What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-31 compared with 2025-04-02 · 817 added, 913 removed, 810 unchanged (68% of the section changed)

3 unchanged sentences

evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as

of the end of the period covered by this Annual Report on Form 10-K.

Based on this evaluation, these officers concluded that as of the

end of the period covered by this Annual Report on Form 10-K, these disclosure controls and procedures were not effective.

of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K.

Based on this evaluation, these officers concluded

that as of the end of the period covered by this Annual Report on Form 10-K, these disclosure controls and procedures were not effective.

conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal

68 unchanged sentences

of the Board and Chief Executive Officer

and Chief Operations Officer

Michael Campbell

Senior Vice President, Corporate Development and Director

Financial Officer

2 unchanged sentences

following biographical information regarding our directors and executive officers.

Campbell became our Chief Executive Officer on September 12, 2018.

For the past 20 years, Mr.

Campbell has been

the managing director of M1 Advisors LLC, a business advisory and consulting firm that has engineered, orchestrated and provided support

and services to numerous private-to-public transitions, debt and equity financings and hyper- organic-growth and consolidation strategies

in a wide range of industries.

In addition, from December 2011 to February 2017, Mr.

Campbell was the Chief Executive Officer and a director

of NXChain, Inc., a publicly-traded start-up shell company in the cryptocurrency business that was a successor to AgriVest Americas Inc.,

a publicly-traded start-up shell company that sought to acquire cattle ranches in Brazil for conversion to soybean farms.

spent the first 20 years of his career in the high-tech industry creating and operating various companies that included a computer retailing

operation, data-storage peripheral company with three computer disk-drive manufacturing companies through joint ventures with the Russian,

Chinese and Spanish governments, a specialized call-center company for telco broadband provisioning and an online broadband services

ordering and order aggregation company with the Regional Bell Operating Companies.

Stone became our President and Chief Operating Officer on March 28, 2023.

Stone has 24 years of broad-based

operations, engineering, construction, integration, transformation, and technical leadership in the data center infrastructure, sourcing,

and telecommunications industries.

Prior to joining our company, Mr.

Stone led the Global Site Sourcing teams for Meta Platforms that

supported the data center infrastructure teams from 2019 to 2022.

Stone became our Chairman of the Board and Chief Executive Officer on March 27, 2026.

Previously, he had been our President and Chief

Operating Officer since March 28, 2023.

Stone has 25 years of broad-based operations, engineering, construction, integration, transformation,

and technical leadership in the data center infrastructure, sourcing, and telecommunications industries.

Prior to joining our company,

Stone led the Global Site Sourcing teams for Meta Platforms that supported the data center infrastructure teams from 2019 to 2022.

Prior to 2019, Mr.

Stone served as Senior Vice President and Chief

Operating Officer of RagingWire Data Centers, an NTT communications company, where he was responsible for critical facilities engineering,

design, construction, and data center operations from 2016-2018.

Stone served as Senior Vice President and Chief Operating Officer of RagingWire Data Centers, an NTT communications

company, where he was responsible for critical facilities engineering, design, construction, and data center operations from 2016-2018.

Prior to RagingWire, Mr.

Stone served as Vice President of Global Data

Center Operations for CenturyLink Communications, responsible for 58 data centers around the world and a global team of 600+ people from

Stone served as Vice President of Global Data Center Operations for CenturyLink Communications, responsible

for 58 data centers around the world and a global team of 600+ people from 2011to 2016.

Prior to CenturyLink, Mr.

Stone was Group Operations Director at Global Switch in London, one of the largest wholesale data

center providers in Europe and Asia.

Stone spent nine years at Microsoft where he was responsible for all North America data center

Stone was Group Operations

Director at Global Switch in London, one of the largest wholesale data center providers in Europe and Asia.

Stone spent nine years

at Microsoft where he was responsible for all North America data center operations.

Earlier in his career, Mr.

Stone built-out two state-of-the-art data centers in Silicon Valley (Santa Clara) for Cable &

Wireless Communications.

Stone built-out two state-of-the-art

data centers in Silicon Valley (Santa Clara) for Cable & Wireless Communications.

Campbell became our Senior Vice President, Corporate Development on March 27, 2026.

Previously, he had been

our Chief Executive Officer since September 12, 2018, a position from which he resigned on March 27, 2026 because of health

For the past 20 years, Mr.

Campbell has been the managing director of M1 Advisors LLC, a business advisory and consulting

firm that has engineered, orchestrated and provided support and services to numerous private-to-public transitions, debt and equity

financings and hyper- organic-growth and consolidation strategies in a wide range of industries.

In addition, from December 2011 to

February 2017, Mr.

Campbell was the Chief Executive Officer and a director of NXChain, Inc., a publicly-traded start-up shell

company in the cryptocurrency business that was a successor to AgriVest Americas Inc., a publicly-traded start-up shell company that

sought to acquire cattle ranches in Brazil for conversion to soybean farms.

Campbell spent the first 20 years of his career in

the high-tech industry creating and operating various companies that included a computer retailing operation, data-storage

peripheral company with three computer disk-drive manufacturing companies through joint ventures with the Russian, Chinese and

Spanish governments, a specialized call-center company for telco broadband provisioning and an online broadband services ordering

and order aggregation company with the Regional Bell Operating Companies.

Skupen became our Chief Financial Officer on September 12, 2018.

32 unchanged sentences

Fontenot became a director of our company on October 7, 2021.

Fontenot has spent more than 20 years as a self-employed

IT and network specialist and in 2017 became an executive producer of independent films.

Fontenot is a technology enthusiast and

film producer that manages a 5013c foundation dedicated to (i) educating the public on the history of video, arcade, and computer gaming

- including the technical aspects and the impact of games on society;

(ii) fostering public interest in software development and gaming

hardware to enable technological growth and inspire the next generation of developers, and (iii) developing public space for action sports’

recreation - including mentoring youths and building programs designed to help bridge the gender gap in various action sports categories

as well as underserved community members.

Fontenot is formally trained as a network engineer and has a multidisciplinary background spanning biotechnology, digital infrastructure, and nonprofit

He currently serves on the board or directors of several biotechnology companies and a nonprofit organization bringing a balanced

perspective across regulated science-driven businesses, capital-intensive technology platforms, and mission-oriented organizations.

in Certain Legal Proceedings

32 unchanged sentences

Until such time, our board of directors will perform the duties of an

Audit Committee including delegating an auditor firm and interacting with them.

Audit Committee, including engaging an auditor firm and interacting with them.

do not have a standing Compensation Committee.

1 unchanged sentence

board of directors.

As we continue to develop our data center and commence selling colocation services, we expect to increase the size

As we continue to develop our business, we expect to increase the size

of our board to include independent directors who will approve the compensation arrangements with our executive officers.

8 unchanged sentences

Section 16(a) Reports

16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of our common

stock to file with the SEC reports of their ownership and changes in their ownership of our common stock.

To our knowledge, based

solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2024 filed

with the SEC, all required Section 16 reports under the Exchange Act for our directors, executive officers and beneficial owners of

greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2024, except for a late Form 4

filing for Michael Campbell.

As of the date of the filing of this annual report, such Form 4 filing has been

16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of our common stock

to file with the SEC reports of their ownership and changes in their ownership of our common stock.

To our knowledge, based solely on

review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2025 filed with the SEC,

all required Section 16 reports under the Exchange Act for our directors, executive officers and beneficial owners of greater than 10%

of our common stock were filed on a timely basis during the year ended December 31, 2025, except for the filing of a Report of Beneficial Ownership on Form 4 and an amendment to a previously-filed Report on Schedule

13D, which were filed one day late by Chauncey Lennis Thompson, the beneficial owner of more than 10% of our common stock.

Compensation.

12 unchanged sentences

President and Chief Operating Officer (3)

Chief Financial

Chief Financial Officer

Campbell resigned his office as our Chief Executive Officer and became our Senior Vice President, Corporate Development in March

amounts earned by Mr.

1 unchanged sentence

Campbell became an employee of our company in March 2024.

Stone became our President and Chief Operating Officer on March 28, 2023.

Stone became our Chief Executive Officer in March 2026.

Previously, he had been our President and Chief Operating Officer.

amounts earned by Mr.

7 unchanged sentences

the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options.

June 19, 2023, we entered into an Employment Agreement dated as of June 19, 2023 (the “Employment Agreement”) with Joel D.

Stone, our President and Chief Operating Officer.

On March 27, 2026, we entered into an Employment Agreement dated as of March 27, 2026 (the “Employment Agreement”) with Joel

Stone, to serve as our Chairman and Chief Executive Officer.

Prior to entering in the Employment Agreement, Mr.

Stone had been our

President and Chief Operating Officer.

Pursuant to the terms of the Employment Agreement, Mr.

Stone received or will receive

(i) an annual base salary of $250,000, which amount may be increased upon our reaching certain benchmarks described in the Employment

Agreement, as determined in our sole discretion;

(ii) an initial option grant of seven-year options to purchase 2,500,000 shares of our

common stock for a purchase price of $0.50 per share, of which the right to purchase up to 1,250,000 shares will vest in equal installments

over a period of three years and the right to purchase up to 1,250,000 shares will vest upon our completing certain milestones that are

set out in the Employment Agreement;

and (iii) the right to participate in all benefit plans offered to our senior executive officers.

Stone will receive (i) an annual base salary

of $300,000, which amount may be increased upon our reaching certain benchmarks described in the Employment Agreement, as determined in

our sole discretion;

(ii) an additional option grant of seven-year fully-vested options to purchase 2,000,000 shares of our common stock

for a purchase price of $0.49 per share, and (iii) the right to participate in all benefit plans offered to our senior executive officers.

Employment Agreement also provides for certain severance benefits upon a termination by us without “cause” or by Mr.

for “good reason.” In the event of a termination by us without “cause” or by Mr.

Stone for “good reason”

after the first full year of employment, Mr.

Stone for “good reason”, Mr.

Stone will be entitled to (i) continued payment of his base salary for the lesser of six

22 unchanged sentences

for issuance:

of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Average Exercise Price of Outstanding Options, Warrants and Rights

of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

Plan category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected

in Column (a))

2021 Equity compensation plan approved by security holders

compensation plans not approved by security holders

Equity compensation plans not approved by security holders

Equity Incentive Plan

October 4, 2021, we adopted our 2021 Equity Incentive Plan (the “Equity Plan”) to provide an additional means to attract,

motivate, retain and reward selected employees and other eligible persons.

Our stockholders also approved the Equity Plan on October

On November 28 2023, our board of directors approved an increase in the number shares of common stock reserved for issuance

under the Equity Plan to 10,000,000 shares, subject to stockholder approval, which has not yet been obtained.

Employees, officers, directors

and consultants who provide services to us or one of our subsidiaries were eligible to receive awards under the Equity Plan.

the Equity Plan are issuable in the form of incentive or nonqualified stock options, stock appreciation rights, stock bonuses, restricted

stock, stock units and other forms of awards including cash awards.

of December 31, 2024, options to purchase an aggregate of 8,204,000 shares of common stock had been granted under the Equity Plan, and 1,796,000

shares authorized under the Equity Plan remained available for award purposes.

October 4, 2021, we adopted our 2021 Equity Incentive Plan (the “Equity Plan”) to provide an additional means to

attract, motivate, retain and reward selected employees and other eligible persons.

Our stockholders also approved the Equity Plan

on October 4, 2021.

On November 28 2023, our board of directors approved an increase in the number shares of common stock reserved

for issuance under the Equity Plan to 10,000,000 shares, subject to stockholder approval, which has not yet been obtained.

to obtain the required stockholder approval by written consent in the second quarter of 2026.

Employees, officers, directors and

consultants who provide services to us or one of our subsidiaries were eligible to receive awards under the Equity Plan.

under the Equity Plan are issuable in the form of incentive or nonqualified stock options, stock appreciation rights, stock bonuses,

restricted stock, stock units and other forms of awards including cash awards.

of December 31, 2025, options to purchase an aggregate of 8,204,000 shares of common stock had been granted under the Equity Plan,

and 1,796,000 shares authorized under the Equity Plan remained available for award purposes.

The purpose of the Equity Plan is to further and promote the interests of our company and its stockholders by enabling us to attract,

129 unchanged sentences

following table sets forth outstanding equity awards to our named executive officers as of December 31, 2025.

