The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2021.





This discussion contains certain forward-looking statements that involve risks
and uncertainties. Our actual results and the timing of certain events could
differ materially from those discussed in these forward-looking statements as a
result of certain factors, including, but not limited to, those set forth herein
and elsewhere in this Quarterly Report and in our other filings with the
Securities and Exchange Commission. See "Cautionary Note Regarding Forward

Looking Statements."



Plan of Operations



As of the filing of this Report, it is our plan to continue our focus on
building a large-scale, clean-energy powered, containerized, immersion-cooled
data center operation that will provide wholesale colocation services to
high-density computing, enterprise customers. While it was originally part of
our strategy to build such a facility for our own utilization with the bitcoin
mining systems that we planned to manufacture and use for our own bitcoin mining
operations, going forward, our operating plan is to focus only on developing and
building clean-energy powered, containerized, immersion-cooled data centers for
enterprise customers. To implement this plan, we intend to complete the purchase
of 80 acres of land and to negotiate a Power Purchase Agreement with the local
utility company for up to 100 megawatts of clean energy from local geothermal
power plants and solar farms and to evaluate various paths for accessing
close-by fiber networks.



Once the land acquisition is closed, we intend to complete a land use plan that
will be submitted to authorities for approval and for permits to start
construction. We expect, based on all related factors, that a submittable plan,
which will include civil engineering, data center and infrastructure design and
construction schedule will take approximately three months to complete. Once
submitted to the appropriate governmental departments and agencies for approval,
it is expected that it could take another three months or more before we receive
the required permits for construction, and that the construction could take
another six months or more to complete depending on supply chain issues at the
time for data center, electrical and communication connectivity components

of
the data center build.

As we move through the development process to build a clean-energy powered, containerized, immersion-cooled data center, we will continue to refine and finalize the courses of action needed to implement our business plan and operations. As a result, management has not fully determined our actual short-term or long-term capital requirements, which management expects to be substantial.





It is anticipated that we will incur significant expenses in the implementation
of our business plan as described herein, and that we will require substantial
financing to complete the development and construction of the planned data
center operation. A failure to obtain this necessary capital when required on
acceptable terms, or at all, could force us to delay, limit, reduce or terminate
our development plans, any commercialization efforts and any other operations.
We may not be able to secure financing on favorable terms, or at all, to meet
our future capital needs. In addition, even if we are able to obtain sufficient
funding to commence our business operations, we may need to pursue additional
financing in the future to make expenditures and/or investments to support the
growth of our business. In addition, we may require additional capital to pursue
our business objectives and respond to new competitive pressures, pay
extraordinary expenses or fund our growth, including through acquisitions.
Additional funding, however, may not be available when required on terms that
are acceptable to us, or at all. If we are unable to obtain adequate financing
or financing on terms satisfactory to us when it is required, our ability to
commence and grow our proposed business operations, to support our business and
to respond to business challenges could be significantly limited.

We currently have only limited capital with which to pay these anticipated expenses. To fund our business plan going forward, we intend to raise funds from investors by issuing common stock, preferred stock and/or debt securities.





12







Results of Operations



The table summarizes the results of operations for the three and six months
ended June 30:



                                        For the Three Months Ended          For the Nine Months Ended
                                               September 30,                      September 30,
                                           2022              2021             2022              2021

Revenues                              $            -     $          -     $           -     $          -
Operating expenses
Professional fees                            136,000          118,000           588,000          824,000
Stock based compensation                 (11,168,000 )      1,745,000        (4,791,000 )      1,745,000

General and administrative expenses           24,000           13,000            59,000           18,000
Impairment loss                                    -                -           154,000                -
Total operating (income)expenses         (11,008,000 )      1,876,000        (4,020,000 )      2,587,000
Income (loss) from operations             11,008,000       (1,876,000 )

4,020,000 (2,587,000 )



Other income (expense)
Interest income                                1,000                -             1,000                -
Financing costs                             (509,000 )       (187,000 )      (1,622,000 )       (226,000 )
Total other expenses                        (508,000 )       (187,000 )

(1,621,000 ) (226,000 )



Income (loss) before provision for
income taxes                              10,500,000       (2,063,000 )       2,399,000       (2,813,000 )
Provision for income taxes                         -                -                 -                -
Net income (loss)                     $   10,500,000     $ (2,063,000 )   $

  2,399,000     $ (2,813,000 )




Revenues

The Company had no revenues for the nine months ended September 30, 2022 and 2021.





Expenses



Operating (income) expense for the nine months ended September 30, 2022 was
$4,020,000, compared to $(2,587,000) for the nine months ended September 30,
2021. The increase of $6,607,000, in operating income, pertains primarily to (1)
reversal of $4,791,000 of stock-based compensation expense, for the year ended
December 31, 2021, related to the forfeiture of the stock-based awards. Since
the Company discontinued the development in South Korea of the Company's 5
nanometer ASIC chip and containerized, immersion-cooled bitcoin mining computer
system, management determine that performance-based service would not be
achievable. Also, the stock-based compensation for the nine months ended
September 31, 2022 was nil, because of the reversal of unvested restricted stock
awards, which was forfeited, compared to the stock based compensation expense of
$1,745,000 for the nine months ended September 31, 2021. The expense of $90,000
for settling a legal case for the nine months ended September 30, 2022.

