TerraVolt Holdings, Inc. 10-K

Item 1. Business. Corporate History and Recent Developments We 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. On 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” company. On 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 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 20, 2018. Prior 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. In 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. On 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. 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. Plan of Operations As 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. 4 Currently, 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. We 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. Once 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. As 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. It 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. 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. 5 Competition 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. Our 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. Some 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 Our 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. However, as of the date of this Report, we do not have any patents or registered trademarks. We 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. Despite 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. In addition, 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 copyright, trademark, trade secret and patent protection may not be available in those jurisdictions. Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others. Further, 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. We may be unable to develop non-infringing technology or obtain a license on commercially reasonable terms, if at all. Employees We currently do not have any employees and our officers and directors are serving our company as consultants and independent contractors. Item 1A. Risk Factors. We 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. 6 Item 1B. Unresolved Staff Comments. None. Item 2. Properties. We 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. We are not charged rent for the use of this space. We believe our existing facilities are sufficient for our current operations.