Option/Warrants Awards

Number of Securities Underlying Unexercised Options/Warrants (#) Exercisable

Number of Securities Underlying Unexercised Options/Warrants (#) Unexercisable

Exercise Price

Expiration Date

Number of Shares or Units of Stock that have not Vested

Market Value of Shares or Units of Stock that have not Vested

Michael Campbell (1)

Michael Campbell (2)

Michael Campbell (3)

Option/Warrants

of Securities Underlying Unexercised Options/Warrants (#) Exercisable

of Securities Underlying Unexercised Options/Warrants (#) Unexercisable

of Shares or Units of Stock that have not Vested

Value of Shares or Units of Stock that have not Vested

on December 6, 2023.

29 unchanged sentences

Compensation.

We did not pay any cash compensation to our directors during the year ended December 31, 2024.

However, we intend to

implement a cash compensation program for our board members in the future.

We did not pay any cash compensation to our directors during the years ended December 31, 2025 or 2024.

we intend to implement a cash compensation program for our board members in the future.

We did not grant any compensatory equity awards to our directors during the year ended December 31, 2025.

we intend to implement a program for the grant of equity awards to our board members in the future.

However, we intend

to implement a program for the grant of equity awards to our board members in the future.

and Retirement Plans

6 unchanged sentences

Name and Address of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Class(1)

Officers and Directors

Michael Campbell (2)

3 unchanged sentences

Sean Fontenot (6)

All executive officers and directors as a group

All executive officers and directors as a group (5 Persons)

10% Stockholder

SFO IDF, LLC (7)

of March 16, 2025, there were 25,730,540 shares of common stock outstanding.

Except as indicated in the footnotes to this table, we believe

that all persons named in the table have sole voting and investment power with respect to all common stock shown as beneficially

Except as indicated in the footnotes to this table,

we believe that all persons named in the table have sole voting and investment power with respect to all common stock shown as beneficially

owned by them.

7 unchanged sentences

not constitute an admission of beneficial ownership.

Represents (i) 8,854,199 shares of common stock owned of record by M1 Advisors

LLC, a company controlled by Michael Campbell, (ii) currently-exercisable warrants to purchase 3,545,801 shares of common stock owned

of record by M1 Advisors LLC, (iii) currently-exercisable stock options to purchase 500,000 shares of common stock owned by M1 Advisors

LLC, and (iv) currently-exercisable stock options to purchase 166,667 shares of common stock owned by Michael Campbell.

The address of

Michael Campbell and M1 Advisors LLC is 11753 Willard Avenue, Tustin, CA 92782.

Campbell has sole voting and investment power over

the shares held by M1 Advisors LLC.

Represents currently-exercisable stock options to purchase 583,333 shares

of common stock owned by Joel Stone.

(i) 8,854,199 shares of common stock owned of record by M1 Advisors LLC, a company controlled by Michael Campbell, (ii) currently-exercisable

warrants to purchase 3,545,801 shares of common stock owned of record by M1 Advisors LLC, (iii) currently-exercisable stock options

to purchase 500,000 shares of common stock owned by M1 Advisors LLC, and (iv) currently-exercisable stock options to purchase 333,333

shares of common stock owned by Michael Campbell.

The address of Michael Campbell and M1 Advisors LLC is 11753 Willard Avenue, Tustin,

Campbell has sole voting and investment power over the shares held by M1 Advisors LLC.

currently-exercisable stock options to purchase 1,166,667 shares of common stock owned by Joel Stone.

shares of common stock owned of record by DSS Consulting Corporation, a company controlled by Dean Skupen.

3 unchanged sentences

by DSS Consulting Corporation.

(i) 161,010 shares of common stock owned of record by Core Fund Management, LP, a company controlled by Steven Shum and (ii) currently exercisable stock options to purchase 404,000 shares of common stock owned

by Steven Shum.

The address of Core Fund Management, LP is 1515 SW 5th Avenue, Suite 606, Portland, OR 97201.

Shum has sole voting

and investment power over the shares held by Core Fund Management.

(i) 9,074,386 shares of common stock owned of record by Nanosha LLC, a company controlled by Sean Fortenot, (ii) currently exercisable

warrants to purchase 4,458,877 shares of common stock owned of record by Nanosha LLC, and (iii) currently-exercisable stock options to

purchase 750,000 shares of common stock owned by Nanosha LLC.

The address of Nanosha Investments LLC is 1202 Walnut Avenue, Long Beach,

Fontenot has sole voting and investment power over the securities held by Nanosha Investments, LLC.

(i) 161,010 shares of common stock owned of record and (ii) currently

exercisable stock options to purchase 404,000 shares of common stock.

Does not include shares of common stock beneficially owned by SFO IDF LLC, a single member limited liability company owned and controlled

by a trust established for the benefit of certain family members of Mr.

Fontenot, the trustee of which is independent and not affiliated

Fontenot has no voting or investment power over the securities held by SFO IDF LLC and disclaims beneficial ownership

of such securities.

Represents (i) 9,074,386 shares of common stock owned of record, (ii) currently exercisable warrants to purchase 7,958,877 shares of common

stock, and (iii) currently exercisable stock options to purchase 750,000 shares of common stock.

Relationships and Related Transactions, and Director Independence.

33 unchanged sentences

December 15, 2024, we entered into an exchange subscription agreement with Nanosha pursuant to which Nanosha exchanged (i) the promissory

note we issued to Nanosha on February 12, 2024 in the principal amount of $1,000,000, and (ii)

the warrants we issued to Nanosha on May 30, 2024 and August 31, 2024 for the purchase of an aggregate of 600,000 shares of common stock,

for (a) 500,000 shares of common stock and (b) a five-year warrant to purchase an aggregate of 2,258,877 shares of common stock for a

purchase price of $2.00 per share.

In connection with such exchange, we paid accrued interest on the exchanged promissory note in the amount of $105,918

note we issued to Nanosha on February 12, 2024 in the principal amount of $1,000,000, and (ii) the warrants we issued to Nanosha on May

30, 2024 and August 31, 2024 for the purchase of an aggregate of 600,000 shares of common stock, for (a) 500,000 shares of common stock

and (b) a five-year warrant to purchase an aggregate of 2,258,877 shares of common stock for a purchase price of $2.00 per share.

connection with such exchange, we paid accrued interest on the exchanged promissory note in the amount of $105,918 in cash.

