CalEthos (GEDC) 10-Q 14 Aug 23 2023 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
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		14,495,621

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 1,707,000	$ 2,067,000
Prepaid and other current assets	10,000	4,000
Total current assets	1,717,000	2,071,000
Data center costs	233,000
Total assets	1,950,000	2,071,000
Current liabilities
Accounts payable and accrued expenses	808,000	540,000
Convertible promissory notes, net	4,613,000	4,613,000
Notes payable	61,000	61,000
Total current liabilities	5,482,000	5,214,000
Stockholders’ deficit
Preferred stock, value
Common stock par value $0.001: 100,000,000 shares authorized; 14,495,621 and 24,495,621 shares issued and outstanding	14,000	24,000
Additional paid-in capital	11,514,000	11,480,000
Other comprehensive income	8,000	5,000
Stock subscription receivable	(2,000)	(2,000)
Accumulated deficit	(15,066,000)	(14,650,000)
Total stockholders’ deficit	(3,532,000)	(3,143,000)
Total liabilities and stockholders’ deficit	1,950,000	2,071,000
Series A Convertible Preferred Stock [Member]
Stockholders’ deficit
Preferred stock, value

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
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	14,495,621	24,495,621
Common stock, shares outstanding	14,495,621	24,495,621
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		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues
Operating Expenses
Professional fees	97,000	177,000	186,000	422,000
Equity-based compensation	24,000	3,206,000	24,000	6,376,000
General and administrative expenses	33,000	31,000	41,000	35,000
Impairment loss		154,000		154,000
Operating expense	154,000	3,568,000	251,000	6,987,000
Loss from operations	(154,000)	(3,568,000)	(251,000)	(6,987,000)
Other income (expenses)
Interest income	17,000		31,000
Gain on settlement of accounts payable	23,000		23,000
Financing costs	(103,000)	(606,000)	(219,000)	(1,113,000)
Total other expenses	(63,000)	(606,000)	(165,000)	(1,113,000)
Loss before provision for income taxes	(217,000)	(4,174,000)	(416,000)	(8,100,000)
Provision for income taxes
Net loss	(217,000)	(4,174,000)	(416,000)	(8,100,000)
Comprehensive loss
Foreign currency translation loss	1,000	2,000	3,000	(1,000)
Comprehensive loss	$ (216,000)	$ (4,172,000)	$ (413,000)	$ (8,101,000)
Net loss per share - basic	$ (0.01)	$ (0.16)	$ (0.02)	$ (0.31)
Net loss per share - diluted	$ (0.01)	$ (0.16)	$ (0.02)	$ (0.31)
Weighted Average Number of Shares Outstanding, Basic	14,495,621	25,995,621	14,495,621	25,995,621
Weighted Average Number of Shares Outstanding, Diluted	14,495,621	25,995,621	14,495,621	25,995,621

