What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-31 compared with 2021-06-30 · 144 added, 232 removed, 7 unchanged (98% of the section changed)

History and Recent Developments

were incorporated pursuant to the laws of the State of Nevada on March 20, 2002 under the name Integrated Brand Solutions Inc.,

and on February 6, 2006, we changed our name to Upstream Biosciences Inc.

From 2006 to December 2009, our company operated as

a biotechnology company, and from 2010 until May 2013, our company had no operating business.

May 24, 2013, our then majority stockholders sold their interests in our company to RealSource Acquisition Group, LLC, a Utah

limited liability company, and Chesterfield Faring Ltd., a New York corporation, and on July 11, 2013, we changed our corporate

name to RealSource Residential, Inc.

were incorporated pursuant to the laws of the State of Nevada on March 20, 2002 under the name Integrated Brand Solutions Inc., and on

February 6, 2006, we changed our name to Upstream Biosciences Inc.

From 2006 to December 2009, our company operated as a biotechnology

company, and from 2010 until May 2013, our company had no operating business.

May 24, 2013, our then majority stockholders sold their interests in our company to RealSource Acquisition Group, LLC, a Utah limited

liability company, and Chesterfield Faring Ltd., a New York corporation, and on July 11, 2013, we changed our corporate name to RealSource

Residential, Inc.

Our initial business strategy in 2013 was to engage in various real estate related businesses.

However, in 2016 we disposed of all of our real estate and other assets and continued operations as a

public “shell”

However, in 2016 we

disposed of all of our real estate and other assets and continued operations as a public “shell”

September 12, 2018, M1 Advisors, LLC, a Delaware limited liability company controlled by Michael Campbell, our current Chief Executive

Officer and a director of our company (“M1 Advisors”), acquired from certain then majority stockholders of our company

an aggregate of 440,256 shares (after giving effect to the subsequent reverse stock split described below) of our common stock,

which shares represented approximately 70% of the issued and outstanding shares of capital stock of our company at that time,

for aggregate cash payments amounting to $260,000.

September 12, 2018, following the closing of the change of control transaction described above, we entered into a Series A Preferred

Stock Purchase Agreement (the “Preferred Purchase Agreement”) with M1 Advisors, Piers Cooper, our former President

and director, and the other investors who were signatories thereto (collectively, the Purchasers”).

Pursuant to the Preferred

Purchase Agreement, the Purchasers purchased from us an aggregate of 15,600,544 shares of Series A preferred stock, par value

$0.001 per share (“Series A Preferred Stock”), for an aggregate purchase price of $15,600.54, or $0.001 per share.

Of the shares sold, 9,320,414 shares were purchased by M1 Advisors and 4,674,330 shares were purchased by Mr.

shares of preferred stock were converted into shares of our common stock on December 20, 2018.

the consummation of the change of control transaction and the sale of the Series A Preferred Stock on September 12, 2018 (the

“Change of Control Transactions”), our company remained a shell company with no operating business.

As a result of

the September 12, 2018 transactions, our current executive officers and directors acquired effective control of our company and,

in connection with such transactions, our board of directors determined to establish our company in the rapidly-growing legal

cannabis industry, initially in the State of California.

In order to fund such proposed business plan, we intend to raise additional

funds from investors by issuing our common stock, preferred stock and/or debt securities to fund future operations, including

the acquisition of manufacturing facilities and equipment.

August 28, 2018, we filed a Certificate of Change to our Articles of Incorporation with the Secretary of State of the State of

Nevada to (i) reduce our authorized shares of common stock from 100,000,000 shares to 4,000,000 shares and (ii) to effectuate

a stock combination or reverse stock split whereby every 25 outstanding shares of our common stock were converted into one share

of common stock.

This amendment became effective on August 30, 2018.

All share and per share amounts in this Report have been

restated to give effect to such reverse stock split.

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 (i) change our corporate name from “RealSource Residential, Inc.”

to “CalEthos, Inc.”

(ii) to increase our authorized shares of common stock from 4,000,000 shares to 100,000,000 shares.

This amendment became effective

immediately upon filing on December 20, 2018.