April 22, 2025, SFO IDF LLC, a company owned and controlled by a trust established for the benefit of certain family members of Mr.

the trustees of which are independent and not affiliated with Mr.

Fontenot (“SFO IDF”), made a loan to us in the amount of

$250,000 in consideration for which we issued to SFO IDF a promissory note in the principal amount of $250,000 that bears interest at

the rate of 10% per annum and originally matured on August 31, 2026 and a five-year warrant to purchase up to 500,000 shares of common

stock with an exercise price of $0.49 per share.

In connection with such loan, we also agreed to reduce the exercise price of the warrant

issued to Nanosha on December 15, 2024 from $2.00 per share to $0.49 per share.

July 22, 2025, SFO IDF made a loan to us in the amount of $500,000 in consideration for which we issued to SFO IDF a promissory note

in the principal amount of $500,000 that bears interest at the rate of 10% per annum and originally matured on January 31, 2026 and a

five-year warrant to purchase up to 2,000,000 shares of common stock with an exercise price of $0.50 per share.

In connection with such

loan, SFO IDF also agreed to extend the maturity date of the promissory note we issued to SFO IDF on April 22, 2025 from August 31, 2025

to January 31, 2026.

December 15, 2025, SFO IDF made a loan to us in the amount of $250,000 in consideration for which we issued to SFO IDF a promissory note

in the principal amount of $250,000 that bears interest at the rate of 10% per annum and matures on June 30, 2026 and a five-year warrant

to purchase up to 1,000,000 shares of common stock with an initial exercise price of $0.50 per share.

In connection with such loan, SFO

IDF also agreed to extend the maturity dates of the promissory notes we issued to SFO IDF on April 22, 2025 and July 22, 2025 from January

31, 2026 to June 30, 2026.

Accountant Fees and Services.

2 unchanged sentences

by the independent accountant in connection with statutory and regulatory filings or engagements for these periods were as follows:

the Years ended December 31,

Audit Fees and Audit Related Fees

All Other Fees

For the Years ended

Fees and Audit Related Fees

the above table, “audit fees” are fees billed by our company’s external auditor for services provided in auditing our

13 unchanged sentences

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on July 19, 2013).

Description of Registered Securities

Description of Registered Securities (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 10-K filed on April 2, 2025)

2021 Equity Incentive Plan (incorporated by reference to Exhibit Annex A to our Schedule 14C Information Statement filed on October 21, 2021).

1 unchanged sentence

and DSS Consulting Corporation (incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K filed on March 31, 2022).

Employment Agreement dated as of June 19, 2023 between CalEthos Inc.

and Joel Stone (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on June 27, 2023).

Warrant dated December 6, 2023 of CalEthos issued to M1 Advisors LLC.

Employment Agreement dated as of March 27, 2026 between CalEthos, Inc.

and Joel Stone.

Warrant dated November 28, 2023 of CalEthos issued to M1 Advisors LLC (incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K filed on April 2, 2025).

Warrant dated February 12, 2024 of CalEthos, Inc.

2 unchanged sentences

Warrant dated December 15, 2024 of CalEthos, Inc.

issued to Nanosha Investments LLC.

issued to Nanosha Investments LLC (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K filed on April 2, 2025).

Warrant dated April 22, 2025 of CalEthos, Inc.

issued to SFO IDF LLC

Warrant dated July 22, 2025 of CalEthos, Inc.

issued to SFO IDF LLC

Warrant dated December 15, 2025 of CalEthos Inc.

issued to SFO IDF LLC

Code of Conduct and Ethics of CalEthos Inc.

16 unchanged sentences

to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to

be signed on its behalf by the undersigned, thereunto duly authorized on the 1st day of April 2025.

Michael Campbell

be signed on its behalf by the undersigned, thereunto duly authorized on the 31st day of March 2026.

Executive Officer

2 unchanged sentences

registrant and in the capacities and on the dates indicated.

Michael Campbell

Executive Officer and Director

April 1, 2025

Executive Officer)

Financial Officer

April 1, 2025

Accounting Officer)

/s/ Michael Campbell

Michael Campbell

Sean Fontenot

April 1, 2025

Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this

Report of Independent Registered Public Accounting Firm (PCAOB 587 );

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

CalEthos, Inc.

Opinion on the Financial

We have audited the accompanying consolidated balance sheets of CalEthos Inc., (the “Company”) as of December 31, 2024 and

2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash

flows for each of the years in the two-year period ended December 31, 2024, and the related notes and schedules (collectively referred

to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations

and its cash flows for each of the two years in the period ended December 31, 2024 in conformity with accounting principles generally

accepted in the United States of America.

Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

in Note 1 to the accompanying consolidated financial statements, although the Company has net income it is primarily attributable to non-cash

reversal of compensation for restricted stock units, has generated negative cash flows from operating activities, has an accumulated deficit

and has stated that substantial doubt exists about Company’s ability to continue as a going concern.

Management’s evaluation

of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the

Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

The following documents are filed as part of this Report:

of Independent Registered Public Accounting Firm (PCAOB 587 );

Balance Sheets as of December 31, 2025 and 2024

Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2025 and 2024

Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025 and 2024

Statements of Cash Flows for the Years Ended December 31, 2025 and 2024

to Consolidated Financial Statements

805 Third Avenue

New York, NY 10022

Fax 212.838.2676

www.rbsmllp.com

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

on the Financial Statements

We have audited the accompanying consolidated balance sheets of CalEthos,

Inc., (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive

loss, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2025, and the

related notes and schedules (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024,

and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2025 in conformity

with accounting principles generally accepted in the United States of America.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared

assuming the Company will continue as a going concern.

As discussed in Note 1 to the accompanying consolidated financial statements, although

the Company has net income it is primarily attributable to non-cash reversal of compensation for restricted stock units, has generated

negative cash flows from operating activities, has an accumulated deficit and has stated that substantial doubt exists about Company’s

ability to continue as a going concern.

Management’s evaluation of the events and conditions and management’s plans regarding

these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from

the outcome of this uncertainty.

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to

be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control

over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective or complex judgments.

RBSM determined there were no CAM’s for the audit

of the year ended December 31, 2024.

We have served as the Company’s

auditor since 2018.

April 1, 2025

The critical audit matters are matters arising from the current period

audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to

accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex

RBSM determined there were no CAM’s for the audit of the year ended December 31, 2025.

have served as the Company’s auditor since 2018.

