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BlockchainK2 Corp — Management Reports 2026
Jan 28, 2026
44356_rns_2026-01-28_6399fb70-18c9-4651-a09b-bfd14d13a809.pdf
Management Reports
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BLOCKCHAINK2 CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FORM 51-102F1
FOR THE YEAR ENDED SEPTEMBER 30, 2025
January 28, 2026
Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2025. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).
The Corporation is an early-stage technology company. The Corporation has limited financial resources, and there is no assurance that additional funding will be available to the Corporation to carry out the completion of all proposed activities. Although the Corporation has not yet obtained financing through the sale of equity securities, there can be no assurance that the Corporation will be able to obtain adequate financing in the future or that the terms of such financing will be favorable.
DESCRIPTION OF BUSINESS
The Corporation is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, PEI and Newfoundland and its shares are listed on the TSX Venture Exchange (“TSXV”) under the symbol BITK. The Corporation was transferred to the NEX board in July 2015. Effective August 3, 2018, the Corporation began trading on the U.S. OTC Market under the symbol BIDCF. Effective February 19, 2021, the Corporation began trading on the Frankfurt Stock Exchange under the symbol KRL2.
The Corporation is currently operating as a holding company investing in blockchain technology solutions for capital markets and other sectors that can be made more efficient through tokenization. To date, the Corporation have had invested in three separate ventures: 1. Amplify Games Inc. (“Amplify”); 2. iRecover Inc. (“iRecover”); and 3. Envexergy Inc. (Envexergy). The Corporation also holds a 51% interest in Sobe Organics Inc. (“Sobe Organics”). Sobe Organics is an omni-channel platform that distributes a broad line of CBD infused products. It owns the CBD indie beauty brand, Lux Beauty Club, which sells online to subscription box retailers, distributors, specialty chains, and private label businesses. Amplify and iRecover were dissolved on February 26, 2024.
On February 23, 2021, the Corporation incorporated a wholly owned subsidiary, iRecover, a company that offers online substance abuse education and support for middle, high school and college students. On February 26, 2024, the Corporation completed the dissolution of iRecover.
On March 1, 2021, the Corporation launched Amplify. Amplify utilizes blockchain technology to create a decentralized distribution network for digital games. On February 26, 2024, the Corporation completed the dissolution of Amplify. (See more details under heading Amplify Games)
As of the year ended September 30, 2023, Sobe Organics ceased operations and has the intention to proceed with dissolution. However, the dissolution process has not been completed as of date.
On February 26, 2024, the Corporation completed the dissolution of its wholly owned subsidiaries, Amplify and iRecover. As a result of the loss on control on Amplify, the Corporation derecognized all assets and liabilities at their book values on September 30, 2024 and wrote down all balances receivable from Amplify to $Nil. During the year ended September 30, 2024, the Corporation recorded a write-off of accounts payable of $30,074 as a result of the dissolution of Amplify.
On April 9, 2024, the Corporation acquired approximately 99.3% of the issued and outstanding shares of Envexergy Inc. ("Envexergy"), commonly referred to as RealBlocks and its wholly owned subsidiaries, RealBlocks Private Securities Inc. and RealBlocks Investment Advisors, Inc., in exchange for a cash consideration of US$225,000. (See more details under heading Acquisition of Envexergy)
The address of the Corporation’s main office is 400 - 837 West Hastings Street, Vancouver, BC V6C3N6.
RECENT EVENTS AND HIGHLIGHTS
On February 6, 2024, the Corporation closed its non-brokered private placement offering of 5,000,000 common shares at a price of $0.105 per common share for aggregate gross proceeds of $525,000.
On February 14, 2024, the Corporation engaged Aktiencheck.de AG, owned by Stefan Lindam, for 100,000 euros for a European marketing and news dissemination program. The program is expected to use Aktiencheck.de's website and other related websites, as well as Facebook, and will include social media engine and e-mail marketing. The campaign commenced in February 2024 for a three-month term. The engagement included no shares or options being issued to Aktiencheck.de or its principal.
On April 18, 2024, the Corporation closed its non-brokered private placement of 1,884,437 units at a price of $0.265 per unit for aggregate gross proceeds of $499,376. Each unit comprises one common share in the capital of the Corporation and one-half of one share purchase warrant. Each unit warrant is exercisable to acquire one additional share at an exercise price of $0.40 per unit warrant share until April 18, 2026. The Corporation recorded the estimated fair value of warrants of $135,623 to warrants reserve in the consolidated statements of financial position.
On April 9, 2024, the Corporation completed the acquisition of Envexergy Inc., commonly referred to as RealBlocks and its wholly owned subsidiaries, RealBlocks Private Securities Inc. and RealBlocks Investment Advisors, Inc.
On April 19, 2024, the Corporation signed a strategic partnership between RealBlocks and Bosonic Securities LLC. A memorandum of understanding (MOU) between the two companies provided a framework of a binding contract regarding the listing, trading, clearing and settlements of tokenized assets by RealBlocks on Bosonic's alternative trading system (ATS) and utilizing Bosonic's proprietary technology and infrastructure.
