BMNRBitmine Immersion Technologies

Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications.

There have been no written communications as defined in Rule 405 to date. The Company acknowledges the Staff’s comment and respectfully advises the Staff that it will supplementally provide the Staff with copies of any and all future written communications as defined in

Rule 405 under the Securities Act. Read in the reply ↗

We note your disclosure that your offering of common shares will be at an "assumed public offering price." Please revise to state the price of the securities to the public and clarify whether it will be fixed for the duration of the offering. If you are not able to state a price, explain the method by which the price is to be determined. Refer to Instruction 2 to Item 501(b)(3) of Regulation S-K for guidance.

At the time of filing the

Registration Statement, the stock split ratio, the offering price and the number of shares to be offered was not known and still are not known. The Company will amend the Registration Statement when such information is determined. In the interim, the Amended Registration includes changes to the cover page which make clear that the offering price, once determined, will be fixed for the duration of the offering. Read in the reply ↗

We note your disclosure on page 104, under the heading Principal Stockholders, that your CEO, Jonathan Bates, controls 52.6% of your common stock and that your directors and executive officers, as a group, control 74.0% of your common stock.

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Please advise as to whether you anticipate being a "controlled company," as defined by the rules of the exchange upon which you plan to list your shares, upon the completion of this offering, and provide appropriate disclosure on the prospectus cover page, prospectus summary and risk factors to the extent appropriate. In this regard, we note your risk factor disclosure on page 40. If applicable, please also clarify whether you will avail yourself of any controlled company exemptions to the relevant exchange’s corporate governance rules.

The Company respectfully acknowledges the Staff’s comment and has revised the Amended Registration Statement to clarify that the Company does not plan to elect treatment as a “controlled company,” as defined by the rules of any exchange where it plans to list its shares, even if it may technically meet the definition. However, the Company does not believe that additional disclosure of this risk is necessary because the offering terms currently being considered will result in Mr. Bates individually, and officers and directors as a whole, owning materially less than 50%.

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However, if the final offering terms would possibly qualify the Company as a “controlled company,” the Company will add the additional disclosure suggested in the comment.

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Your cover page disclosure indicates that the listing of your common stock on a national securities exchange or trading market is a condition to this offering. If so, please reconcile your disclosure here to indicate that your offering is contingent upon such listing.

This risk factor, and certain other disclosures in the Amended Registration Statement, have been amended to clarify that the offering is contingent on the approval of such listing. Read in the reply ↗

Please revise this risk factor to disclose the number of shares of common stock the

In response to the Staff’s comment, the risk factor has been amended to specify the number of shares of common stock that will be issued upon conversion of the two series of preferred stock on both a preand post-split basis. Read in the reply ↗

Please tell us whether a material part of the proceeds of this offering will be used to discharge your indebtedness to IDI. If so, please revise to disclose the interest rate and maturity of such indebtedness. Additionally, describe the use of the proceeds of such indebtedness, or advise. Refer to Instruction 4 to Item 504 of Regulation S-K.

None of the proceeds will be used to discharge the Company’s debt to IDI, and therefore we do not believe any change is necessary to the “Use of Proceeds” section. The manner in which the IDI debt will be restructured is fully disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources” and “Certain Relationships and Related Party Transactions – Letter Agreement with Jonathan Bates and IDI,” which sections make clear that no cash payment will be made to IDI as part of the restructuring of the IDI debt. Read in the reply ↗

Please expand your disclosure related to the line of credit from IDI to disclose the largest aggregate amount of principal outstanding during the period for which disclosure is provided, the amount of principal paid during the periods for which disclosure is provided, and the amount of interest paid during the period for which disclosure is provided.

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Please make corresponding revisions to your risk factor disclosure on page 44.

In response to the Staff’s comment, the passage described above has been amended to clarify that the Company had not made any payment of principal or accrued interest under the LOC Agreement since its inception and, as a result, the current principal and interest amount represents the largest amounts that have been outstanding since the Company’s entry into the loan agreement. Read in the reply ↗

Please revise your disclosure to also show the beneficial ownership information after the completion of the offering. We also note that you intend to effectuate a Reverse Split immediately following the effective date of the registration statement but prior to the closing of this offering. Please clarify if the information presented in this section reflects the Reverse Split.

In response to the Staff’s comment, the beneficial ownership table has been amended to add additional columns showing the number of shares, and the percentage ownership, of each person listed therein after giving effect to the stock split and the offering.

In connection with responding to the Staff’s comments, we acknowledge that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company

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may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note that your registration statement includes a number of blanks or omitted information, including, without limitation: • the exchange on which your common stock will be listed; • the number of shares that will be available for sale into the market if the restrictions under the lock-up agreements with your directors, executive officers and holders of 5% or more of your common stock are waived (page 48); and •

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certain information related to the annual management fee and performance allocation IDI is entitled to pursuant to the line of credit (pages 73 and 102). Please include this information in your next amendment, or tell us when you intend to do so.

The

Company acknowledges the Staff’s comment and respectfully responds as follows:

· The Company expects to list its common stock on the NYSE American and has filed an application for such listing. The Registration Statement has been amended to disclose the NYSE American as the prospective stock exchange for the Company’s common stock.

· The risk factor on page 49 has been amended to disclose the number of shares that will be available for sale if the restrictions under the lock-up agreements with the Company’s directors, executive officers, and holders of 5% or more of its common stock

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are waived.

· The disclosures on pages 76 and 108 have been revised to clarify that the general partner of IDI is entitled to an annual management fee of 0% on net assets of the partnership and an annual performance allocation of 30% on the increase in the net asset value of the partnership.

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We note in the first paragraph that you are offering 1,704,546 shares of your common stock. Please revise here and throughout your Prospectus to also disclose the total number of shares you are offering assuming the underwriters exercise the overallotment option in full.

In response to the Staff’s comment, the Registration Statement has been amended to disclose the total number of shares offered in the offering assuming the underwriters exercise the overallotment option in full. Read in the reply ↗

Please revise to disclose the total number of shares of your common stock outstanding giving effect to the anticipated conversion of your Series A and B preferred stock and indebtedness due to an affiliate. Please make similar revisions to your disclosure in the second paragraph on page 104 under Principle Stockholders and elsewhere in your Prospectus, as appropriate.

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the conversion numbers were added to the total number of shares of common stock outstanding after the offering and disclosed in footnote 2 on pages 13 and 111. This is because the conversions will occur upon consummation of the offering, i.e., the offering has to occur first before the conversions will occur. It could be misleading to include the conversions in the number of shares outstanding prior to the offering. However, if the Staff disagrees, we are happy to make this revision upon your further comment. Read in the reply ↗

Please revise this risk factor to disclose, on a post-split basis, the number of shares of common stock the shares of Series A Convertible Preferred Stock are convertible into, the number of shares of common stock the shares of Series B Convertible Preferred Stock are convertible into, and the total of the two.

In response to the Staff’s comment, the risk factor has been amended to disclose on a post-split basis, the number of shares of common stock the shares of Series

A Convertible Preferred Stock are convertible into, the number of shares of common stock the shares of Series B Convertible Preferred

Stock are convertible into, and the total of the two. Read in the reply ↗

Provide disclosure of any significant crypto asset market developments material to understanding or assessing your business, financial condition and results of operations, or share price since your last reporting period, including any material impact from the price volatility of crypto assets.

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In addition, and to the extent material, discuss how recent bankruptcies in the crypto asset market and the downstream effects of those bankruptcies have impacted or may impact your business, financial condition, customers, and counterparties, either directly or indirectly. Clarify whether you have material assets that may not be recovered due to the bankruptcies or may otherwise be lost or misappropriated.

Attached hereto as Exhibit A is the risk factor section as Company expects to file it in its Form 10-K for the year ended August 31, 2023, which is due in late November

2023 (the “Updated Risk Factors.)1 The Updated

Risk Factors include additional risk factors, which include the risks associated with recent crypto market developments, the price volatility in crypto markets and recent bankruptcies of industry participants (Risk Factor 7, 50 and 73). The Company does not have any exposure in recent bankruptcies, and that fact is also addressed in the risk factors. (Risk Factor 7) Read in the reply ↗

If material to an understanding of your business, describe any direct or indirect exposures to other counterparties, customers, custodians, or other participants in crypto asset markets, including Gemini, known to: • Have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment for the benefit of creditors, or have had a receiver appointed for them.

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• Have experienced excessive redemptions or suspended redemptions or withdrawals of crypto assets. • Have the crypto assets of their customers unaccounted for. • Have experienced material corporate compliance failures. Please also revise your risk factor disclosure as appropriate.

To the Company’s knowledge, it does not have any direct or indirect exposure to third parties that meet any of the specific conditions described in the comment. We understand that about 340,000 customers of Gemini who invested in the Gemini Earn program with Genesis Capital have had their accounts frozen by the bankruptcy of Genesis. The amount frozen is allegedly around $900 million. However, we also understand that any liability of Gemini relating to that bankruptcy matter is segregated from the type of account that we have with Gemini.

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Nevertheless, as indicated in the

Updated Risk Factors, the Company minimizes its exposure to Gemini by keeping most of its bitcoin assets in cold storage, only transfers them to Gemini when necessary to liquidate them, and then transfers the proceeds out of Gemini the same day that the bitcoin is liquidated.

As a result, the Company may experience a small loss if Gemini filed for bankruptcy in the brief window of time in which it has custody of the Company’s cash or bitcoin, but otherwise the Company does not believe its assets would be at risk in a Gemini bankruptcy.

(Risk Factors 8 and 50) Also, the Company has mitigated the risk of relying on Gemini as its vendor for liquidating bitcoin by seeking to open accounts at other firms, and to that end has already opened an account at Bitgo. (Risk Factors 8 and 50)

We note that the Company is, like all companies, subject to the general risk that certain material counterparties cannot fulfill their obligations. The Updated Risk Factors include an additional risk factor addressing general counterparty risk, and identifies the two counterparty’s that the Company believes present the only material risks at this time (Trinidad Mining and the Pecos Joint Venture). (Risk Factor 34)

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Describe your plan of operations for the next 12 months, providing specific details of your plan, including milestones, the anticipated timeframe for beginning and completing each milestone, anticipated expenses associated with each milestone and the expected sources of funding. Please explain how the company intends to meet each of the milestones if it cannot receive funding.

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Refer to Item 101(a)(2) of Regulation S-K.

The Company cannot provide this level of detail of its future business operations due to the nature of the business it is in, and believes that any attempt to provide that sort of detail would be inherently misleading to investors. The amount of bitcoin generated as revenues is strongly correlated to the amount of computing power deployed by a mining company, which is strongly correlated to the amount of capital available to purchase and install new computing power. Any plan or milestone is meaningless without a source of capital to fund it.

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There is no way that a company in this industry can predict the amount or timing of capital that it will be able to raise, such that any projections based on highly uncertain capital raises would be more likely to mislead, than inform, investors about the Company’s future prospects. As we note in Risk Factor 2, we currently lack the capital to open material additional facilities or materially expand our additional facilities and we have hired investment bankers to assist us in raising capital, but there is no assurance they will be successful.

Furthermore, nothing in Item 101 of Regulation

S-K requires the level of detail requested by the comment. The subsection of Rule 101 cited in the comment only requires that a company provide “an update to the general development of its business, disclosing all of the material developments that have occurred since the most recent registration statement or report that includes a full discussion of the general development of its business.” The

Company provides this sort of update in every Form 10-K and 10-Q that it files.

Item 101(a)(3)(iii)(B)(1) only requires disclosure of the registrant’s “opinion” of the period of time that that the offering proceeds will cover its cash requirements.

While the section provides that a cash budget may be provided to the Commission, it also provides that it need not be included in the registration statement itself. The Company believes that its existing practice of providing an update of major business developments in every Form 10-K and 10-Q that it files, and its opinion of how long it can operate with its current and expected liquidity, along with the sources of its liquidity, is exactly what is required of Item 101 and is consistent with the practice of other registrants.

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Please provide a quantified breakeven analysis that compares the cost to earn/mine the crypto assets with the value of those crypto assets.

In future filings, the Company intends to include in its management’s discussion section a table that shows for the current and prior period data that will enable an investor to analyze the profitability of the Company’s operations, including the cost of mining per bitcoin earned in the period (with costs broken out separately for major categories of expenses included cost of sales), the average revenue of each bitcoin mined, the cost of mining as a percentage of average bitcoin revenue, the total amount of bitcoin mined in the period, the total kwh’s used, the total energy expense and energy

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expense as a percentage of bitcoin mining revenue. The Company has observed some mining firms begin to include such disclosure, which will serve as a model for the Company’s disclosure.

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Please expand your disclosure regarding the joint arrangement entered for a location and power purchase agreement in Pecos, Texas to include the parties and material terms including any termination provisions and file the agreement as an exhibit.

Attached hereto as Exhibit B is the proposed disclosure of the Company’s Pecos joint venture, which we intend to include in the next Form 10-K. Note that there are no provisions that allow either party to terminate the relationship. The Company will file the following agreements as exhibits to the Form 10-K: the Operating Agreement for ROC Digital Mining I, LLC, which serves as the operating entity), the Operating Agreement for

ROC Digital Mining Manager, LLC (which serves as the managing member of ROC Digital Mining I, LLC, and the documents executed in connection with the sale of equipment

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to ROC Digital Mining I, LLC (Transfer, Bill of Sale and Assignment; Promissory Note; and Security Agreement).

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Refer to your statement "[W]e have the right to terminate our agreement with TSTT at any time that the price for electricity consumption exceeds $0.05 per kwh" and advise us of the basis for this termination right. Also, if any Statements of Work have been executed, please file these as exhibits or advise.

The right to terminate if the price of electricity exceeds $0.05 per kwh is contained in a separate Statement of Work, which will be filed as an exhibit to the next Form 10-K. Read in the reply ↗

We note your statement in the penultimate paragraph on page 2 and the second bullet point on page 3 and on page 51 that your mining activities are “in exchange for digital asset rewards (primarily bitcoin).” Please tell us, and disclose in future filings, any other crypto assets received and clarify your use of “primarily.”

To date, all digital asset rewards have been in bitcoin, and the Company has no plans at this time to mine for any other digital assets. Thus, the use of “primarily” was only intended to reserve the Company’s right to mine for other types of digital assets. In future filings, including the next

Form 10-K, the language will be changed to better reflect what has been mined to date and the future intent with regard to other types of digital assets. Read in the reply ↗

We note your disclosure on pages 2 and 58 that you participate in mining pools and have executed contracts "with the mining pool operators to provide computing power to the mining pool." With regards to your hosting service, please clarify whether hosting customers have full control over the pool utilized by the mining machines held by the Company and whether mining rewards are paid directly to customers' wallets by

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the mining pool or if they are paid to the Company and then disbursed to the hosting customer. Please also revise to disclose: • the mechanics of how revenues are split in the pools in which you participate; • the material terms of your mining pool agreements and file these agreements as exhibits; • the percentage of your Bitcoin hashing power contributed to mining pools; • the total hashing power of each pool and the percentage thereof contributed by your miners; • how the pools hold your proportion of mining rewards and the duration thereof; and • whether the pool operators have insurance for theft or loss and the risks associated with transferring crypto assets.

Below are answers to each of the questions in this comment, and how the Company intends to address the issue, if at all, in its disclosures:

· Customers have full control over the pool utilized by their miners, i.e., they can elect to use the pool that the Company uses for its self-mining operations or can specify a different pool.

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We will disclose this aspect of the hosting business in Item 1.

· Customers currently have the option of having mining rewards paid to an account of the Company, an account of the customer, or split by the pool between the Company and the customer (but only for those pools that offer that capability). Where mining rewards are paid all to the Company, the Company historically pays the customer its share daily by cold wallet transfer. Where the mining rewards are paid to the customer, the Company bills the customer monthly for its share, and the amount due is settled monthly. We will disclose this aspect of the hosting business in Item 1. However, as indicated in our response to Comment No. 26, we expect that our model in the future will be to provide that mining rewards are paid to the customer.

· We will disclose the percentage of hashing power of the Company’s self-mining operations allocated to each pool for each accounting period. Other miners disclose this in the notes to the financial statements, and the Company intends to do likewise.

· We do not know the total hashing power of each pool or our percentage of the total hashing power, and it is actually not a relevant fact. Mining pools pay rewards in two different ways: as a percentage of the total reward received by the mining pool each day (the “Actual

Reward Method”); or based on the theoretical reward the pool participant should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the “Expected Reward Method”). We only use mining pools that pay rewards under the Expected Reward Method, which means that we can easily verify that we have received the proper reward since we also know the hashing power we have contributed and the difficulty index, which is publicly available. We will disclose this aspect of our mining/hosting business in Item 1.

· The pools in which we participate pay mining rewards daily. Therefore, on any given day we have very little at risk with any pool.