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)	Preferred Stock [Member] Series A Convertible Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Stock Subscription Receivable [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021			$ 26,000	$ 16,269,000	$ (2,000)	$ (2,000)	$ (16,831,000)	$ (540,000)
Beginning balance, shares at Dec. 31, 2021			25,995,621
Foreign currency translation income						(3,000)		(3,000)
Net loss							(3,926,000)	(3,926,000)
Equity-based compensation on restricted stock awards				3,170,000				3,170,000
Ending balance, value at Mar. 31, 2022			$ 26,000	19,439,000	(2,000)	(5,000)	(20,757,000)	(1,299,000)
Ending balance, shares at Mar. 31, 2022			25,995,621
Beginning balance, value at Dec. 31, 2021			$ 26,000	16,269,000	(2,000)	(2,000)	(16,831,000)	(540,000)
Beginning balance, shares at Dec. 31, 2021			25,995,621
Foreign currency translation income								(1,000)
Net loss								(8,100,000)
Ending balance, value at Jun. 30, 2022			$ 26,000	22,645,000	(2,000)	(3,000)	(24,931,000)	(2,265,000)
Ending balance, shares at Jun. 30, 2022			25,995,621
Beginning balance, value at Mar. 31, 2022			$ 26,000	19,439,000	(2,000)	(5,000)	(20,757,000)	(1,299,000)
Beginning balance, shares at Mar. 31, 2022			25,995,621
Foreign currency translation income						2,000		2,000
Net loss							(4,174,000)	(4,174,000)
Equity-based compensation on restricted stock awards				3,206,000				3,206,000
Ending balance, value at Jun. 30, 2022			$ 26,000	22,645,000	(2,000)	(3,000)	(24,931,000)	(2,265,000)
Ending balance, shares at Jun. 30, 2022			25,995,621
Beginning balance, value at Dec. 31, 2022			$ 24,000	11,480,000	(2,000)	5,000	(14,650,000)	(3,143,000)
Beginning balance, shares at Dec. 31, 2022			24,495,621
Foreign currency translation income						2,000		2,000
Net loss							(199,000)	(199,000)
Ending balance, value at Mar. 31, 2023			$ 24,000	11,480,000	(2,000)	7,000	(14,849,000)	(3,340,000)
Ending balance, shares at Mar. 31, 2023			24,495,621
Beginning balance, value at Dec. 31, 2022			$ 24,000	11,480,000	(2,000)	5,000	(14,650,000)	(3,143,000)
Beginning balance, shares at Dec. 31, 2022			24,495,621
Foreign currency translation income								3,000
Net loss								(416,000)
Ending balance, value at Jun. 30, 2023			$ 14,000	11,514,000	(2,000)	8,000	(15,066,000)	(3,532,000)
Ending balance, shares at Jun. 30, 2023			14,495,621
Beginning balance, value at Mar. 31, 2023			$ 24,000	11,480,000	(2,000)	7,000	(14,849,000)	(3,340,000)
Beginning balance, shares at Mar. 31, 2023			24,495,621
Foreign currency translation income						1,000		1,000
Net loss							(217,000)	(217,000)
Fair value of equity-based compensation				24,000				24,000
Cancellation of shares			$ (10,000)	10,000
Cancellation of stock, shares			(10,000,000)
Ending balance, value at Jun. 30, 2023			$ 14,000	$ 11,514,000	$ (2,000)	$ 8,000	$ (15,066,000)	$ (3,532,000)
Ending balance, shares at Jun. 30, 2023			14,495,621

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Cash Flows From Operating Activities
Net loss	$ (217,000)	$ (199,000)	$ (4,174,000)	$ (3,926,000)	$ (416,000)	$ (8,100,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment			154,000			154,000
Amortization of convertible promissory note discounts						1,071,000
Fair value of equity-based compensation					24,000	6,376,000
Gain on settlement of accounts payable	(23,000)				(23,000)
Changes in operating assets and liabilities
Prepaid expenses and other current assets					(6,000)	(6,000)
Accounts payable and accrued expenses					243,000	(8,000)
Net Cash Used in Operating Activities					(178,000)	(513,000)
Cash Flows From Investing Activities
Data center costs					(184,000)
Other assets						(107,000)
Net Cash Used in Investing Activities					(184,000)	(107,000)
Cash Flows From Financing Activities
Repayments of Notes						(25,000)
Net Cash Used in Financing Activities						(25,000)
Effect of exchange rate changes on cash and cash equivalents					2,000	(1,000)
Net decrease in Cash					(360,000)	(646,000)
Cash, Beginning of Period		$ 2,067,000		$ 3,047,000	2,067,000	3,047,000	3,047,000
Cash, End of Period	$ 1,707,000		$ 2,401,000		1,707,000	2,401,000	$ 2,067,000
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes
Non-cash investing and financing activities - none
Accrued interest capitalized as data center cost					$ 14,000

