What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-03-12 compared with 2024-08-09 · 67 added, 70 removed, 81 unchanged (63% of the section changed)

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The following discussion and analysis should be

read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information

appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included

in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The following discussion and analysis compares our consolidated

results of operations for the three months ended June 30, 2024 (the “2024 Quarter”) with those for the six months ended June

30, 2023 (the “2023 Quarter”) and our consolidated results of operations for the six months ended June 30, 2024 (the “2024

Period”) with those for the six months ended June 30, 2023 (the “2023 Period”).

read in conjunction with our unaudited consolidated financial statements, and the notes thereto, and other financial information appearing

elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual

Report on Form 10-K for the fiscal year ended December 31, 2023.

The following discussion and analysis compares our consolidated results

of operations for the three months ended September 30, 2024 (the “2024 Quarter”) with those for the three months ended September

30, 2023 (the “2023 Quarter”) and our consolidated results of operations for the nine months ended September 30, 2024 (the

“2024 Period”) with those for the nine months ended September 30, 2023 (the “2023 Period”).

Cautionary Note Regarding Forward-Looking Statements

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terminated all rental agreements and future purchase orders related to Ethereum mining operations.

We now intend to mine Bitcoin, subject

to financing.

However, we require significant financing to commence Bitcoin mining.

Since late 2022 we have focused on securing

a debt facility.

We now intend to build Tier 3 AI data

center infrastructure and lease our data centers to tenants who require custom built high performance computing facilities, subject to

However, we require significant financing to commence building these data centers.

Since late 2024 we have focused on

securing equity and debt capital.

We cannot provide any assurances we will receive any capital under a debt facility.

Any debt financing will be used to

finance the purchase of Bitcoin mining hardware and hosting contracts.

Any financing will

be used to finance the build of High Performance computing data centers.

We have suspended our daily operations subject to receiving additional

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the Company involving mergers, acquisitions or other business combination transactions in an effort to diversify our business.

not currently a party to any agreement or understandings with any third parties, and there are no assurances even if our management locates

an opportunity which it believes will be in the best interests of our shareholders that we will ever consummate such a transaction.

investors should not place undue reliance on these efforts.

As stated above, at present, the Company has no

sources of revenue and has no specific business plan or purpose without significant financing.

Therefore, the Company’s business

plan is to also seek an acquisition or merger candidate (a “Business Combination”).

As a result, the Company is considered

a “blank check” or “shell” company.

See the Risk Factors included in our Annual Report on Form 10-K for the fiscal

year ended December 31, 2023.

Management does not intend to undertake any efforts to cause a market to develop in the Company’s

securities until such time as the Company has successfully implemented its business plan and/or closed on a suitable Business Combination.

not currently a party to any definitive agreement with any third parties, and there are no assurances that we will ever consummate any

merger, acquisition or business combination.

Accordingly, investors should not place undue reliance on these efforts.

Although we have been in discussions with potential

partners or targets, we have not entered into any definitive agreements.

The evaluation and selection of a business opportunity is a complex

and uncertain process, and we have not yet identified a target operating business for acquisition.

Business opportunities that we believe

are in the best interests of the Company and its shareholders may be scarce, or we may be unable to attract the businesses we identify

as viable for our objectives, including due to competitive forces in the marketplace beyond our control.

There is no assurance that we

will be able to locate compatible business opportunities for the Company.

partners and acquisition targets, we have not entered into any definitive agreements.

The evaluation and selection of a business opportunity

is a complex and uncertain process.

Business opportunities that we believe are in the best interests of the Company and its shareholders

may be scarce, or we may be unable to attract the businesses we identify as viable for our objectives, including due to competitive forces

in the marketplace beyond our control.

As stated above, at September 30, 2024, the Company

had no sources of revenue and has no specific business plan or purpose without significant financing.

Therefore, the Company’s business

plan is to also seek an acquisition or merger candidate.

As a result, the Company is considered a “blank check” or “shell”

See the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Critical Accounting Policies and Estimates

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For information on recent accounting pronouncements

and impacts, see Note 1 to the unaudited condensed consolidated financial statements.

Three Months Ended June 30, 2024 Compared to

the Three Months Ended June 30, 2023

and impacts, see Note 1 to the unaudited consolidated financial statements.

Three Months Ended September 30, 2024 Compared

to the Three Months Ended September 30, 2023

Results of operations

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reduce cost compared to the 2023 Quarter.

Our other income for the 2024 Quarter was $69,941

compared to other income of $484,887 for the 2023 Quarter.

Other income in the 2024 quarter was comprised of $18,132 in interest expense

Our other expense for the 2024 Quarter was $1,017,534

compared to other expense of $20,323 for the 2023 Quarter.