On June 7, 2024, the Corporation issued 1,703,571 common shares with a fair value of $434,411 to directors of the Corporation to settle outstanding debt of $404,427 to loans payable and $106,643 to accounts payable for a total of $511,070. The Corporation recorded the gain on settlement of loan of $60,664 in contributed surplus and the gain on settlement of accounts payable of $15,997 in the statement of comprehensive loss.
On April 2, 2025, the British Columbia Securities Commission issued a Cease Trade Order ("CTO") against the Corporation for failing to file its annual audited financial statements and certificate of annual filings for the year ended September 30, 2024, its interim financial report and certification of interim filings for the period ended December 31, 2024, as well as its management's discussion and analysis for the periods ended September 30, 2024 and December 31, 2024, indicated within the required time period. The said reports were filed and completed shortly and on May 14, 2025, the CTO was revoked. Pursuant to the revocation, the trading of the Corporation’s common shares has been reinstated on August 11, 2025.
SOBE ORGANICS
Sobe Organics is a private beauty, health and wellness company that sells health and beauty products nationwide in the United States independent stores, including resorts, spas, pharmacies, salons, hotel chains, and department stores.
During the year ended September 30, 2025, Sobe Organics contributed a net loss of $137,162 (2024 – $13,960) to the Corporation’s consolidated results.
As of the year ended September 30, 2023, Sobe Organics ceased operations and has the intention to proceed with dissolution. However, the dissolution process has not been completed as of date.
AMPLIFY GAMES
On March 1, 2021, the Corporation launched Amplify Games Inc. (“Amplify Games”). Amplify Games utilizes blockchain technology to create a decentralized distribution network for digital games.
On March 4, 2021, Amplify Games announced alliance with Se7enSins gaming community which will be part of the first gaming sites to launch on the Amplify storefront. Se7enSins will receive a portion of every sale made on its white-labelled Amplify storefront, greatly increasing their potential revenue from their site.
On March 8, 2021, Amplify Games announced alliance with Leaptrade Marketplace (“Leaptrade”). Leaptrade will bring a robust marketplace to the Amplify network that allows its members to buy and sell everything from retro physical game disc/cartridges to digital game keys and non-fungible tokens (NFTs).
On March 11, 2021, Amplify Games joined the largest association of companies promoting blockchain and non-fungible tokens within the gaming industry; the BGA or Blockchain Game Alliance. Amplify Games' inclusion into the BGA will enable new partnerships with blockchain technologies companies and inclusion of new game titles on the Amplify platform through relationships with game studio members.
On March 15, 2021, Amplify Games joined as a partner in the largest association of game developers in the gaming industry, the International Game Developers Association (IGDA). Amplify Games' inclusion into the IGDA, participating with other IGDA partners and exposure to its 30,000 members will accelerate adoption of the Amplify platform in the indie gaming market, helping game developers reach the next level of success for their games and careers.
On May 17, 2021, Amplify Games announced that Teravision Games joined the Amplify alliance to provide vital developer guidance as Amplify continues to build its coming gaming technology platform.
On June 1, 2021, Amplify Games has officially partnered with The Amplifier Group, a strategic communications consultancy focused exclusively on interactive entertainment.
On June 7, 2021, Amplify Games welcomed Santiago Zapata (aka slashie), a games industry veteran developer and leader for the roguelike community, to its industry alliance.
On July 15, 2021, Amplify Games also welcomed Rupert Ochsner, chief executive officer of Bonus Level Entertainment, to the Amplify alliance.
The fast-growing Amplify alliance is an advisory counsel of worldwide developers with first-hand experience in the games industry. This diverse and talented group will provide invaluable guidance to Amplify Games as it continues to build its gaming technology platform, which will provide much-desired resources to game developers and content creators.
In May 2022, Amplify Games launched the public beta of its new class-leading gaming marketplace, Arkade. The Arkade marketplace will not only be a place where gamers can come to buy and sell their games, but it will be a safe and trusted community where they can engage with the crypto and NFT side of gaming as that space evolves over time and becomes mainstream.
In June 2022, new group of game stores were onboarded to the platform, as well as sale and trading of physical games. The addition of physical game sales further adds to the breadth of offerings available on the Arkade marketplace,
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bringing in not only millions of gamers that want to buy, sell and trade in their physical games, but also enabling local game stores to better monetize their presence online and increase engagement in their brick-and-mortar stores.
On February 26, 2024, the Corporation completed the dissolution of its wholly owned subsidiaries, Amplify and iRecover. As a result of dissolution, the Corporation derecognized all assets and liabilities at their book values and wrote down all balances receivable from Amplify to $Nil. During the year ended September 30, 2024, the Corporation recorded a gain of $30,074 as a result of the dissolution of Amplify.
ACQUISITION OF ENVEXERGY
On April 9, 2024, pursuant to the Corporation’s purchase of 1,001,730,300 common shares of Envexergy for a cash consideration of $305,505 (US$225,000), an acquisition resulting in the Corporation owning an equivalent to 99.34% of the equity interest in Envexergy. The Corporation determined that the acquisition was completed on the date the shares certificates were received, being April 9, 2024. As a result, Envexergy became a subsidiary of the Corporation together with its wholly owned subsidiaries, RealBlocks Private Securities Inc. and RealBlocks Investment Advisors, Inc.
