CalEthos (GEDC) 10-Q 16 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 11, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-50331
Entity Registrant Name	CalEthos, Inc.
Entity Central Index Key	0001174891
Entity Tax Identification Number	98-0371433
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	11753 Willard Avenue
Entity Address, City or Town	Tustin
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92782
City Area Code	(714)
Local Phone Number	352-5315
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,995,621

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 2,749,000	$ 3,047,000
Prepaid expenses	21,000	7,000
Total current assets	2,770,000	3,054,000
Intangible assets	74,000
Other assets		38,000
Total assets	2,844,000	3,092,000
Current liabilities
Accounts payable and accrued expenses	483,000	434,000
Notes payable	86,000	111,000
Convertible promissory notes, net	3,574,000	3,087,000
Total liabilities	4,143,000	3,632,000
Stockholders’ deficit
Preferred stock, par value $0.001, 100,000,000 shares authorized; no shares issued and outstanding
Common stock, par value $0.001, 100,000,000 shares authorized; 25,995,621 shares issued and outstanding	26,000	26,000
Additional paid-in capital	19,439,000	16,269,000
Other comprehensive loss	(5,000)	(2,000)
Stock subscription receivable	(2,000)	(2,000)
Accumulated deficit	(20,757,000)	(16,831,000)
Total stockholders’ deficit	(1,299,000)	(540,000)
Total liabilities and stockholders’ deficit	2,844,000	3,092,000
Series A Convertible Preferred Stock [Member]
Stockholders’ deficit
Preferred stock, par value $0.001, 100,000,000 shares authorized; no shares issued and outstanding

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	25,995,621	25,995,621
Common stock, shares outstanding	25,995,621	25,995,621
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,600,000	3,600,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenues
Operating expenses
Professional fees	3,415,000	73,000
General and administrative expenses	4,000	2,000
Operating expenses	3,419,000	75,000
Loss from operations	(3,419,000)	(75,000)
Other expenses
Financing cost	(507,000)	(17,000)
Total other expenses	(507,000)	(17,000)
Loss before provision for income taxes	(3,926,000)	(92,000)
Provision for income taxes
Net loss	(3,926,000)	(92,000)
Other comprehensive income (loss)	(3,000)
Comprehensive loss	$ (3,929,000)	$ (92,000)
Net loss per share	$ (0.15)	$ (0.01)
Weighted average number of shares outstanding - basic and diluted	25,995,621	16,709,951

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)	Preferred Stock [Member]Series A Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Stock Subscription Receivable [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2020		$ 17,000	$ 8,744,000	$ (2,000)		$ (10,082,000)	$ (1,323,000)
Balance, shares at Dec. 31, 2020		16,634,951
Net Loss						(92,000)	(92,000)
Relative fair value of warrants issued with convertible promissory notes			3,000				3,000
Stock options issued for services			52,000				52,000
Stocks issued from debt forgiveness			98,000				98,000
Stocks issued for debt forgiveness, shares		75,000
Additional capital from debt forgiveness			68,000				68,000
Balance at Mar. 31, 2021		$ 17,000	8,965,000	(2,000)		(10,174,000)	(1,194,000)
Balance, shares at Mar. 31, 2021		16,709,951
Balance at Dec. 31, 2021		$ 26,000	16,269,000	(2,000)	$ (2,000)	(16,831,000)	(540,000)
Balance, shares at Dec. 31, 2021		25,995,621
Stock based compensation on restricted stock awards			3,170,000				3,170,000
Foreign currency translation loss					(3,000)		(3,000)
Net Loss						(3,926,000)	(3,926,000)
Balance at Mar. 31, 2022		$ 26,000	$ 19,439,000	$ (2,000)	$ (5,000)	$ (20,757,000)	$ (1,299,000)
Balance, shares at Mar. 31, 2022		25,995,621

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Cash flows from operating activities
Net loss	$ (3,926,000)	$ (92,000)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization of convertible promissory note discounts	487,000	3,000
Stock based compensation	3,170,000	15,000	$ 4,792,000
Changes in operating assets and liabilities:
Prepaid expenses	(14,000)
Accounts payable and accrued expenses	49,000	(5,000)
Net cash used in operating activities	(234,000)	(79,000)
Cash flows from investing activities
Intangible assets	(37,000)
Net cash used in investing activities	(37,000)
Cash flows from financing activities
Proceeds from the issuance of convertible promissory notes		50,000
Proceeds from the issuance of notes payable		40,000
Payment of notes payable	(25,000)
Net cash provided by (used in) financing activities	(25,000)	90,000
Effect of exchange rate changes on cash and cash equivalents	(2,000)
Net increase (decrease) in cash	(298,000)	11,000
Cash, beginning of period	3,047,000
Cash, end of period	2,749,000	11,000	3,047,000
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes
Non-Cash investing and financing activities
Reclassification of other assets to intangible assets	38,000
Relative fair value of warrants issued with convertible promissory notes		3,000	$ 1,690,000
Accrued equity compensation granted		38,000
Common stock issued from forgiven debt		98,000
Additional capital from forgiven debt		$ 68,000

