What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 100 added, 67 removed, 96 unchanged (63% of the section changed)

9 unchanged sentences

of Operations

of the filing of this Report, it is our plan to continue our focus on building a large-scale, clean-energy-powered, data center

operation using the latest energy-efficient cooling technologies and to provide wholesale colocation services to enterprise IT and

hyperscale customers.

To implement this plan, we have optioned 80 acres of land for the initial phase of development and contracted

HDR Engineering, Inc., a data center architect and engineering firm (“HDR”) to provide master planning services that include site feasibility and a shovel-ready site development plan.

addition, we are having on-going discussions and negotiations to acquire clean energy from the local power utility and nearby

geothermal power plants and solar farms and contracting a network engineering firm to evaluate and engineer various paths to run

conduit for accessing close-by internet fiber networks.

June 23, 2023 we engaged HDR to complete a feasibility study and site development master

Once the plan is developed, we will submit plans to authorities for approval and for permits to start construction.

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 to six 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 to start

construction, and that the construction could take another six to twelve months to complete depending on supply chain issues at the time

for data center, electrical and communication connectivity components of the data center build.

of the filing of this Report, it is our plan to continue our focus on building a large-scale, clean-energy-powered, data center operation

using the latest energy-efficient cooling technologies and to provide wholesale colocation services to enterprise IT and hyperscale customers.

To implement this plan, we have optioned 80 acres of land for the initial phase of development and contracted HDR Engineering, Inc.,

a data center architect and engineering firm (“HDR”), to provide master planning services that include site feasibility and

a shovel-ready site development plan.

In addition, we are having on-going discussions and negotiations to acquire clean energy from the

local power utility and nearby geothermal power plants and solar farms and contracting a network engineering firm to evaluate and engineer

various paths to run conduit for accessing close-by internet fiber networks.

June 23, 2023, we engaged HDR to complete a feasibility study and site development master plan.

Once the plan is developed, we will submit

plans 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 six 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 to start construction, and that the construction

could take another six to twelve months to complete depending on supply chain issues at the time for data center, electrical and communication

connectivity components of the data center build.

we move through the development process to build a clean-energy powered data center operation, we will continue to refine and finalize

22 unchanged sentences

of Operations

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

For the Three Months Ended June 30,

For the Six Months

Ended June 30,

table summarizes the results of operations for the three and nine months ended September 30:

the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Operating expenses

1 unchanged sentence

Equity-based compensation

(11,168,000 )

General and administrative expenses

Impairment loss

Total operating expenses

Loss from operations

Total operating (income) expenses

(11,008,000 )

Income (loss) from operations

Other income (expenses)

3 unchanged sentences

Total other expenses

Loss before provision for income taxes

Income (loss) before provision for

Provision for income taxes

$ (4,174,000 )

$ (8,100,000 )

Company had no revenues for the three and six months ended June 30, 2023 and 2022.

expenses for the three and six months ended June 30, 2023 were $154,000 and $251,000, respectively, compared to $3,568,000 and $6,987,000

for the three and six months ended June 30, 2022, respectively.

The decrease in both the three and six month June 30, 2023 operating

expenses was attributable to both the decline in our professional fees and equity-based compensation.

Net income (loss)

had no revenues for the three and nine months ended September 30, 2023 and 2022.

Expenses for the three months ended September 30, 2023 and 2022

fees decreased to approximately $48,000 for the three months ended September 30, 2023, as compared to $136,000 for the three months ended

September 30, 2022.

As the Company has shifted its operating activity toward developing the data center professional fees have either

decreased or have been capitalized as development cost.

compensation increased to approximately $31,000 for the three months ended September 30, 2023, as compared to $(11,168,000) for the three

months ended September 30, 2022.

During the three months ended September 30, 2022,

We had a cancelation of an equity-based compensation agreement for 10,000,000 shares of our common stock.

we had a reversal of approximately $11,168,000 of previously expensed equity-based compensation.

The equity-based compensation

of $31,000 related to the issuance of an employment agreement during the second quarter of 2023.

and administrative expenses decreased to approximately $13,000 for the three months ended September 30, 2023, as compared to $24,000

for the three months ended September 30, 2022.

The decrease was attributable to the capitalization of out-of-pocket expenses related

to the development of the data center.

Expenses for the six months ended September 30, 2023 and 2022

fees decreased to approximately $234,000 for the six months ended September 30, 2023, as compared to $558,000 for the six months ended

September 30, 2022.

As we have shifted our operating activity toward developing the data center professional fees have either

decreased or have been capitalized as development cost.

compensation increased to approximately $55,000 for the six months ended September 30, 2023, as compared to $(4,791,000) for the six

months ended September 30, 2022.

During the six months ended September 30,

2022, we had a cancelation of an equity-based compensation agreement for 10,000,000 shares of our common stock.

Therefore, we had a reversal of approximately $11,168,000 of previously expensed equity-based compensation.

equity-based compensation of $55,000 related to the issuance of an employment agreement during the second quarter of

and administrative expenses decreased to approximately $54,000 for the six months ended September 30, 2023, as compared to $59,000 for

the six months ended September 30, 2022.

The decrease was attributable to the capitalization of out-of-pocket expenses related to the

development of the data center.

and Capital Resources

Company’s financial position as of June 30, 2023 and December 31, 2022 were as follows:

financial position as of September 30, 2023 and December 31, 2022 was as follows:

Capital Deficit

September 30,

Current assets

3 unchanged sentences

$ (3,143,000 )

Company’s working capital deficit increased by $622,000 as of June 30, 2023 from $3,143,000 as of December 31, 2022.

decline was due to the use of approximately $178,000 for operating expenses and $184,000 for data center development costs, and the

increase in our accounts payable and accrued expense of approximately $268,000.

For the Six Months Ended

working capital deficit increased by $1,719,000 as of September 30, 2023 from $3,143,000 as of December 31, 2022.

The increase was

due to the use of cash of approximately $233,000 for operating expenses and approximately $661,000 for data center development

costs, and the increase in our accounts payable and accrued expense of approximately $838,000.

For the Nine Months Ended

September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of exchange rate changes

3 unchanged sentences

flows used in operating activities

cash used in operating activities decreased by $335,000 during the six months ended June 30, 2023 from $513,000 for six months ended

June 30, 2022.

The decrease resulted from the reduction in our operating expense related to professional fees during the six months ended

June 30, 2023.

flows used in investing activity

cash used in investing activity increased by $77,000 during the six months ended June 30, 2023 from $107,000 for the six months ended

June 30, 2022.

The increase resulted from the expenditures during the six months ended June 30, 2023 for the development activities for

our data center project.

cash used in operating activities decreased by $441,000 during the nine months ended September 30, 2023 from $674,000 for nine months

ended September 30, 2022.

The decrease resulted from the reduction in our operating expense related to professional fees and general

administrative expenses during the nine months ended September 30, 2023.

flows used in investing activities

cash used in investing activity increased by $555,000 during the nine months ended September 30, 2023 from $106,000 for the nine months

ended September 30, 2022.

The increase resulted from the expenditures during the nine months ended September 30, 2023 for the development

activities for our data center project.

flows used in financing activities

cash used in financing activities decreased by $25,000 during the six months ended June 30, 2023 as compared to $25,000 for the six months

ended June 30, 2022.

cash used in financing activities decreased by $25,000 during the nine months ended September 30, 2023 as compared to $25,000 for the

nine months ended September 30, 2022.

The decrease resulted from our not making any repayments of our outstanding notes payable.

2 unchanged sentences

Once the plans are approved for construction

by the requisite authorities, we estimate the initial phase of our planned data center operation will cost between $60 to $75

million to build.

the plan development phase, we will need to raise capital in order to build our planned operations and achieve our growth targets,

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

However, there can

be no assurance that such financing will be available in sufficient amounts and on acceptable terms when it is needed.

amount and timing of our 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 our 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 the purchase of the goods and services we will need to build our data center

by the requisite authorities, we estimate the initial phase of our planned data center operation will cost between $60 to $75 million

the plan development phase, we will need to raise capital in order to build our planned operations and achieve our growth targets, which

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

However, there can be no assurance that

such financing will be available in sufficient amounts and on acceptable terms when it is needed.

The precise amount and timing of our

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 our 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

the purchase of the goods and services we will need to build our data center operation.

Accounting Policies

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and Debt Discounts

accordance with ASC 470-20, Debt with Conversion and Other Options , we first allocate the cash proceeds of the notes

between the notes and the warrants on a relative fair value basis.

accordance with ASC 470-20, Debt with Conversion and Other Options , we first allocate 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.

account 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

We amortize these costs over the term of our debt agreements as financing cost in the consolidated statement of

account 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.

these costs over the term of our debt agreements as financing cost in the consolidated statement of operations.

account for our stock-based compensation under ASC 718, “ Compensation – Stock Compensation ” using the fair value-based

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Accounting Pronouncements

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.

management reviewed all recently issued accounting standard updates (“ASU’s”) not yet adopted by us and does not

believe the future adoptions of any such ASU’s may be expected to cause a material impact on our condensed consolidated

financial condition or the results of our operations.

Sheet Arrangements

of June 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

of September 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

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