ORGANIZATION AND ACCOUNTING POL

ORGANIZATION AND ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
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. The Company is implementing its plan to build a clean-energy-powered data center operation using the latest energy-efficient building materials and cooling technologies and to provide wholesale colocation services to enterprise IT and hyperscale customers. In addition, the Company may acquire assets and all or part of other companies operating in the high-density computing industry or invest in or joint venture with other more-established companies already in the industry that would add value to the Company’s business strategy. As of July 2022, the Company’s board of directors resolved to focus exclusively on developing a clean-energy-powered data center. Korean entity On November 5, 2021, AIQ System Inc. (“AIQ”) was incorporated in Seoul, Republic of Korea. AIQ is authorized to issue 3 10,000 100,000,000 89,000 100 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 June 30, 2023 condensed consolidated balance sheet data was derived from audited 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 six-month periods ended June 30, 2023 and 2022. The results for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K filed with the SEC on April 17, 2023. Liquidity and Going Concern The Company incurred a net loss of approximately $ 416,000 for the six months ended June 30, 2023 and had an accumulated deficit of approximately $ 15,066,000 as of June 30, 2023. The Company has financed its activities principally through debt and equity financing and shareholder contributions. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these condensed consolidated financial statements. 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 the development of its data center campus development, approvals for construction permits, construction times, delivery of critical equipment, market demand for the Company’s wholesale colocation data center services, the timing of customer commitments for data center space, the management of working capital, and payment terms and conditions for purchase of the Company’s 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 raise additional funding from investors or through other avenues, it may not be able to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable 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 The Company uses 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 and six months ended June 30, 2023 and 2022 because their inclusion would be anti-dilutive. Common share equivalents amounted to 6,000,250 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.

DATA CENTER COSTS

DATA CENTER COSTS	6 Months Ended
	Jun. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
DATA CENTER COSTS	Note 2 – Data Center Costs DATA CENTER COSTS On March 30, 2023, the Company signed an option agreement to acquire 80 3,360,000 September 2024 84,000 84,000 84,000 The Purchase Price is payable with a cash payment of $ 1,680,000 840,000 1.00 840,000 2.0 If the Purchase Shares are issued at the Closing Date, the Company has agreed to repurchase the Purchase Shares (the “Put Option”) under specific circumstances. However, the Put Option expires if the Company’s common stock trades above $2.00 per share for 120 consecutive days. If the Company’s common stock trades below $2.00 per share for 10 consecutive days, the Holder has the option for the Company to repurchase the Purchase Shares for $2.00 per share. As of June 30, 2023, the Company has incurred and capitalized approximately $ 135,000 14,000 On June 23, 2023, the Company signed a contract with HDR Engineering, Inc. to provide site assessment and feasibility to connect critical resources for data center operations and develop a shovel-ready development plan for the Company’s initial 80-acre site. The Company plans to complete this development phase by the end of the third quarter of 2023 and the estimated cost to be approximately $ 500,000 .

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6 Months Ended
	Jun. 30, 2023
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 June 30, December 31, 2023 2022 Accounts payable $ 231,000 $ 186,000 Accrued expenses 19,000 28,000 Accrued interest 558,000 326,000 Accounts payable and accrued expenses $ 808,000 $ 540,000 Accrued Interest The following table presents the details of accrued interest as of the dates indicated: SCHEDULE OF ACCRUED INTEREST June 30, December 31, 2023 2022 Notes payable $ 21,000 $ 17,000 Convertible promissory notes 537,000 309,000 Balance, end of the year $ 558,000 $ 326,000

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
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 June 30, December 31, 2023 2022 Balance, beginning of the year $ 61,000 $ 61,000 Additions – – Payments – – Balance, end of the year $ 61,000 $ 61,000 On July 7, 2020, the Company issued a promissory note in the principal amount of $ 11,000 10 100,000 11,000 3,000 On April 22, 2021, the Company issued a promissory note in the principal amount of $ 50,000 10 April 22, 2022 15 50,000 14,000 Interest expense on these notes payable amounted to $ 6,000 6,000