Envexergy Inc. founded in 2017 in New York City, built an alternative investment experience for fund managers and their investors worldwide through its online platform. RealBlocks used advanced technology to offer a fully digital, white-label solution for today's fund managers wishing to expand their firm's investor base by allowing them to offer more funds in more locations with lower investor minimums.
The transaction was accounted for as a business combination under IFRS 3, Business Combinations. At the date of acquisition, the Corporation determined the fair value of the net identifiable liabilities of Envexergy and recognized an intangible asset of $Nil and goodwill of $482,518.
The fair value of the total consideration has been allocated as below:
| Cash consideration | $ 305,505 |
|---|---|
| Fair value of assets and liabilities acquired: | |
| Cash | $ 33,783 |
| Trade and other receivables | 248,963 |
| Prepaid expenses | 53,060 |
| Investment | 116,942 |
| Trade and other payables | (533,868) |
| Due to BlockchainK2 | (97,069) |
| Total net liabilities | (178,189) |
| Percentage acquired | 99.34% |
| Net liabilities acquired | (177,013) |
| Non-controlling interest | (1,176) |
| Goodwill | $ 482,518 |
At the date of acquisition Envexergy had 654,390 options outstanding. The Corporation used the Black Scholes Option Pricing Model to determine the fair value of $Nil using the following assumptions: Estimated risk-free rate – 4.47%, Expected volatility – 50%, Estimated annual dividend yield – 0.00%, Expected life of options – 2 to 6 years, Stock price at issue date – US$0.00022, Forfeiture rate – 0.00%.
During the year ended September 30, 2024, the acquired business contributed $284,614 in revenue and a net loss of $508,900 to the Corporation’s consolidated results.
During the year ended September 30, 2025, the contract with Envexergy’s main customer from which it derived its revenue was terminated and there is no assurance that it will continue to generate revenue in the near future. Therefore, the Corporation determined that goodwill was impaired as of September 30, 2024 and recorded an impairment loss of $482,518 in the statement of comprehensive loss related to the carrying value of goodwill.
Since 2017, RealBlocks has been using technology to provide its clients with easier access to alternative investment options. The firm positions its platform as "Global Infrastructure as a Service for Investment Capital" to alternative investment funds spanning private equity and credit across: real estate, venture capital, buyout, infrastructure, timber, farmland and hedge funds represent over $9.5 Trillion in AUM globally. The startup, aimed at institutional investors, family offices, financial intermediaries and alternative investment managers, connects investors with investment strategies that have enhanced liquidity levels and simplified administration, otherwise known as Open Alts. Real Estate and alternative investment fund managers can use the firm's technology and feeder fund solutions to multiply revenue streams and offer their customers more diversified products on a global scale.
RealBlocks www.realblocks.com firm positions its platform as "Global Infrastructure as a Service for Investment Capital" to alternative investment funds spanning private equity and credit across: real estate, venture capital, buyout, infrastructure, timber, farmland and hedge funds, which represents over $10 trillion in AUM globally. RealBlocks is primarily focused on real estate asset managers given the strong demand for real estate product by institutional and HNW investors globally. The firm is also offering a la carte components including automated on-boarding and secondary trading. RealBlocks is the sole international distribution partner for a large US real estate asset manager. RealBlocks operates on three revenue streams: 1) an upfront one-time set up fee, 2) an Asset under Management (AUM) fee and 3) secondary market listing fees. Differentiating Factors: Key advantages include, but are not limited to: 1) connectivity to a large, global universe of placement agents and third party marketers for capital raising, 2) fully integrated, tech-enabled secondary trading, 3) turnkey technology enhanced feeder funds allowing for rapid implementation to expand managers' global distribution capabilities. RealBlocks provides Lasalle Investment Management Global Institutional Onboarding of entire $77B business.
INVESTMENTS
| Balance, September 30, 2023 | $ | 1,104,584 |
|---|---|---|
| Impairment | (1,104,584) | |
| Assumed on acquisition | 116,942 | |
| Redemption of shares | (46,499) | |
| Change in fair value | (2,881) | |
| Foreign exchange adjustment | (645) | |
| Balance, September 30, 2024 | 66,917 | |
| Redemption of shares | (2,515) | |
| Change in fair value | (4,585) | |
| Foreign exchange adjustment | 2,035 | |
| Balance, September 30, 2025 | $ | 61,852 |
Investment in Envexergy inc.
In October 2020, the Corporation invested $265,840 (US$200,000) in Envexergy as part of Envexergy's US$7 million Series A round of financing. The Corporation's investment allows it to maintain its pro rate share of Envexergy and adds to its previous $654,350 (US$500,000) investment in Envexergy, which was completed in July of 2019 as part of a US$3.1-million seed round of financing by Envexergy.
As at September 30, 2023, the fair value of the investment (223,580 shares of Envexergy) was calculated to be $1,104,584 (US$817,000), applying the market approach of valuation. The Corporation estimated the fair value of Envexergy, as a going concern, mainly on the basis of observable arm's length transactions in Envexergy's shares between its shareholders.
Valuation Techniques
The valuation model is based on weighting of the three methods of the market approach: a) 90% weighting on prior transactions adjusted for market change of 5.5% increase; b) 5% weighting on comparable public companies; and c) 5% weighting on transaction in comparable companies.