Officer and a director of our company (“M1 Advisors”), acquired a controlling interest in our company, and 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 (i)

change our corporate name from “RealSource Residential, Inc.” to “CalEthos, Inc.” and(ii) to increase our authorized

shares of common stock from 4,000,000 shares to 100,000,000 shares.

This amendment became effective immediately upon filing on December

to the outbreak of the 2020 COVID-19 pandemic we had intended to focus our business development efforts on building a chain of large-format

cannabis superstores to serve the needs of the rapidly-growing Southern California cannabis market.

We spent over two years putting together

business opportunities for retail licenses, store leases and display agreements with brands while trying to find adequate financing to

fund our business plan.

However, at the end of 2020, we concluded that there were too many issues in the cannabis industry due

to federal legalization and that adequate funding was not available for us to execute our plans.

This caused us to review other business

opportunities and prospects and, after many months of research, we determined there was a sizable opportunity to create high-performance

computer systems for bitcoin miners as an alternative to the Chinese mining machine manufacturers that controlled that market in the

bitcoin industry for the last 10 or more years.

September 2021, we closed a convertible debt financing of $3.5 million to fund the initial phase of product development.

In connection

with such capital raise, our board of directors determined that we are no longer a shell

company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In connection

with our change of business direction, we have started the process of changing our corporate name to AIQ Blockchain, Inc., which we intend

to complete upon receipt of all requisite regulatory approvals.

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.

is in the business of (1) developing and manufacturing computer chips and system, (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.

of Operations

prior to the consummation of the Change of Control Transactions, our company was a shell company with no operating business.

a result of the Change of Control Transactions, Mr.

Campbell acquired control of our company.

It is the current intention of Mr.

Campbell for our company to develop and manufacture a next generation high-performance computer system that is scalable, upgradeable

and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions.

In order to fund our proposed business

plan, we intend to raise funds from investors by issuing common stock, preferred stock and/or debt securities.

Upon the consummation

of such fundraising efforts and the commencement of such operations, it is expected that our company will cease being a shell

enter into our proposed new business, we may seek to acquire one or more other companies that have businesses that are synergistic

to our proposed business or to acquire all or a portion of the assets of such businesses.

We may also engage employees, consultants

or third parties to assist us in developing our own products or services.

discussion of our proposed business is purposefully general and is not meant to be restrictive of our virtually unlimited discretion

to search for and enter into potential business opportunities.

Management anticipates that, initially, we may be able to participate

in only one potential business venture because we have nominal assets and limited financial resources.

This lack of diversification

should be considered a substantial risk to our shareholders because it will not permit us to offset potential losses from one

venture against gains from another.

may seek a business opportunity with entities that have recently commenced operations, or that wish to utilize the public marketplace

in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or

for other corporate purposes.

We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing

businesses as subsidiaries.

anticipate that the selection of a business opportunity in which to participate will be complex and extremely risky.

Due to general

economic conditions, rapid technological advances being made in some industries and shortages of available capital.

Our management

believes there are numerous firms seeking the perceived benefits of a publicly-registered corporation.

Such perceived benefits

may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive

stock options or similar benefits to key employees, and providing liquidity (subject to restrictions of applicable statutes) for

all shareholders, among other factors.

Available business opportunities may occur in many different segments of the cryptocurrency

or blockchain industry and at various stages of development, all of which will make the task of comparative investigation and

analysis of such business opportunities extremely difficult and complex.

officers have only limited experience in managing a shell company similar to ours and will rely upon their own efforts in accomplishing

our business purposes.

Nevertheless, we anticipate we will locate and make contact with possible target businesses primarily through

the efforts of our officers and directors, who will meet personally with existing management and key personnel, visit and inspect

material facilities, assets, products and services belonging to such prospects, and undertake such further reasonable investigation

as they deem appropriate.

Management has a network of business contacts, including our outside lawyers and accountants, and believes

that prospective target businesses will be referred to us through this network.

also anticipate that prospective target businesses will be brought to our attention from various other non-affiliated sources,

including securities broker-dealers, investment bankers, venture capitalists, bankers, and other members of the financial community.

We have neither the present intention, nor does the present potential exist for us, to consummate a business combination with

a target business in which our management or their affiliates or associates directly or indirectly have a pecuniary interest,

although no existing corporate policies would prevent this from occurring.