Also, if a pool ever withheld our reward for any reason, would have the power to remove our machines from the pool instantly. Also, other pools allow one to sign up instantly, and thus switching pools would cause little if any downtime where the miners were not being utilized in mining. Therefore, we do not believe that a default by a pool is a material risk or, if it happened, could cause a material loss. We will disclose this aspect of our mining/hosting business in Item 1.

· We do not know if any pools have insurance against loss, but as noted above, we do not consider theft or loss by a pool to be a material risk given that we never have any material assets at risk in a pool. We believe the existing risk factors already addressed the risks of holding and transferring bitcoin, so no change was made in regard to that question.

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You disclose that you do not have a set policy in regard to how long you hold crypto assets that you receive as payment, other than to "immediately sell digital assets as needed to pay operating expenses or for capital expenditures." Please revise to discuss: (i) the average period between receipt of your crypto assets and the subsequent sale and (ii) any risks to your liquidity caused by volatility in crypto asset

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pricing.

We have historically sold bitcoin within

2-3 weeks of receipt, and intend to revise the statement to clarify that we expect to hold any bitcoin for less than a month. With regard to the issue raised by the latter part of the comment, please see Risk Factor 73. Read in the reply ↗

Please reconcile your disclosures on whether you hold or plan to hold crypto assets for investment. For example, on page 4 you state "[w]e do not plan to hold any digital assets that we receive as a long-term investment" and on page 51 you state "we may hold our digital assets as investments in anticipation of continued adoption of digital assets as a “store of value” and a more efficient medium of exchange than

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traditional fiat currencies."

The proper statement of the Company’s intent is the first statement, and the second statement will be removed or revised to be consistent with the first.

Key Factors Affecting Our Performance Halving, Read in the reply ↗

Please revise to discuss the anticipated impacts of the next Bitcoin halving and what steps you are taking to address or mitigate these impacts, if any. Discuss in greater detail the potential impact of the decrease in the amount of Bitcoin rewards on your revenues and on the economics of your mining operations.

The Updated Risk Factors include a risk factor that addresses the potential impact of the next bitcoin halving on the Company. (Risk Factor 71) Read in the reply ↗

Please revise to quantify electricity costs and the electricity rates paid for mining efforts for each period presented.

As noted in response to Comment No. 4, the MDA section will be expanded in future reports to include detail on the costs that are incurred to mine bitcoin, including electricity costs, which are the primary marginal cost in mining. We believe that this the better and standard place to make such disclosures, rather than in Item 1. Read in the reply ↗

Refer to your updated disclosure on the Trinidad local utility's intent to charge $0.09 per kwh for electricity supplied to your hosting containers, rather than the 3.5 cents per kwh you expected to pay, and your new focus on developing hosting locations in the United States and Canada where you state that rates are 16.2 cents per kwh and 10.7 cents per kwh, respectively.

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Please update here to clarify the rate you expect to pay for electricity in these replacement hosting locations. Also update disclosures in the MD&A and throughout the filing to reflect how this price change will affect your business and operations. In addition, please update disclosures on your Trinidad container and warehouse space leases and on the "permanent facilities" you reference to clarify how your operations and plans are impacted by the utility's intent to charge you $0.09 per kwh, including intentions regarding renewal of the leases and for the "permanent facilities." Mining Equipment, page 11

Subsequent Form 10-Qs have already included an update on the negotiations with the Trinidad utility, as well as updates on the facilities located at the TSTT site and the use of temporary facilities, and the Company expects to continue that practice going forward. However, our past updates did not address the rate that we expect to receive at the TSTT sites after the dispute between TSTT and electric utility was resolved. The resolution will result in our sites receiving power at TSTT’s normal rate of 3.5 cents per kwh.

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Also, since the last report was filed, the local utility has electrified the site, and it is now operational. These facts will be addressed in the next Form 10-K.

The discussion of average rates in the U.S. and

Canada was referring to “household” rates, and is meant to provide a reference point for why Trinidad is an attractive place to locate a bitcoin mining operation. The passage was added in response to a prior SEC comment requesting that the Company substantiate its contention that Trinidad has some of the lowest electricity rates in the world, which the passage does, at least insofar as household electricity rates are concerned. In reality, business users that are willing to sign term agreements and make usage commitments are able to negotiate “wholesale” rates that are significantly below average household/consumer rates in many parts of the U.S. The

Company is not aware of any publicly available data that provides comparisons of “wholesale” rates by country, most likely because those tend to be individually-negotiated, private transactions. The Company will revise this passage to clarify that the rates are household rates, not wholesale, negotiated rates. Later in the same section, the Company makes clear that it does not expect to open new facilities in the U.S. or Canada unless it is able to negotiate terms for “affordable” rates.

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Refer to your disclosure that your principal supplier for miners has been Bitmain and that your mining business is "highly dependent upon digital asset mining equipment suppliers such as Bitmain...." If significant, please quantify your reliance on Bitmain or other digital asset mining equipment suppliers and revise to include a related risk factor on your reliance on digital asset mining equipment suppliers such as

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Bitmain. To the extent you are substantially dependent on any agreements with Bitmain or other suppliers, please describe the material terms of such agreements and file the agreements as exhibits. If you believe you are not substantially dependent on the agreements, please provide us with an analysis supporting your belief. See Item See Item 101(h)(4)(v) of Regulation S-K.

The Company is not dependent on Bitmain for the purchase of any mining equipment. All of the mining purchases made by the Company to date have been made through resellers of

Bitmain manufactured miners, not Bitmain directly, and in fact resellers handle most of the market in miners that are bought and sold by small industry participants. The Company does not have a supply or purchase agreement with any reseller or any manufacturer, such as

Bitmain. There are many companies that resell new or used miners that the Company may use any time. Read in the reply ↗

Please revise your risk factor disclosure to address the following risks, to the extent material: • Discuss any reputational harm you may face in light of the recent disruption in the crypto asset markets. For example, discuss how market conditions have affected how your business is perceived by customers, counterparties, and regulators, and whether there is a material impact on your operations or financial

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condition. • Describe any material risks to your business from the possibility of regulatory developments related to crypto assets and crypto asset markets. Identify material pending crypto legislation or regulation and describe any material effects it may have on your business, financial condition, and results of operations. • Describe any material risks you face related to the assertion of jurisdiction by U.S. and foreign regulators and other government entities over crypto assets and crypto asset markets. • To the extent material, describe any gaps your board or management have identified with respect to risk management processes and policies in light of current crypto asset market conditions as well as any changes they have made to address those gaps. • Describe any material financing, liquidity, or other risks you face related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets you use as collateral or the value of your crypto assets used by others as collateral.

With regard to each of the topic areas referenced in the comment:

· We believe that the Form 10-K already addressed reputational issues in relation to bitcoin but we have nevertheless reviewed the risk factors and made updates to the risk factors to address recent events in the bitcoin industry. (Risk Factors 7 and 50)

· We have reviewed existing risk factors on regulatory risks, and updated such risk factors to address recent regulatory developments.

(See Risk Factors 40-49 generally; Risk Factors 45, 48 and 49 specifically)

· We have reviewed existing risk factors addressing the risks

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of government or regulatory jurisdiction over digital currencies, and updated such risk factors where necessary. (Risk Factors 43 and 44)

· We are not aware of any gaps our board or management have in regard to risk management policies at this time.

· The risk factors have been updated to ensure that they disclose financing and liquidity risks that we face based on disruptions in the markets for crypto assets. (Risk Factors 7 and 50)

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To the extent material, describe any of the following risks due to disruptions in the crypto asset markets: • Risk from depreciation in your stock price. • Risk of loss of customer demand for your products and services. • Financing risk, including equity and debt financing. • Risk of increased losses or impairments in your investments or other assets.

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• Risks of legal proceedings and government investigations, pending or known to be threatened, in the United States or in other jurisdictions against you or your affiliates. • Risks from price declines or price volatility of crypto assets.

We believe that the existing risk factors already disclose these risk factors, at least where we believe they are relevant to the Company. The locations of risk factors addressing these issues are:

· Risk from depreciation in our stock price. (Risk Factors 2, 87, 89, 90)

· Risk of loss of customer demand for your products and services. (many places, but see Risk Factor 19, 32, 37, 54, 55, 56, 61 and 62, among others).

· Financing risk, including equity and debt financing. (Risk Factors 2 and 13)

· Risk of increased losses or impairments in your investments or other assets.

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(Risk Factors 10 and 34)

· Risks of legal proceedings and government investigations, pending or known to be threatened, in the United States or in other jurisdictions against you or your affiliates. (We do not have any pending or threatened legal proceedings, but the risk of such events is addressed in Risk Factor 91)

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Please remove your disclosure on page 32 in future filings that, "Because there has been limited precedent set for the financial accounting for Bitcoin and other digital assets and related revenue recognition and no official guidance has yet been provided by the Financial Accounting Standards Board or the SEC, it is unclear how companies may in the future be required to account for digital asset transactions and

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assets and related revenue recognition." We observe that the FASB codification is the source of authoritative generally accepted accounting principles and that there is codification guidance whose scope applies to your transactions.

The Updated Risk Factors remove this statement.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations, page 52 Read in the reply ↗

Please tell us, and revise future filing disclosures, to quantify and discuss the expenses (e.g. electricity, utilities, facilities costs, depreciation and supplies, purchase price of equipment sold, shipping and value added tax on the equipment) comprising your cost of sales for both hosting and mining and equipment sold.

As discussed in response to Comment No.

4, the MDA section in future reports will include disclosure of material costs that comprise cost of sales for mining and hosting operations.

We anticipate including costs categories only where they are material, which means that many of the cost categories described in the comment will not be shown separately, but instead will be contained within an “other costs” category.

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We also plan to do the same with regard to cost of sales for equipment sold, except in the case of equipment sales which are reported on the installment sale basis, where no cost of sales is shown for the sale under current accounting rules.

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We note your disclosure in the Liquidity section that you believe you will have sufficient liquidity to fund operations for the next 12 months. Please tell us the following: • Given your significant losses in the periods presented and accumulated deficit, please tell us, in detail, how you determined the cash flows referenced in the Liquidity section will be sufficient to satisfy liquidity needs in the next 12

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months, especially given the uncertainties surrounding the cash flows referenced (i.e. repayment on container sales, the price of Bitcoin, electricity costs, performance of joint venture, etc.); • How you analyzed your ability to generate and obtain adequate amounts of cash to meet your requirements in the long-term (i.e., beyond the next 12 months) as required by Item 303(b)(1) of Regulation S-K; and • How your auditor - BF Borgers CPA PC - evaluated the Company's ability to continue as a going concern and the need for explanatory language.

With respect to our liquidity disclosure, we supported our position by preparing a detailed monthly projection of revenues and expenses, which was vetted with and determined to be reasonable by our auditors, BF Borgers CPA PC. This projection took into account contractual receipts from transactions the Company had in hand (and did not include any new projected business), expected self-mining revenue to be generated from mined bitcoin based on equipment already on hand, as well unused availability of $600,000 from our Line of Credit.

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The revenue projections from self-mining were based on the hash capacity of the machines and an estimated annual average bitcoin market price of $17,000 per bitcoin, which was the price at the time of the analysis.

On the expense side, we included public company expenses, general and administrative expenses, future expected capital expenditures, the cost of labor/personnel and facilities as well as including a cushion for unexpected expenses, all based on historical norms and expected increases in the future.

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We note that your financial statements include items for which the underlying carrying value and valuation involves significant estimates. Please address the following for all critical accounting estimates: • Identify your critical accounting estimates or assumptions that have had or you expect could have a significant impact on your financial statements; • Supplements, but does not duplicate, the description of

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accounting policies or other disclosures in the notes to the financial statements; • Identify the key quantitative inputs in your baseline estimates; • Explain the qualitative adjustments made to the baseline estimates; • Discuss why each critical accounting estimate is subject to uncertainty; • Discuss how much each estimate and/or assumption has changed over the relevant period; and • Discuss the sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation. Refer to Release No. 33-8350 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 303(b)(3) of Regulation S-K.

Per Item 303(b)(3) of Regulation S-K, the level of detail requested by the comment about accounting estimates is only required to the extent the information is “material and reasonably available.” Given the Company’s early stage of development, there are relatively few accounting estimates involved in preparing its financial statements (specifically, estimates of the useful life of its equipment and of the fair value of shares of its common stock issued for goods and services), and the Company does not have sufficient operating history to analyze the long-term accuracy of its estimates or to

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justify changing any estimates. The Company is aware of its disclosure obligations in regard to accounting estimates, and will monitor its estimates each period to ensure that the proper disclosure has been made. A review of other companies’ securities reports indicate that the Company’s disclosure on these issues is essentially identical to what other companies do.

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You disclose that the percent of common stock held by the shares beneficially owned is based on 48,706,915 shares of common stock issued and outstanding as of December 1, 2022. We are unable to recalculate the percents disclosed. Additionally, tell us why you have included unexercised warrants for common stock in shares benefically owned. Based on overall materiality, please revise accordingly.

The Company has reviewed its calculations, and believes that the percentages are calculated correctly in accordance with Item 403 of Regulation S-K, which generally provides that beneficial ownership is calculated in accordance with Rule 13d-3. The Company included the shares issuable under unexercised warrants for the person holding those warrants because Rule 13d-3 requires that ownership include any shares owned plus any shares that the holder has the right to acquire within 60 days, and also included those shares in calculating the number of outstanding shares of the Company, but only for

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the purposes of calculating the percentage ownership of that person. See Rule 13d-3(d)(1)(i)(D). Since all of the warrants are exercisable immediately, shares issuable thereunder are to be included in calculating the beneficial ownership of the holder of the warrants, but not for any other beneficial owner. The Company also included in an individual’s ownership any shares for which it had either voting or dispositive control, such as in the case of Jonathan Bates and Erik Nelson in regard to separate entities that they control.

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You disclose in your cash flow statement that you received cash proceeds of $5.2 million from the sale of common shares in a private placement. We also note your disclosure that 2,672,000 Units in the Unit offering (private placement) consisted of an in-kind investment in the form of a sale of new mining equipment to the Company for $3.3 million.

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Please tell why you have reflected the in-kind exchange for new mining equipment for 2,672,000 Units as cash proceeds from the sale of common shares in a private placement and how you have reflected the in-kind exchange in the purchase of fixed assets.

The amount of $2,672,000 should have been treated as a non-cash transaction and subtracted from the purchase of fixed assets and proceeds received from the sale of common shares in a private placement. Instead, this transaction should have been disclosed as a supplemental disclosure of non-cash investing and financing activities. This will be corrected in the Company’s next Form 10-K report. Quantitatively, this has no impact on profit and loss or cash flows, as it is a reclassification only. Read in the reply ↗

Please tell us, and revise future filings, to disclose the following: • Who the customer is and the basis for your determination; • Who has the discretion to set prices and or consideration in the digital asset mining pools in which you participate; • Who directs the use of your computing infrastructure used in the pool and who obtains substantially all the asset’s economic benefits; and • If the Company is a

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principal or agent in the arrangement.

Below are answers to the questions in the comment:

· The Company believes it is the customer when it uses mining pools, because the Company pays a de minimus amount of its rewards to the pool operator for managing the pool.

· The mining pools in which we participate publish their methodology of paying rewards and their rates for managing the pool, which is normally presented on a “take it or leave it” basis. A pool participant can either accept the pool’s terms and contribute its hashing power, or it can take its business to a different pool.

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All pool agreements are terminable without cause at any time, and most pools allow new participants to join a pool immediately.

· We (or our hosting clients for their machines) direct our machines to use a particular pool. The miners that we have purchased are built under the assumption that all mining will be done through mining pools; therefore, they come with pre-installed firmware which provides a screen to input the internet address of the pool that will be used for bitcoin mining. We have the power to disconnect from a mining pool and connect to a new mining pool at any time simply by changing the internet address to which the machine is pointed (and agree to the online terms of service of the mining pool that we are joining).

· A pool participant obtains substantially all of the economic benefits of the pool in the form of rewards. The fees charged by pool operators are a de minimus percentage of the rewards (currently 0.3% of rewards).

· The Company believes that it is the principal in the relationship and the pool operator is the agent, to the extent relevant. However, neither party has the authority to bind the other party to anything, which is the hallmark of a principal-agent relationship, so it is not clear that a principal-agent relationship exists at all.

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We note your disclosure that for digital currency mining, including self-mining, you measure consideration at fair value on the date received, which is not materially different than the fair value at the contract inception or the time you earned the award from the pools.

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Under ASC 606-10-32-21, you are required to measure the estimated fair value of the noncash consideration at contract inception (that is, the date at which the criteria in ASC 606-10-25-1 are met). Your disclosure that you measure the consideration at fair value when the mining pool operator successfully places a block and you receive confirmation does not appear to comply. Please address the following: • Tell us the consideration specified in the digital currency mining contracts; • Tell us how you are able to determine that your policy is not materially different than the fair value at contract inception. Please provide quantitative information supporting this claim; • Explain to us at what point in time contract inception occurs and explain how you made the determination with appropriate reference to ASC 606; and • Tell us the specific nature of your performance obligation under the contract terms, e.g. computing power or the performance of testing nonces, including the consideration for contract term and or duration and or if a series exist. Refer to ASC 606-10-25, paragraphs 14 and 15.

