T-REX Acquisition's Losses Double Amid Soaring Costs, Cash Dries Up

TL;DR

**TRXA is burning cash at an alarming rate with no clear path to profitability, making it a speculative bet at best.**

AI Summary

T-REX Acquisition Corp. (TRXA) reported a net loss of $654,214 for the three months ended September 30, 2025, a significant increase from the $311,815 net loss in the same period of 2024. Total revenues for the quarter were $9,258, primarily from $7,923 in mining revenue and $1,335 in realized gains on Bitcoin, marking a new revenue stream compared to zero revenue in Q3 2024. However, cost of goods sold surged to $61,928, driven by $20,424 in electricity and $22,056 in repairs and maintenance. Operating expenses also rose substantially to $552,788 from $300,561 year-over-year, with management and consulting fees alone accounting for $380,951. The company's cash and cash equivalents plummeted from $49,733 at June 30, 2025, to just $384 by September 30, 2025. Total liabilities remain high at $1,586,719, exceeding total assets of $843,519, resulting in a stockholders' deficit of $(743,200). The company continues to expand its cryptocurrency-focused subsidiaries, including the acquisition of Baoblock, Inc. assets for $210,000 paid in common stock and cash, which was subsequently impaired to $0.

Why It Matters

TRXA's escalating net losses and dwindling cash reserves signal significant operational challenges and financial instability, which could severely impact investor confidence and future funding prospects. The company's strategy of expanding into various cryptocurrency-related segments like mining, hosting, and software services, while generating some revenue, is currently outpaced by rapidly increasing costs, particularly in management and consulting fees. This financial strain could jeopardize TRXA's ability to retain employees, invest in necessary infrastructure, and compete effectively against more established players in the volatile crypto market. For investors, the negative equity position and high burn rate suggest a high-risk investment with a questionable path to profitability.

Risk Assessment

Risk Level: high — The company reported a net loss of $654,214 for the quarter, with cash and cash equivalents dropping to $384 from $49,733 in just three months. Total liabilities of $1,586,719 significantly outweigh total assets of $843,519, resulting in a stockholders' deficit of $(743,200), indicating severe financial distress and a high risk of insolvency.

Analyst Insight

Investors should exercise extreme caution and consider divesting from TRXA given its rapidly deteriorating cash position, increasing losses, and negative equity. The company's current financial trajectory suggests a high probability of further dilution or potential bankruptcy, making it unsuitable for risk-averse portfolios.

Financial Highlights

debt To Equity

N/A

revenue

$9,258

operating Margin

N/A

total Assets

$843,519

total Debt

$1,586,719

net Income

-$654,214

eps

N/A

gross Margin

N/A

cash Position

$384

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $654,214 — Net Loss (Increased from $311,815 in Q3 2024, indicating worsening financial performance.)
• $384 — Cash & Cash Equivalents (Decreased significantly from $49,733 at June 30, 2025, highlighting liquidity issues.)
• $9,258 — Total Revenues (Generated in Q3 2025, primarily from mining, compared to $0 in Q3 2024.)
• $61,928 — Cost of Goods Sold (New expense in Q3 2025, driven by electricity and repairs.)
• $552,788 — Total Operating Expenses (Increased from $300,561 in Q3 2024, largely due to management fees.)
• $380,951 — Management and Consulting Fees (Major component of operating expenses, up from $154,751 in Q3 2024.)
• $1,586,719 — Total Current Liabilities (Exceeds total assets, contributing to a negative equity position.)
• $843,519 — Total Assets (Lower than total liabilities, indicating financial instability.)
• $(743,200) — Total Stockholders' Equity (Deficit) (Reflects a negative equity position, worsening from $(1,062,521) at June 30, 2025.)
• 26,511,032 — Common Shares Outstanding (Increased from 25,067,479 at June 30, 2025, indicating dilution.)

Key Players & Entities

• T-REX Acquisition Corp. (company) — Registrant and parent company
• TRXA (company) — Ticker symbol for T-REX Acquisition Corp.
• Raptor Mining LLC (company) — Subsidiary for Bitcoin mining operations
• Megalodon Mining and Electric LLC (company) — Subsidiary for data centers and co-location hosting
• Sabretooth Mining Containers LLC (company) — Subsidiary for designing modular mining containers
• Deinodon Mining Solutions LLC (company) — Subsidiary for software and technical resources
• Baoblock, Inc. (company) — Company whose assets were acquired by Deinodon
• Chief Technology Officer (person) — Owner of Baoblock, Inc. and developer of acquired software
• SEC (regulator) — Securities and Exchange Commission
• Bloomberg (company) — Financial news and data provider