We may engage the services of professional firms that

specialize in finding business acquisitions and pay a finder’s fee or other compensation.

analysis of new business opportunities will be undertaken by, or under the supervision of, our officers and directors.

prospective business opportunities, management will consider such matters as the available technical, financial and managerial

working capital and other financial requirements;

history of operations, if any;

prospects for the future;

present and expected competition;

the quality and experience of management services that may be available and the depth of that

the potential for further research, development or exploration;

specific risk factors not now foreseeable but that

then may be anticipated to impact the proposed activities of our company;

the potential for growth or expansion;

the potential

the perceived public recognition of, or acceptance of, products, services or trades;

name identification;

the regulatory

landscape relating to the proposed business;

and other relevant factors.

Our officers and directors expect to meet personally

with management and key personnel of the business opportunity as part of their investigation.

To the extent possible, we intend

to utilize written reports and investigation to evaluate the above factors.

We will not acquire or merge with any company for

which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction.

Our limited funds and the lack of full-time management, however, will likely make it impracticable to conduct a complete and exhaustive

investigation and analysis of a target business before we commit our capital or other resources thereto.

Management decisions,

therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which would

be desirable if we had more funds available.

We will be particularly dependent in making decisions upon information provided by

the promoter, owner, sponsor or others associated with the business opportunity seeking our participation.

will not restrict our search to any specific kind of business, but we may acquire a venture that is in its preliminary or development

stage, which is already in operation, or in essentially any stage of its corporate life.

It is impossible to predict at this time

the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire

to have its shares publicly traded, or may seek other perceived advantages which we may offer.

is anticipated that we will incur expenses in the implementation of the business plan described herein, and such expenses may

be substantial.

However, we currently have only limited capital with which to pay these anticipated expenses.

time and costs required to select and evaluate a target business (including conducting a due diligence review) and to structure

and consummate the business combination (including negotiating relevant agreements and preparing requisite documents for filing

pursuant to applicable securities laws and state “blue sky”

and corporation laws) cannot presently be ascertained

with any degree of certainty.

Our officers and directors only devote a limited portion of their time to the operations of our

company, and, accordingly, consummation of a business combination may require a greater period of time than if they devoted their

full time to our company’s affairs.

However, our officers and directors will devote such time as they deem reasonably needed.

implementing a structure for a particular business opportunity, we may become a party to a merger, consolidation, reorganization,

joint venture or licensing agreement with another corporation or entity.

We may also acquire the stock or assets of an existing

Upon the consummation of a transaction, it is possible that our present management and shareholders will no longer be

in control of our company.

In addition, our directors may, as part of the terms of the acquisition transaction, resign and be

replaced by new directors without a vote of our current shareholders or may sell their stock in our company.

Any and all such

sales will only be made in compliance with the securities laws of the United States and any applicable state.

is anticipated that any securities issued in any such reorganization will be issued in reliance upon exemption from registration

under applicable federal and state securities laws.

In some circumstances, however, as a negotiated element of its transaction,

we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times

If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after

we have successfully consummated a merger or acquisition and we are no longer considered a “shell”

such time as this occurs, we do not intend to register any additional securities.

The issuance of substantial additional securities

and their potential sale into any trading market that may develop in our securities may have a depressive effect on the value

of our securities in the future, if such a market develops, of which there is no assurance.

a general rule, federal and state tax laws and regulations have a significant impact upon the structuring of business combinations.

We will evaluate the possible tax consequences of any prospective business combination and will endeavor to structure a business

combination so as to achieve the most favorable tax treatment for us, the target company and their respective stockholders.

there can be no assurance that the Internal Revenue Service (“IRS”) or relevant state tax authorities will ultimately

assent to our tax treatment of a particular consummated business combination.

the extent the IRS or any relevant state tax authorities ultimately prevail in recharacterizing the tax treatment of a business

combination, there may be adverse tax consequences to us, the target business and their respective stockholders.

Tax considerations

as well as other relevant factors will be evaluated in determining the precise structure of a particular business combination,

which could be effected through various forms of a merger, consolidation or stock or asset acquisition.

the actual terms of a transaction to which we may be a party cannot be predicted, it may be expected that the parties to the business

transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so-called

“tax-free”

reorganization under Sections 368(a) (1) or 351 of the Internal Revenue Code of 1986, as amended (the “Code”).