To answer the questions posed by this comment:

· In the mining pool agreements, our consideration consists of the contribution of our computing power to the pool each day and the payment of a fee to the pool operator for its services. The pool operator’s consideration is the payment to us of bitcoin, net of its fee.

· The Company enters into contracts with mining pool operators to provide computing power to the mining pools.

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The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator. The Company only uses mining pools that pay rewards under the Expected Reward Method. Under that method, in exchange for providing computing power the Company is entitled to its expected reward as if the Company were awarded that number of bitcoin and transaction fees that should have been awarded based on the Company’s hashing power contribution to the pool and the difficulty index at the time (as noted in Comment No. 8, the other way that pools pay rewards to pool participants is under the Actual

Reward Method, which pays participants based on the actual rewards received by the pool each day times the pool participant’s percentage share of hashing power of the entire pool for the day). The amount of bitcoin payable to the Company each day is determined a look back basis by the pool operator estimating the amount of the reward that would be due on the computer power contributed by the Company in 144 ten minute increments (there are 1,440 minutes in a day). Applying the criteria per ASC 606-10-25-1, the contract arises at the point that the Company provides computing power to the mining pool operator, which is also contract inception, because the contracts are terminable by either party at any time on an at-will basis and because daily earnings in tandem with daily delivery of the computing power.

· Based on the criteria of ASC 303, the Company has a single performance obligation in providing computing power services (i.e., hashrate) to the mining pool operator (i.e., customer). The performance obligation of computing power 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 hashrate to produce bitcoin. The Company has full control of the mining equipment utilized in the mining pool and if the Company determines it will decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the computing power provided to the pool will be reduced, and its reward that day will be reduced accordingly. Likewise, the Company may, in its discretion, increase the computing power it provides to the pool (i.e., by adding new miners or running existing miners are higher speeds) and its rewards will be increased accordingly.

· The transaction consideration the Company earns is non-cash digital consideration in the form of bitcoin, which the Company measures at fair value on the date earned and is the same at contract inception per Step 1. The current mining pool that we utilize determines the amount due each participant daily from midnight to midnight UTC time, and pays our share of bitcoin every day at 2:16 a.m. eastern time. We value the bitcoin received each calendar day based on the closing price of bitcoin as quoted on Yahoo!Finance on the day of receipt.

Any differences between the closing price of bitcoin and the price at of 12:00 a.m. or 2:16 a.m. are de minimus, and in any event would tend to cancel other out over the course of a month or quarter.

· The transaction consideration the Company earns is all variable since it is dependent on the daily computing power provided by the

Company. The Company’s bitcoins earned through the contractual payout formula is not known until the Company’s computational hashrate contributed over the daily measurement period is fulfilled over-time daily. The Company’s proportionate amount of the global network transaction fee rewards earned are calculated at the end of each transactional day. 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 Company fully constrains all variable consideration as a result of ASC 606-10-32-12a because the amount of consideration is highly susceptible to factors outside of our control as defined by the Company’s customer’s payout methodology. The variable consideration is constrained until the Company can reasonably estimate the amount of mining rewards by the end of a given transactional day based on the actual amount of computing power provided to the mining pool operators. By then, the Company considers it is highly probable that a significant reversal in the amount of revenues will not occur and includes such variable consideration in the transaction price. The

Company’s performance is complete in transferring the hashrate service over-time (midnight to midnight) to the customer and the customer obtains control of that asset.

· 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 each 24 hour, there are no remaining performance obligations

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We note your disclosures on pages 10 and 51, that you are temporarily leasing space for a small number of ASIC computers with a co-host, including warehouse space and a 72-slot fan cooled container. Please address the following: • Tell us and disclose the material terms of the co-host agreement(s), including, but not limited to, the duration, rights and obligations of each party and fee structure; and • Provide us

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with an accounting analysis for the agreement(s), including how the lease is reflected in the financial statements and the impact to your revenue hosting arrangements.

We believe that the Form 10-K already contained disclosure of the terms of the lease. Under “Our Facilities,” we disclosed:

We lease 1,800 square feet of warehouse space in Trinidad that we use to house a 72-slot fan cooled container that we also lease. The warehouse lease is for eleven months beginning on February 1, 2022 and provides for rental payments of $3,818 per month. The container lease is for twelve months beginning February

1, 2022, and provides for rental payments of $2,500 per month.

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We are using this space as a temporary facility for our initial hosting customer until our permanent facilities become operational

The only arguable omission from the discussion is to clarify that the Company reimburses the lessor for the cost of electricity used by its equipment at the lessor’s actual cost, and that fact will be added in subsequent reports to the extent it is necessary to disclose this transaction. We note that the leases of the space and the container have been terminated.

The lease expense is included in cost of sales.

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Please tell us, and enhance your disclosures in future filings, to address the following: • Each parties rights and performance obligations responsibilities under your Hosting arrangements, • How you determined all performance obligations are achieved simultaneously; • How the satisfaction of the performance obligations correlates to the timing of revenue recognition of hosting services billed in U.S.

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dollars and based on a percentage of cryptocurrency generated by the customer. • Who directs the use of the computing infrastructure and how the price is set in the • Why you send your hosting client its portion daily as you receive proceeds when you accept the mining proceeds daily from the mining pool into a cold wallet in your name; • How you analyzed whether your hosting arrangements, in particular those based on the Company’s share of cryptocurrency received from the mining pool, include variable consideration and whether the contracts contain a significant financing component.

We will revise and/or enhance our discussion of our revenue recognition policy in future reports to be consistent with our answers below. To answer the questions posed by this comment:

· As the hosting company, the Company’s obligation is to provide energized and cooled space with sufficient internet connectivity to customers who locate their equipment within the Company’s co-hosting facility.

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The hosting client’s obligation is to provide its computers to the hosting location, and administrative credentials sufficient to access and direct the computers.

· Each party’s obligations are satisfied each day that a customer’s computers are hosted in a satisfactory environment within the uptime requirements specified in the hosting contract, as there is nothing more that is required.

· The Company directs the customer’s computers pursuant to the instructions of the customer. As noted in response to Comment No.

8, all mining is accomplished through mining pools, and customers have the right to direct their computers to a mining pool of their choice or utilize the mining pool utilized by the Company for its self-mining.

· With regard to the contract referenced in the comment, the Company sent the customer its share of mining proceeds daily because that is what the contract with the customer required. However, we note that that process was contained in the Company’s first hosting agreement that terminated in the fall of 2022. Since then, the Company has entered into two new hosting agreements. One provides that the mining rewards are paid directly to the customer by the mining pool, and we believe that that will be the model for all future hosting agreements. The other agreement provides that mining rewards are paid to our account, like the hosting agreement terminated in 2022, but we anticipate converting that agreement over to the model whereby mining rewards are paid directly to the customer.

· Under the hosting agreement in question, hosting revenue was recognized as services are performed on a variable basis. 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. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. We recognize variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s performance). With regard to hosting revenues that are billed in U.S. dollars, revenues are recorded at the time of invoicing after the customer’s usage has been determined. 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.

· We do not believe that there is any financing component in hosting revenues.

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You disclose that you accept mining proceeds directly from the mining pool into a cold wallet addressed in your name. You also disclose that you send hosting clients their portion daily. Please address the following regarding these transactions: • Tell us if the receipts from and payments to hosting clients are with the same parties and or related parties; • Provide us with a comprehensive accounting analysis for

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these transactions, including how the entirety of the transactions are reflected in the financial statements; and • Provide us with your SAB 121 analysis, including your determination of control and whether the Company controls the digital assets.

In March

2022, the SEC staff released Staff Accounting Bulletin No. 121 (SAB 121), which provides interpretive guidance for reporting entities that engage in activities in which they have an obligation to safeguard customers' crypto assets. The guidance is applicable to certain reporting entities that apply US GAAP or IFRS. SAB 121 requires a reporting entity that performs crypto asset custodial activities, whether directly or through an agent acting on its behalf, to record a liability with a corresponding asset.

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It also requires disclosure of the nature and amount of crypto assets the reporting entity is responsible for safeguarding for its customers. SEC registrants are expected to comply with the guidance in the first interim or annual financial statements ending after June 15, 2022 (e.g., Q2 2022 for calendar year-end public companies), and apply it retrospectively to the beginning of the year.

Certain other specified entities are also in the scope of the new interpretive guidance.

With regard to the hosting agreement in question, the receipt of mined bitcoin came to our cold wallet from the mining pool that our hosting customer’s miners participated in. Within a day or two, we transferred the customer’s share of the mined bitcoin to its cold wallet account. Therefore, we had control of the customer’s share of the mined bitcoin from a brief period of time each day. In prior financials, we only reported our share of the bitcoin mined as revenue, and we did not record the client’s share of the mined bitcoin in the income statement, nor did we show a liability to the customer for any bitcoin owed to the customer as the end of the relevant accounting period. We do not believe it is necessary to revise our prior financial statements to give retrospective effect to SAB 121, as the amounts involved are not material.

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Please tell us your basis and consideration for classifying impairment expense on digital assets within operating expenses while the losses on sales of digital assets within other income (expense). Specifically, explain how you considered whether there is consistency in presentation between operating vs. non-operating classification involving activities relating to the same digital assets.

Digital currencies are classified as indefinite lived intangible assets in accordance with ASC 350, Intangibles Goodwill and Others. Under the guidelines of ASC 350 any impairments in intangible assets are charged to operating expenses. Prospectively the Company will change its accounting policy for digital assets to record realized losses as an operating expense. Read in the reply ↗

We note your disclosure that you classified digital assets earned by the Company through its mining activities within operating activities and sales of digital currencies within investing activities on the Consolidated Statements of Cash Flows. Please provide your accounting analysis supporting your conclusions on their classification on the Consolidated Statements of Cash Flows.

The Company will change its accounting policy prospectively to reflect sales of digital currencies within operating activities. Read in the reply ↗

We note your disclosure that the Company has an account at Gemini Trust Company, LLC, which the Company only uses to transfer cryptocurrencies that it desires to liquidate. Please tell us the following, and disclose in future filings as appropriate: • Quantify how much cryptocurrency the Company has transferred and liquidated at Gemini during the historical periods; and • Where this liquidation activity is reflected

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in the Company's Consolidated Statement of Cash Flows.

The Company already includes a table in the financial notes, which appears to be standard in the industry, that reports the balance of bitcoin in dollar terms at the beginning and ending of each period, and changes within the period due to bitcoin mined, sold, or impairment losses taken. The Company has no objection to including in that same note a separate table that shows the amount of bitcoin owned as of the beginning and end of the period, as well as the bitcoin received and sold during the period, which does not appear to be a standard disclosure yet.

As indicated in Comment No.

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29, in past financials, the liquidation of crypto currencies has appeared in investing activities in the statement of cash flows, but will be reflected in operating activities prospectively.

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Please tell us and enhance your disclosures to explain why you have combined hosting and self-mining revenue, net in your presentation of disaggregated revenues. Refer to ASC 606-10-50-5.

The amount of revenue from self-mining was $9,325 which represented approximately 2.2% of revenue and was not material to the financial statements. In future filings hosting and self -mining revenue will be broken separately in the Company’s disclosures. Read in the reply ↗

Please expand your disclosure related to Notes Receivable to provide the following: • The specific GAAP guidance you followed to form your accounting policy for your allowance for doubtful accounts; • Loans charged-off in the periods presented; • Basis for inclusion of the note write-off of $168,750 in cost of sales as disclosed on page 53 and authoritative guidance to support your accounting; and • Your charge-off

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policy under ASC 310-10-35-41.

In future filings, we will provide the requested detail regarding the Company’s accounting policy regarding charge-offs and the amount charged off each period. For your information, our charge-off policy follows the guidelines of ASC 310-10-35-41 in that we evaluate loans receivable for impairment and establish an allowance for doubtful accounts when we determine that collectability of the note in question.

With regard to the question about the $168,750 note write-off, in this case the write-off of $168,750 did not relate to the creditworthiness of the customer, but rather was due to sub-par

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equipment for which we had a warranty obligation that could be set off against the balance due on the note, and therefore expense was charged to cost of goods sold.

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You disclose that in January 2022, you commenced a $10 million Unit Offering of your common stock and warrants at a Unit price of $1.25 per Unit, comprised of one share of common stock, one Class C-1 Warrant and one Class C-2 Warrant, that you account for the issuance of equity in the Unit Offering under the guidelines of ASC 820, Fair Value Measurement since your common stock is considered thinly traded and not

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indicative of fair market value and that using the Black-Scholes method you estimated each Class C-1 Warrant was worth $0.41, each Class C-2 Warrant was worth $0.40, and therefore that the value of the common stock sold in the Unit offering was worth $0.44. We also note that subsequent to your January 2022 Unit Offering, you have utilized $.44 as the common stock per share value in conjunction with all common share issuances, including as reflected in your 10-Q for the period ending February 28, 2023. Please address the following: • Please tell us in detail the GAAP guidance you relied upon and how you concluded that the cash price paid for the shares was not a better indication of the fair value. • Tell us why you have continued to utilize the $.44 as the common stock value considering the overall declining OTC stock price and that $3.3 million of total proceeds of $5.2 million in the Unit Offering was in the form of an in-kind investment for hosting operation transformers; and • Confirm to us that remaining $1.9 million in gross proceeds from the Unit Offering was received in cash and from other than persons or entities listed in Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters on page 68.

Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.

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If the issuer is a newly formed corporation or shares of the issuer are thinly traded, the use of share prices established in the issuer’s most recent private placement memorandum, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a large spread between the bid and asked quotes and lack of consistent trading in the market.

Based on an analysis of the Company’s historical stock activity for the fiscal year ended August 31, 2022 and through the present, the Company’s stock price clearly meets the definition of “thinly traded” stock. Thinly traded stocks are those stock that cannot be easily sold or exchanged for cash without a significant change in price. These stocks are traded in low volumes resulting in significant volatility when a trade occurs. Therefore, unlike mature companies whose stock trades in high volumes on a consistent basis, we do not believe that the stock price is not indicative of fair value. As a result, the Company has used the value as determined from its most recent private placement as the best indicator of fair value.

We hereby confirm that $1.9 million of proceeds from the private placement were received in cash and were entirely from persons who are not listed in the table of beneficial owners contained in Item 12.

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We note that you have classified the Series A Preferred Convertible Preferred Stock as equity. Please tell us how you determined this treatment is appropriate given the guidance in ASC 480 and how your current presentation is appropriate if the holder can redeem, including how this is within the control of the Company.

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In this regard, we note the Officers and Directors hold 63.9% of common stock as a group, and Jonathan Bates, CEO, directly and indirectly holds 72.8% as disclosed on page 69, and thus the Company is considered a "controlled company".

All of the Series A Convertible Preferred

Stock (“Series A”) is held by management/related parties. Contrary to the assumption in the comment, it is not immediately redeemable because the redemption feature is based upon certain events that have not yet occurred. Even if the Series A were “mandatorily redeemable,” the fact that the Series A is convertible into common stock at a price close to its fair value would prevent treatment of the Series A as a liability.

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In particular, per the Price Waterhouse Coopers (PWC) December 31, 2022 accounting guide:

“If a share of mandatorily redeemable preferred stock contains a conversion feature, it would not be classified as a liability due to the inclusion of the conversion feature. However, as illustrated in ASC 480-10-55-12, if the conversion price at inception is extremely high relative to the current share price (so that the likelihood of the stock price ever reaching the conversion price is remote), it would be considered non substantive and therefore, disregarded.”

In this case the conversion price of $0.575 is not relatively high compared to the current share price (internal fair value of $0.44, and current quoted price of $0.75) and is therefore substantive. Therefore, the Company believes its presentation of the Series A as equity is correct.

We do not believe that there are any accounting implications to being a controlled company. We have a risk factor addressing the fact that the company is controlled by management. (Risk

Factor 85) However, being a controlled company would impact the applicability of various corporate governance requirements to a NASDAQ listing, assuming the Company’s stock was listed on that exchange.

Finally, while not relevant to the accounting treatment of the Series A for the reasons stated above, we would like to note that the computation of Mr. Bates’ ownership is stated incorrectly in the comment. Mr. Bates’ beneficial ownership was 41.7% as of December 1, 2022, as stated in the Form 10-K. It is incorrect to add his ownership to that of Innovative Digital Investors Emerging Technology, LP (“IDI”) since, as explained in Note

2, Mr. Bates ownership percentage already includes the shares owned by IDI.

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You disclose that in October 2022 you entered into a Repurchase and Hosting Agreement (the “TCC Agreement”) with The Crypto Company (“TCC”), under which you agreed to repurchase certain miners previously sold in Feburary 2022 for a total of $337,500 to TCC for which TCC paid 50% in cash and recognized a note receivable of $168,750 for the balance.