ORGANIZATION AND ACCOUNTING POL

ORGANIZATION AND ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
ORGANIZATION AND ACCOUNTING POLICIES	Note 1 – Organization and Accounting Policies ORGANIZATION AND ACCOUNTING POLICIES CalEthos, Inc. (the “Company” or “we”) was incorporated on March 20, 2002 under the laws of the State of Nevada. On December 20, 2018, we filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to change the Company name from “RealSource Residential, Inc.” to “CalEthos, Inc.”. This amendment became effective immediately upon filing on December 20, 2018. As of December 31, 2021, the primary activity of the Company’s management is to develop and implement a plan to manufacture high-performance computer systems that are scalable, upgradeable and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions, and if other opportunities warrant, acquire assets and all or part of other companies operating in the cryptocurrency mining hardware industry or invest or joint venture with other more established companies already in the industry. The Company will not restrict its search to any specific business segment of the cryptocurrency mining hardware industry or geographical location and the Company may participate in a business venture of virtually any kind or nature that is beneficial to the Company and its shareholders. Amendments to Certificate of Incorporation In October 2021, the Board of Directors authorized an amendment to the Articles of Incorporation of the Company to change the Company’s name to AIQ Blockchain, Inc. The name change has not yet been effected. Incorporation of Korean entity On November 5, 2021, AIQ System Inc. (“AIQ”) was incorporated in Seoul, Republic of Korea. AIQ is authorized to issue 3 million shares of common stock. At the date of incorporation, 10,000 shares were issued to the Company for 100,000,000 Korean Won, or approximately $ 89,000 for 100 % ownership of AIQ. AIQ is in the business of (1) developing and manufacturing computer chips and systems, (2) importing and exporting semiconductors and electronic products, (3) wholesale and retail business of semiconductors and electronic products, and (4) any and all business activities incidental to the foregoing activities. Basis of Presentation The accompanying Condensed Consolidated Financial Statements and notes thereto are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The December 31, 2021 condensed balance sheet data was derived from financial statements but does not include all disclosures required by GAAP. These interim unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three-month period ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, included in the Company’s annual report on Form 10-K filed with the SEC on March 31, 2022. Liquidity and Going Concern The Company incurred a net loss of approximately $ 3,926,000 20,757,000 The Company’s condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals; successful development, marketing and branding of products; uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including obtaining adequate financing to fund its operations and generating a level of revenues adequate to support the Company’s cost structure. The Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including market demand for the Company’s products and services, the success of product development efforts, the timing of receipts for customer deposits, the management of working capital, and the continuation of normal payment terms and conditions for purchase of goods and services. The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance date of these financial statements. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will likely need to raise additional funding from investors or through other avenues to continue as a going concern. COVID-19 The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. The impact of COVID-19 has not been significant to the Company’s results of operations, financial condition, and liquidity and capital resources. Although no material impairment or other effects have been identified to date, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known. The Company will continue to consider the potential impact of the COVID-19 pandemic on its business operations. Earnings Per Share We use ASC 260, “ Earnings Per Share Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share for the three months ended March 31, 2022 and 2021 because their inclusion would be anti-dilutive. Common share equivalents amounted to 19,011,450 2,735,214 Recent Accounting Pronouncements The Company’s management reviewed all recently issued accounting standard updates (“ASU’s”) not yet adopted by the Company and does not believe the future adoptions of any such ASU’s may be expected to cause a material impact on the Company’s condensed consolidated financial condition or the results of its operations.

INTANGIBLE AND OTHER ASSETS

INTANGIBLE AND OTHER ASSETS	3 Months Ended
	Mar. 31, 2022
Intangible And Other Assets
INTANGIBLE AND OTHER ASSETS	Note 2 – Intangible and Other Assets INTANGIBLE AND OTHER ASSETS On December 23, 2021, AIQ entered into a Technology Development Agreement (the “Agreement”) with PICOCEL, Co., Ltd. (the “Contractor” or “PICOCEL”) to develop a Field Programable Gate Array (‘FPGA”) based Bitcoin mining simulation system. The Agreement was expected to be completed within 6 weeks for a total contract price of 198,000,000 Korean Won (“KRW”) or approximately $ 167,000 . On March 17, 2022, the Company and PICOCEL entered into a mutual agreement to cancel and terminate the Agreement. As of the date of the termination, PICOCEL had completed the first phase of the Agreement upon delivery of the SHA-256 code and FPGA board simulator resulting to a reclassification of deposits amounting to $ 38,000 under other assets as of December 31, 2021 to intangible assets as of March 31, 2022. Additional payments were made to PICOCEL for the three months ended March 31, 2022 amounting to approximately $ 36,000 . Total intangible assets amounted to $ 74,000 as of March 31, 2022.