CONVERTIBLE PROMISSORY NOTES

CONVERTIBLE PROMISSORY NOTES	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
CONVERTIBLE PROMISSORY NOTES	Note 5 – Convertible Promissory Notes CONVERTIBLE PROMISSORY NOTES Convertible promissory notes consisted of the following as of the dates indicated: SCHEDULE OF CONVERTIBLE PROMISSORY NOTES June 30, December 31, 2023 2022 Principal Balance, beginning of year $ 4,613,000 $ 4,613,000 Additions – – Balance, end of year 4,613,000 4,613,000 Discount Balance, beginning of year – 1,526,000 Additions – – Amortization – (1,526,000 ) Balance, end of year – – Net carrying amount $ 4,613,000 $ 4,613,000 The effective interest rate used to amortize the debt discount for the six months ended June 30, 2022 ranged 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 June 30, December 31, 2023 2022 Principal $ 4,613,000 $ 4,613,000 Interest 538,000 309,000 Total 5,151,000 4,922,000 Conversion price per share 1.00 1.25 1.00 1.25 Potential future share 4,220,448 4,125,699 Interest expense on default convertible promissory notes amounted to $ 229,000 14,000 37,000 1,071,000

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Note 6 – Commitments and Contingencies COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. Employment Agreement In June 2023, the Company executed an employment agreement (“Employment Agreement”) to employ an individual to be the Company’s President and Chief Operating Officer (“Executive”). As compensation for services rendered, the Executive will be paid a base salary of $ 250,000 1) when the necessary governmental permits are granted to start construction of the Data Center, 2) once the Data Center is operational and at least 25% of the planned MW’s of collation capacity is leased. Also, at the discretion of the Company, following each calendar year of continued employment, the Executive shall be eligible to receive a discretionary bonus of up to fifty percent ( 50%) of Executive’s Base Salary during the first year of employment, up to seventy-five percent (75%) of Executive’s then-current Base Salary during the second year of employment, and up to one-hundred percent (100%) of Executive’s then-current Base Salary during Executive’s third year of employment (the “Bonus”). Payment of the Bonus will be based on achieving certain goals and performance criteria established by the Company 600,000 1,900,000 The Employment Agreement also provides for certain severance benefits upon termination by the Company without “cause” or by the Executive for good reason. In the event of a termination by the Company without cause or by the Executive for good reason after the first full year of employment, the Executive would be entitled to (i) continued payment of the base salary for the lesser of six months or the remaining term of the Employment Agreement, subject to the Executive signing a timely and effective separation agreement containing a release of all claims against the Company and other customary terms; provided, however, that if such termination is between the 91 st

STOCKHOLDERS DEFICIT

STOCKHOLDERS DEFICIT	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
STOCKHOLDERS DEFICIT	Note 7 – Stockholders Deficit STOCKHOLDERS DEFICIT Stock options As part of the Employment Agreement, as defined in Note 6 – Commitments and Contingencies, the executive was granted an incentive stock option (“Incentive Option”) and a non-qualified stock option (“Non-Qual Option”) (collectively “Stock Options”) to purchase 600,000 1,900,000 0.50 The Incentive Option shall vest and become exercisable as follows: (i) options to purchase up to 200,000 200,000 200,000 600,000 339 0.50 5 3.99 0 6,000 The Non-Qual Option shall vest and become exercisable as follows: (1) 216,666 216,668 (2) the remaining 1,250,000 a. 250,000 b. 250,000 c. 250,000 d. 500,000 The Company’s management has accounted for the Non-Qual Option 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 development phase (a) will be completed by March 31, 2024, the second development phase (b) by September 30, 2024, the third development phase (c) by March 31, 2025 and the fourth development phase by September 30, 2025. The estimated service period will be adjusted for actual and expected completion date changes. Any such change will be recognized prospectively, and the remaining deferred compensation will be recognized over the remaining service period. The Non-Qual Option Grant Date fair value of $ 550,000 137 176 0.50 3.9 4.5 4.7 5.2 0 18,000 As of June 30, 2023, the Company had 2,500,000 7 0.50 0.47 Warrants During the six months ending June 30, 2023, 84,304 1,684,000 1.84 0.46 0.47

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Note 8 – 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 there are no reportable events.