Balance Sheets

of December 31,

and cash equivalents

and other current expenses

current assets

Cash and cash equivalents

Prepaid and other current expenses

Total current assets

Data center Campus costs

Liabilities and stockholders’ equity

center campus costs

and stockholders’ (deficit) equity

payable and accrued expenses

payable – related parties, net

debentures, net

current liabilities

Accounts payable and accrued expenses

Convertible promissory notes, net

Notes payable, net of discount

Total current liabilities

Convertible debentures, net

Total liabilities

Stockholders’ equity

Series A convertible preferred stock, par value $ 0.001 , 3,600,000 shares authorized;

no shares issued and outstanding

Preferred stock, par value $ 0.001 , 100,000,000 shares authorized, no shares issued and outstanding

Preferred stock, value

Common stock par value $ 0.001 :

debentures, net

Stockholders’

(deficit) equity

stock par value $ 0.001 :

100,000,000 shares authorized;

25,730,540 and 25,730,540 shares issued and outstanding

Additional paid-in capital

Other comprehensive income

Stock subscription receivable

Accumulated deficit

paid-in capital

comprehensive income

subscription receivable

( 38,368,000 )

( 31,870,000 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ (deficit) equity

( 2,800,000 )

liabilities and stockholders’ (deficit) equity

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

the Years Ended December 31,

and administrative expenses

and related expense

operating expenses

Professional fees

Equity-based compensation

General and administrative expenses

Data center campus cost - abandonment

Payroll and related expense

Total operating expenses

Loss from operations

from operations

( 1,055,000 )

( 1,063,000 )

Other income (expenses)

Interest income

Financing costs

Financing costs – related party

income (expenses)

costs – related party

( 2,398,000 )

Gain on settlement of accounts payable

Loss on extinguishment of notes payable – related party

of development project cost

( 4,594,000 )

Loss on extinguishment of convertible promissory notes

from closure of foreign subsidiary

on extinguishment of notes payable – related party

( 2,317,000 )

Total other expenses

on extinguishment of convertible promissory notes

( 6,468,000 )

other expenses

( 5,443,000 )

Loss before provision for income taxes

( 11,527,000 )

before provision for income taxes

( 6,498,000 )

Provision for income taxes

( 12,590,000 )

for income taxes

( 6,498,000 )

Net loss per share - Basic and Diluted

Weighted Average common shares outstanding - Basic and Diluted

Comprehensive (loss) income

( 12,590,000 )

loss per share - Basic and Diluted

Average common shares outstanding - Basic and Diluted

Comprehensive

(loss) income

( 6,498,000 )

Foreign currency translation gain

Comprehensive loss

( 12,590,000 )

currency translation loss

Comprehensive

$ ( 6,507,000 )

$ ( 12,590,000 )

accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Stockholders’ Equity

Statements of Stockholders’ (Deficit) Equity

the Years Ended December 31, 2025 and 2024

Series A convertible preferred stock

Preferred Stock

Additional Paid-in

Stock Subscription

Other Comprehensive

Total Stockholders’

Balance December 31, 2022

Comprehensive

Stockholders’

December 31, 2023

$ ( 19,280,000 )

issued for extinguishment of debt Convertible Debentures

issued for note payable extension

issued for extinguishment of notes payable

for stock subscription receivable

( 12,590,000 )

Cancellation of shares

( 12,590,000 )

Shares issued for extinguishment of convertible debentures

Equity-based compensation

Foreign currency translation income (loss)

December 31, 2024

( 31,870,000 )

Balance December 31, 2023

compensation capitalized

of capitalized equity-based compensation

( 2,022,000 )

Shares issued for extinguishment of Convertible Debentures and accrued interest

Warrants issued for note payable extension

Shares issued for extinguishment of notes payable

Warrants issued for extinguishment of notes payable

Proceeds for stock subscription receivable

Equity-based compensation

compensation expensed

of current year equity-based compensation

issued to note payable - related party

currency translation loss

Warrant repricing with financing – related party

( 6,498,000 )

Balance December 31, 2024

December 31, 2025

$ ( 38,368,000 )

$ ( 2,800,000 )

$ ( 38,368,000 )

$ ( 2,800,000 )

accompanying notes are an integral part of these consolidated financial statements.

Statements of Cashflow

the Years Ended December 31,

Cash Flows From Operating Activities

the Year Ended December 31,

Flows From Operating Activities

$ ( 6,498,000 )

$ ( 12,590,000 )

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of note payable discounts

Amortization of debt issuance cost

Fair value of equity-based compensation

Gain on settlement of accounts payable

to reconcile net loss to net cash used in operating activities:

data center campus development costs

from disposal of foreign subsidiary

Loss on extinguishment of notes payable – related party

Loss on extinguishment of debt

Write off of development cost

Changes in operating assets and liabilities

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Net Cash Used in Operating Activities

Cash Flows From Investing Activities

Date center campus development cost

( 1,467,000 )

( 1,730,000 )

Net Cash Used in Investing Activities

of note payable discounts – related party

Warrant repricing with financing – related party

of debt issuance cost

value of equity-based compensation

on extinguishment of debt

in operating assets and liabilities

expenses and other current assets

payable and accrued expenses

cash used in operating activities

Flows From Investing Activities

center campus development cost

( 1,467,000 )

cash used in investing activities

( 1,467,000 )

Cash Flows From Financing Activities

Cash proceeds from issuance of convertible debentures

Cost for issuance of convertible debentures

Proceeds from stock subscription receivable

Cash proceeds for issuances of notes payable

Net Cash Provided by Financing Activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Flows From Financing Activities

proceeds from issuance of convertible debentures

for issuance of convertible debentures

from stock subscription receivable

proceeds for issuances of notes payable

cash provided by financing activities

of exchange rate changes on cash and cash equivalents

decrease in cash and cash equivalents

and cash equivalents, beginning of period

and cash equivalents, end of period

disclosure of cash flow information:

paid for interest

paid for income taxes

investing and financing activities

fair value of warrants issued with note payable

interest – project development cost

stock and warrants issued for extinguishment of notes payable

compensation capitalized

debentures accrued interest converted to equity

compensation expensed

of equity-based compensation expensed

$ ( 236,000 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for income taxes

Non-cash investing and financing activities

Common stock and warrants issued for extinguishment of notes payable

Note payable converted to equity

Capitalized interest – project development cost

Convertible debentures accrued interest converted to equity

Equity-based compensation capitalized

Notes payable converted to equity – related party

accompanying notes are an integral part of these consolidated financial statements.

to the Consolidated Financial Statements

the Years Ended December 31, 2024 and 2023

Financial Statements

the Year Ended December 31, 2025 and 2024

1 – Organization and Accounting Policies

1 unchanged sentence

(the “Company” or “we”) was incorporated on March 20, 2002 under the laws of the State of Nevada.

of July 2022, the Company’s board of directors resolved to focus exclusively on developing a clean-energy-powered data center (“Data

Center Campus”).