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2022
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	Note 3 – Accounts Payable and Accrued Expenses ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table summarizes the Company’s accounts payable and accrued expense balances as of the dates indicated: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES March 31, December 31, 2022 2021 Accounts payable $ 258,000 $ 221,000 Accrued expenses 92,000 99,000 Accrued interest 133,000 114,000 Accounts payable and accrued expenses $ 483,000 $ 434,000 Accrued Interest The following table presents the details of accrued interest as of the dates indicated: SCHEDULE OF ACCRUED INTEREST March 31, December 31, 2022 2021 Notes payable $ 11,000 $ 9,000 Convertible promissory notes 122,000 105,000 Balance, end of the year $ 133,000 $ 114,000

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2022
Notes Payable
NOTES PAYABLE	Note 4 – Notes Payable NOTES PAYABLE The table below summarizes the transactions as of the dates indicated: SCHEDULE OF NOTES PAYABLE March 31, December 31, 2022 2021 Balance, beginning of the year $ 111,000 $ 11,000 Additions – 150,000 Payments (25,000 ) (50,000 ) Balance, end of the year $ 86,000 $ 111,000 On January 11, 2021, the Company issued a promissory note in the principal amount of $ 15,000 . The interest on this note accrued beginning from the date of issuance, at an interest rate of 8 % per annum. The principal and any accrued interest was payable on or before March 11, 2022 . During any event of default under the note, the interest rate shall increase to 10 % per annum. Events of default included failure to pay principal or interest, breach of covenants, breach of representations and warranties, borrower’s assignment of substantial part of its property or business, any money judgment, writ, or similar process shall be entered or filed against the borrower or any subsidiary of the borrower or any of its properties or other assets for more than $ 100,000 , bankruptcy, liquidation of business, and cessation of operations. The principal and the accrued interest amounting to $ 15,000 and $ 1,000 , respectively, was settled on October 27, 2021. On February 19, 2021, the Company issued a promissory note in the principal amount of $ 25,000 . The interest on the unpaid principal balance accrued at a rate of 10 % per annum. The principal and any accrued interest was to be paid in a single installment on or before February 19, 2022 . If the Company failed to pay the balance of this note in full on the due date or fails to make any payment due within 15 days of the due date, any unpaid principal was to accrue interest at the rate of 15 % per annum during the default (default interest). Events of default included failure to make any payment including accrued interest when due, voluntary, or involuntary petition of bankruptcy, appointment of a receiver, custodian, trustee or similar party to take possession of the Company’s assets or property, or assignment made by the Company for the benefit of creditors. The principal amount was settled in full on January 25, 2022. On April 5, 2021, the Company issued a promissory note in the principal amount of $ 9,000 . The interest on the unpaid principal balance accrued at a rate of 8 % per annum. If the Company failed to pay the balance of this note in full on the date or failed to make any payments due within 15 days of the due date, any unpaid principal was to accrue interest at the rate of 8 % per annum during the default. Events of default include failure to make any payment including accrued interest when due, voluntary, or involuntary petition of bankruptcy, appointment of a receiver, custodian, trustee or similar party to take possession of the Company’s assets or property, or assignment made by the Company for the benefit of creditors. The principal and accrued interest under this note was settled on September 16, 2021. On April 22, 2021, the Company issued a promissory note in the principal amount of $ 50,000 10 April 22, 2022 15 50,000 3,000 On July 1, 2021, the Company issued a promissory note in the principal amount of $ 25,000 10 July 1,2022 15 25,000 2,000 On July 12, 2021, the Company issued a promissory note in the principal amount of $ 5,000 . The interest on the unpaid principal balance accrued at a rate of 8 % per annum. The principal and any accrued interest was to be paid in a single installment on or before October 12, 2021 . The principal amount of this note was settled on September 16, 2021. On August 10, 2021, the Company issued a promissory note in the principal amount of $ 7,000 8 November 10, 2021 In August 2021, the Company issued four promissory notes to a single lender in the aggregate principal amount of $ 14,000 . The interest on the unpaid principal balance of these notes accrued at a rate of 8 % per annum. The principal for each note was to be paid in a single installment during November 2021. If the Company failed to pay the balance of these notes in full on the date or failed to make any payments due within 15 days of the due date, any unpaid principal was to accrue interest at the rate of 8 % per annum during the default. Events of default included failure to make any payment including accrued interest when due, voluntary, or involuntary petition of bankruptcy, appointment of a receiver, custodian, trustee, or similar party to take possession of the Company’s assets or property, or assignment made by the Company for the benefit of creditors. The principal amount outstanding under these notes was $ 13,500 as of September 30, 2021. The principal and the accrued interest aggregating to $ 14,000 was settled in October 2021. Interest expense on notes payable amounted to $ 2,000 1,000

CONVERTIBLE PROMISSORY NOTES

CONVERTIBLE PROMISSORY NOTES	3 Months Ended
	Mar. 31, 2022
Debt Disclosure [Abstract]
CONVERTIBLE PROMISSORY NOTES	Note 5 – Convertible Promissory Notes CONVERTIBLE PROMISSORY NOTES During the year ended December 31, 2021, the Company issued two convertible promissory notes amounting to $ 55,000 3,850,000 3,550,000 355,000 March 1, 2022 August 31, 2022 10 1.00 1.25 Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ, or similar process entered or filed against the Company or any of its property or other assets for more than $ 100,000 In connection with the issuance of the Notes, the Company issued to the purchasers of the Notes stock purchase warrants (the “Warrants”) to purchase an aggregate of 1,567,500 1.50 1.87 3,004,000 3 404.91 405.93 0.27 0.42 0.10 1.95 In accordance with ASC 470 - Debt, the Company has allocated the cash proceeds amounts of the Notes among the Notes, the Warrants and the conversion feature. The relative fair value of the Warrants issued amounted to approximately $ 1,690,000 0 The Company determined that the conversion feature of the Notes would not be an embedded feature to be bifurcated and accounted for as a derivative in accordance with ASC 815-15 Derivatives and Hedging Financing cost recognized for the amortization of debt discount was approximately $ 487,000 2,000 The convertible promissory notes consisted of the following as of the dates indicated: SCHEDULE OF CONVERTIBLE PROMISSORY NOTES March 31, December 31, 2022 2021 Principal Balance, beginning of year $ 4,613,000 $ 708,000 Additions – 3,905,000 Balance, end of year 4,613,000 4,613,000 Discount Balance, beginning of year 1,526,000 5,000 Additions – 2,045,000 Amortization (487,000 ) (524,000 ) Balance, end of year 1,039,000 1,526,000 Net carrying amount $ 3,574,000 $ 3,087,000 Effective interest rate used to amortize the debt discount for the three months ended March 31, 2022 and 2021 ranges from 4.76 64.60 Potential future shares to be issued on conversion of the notes as of the dates indicated are as follows: SCHEDULE OF POTENTIAL FUTURE SHARES ISSUANCE OF CONVERSION NOTES March 31, December 31, 2022 2021 Principal $ 4,613,000 $ 4,613,000 Interest 122,000 105,000 Total 4,735,000 4,718,000 Conversion price per share 1.00 1.25 1.00 1.25 Potential future share $ 3,964,842 $ 3,947,394 Interest expense on convertible promissory notes amounted to $ 18,000 14,000