In order to obtain tax-free treatment under the Code, it may be necessary for the owners of the target business to own 80% or

more of the voting stock of the surviving entity.

In such event, our shareholders would retain less than 20% of the issued and

outstanding shares of the surviving entity, which would result in significant dilution in the equity of such shareholders.

there can be no assurance that the IRS or relevant state tax authorities will ultimately assent to our tax treatment of a particular

consummated business combination.

respect to any merger or acquisition, negotiations with the target company’s management is expected to focus on the percentage

of our company that the target company shareholders would acquire in exchange for all of their shareholdings in the target company.

Depending upon, among other things, the target company’s assets and liabilities, it is possible that our shareholders will

hold a substantially lesser percentage ownership interest in our company following any merger or acquisition.

The percentage ownership

may be subject to significant reduction in the event we acquire a target company with substantial assets.

Any merger or acquisition

effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our then shareholders.

will participate in a business opportunity only after the negotiation and execution of appropriate written agreements.

the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties

by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which

must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including

costs associated with our attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.

stated hereinabove, we will not acquire or merge with any entity that cannot provide independent audited financial statements

within a reasonable period of time after closing of the proposed transaction.

We are subject to all of the reporting requirements

included in the Exchange Act.

Included in these requirements is the affirmative duty to file independent audited financial statements

as part of our Current Report on Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a merger

or acquisition, as well as the audited financial statements included in our annual report on Form 10-K.

If such audited financial

statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of

the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the candidate

to be acquired in the closing documents, the closing documents will provide that the proposed transaction will be voidable, at

the discretion of our present management.

do not intend to provide our security holders with any complete disclosure documents, including audited financial statements,

concerning an acquisition or merger candidate and its business prior to the consummation of any acquisition or merger transaction.

company will remain an insignificant participant among the firms that engage in the acquisition of business opportunities in the

cryptocurrency and blockchain industry, particularly in the State of California.

There are many established venture capital and

financial concerns that have significantly greater financial and personnel resources and technical expertise than we have.

view of our combined extremely limited financial resources and limited management availability, we will continue to be at a significant

competitive disadvantage compared to our competitors.

have had in the past, and continue to have, discussions with potential acquisition targets, or merger or acquisition partners,

and while we do not have a definitive agreement in place with any potential acquisition target or partner to do so, we anticipate

issuing shares of our common stock, and possibly preferred stock, as part of any merger or acquisition with a merger or acquisition

we currently have no operations, this section is not applicable.

we have no intellectual property.

of the filing of this Report, it is the intention of the board of directors for our company to develop and manufacture high-performance

computer systems that are scalable, upgradeable, and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions.

In October 2021, Hyuncheol Kim joined our company as our Chief Technology Officer and we

established AIQ Systems, a South Korea subsidiary company, and contracted an engineering design team to start the development of an ASIC

chip, which we plan to incorporate into our planned industrial-grade immersion-cooled bitcoin mining system.

Currently, the first phase

of ASIC chip development is complete and we are now waiting for the release by one of the qualified semiconductor foundries of a low-voltage

design kit that will allow us to move to the next phase of chip development.

In parallel to setting

up our South Korean subsidiary and organizing our engineering teams, we have been working with various semiconductor foundries to get

a low-voltage 5 nanometer (nm) design kit that will allow us to produce a competitive system with good performance and low energy consumption.

In addition, we have been working with various immersion-cooling system manufacturers to custom design a system around our ASIC chips

that meets the performance and energy consumption requirements of large U.S.

bitcoin mining companies.

there is a global chip shortage, which may continue causing a delay or efforts to secure a supply agreement with one of semiconductor

foundry companies that have the technology to meet our design specifications.

The continuation of this shortage will delay the completion

of the development of our chip and bitcoin mining system, and ultimately the time when we are able to produce chips for our planned bitcoin

mining systems.

do not intend to directly manufacture any chips we design and use in our products.

Instead, we intend to utilize what is known as a “fabless

model”, whereby we will cooperate with world-class production partners for all phases of the manufacturing process of our ICs (chips),

including wafer fabrication and packaging and testing.