As such, the Company is implementing its plan to build aa large-scale, data center campus vertically integrated with onsite geothermal

power production In addition, the Company may acquire assets and all or part of other companies operating in the clean energy or data

center infrastructure industries or invest in or joint venture with other more-established companies already in the industry that would

add value to the Company’s business strategy.

July 2022, the Company’s board of directors resolved to restructure the business of the Company to focus exclusively on the development

of a large-scale data center campus, initially in Imperial County, California.

In addition, the Company would consider the acquisition

of assets or all or part of other companies operating in the clean energy or data center infrastructure industries or opportunities to

invest in, or joint venture with, other more-established companies already in the industry that would add value to the Company’s

business strategy.

optioning parcels of land in Imperial County and working with the Imperial County planning department and other local regulatory agencies

in seeking zoning changes and other required regulatory approvals required for the Company’s proposed data center campus, it became

evident by May 2025 that the Company’s timelines for the receipt of such approvals would not be met.

Key factors driving the delay

included the need for additional environmental studies, unresolved community concerns, and delays in receiving several outstanding government

As a result, the Company elected not to renew its purchase option on a 315-acres parcel of land in Imperial County when it

expired in July 2025 and to shift its development efforts to other locations in which the regulatory environment for data center development

and the purchase of available power may be more favorable and the timelines in which the Company may receive all required regulatory

approvals may be shorter.

May 2025, the Company formed TerraVolt Infrastructure Inc.

(“TerraVolt”), a wholly-owned subsidiary established to meet the

demand for sustainable, baseload, powered land and infrastructure solutions for large-scale data centers development and end users.

proposed solution is an Infrastructure-as-a-Service (IaaS) Platform that will integrate a portfolio of grid and behind-the-meter power

with construction-ready data center building sites that include utilities and fiber connectivity.

TerraVolt plans to provide this turnkey

solution to hyperscalers, colocation providers, and data center developers seeking to deploy new capacity faster than with traditional

power generation and transmission.

Company is currently focusing on properties in states in which onsite power production utilizing natural gas reciprocating engines and turbines

are allowed and in which the Company can acquire access to natural gas pipeline and capacity for delivery within a reasonable timeframe.

November 5, 2021, AIQ System Inc.

5 unchanged sentences

As of July 2022, AIQ was placed into a dormant state of operations.

As of January 2025, AIQ had been

of Presentation

5 unchanged sentences

Concern and Liquidity

Company incurred a net loss of approximately $ 12,590,000 for the year ended December 31, 2024, had an accumulated deficit of approximately

$ 31,870,000 as of December 31, 2024 and had no recurring revenue from operations.

The Company has financed its activities principally

through debt and equity financing and shareholder contributions.

Management expects to incur additional losses and cash outflows in the

foreseeable future in connection with its operating activities.

These conditions raise substantial doubt about the Company’s ability

to continue as a going concern for one year from the issuance of these consolidated financial statements.

Company’s consolidated financial statements have been presented on a going concern basis, which contemplates the realization of

assets and the satisfaction of liabilities in the normal course of business.

Company incurred a net loss of approximately $ 6,498,000 for the year ended December 31,

2025, had an accumulated deficit of approximately $ 38,368,000 as of December 31, 2025 and had no recurring revenue from operations.

Company has financed its activities principally through debt and equity financing and shareholder contributions.

Management expects to

incur additional losses and cash outflows in the foreseeable future in connection with its operating activities.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these consolidated

financial statements.

Company’s consolidated financial statements have been presented on a going concern basis, which contemplates

the realization of assets and the satisfaction of liabilities in the normal course of business.

Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals;

8 unchanged sentences

Ultimately, the attainment of profitable operations

is dependent on future events, including obtaining adequate financing to fund the Company’s operations and generating a level of

revenues adequate to support the Company’s cost structure.

is dependent on future events, including locating and contracting to purchase suitable real estate with access to gas pipelines or other

suitable power sources, contracting for the purchase of natural gas or otherwise obtaining the necessary power for the development of

a data center, obtaining adequate financing to fund the Company’s operations and generating a level of revenues adequate to support

the Company’s cost structure.

Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets.

However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if 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 the development of the Company’s data center campus, approvals for construction permits, construction times,

delivery of critical equipment, market demand for the Company’s wholesale colocation data center services, the timing of customer

commitments for data center space, the management of working capital, and payment terms and conditions for purchase of the Company’s

The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth

for the next twelve months from the issuance date of these financial statements.

If the Company is unable to raise additional funding

from investors or through other avenues, it may not be able to continue as a going concern.

The accompanying consolidated financial

statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Segment Reporting

The Company adopted FASB issued ASU 2023-07, “Segment

Reporting (ASC Topic 280) for the annual reporting period ended December 31, 2024.

The most significant provision was for the Company

to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), who is

All expense categories on the Consolidated Statements of Operations are significant and there are no other significant segment

expenses that would require disclosure.

The Company’s CODM, reviews financial information presented on a consolidated basis for

the purpose of making operating decisions, allocating resources, assessing financial performance and making strategic decisions related

to headcount and capital expenditures.

The CODM regularly reviews net loss as reported on the Company’s consolidated statements

The precise amount and timing of the funding needs cannot be determined accurately at this time The Company believes its cash

balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance

date of these financial statements.

If the Company is unable to raise additional funding from investors or through other avenues, it

may not be able to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments that

might be necessary if the Company is unable to continue as a going concern.

Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer.

The Company operates

as one operating segment and uses net income or loss as measures of profit or loss on a consolidated basis in making decisions regarding

the allocation of capital resources and performance assessment.