STOCKHOLDERS DEFICIT

STOCKHOLDERS DEFICIT	3 Months Ended
	Mar. 31, 2022
Equity [Abstract]
STOCKHOLDERS DEFICIT	Note 6 – Stockholders Deficit STOCKHOLDERS DEFICIT Common Stock In January 2021, the Company’s President and a member of the Board of Directors, resigned as an officer and director of the Company (“Termination Agreement”). Part of the Termination Agreement stipulated the return of 3,674,330 shares of the Company’s common stock (“Cancelled Shares”). The Cancelled Shares were returned and cancelled on April 20, 2021. In March 2021, the Company’s Chief Executive Officer (“CEO’) agreed to forgive approximately $ 68,000 In March 2021, the Company’s Chief Financial Officer agreed to reduce the amounts due to him from approximately $ 128,000 to $ 30,000 . For the reduction of $ 98,000 , the Company issued 75,000 shares of common stock. The remaining liability of $ 30,000 was paid in cash. Restricted Common Stock Awards On August 17, 2021, the Company entered into Restricted Share Award Agreements (the “Award Agreements”) with two consultants pursuant to which the Company issued to the consultants shares of common stock of the Company in exchange for their future services. The Awards have an initial term of one year, which shall be automatically renewed on a year-to-year basis unless either party gives a written notice of termination. The two consultants who entered into these agreements include: 1) A consultant who was granted 10,000,000 2) An entity, which is owned by the Company’s CEO and majority shareholder, was granted 1,500,000 The Company’s management has accounted for the Award Grants as restricted stock compensation in accordance with ASC 718 – Stock Compensation (“ASC 718”). ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized. Management has estimated that the first two development phases will be completed within 15 months and the Foundry Mask will be completed within 6 months for a total of 21 months service period. Compensation cost will be recognized ratably over 21 months and in the same manner had the Company paid in cash. The estimated service period will be adjusted for changes in actual and expected completion dates. Any such change will be recognized prospectively, and the remaining deferred compensation will be recognized over the remaining service period. As of December 31, 2021, a total of 11,500,000 1.93 22,195,000 The stock-based award compensation was recorded as an increase in deferred compensation expense, common stock, and additional paid-in capital in the Company’s books at the time of the grant. The table below summarizes the transactions related to the Company restricted stock awards as of March 31, 2022: SCHEDULE OF COMPANY RESTRICTED STOCK AWARDS Shares Deferred compensation Grant date fair value 11,500,000 $ 22,195,000 Accretion - (7,962,000 ) Balance as of December 31, 2021 11,500,000 $ 14,233,000 Stock based compensation expense for the three months ended March 31, 2022 amounted to $ 3,170,000 4,792,000 Issuance of Stock Options and Warrants As of March 31, 2022, a total of 198,000 In February 2021, the Company signed a new consulting agreement that granted one of its shareholders an option to purchase 750,000 0.001 52,000 38,000 14,000

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Note 7 – Subsequent Events SUBSEQUENT EVENTS The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The management of the Company determined the following reportable events: Technology Development Agreement On April 5, 2022, AIQ entered into a Technology Development Agreement (the “Agreement”) with NNS, Co., Ltd. to develop a FPGA based Bitcoin mining simulation system. The Agreement is expected to be completed within 9 weeks for a total contract price of 99,000,000 9,000,000 82,000 SCHEDULE OF PAYMENTS Amount USD KRW Within 5 days after signing the contract $ 41,000 49,500,000 Within 5 days after all conditions are met as stated in “Schedule B – Statement of Work” 41,000 49,500,000 Total $ 82,000 99,000,000

ORGANIZATION AND ACCOUNTING P_2

ORGANIZATION AND ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Amendments to Certificate of Incorporation	Amendments to Certificate of Incorporation In October 2021, the Board of Directors authorized an amendment to the Articles of Incorporation of the Company to change the Company’s name to AIQ Blockchain, Inc. The name change has not yet been effected.
Incorporation of Korean entity	Incorporation of Korean entity On November 5, 2021, AIQ System Inc. (“AIQ”) was incorporated in Seoul, Republic of Korea. AIQ is authorized to issue 3 million shares of common stock. At the date of incorporation, 10,000 shares were issued to the Company for 100,000,000 Korean Won, or approximately $ 89,000 for 100 % ownership of AIQ. AIQ is in the business of (1) developing and manufacturing computer chips and systems, (2) importing and exporting semiconductors and electronic products, (3) wholesale and retail business of semiconductors and electronic products, and (4) any and all business activities incidental to the foregoing activities.
Basis of Presentation	Basis of Presentation The accompanying Condensed Consolidated Financial Statements and notes thereto are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The December 31, 2021 condensed balance sheet data was derived from financial statements but does not include all disclosures required by GAAP. These interim unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three-month period ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, included in the Company’s annual report on Form 10-K filed with the SEC on March 31, 2022.
Liquidity and Going Concern	Liquidity and Going Concern The Company incurred a net loss of approximately $ 3,926,000 20,757,000 The Company’s condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals; successful development, marketing and branding of products; uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including obtaining adequate financing to fund its operations and generating a level of revenues adequate to support the Company’s cost structure. The Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including market demand for the Company’s products and services, the success of product development efforts, the timing of receipts for customer deposits, the management of working capital, and the continuation of normal payment terms and conditions for purchase of goods and services. The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance date of these financial statements. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will likely need to raise additional funding from investors or through other avenues to continue as a going concern.
COVID-19	COVID-19 The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. The impact of COVID-19 has not been significant to the Company’s results of operations, financial condition, and liquidity and capital resources. Although no material impairment or other effects have been identified to date, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known. The Company will continue to consider the potential impact of the COVID-19 pandemic on its business operations.
Earnings Per Share	Earnings Per Share We use ASC 260, “ Earnings Per Share Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share for the three months ended March 31, 2022 and 2021 because their inclusion would be anti-dilutive. Common share equivalents amounted to 19,011,450 2,735,214
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company’s management reviewed all recently issued accounting standard updates (“ASU’s”) not yet adopted by the Company and does not believe the future adoptions of any such ASU’s may be expected to cause a material impact on the Company’s condensed consolidated financial condition or the results of its operations.