Other expense in the 2024 quarter was comprised of $13,493 in interest expense

and $1,279,091 for the loss on the change in fair value of derivative liabilities offset by income of $275,000 on the refund of an equipment

Other income for the 2023 quarter was comprised of $15,113 in interest expense, offset by income of $500,000 in deposits from

equipment refunds.

Six Months Ended June 30, 2024 Compared to

the Six Months Ended June 30, 2023

Other expense for the 2023 quarter was comprised of $20,323 in interest expense.

Nine Months Ended September 30, 2024 Compared

to the Nine Months Ended September 30, 2023

Results of operations

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The stock-based compensation for the 2023 Quarter was related to the amendment

of options to the officers of the Company.

of options to the officers of the Company and new options issued to a consultant.

Our other expense for the 2024 Period was $1,062,198

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Liquidity and Capital Resources

As of June 30, 2024 and the date of the filing

of this report, Company had approximately $400 and $64,000 of cash on hand.

Our liquidity was primarily derived from debt and equity investments

from accredited investors and also from selling the crypto that we mined through September 2022.

On July 5, 2024, subsequent to the period

covered by this report, the Company received an additional refund of $275,000 related to prior advances made for the purchase of equipment.

To recommence our crypto operations and fund operations for the next 12 months, the Company is seeking to raise $75 million in debt facility.

We currently have no available sources of capital and we can provide no assurances that any debt financings will be available in the future.

Additionally, the Company is (i) in default under the 1800 Notes in the sum of 150% of the remaining outstanding principal balances of

the 1800 Notes in the aggregate of approximately $226,000, plus accrued interest and default interest as defined under such notes, (ii)

in default under two other notes in the aggregate principal amount of approximately $120,000 and (iii) owes a significant amount of money

to its executive officers for accrued salary.

We have suspended our operations.

to close on a debt facility or raise sufficient additional funds from other sources, we will be required to abandon our plan of operations.

As of September 30, 2024, Company had approximately

$5,000 of cash on hand.

Our liquidity was primarily derived from debt and equity investments from accredited investors and the refund

of deposits paid to suppliers in 2022.

To commence our Tier 3 data center colocation operations and fund operations for the next 12 months,

the Company is seeking to raise $2 million in equity capital.

We currently have no available sources of capital and we can provide no

assurances that any debt financings will be available in the future.

Additionally, the Company is (i) in default under the 1800 Notes

in the sum of 150% of the remaining outstanding principal balances of the 1800 Notes in the aggregate of approximately $206,000, plus

accrued interest and default interest as defined under such notes, (ii) in default under two other notes in the aggregate principal amount

of approximately $120,000 and (iii) owes a significant amount of money to its executive officers for accrued salary.

If we fail to close on a debt or equity facility

or raise sufficient additional funds from other sources, we will be required to abandon our plan of operations.

The Company has terminated agreements for approximately

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The Company is making no further payments against the potential balance.

No confirmation has been received from 2CRSI and

as such the balance remains outstanding on the Company’s balance sheet in the accompanying financial statements.

Subsequent to September 30, 2024, the Company received

a debt waiver from the vendor in which they agreed to waive the debt completely with no additional amount owed.

See Note 10 – Subsequent Events to the unaudited

consolidated financial statements including in this report.

Summary of cash flows

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Net cash provided by (used in) operating activities

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Operating Activities

During the 2024 Period, cash used in operating

activities of $2,047 primarily resulted from the net loss of $766,682 offset by change in fair value of derivative liabilities of $152,052,

increases in accounts payable and accrued expenses of $45,725 and increases in accrued payroll of $532,137.

During the 2024 Period, cash provided by operating

activities of $22,740 primarily resulted from the refund of prepaid hosting services, offset by the net loss of $2,164,954, change in

fair value of derivative liabilities of $1,431,143, increases in accounts payable and accrued expenses of $68,492 and increases in accrued

payroll of $653,338.

During the 2023 Period, cash provided by operating

activities of $51,683 primarily resulted from the refund of prepaid hosting services, offset by the net loss of $2,611,807 and stock-based

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Financing Activities

In the 2024 Period, cash provided by financing

activities of $6,725 consisted of $10,000 for the repayment of convertible notes payable, offset by proceeds from related party advances

In the 2024 Period, cash used in financing activities

of $124,051 consisted of the repayment of Series B preferred shares, offset by proceeds from convertible notes payable of $160,000.

of $13,275 consisted of $30,000 for the repayment of convertible notes payable, offset by proceeds from related party advances of $16,725.

In the 2023 Period, cash used in financing activities

of $76,109 consisted of the repayment of Series B preferred shares of $270,549 and payments on convertible notes of $41,560, offset by

proceeds from convertible notes payable of $220,000.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis