| 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 December 31, 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 three-month
periods ended March 31, 2024 and 2023. The results for the three months ended March 31, 2024 are not necessarily indicative of the results
to be expected for the full year ending December 31, 2024 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, 2023, included in the Company’s annual report on Form 10-K filed
with the SEC on April 9, 2024. Principles
of Consolidation The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiary from the formation date. All material
intercompany transactions and balances have been eliminated in consolidation. Going
Concern and Liquidity The
Company incurred a net loss of approximately $ 7,014,000 26,294,000 no The
Company’s 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 services; the 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 the Company’s 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 the Company’s 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 consolidated financial
statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Use
of Estimates The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses during the reporting periods. Foreign
Currency Translation The
financial statements of foreign subsidiaries, for which the functional currency is the local currency, are translated into U.S. dollars
using the exchange rate at the consolidated balance sheet date for assets and liabilities and a weighted-average exchange rate during
the year for revenue, expenses, gains and losses. Translation adjustments are recorded as other comprehensive income (loss) within shareholders’
equity (deficit). Gains or losses from foreign currency transactions are recognized in the consolidated statements of operations. Fair
Value Measurement Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date.
Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable
inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs
are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from
sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that
market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level
1 - Observable
inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level
2 - Other
inputs that are directly or indirectly observable in the marketplace.
Level
3 - Unobservable
inputs which are supported by little or no market activity. The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. As
of and for the three months ended March 31, 2024, the Company had no assets or liabilities that require fair value measurement. Cash
and Cash Equivalents The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Cash and cash equivalents are recorded at cost, which approximates their 250,000 552,000 22,000 Prepaid
Expense Prepaid
expenses are assets held by the Company that are expected to be realized and consumed within twelve months after the reporting period. Data
Center Cost Data
center cost is stated at cost, which includes the cost incurred to complete phase I of the
Company’s payroll-related In
accordance with ASC 360-10-35, the Company reviews the carrying amounts of data center cost when events or changes in circumstances indicate
the assets may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. The
recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future
cash flows to be derived from continuing use of the asset or cash-generating unit are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Fair value less
costs of disposal is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between
knowledgeable, willing parties, less the cost of disposal. When a binding sale agreement is not available, fair value less costs of disposal
is estimated using a discounted cash flow approach with inputs and assumptions consistent with those of a market participant. If the
recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the cash-generating
unit is reduced to its recoverable amount. An impairment loss is recognized immediately in net income. As
of March 31, 2024, there have been no circumstances to indicate the asset may not be recoverable. Related
Parties The
Company follows Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
section 850-10 for the identification of related parties and disclosure of related - Pursuant
to ASC section 850-10-20 , The
consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements,
expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated
in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include:
(a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or
nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each
of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that
used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if
not otherwise apparent, the terms and manner of settlement. Commitments
and Contingencies The
Company follows ASC section 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the consolidated
financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events
occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.
In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result
in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought therein. If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment
indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be
disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Stock-Based
Compensation The Company its Compensation – Stock Compensation The Company 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
months ended March 31, 2024 and 2023 because their inclusion would be anti-dilutive. Common stock equivalents amounted to 12,699,801 7,510,448 Recent
Accounting Pronouncements The
Company’s management reviewed all recently - |