ACCOUNTS PAYABLE AND ACCRUED _2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	3 Months Ended
	Mar. 31, 2022
Payables and Accruals [Abstract]
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES	The following table summarizes the Company’s accounts payable and accrued expense balances as of the dates indicated: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES March 31, December 31, 2022 2021 Accounts payable $ 258,000 $ 221,000 Accrued expenses 92,000 99,000 Accrued interest 133,000 114,000 Accounts payable and accrued expenses $ 483,000 $ 434,000
SCHEDULE OF ACCRUED INTEREST	The following table presents the details of accrued interest as of the dates indicated: SCHEDULE OF ACCRUED INTEREST March 31, December 31, 2022 2021 Notes payable $ 11,000 $ 9,000 Convertible promissory notes 122,000 105,000 Balance, end of the year $ 133,000 $ 114,000

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2022
Notes Payable
SCHEDULE OF NOTES PAYABLE	The table below summarizes the transactions as of the dates indicated: SCHEDULE OF NOTES PAYABLE March 31, December 31, 2022 2021 Balance, beginning of the year $ 111,000 $ 11,000 Additions – 150,000 Payments (25,000 ) (50,000 ) Balance, end of the year $ 86,000 $ 111,000

CONVERTIBLE PROMISSORY NOTES (T

CONVERTIBLE PROMISSORY NOTES (Tables)	3 Months Ended
	Mar. 31, 2022
Debt Disclosure [Abstract]
SCHEDULE OF CONVERTIBLE PROMISSORY NOTES	The convertible promissory notes consisted of the following as of the dates indicated: SCHEDULE OF CONVERTIBLE PROMISSORY NOTES March 31, December 31, 2022 2021 Principal Balance, beginning of year $ 4,613,000 $ 708,000 Additions – 3,905,000 Balance, end of year 4,613,000 4,613,000 Discount Balance, beginning of year 1,526,000 5,000 Additions – 2,045,000 Amortization (487,000 ) (524,000 ) Balance, end of year 1,039,000 1,526,000 Net carrying amount $ 3,574,000 $ 3,087,000
SCHEDULE OF POTENTIAL FUTURE SHARES ISSUANCE OF CONVERSION NOTES	Potential future shares to be issued on conversion of the notes as of the dates indicated are as follows: SCHEDULE OF POTENTIAL FUTURE SHARES ISSUANCE OF CONVERSION NOTES March 31, December 31, 2022 2021 Principal $ 4,613,000 $ 4,613,000 Interest 122,000 105,000 Total 4,735,000 4,718,000 Conversion price per share 1.00 1.25 1.00 1.25 Potential future share $ 3,964,842 $ 3,947,394

STOCKHOLDERS DEFICIT (Tables)

STOCKHOLDERS DEFICIT (Tables)	3 Months Ended
	Mar. 31, 2022
Equity [Abstract]
SCHEDULE OF COMPANY RESTRICTED STOCK AWARDS	The table below summarizes the transactions related to the Company restricted stock awards as of March 31, 2022: SCHEDULE OF COMPANY RESTRICTED STOCK AWARDS Shares Deferred compensation Grant date fair value 11,500,000 $ 22,195,000 Accretion - (7,962,000 ) Balance as of December 31, 2021 11,500,000 $ 14,233,000

SUBSEQUENT EVENTS (Tables)

SUBSEQUENT EVENTS (Tables)	3 Months Ended
	Mar. 31, 2022
Subsequent Events [Abstract]
SCHEDULE OF PAYMENTS	SCHEDULE OF PAYMENTS Amount USD KRW Within 5 days after signing the contract $ 41,000 49,500,000 Within 5 days after all conditions are met as stated in “Schedule B – Statement of Work” 41,000 49,500,000 Total $ 82,000 99,000,000

ORGANIZATION AND ACCOUNTING P_3

ORGANIZATION AND ACCOUNTING POLICIES (Details Narrative) - USD ($)	Nov. 05, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Number of common stock issued		100,000,000		100,000,000
Shares were issued	10,000
Net loss		$ 3,926,000	$ 92,000
Accumulated deficit		$ 20,757,000		$ 16,831,000
Common share equivalents		19,011,450	2,735,214
KOREA, REPUBLIC OF
Related Party Transaction [Line Items]
Shares were issued	100,000,000
AIQ [Member]
Related Party Transaction [Line Items]
Number of common stock issued	3,000,000
AIQ [Member] | KOREA, REPUBLIC OF
Related Party Transaction [Line Items]
Shares were issued, value	$ 89,000
Equity method investment, ownership percentage	100.00%