Additionally, the Company’s CODM regularly reviews the Company’s

expenses on a consolidated basis.

The financial metrics used by the CODM help make key operating decisions, such as determination of

the use of capital resources for data center development and general and administrative expenses.

the Company operates as one reportable segment, all financial information required by “Segment Reporting” can be found in

the accompanying consolidated financial statements.

The CODM does not review segment assets at a level other than

that presented in the Company’s consolidated balance sheets.

There are no intra-entity sales or transfers,

and no significant expense categories regularly provided to the CODM beyond those disclosed in the Consolidated Statements

of Operations.

The CODM uses net loss as the measure of profit or loss to allocate resources and assess performance.

Since the Company operates as one reportable segment,

all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements.

The CODM does not review segment assets at a level other than that presented in the Company’s consolidated balance sheets.

are no intra-entity sales or transfers, and no significant expense categories regularly provided to the CODM beyond those disclosed in

the Consolidated Statements of Operations.

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

24 unchanged sentences

measuring fair value.

of and for the years ended December 31, 2024 and 2023, the Company had no assets or liabilities that require fair value measurement.

of and for the years ended December 31, 2025 and 2024, the Company had no assets or liabilities that required fair value measurement.

and Cash Equivalents

8 unchanged sentences

Center Campus Costs

center cost is stated at cost, which includes the cost incurred to complete phase I of the Company’s data center development plan.

Phase I costs include the option payment for the land and the cost of consulting firms to provide power and connectivity assessments,

feasibility studies, engineering plans, and project benchmarking.

Data center cost also includes internal cost such as payroll-related

cost and debt interest cost.

center development cost is stated at cost, which includes the cost incurred to complete phase I of the Company’s former data center

development plan.

Phase I costs included the option payment for the land and the cost of consulting firms to provide power and connectivity

assessments, feasibility studies, engineering plans, and project benchmarking.

Data center development cost also included internal cost

such as payroll-related cost and debt interest cost.

accordance with ASC 360-10-35, the Company reviews the carrying amounts of data center cost when events or changes in circumstances indicate

15 unchanged sentences

unit is reduced to its recoverable amount.

An impairment loss is recognized immediately in net income.

of December 31, 2024, there have been no circumstances to indicate the asset may not be recoverable.

An impairment loss is recognized immediately in operating results.

Company follows Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)

17 unchanged sentences

to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements,

expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated

in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include:

consolidated financial statements are required to include disclosures of material related party transactions, other than compensation

arrangements, expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that

are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures

are required to include:

(a.) the nature of the relationship(s) involved;

(b.) a description of the transactions, including transactions to which no amounts or

nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary

to an understanding of the effects of the transactions on the financial statements;

(c.) the dollar amounts of transactions for each

of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that

used in the preceding period;

and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if

not otherwise apparent, the terms and manner of settlement.

(b.) a description of the transactions, including transactions

to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other

information deemed necessary to an understanding of the effects of the transactions on the financial statements;

(c.) the dollar amounts

of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing

the terms from that used in the preceding period;

and (d.) amounts due from or to related parties as of the date of each balance sheet

presented and, if not otherwise apparent, the terms and manner of settlement.

and Contingencies

22 unchanged sentences

the issuance of those equity instruments.

Company uses the fair value method for equity instruments granted to non-employees and use the BSM model for measuring the fair value

Company uses the fair value method for equity instruments granted to non-employees and uses the BSM model for measuring the fair value

The stock-based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over

10 unchanged sentences

ended December 31, 2025 and 2024 because their inclusion would be anti-dilutive.

Common stock equivalents amounted to 11,326,178 and

nil for the years ended December 31, 2024 and 2023, respectively.

Common stock equivalents amounted to 21,907,913

and 11,326,178

as of December 31, 2025 and 2024,

respectively.

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

Company and does not believe the future adoption of any such ASU’s may be expected to cause a material impact on the Company’s

consolidated financial condition or the results of its operations.

In October 2023, the FASB issued

ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codification.

Certain of the

amendments represent clarifications to, or technical corrections of the current requirements.

Each amendment in the ASU will only become

effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027.

currently evaluating the impact that the adoption of the provisions of the ASU will have on our consolidated financial statements.

amendments in this ASU are not expected to have a material impact on the results of operations or financial position.

In November 2023, the FASB issued

ASU 2023-07, “Segment Reporting (ASC Topic 280):

Improvements to Reportable Segment Disclosures.” The amendments require the

disclosure of significant segment expenses as well as expanded interim disclosures, along with other changes to segment disclosure requirements.

The standard will be effective for fiscal years beginning after December 15, 2023, and interim periods beginning on or after December

We have implemented the provisions of the ASU 2023-07.

On December 14, 2023, the FASB

issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires

entities to disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount

of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign.

new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted.

The Company is

currently evaluating the impact of adopting the standard.

In November 2024, the FASB issued

ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)”.

amendments require the disclosure of specified information about certain costs and expenses including purchases of inventory, employee

compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil and

gas producing activities.

It also requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions

that are not separately disaggregated quantitatively as well as the total amount of selling expenses and, in annual reporting periods,

an entity’s definition of selling expenses.

The standard will be effective for fiscal years beginning after December 15, 2026, and

interim reporting periods beginning after December 15, 2027.

We are currently evaluating the impact that the adoption of the provisions

of the ASU will have on our consolidated financial statements.

We are currently evaluating the impact that the adoption of the provisions

of the ASU will have on our consolidated financial statements.

2 – Data Center Costs

DATA CENTER COSTS

2 – Data Center Development Costs

CENTER DEVELOPMENT COSTS

July 22, 2024, the Company entered into an option agreement (“Option”) to acquire for a purchase price of $ 5,000,000 a 315 -acre

2 unchanged sentences

With the execution of the Option, the Company paid a non-refundable deposit of $ 50,000 .

The Option has an initial term

of one year and may be extended for an additional six-month period by the payment of $ 75,000 on or before July 21, 2025.

The Option had an initial term

of one year and could have been extended for an additional six-month period by the payment of $ 75,000 on or before July 21, 2025.