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Quantitative impact/Sensitivity
The higher the market change assumption, the higher the fair value of the investment. A 1% change in market change assumption will result in a change of $8,000 to the investment.
During the year ended September 30, 2024, the Corporation purchased 1,001,730,300 common shares in Envexergy for a consideration of $305,505 (US$225,000), an acquisition resulting in the Corporation having an equivalent to 99.34% of the equity interest in Envexergy. Prior to the acquisition, the Corporation had an investment in Envexergy with a value of $1,104,584, which was written down to fair value of $Nil prior to acquisition.
Investment in Starwood Real Estate Income Trust, Inc. ("SREIT")
In September 2022, Envexergy purchased 3,643 shares of SREIT for $131,792 (US$100,100). In connection with the acquisition of Envexergy, the Corporation acquired this investment to SREIT with a market value of $116,942 (US$86,126).
During the year ended September 30, 2025, the Corporation redeemed 84 shares (2024 – 1,499 shares) of SREIT for cash proceeds of $2,515 (US$1,862) (2024 – $46,499 (US$34,446)) and recognized an unrealized loss of $4,585 (2024 – $2,881) in the consolidated statements of loss and comprehensive loss. The Corporation also earned dividend income of $2,697 (2024 – $1,786) from this investment.
SELECTED ANNUAL INFORMATION
The following table sets forth selected consolidated information of the Corporation at September 30 for each of the three most recently completed financial years prepared in accordance with IFRS. The selected consolidated financial information should be read in conjunction with the Audited Consolidated Financial Statements of the Corporation.
| September 30, 2025 (audited) | September 30, 2024 (audited) | September 30, 2023 (audited) | |
|---|---|---|---|
| $ | $ | $ | |
| Revenue | 142,657 | 284,614 | 31,902 |
| Net loss attributable to owners of the parent | (1,022,536) | (2,734,512) | (316,136) |
| Net loss attributable to owners of the parent - per share, basic and fully diluted | (0.03) | (0.11) | (0.02) |
| Total assets | 346,899 | 496,112 | 1,161,747 |
| Total non-current liabilities | – | 70,499 | 74,026 |
| Working capital deficit | (1,888,801) | (711,367) | (732,780) |
RESULTS OF OPERATIONS
Year ended September 30, 2025
Net loss
The net loss for the year ended September 30, 2025 of $1,092,562 ($0.03 per share) compared to $2,744,710 ($0.11 per share) for the year ended September 30, 2024, representing a decrease in net loss of $1,652,148. The decrease in net loss was mainly attributable to the decrease in operating expenses and no impairment loss recognized during the current year.
During the year ended September 30, 2025, the Corporation recorded interest and accretion of $143,307 (2024 – $24,024), loss from change in fair value of investment of $4,585 (2024 – $2,881), dividend income of $2,697 (2024 – $1,786), impairment loss of $Nil (2024 – $1,587,102), gain on debt settlement of $Nil (2024 – $15,997), gain on dissolution of subsidiary of $Nil (2024 – $30,074), and gain from write-off of accounts payable of $11,478 (2024 – $61,472).
During the year ended September 30, 2025, the acquired business, Envexergy inc., contributed $142,657 in revenue and a net loss of $427,078 to the Corporation’s consolidated results.
Expenses
The expenses for the year ended September 30, 2025 of $1,101,502 compared to $1,490,685 for the year ended September 30, 2024, representing a decrease of $389,183. The decrease in expenses was mainly attributable to the decrease in advertising and promotion to $1,218 from $209,203 in 2024 due to decreased promotional activities for the Corporation’s services, decrease in business development to $Nil from $2,515 in 2024 due to no related fees incurred during the current year, decrease in general and administrative expenses to $81,256 from $144,738 in 2024 due to lower corporate activities in the current year, decrease in investor relations to $8,631 from $38,749 in 2024 due to decreased capital activities in the current year, and decrease in salaries to $Nil from $329,013 in 2024 due to no payroll fees paid or accrued during the current year. These decreases are partially offset by the increase in bad debt expenses to $70,173 from $1,108 in 2024, increase in consulting fees to $291,899 from $191,183 in 2024 due to higher fees paid or accrued to consultants in the current year, increase in directors’ fees to $168,333 from $163,065 in 2024 due to higher fees paid or accrued to directors of the Corporation in the current year, increase in filing and listing fees to $87,971 from $62,910 in 2024 due to increased activities in connection with regulatory and filing fees of the Corporation in the current year, increase in foreign exchange loss to $7,876 from a gain of $2,647 in 2024, and increase in professional fees to $384,145 from $350,848 in 2024 due to increased legal and professional fees incurred in the current year. The decrease in expenses was mainly due to lower corporate expenses in the current year in comparison to the costs incurred in the previous fiscal year in relation to its day-to-day business activities.
During the year ended September 30, 2025, Envexergy Inc. contributed expenses of $579,325 (2024 – $819,930) to the Corporation’s consolidated results.