FAQ

Risk Factors

• Severe Liquidity Constraints [high — financial]: Cash and cash equivalents have plummeted from $49,733 to $384 in Q3 2025, indicating an immediate and critical liquidity crisis. This lack of operating cash poses a significant threat to the company's ability to meet its short-term obligations and continue operations.
• Negative Working Capital and Stockholders' Deficit [high — financial]: Total liabilities of $1,586,719 significantly exceed total assets of $843,519, resulting in a substantial stockholders' deficit of $(743,200). This negative equity position, coupled with a large current liabilities balance of $1,586,719, highlights severe financial instability.
• High Cost of Goods Sold and Operating Expenses [high — operational]: Cost of goods sold surged to $61,928 in Q3 2025, driven by electricity ($20,424) and repairs ($22,056). Operating expenses also rose to $552,788, with management and consulting fees at $380,951, indicating escalating operational costs that are outpacing revenue generation.
• Volatility of Cryptocurrency Markets [medium — market]: The company's revenue is tied to Bitcoin mining and realized gains on Bitcoin. The inherent volatility of cryptocurrency prices presents a significant risk to revenue stability and profitability. A downturn in Bitcoin prices could severely impact the company's financial performance.
• Dependence on Related Party Transactions [medium — financial]: Significant amounts are due to related parties, including $591,415 in accrued compensation and $334,366 in notes payable. This reliance on related parties for funding and compensation can introduce conflicts of interest and financial risks.
• Impairment of Acquired Assets [medium — operational]: The acquisition of Baoblock, Inc. assets for $210,000 resulted in an impairment to $0, indicating poor due diligence or overvaluation of acquired assets. This suggests potential inefficiencies in capital allocation and strategic execution.
• Dilution from Share Issuances [low — financial]: The number of common shares outstanding increased from 25,067,479 to 26,511,032, representing a dilution of approximately 5.7%. This dilution can negatively impact existing shareholders' ownership percentage and earnings per share.

Industry Context

T-REX Acquisition Corp. operates in the cryptocurrency mining and blockchain technology sector. This industry is characterized by high volatility in digital asset prices, significant energy consumption for mining, and rapid technological advancements. The competitive landscape includes large-scale mining operations and emerging players seeking to leverage blockchain technology.

Regulatory Implications

The cryptocurrency industry faces evolving regulatory scrutiny globally. Changes in regulations regarding digital assets, mining operations, and financial reporting could impact T-REX's operations, profitability, and compliance costs. The company must navigate these uncertainties to ensure continued operation.

What Investors Should Do

1. Monitor cash burn rate and liquidity closely.
2. Assess the sustainability of the current business model.
3. Evaluate the impact of cryptocurrency price volatility on revenue.
4. Scrutinize related party transactions and management fees.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported a net loss of $654,214, with cash reserves dwindling to $384, highlighting severe financial distress.
• 2025-06-30: End of Q2 2025 — Reported cash and cash equivalents of $49,733 and a stockholders' deficit of $(1,062,521).
• 2024-09-30: End of Q3 2024 — Reported a net loss of $311,815 with no revenue, indicating a worsening financial performance trend.

Glossary

Stockholders' Equity (Deficit)

The net worth of a company, calculated as total assets minus total liabilities. A deficit means liabilities exceed assets. (Indicates the company has negative net worth, with liabilities of $1,586,719 exceeding assets of $843,519, resulting in a deficit of $(743,200).)

Cost of Goods Sold (COGS)

Direct costs attributable to the production or purchase of the goods sold by a company. (New and significant expense for TRXA in Q3 2025, totaling $61,928, primarily from electricity and repairs for mining operations.)

Realized Gain (Loss) on Bitcoin Held

The profit or loss from selling Bitcoin that the company held. This is recognized when the Bitcoin is converted to fiat currency or used for payments. (A new revenue stream for TRXA in Q3 2025, contributing $1,335 to total revenues.)

Accumulated Deficit

The cumulative net losses of a company since its inception that have not been offset by net income. (Shows a substantial cumulative loss of $(10,213,563) as of September 30, 2025, reflecting the company's history of unprofitability.)

Derivative Liability

A financial instrument whose value is derived from an underlying asset, and which represents an obligation for the company. (Increased from $34,597 to $105,710 in Q3 2025, indicating a growing financial obligation related to complex financial instruments.)

Dilution

The reduction in the ownership percentage of existing shareholders due to the issuance of new shares. (Occurred in Q3 2025 as common shares outstanding increased by approximately 5.7%, potentially reducing the value of existing holdings.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, T-REX Acquisition Corp. has seen a significant deterioration in its financial performance. While the company generated its first revenues of $9,258 in Q3 2025, this was accompanied by a substantial increase in net loss to $654,214 from $311,815 in Q3 2024. Cost of goods sold and operating expenses have surged, with electricity, repairs, and management fees being major drivers. Most critically, cash and cash equivalents have collapsed from $49,733 to a mere $384, indicating an acute liquidity crisis. The company's financial instability is further underscored by its growing stockholders' deficit.