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Then under the TCC Agreement, you accepted the return of the 70 Antminer TY17s for a credit of $175,000, repurchased the 25 Whatsminers for $62,500, purchased 72 Antminer T-19s from TCC for $144,000 and the credit and purchase prices for the equipment were applied to cancel the note receivable of $168,750 and you paid $212,500 in cash to TCC. Please address the following: • Tell us how the original sale to TCC was recognized in the financial statements, including your consideration of ASC 606-10-25-1(e); • Tell us why you only paid $62,500 for the 25 Whatsminers originally sold in February 2022 for $162,500; and • Tell us how the repurchase, including write off of the notice receivable of $168,750 from TCC was recognized in the financial statements.

The original sale in the Company’s financial statements was recognized as a sale of equipment because all of the criteria under ASC 606 guidelines had been met. The contractual terms were agreed upon, the equipment was delivered and TCC made a substantial 50% downpayment indicative of their ability to pay the remaining note (as required under ASC 606)

The price of $62,500 for the Whatsminers was the negotiated price that TCC agreed to accept. The Company recorded the purchase of the Whatsminers as an equipment purchase for the same amount.

As discussed in response to Comment No.

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32, the write-off amount of $168,750 was charged to “cost of sales equipment” on the Company’s statement of operations because the write-off related to the subpar 70 Antminer TY-17s for $175,000. There was no credit issue that necessitated the write-off.

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We note that during the year-ended August 31, 2022 you issued common shares for which the related value would be amortized over the prospective vesting period, including shares to Chris Moses, Erik Nelson, and Raymond Mow. Please tell us how you recognized the related amortization in the financial statements for the nine months ending May 31, 2023.

The related value of the common shares are being amortized on a straight line basis and are included as an operating expense under the heading “related party compensation” in the Company’s Statements of Operations. The dollar amount of the amortization each period is equal to the number of shares which vested that period times the value of the common stock at the time of vesting. As discussed in Comment No. 33, the value of the common stock is not the quoted price but the value determined pursuant to ASC Section 505-50-30. Read in the reply ↗

Please tell us, and revise future filings, to include the following related to your Investment in Joint Venture of $987,429 at May 31, 2023 and the related disclosure requirements in ASC 323-10-50, including: • When this transaction occurred and the terms of the joint arrangement, including what the Company received in exchange for the contribution; • The structure, purpose and ongoing activities in order to

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understand the joint venture, the Company's involvement, rights, obligations and operations; • The impact on the financial statements. For example, disclose if the contributed assets were de-recognized and how you are accounting for the joint venture and its' activities; and • Provide us with your comprehensive accounting analysis of the arrangement, its terms and the ongoing activities of the joint venture.

The purpose of the joint venture is to construct and operate a bitcoin mining site in Pecos, Texas. The transaction occurred in October 2022. Under the joint venture, we contributed one immersion container, six transformers and cash with a value of $1,056,000 as a capital contribution to ROC Digital Mining I, LLC (the

“ROC Digital”). In return, we received 240 Class B Units of ROC Digital pursuant to an ongoing offering of a total of 1,000 Class B Units at $4,400 per unit.

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We simultaneously sold ROC Digital four immersion containers for $1,200,000, which is payable pursuant to a promissory note the bears interest at 5% per annum, and is payable pursuant to monthly payments of $31,203.64 per month commencing on December 30, 2022, with any remaining principal and interest payable in full on May 31, 2026. The note is secured by the equipment that was sold. We also obtained the right to locate one container at the location that we would be able to use for self-mining.

We also acquired at 33 1/3% interest in ROC (“ROC Manager”), which serves as the managing member of ROC Digital.

The assets contributed to the joint venture were derecognized, in the sense that they were converted into a Class B Units of the joint venture.

The Company accounts for investments in which it owns between 20% and 50% of the common stock or has the ability to exercise significant influence, but not control, over the investee using the equity method of accounting in accordance with ASC 323 - Equity Method Investments and Joint Ventures. Under the equity method, an investor initially records an investment in the stock of an investee at cost and adjusts the carrying amount of the investment to recognize the investor’s share of the earnings or losses of the investee after the date of acquisition.

The Company will account for its investment in

ROC Digital under the equity method in accordance with ASC 323. The Company owns between 20% and 50% of the equity interests ROC

Digital. The Company also has the right to exercise significant influence, but not control, over the ROC Digital through its 33 1/3% interest in ROC Manager. While the Company does not participate in day-to-day management of ROC Manager through an appointed manager, ROC Manager’s right to manage ROC Digital are subject to the limitation that many important actions require unanimous consent of ROC Manager’s equity owners, such as incurring more than $50,000 of indebtedness, approval of operating budget, filing for bankruptcy, making any material change in ROC Digital’s business, merging, consolidating or combining ROC Digital with another entity, selling off a substantial part of ROC Digital’s assets, amending the operating agreement of ROC Digital, or causing ROC Digital to enter into any agreement with a related party. The Company’s equity method investment in ROC Digital will be included in non-current assets in the condensed consolidated balance sheets.

The Company’s investment in ROC Manager will be accounted for under the equity method for the same reasons as its investment in ROC Digital, although we note that its investment ROC

Manager is only $1,500.

Attached hereto as Exhibit B is the proposed disclosure that we intend to include in future reports about the terms and structure of the joint venture.

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Please tell us the following related to your property and equipment: • What specific equipment the equipment not in service relates to (i.e. miners and mining equipment, machinery and equipment, office and computer equipment); • Consider breaking out the equipment category to include the major classes of depreciable assets referenced above in your rollforward.

Rest of the question

See ASC 360-10-50-1; and • Reconcile for us the equipment not in service balance of $3,938,427 with your statement in liquidity on page 29 that, "the Company owns 506 miners, most of which the Company plans to use for self-mining."

In answer to the questions raised in the comment:

For your information, the specific equipment not in service relates to:

· immersion containers, valued at $1,276,379;

· transformers, valued at $1,750,000;

· miners, valued at $348,763; and

· equipment and parts valued at $563,285.

In each case, the valuation is at the cost basis of the equipment.

Under the guidelines of ASC 360-10-50-1, we are required to disclose the balances of major classes of depreciable assets by nature or function.

Rest of the answer

We will agree to expand and breakout our classes of depreciable assets in future filings to be more descriptive. We consider equipment that is not in service to be its own equipment category.

Equipment that is not in service is primarily comprised of immersion containers, miners, network equipment, and transformers. Depreciation is not taken on this equipment until it is installed.

Upon completion of the installation of this equipment, the balances are reclassified to their respective property and equipment categories.

Of the 506 miners referenced in the passage, 209 were in service and 297 were classified as not in service.

In connection with responding to the Staff’s comments, we acknowledge that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note your response to prior comment 37 and your proposed enhanced disclosures in Exhibit B to your correspondence. Please address the following: • Tell us and enhance your disclosures in future filings how the sales of hosting containers in August 2022 and October 2022 for $1.2 million and $.960 million reconcile to sale of fixed assets of $1,558.4 million as presented in the cash flow statement for the nine

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months ended May 31, 2023; • Tell us and enhance your disclosures in future filings how the investment in joint venture $1,056 million (consisting of one immersion container valued at $.3 million, six GE Protec 1500 KVA transformers valued at $.750 million and $6,000 cash as disclosed in the 10-K for period ending August 31, 2022) reconciles to the $.987 million investment in joint venture recognized in the cash flow statement and to the change in fixed assets for the nine months ended May 31, 2023; • Tell us and enhance future filings your share of earnings or losses from your joint venture investment for the periods presented. Refer to ASC 323-10-45-1; and • Confirm to us that cash flow investing and financing activities represent actual cash outflows and inflows of the disclosed activities and do not include any in-kind transactions as noted in your response to prior comment 22.

In answer to the above comments:

·

In the original report, sales of fixed assets for notes receivable should not have been reported in “net cash used in investing activities.” In the 2023 Form 10-K, equipment sales for notes receivable are no longer included in net cash provided (used) in investing activities in fiscal 2023, but as a supplemental item instead.

The components of the investment in the joint venture were comprised of six transformers valued at $750,000, $6,000 in cash and one immersion container which was valued at cost of $231,429, thus the total cost basis of the investment

Rest of the answer

was $987,429. (The joint venture credited this container towards the Company investment at $300,000). Initially the Company incorrectly reported the investment as “net cash used from investing activities”. The $6,000 cash in the investment is considered immaterial. The amount of $987,429 should have been reported supplementally as a non-cash item on the Statements of Cash Flows. This was corrected in the 2023 Form 10-K.

The Company did not report earnings or loss from the joint venture through August 31, 2023 because the joint venture was not in operation yet. However, for the 2023 10-K, the Company obtained a third party valuation that confirmed its fair value. The joint venture commenced operations during the quarter ended November 2023, and in the 2024 Q1 10-Q the Company reported its share of net loss of the joint venture for that period.

As reported in the 2024 Q1 10-Q and the 2023 Form 10-K, the statement of cash flows represents actual cash outflows and inflows each period.

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Please update your future filings to provide disclosure responsive to prior comment 4. Please also clarify in your breakeven analysis whether, and if so how, the cost of purchasing mining equipment factors into your analysis. Additionally, clarify whether you finance the purchase of mining equipment and, if so, reflect financing costs in your analysis.

The 2023 Form 10-K contains the additional disclosure described in our response to prior Comment No. 4. See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Cost of Sales.”

The Company does not incorporate either the cost of purchasing mining equipment or financing costs into the information described above, since the analysis only addresses cost of sales related to mining activities.

Rest of the answer

Depreciation is included in operating expenses and financing costs are included in other income (expense).

During the period covered by the 2023 Form 10-K, the Company did not incur purchase money financing for any equipment. During the period covered by the 2024 Q1 10-Q, the Company incurred purchase money financing for miners purchased during the period.

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Refer to prior comment 3 and to your response. Please update the business disclosures in your future filings to clearly describe your current operations, related agreements and primary sources of revenue and to clearly distinguish these from any discussion of future plans. To the extent known, any disclosures of future plans should include the anticipated steps, timing and financing for these future plans.

The Company believes it has done this in the 2023 Form 10-K and the 2024 Q1 10-Q, as the business discussion in each discusses the legal structure and status of operations at each of its business locations. The Company believes it has also discussed its future plans where such plans can be discussed with sufficient certainty, but is concerned that discussing future plans which are subject to substantial contingencies (mainly financing) could mislead investors. Read in the reply ↗

Please update your future filings to provide disclosure responsive to prior comment 8. In addition please disclose the material terms of your mining pool agreements and file these agreements as exhibits to the extent required by Item 601(b)(10) of Regulation S-K.

In the 2023 Form 10-K, the Company disclosed the materials terms of its only mining pool agreement in the accounting policy sections of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation” and the notes to its financial statements, with the exception that neither discussion includes the fee rate (0.3% of block rewards and transaction fees). The Company included a similar discussion in the notes to the financial statements in its 2024 Q1 10-Q, although that discussion included the fee rate charged by the mining pool, even though it is immaterial.

Rest of the answer

Future reports will conform to the disclosure in the 2024 Q1 10-Q.

The Company objects to filing the mining pool agreement as an exhibit because it is clearly not a material contract. Mining pool agreements are ordinarily executed in the ordinary course of business by companies in the same business as the Company, and do not fall within any of the four exceptions set out in Item 6.01(b)(10)(ii) for when a contract in the ordinary course of business should be filed as an exhibit: (i) it is not a contract to which any director, officer, promoter, voting trustee or security holder named in the 2023 Form 10-K is a party; (ii) it is not a contract on which the Company is materially dependent given the ready availability of other mining pools; (iii) it does not involve the sale of more than 15% of any property, plant or equipment of the Company; and (iv) it is not a material lease.

We also note that we could not find any other companies in the same business that have filed their mining pool agreements as exhibits and have not seen the Commission request the filing of mining pool agreements in comments made to registration statements or reports filed by other companies in the same industry, which we believe reflects widespread recognition that such agreements are not material in nature.

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Refer to comment 11 and to your response that you have included a related risk factor. We restate the comment to revise future filings to discuss in this section the anticipated impacts of the next Bitcoin halving and what steps you are taking to address or mitigate these impacts, if any, and the potential impact of the decrease in the amount of Bitcoin rewards on your revenues and on the economics of your mining

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operations. Please also cross-reference the related risk factor.

The existing disclosure of halving already makes clear that it would result in a reduction by half of the rewards from mining, and the associated risk factor makes clear that the reduction in rewards may result in unprofitable operations that cause the Company or its hosting clients to cease operations, which adequately summarizes the impact of a halving event. However, in the 2024 Q1 10-Q, Part II, Item 1A, we included updated risk factors addressing some additional risks associated with the halving.

Rest of the answer

In particular, we disclosed that the halving may require that the Company subsidize mining activities to the extent the rewards, as reduced by the halving, are less than the marginal cost of mining, may require us to furlough miners in locations where we are allowed to do so, may result in penalties and the forfeiture of mining equipment if we furlough miners in locations where we are not allowed to do so by the terms of the hosting agreement, and may impair the ability of our hosting clients to comply with their obligations to us. The decline in cash flow from a halving event may also result in a default under financing secured by miners, but that is not a particular risk to the Company since it does not expect to have any such financial arrangements when the halving occurs. The Company will also cross-reference the associated risk factor in the business discussion.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources, page 54

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We note your response to prior comment 19. We did not note how you addressed the second bullet point. For that reason, and given the continued losses in the 3and 9months ended May 31, 2023, we reissue that bullet point: • Please tell us how you analyzed your ability to generate and obtain adequate amounts of cash to meet your requirements in the long-term (i.e., beyond the next 12 months) as required by Item

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303(b)(1) of Regulation S-K.

In the 2024 Q1 10-Q, the Company addressed the issue raised by the comment in “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resource.” Read in the reply ↗

We note your response to prior comment 20. We do not understand your statement that critical accounting estimates are not material or reasonably available given that you have been generating revenue from the mining of Bitcoin digital currency and the sale of mining equipment for over 18 months, since the period ended for the three months ended February 28, 2022.

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Further, we do not note any scaled disclosures for smaller reporting companies in Item 10(f)(1) of Regulation S-K. Please update your next 10-K to include critical accounting estimates that address the following: • Identify your critical accounting estimates or assumptions that have had or you expect could have a significant impact on your financial statements; • Supplements, but does not duplicate, the description of accounting policies or other disclosures in the notes to the financial statements; • Identify the key quantitative inputs in your baseline estimates; • Explain the qualitative adjustments made to the baseline estimates; • Discuss why each critical accounting estimate is subject to uncertainty; • Discuss how much each estimate and/or assumption has changed over the relevant period; and • Discuss the sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation. Refer to Release No. 33-8350 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 303(b)(3) of Regulation S-K.

The Company reiterates its position that the level of detail requested by the comment is not material or reasonably available. Even though the Company has been in business for roughly 18 months, its only material estimates capable of being evaluated in this fashion are the useful life of equipment.

However, the Company has not been in business long enough to evaluate whether its useful life estimates are correct or not, as the estimated useful life of all equipment exceeds the time the equipment has been placed in service.

Rest of the answer

Other estimates that the Company makes are, by their nature, estimates that must be made on a continuous basis at the time of each transaction or the end of each accounting period, such as the fair value of common stock issued for services or the collectability of notes receivable. Also, the Company cannot find any other companies within its industry, or outside of it, that provides this level of analysis of each of its accounting estimates requested by this comment.

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We note your response to prior comment 21. Please enhance your disclosure in future filings in footnote 1 to clarify, if true, that the percent of common stock beneficially owned, is based on outstanding shares as of the disclosed date, including any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual or entity has the right to

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acquire within 60 days after the disclosed date through the exercise of any stock option, warrant or other right, or the conversion of any security which are deemed to be outstanding and beneficially owned, both for that individual and in total shares outstanding.