Liquidity and Capital Resources





The Company's financial position as of September 30, 2022 and December 31, 2021
were as follows:



Working Deficit



                       September 30,       December 31,
                           2022                2021
                        (Unaudited)
Current assets        $     2,250,000     $    3,054,000
Current liabilities         5,163,000          3,632,000
Working deficit       $    (2,913,000 )   $     (578,000 )
At September 30, 2022, the Company had cash of approximately $2,249,000 and
prepaid expenses of approximately $1,000. The working deficit increased by
approximately $2,335,000 from December 31, 2021 to September 30, 2022. The
increase in the working capital deficit was due primarily to the decrease in
cash of $798,000 and the increase in convertible promissory of approximately
$1,526,000.



At September 30, 2022, the Company had outstanding promissory notes and accrued
interest in the aggregate amount of $104,000 and outstanding convertible notes
and accrued interest in aggregate amount of $4,806,000, all of which were past
due and all of which were in default. See Notes 4 and 5 to the accompanying
unaudited financial statements of the Company.



Cash Flows



                                                        For the Nine Months Ended
                                                              September 30,
                                                           2022             2021


Net cash used in operating activities                 $     (674,000 )   $  (301,000 )
Net cash used in investing activities                       (106,000 )

-

Net cash provided by (used in) financing activities (25,000 ) 3,678,000 Effect of exchange rate changes

                                7,000

-


Increase (decrease) in Cash during the Period               (798,000 )    

3,377,000
Cash, Beginning of Period                                  3,047,000               -
Cash, End of Period                                   $    2,249,000     $ 3,377,000




13

Cash flows used in operating activities

Net cash used in operating activities increased by $373,000 during the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 due to an increase in cash expense of approximately $403,000.

Cash flows used in investing activity





Net cash used in investing activity increased by $106,000 during the nine months
ended September 30, 2022 as compared to the nine months ended September 30, 2021
due to payments for design and development work for the Company's ASIC chip
which was discontinued in the third quarter of 2022.

Cash flows used in financing activities





The Company had net cash used in financing activities during the nine months
ended September 30, 2022 due to $25,000 repayment of notes payable. Conversely,
it had net cash provided by financing activities during the nine months ended
September 30, 2021 mainly due to proceeds from convertible promissory notes and
notes payable amounting to $3,550,000 and $128,000, respectively.



Capital Requirements




The Company estimates that it will require up to $2 million of its current cash
for expenses and operating costs to complete the development of a comprehensive
plan for its planned clean-energy powered, containerized, immersion-cooled data
center operation. Once the plans are approved for construction by the requisite
authorities, the Company estimates the initial phase of its planned data center
operation will cost between $60 to 75 million to build.



Past the plan development phase, the Company will need to raise capital in order
to build its planned operations and achieve its growth targets, which the
company plans to raise from investors by issuing common stock, preferred stock
and/or debt securities. However, there can be no assurance that such financings
will be available in sufficient amounts and on acceptable terms when it's
needed. 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 but
not limited to the condition of the capital market, investor interest in our
business plan, demand for the Company's services by enterprise customers, the
timing of approvals from authorities to start construction, the management of
working capital, and reasonable payment terms and conditions for purchase of
goods and services we will need to build our data center operation.



Critical Accounting Policies



The preparation of condensed consolidated financial statements in conformity
with United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the
condensed consolidated financial statements and accompanying disclosures of our
company. Although these estimates are based on management's knowledge of current
events and actions that our company may undertake in the future, actual results
may differ from such estimates.



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.



Foreign Currency Translation



The financial statements of our foreign subsidiary, 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.



Debt and Debt Discounts




In accordance with ASC 470-20, Debt with Conversion and Other Options, the
Company first allocates the cash proceeds of the notes between the notes and the
warrants on a relative fair value basis, secondly, proceeds are then allocated
to the conversion feature.



The Company accounts for debt discounts originating in connection with
conversion features that remain embedded in the related notes in accordance with
ASC 470-20. These costs are classified on the consolidated balance sheet as a
direct deduction from the debt liability. The Company amortizes these costs over
the term of its debt agreements as financing cost in the consolidated statement
of operations.



Stock-Based Compensation




We account for our stock-based compensation under ASC 718, "Compensation - Stock
Compensation" using the fair value based method. Under this method, compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period. This
guidance establishes standards for the accounting for transactions in which an
entity exchanges it equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity's equity instruments or
that may be settled by the issuance of those equity instruments.



14







We use the fair value method for equity instruments granted to non-employees and
use the BSM model for measuring the fair value of options. The stock based fair
value compensation is determined as of the date of the grant (measurement date)
and is recognized over the vesting periods.

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.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

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