Segmented disclosure
The Corporation operates their business in the following segments:
- Investing in blockchain technology solutions for capital markets and other sectors
- Sale of health and beauty products – operated by Sobe Organics;
- Digital game distribution – operated by Amplify;
- Addiction recovery platform services – operated by iRecover; and
- Investment platform and advisory services – operated by Envexergy
Revenues for the years ended September 30, 2025 and 2024 as follows:
| Investment platform and advisory services | |
|---|---|
| For the year ended September 30, 2025 | |
| Sales | $ 142,657 |
| Cost of sales | – |
| Gross profit | $ 142,657 |
| For the year ended September 30, 2024 | |
| Sales | $ 284,614 |
| Cost of sales | (33,961) |
| Gross profit | $ 250,653 |
All revenue during the years ended September 30, 2025 and 2024 are derived from customers in United States.
100% of the revenue during years ended September 30, 2025 and 2024 is derived from Envexergy’s platform sales.
SELECTED QUARTERLY INFORMATION
| Quarter ended | Sep. 30, 2025 | Jun. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Revenue | (10,701) | – | 10,742 | 142,616 |
| Net loss | (402,867) | (281,300) | (316,924) | (91,471) |
| Net loss per share | (0.01) | (0.01) | (0.01) | (0.00) |
| Net loss attributable to owners of the parent | (338,473) | (279,480) | (314,378) | (90,205) |
| Net loss attributable to owners of the parent – per share, basic and fully diluted | (0.01) | (0.01) | (0.01) | (0.00) |
| Working capital deficit | (1,888,801) | (1,449,173) | (1,222,197) | (906,018) |
| Quarter ended | Sep. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
| --- | --- | --- | --- | --- |
| $ | $ | $ | $ | |
| Revenue | 141,863 | 142,751 | – | – |
| Net loss | (736,111) | (625,827) | (1,319,591) | (63,181) |
| Net loss per share | (0.02) | (0.03) | (0.05) | (0.00) |
| Net loss attributable to owners of the parent | (732,340) | (621,623) | (1,318,491) | (62,058) |
| Net loss attributable to owners of the parent – per share, basic and fully diluted | (0.02) | (0.03) | (0.05) | (0.00) |
| Working capital deficit | (711,367) | (706,741) | (630,348) | (797,188) |
The above noted financial data should be read in conjunction with the consolidated financial statements for the year ended September 30, 2025.
Fiscal 2025
During the fourth quarter of fiscal 2025, the Corporation recorded a loss of $402,867 compared to a loss of $281,300 in the third quarter of fiscal 2025. The change is mainly due to lower corporate expenses incurred and increase in interest and accretion during the fourth quarter.
During the third quarter of fiscal 2025, the Corporation recorded a loss of $281,300 compared to a loss of $316,924 in the second quarter of fiscal 2025. The change is mainly due to lower corporate expenses incurred and no revenue earned during the third quarter.
During the second quarter of fiscal 2025, the Corporation recorded a loss of $316,924 compared to a loss of $91,471 in the first quarter of fiscal 2025. The change is mainly due to higher corporate expenses incurred and decrease in revenue earned during the second quarter.
During the first quarter of fiscal 2025, the Corporation recorded a loss of $91,471 compared to a loss of $736,111 in the fourth quarter of fiscal 2024. The change is mainly due to lower corporate expenses and no impairment loss incurred during the first quarter.
Fiscal 2024
During the fourth quarter of fiscal 2024, the Corporation recorded a loss of $736,111 compared to a loss of $625,827 in the third quarter of fiscal 2024. The change is mainly due to higher impairment loss, offset by lower corporate expenses during the fourth quarter.
During the third quarter of fiscal 2024, the Corporation recorded a loss of $625,827 compared to a loss of $1,319,591 in the second quarter of fiscal 2024. The change is mainly due to no impairment loss recognized during the third quarter.
During the second quarter of fiscal 2024, the Corporation recorded a loss of $1,319,591 compared to a loss of $63,181 in the first quarter of fiscal 2024. The change is mainly due to impairment loss recognized during the second quarter.
During the first quarter of fiscal 2024, the Corporation recorded a loss of $63,181 compared to a loss of $218,272 in the fourth quarter of fiscal 2023. The change is mainly due to lower corporate expenses and no revenue during the first quarter.
NON-CONTROLLING INTEREST
As at September 30, 2025, the carrying value of non-controlling interest (“NCI”) was ($118,684) (2024 – ($48,531)) which was determined as follows:
| Sobe Organics | Envexergy | Total | |||
|---|---|---|---|---|---|
| Balance, September 30, 2023 | $ | (43,471) | $ | – | $ (43,471) |
| NCI recognized upon acquisition | – | 1,176 | 1,176 | ||
| Loss allocated to NCI | (6,840) | (3,358) | (10,198) | ||
| Gain on translation allocated to NCI | 3,914 | 48 | 3,962 | ||
| Balance, September 30, 2024 | (46,397) | (2,134) | (48,531) | ||
| Loss allocated to NCI | (67,209) | (2,817) | (70,026) | ||
| Gain (loss) on translation allocated to NCI | (206) | 79 | (127) | ||
| Balance, September 30, 2025 | $ | (113,812) | $ | (4,872) | $ (118,684) |
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2025, the Corporation had a working capital deficit of $1,888,801 which compares to a working capital deficit of $711,367 as at September 30, 2024.