Item 12 in the 2023 Form 10-K contains disclosure of the methodology of calculating beneficial ownership is required by the underlying rule. Read in the reply ↗

We note your response to prior comment 24. Please confirm our understanding, and include the specific disclosures in future filings: • Tell us the name of the mining pool(s) in which you participate; • You describe your payment mechanism as the "Expected Reward Method." Tell us your payment mechanism, e.g., Full Pay Per Share (FPPS), Pay Per Share (PPS), Pay Per Last N Shares (PPLNS), Pay Per Share+ (PPS+) and or

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Proportional (Prop) and disclose in future filings; • Revise your disclosure to indicated how each component of your contract consideration and or payment mechanism is calculated. In this regard, we note block rewards, transaction fees, and mining pool operator fees; • We note that your contracts are terminable, "at any time by either party." Please confirm if your contracts are terminable, "at any time by either party and without penalty" and include this specific disclosure in future filings, if true; • We note that your performance obligation is to, "provide computing power to the mining pool." Tell us your consideration for disclosing your performance obligation as, "the service of performing hash computations for the mining pool operator," or something similar to more precisely and closely align with the promise in your contracts, and include this specific disclosure in future filings, if true; • Tell us your consideration of whether each mining pool arrangement is a contract that is continuously renewed, and if so,o Your consideration as to whether the duration of your contracts is less than 24 hours; o Whether the rate of payment remains the same upon renewal; and o Whether your customer's option to renew represents a material right that represents a separate performance obligation as contemplated by ASC 606-10- 55-42. • You disclose that you value noncash consideration at the closing price of Bitcoin on the day of receipt. Given that the Bitcoin exchange trades 24/7, please tell us the specific point in time that you fair value Bitcoin each day (e.g., 23:59:59 or 0:00:00). If 0:00:00, please specify if that is the start of the day of the contract (i.e. 0:00:00 to 23:59:59) or the start of the next day. • You state in your response that the current mining pool that you utilize determines the amount due to each participant daily from midnight to midnight UTC time and pays your share of bitcoin every day at 2:16 a.m. eastern time, that you value the bitcoin received each calendar day based on the closing price of bitcoin on the day of receipt, that any differences between the closing price of bitcoin and the price at of 12:00 a.m. or 2:16 a.m. is de minimus and in any event would tend to cancel other out over the course of a month or quarter. If you receive your share of bitcoin at 2:16 a.m. eastern time and value at the closing price of bitcoin on the day of receipt, tell us how the closing price on the day after you provide the service of performing hash computations for the mining pool operator complies with ASC 606-10-32-21 (that is, the date at which the criteria in paragraph 606-10-25-1 are met) and or clarify your response. • If your payment mechanism is FPPS, disclose if true, that you recognize non-cash consideration on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as the contract inception.

In answer to the above comments:

The name of the pool operator is Luxor Technology Corporation.

The payment mechanism is Full Pay Per Share, and that fact is disclosed in the 2023 Form 10-K.

We believe the note on “Revenues from digital currency mining – General” in the 2023 Form 10-K includes a sufficient discussion of how each component of contract consideration and payment are calculated.

We can confirm that the mining pool agreement is terminable at will by either party at any time without penalty, and that fact is disclosed in the 2023 Form 10-K.

The mining pool agreement itself

Rest of the answer

does not specifically state the Company’s performance obligation. However, the following passage explains the consideration the Company has to provide in order to receive compensation from the pool:

Based on these criteria, the Company has a single performance obligation in providing computing power (i.e., hashrate) to the mining pool operator (i.e., customer). The performance obligation of computing power 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.

As stated in the 2023 Form 10-K, we believe the mining pool agreement is a daily agreement that renews daily as long as neither party elects to terminate it. We do not believe the duration is less than 24 hours as that is the cycle upon which the Company’s performance consideration is evaluated and payment is calculated. The formula for payment does not change on renewal, but the actual amount of payment depends on the consideration provided to the pool during each daily contract. The Grant Thornton Revenue guide analysis of ASC 606-10-55-42 supports the Company’s treatment:

If, in a contract, an entity grants a customer the option to acquire additional goods or services, that option gives rise to a performance obligation in the contract only if the option provides a material right to the customer that it would not receive without entering into that contract (for example, a discount that is incremental to the range of discounts typically given for those goods or services to that class of customer in that geographical area or market). If the option provides a material right to the customer, the customer in effect pays the entity in advance for future goods or services, and the entity recognizes revenue when those future goods or services are transferred or when the option expires.

As disclosed in the 2023 Form 10-K, the mining pool operator calculates the bitcoin due pool participants on a 24 hour cycle that runs from midnight to midnight UTC time. The Company values bitcoin it receives from the mining pool each day at the spot price of bitcoin as of midnight UTC time at the end of the day that it is earned, not the day of actual receipt. We believe the 2023 Form 10-K adequately discloses this methodology, and is consistent with the guidelines of ASC 606-10-55-42. Any difference in the amount of revenue that would be recognized if calculated at the price of bitcoin at the beginning of the day instead of the end of the day is immaterial. See also, the response of Bit Digital Inc. to a similar comment from the Commission, Letter to the Commission dated April 4, 2023, Comment No. 9, for a calculation of the difference. To the extent any previous description stated otherwise, it has been corrected in the 2023 Form 10-K.

The day of recognition is not the same as the day of receipt. There is currently a five hour time difference between UTC and U.S. eastern standard time, which means that the revenue is recognized as of 7 PM EST each day (midnight UTC time), whereas the bitcoin is not received until 7-8 hours later, i.e., 2-3 AM EST the next calendar day.

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In your response to comment 24 you state that mining revenues are comprised of both a block reward and transaction fees, that both components of the revenue are variable since dependent on the daily computing power provided by you, that the block reward earned is not known until the computational hashrate contributed by you over the daily measurement period is fulfilled over time daily, your proportionate amount of

Rest of the question

transaction fees are calculated at the end of each transactional day and as such that in accordance with ASC 606-10-32-12a, because the amount of consideration is highly susceptible to factors outside your control, you fully constrain all (variable) consideration until the end of the day when it is highly probable that a significant reversal will not occur. With regard to the measurement of your block reward, please address the following: • Tell us the inputs that determine your block reward; • Tell us if any inputs that determine your block reward other than your hash rate are not fixed at the time you begin providing computational power and the factors that would cause an input to change; and • Tell us how your threshold of highly probable is consistent with the guidance in ASC 606-10-32-11.

The Company only has one mining pool agreement with Luxor Technology Corporation. Under the agreement, both the block reward and transaction fees are calculated over 144 blocks.

Each block is about 10 minutes of time, and therefore 144 blocks generally equals a full day. The transaction fees for each block are based on the average transaction fees for the prior 144 blocks on a rolling basis. The block reward is based on the amount of hash rate contributed during the block.

Rest of the answer

The amount of hash rate contributed varies throughout the day, and for each full day, due to a variety of factors, such as

· miners may be placed online mid-day, or taken offline mid-day due to maintenance or other factors;

· many of our locations (Pecos, Texas; Murray, Kentucky) provide for the cessation of mining during peak usage periods during the day;

· even Luxor only guarantees 98% uptime on a monthly basis, and awards are calculated only on the Luxor uptime during the day, provided monthly uptime is 98% or greater.

None of these inputs are fixed in time at any point during the day.

ASC 606-10-32-11 states that an entity should include in the transaction price some or all of an amount of variable consideration, but only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating the consideration each day is subject to a risk of material misestimation due to the factors described above, and thus it is more appropriate to record revenue based on the end of day price when all of the variable inputs are known and the reward has been calculated. See also, the response of Bit Digital Inc. to a similar comment from the Commission, Letter to the Commission dated April 4, 2023, Comment No. 9.

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We note your response to prior comment 27. Please provide your SAB 99 materiality analysis supporting your assertion that the retrospective application of your accounting for safeguarding of crypto asset obligations is not material.

As set forth in SEC Staff Accounting Bulletin: No. 99 (“SAB 99”), assessments of materiality by financial management require both quantitative and qualitative analysis. Based on the guidance of SAB 99, the Company does not believe that the retrospective application of its accounting for safeguarding crypto asset obligations was either quantitatively or qualitatively material.

a. Quantitative

Materiality

In the course of the Company’s review of FASB ASC Topic 820, management evaluated whether there was a material difference by conducting a quantitative assessment.

Rest of the answer

Because the Company’s practice was to disburse the hosting client its share of net revenues on a daily basis, it only owed the hosting client a small amount at the end of each day. The actual amount due to the hosting client at May 31, 2022 was 0.014 bitcoin, with a value of $447 based on the price of bitcoin on that date, and $0 at all other periods. The amount was around 0.02% of current liabilities and 0.014% of total assets as of that date. Based on the results of the assessment, management concluded that the error was quantitatively immaterial.

b. Qualitative

Management has also concluded that the error was qualitatively immaterial. As described in SAB 99, the Staff of the Commission clarified that materiality assets require a full analysis of all relevant considerations in addition to a quantitative analysis. Based on the guidance of SAB 99, the Company considered the following qualitative factors, both individually and in the aggregate, in the light of the totality of the circumstances and full context of the facts:

· Whether the misstatement arose from an item capable of precise measurement or from an estimate, and, if so, the degree of imprecision inherent in such estimate;

· Whether the misstatement masks a change in earnings or other trends;

· Whether the misstatement hides a failure to meet analysts’ consensus expectations for the enterprise;

· Whether the misstatement changes a loss into income or vice versa;

· Whether the misstatement concerns a segment or other portion of the registrant’s business that has been identified as playing a significant role in the registrant’s operations or profitability;

· Whether the misstatement affects the registrant’s compliance with regulatory requirements;

· Whether the misstatement affects the registrant’s compliance with loan covenants or other contractual requirements;

· Whether the misstatement has the effect of increasing the management’s compensation—for example, by satisfying the requirements for the award of bonuses or other forms of incentive compensation;

· Whether the misstatement involves concealment of an unlawful transaction; and

· Other relevant factors, such as possible market reaction.

In light of these factors, the

Company determined that the failure to adopt retrospective application of SAB 121 did not:

· Mask a change in earnings or other trends;

· Hide any failures to meet analyst consensus expectations;

· Change a loss into income or vice versa;

· Significantly affect a segment or portion of the Company’s business;

· Affect compliance with regulatory requirements;

· Affect compliance with loan covenants or other contractual requirements;

· Affect the compensation of Company, including triggering the payment of bonuses or other compensation;

nor

· Involve concealment of unlawful transactions.

Considering all of the foregoing, the Company concluded that retrospective application of SAB 121 would not be deemed important or significant by a reasonable person. As such, the management determined that the retrospective application was also qualitatively immaterial.

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We note your response to prior comment 29. Please tell us the following regarding your assertion that activities related to digital assets earned through your mining activities and sales of these digital assets should be included within operating activities on the statement of cash flows: • Cryptocurrencies are included within non-current assets on the balance sheet.

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Tell us how it is appropriate to classify crypto assets as non-current under ASC 210 but the related cash flows as operating; • Tell us the historical timeline (i.e. the number of hours, days, weeks, or months) for converting crypto assets into cash in the periods presented; and • Considering your disclosures, including in your risk factors, that you are dependent on the sale of bitcoin you generate from your self-mining operations to pay any of your expenses that are payable in U.S. dollars, your intention, including if you have a policy, of when you will convert bitcoin receive into U.S. dollars

When the Company commenced operations in early 2022, the accounting for cryptocurrencies was uncertain. The Company reviewed how other companies classified cryptocurrencies and found a divergence of approaches. The Company initially elected to classify them as current assets. However, on August 25, 2022, the

Company received a comment letter to a registration statement on Form S-1 that questioned the Company’s decision to classify cryptocurrencies as a current asset. See Comment 37 therein.

Rest of the answer

In response, the Company reclassified cryptocurrencies as an intangible asset in subsequent reports, relying on an AICPA white paper issued in 2020 which suggested they should be classified as intangible assets. Subsequently, on March 23, 2023, the FASB proposed new accounting guidance on the treatment of cryptocurrencies. The release became effective December

13, 2023, and only applies to fiscal years beginning after December 15, 2024. The release did not address balance sheet classification of cryptocurrencies, and instead made reference to Topic 210 for the answer to that issue. The current PWC guide analysis of the application of ASC Topic 210 to cryptocurrencies provides as follows:

In accordance with ASC 210-10-45, Balance

Sheet–Overall, we believe in-scope crypto assets may be presented as noncurrent assets because they meet the definition of intangible assets. Nevertheless, a reporting entity could classify crypto assets as current assets when the investment time horizon at acquisition is less than one year. Reporting entities should evaluate their specific facts and circumstances.

As indicated in response to Comment No.

9 of the prior comment letter, and as disclosed in the risk factors, the Company historically has disposed of bitcoin within 2-3 weeks of receipt, either by a sale for cash or conveyed to pay hosting or mining expenses when permitted under the underlying agreement. Accordingly, the Company has revised its presentation of cryptocurrencies to include them in current assets in the 2024 Q1 10-Q.

The Company believes its existing disclosure regarding sales of bitcoin adequately discloses its policy in that regard. That policy is as follows:

“We do not have a set policy in regard to how long we hold digital assets that we receive as payment, although our practice has been to immediately sell digital assets as needed to pay operating expenses or for capital expenditures. We do not plan to hold any digital assets that we receive as a long-term investment.”

See “Item 1. Business – Revenue Sources” of 2023 Form 10-K.

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We note your response to prior comment 30 and your assertion that cash flows related to the sale of cryptocurrencies has been included in investing activities in the statements of cash flows. • We note you had $59,828 of proceeds from the sale of cryptocurrency in the six months ended February 28, 2023 and May 31, 2023; • Further, we note that the net activity in cryptocurrencies of $14,627 in the six months ended

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February 28, 2023 and $39,792 in the nine months ended May 31, 2023 - which includes the sale on cryptocurrencies - is reflected in cash flows from operating activities; • Please confirm our understanding that sales of cryptocurrencies is already reflected in cash flows from operating activities in the periods presented, or advise otherwise.

The Company confirms that proceeds from the sale of cryptocurrencies are reflected in changes to the balance of cryptocurrencies in cash flows from operating activities. Read in the reply ↗

We note your response to prior comments 32 and 35. Please tell us, and enhance future filings as necessary, to address the following: • The specific details of the warranty obligation on the sales of mining equipment on February 23, 2022; • How you accounted for the warranty obligation upon sale, including the authoritative guidance you use to support your accounting; • Cite the authoritative guidance used to

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support your accounting for the inclusion of the note receivable write-off of $168,750 in cost of sales; and • Tell us how you recognized for the repurchase of the 70 Antminer TY-17s and 25 Whatsminers, including the accounts and amounts.

The warranty obligation the

Company makes varies based on the transaction. In the transaction that is the basis for the comment, the Company provided two warranties:

(i) a right to reject a miner, and obtain a full credit against the purchase price, if the miner is nonoperative within 30 days of the date of the sale, (ii) a right to obtain a credit equal to 50% of the purchase price of the miner if it is nonoperative between 30 days and six months after the sale, subject to the Company’s right to repair or replace the miners instead.

Rest of the answer

The miners that were the subject of the later mining credit were damaged in shipment to the hosting location. However, that fact was not known until the fourth quarter of 2022, at which time the hosting customer no longer had a right to obtain a 100% refund for the warranty claim, but at best a 50% warranty credit subject to the Company’s right to repair or replace the defective miners.

The Company ultimately reached an agreement which recited that it was granting the hosting client a 100% credit for the machines, even though it had no obligation to do so. The agreement must be viewed as part of a larger agreement to sever its relationship with the hosting client entirely, and included the repurchase of other machines for substantially less than the hosting client had paid for them, and other payments and releases, and not just a simple warranty claim. In recording the transaction, the Company was faced with several possibilities. The Company chose to debit cost of sales for $168,750 under the guidelines of ASC 705 because it matches the revenue generated from the sale with the direct cost of sale. However, the Company believes it is important to note that none of the options would have changed operating income or net income for period as reported.

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We note your response to prior comment 33. Please tell us in your response, and revise future filings as applicable, to address the following: • ASC 505 has been superseded by ASC 718. Please address your accounting using this guidance; • We note from ASC 718-10-30 that, "a share-based payment transaction shall be measured based on the fair value." Exceptions appear to be related to nonpublic entities (ASC

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718-10-30) and situations where fair value is not reasonably estimable (ASC 718-20-35), which do not appear applicable in your case; and • Based on the above, please re-evaluate your response and accounting under ASC 718 in the periods presented.

ASC 718 does not materially change the method for determining the value for share-based payment transaction from ASC 505 for the transaction at issue in this comment. Under the guidelines of ASC 718, when measuring share-based payments, the objective under ASC 718-10-30-6 is to estimate the fair value at the measurement date of the instrument that the entity is obligated to issue when the grantee has provided the required service and any other conditions necessary to earn the instrument have been satisfied.

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The fair value of the award is calculated based on the share price, as well as other relevant factors, such as expected volatility. Since the Company’s common stock is very thinly traded, it did not believe that its publicly quoted share price was indicative of the fair value of the common stock. Instead, the Company estimated the fair value of the common stock based on the value indicated from a private placement of Units that was completed in June 2022. Each Unit consisted of one share of common stock, one Class C-1 Warrant and one Class C-2 Warrant. The Unit were sold for $1.25 each. The Company determined the value of the warrants using the Black-Scholes method and deducted their value from the offering price to determine the value of the common stock. Since the private placement raised a significant amount of new capital from third party investors, we determined that the offering was clearly indicative of the fair value of the Company’s common stock.

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We note your response to prior comment 34. Please tell us in your response, and revise future filings as appropriate, to address your presentation of preferred stock within stockholders' equity. Refer to Rule 5-02-27(d) and 28 of Regulation S-X.