ORGANIZATION AND ACCOUNTING P_2

ORGANIZATION AND ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Korean entity	Korean entity On November 5, 2021, AIQ System Inc. (“AIQ”) was incorporated in Seoul, Republic of Korea. AIQ is authorized to issue 3 10,000 100,000,000 89,000 100
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 June 30, 2023 condensed consolidated balance sheet data was derived from audited 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 six-month periods ended June 30, 2023 and 2022. The results for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K filed with the SEC on April 17, 2023.
Liquidity and Going Concern	Liquidity and Going Concern The Company incurred a net loss of approximately $ 416,000 for the six months ended June 30, 2023 and had an accumulated deficit of approximately $ 15,066,000 as of June 30, 2023. The Company has financed its activities principally through debt and equity financing and shareholder contributions. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these condensed consolidated financial statements. 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 the development of its data center campus development, approvals for construction permits, construction times, delivery of critical equipment, market demand for the Company’s wholesale colocation data center services, the timing of customer commitments for data center space, the management of working capital, and payment terms and conditions for purchase of the Company’s 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 raise additional funding from investors or through other avenues, it may not be able to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable 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 The Company uses 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 and six months ended June 30, 2023 and 2022 because their inclusion would be anti-dilutive. Common share equivalents amounted to 6,000,250
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)	6 Months Ended
	Jun. 30, 2023
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 June 30, December 31, 2023 2022 Accounts payable $ 231,000 $ 186,000 Accrued expenses 19,000 28,000 Accrued interest 558,000 326,000 Accounts payable and accrued expenses $ 808,000 $ 540,000
SCHEDULE OF ACCRUED INTEREST	The following table presents the details of accrued interest as of the dates indicated: SCHEDULE OF ACCRUED INTEREST June 30, December 31, 2023 2022 Notes payable $ 21,000 $ 17,000 Convertible promissory notes 537,000 309,000 Balance, end of the year $ 558,000 $ 326,000

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Payable
SCHEDULE OF NOTES PAYABLE	The table below summarizes the transactions as of the dates indicated: SCHEDULE OF NOTES PAYABLE June 30, December 31, 2023 2022 Balance, beginning of the year $ 61,000 $ 61,000 Additions – – Payments – – Balance, end of the year $ 61,000 $ 61,000

CONVERTIBLE PROMISSORY NOTES (T

CONVERTIBLE PROMISSORY NOTES (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
SCHEDULE OF CONVERTIBLE PROMISSORY NOTES	Convertible promissory notes consisted of the following as of the dates indicated: SCHEDULE OF CONVERTIBLE PROMISSORY NOTES June 30, December 31, 2023 2022 Principal Balance, beginning of year $ 4,613,000 $ 4,613,000 Additions – – Balance, end of year 4,613,000 4,613,000 Discount Balance, beginning of year – 1,526,000 Additions – – Amortization – (1,526,000 ) Balance, end of year – – Net carrying amount $ 4,613,000 $ 4,613,000
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 June 30, December 31, 2023 2022 Principal $ 4,613,000 $ 4,613,000 Interest 538,000 309,000 Total 5,151,000 4,922,000 Conversion price per share 1.00 1.25 1.00 1.25 Potential future share 4,220,448 4,125,699

ORGANIZATION AND ACCOUNTING P_3

ORGANIZATION AND ACCOUNTING POLICIES (Details Narrative) - USD ($)		3 Months Ended				6 Months Ended
	Nov. 05, 2021	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Number of common shares authorized to issued		100,000,000				100,000,000		100,000,000
Number of shares issued	10,000
Net Income (Loss) Attributable to Parent		$ 217,000	$ 199,000	$ 4,174,000	$ 3,926,000	$ 416,000	$ 8,100,000
Retained Earnings (Accumulated Deficit)		$ 15,066,000				$ 15,066,000		$ 14,650,000
Antidilutive securities						6,000,250
AIQ System Inc. [Member]
Number of common shares authorized to issued	3,000,000
AIQ System Inc. [Member] | KOREA, REPUBLIC OF
Number of shares issued	100,000,000
Number of shares issued, value	$ 89,000
Ownership percentage	100%