INTANGIBLE AND OTHER ASSETS (De

INTANGIBLE AND OTHER ASSETS (Details Narrative)	Dec. 23, 2021USD ($)	Dec. 23, 2021KRW (₩)	Mar. 31, 2022USD ($)	Mar. 31, 2021USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reclassification of deposits and other assets			$ 38,000
Technology Development Agreement [Member] | PICOCEL, Co., Ltd. [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Contract price	$ 167,000	₩ 198,000,000
Reclassification of deposits and other assets			38,000
Additional payment of intangible assets			36,000
Intangible assets			$ 74,000

SCHEDULE OF ACCOUNTS PAYABLE AN

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accounts payable	$ 258,000	$ 221,000
Accrued expenses	92,000	99,000
Accrued interest	133,000	114,000
Accounts payable and accrued expenses	$ 483,000	$ 434,000

SCHEDULE OF ACCRUED INTEREST (D

SCHEDULE OF ACCRUED INTEREST (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Notes payable	$ 11,000	$ 9,000
Convertible promissory notes	122,000	105,000
Balance, end of the year	$ 133,000	$ 114,000

SCHEDULE OF NOTES PAYABLE (Deta

SCHEDULE OF NOTES PAYABLE (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Notes Payable
Balance, beginning of the year	$ 111,000	$ 11,000
Additions		150,000
Payments	(25,000)	(50,000)
Balance, end of the year	$ 86,000	$ 111,000

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)	Aug. 31, 2021	Aug. 10, 2021	Jul. 12, 2021	Jul. 01, 2021	Apr. 22, 2021	Apr. 05, 2021	Feb. 19, 2021	Jan. 11, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Oct. 31, 2021	Oct. 27, 2021	Sep. 30, 2021
Short-Term Debt [Line Items]
Accrued interest									$ 133,000		$ 114,000
Interest expense, debt									18,000	$ 14,000
Promissory Note [Member]
Short-Term Debt [Line Items]
Debt instrument, face amount	$ 14,000	$ 7,000	$ 5,000			$ 9,000	$ 25,000	$ 15,000				$ 14,000	$ 15,000	$ 13,500
Debt instrument, interest rate	8.00%	8.00%	8.00%			8.00%	10.00%	8.00%
Debt instrument, maturity date		Nov. 10, 2021	Oct. 12, 2021				Feb. 19, 2022	Mar. 11, 2022
Increase in interest rate	8.00%					8.00%	15.00%	10.00%
Accrued interest													$ 1,000
Interest expense, debt									2,000	$ 1,000
Promissory Note [Member] | Borrower [Member]
Short-Term Debt [Line Items]
Debt instrument, periodic payment								$ 100,000
Promissory Note One [Member]
Short-Term Debt [Line Items]
Debt instrument, face amount					$ 50,000				50,000
Debt instrument, interest rate					10.00%
Debt instrument, maturity date					Apr. 22, 2022
Increase in interest rate					15.00%
Accrued interest									3,000
Promissory Note Two [Member]
Short-Term Debt [Line Items]
Debt instrument, face amount				$ 25,000					25,000
Debt instrument, interest rate				10.00%
Debt instrument, maturity date				Jul. 1, 2022
Increase in interest rate				15.00%
Accrued interest									$ 2,000

SCHEDULE OF CONVERTIBLE PROMISS

SCHEDULE OF CONVERTIBLE PROMISSORY NOTES (Details) - Convertible Notes Payable [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Short-Term Debt [Line Items]
Principal balance, beginning of year	$ 4,613,000	$ 708,000
Principal additions		3,905,000
Principal balance, end of year	4,613,000	4,613,000
Discount balance, beginning of year	1,526,000	5,000
Discount additions		2,045,000
Discount amortization	(487,000)	(524,000)
Discount balance, end of year	1,039,000	1,526,000
Net carrying amount	$ 3,574,000	$ 3,087,000

SCHEDULE OF POTENTIAL FUTURE SH

SCHEDULE OF POTENTIAL FUTURE SHARES ISSUANCE OF CONVERSION NOTES (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Principal	$ 4,613,000	$ 4,613,000
Interest	122,000	105,000
Total	$ 4,735,000	$ 4,718,000
Potential future share	3,964,842	3,947,394
Minimum [Member]
Debt Instrument [Line Items]
Conversion price per share	$ 1	$ 1
Maximum [Member]
Debt Instrument [Line Items]
Conversion price per share	$ 1.25	$ 1.25