We believe that the current reporting of the Series A Preferred Stock in a separate line within stockholders’ equity is correct. The Series A Preferred Stock is not redeemable preferred stock as defined in Rule 5-02-27 since it is (i) not redeemable at a fixed or determinable price or a determinable date or dates,

(ii) is not redeemable at the option of the holder, and (iii) has conditions for redemption which are solely within the control of the

Company (i.e., the amount of Liquid Net Assets held by the Company at any time and whether the Company, default under any representation, warranty

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or covenant for the benefit of the Series A Preferred, or whether the Company enters into a Fundamental Transaction). However, the Series A Preferred is redeemable at any time at the option of the Company, and is considered non-redeemable preferred stock governed by Rule 5-02-28. Unlike Rule 5-02-27, Rule 5-02-28 does not bar the Company from reporting non-redeemable preferred stock under the “stockholders’ equity” heading. We believe the financial statements and the notes thereto contain all of the information required by Rule 5-02-28 for the Series A Preferred Stock.

In connection with responding to the Staff’s comments, we acknowledge that:

the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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Refer to prior comment 4, to comment 8 in our letter dated August 28, 2023, and to your responses to these comments and disclosures in this filing. We do not see disclosure regarding the total hashing power of the pool in which your miners participate and the percentage thereof contributed by your miners, how that pool holds your proportion of mining rewards and the duration thereof, whether the pool operator has

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insurance for theft or loss and risk factor disclosure related to transferring crypto assets. Also, in your January 12, 2024 response you advised that you disclosed the material terms of your mining pool agreement in your Management’s Discussion and Analysis of Financial Condition and Results of Operation and the notes to your financial statements, yet your most recent form 10-K doesn't appear to disclose material terms of the mining agreement. Furthermore, your October 6, 2023 response letter advises that you will revise future filings to disclose the percentage of hashing power of your self-mining operations allocated to each pool for each accounting period in the notes to the financial statements, and we see no such disclosure. Please direct us to the above disclosures or please provide draft disclosures and confirm these disclosures will be included in future filings.

As we believe was explained in response to the comments, the Company did not disclose the total hashing power of the pool and the percentage contribution by its miners because it is not relevant to the amount of rewards paid to the Company, and therefore is not shared by the pool operator. The Company disclosed that the mining pool operator calculates revenues in 24 hour increments, and pays each day’s revenue within 24 hours after the end of each day. See “Item 7.

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Management’s Discussion and Analysis of Financial Condition and Results of Operation –

Critical Accounting Policies – Revenues from digital currency mining – General - Step 3.” The Company also disclosed that it used only one mining pool during the year ended August 31, 2023. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation – Critical Accounting Policies – Revenues from digital currency mining –

General.” As explained in the initial response to this comment, we do not know if the pool operator has insurance against loss but we do not consider the risk to be material because the pool operator normally holds only one day of mining rewards and the Company has the ability to terminate its contributions to the pool at any time. Also, there is a risk factor disclosing that none of the bitcoin owned by the Company is insured, which would necessarily include bitcoin held on our behalf by the pool operator.

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You state that you "plan to operate [y]our data centers using immersion cooling technology." In future filings please revise this statement to also clarify the extent to which your operations currently use immersion cooling technology.

Beginning with the Current Form 10-Q, the Company will include a count of the miners that are immersion cooled miners versus air-cooled miners in future filings. Read in the reply ↗

Please clarify in the business section of future filings your intentions to mine digital assets other than bitcoin. Refer to comment 7 in our August 28, 2023 letter and to your response on October 6, 2023 that in future filings, including this Form 10-K, you would revise to "better reflect what has been mined to date and the future intent with regard to other types of digital assets." Please advise where in the

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document you clarify your intent regarding mining digital assets other than bitcoin or provide draft language you intend to include in future filings. We note your statements that that mining activities to date have been limited to Bitcoin and other disclosures in your risk factors on pages 22, 28 and 44 referencing "other cryptocurrencies we mine" or "any other digital assets we mine."

We do not believe the references to “other digital assets [cryptocurrencies] we mine” in a few risk factors means that the Company mines any assets other than bitcoin presently.

The Company has made clear in three other places that it has only mined bitcoin to date, but reserves its right to mine other digital currencies. The language cited from the risk factors merely covers the possibility that the Company owns or mines other digital assets, without representing that it actually does. Nevertheless, Item 1A.

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Risk Factor in the Current Form 10-Q includes amended versions of the three risk factors to clarify that the reference to other digital assets or cryptocurrencies does not mean that the Company actually owns or mines them.

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We note your response to prior comment 2. In future filings please include a more comprehensive breakeven analysis for your bitcoin mining operations that compares the cost to earn/mine one bitcoin with the market value of one bitcoin. Your analysis should identify and explain all relevant inputs used in your calculation, regardless of whether various inputs are discussed elsewhere in separate parts of your filing.

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As part of your analysis please include the cost of acquiring mining equipment and any related financing costs.

Most miners that include a breakeven analysis do not include the depreciation of mining equipment, but at least one does, and therefore the Company will include depreciation associated with its miners in the breakeven analysis, beginning with the Current Form 10-Q. As far as we can determine, no other miners include financing costs of miners in their breakeven analysis.

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The Company does not believe there is any practical way to separate financing costs of miners given the nature, terms and use of proceeds from the debt and equity financings in which the Company has engaged to date, and we believe that others have reached the same conclusion.

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In future filings please revise your statement in the second paragraph that "our rate for electricity will be TSTT’s existing rate of 3.5 cents per kwh" to state, if true and as stated in the paragraph above, that "[y]our hosting containers will be billed for electricity usage at the local utility’s standard rates, which is the greater of 3.5 cents per kwh or 75% of the declared reserve capacity, which is equal to

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the customer’s highest expected monthly kilovolt-ampere demand at $7.40." Please also revise the similar statement on page 12.

In future filings, we will include the entire formula which governs the electricity rates that we are charged in our Trinidad operations. Read in the reply ↗

You state that "[w]hile [y]our TSTT site was delayed pending electrification, [you] entered into a hosting agreement with a third party in Trinidad to host up to 192 miners in one immersion container until August 31, 2024." In future filings please disclose the electrical rates you have been paying at this location.

In future filings, we will disclose the electricity rate for the 192 miners hosted by a third party in Trinidad. Read in the reply ↗

We note your disclosure on page 46 that you "generally liquidate [y]our bitcoin within 2-3 weeks of receipt in order to pay operational expenses. Therefore, [you] do not expect to incur material losses on bitcoin that [you] hold due to the short holding period.

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However, the volatility of bitcoin prices makes it more likely that [you] experience losses from holding bitcoin, which could have a material, adverse impact on [y]our liquidity and [y]our business." In future filings please revise this risk factor to address the fact that, as stated on page 5, you do not have a set policy in regard to how long you hold digital assets that you receive as payment. Address how the lack of such policy could exacerbate the volatility risk from holding bitcoin.

The revised risk factor is included in

Part II, Item 1A, Risk Factors of the Current Form 10-Q. Read in the reply ↗

We reissue comment 10 in our letter dated August 28, 2023. In future filings please reconcile your disclosures regarding whether you hold or plan to hold crypto assets for investment. For example, on page 6 you state that you "do not plan to hold any digital assets that [you] receive as a long-term investment," however on page 2 you state that you "may hold [y]our digital assets as investments in anticipation of

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continued adoption of digital assets as a 'store of value' and a more efficient medium of exchange than traditional fiat currencies." Likewise on page 56 you state that you "reserve the right to hold [y]our digital assets as a long-term investment." We note that in your October 6, 2023 response letter you advised that the "proper statement of the Company’s intent is the first statement, and the second statement will be removed or revised to be consistent with the first."

The proper statement of intent is that the Company does not currently hold digital assets for long-term investment, but reserves the right to do so in the future. The Company believes that saying it “may” hold bitcoin as a long-term investment is not inconsistent with that general statement of its intent. In future filings, we will endeavor to make that intent clear in all places where the issue is discussed, and indicate when the

Company holding period has changed, if that ever occurs. Read in the reply ↗

Refer to prior comment 5, your response and your disclosures. We note that you have not included the requested cross-reference in either your most recent Form 10-K or 10-Q filings. Please confirm that you will revise the halving disclosure in your Business section of future filings to provide a cross-reference to your risk factor on the risks of halving.

We will endeavor to include a cross-reference to the cited risk factor in future filings.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies, page 62 Read in the reply ↗

We note your response to comment 7 and that you recognized an impairment of fixed assets of $122,950 for the year ending August 31, 2023. Please enhance future filings to reflect your response and include a subheading for property and equipment.

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We note that within your critical accounting estimates discussion you separately discuss revenue recognition, cash and cash equivalents, cryptocurrency, stock-based compensation, related party transactions, net loss per share and income taxes but not property and equipment. Please also revise the header of your discussion from Critical Accounting Policies to Critical Accounting Estimates. Refer to Release No. 33-8350 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 303(b)(3) of Regulation S-K.

In future filings we will revise the header from “Critical Accounting Policies” to “Critical Accounting Estimates,” and in the annual reports we will include a subheading for property and equipment. In the quarterly reports, we simply cross-reference the applicable disclosure in the notes to the financial statements and expect to continue that process going forward.

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Regarding disclosure of the $122,950 impairment loss, we intend to include enhanced narrative disclosure of material transactions relating to property and equipment in the financial statement note concerning same, beginning with the Current Form 10-Q.

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We note your response to prior comment 8. We note that the percent of common stock column in the table on page 78 does not compute based on the shares beneficially owned and the 49,665,649 shares of common stock issued and outstanding at December 1, 2023.

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• For example, you disclose 23,595,583 shares beneficially owned by Jonathan Bates, which represents 47.5% of common stock based on 49,665,649 shares of common stock issued and outstanding at December 1, 2023, not 41.0% as disclosed in the percentage of common stock column; and • For example, you disclose 16,786,887 shares beneficially owned by Innovative Digital Investors Emerging Technology, LP, which represents 33.8% of common stock based on 49,665,649 shares of common stock issued and outstanding at December 1, 2023, not 30.5% as disclosed in the percentage of common stock column. We note these computational discrepancies for all beneficial share owners. Please revise future filings to address these concerns. Show us what your proposed disclosure will look like in your response, or advise otherwise.

We believe that the percentages are correct.

The percentages were calculated in accordance with Item 403 of Regulation S-K, which generally provides that beneficial ownership is calculated in accordance with Rule 13d-3. Rule 13d-3 requires that beneficial ownership include any shares owned plus any shares that the holder has the right to acquire within 60 days.

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Rule 13d-3 also addresses how to calculate the numerator in situations where a person’s ownership includes shares that are not yet issued, as follows: “Any securities not outstanding which are subject to such options, warrants, rights or conversion privileges shall be deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person but shall not be deemed to be outstanding for the purpose of computing the percentage of the class by any other person.” Rule 13d-3(d)(1)(i)(D)

Therefore, Mr. Bates’ beneficial ownership includes 15,700,000 shares owned directly by affiliates that he controls, plus 2,608,696 shares of common stock issuable upon conversion of Series A Preferred Stock he owns, plus 5,286,887 shares of common stock issuable under Series A Preferred Stock owned by Innovative

Digital Investors Emerging Technology, LP (“IDI”), which he controls, for a total of 7,895,583 contingent shares, and an overall total of 23,595,583 shares. Under Rule 13d-3, his beneficial ownership is thus calculated as 23,595,583 / 57,561,234 (derived from 49,665,651 + 7,895,583) = 41%.

Similarly, IDI’s ownership includes 11,500,000 shares which it owns directly, plus 5,286,887 shares of common stock issuable under Series A Preferred Stock which it owns, for an overall total of 16,786,887 shares. Under Rule 13d-3, its beneficial ownership is thus calculated as 16,786,887 / 54,952,538 (derived from 49,665,651

+ 5,286,887) = 30.5%.

The only other persons named in the table whose ownership includes unissued contingent shares are Erik Nelson and Rykor Energy Solutions, LLC, and their beneficial ownership percentage is calculated in the same manner.

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We note your response to comment 1 and that the basis of the one immersion container with a carrying value of $231,429 contributed by you in the joint venture was stepped up to $300,000, and is included in the total cost basis of $987,429 of your joint venture investment. Please tell us how you accounted for the increase in step-up of $69,000 and the accounting guidance to support your accounting.

We believe that our answer to a previous comment about this transaction may have been misinterpreted. The Company used its basis in the assets contributed of $231,429 in recording the amount of its investment in the joint venture, but the Company did not increase the value of the asset on its books and record a gain. The Company merely noted that the transaction documents for the joint venture assigned a value of $300,000 to the container that was contributed, but no accounting effect to mark up its investment to that value was given to that language. Read in the reply ↗

Please address the following: • Tell us how cryptocurrency proceeds from the sale of equipment of $56,730 is reflected in supplemental non-cash activities; and • Tell us how cryptocurrency used to pay expenses and to purchase equipment of $213,918 is reflected in supplemental non-cash activities.

As indicated in our responses to the last comment letter, all transactions relating to cryptocurrencies are reflected in changes to the balance of cryptocurrencies in cash flows from operating activities, which would be the case with regard to the two items mentioned in the common. See Response to Comment 13. Thus, for the year ended August 31, 2023, change in cryptocurrencies in the cash flow statement was ($108,035).

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As disclosed in Note 2 to the financial statements, cryptocurrencies had a value of $21,434 at the beginning of the year and a value of

$129,469 at the end of the year, for a difference of $108,035. Both items mentioned in the comment are included in the reconciliation of changes in cryptocurrencies contained in Note 2.

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We note your response to comments 9 and 10. Please address the following: • You assert that the mining pool agreement renews daily as long as neither party elects to terminate it, and you do not believe the duration is less than 24 hours.

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The guidance in ASC 606-10-25-3 indicates that the duration of the contract is the period in which the parties have present enforceable rights and obligations considering termination and renewal rights. Tell us your consideration of the interpretation in the FASB Revenue Recognition Implementation Q&A question 8 and whether a contract that can be terminated at any time without penalty would result in a contract that is continuously renewed throughout the day and therefore results in many contracts with durations less than 24 hours. If true, revise future filings to specifically disclose that, "the contract duration is less than 24 hours and is continuously renewed throughout the day," or advise; • You assert that your mining pool contracts are terminable at any time by either party without penalty and the formula for payment does not change upon renewal. Your response implies that your customer does not have a material right. Confirm our understanding and, if so, enhance your disclosures in future filings to support that you have a single performance obligation. Refer to ASC 606-10-55-42; • Revise future filings to remove reference to your performance obligation as being the provision of “computing power” and instead describe the performance obligation as the provision of “hash calculation services” or something similar. In this regard, we note your response to the fifth bullet of prior comment 9 but continue to believe that the provision of “computing power” is too imprecise to describe your performance obligation to provide a service to the mine pool operator to run its software on your equipment to, in part, construct header candidates and perform hash calculations; • Enhance future filings to indicate, if true, that providing hash calculation services for the pool operator is an output of your ordinary activities, that you determine when to provide services, and that your enforceable right to compensation begins when, and continues for as long as, services are provided; and • You state in your response and your disclosures that you measure Bitcoin consideration earned at the end of the day spot price which is not materially different than at contract inception. Please remove these statements and indicate that you measure Bitcoin consideration earned on the date of contract inception.

The answers to each sub-question of this comment are:

· While the mining pool contract may be terminated at any time during a day, that would not change the fact that the mining pool operator would still only calculate the Company’s share of rewards over the course of the entire day. Its rewards would not be determined at termination, but at midnight UTC on the date of termination, and paid in its normal course several hours later by a transfer to the Company’s wallet account based on the computing power contributed by the Company over the entire 24 hour day, even though the Company may have

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disconnected its machines from the mining pool mid-day when it elected to terminate the agreement. Furthermore, treating the contract as being a series of one second agreements throughout the day, with separate pricing for each one second contract based on the price of bitcoin for that split second, would introduce substantial administrative costs to calculate revenues with only a de minimus change in the actual revenues reported.

· We are not totally sure what the comment is asking, but we believe the mining pool operator has the same right to terminate the agreement at any time that the Company has.

· The Company will change references to computing power to hash calculation services in future filings, beginning with the Current 10-Q.

· The Company included the verbiage suggest in the fourth bullet point in the Current 10-Q and will do so in future filings.

· The

Company cannot change the statement since it is factually incorrect. To date, revenues have been based on the price of bitcoin at midnight UTC at the end of each day. However, beginning as of March 1, 2024, the Company will change its method of recognizing revenue to measure the bitcoin it generates based on the opening price of bitcoin on the date earned. As with other miners, the Company maintains that the change will not have a material impact on the amount of revenue recorded, and therefore it is not necessary to effect the change retrospectively or restate prior financial statements to reflect the change. For example, had the Company made the change effective as of September 1, 2023, the change would have only resulted in a decrease of $5,348 in mining revenue offset by an increase in realized gain on the sale of bitcoin, for no net change in net income (loss) for the six month period. The Company believes that this reclassification entry, which has no impact on net loss or the balance sheet, is immaterial, and will adopt the change in estimate prospectively commencing on March

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We note your response to comment 10 and your disclosure your payment mechanism is FPPS and you fully constrain all variable consideration until you receive confirmation of the amount, usually via settlement of the fractional share of block reward and transaction fee in your digital wallet because the amount of consideration is highly susceptible to factors outside of your control as defined by your customer’s payout

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methodology. The inputs of the standard block reward formula for a FPPS payment mechanism are pool participant hash rate, network difficulty which adjusts every two weeks and block subsidiary which halves about every four years. Since the only formula input that can change at contract inception is your hash rate, which you decide, please revise your disclosure in future filings to clarify, if true, that only transaction fees are constrained until the end of each transactional day or midnight UTC time.