DATA CENTER COSTS (Details Narr

DATA CENTER COSTS (Details Narrative)			6 Months Ended
	Jun. 23, 2023 USD ($)	Mar. 30, 2023 USD ($) a $ / shares shares	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Escrow funds		$ 84,000
Purchase price payable with issuance of share			$ 61,000	$ 61,000	$ 61,000
Development costs			135,000
Interest expense			$ 14,000
Payments to Acquire Property, Plant, and Equipment	$ 500,000
Option Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of acres of commercially zoned land | a		80
Purchase price		$ 3,360,000
Option expiration description		September 2024
Non-refundable deposit		$ 84,000
Escrow funds		84,000
Purchase price payable with cash payment		$ 1,680,000
Purchase price payable with issuance of share | shares		840,000
Shares issued price per share | $ / shares		$ 1
Purchase price payable with issuance of share		$ 840,000
Repurchase description of shares		However, the Put Option expires if the Company’s common stock trades above $2.00 per share for 120 consecutive days. If the Company’s common stock trades below $2.00 per share for 10 consecutive days, the Holder has the option for the Company to repurchase the Purchase Shares for $2.00 per share.
Option Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Interest rate, stated percentage		200%

SCHEDULE OF ACCOUNTS PAYABLE AN

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounts payable	$ 231,000	$ 186,000
Accrued expenses	19,000	28,000
Accrued interest	558,000	326,000
Accounts payable and accrued expenses	$ 808,000	$ 540,000

SCHEDULE OF ACCRUED INTEREST (D

SCHEDULE OF ACCRUED INTEREST (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Notes payable	$ 21,000	$ 17,000
Convertible promissory notes	537,000	309,000
Balance, end of the year	$ 558,000	$ 326,000

SCHEDULE OF NOTES PAYABLE (Deta

SCHEDULE OF NOTES PAYABLE (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Notes Payable
Balance, beginning of the year	$ 61,000	$ 61,000	$ 61,000
Additions
Payments		$ (25,000)
Balance, end of the year	$ 61,000		$ 61,000

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)			6 Months Ended
	Apr. 22, 2021	Jul. 07, 2020	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Apr. 21, 2021
Short-Term Debt [Line Items]
Accrued interest			$ 558,000		$ 326,000
Promissory Note [Member]
Short-Term Debt [Line Items]
Debt instrument, face amount		$ 11,000	11,000
Increase in interest rate		10%
Accrued interest			3,000
Interest expense, debt			6,000	$ 6,000
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
Increase in interest rate	15%
Accrued interest			$ 14,000
Debt instrument interest rate						10%
Debt instrument, maturity date	Apr. 22, 2022

SCHEDULE OF CONVERTIBLE PROMISS

SCHEDULE OF CONVERTIBLE PROMISSORY NOTES (Details) - Convertible Notes Payable [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Balance, beginning of year	$ 4,613,000	$ 4,613,000
Additions
Balance, end of year	4,613,000	4,613,000
Balance, beginning of year		1,526,000
Additions
Amortization		(1,526,000)
Balance, end of year
Net carrying amount	$ 4,613,000	$ 4,613,000

SCHEDULE OF POTENTIAL FUTURE SH

SCHEDULE OF POTENTIAL FUTURE SHARES ISSUANCE OF CONVERSION NOTES (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Principal	$ 4,613,000	$ 4,613,000
Interest	538,000	309,000
Total	$ 5,151,000	$ 4,922,000
Potential future share	4,220,448	4,125,699
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 ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Short-Term Debt [Line Items]
Interest expense	$ 135,000
Interest expense	14,000
Amortization of debt discount		$ 1,071,000
Convertible Notes Payable [Member]
Short-Term Debt [Line Items]
Default interest expense	229,000
Interest expense	$ 14,000
Interest expense		37,000
Amortization of debt discount		$ 1,071,000
Convertible Notes Payable [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Effective interest rate debt discount percentage		4.76%
Convertible Notes Payable [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Effective interest rate debt discount percentage		64.60%

