present value calculation is 11.25%, and the period of the contract has been determined to be 3 years.

 

  (c) Bald Eagle Acquisition

 

On January 17, 2025, the Company consummated the acquisition of assets of Bald Eagle Mining, LLC (“Bald Eagle”), located in Columbiana Country, Ohio, for a total purchase price of $4,765,000. Bald Eagle is a Bitcoin mining facility, powered by 5MW of flared natural gas energy, which at the time of the acquisition supported over 900 bitcoin mining units. During the third quarter of 2025, the Company increased the number of mining units at the Bald Eagle mining site to 1,662.

 

The following pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024.

 

                 
   Proforma for the three months ended September 30,   Proforma for the nine months ended September 30, 
   2025   2024   2025   2024 
Revenue  $525,915   $319,739   $1,251,124   $1,363,168 
                     
Net loss  $(8,351,326)  $(6,101,455)  $(16,557,023)  $(13,447,604)

 

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net loss position.

 

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Bald Eagle to reflect the additional amortization that would have been charged assuming the fair value adjustments to the intangible assets had been applied from January 1, 2025, with the consequential tax effects.

 

The following table summarizes the consideration transferred to acquire Bald Eagle and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

 

   January 17, 2025 
Cash consideration  $3,550,000 
Option payment   1,215,000 
Purchase price  $4,765,000 
Assets acquired    
S19J Pro Bitmain ASIC Miners  $746,159 
Natural gas power generators   1,671,586 
Transformers   131,878 
Data centers   609,554 
Shipping containers   13,744 
Standby generators   66,090 
Fair value of identified net assets acquired  $3,239,012 
Goodwill  $1,525,988 

 

As of September 30, 2025, the Company’s goodwill balance was $1,535,333 (foreign exchange gain of $9,345).

 

The Company will continue to operate its bitcoin mining business alongside its AVAX treasury business, which will be the main business operation post-closing.