We believe the comment reflects a misreading of our prior responses to comments on this issue. As disclosed in our comment response, the amount of hashing power contributed each day is not known at the beginning of the day, because it is impacted by mid-day events. In particular, our response to Comment No.

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10 in the last comment letter explained the reasons why the hashing power contribution is not known at the beginning of each day as follows:

· miners may be placed online mid-day, or taken offline mid-day due to maintenance or other factors;

· many of our locations (Pecos, Texas; Murray, Kentucky) provide for the cessation of mining during peak usage periods during the day;

· even Luxor only guarantees 98% uptime on a monthly basis, and awards are calculated only on the Luxor uptime during the day, provided monthly uptime is 98% or greater.

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You disclose that Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives and are not amortized but assessed for impairment quarterly, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired.

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Please address the following: • Confirm our understanding and revise your disclosure in future filings to clearly indicate that you assess cryptocurrency impairment based on the lowest intraday price each day. Refer to ASC 350-30-35-18B; and • Confirm that cryptocurrency impairment of $3,523 was determined based on the lowest intraday price each day for your crypto holdings over the course and during the year ended August 31, 2023.

The impairment, which is immaterial, was not calculated using the lowest intraday price. It was calculated using the closing price of bitcoin at the end of the accounting period. The accounting rule cited in the comment does not provide the methodology for valuing intangibles or even use the term “intraday.”

In addition, the Company cannot find any other accounting authority which would indicate that intangibles (including bitcoin) should be valued at their lowest intraday price, including accounting guidance published by such firms as KPMG and Deloitte.

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If we have inadvertently failed to locate the applicable authority, please provide us with a citation so that we may review it., and to the extent the suggested method is required, the Company will have no objection to adopting it.

Read in the reply ↗

We note your response to comment 14. Please address the following: • We note that purchases and disposition of property and equipment is recurring and significant to the operation of your business. We are unable to reconcile the change in year-over-year balances to the activity disclosed.

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Provide us and enhance future filings to disclose purchases and dispositions separately in the table of property and equipment as disclosed for the periods presented. To the extent such activity does not directly tie to related activity in your statement of cash flows, including supplemental non-cash activity, include footnotes to explain any differences. Refer to ASC 21010-S99 and Regulation S-X Rule 5-02.13(a); • As previously requested, tell us how you accounted for the October 19, 2022 TCC repurchase of the 70 Antminer TY-17s and 25 Whatsminers, including the accounts and amounts and how the $212,500 cash payment by you is reflected in the statement of cash flows; and • You state in your response that you chose to debit cost of sales for $168,750 based on the terms of your warranty obligation but we note that cost of sales from mining equipment for the year ended August 31, 2023 is only $87,080.

As noted in response to Comment No. 10, we are including enhanced narrative disclosure of material transactions relating to property and equipment in the financial statement note concerning same, beginning with the Current Form 10-Q, which is the method used by other companies to explain and reconcile changes in property and equipment.

The answer to each sub-question of this comment is as follows:

· The following is a breakdown of the changes in fixed assets and fixed assets not in service during the year ended August 31, 2023:

Fixed Assets in Service

August 31, 2022

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balance

21,875.00

Transfers from fixed assets not in service

1,515,978.40

Impairment charge

(44,500.00 )

Purchase of fixed assets

56,000.00

Sale of fixed assets

(42,500.00 )

Depreciation

(470,704.60 )

August 31, 2023 balance

1,036,149.00

Fixed Assets not in Service

6,509,601.92

Transfers to fixed assets in service

(1,515,978.40 )

Fixed assets acquired from TCC

212,750.00

Other fixed assets acquired

757,381.51

(84,450.00 )

Fixed assets contributed to ROC JV

(981,428.57 )

Fixed assets sold to ROC JV

(984,857.14 )

3,913,019.32

· The Company accounted for the purchase of 70 Antminer TY-17s and 25 Whatsminers in October 2022 as a purchase of property and equipment. In the Form 10-Q for the quarter ended November 30, 2022, the cash flow statement includes a line for “sale of fixed assets” of $1,558,443, which is actually sales of fixed assets net of purchases, including the $212,750 spent to purchase the miners referenced in the comment. The cash flow statement for the six months ended February 28, 2023 in the Current

Form 10-Q has been substantially changed from what was originally filed. A number of large non-cash transactions are now reported in the “Supplemental disclosure . . .” section, and “Purchase of fixed assets” of $469,843 includes $212,750 for the purchase of miners from TCC.

· The $168,750 warranty expense was recorded in the quarter ended August 31, 2022. See Note 5 to the audited financial statements included with the Form 10-K for the year ended August 31, 2022. The Company elected to record this amount in fiscal

2022 because the warranty liability was apparent prior to August 31, 2022.

Read in the reply ↗

You disclose that on February 1, 2023, you modified the agreement for the sale of two hosting containers for $960,000 under which you agreed that the remaining principal balance of the note was $731,472, and that you agreed to allow the note obligor to repay the note principal at a 10% discount. You also disclose that you received all payments due on this note during the period.

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Please address the following: • How you accounted for the note reduction and all the payments received due during the year ended August 31, 2023, including how reflected in your statements of cash flows and or supplemental non-cash activity; and • Tell us why your reclassified the note receivable from ROC from Notes receivable to Notes receivable-related party.

The answer to each sub-question of this comment is as follows:

· The Company did not record any entry in connection with the note reduction to $731,472, since that amount represented the principal balance after all payments were applied, and not a partial forgiveness of the principal amount, as the comment seems to imply. According to the guidelines of ASC 606-10-25-1, a company should not recognize revenue until it is probable that the payment for that revenue will be collected.

Rest of the answer

This means that a company must consider the creditworthiness of its customers and any other factors that may affect their ability to pay before recognizing revenue from a particular contract. Due to the start-up nature of the customer purchasing the two hosting containers under the guidelines of ASC 606 the Company could not determine that the contractual payment was “probable”. As such the Company recognized a portion of each payment received as revenue calculated by taking the amount of each payment reduced a prorated portion of deferred revenue recorded on the initial sale.

· The Company did not record any impact of the 10% discount because the understanding of the parties was that the 10% would apply only if the customer was able to repay the principal by the end of February 2023, which it was not able to do.

· The note receivable from ROC is part of the Company’s investment in the joint venture with ROC; therefore, ROC is a related party and the note receivable from the ROC is therefore a related party receivable.

Read in the reply ↗

We note that you have removed the disclosure of the terms of your Preferred Stock. Please include in future filings, the terms of your preferred stock, including pertinent information that informed your determination to classify preferred stock within stockholder's equity, including that redemption solely within your control. Refer to ASC 505-10-50-4 and Refer to Rule 5-02-27(d) and 28 of Regulation S-X.

In future filings, beginning with the

Current 10-Q, we will include the prior discussion of the terms of the Series A Preferred Stock in the financial statement note concerning stockholders’ equity.

Form 10-Q For the Period Ended November 30, Read in the reply ↗

Please tell us how cryptocurrency used to pay expenses and to purchase equipment of $67,580 on page 16 is reflected in your cash flow and or supplemental disclosure of noncash activity.

See our response to Comment No. 13 herein.

As previously indicated, all transactions relating to cryptocurrencies are reflected in changes to the balance of cryptocurrencies in cash flows from operating activities, which is the case with regard to the item mentioned in the comment. Read in the reply ↗

We note your response to prior comment 12 and your classification of digital assets as current assets in the Form 10-Q for the quarterly period ended November 30, 2023. Please revise your disclosure in future filings to specifically disclose that you classify your digital assets as current assets because you, "reasonably expect to sell or exchange these assets within one year," which is consistent with your response.

The Company will make this change in future filings, beginning with the Current 10-Q to reflect that it expects to exchange these assets within one quarter. Read in the reply ↗

Please tell us and enhance future filings to disclose, for cryptocurrencies accounted for as intangibles, the fair value disclosures required by ASC 820-10-50.

The fair value disclosures are not necessary because cryptocurrencies are not valued under the fair value method of ASC 820 until the Company adopts ASU 2023-08, which it has yet to do. The Company’s disclosure of its accounting for cryptocurrencies is consistent with that of other miners prior to their adoption of ASU 2023-08. Read in the reply ↗

Please tell us what in-transit adjustment of $5,165 as reflected in your rollforward on page 16 represents and the related accounting.

The adjustment, which is immaterial, should have simply been labeled as an “adjustment” instead of an “in-transit adjustment”.

This adjustment was recorded as a miscellaneous expense reduction.

Note 7 - Bitcoin Loan and Derivative Liability, Read in the reply ↗

We note your disclosure of the Luxor Bitcoin Financing ("LBF") in October 2023. Please tell us the following related to the LBF: • How you calculated the $37,537 extinguishment of debt and the specific authoritative literature you relied upon under GAAP to determine this amount; • How you calculated the $50,429 in financing costs and the specific authoritative literature you relied upon under GAAP to determine this

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amount; and • Include a rollforward of the bitcoin loan balance due from the $527,505.19 at 10/4/23 to the $394,922 at 11/30/23, and any future interim periods, as appropriate.

The calculations for the $37,537 loss on extinguishment of debt, $50,429 in financing costs and the rollforward of the bitcoin loan is presented in Exhibit A, attached hereto. The authoritative literature used to calculate the loss of $37,537 and the recording of $50,429 in financing costs amount are as follows:

· Loss on the Extinguishment of Debt - ASC 470-50-15-4: Per 40-1, as indicated in paragraph 470-50-15-4 the general guidance for the extinguishment of liabilities is contain in subtopic 405-20 and defines transactions that the debtor shall recognize as an extinguishment of a

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liability. Per 40-2, a difference between the reacquisition price of debt and the net carrying amount of debt shall be recognized currently in income of the period of extinguishment as loss or gain and identified as a separate item. Gains and losses shall not be amortized to future periods. In this case, the LBF is only repayable in bitcoin, not cash. The $37,537 loss on extinguishment of debt was due to the difference between the expected value of the payments made in the first quarter and the actual value of the payments, which was higher due to the fact that the market price of bitcoin rose during the quarter. Below are the calculations:

Loan Activity in BTC

Opening balance BTC due

20.78946

Repaid in 2024 Q1

(6.583329 )

Amount due 11/30/2023

14.206131

Repaid in 2024 Q2

(10.8327102 )

Amount due 2/29/2024

3.3734208

Calculation of Loss on Loan Payments

Value of BTC paid in 2024 Q1

220,550

Expected value of BTC paid in 2024 Q1

183,013

Loss on extinguishment of debt

(37,537 )

Value of BTC paid in 2024 Q2

484,813

Expected value of BTC paid in 2024 Q2

301,143

(183,670 )

· ASC 310-20 provides guidance on the recognition and measurement of non-refundable fees and origination costs associated with all types of lending. Origination costs associated with loans received are expensed as period costs. The Company considers the obligation to repay

20.79 bitcoin to Luxor when it borrowed only 18.9754 bitcoin times the then current price of bitcoin of $27,799.39 to be an origination cost that it immediately expensed.

· Below is the requested roll-forward of the bitcoin loan balance through February 29, 2024:

Loan Activity in USD

Opening balance

577,934

Q1 payments (expected value at inception)

Q1 ending balance

394,921

Q2 payments (expected value at inception)

Q2 ending balance

93,779

The difference between the value of bitcoin payable at the end of the quarter and the expected value at contract inception is reflected on the balance sheet as a “derivative liability” and in the income statement as “change in derivative liability.” As indicated in the notes to the financial statements, the value of the remaining bitcoin payable under the LBF at the end of each quarter is determined under the Black-Scholes method. The assumptions used for the Black-Scholes computations are included in the financial note.

In connection with responding to the Staff’s comments, we acknowledge that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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On May 3, 2024, the Commission entered into an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC and its sole audit partner Benjamin F. Borgers CPA (individually and together BF Borgers).

Rest of the question

Please refer to the order on the SEC’s website at https://www.sec.gov/files/litigation/admin/2024/3311283.pdf and the related staff statement at https://www.sec.gov/corpfin/announcement/staffstatement-borgers-05032024. Because BF Borgers has been denied the privilege of appearing or practicing before the Commission, issuers that have engaged BF Borgers to audit or review financial information to be included in any Exchange Act filings to be made on or after the date of the Order need to engage a new qualified, independent, PCAOB-registered accountant. Part I

The Company is aware of its obligations in regard to the Order, and has complied with regard to any Exchange Act reports filed since the Order was issued. Read in the reply ↗

We note your response to prior comment 4 wherein you state that there is no practical way to determine the financing costs for your miners. In your response to us please explain in greater detail why you believe you cannot determine the financing costs for your miners. It appears that such costs could have a material impact on your breakeven analysis.

To date, the Company has only financed the purchase of its hosting and mining equipment from a combination of debt financings and equity offerings where the capital raised is available for use for general corporate purposes, including both equipment purchases and general and administrative expenses. Therefore, there is no practical way to determine how much of the purchase price of any item of equipment is attributable to a particular debt or equity offering.

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Furthermore, to the extent part of an equipment purchase is traceable to an equity offering, there is no possible way to determine the cost of capital of that financing. Thus, any estimate of the financing costs for any period would be subject to such a high degree of guesswork and speculation that it risks being misleading to investors. Finally, as mentioned in our prior response to this same comment, no other industry participants include financing costs in their breakeven analysis, and we believe it is for the same reasons.

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We note your breakeven analysis provided in response to prior comment 4. By a footnote or parenthetical, please disclose what is included in "Other direct costs of mining per bitcoin mined" under Owned Facilities in future filings.

The Current Form 10-Q includes an additional footnote that adds the requested information. Read in the reply ↗

We note your response to prior comment 14. In response 9 in your letter dated January 12, 2024, as well as your accounting policy disclosure, you state that the mining pool contract can be terminated by either party at any time without penalty.

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Per question 7 to the FASB Revenue Recognition Implementation Q&As, such an arrangement would result in a contract that does not extend beyond the services already provided (i.e. a single hash calculation). As such, it appears mining pool services are transferred many times a day, the contract is renewed continuously, and contract duration is for a less than a 24hour period (regardless of when/how payment is processed). Please revise your accounting and disclosure throughout your policy footnote to be consistent with ASC 606 and the related FASB Q&A in future filings. In that regard, we note that ASC topic 60610-32-21 states “an entity shall measure the estimated fair value of the noncash consideration at contract inception (that is, the date at which the criteria in paragraph 60610-25-1 are met).

The Company believes that treating a contract as a minute-by-minute (or even a second-by-second) contract is not required by the cited accounting literature and would impose unprecedented accounting and administrative costs on companies to achieve only a slight change in revenues that would be immaterial to investors.

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While a parenthetical in the Q&A cited in the Comment raises the possibility of a minute-by-minute contract, we note that the examples that follow the passage do not treat the subject contracts as minute-by-minute contracts when they could have, and no other examples in the

Q&A treat a contract as a minute by minute contact when the example involves a contract terminable at will by one or both parties.

Contractual relationships that are terminable at will be one or both parties are common. Adoption of such a rule would require that all companies that follow GAAP implement accounting systems to record the minute of material contract events, such as the execution or termination of a contract, in order to properly allocate revenues and/or costs between accounting periods before and after the event, which is something that we do not believe any company currently does. If that level of record keeping is required, it represents a significant change to normal legal and accounting practices, and therefore should have been more broadly and openly mentioned in the accounting releases than in a minor parenthetical without any examples demonstrating the practice, or any clarification as to when accounting to the minute is required, as opposed to conventional accounting on a daily basis. Further, if the Company is held to this standard, then all companies should be held to this standard for all contracts that are terminable at will by one or both parties.

In addition, the Company could not practically implement this standard on a minute-by-minute basis because it does not have a reliable way to know how much bitcoin it earns each minute. The amount of hash calculations that produce bitcoin is not an even amount over the day for the reasons described in response to Comment No. 5, as the amount varies during the day due to peak usage outages at different geographic areas where miners are hosted, maintenance outages by either the Company or the hosting firm and permitted outages by the hosting firms or pool operator. The counterparty does not report how many hash calculations the Company provides each minute of each day. Further, the Company’s own internal estimates of hash calculations are not reliable because they do not take into account the downtime that the pool operator is permitted on a daily basis. Finally, the formula for determining the Company’s share of bitcoin earned is a daily calculation, and the counterparty is not equipped to calculate the Company’s compensation on a minute-by-minute basis.

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We note your response to prior comment 15. In your response you identify instances of when miners may be taken off-line during the day. It appears that the decision to curtail mining in response to these events is within the company’s influence.