CONVERTIBLE PROMISSORY NOTES (D

CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Short-Term Debt [Line Items]
Proceed from convertible debt		$ 50,000
Events of default description			Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ, or similar process entered or filed against the Company or any of its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company’s common stock delisted, or dissolution, winding up, or termination of the business of the Company.
Indebtedness for borrowed money maximum limit			$ 100,000
Relative fair value of warrants issued with convertible promissory notes		3,000	1,690,000
Debt instrument, convertible, beneficial conversion feature			$ 0
Amortization of debt discount	487,000	2,000
Interest expense, debt	$ 18,000	$ 14,000
Minimum [Member]
Short-Term Debt [Line Items]
Debt instruments, conversion price	$ 1		$ 1
Maximum [Member]
Short-Term Debt [Line Items]
Debt instruments, conversion price	$ 1.25		$ 1.25
Warrant [Member]
Short-Term Debt [Line Items]
Issuance of warrants to purchase of common stock			1,567,500
Fair value of warrants			$ 3,004,000
Fair value of common stock estimated life			3 years
Warrant [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Issuance of warrant price per share			$ 1.50
Volatility			404.91%
Risk-free equivalent yield			0.27%
Share price			$ 0.10
Warrant [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Issuance of warrant price per share			$ 1.87
Volatility			405.93%
Risk-free equivalent yield			0.42%
Share price			$ 1.95
Convertible Promissory Note One [Member]
Short-Term Debt [Line Items]
Convertible promissory note			$ 55,000
Debt instrument, maturity date			Mar. 1, 2022
Debt instruments, conversion price			$ 1
Convertible Promissory Note Two [Member]
Short-Term Debt [Line Items]
Convertible promissory note			$ 3,850,000
Proceed from convertible debt			3,550,000
Original issue discount			$ 355,000
Debt instrument, maturity date			Aug. 31, 2022
Increase in interest rate			10.00%
Debt instruments, conversion price			$ 1.25
Convertible Notes Payable [Member]
Short-Term Debt [Line Items]
Original issue discount	$ 1,039,000		$ 1,526,000	$ 5,000
Debt interest effective percentage	4.76%	64.60%

SCHEDULE OF COMPANY RESTRICTED

SCHEDULE OF COMPANY RESTRICTED STOCK AWARDS (Details) - Restricted Stock [Member]	Mar. 31, 2022USD ($)shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Grant date fair value, shares | shares	11,500,000
Deferred compensation grant date fair value | $	$ 22,195,000
Accretion, shares | shares
Deferred compensation accretion | $	$ (7,962,000)
Shares, balance | shares	11,500,000
Deferred compensation | $	$ 14,233,000

STOCKHOLDERS DEFICIT (Details N

STOCKHOLDERS DEFICIT (Details Narrative) - USD ($)	Nov. 05, 2021	Aug. 17, 2021	Mar. 31, 2021	Feb. 28, 2021	Jan. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of common stock issued	10,000
Remaining liability paid for cash			$ 30,000				$ 30,000
Stock based compensation						$ 3,170,000	15,000	$ 4,792,000
Warrant shares expired						198,000
Chief Executive Officer [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Debt instrument decrease forgiveness			68,000
Restricted common stock shares granted		1,500,000
Chief Financial Officer [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reduction amount			$ 98,000
Number of common stock issued			75,000
Chief Financial Officer [Member] | Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Due to related parties			$ 128,000				128,000
Chief Financial Officer [Member] | Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Due to related parties			$ 30,000				30,000
Consultants [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Restricted common stock shares granted		10,000,000						11,500,000
Shares issued, price per share								$ 1.93
Fair value of restricted common stock shares granted								$ 22,195,000
Termination Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Return of shares					3,674,330
New Consulting Agreement [Member] | Shareholder [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Option to purhase shares				750,000
Share price				$ 0.001
Fair value of options				$ 52,000
Option expense							$ 14,000		$ 38,000

SCHEDULE OF PAYMENTS (Details)

SCHEDULE OF PAYMENTS (Details) - Apr. 05, 2022 - Subsequent Event [Member]	USD ($)	KRW (₩)
Subsequent Event [Line Items]
Contract price	$ 82,000	₩ 99,000,000
Within Five Days After Signing The Contract [Member]
Subsequent Event [Line Items]
Contract price	41,000	49,500,000
Within Five Days Afterall Conditions Are Met [Member]
Subsequent Event [Line Items]
Contract price	$ 41,000	₩ 49,500,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - Apr. 05, 2022 - Subsequent Event [Member]	USD ($)	KRW (₩)
Subsequent Event [Line Items]
Contract price	$ 82,000	₩ 99,000,000
AIQ [Member]
Subsequent Event [Line Items]
Contract price		99,000,000
Value added tax		₩ 9,000,000
Payments to Related Parties | $	$ 82,000