On February 6, 2024, the Corporation closed its non-brokered private placement offering of 5,000,000 common shares at a price of $0.105 per common share for aggregate gross proceeds of $525,000.
On April 18, 2024, the Corporation closed its non-brokered private placement of 1,884,437 units at a price of $0.265 per unit for aggregate gross proceeds of $499,376. Each unit comprises one common share in the capital of the Corporation and one-half of one share purchase warrant. Each unit warrant is exercisable to acquire one additional share at an exercise price of $0.40 per unit warrant share until April 18, 2026. The Corporation recorded the estimated fair value of warrants of $135,623 to warrants reserve in the consolidated statements of financial position.
On June 7, 2024, the Corporation issued 1,703,571 common shares with a fair value of $434,411 to directors of the Corporation to settle outstanding debt of $404,427 to loans payable and $106,643 to accounts payable for a total of $511,070. The Corporation recorded the gain on settlement of loan of $60,664 in contributed surplus and the gain on settlement of accounts payable of $15,997 in the statement of comprehensive loss.
On July 19, 2024, the Corporation issued 359,156 common shares upon the exercise of warrants for gross proceeds of $143,662 at $0.40 per share and $51,697 were transferred from contributed surplus to share capital.
On September 5, 2024, the Corporation issued 50,000 common shares upon the exercise of warrants for gross proceeds of $20,000 $0.40 per share and $7,197 were transferred from contributed surplus to share capital.
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TRANSACTIONS WITH RELATED PARTIES
Key management consists of directors and officers.
The following is a summary of the related party transactions that occurred throughout the years ended September 30, 2025 and 2024:
a) During the year ended September 30, 2025, the Corporation incurred directors' fees of $168,333 (2024 – $163,065) to a current director of the Corporation.
b) During the year ended September 30, 2025, the Corporation incurred consulting fees of $36,000 (2024 – $36,000) to a company controlled by the CFO of the Corporation.
c) During the year ended September 30, 2025, the Corporation incurred salaries of $Nil (2024 – $156,612) to a former director of the Corporation.
d) As at September 30, 2025, included in the accounts payable and accrued liabilities, the Corporation has $566,829 (2024 – $425,042) due to related parties as a result of related party transactions incurred throughout the year. These amounts are due on demand, unsecured and non-interest bearing.
e) As the September 30, 2025, included in the loans payable was $51,500 (2024 - $Nil) owing to a director and officer of the Corporation. These amounts are due on demand, unsecured and non-interest bearing.
f) On June 7, 2024, the Corporation issued 355,482 common shares to settle $106,645 owing to a director and officer of the Corporation and recorded the gain on debt settlement of $15,997 in the statement of comprehensive loss.
g) The CEO of the Corporation subscribed for 1,333,333 common shares and a director of the Corporation subscribed for 476,190 common shares in the private placements closed on February 6, 2024 for a total fair value of $190,000.
h) The CEO of the Corporation subscribed for 553,388 common shares in the private placements closed on April 18, 2024 for a fair value of $146,648.
i) During the year ended September 30, 2024, the Corporation issued 1,348,089 common shares in full settlement of the outstanding loan of $404,427 owing to a director of the Corporation and recorded the gain on debt settlement of $60,664 in contributed surplus. As at September 30, 2024, loans payable includes $Nil owing to a director.
j) Subsequent to the year ended September 30, 2025, the Corporation issued 2,503,612 common shares to the director and officer of the Corporation to settle $100,556 of accounts payables and $50,000 for the settlement of principal loan for a total of $150,556.
k) As at September 30, 2025, included in the loans payable was $250,417 (2024 - $Nil) owing to a family member of a director and officer of the Corporation. These amounts are unsecured, bears 12% interest per annum and is due in 3 months (on December 25, 2025). The loan was settled subsequent to the year ended September 30, 2025.
Compensation of key management personnel
| Years ended September 30, | 2025 | 2024 |
|---|---|---|
| Directors', consulting fees and salaries | $ 204,333 | $ 355,677 |
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MANAGEMENT CHANGES
On May 2, 2024, the Corporation appointed Scott Brooks III as Chief Executive Officer of RealBlocks and as a director of the Corporation. Mr. Brooks replaces Balazs Veszpremi who resigned as a director for the Corporation.
On August 23, 2024, Scott Brooks III resigned as Chief Executive Officer of RealBlocks and as a director of the Corporation.
As the date of this MD&A, the Corporation’s management now consists of Sergei Stetsenko as Chief Executive Officer and director, Yuying Liang as Chief Financial Officer and corporate secretary, Steven Sangha and Robert Jarva as directors.
SUBSEQUENT EVENTS
On October 10, 2025, the Corporation, pursuant to the debt settlement agreement approved subsequently to the year ended September 30, 2025 which was entered on September 14, 2025 with a certain creditor and a director of the Corporation, issued 4,219,970 common shares to settle indebtedness of $191,542 to loans payable and $40,556 to accounts payable for a total of $232,098.
On November 26, 2025, the Corporation, pursuant to the debt settlement agreement entered on October 31, 2025 with a certain creditor and a director of the Corporation, issued 4,464,286 common shares to settle outstanding indebtedness of $252,500 to loans payable and $60,000 to accounts payable for a total of $312,500.
ACCOUNTING POLICIES
The consolidated financial statements and related MD&A have been prepared on a historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for the assets recorded on the date of transition. The consolidated financial statements have been prepared on a going concern basis.
A summary of the Corporations material accounting policies under IFRS is presented in Note 3 – “Material accounting policies” in the Corporation’s consolidated financial statements for the year ended September 30, 2025.
Items included in the financial statements of the Corporation and its subsidiaries are measured using the currency of the primary economic environment in which the Corporation operates (the “functional currency”). The consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional and presentation currency.
CRITICAL ACCOUNTING ESTIMATES
The Corporation has made estimates and assumptions regarding certain assets, liabilities, and expenses in the preparation of the consolidated financial statements. Such estimates primarily relate to unsettled transactions and events as of the date of the consolidated financial statements. Accordingly, actual results may differ from estimated amounts. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
Accounting estimates
a.) Share-based payments
The Corporation has made various assumptions in estimating the fair values of the common stock options granted including expected volatility, expected exercise behavior and future forfeiture rates. Any changes in the estimates or inputs utilized to determine fair value could result in a significant impact on the Corporation’s future operating results or on other components of shareholders’ equity.
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Accounting judgments
a.) Deferred taxes
Tax interpretations, regulations and legislation are subject to change and as such income taxes are subject to measurement uncertainty. Deferred tax assets are assessed by management at the end of the reporting period to determine the likelihood that they will be realized from future taxable earnings. Actual results may differ from these estimates due to, among other factors, future changes in business environment, currently unknown changes in income tax legislation, or results from the final review of tax returns by tax authorities.
b.) Going concern assessment
The consolidated financial statements have been prepared on a going concern basis, which assumes that the Corporation will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The assessment of the Corporation's ability to source future operations and continue as a going concern involves judgment. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. If the going concern assumption were not appropriate for the consolidated financial statements, then adjustments to the carrying value of assets and liabilities, the reported revenue and expenses and the statement of financial position would be necessary, and such adjustments could be material.
c.) Business combinations
Judgement is required to determine if the Corporation's acquisitions represent a business combination or an asset acquisition. For acquisitions accounted as business combination, goodwill was recognized on the transactions and acquisition costs were expensed. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets acquired and liabilities incurred or assumed.
During the year ended September 30, 2024, management concluded that the acquisition of Envexergy represent a business combination. For acquisitions representing asset acquisition, goodwill is recognized on the transactions and acquisition costs are capitalized to the assets purchased. An allocation of the purchase price to the individual identifiable assets acquired, including intangible assets, and liabilities assumed based on their fair values at the date of purchase is required. The fair values of the net assets acquired was calculated using significant estimates and judgments. If estimates or judgments differed, this could result in a materially different allocation of net assets on the consolidated statement of financial position.
FINANCIAL INSTRUMENTS
As at September 30, 2025, the Corporation's financial instruments are cash, receivables, investments, accounts payables and loans payable. The amounts reflected in the balance sheet for these financial instruments approximate their fair values due to the short-term nature and negligible credit losses.
The Corporation does not use derivative instruments or hedges to manage risks because the Corporation's exposure to credit risk, interest rate risk and currency risk is not considered significant.
OFF-BALANCE SHEET ARRANGEMENTS
The Corporation has not engaged in any off-balance sheet arrangements.
DISCLOSURE OF OUTSTANDING SHARE DATA
Authorized and Issued Share Capital
The following is outstanding as of January 28, 2026:
| Class | Par Value | Authorized | Issued |
|---|---|---|---|
| Common | Nil | Unlimited | 39,007,834 |
| Preferred | Nil | Unlimited | Nil |
Description of Options and Warrants Outstanding
The following is outstanding as of January 28, 2026:
| Security Type | Number | Exercise Price | Expiry Date |
|---|---|---|---|
| Options | 217,040 | $0.52 | November 8, 2027 |
| Options | 167,766 | $0.25 | June 15, 2028 |
| Options | 700,000 | $0.77 | January 7, 2031 |
| Warrants | 533,062 | $0.40 | April 18, 2026 |
Envexergy options outstanding as of January 28, 2026 are as follows:
| Number | Exercise Price (USD) | Expiry Date |
|---|---|---|
| 17,713 | $1.43 | November 12, 2028 |
| 25,044 | $1.52 | March 6, 2030 |
FORWARD-LOOKING STATEMENTS
This MD&A, which contains certain forward-looking statements, are intended to provide readers with a reasonable basis for assessing the financial performance of the Corporation. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, fluctuations in the currency markets such as Canadian dollar and U.S. dollar, fluctuations in the prices of commodities, changes in government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States or other countries in which the Corporation carries or may carry on business in the future. Many of these uncertainties and contingencies can affect the Corporation’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Corporation. Readers are cautioned that forward-looking statements are not guarantees of future performance. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those acknowledged in such statements. Specific reference is made to the “Risk and Uncertainties” section of these MD&A for a discussion of some of the factors underlying forward-looking statements. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.
RISK FACTORS
In the normal course of business, the Corporation is exposed to various business risks and uncertainties that can have an effect on the Corporation's results of operations, financial position, or liquidity. While some exposures may be reduced by the Corporation's risk management strategies, many risks are driven by external factors beyond the Corporation's control or are of a nature which cannot be eliminated. The following is a discussion of key areas of business risks and uncertainties.
The Corporation
The Corporation is in the early stage of development and must be considered a start-up. As such, the Corporation is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and the lack of revenues. There is no assurance that the Corporation will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of its early stage of operations. The Corporation has no intention of paying any dividends in the near future.
The Corporation will have limited financial resources and there is no assurance that additional funding will be available to it for further development of its business or to fulfil its obligations under any applicable agreements.
As certain of the officers and directors of the Corporation are directors, officers or shareholders of other companies, there are potential conflicts of interest to which the officers and directors of the Corporation may be subject to from time to time, in connection with the operations of the Corporation. Conflicts, if any, will be subject to the procedures and remedies under the Business Corporation Act (Alberta).
The Corporation may need additional financing to continue in business and there can be no assurance that such financing will be available or, if available, will be on reasonable terms. If financing is obtained by issuing common shares from treasury, control of the Corporation may change and investors may suffer additional dilution. To the extent financing is not available, business opportunities and potential acquisitions could be lost for the Corporation.
Liquidity
Disruptions in the financial markets or deterioration of the Corporation's credit ratings could hinder the Corporation's access to external sources of funding to meet its liquidity needs. There can be no assurance that changes in the financial markets will not have a negative effect on the Corporation's liquidity and its access to capital at acceptable rates.
Risks from Acquisitions, Strategic Alliances and Joint Ventures
The Corporation may pursue acquisitions, strategic alliances and joint ventures. The ability of the Corporation to complete acquisitions, strategic alliances and joint ventures is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, acquisitions, strategic alliances and joint ventures involve risks that could adversely affect the Corporation's results of operations, including the management time that may be diverted from operations in order to pursue and complete such transactions and, difficulties in the case of acquisitions, integrating and managing the additional operations and personnel of acquired businesses. There can be no assurance that the Corporation will be able to obtain the capital necessary to consummate acquisitions, strategic alliances or joint ventures on satisfactory terms, if at all. Future acquisitions, strategic alliances or joint ventures could result in the incurrence of additional debt, costs and contingent liabilities, all of which could materially adversely affect the Corporation.
The Corporation is planning to change its business to digital currency mining and block chain software businesses. There is no assurance that the Corporation will receive requisite regulatory, exchange and shareholder approvals. In the event that the Corporation is able to change its business to technology and block chain businesses, such businesses are inherently early stage, unproven, volatile and subject to risks including regulatory, technological and financing.
Dependence on Key Personnel
The success of the Corporation will depend, to a significant extent, upon the efforts and abilities of its senior management team. The loss of any management, or the inability to attract and retain additional skilled management, could have a material adverse effect on the business, operating results and financial condition of the Corporation.
Global Financial Conditions
Global financial conditions may be subject to high volatility which could result, as they have in the past, in numerous commercial and financial enterprises either going into bankruptcy or creditor protection or having had to be rescued by governmental authorities. In recent years, access to public financing has been negatively impacted by sub-prime mortgage defaults in the United States, the liquidity crisis affecting the asset-backed commercial paper and collateralized debt obligation markets, massive investment losses by banks with resultant recapitalization efforts and a deterioration in the global economy. More recently, the European debt crisis has affected equity investor sentiment and, if it worsens, could also affect worldwide credit markets, which might impact the Corporation.
Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions can cause the broader credit markets to further deteriorate and stock markets to decline substantially. Banks have been adversely affected by the worldwide economic crisis and have somewhat curtailed existing liquidity lines, increased pricing and introduced new
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and tighter borrowing restrictions to corporate borrowers, with limited access to new facilities or for new borrowers. These factors, if they were to reoccur, could negatively impact the Corporation's ability to access liquidity needed for the Corporation's business in the longer term. These factors may impact the Corporation's future ability to obtain equity, debt or bank financing on terms favourable to the Corporation, or at all. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses.
Potential Volatility of Share Price
The market price of the common shares of the Corporation may be volatile and could be subject to wide fluctuations due to a number of factors, including but not limited to: actual or anticipated fluctuations in the Corporation's results of operations; changes in estimates of the Corporation's future results of operations by management or securities analysts; introduction of new products or services by the Corporation or its competitors; and general industry changes. In addition, the financial markets have in the past experienced significant price and value fluctuations that have particularly affected the market prices of equity securities of many venture issuers and that sometimes have been unrelated to the operating performance of these companies. Broad market fluctuations, as well as economic conditions generally, may adversely affect the market price of the shares.
Tax Considerations
The return on an investment in common shares of the Corporation will be subject to changes in federal and provincial tax laws. There can be no assurance that the income tax legislation in Canada will not be amended so as to fundamentally alter the tax consequences of holding or disposing of the common shares.
Legal or Regulatory Proceedings
Although the Corporation is not currently a party to any material legal or regulatory proceedings, legal or regulatory proceedings could be filed against the Corporation in the future. No assurance can be given as to the final outcome of any legal or regulatory proceedings or that the ultimate resolution of any legal or regulatory proceedings will not have a material adverse effect on the Corporation.
Additional Information
Additional information is available on SEDAR at www.sedarplus.ca