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Therefore, since the only formula input that can change at contract inception with respect to block rewards is the rate at which you provide hash calculations, which you decide, please revise your disclosure in future filings to remove disclosure related to the constraint of block rewards. Cryptocurrencies, page F-11 We note your response to prior comment 16. Per ASC Topic 350-30-35-18 an intangible asset that is not subject to amortization shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. It appears that the sale of an identical asset, at any period during a day, for a price less than the Company’s current carrying value, would be an indicator that it is more likely than not that the asset is impaired. As such, it remains unclear why you would not conduct an impairment test at that time. We further note that per ASC Topic 350-30-35-20 subsequent reversal of a previously recognized impairment loss is prohibited. Please provide a SAB 99 analysis to address materiality in the periods presented from your current impairment policy to one in which you assess cryptocurrency impairment based on lowest intraday price. 6. 7. We note your revised digital currency mining revenue policy disclosure on page 11 of your 10-Q for the three months ending February 28, 2024. In your revised disclosure you state that you are entitled to compensation equal to the expected reward. However, your disclosure also implies you receive a share of the rewards paid to the pool operator for successful efforts. Please revise your disclosure in future filings to reconcile the two statements and clearly state that as a participant in an FPPS mining pool your compensation is not contingent on the pool operator successfully placing a block.

The Company disputes that conclusion.

While the Company may have control over scheduled maintenance, all of the other items are outside the Company’s control. The Company has no control over when a particular miner breaks down mid-day. It also has no control over the time periods in which mining activity is temporarily shut down during periods of peak usage. Peak usage is partly driven by local weather events that impact usage of air condition and heating, for example, and the Company has no control over the weather.

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Finally, where the Company’s miners are hosted by third parties, the Company has no control over scheduled maintenance by the hosting firm. Even the pool operator only guarantees 98% uptime of the pool, and the Company has no control over downtime by the pool operator. In short, there is no way that the Company can predict the amount of hash calculation services at the beginning of any given calendar day due to the foregoing factors.

Read in the reply ↗

We note your response to prior comment 2. Please file draft disclosure of your breakeven analysis as correspondence on EDGAR, that you plan to include in your next periodic report, that includes an estimate of the financing costs of your miners.

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Please add any explanatory disclosure you deem necessary, in addition to disclosing an estimate of your financing costs, to discuss any assumptions and limitations relevant to the financing cost estimate that you disclose. In that draft disclosure please address the following matters regarding your breakeven analysis: Please explain why your footnote states that "Other direct costs of mining - non • 2. energy utilities per bitcoin mined" includes electricity if this line is for "non energy" utilities. • Please clarify where depreciation of your mining equipment is reflected under both "Cost of Mining - owned facilities" and "Cost of Mining - hosted facilities." • By footnote or other means, under "Statistics - hosted facilities" please disclose what is included in "Other direct costs of mining - non energy utilities."

Attached hereto as Exhibit A is an excerpt from “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” which contains an analysis of the Company’s revenues and cost of service for its proprietary mining operations. As discussed with the Staff, the analysis includes financing costs for miners that were acquired with purchase money financing, but not an estimated cost of capital to the extent miners were acquired from general working capital. Read in the reply ↗

We note that you provide audited financial statements as of August 31, 2020 and July 15, 2020 and for the period from July 16, 2020 (inception) through August 31, 2020. We further note from your disclosure in Note 1 to your consolidated financial statements that Sandy Springs Holdings, Inc.

Rest of the question

was formed as part of a reorganization that occurred as a result of a merger with RESS Merger Corporation and RESS of Delaware, which are all related companies controlled by Erik Nelson, CEO and President. Please explain to us in detail how you accounted for the reorganization and tell us how you considered the guidance in ASC 250-10 and ASC 805-50 as it relates to your financial statement presentation.

have reviewed the guidance of ASC 250-10-45-21 and ASC 805-50 and do not believe that there has been any change in reporting entity, or business combination. It is our position that Sandy Springs Holdings, Inc. (“SSHI”) is a validly formed new corporation with no predecessors. Our accounting reflects the formation of SSHI on July 15, 2020, with a short period year ending August 31, 2020.

2030

Powers Ferry RD SE Suite # 212 Atlanta GA 30339 (404)-816-8240 Fax (404)-816-8830

Per the Ernest and Young Financial reporting developments guide “Accounting changes and error corrections” dated

May

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2020:

Common examples of an accounting change that is a change in reporting entity are mainly limited to the following:

1. Presenting consolidated or combined financial statements in place of financial statements of individual entities

Read in the reply ↗

We note your response to comment 1. Please tell us how you considered the guidance in ASC 805-50-45 when presenting your financial statements given the entities described in Note 1, that were part of the reorganization, were all controlled by Eric Nelson, CEO and President.

Not ordinarily. If the Company was required to file periodic reports under the Exchange Act within one year prior to the spin-off, the staff believes the Company should reflect the disposition in conformity with FASB ASC Topic 360. This presentation most fairly and completely depicts for investors the effects of the previous and current organization of the Company.

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However, in limited circumstances involving the initial registration of a company under the Exchange Act or Securities Act, the staff has not objected to financial statements that retroactively reflect the reorganization of the business as a change in the reporting entity if the spin-off transaction occurs prior to effectiveness of the registration statement. This presentation may be acceptable in an initial registration if the Company and the subsidiary are in dissimilar businesses, have been managed and financed historically as if they were autonomous, have no more than incidental common facilities and costs, will be operated and financed autonomously after the spin-off, and will not have material financial commitments, guarantees, or contingent liabilities to each other after the spin-off. This exception to the prohibition against retroactive omission of the subsidiary is intended for companies that have not distributed widely financial statements that include the spun-off subsidiary. Also, dissimilarity contemplates substantially greater differences in the nature of the businesses than those that would ordinarily distinguish reportable segments as defined by FASB ASC paragraph 280-10-50-10 (Segment Reporting Topic).

We believe that the elimination of prior discontinued operations (due to divestiture of the subsidiary RESS of Delaware, Inc.) is appropriate in that

SAB 5.Z.7 is analogous to the situation, and ASC 805-45-2 instructs to report results of operations for the period in which the transfer occurred as though the transfer or exchange had occurred at the beginning of the period.

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We hope this correspondence meets with your satisfaction.

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We note from your response that "there were no assets or business during the prior three years of the divested subsidiary RESS of Delaware, Inc. into which RESS Merger Co. had merged." Please clarify for us if Renewable Energy Solution Systems, Inc. ("RESS"), RESS Merger Corporation ("RESSMC") or RESS of Delaware, which were part of the reorganization, had any assets, liabilities or operations prior to the merger.

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We further note that Sandy Springs Holdings, Inc. ("Sandy Springs") has a promissory note of $50,447 due to Coral Investment Partners as of August 31, 2020. Please tell us if the promissory note was transferred to Sandy Springs or if any other assets or liabilities were transferred between entities through the merger.

We note from your response that “there were no assets or business during the prior three years of the divested subsidiary RESS of Delaware, Inc. into which RESS Merger Co. had merged.” Please clarify for us if

Renewable Energy Solution Systems, Inc. (“RESS”), RESS Merger Corporation (“RESSMC”) or RESS of Delaware, which were part of the reorganization, had any assets, liabilities or operations prior to the merger. We further note that Sandy

Springs Holdings, Inc. (“Sandy Springs”) has a promissory note of $50,447 due to Coral Investment Partners as of August

31, 2020.

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Please tell us if the promissory note was transferred to Sandy Springs or if any other assets or liabilities were transferred between entities through the merger.

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ANSWER: Renewable

Energy Solution Systems, Inc. which merged into RESS Merger Co. (“RESSMC”) to redomicile, and RESS of Delaware, Inc.

had no operations, nor assets in at least 2-3 years preceding the redomicile and the reorganization into a holding company, Sandy

Springs Holdings, Inc. The liabilities, based upon the records available, were nominal but could not be accurately determined and the statute of limitations had run, it was believed, on most if not all liabilities, except the note for advances by Coral Investment

Partners.

The Coral Investment note was agreed to be assumed by the newly formed holding company (Sandy Springs) based upon the agreement of Coral Investment

Partners to fund additional monies necessary for reorganization and audits and transfer agent costs to the benefit of Sandy Springs

Holdings, Inc. audits shareholders.

No other liabilities were transferred to or assumed by Sandy Springs Holdings, Inc. from RESS of Delaware.

Read in the reply ↗

We note that your auditor expressed an opinion on your financial statements for the period from July 15, 2020 (Inception) through August 31, 2020, however, your statements of operations, changes in stockholders' equity (deficit) and cash flows are labeled as "for the period from July 16, 2020 through August 31, 2020." We further note from your disclosure in Note 1 that Sandy Springs Holdings, Inc.

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was incorporated on November 20, 2019. Please reconcile these discrepancies and explain to us why November 20, 2019 is not considered your inception date for your financial statements.

to your comment, Sandy Springs Holdings, Inc., while formed November 20, 2019, was not active in any business operations until the date of the Holding Company Reorganization and was a shell formed for the purpose of the Holding Company Reorganization. The Holding

Company Reorganization date was taken to be the date of commencement of operations for purposes of accounting and operations. Due to the fact that immediately after the Reorganization became effective the RESS of Delaware, Inc.

Rest of the answer

subsidiary was fully divested which had discontinued all business activities years earlier, it was deemed that the date of the divestiture was effective for purposes of an audit.

This accounting period adoption of July 15, 2020 is justified based upon ASC 805-50-45 et seq. as summarized below and as pointed out in our prior response letter.

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ASC 805-50-45-2

The financial statements of the receiving entity should report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period.

Results of operations for that period will thus comprise those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period.

By eliminating the effects of intra-entity transactions in determining the results of operations for the period before the combination, those results will be on substantially the same basis as the results of operations for the period after the date of combination.

The effects of intra-entity transactions on current assets, current liabilities, revenue, and cost of sales for periods presented and on retained earnings at the beginning of the periods presented should be eliminated to the extent possible.

ASC 805-50-45-3

The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity transactions involving long-term assets and liabilities need not be eliminated. However, paragraph 805-50-50-2 requires disclosure.

ASC 805-50-45-4

Similarly, the receiving entity shall present the statement of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date.

Subsections 3 & 4 above are not applicable.

PWC Guide for Business Combinations and

Non-Controlling Interests (2017) provides under Chapter 6.2,3.2-“Guidance for presenting a change in reporting entity” at page 6-14

“In addition, sometimes a new parent company may be added to an existing company (or consolidated group of companies) by setting up a new holding company. The shareholders of the existing company exchange their shares for shares in the new company in proportion to their existing ownership interests (i.e., share for share exchange). In such cases, there is no change in the substance of the reporting entity. Therefore, absent basis differences between a controlling owner and the parent company, the consolidated financial statements of the new company should reflect the accounting of the pervious company (or existing consolidated group), except that the legal capital (i.e., issued and outstanding capital stock or membership interests) should reflect the capital of the new parent company.”

The following guidance is found in Deloitte’s “A Road Map to Reporting Discontinued Operations”:

However, at the 2015 AICPA Conference on Current SEC and PCAOB Developments, while not specifically talking about common-control transactions, the SEC staff further

3 of 6 highlighted a number of factors for registrants to consider in determining the predecessor, including, 18 Accounting for Common-Control Transactions but not limited to, (1) the order in which the entities are acquired, (2) the size of the entities, (3) the fair value of the entities, and (4) the ongoing management structure. The staff indicated that no one item is determinative on its own and that there could also be more than one predecessor. Thus, entities should use judgment when identifying the predecessor. CC.4.3 Financial Statement Presentation by the Transferring Entity ASC 805-50 only addresses the receiving entity’s presentation. It contains no specific guidance on how the transferring entity should present a common-control transfer in its separate financial statements. Although the transferring entity’s measurement generally matches the receiving entity’s, its presentation typically does not. Entities have analogized to SAB Topic 5.Z.7 for guidance on whether the transferring entity may present its separate financial statements as if a change in the reporting entity has occurred by derecognizing the transferred net assets and operations in the historical periods (sometimes referred to as a “depooling“). SAB Topic 5.Z.7, which addresses whether an entity may present a spin-off as a change in the reporting entity and restate its historical financial statements to exclude the subsidiary, states: Facts: A Company disposes of a business through the distribution of a subsidiary’s stock to the Company’s shareholders on a pro rata basis in a transaction that is referred to as a spin-off. Question: May the Company elect to characterize the spin-off transaction as resulting in a change in the reporting entity and restate its historical financial statements as if the Company never had an investment in the subsidiary, in the manner specified by FASB ASC Topic 250, Accounting Changes and Error Corrections? Interpretive response:

Not ordinarily. If the Company was required to file periodic reports under the Exchange Act within one year prior to the spin-off, the staff believes the Company should reflect the disposition in conformity with FASB ASC Topic 360. This presentation most fairly and completely depicts for investors the effects of the previous and current organization of the Company. However, in limited circumstances involving the initial registration of a company under the Exchange Act or Securities Act, the staff has not objected to financial statements that retroactively reflect the reorganization of the business as a change in the reporting entity if the spin-off transaction occurs prior to effectiveness of the registration statement. This presentation may be acceptable in an initial registration if the Company and the subsidiary are in dissimilar businesses, have been managed and financed historically as if they were autonomous, have no more than incidental common facilities and costs, will be operated and financed autonomously after the spin-off, and will not have material financial commitments, guarantees, or contingent liabilities to each other after the spin-off. This exception to the prohibition against retroactive omission of the subsidiary is intended for companies that have not distributed widely financial statements that include the spun-off subsidiary. Also, dissimilarity contemplates substantially greater differences in the nature of the businesses than those that would ordinarily distinguish reportable segments as defined by FASB ASC paragraph 280-10-50-10

(Segment Reporting Topic). While this guidance does not specifically address common-control transactions, entities have analogized to it in practice. All requirements in SAB Topic 5.Z.7 must be met for the transferring entity to depool the transferred net assets.

We believe that in addition ASC 805-50-45-2 requires that the "effects of intra-entity transactions on current assets, current liabilities [emphasis supplied], revenue, and cost of sales for periods

4 of 6 presented and on retained earnings at the beginning of the periods presented shall be eliminated to the extent possible”. This is considered an exchange of shares between entities under common control and per ASC 805-50-45-2 the financial statements “shall report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. In researching this, the company has found several instances in which the Staff has accepted this treatment after a spin-off, divestiture, or other reorganization.

We also submit that SAB 5.Z.7 says:

7. Accounting for the spin-off of a subsidiary

Facts:

A Company disposes of a business through the distribution of a subsidiary’s stock to the Company’s shareholders on a pro rata basis in a transaction that is referred to as a spin-off.

Question:

May the Company elect to characterize the spin-off transaction as resulting in a change in the reporting entity and restate its historical financial statements as if the Company never had an investment in the subsidiary, in the manner specified by FASB ASC

Topic 250, Accounting Changes and Error Corrections?

Interpretive

Response: Not ordinarily. If the Company was required to file periodic reports under the Exchange Act within one year prior to the spin-off, the staff believes the Company should reflect the disposition in conformity with FASB ASC Topic 360. This presentation most fairly and completely depicts for investors the effects of the previous and current organization of the Company. However, in limited circumstances involving the initial registration of a company under the Exchange Act or Securities Act, the staff has not objected to financial statements that retroactively reflect the reorganization of the business as a change in the reporting entity if the spin-off transaction occurs prior to effectiveness of the registration statement. This presentation may be acceptable in an initial registration if the Company and the subsidiary are in dissimilar businesses, have been managed and financed historically as if they were autonomous, have no more than incidental common facilities and costs, will be operated and financed autonomously after the spin-off, and will not have material financial commitments, guarantees, or contingent liabilities to each other after the spin-off. This exception to the prohibition against retroactive omission of the subsidiary is intended for companies that have not distributed widely financial statements that include the spun-off subsidiary. Also, dissimilarity contemplates substantially greater differences in the nature of the businesses than those that would ordinarily distinguish reportable segments as defined by FASB ASC paragraph 280-10-50-10 (Segment Reporting Topic).

We believe that the elimination of prior discontinued operations (due to divestiture of the subsidiary RESS of Delaware, Inc.) is appropriate in that

SAB 5.Z.7 is analogous to the situation, and ASC 805-45-2 instructs to report results of operations for the period in which the transfer occurred as though the transfer or exchange had occurred at the beginning of the period. The date

5 of 6 of the financial period of the audit,

July 15, 2020, was adopted since it was the effective date of the reorganization and the divestiture of subsidiary RESS of Delaware,

Inc.

It is our belief that the audit period as shown in the financials reflect accurately the financial condition and position of the Company, especially considering ASC 805-50-45.

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Please provide updated financial statements in accordance with Rule 8-08 of Regulation S-X in your next amendment.

ANSWER: To be filed in Form 10-Q for the period ended February 28, 2021 due April 14, 2021.

We hope this correspondence meets with your satisfaction. Read in the reply ↗