Under the fabless model, we will be able to leverage the expertise of industry

leaders that are certified by the ISO in such areas as fabrication, assembly, quality control and assurance, reliability and testing.

In addition, the fabless model will allow us to avoid many of the significant costs and risks associated with owning and operating various

fabrication and packaging and testing facilities.

Our fabrication partners will be responsible for procurement of the majority of the

raw materials used in the production of our planned ICs.

As a result, we can focus our resources on research and development, product

design and additional quality assurances.

We intend to work closely with leading global production partners, including the leading semiconductor

foundries and IC fabrication companies.

we are able to get an adequate design kit from a foundry, the ASIC chip and immersion-cooled system development is expected to take from

six to eight months to complete.

At the final stages of development, we plan to complete a 1MW immersion-cooled bitcoin mining system

for testing and customer demonstration.

We are planning to design the systems to require over 50% less energy than conventional air-cooled

bitcoin mining operations that currently make up over 90% of the global bitcoin mining fleet.

we move through the chip and immersion-cooled bitcoin mining system development process, we intend to continue to refine and finalize

the course 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.

is anticipated that we will incur expenses in the implementation of the business plan described herein, and such expenses will require

substantial financing to complete the development of our ASIC chip and immersion-cooled bitcoin mining system and to achieve our goals.

Our failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate

our product development plans, any commercialization efforts or 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 and 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 funds, however, may not be available when we need them 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 we

require it, our ability to commence our proposed business operations, to continue to grow and support our business and to respond to

business challenges could be significantly limited.

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.

Cryptocurrency

mining machines comprise the overwhelming majority of blockchain hardware.

The global Bitcoin mining machine market is relatively concentrated

with a few large players, most of which are China-based companies that have been in business for five or more years and control the majority

of market share.

competitors include many well-known domestic and international players.

We expect that competition in the Bitcoin mining industry will

continue to be intense as we compete not only with existing players that have been focused on Bitcoin mining, but also new entrants that

include well-established players in the semiconductor industry, and players who were not predisposed to this industry in the past.

of these competitors may also have stronger brand names, greater access to capital, longer histories, longer relationships with their

suppliers or customers and more resources than we do.

intellectual property consists of computer code for and FPGA simulation of an ASIC chip for bitcoin mining that is designed to be integrated

in immersion-cooled bitcoin mining systems.

We intend to rely on a combination of patent, copyright, trademark and trade secret laws

in the United States and other jurisdictions, as well as contractual protections, to protect our proprietary technology.

of the date of this Report, we do not have any patents or registered trademarks.

cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since

the validity, enforceability and type of protection of proprietary rights in software-related industries are uncertain and still evolving.

our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use

information that we regard as proprietary.

Policing unauthorized use of our products is difficult, and while we are unable to determine

the extent to which piracy of our software products exists, software piracy can be expected to be a persistent problem.

the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States, and effective

Our means of protecting our proprietary

rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.

in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights,

particularly in the software and Internet-related industries.

We can become subject to intellectual property infringement claims as the

number of our competitors grows and our products and services overlap with competitive offerings.

These claims, even if not meritorious,

could be expensive to defend and could divert management’s attention from operating our business.

If we become liable to third

parties for infringing their intellectual property rights, we could be required to pay a substantial award of damages and to develop

non-infringing technology, obtain a license or cease selling the products that contain the infringing intellectual property.

unable to develop non-infringing technology or obtain a license on commercially reasonable terms, if at all.

currently do not have any employees and our officers and directors are serving our company as consultants and independent contractors.

1A.Risk Factors.

are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information

under this item.

Unresolved Staff Comments.

are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this

Staff Comments.

do not own any real property.

Our executive office is located at 11753 Willard Avenue, Tustin, California 92782, in the office

of Michael Campbell, our Chief Executive Officer.

Our executive office is located at 11753 Willard Avenue, Tustin, California 92782, in the office of Michael

Campbell, our Chief Executive Officer.

We are not charged rent for the use of this space.

We believe our existing facilities

are sufficient for our current operations.

Legal Proceedings.

know of no material active or pending legal proceeding against our company, nor are we involved as a plaintiff in any material

proceeding or pending litigation.

Mine Safety Disclosures.

We believe our existing facilities are sufficient

for our current operations.

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-K

Item 1. Business