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Employee salary compensation	1) when the necessary governmental permits are granted to start construction of the Data Center, 2) once the Data Center is operational and at least 25% of the planned MW’s of collation capacity is leased. Also, at the discretion of the Company, following each calendar year of continued employment, the Executive shall be eligible to receive a discretionary bonus of up to fifty percent ( 50%) of Executive’s Base Salary during the first year of employment, up to seventy-five percent (75%) of Executive’s then-current Base Salary during the second year of employment, and up to one-hundred percent (100%) of Executive’s then-current Base Salary during Executive’s third year of employment (the “Bonus”). Payment of the Bonus will be based on achieving certain goals and performance criteria established by the Company
Incentive Option [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Share option granted to purchase	600,000	600,000
Non Qual Option [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Share option granted to purchase	1,900,000	1,900,000
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Base salary	$ 250,000

STOCKHOLDERS DEFICIT (Details N

STOCKHOLDERS DEFICIT (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended	6 Months Ended
	Nov. 05, 2021	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2023
Subsidiary, Sale of Stock [Line Items]
Compensation expense			$ 6,000
Stock issued during period, shares	10,000
Stock options outstanding		2,500,000	2,500,000	2,500,000
Average remaining life				7 years
Remaining outstanding balance		1,684,000	1,684,000	1,684,000
Weighted average exercise price		$ 1.84	$ 1.84	$ 1.84
Average remaining life		5 months 15 days	5 months 15 days	5 months 15 days
Minimum [Member]
Subsidiary, Sale of Stock [Line Items]
Weighted average fair value				$ 0.47
Maximum [Member]
Subsidiary, Sale of Stock [Line Items]
Weighted average fair value				$ 0.50
Initial Site Development [Member]
Subsidiary, Sale of Stock [Line Items]
Stock issued during period, shares				250,000
Permits Construction [Member]
Subsidiary, Sale of Stock [Line Items]
Stock issued during period, shares				250,000
Completion Of Construction [Member]
Subsidiary, Sale of Stock [Line Items]
Stock issued during period, shares				250,000
Build To Suit [Member]
Subsidiary, Sale of Stock [Line Items]
Stock issued during period, shares				500,000
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock per share				$ 0.50
Granted option fair value		$ 600,000	$ 600,000	$ 600,000
Volatality percentage				339%
Estimated life				5 years
Risk free rate				3.99%
Dividend rate				0%
Common Stock [Member] | First Anniversary Grant Date [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock vested and exercised		200,000	200,000	200,000
Common Stock [Member] | Second Anniversary Grant Date [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock vested and exercised		200,000	200,000	200,000
Common Stock [Member] | Third Anniversary Grant Date [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock vested and exercised		200,000	200,000	200,000
Warrant [Member]
Subsidiary, Sale of Stock [Line Items]
Weighted average fair value				$ 0.47
Warrant shares expired				84,304
Incentive Option [Member]
Subsidiary, Sale of Stock [Line Items]
Share option granted to purchase		600,000		600,000
Non Qual Option [Member]
Subsidiary, Sale of Stock [Line Items]
Share option granted to purchase		1,900,000		1,900,000
Compensation expense			$ 18,000
Non Qual Option [Member] | Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock per share				$ 0.50
Common stock vested and exercised		1,250,000	1,250,000	1,250,000
Granted option fair value		$ 550,000	$ 550,000	$ 550,000
Dividend rate				0%
Volatality percentage, minimum				137%
Volatality percentage, maximum				176%
Risk free rate, minimum				4.70%
Risk free rate, maximum				5.20%
Non Qual Option [Member] | Common Stock [Member] | Minimum [Member]
Subsidiary, Sale of Stock [Line Items]
Estimated life				3 years 10 months 24 days
Non Qual Option [Member] | Common Stock [Member] | Maximum [Member]
Subsidiary, Sale of Stock [Line Items]
Estimated life				4 years 6 months
Non Qual Option [Member] | Common Stock [Member] | Third Anniversary Grant Date [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock vested and exercised		216,668	216,668	216,668
Non Qual Option [Member] | Common Stock [Member] | First And Second Anniversary Grant Date [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock vested and exercised		216,666	216,666	216,666