Key Financial Figures

• $0.0001 — e 26,511,032 shares of the Registrant's $0.0001 par value common stock issued and outst
• $0.001 — at Par $0.0001 Preferred Stock at Par $0.001 Additional Stock Number of Shar

Filing Documents

• trex_10q.htm (10-Q) — 1292KB
• trex_ex311.htm (EX-31.1) — 13KB
• trex_ex321.htm (EX-32.1) — 5KB
• 0001477932-25-008667.txt ( ) — 7704KB
• trxa-20250930.xsd (EX-101.SCH) — 78KB
• trxa-20250930_lab.xml (EX-101.LAB) — 389KB
• trxa-20250930_cal.xml (EX-101.CAL) — 52KB
• trxa-20250930_pre.xml (EX-101.PRE) — 328KB
• trxa-20250930_def.xml (EX-101.DEF) — 210KB
• trex_10q_htm.xml (XML) — 1706KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS F-1 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 6 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 6

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 8 ITEM 1A.

RISK FACTORS

RISK FACTORS 8 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 8 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9 ITEM 4. MINE SAFETY DISCLOSURES 9 ITEM 5. OTHER INFORMATION 9 ITEM 6. EXHIBITS 10 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. T-REX ACQUISITION CORP. September 30, 2025 Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Stockholders' Equity F-4 Consolidated Statements of Cash Flows F-5 Notes to the Consolidated Financial Statements F-6 F-1 Table of Contents TREX ACQUISITION CORP. CONSOLIDATED BALANCE SHEETS September 30, 2025 June 30, 2025 (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash & cash equivalents $ 384 $ 49,733 Bitcoin held - 17,502 Prepaid consulting 63,342 13,333 Prepaid expense 9,658 14,997 TOTAL CURRENT ASSETS 73,384 95,565 NON-CURRENT ASSETS: Plant and equipment, net 587,425 588,361 Prepaid consulting 97,514 13,333 Other assets 85,196 77,069 TOTAL NON-CURRENT ASSETS 770,135 678,763 TOTAL ASSETS $ 843,519 $ 774,328 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable and accrued expenses $ 49,868 $ 56,095 Due to related party- accrued compensation 591,415 508,163 Due to related party- advances 14,331 5,150 Note payable - unrelated parties 443,142 401,780 Interest payable - unrelated parties 30,005 12,997 Notes payable - related parties 334,366 304,366 Interest payable - related parties 17,882 9,391 Derivative liability 105,710 34,597 Deposit payable - - TOTAL CURRENT LIABILITIES 1,586,719 1,332,539 NON-CURRENT LIABILITIES: Stock subscription payable (liability) $ - 504,310 TOTAL NON-CURRENT LIABILITIES - 504,310 TOTAL LIABILITIES 1,586,719 1,836,849 Commitments and contingencies (Note 10) - - STOCKHOLDERS' EQUITY (DEFICIT) Common stock, 0.0001 par value, authorized 350,000,000 shares and 26,511,032 and 25,067,479 issued and outstanding as of September30, 2025, and June 30, 2025, respectively $ 2,651 $ 2,506 Series A Preferred stock, 0.001 par value, authorized 20,000,000 shares, 10,000 desi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS T-REX Acquisition Corp. ("T-REX" or the " Company ") was incorporated on January 16, 2008, in the State of Nevada. From inception through June 2021, the Company sought a business combination, including a reverse merger opportunity. In July 2021, the Company pivoted its strategy to become an emerging technology enterprise, focusing on operations and investments in the cryptocurrency sector, particularly those related to distributed ledger technologies and associated intangible assets. On June 1, 2022, the Company formally changed its name from "TREX Acquisition Corp." to "T-REX Acquisition Corp." As of June 30, 2025, the Company is a holding company with the following subsidiaries: Raptor Mining LLC, a Florida limited liability company (" Raptor "); and TRXA Merger Sub, Inc., an inactive Delaware corporation (" Merger Sub "), Megalodon Mining and Electric, LLC, a Florida limited liability company (" Megalodon "), Sabretooth Mining Containers, LLC., a Florida limited liability company (" Sabretooth "), and Deinodon, a Florida limited liability company (" Deinodon "). The Company is authorized to issue up to 350,000,000 shares of common stock , with a par value $ 0.0001 per share and 20,000,000 blank-check preferred shares, with a par value $ 0.001 per share. Business Focus and Strategy T-REX's current strategic focus includes securing and operating within the Bitcoin distributed ledger network , as well as exploring additional distributed ledger protocols and infrastructure opportunities. Bitcoin ("BTC") is a decentralized digital currency operating on a peer-to-peer network called the blockchain , which enables secure, trustless transactions without reliance on a central authority. The Company began earning Bitcoin mining rewards on February 17, 2022, recognizing revenue based on the USD value of the rewards received. T-REX, generally does not r

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View this 10-Q filing on SEC EDGAR