March 30, 2023, the Company signed an option agreement (“Initial Option”) to acquire 80 acres of commercially zoned land

5 unchanged sentences

On July 24, 2024 (“Termination Date”), the Company terminated (“Termination”)

the Initial Option as the Company believes the New Property is better suited for the Company’s Data Center Campus project.

the Initial Option as the Company believed the New Property was better suited for the Company’s Data Center Campus project.

of the Termination Date, the Company had approximately $ 4,158,000 of cost (“DCC Cost”) for the Data Center Campus project.

In accordance with ASC 790 and 360, the Company is required to determine the amount of DCC Cost (“Option Cost”) associated

In accordance with ASC 790 and 360, the Company was required to determine the amount of DCC Cost (“Option Cost”) associated

with the Initial Property.

The Option Cost is required to be exposed on the date the Company abandoned the Initial Option.

The Option Cost was required to be exposed on the date the Company abandoned the Initial Option.

has determined the date of abandonment was the Termination Date.

As of the Termination Date, the Company had approximately $ 344,000 of

The remaining DCC Cost are related to the development activities to the overall Data Center Campus, as such are not cost

associated with the Initial Property.

of December 31, 2024, the Company has incurred DCC Cost of approximately $ 5,849,000 , which includes approximately $ 284,000 of capitalized

interest related to the interest calculated for the funds, from the Notes payable and Convertible promissory notes, used for the DCC

development expenditures.

3 – Notes Payable

NOTES PAYABLE

payable transactions for the year ended December 31, are summarized as follows:

OF NOTES PAYABLE

The remaining DCC Cost was related to the development activities to the overall Data Center Campus and, as such, were not

cost associated with the Initial Property.

disclosed in Note 1 – Organization and Accounting Policies, given

the recent development of the Plan and the prolonged uncertainty, the Company elected not to renew its purchase option on the New Property

when it expired in July 2025.

Consequently, previously capitalized data center development costs were expensed, and the Company will

cease capitalizing additional data center development expenses until the Company can secure parcels with appropriate zoning for data

center use and greater certainty around the execution of its development plans, as disclosed in Note 1.

As of the termination of the

data center development, the Company had approximately $ 4,581,000 of capitalized development cost, which has been recorded as abandoned

project costs.

3 – Notes Payable – Related Party

the year ended December 31, 2024, the Company entered into transactions with Nanosha LLC, (“Nanosha”) an entity controlled

by the Company’s director Sean Fontenot.

During December 31, 2025, Nanosha transferred the notes payable and related securities

from the December 31, 2024 transactions, as described below to SFO IDF LLC, (“SFO”) a single member limited liability company

owned and controlled by a trust established for the benefit of certain family members of Mr.

Fontenot, the trustee of which is independent

and not affiliated with Mr.

Fontenot has no voting or investment power over the securities held by SFO and disclaims beneficial

ownership of such securities.

The Company has determined that SFO is a related party given SFO was established to benefit Mr.

family members.

PAYABLE - RELATED PARTIES

payable – related party transactions are summarized for the periods as follows for the years ended December 31,

SCHEDULE OF NOTES PAYABLE

beginning of the period

balance, beginning of the period

Additions – related party

Settlement – related party

( 1,000,000 )

end of the period

balance, end of the period

beginning of the period

balance, beginning of the period

Additions – related party

Amortization – related party

Balance, end of the period

Net carrying amount

February 2024, the Company issued a promissory note (“Promissory Note”) in the principal amount of $ 1,000,000 that bears

( 2,355,000 )

end of the period

Discount balance,end of the period

carrying amount

December 2025, the Company issued a $ 250,000 note payable to the SFO (“Lender”) (“December 2025 Note”) and extended the April 2025

Note and July 2025 Note (collectively “Extended Notes”) maturity dates to June 30, 2026 .

The December 2025 Note has an interest

rate of 10 % and the outstanding principal and interest are payable on June 30, 2026 .

Also, the Company issued the Lender a warrant to

purchase 1,000,000 shares of the Company’s common stock at $ 0.50 per share.

For accounting purposes, the Company allocated the

1,000,000 warrants equally to the modification of the Extended Notes 500,000 warrants (“Second Modification Warrants”) and

the December 2025 Note 500,000 warrants (“December 2025 Warrants”) (collectively the “Warrants’).

December 2025 Warrant’s grant date fair value of approximately $ 188,000 was calculated using the Black Scholes fair value option-pricing

model with key input variables provided by management, as of the date of issuance:

volatility of 226.53 %, the fair value of common stock

$ 0.38 , estimated life of 5.5 years, risk-free rate of 3.73 % and dividend rate of $ 0 .

In accordance with ASC 470 – Debt, the gross

proceeds of $ 250,000 was allocated between the December 20025 Note and the December 2025 Warrants on a relative fair value basis.

the July 2025 Warrants were recorded at $ 108,000 .

December 2025, the Company and the Lender agreed to extend the maturity date of the April 2025 Note and July 2025 Note to June 30, 2026 ,

which was accounted for as a modification under ASC 470—Debt.

In connection with this modification, the Company issued Second Modification

Warrants to the Lender.

The fair value of the Modification Warrants, determined to be $ 188,000 as of the extension date, was recorded

as a debt discount.

This amount will be amortized over the remaining term of the modified debt.

July 2025, the Company issued a $ 500,000 note payable to the Lender (“July 2025 Note”) and extended the April 2025 Note’s

maturity date to January 31, 2026 .

The July 2025 Note has an interest rate of 10 % and the outstanding principal and interest are payable

on January 31, 2026 .

Also, the Company issued to the Lender a warrant to purchase 2,000,000 shares of the Company’s common stock

at $ 0.50 per share.

For accounting purposes, the Company allocated the 2,000,000 warrants equally to the modification of the April 2025

1,000,000 warrants (“Modification Warrants”) and the July 2025 Note 1,000,000 warrants (“July 2025 Warrants”)

(collectively the “Warrants’).

The Warrant’s

grant date fair value of approximately $ 555,000 was calculated using the Black Scholes fair value option-pricing model with key input

variables provided by management, as of the date of issuance:

volatility of 226.55 %, the fair value of common stock $ 0.28 , estimated

life of 5.5 years, risk-free rate of 3.88 % and dividend rate of $ 0 .

In accordance with ASC 470 – Debt, the gross proceeds of $ 500,000

was allocated between the July 20025 Note and the July 2025 Warrants on a relative fair value basis.

Therefore, the July 2025 Warrants

were recorded at $ 178,000 .

July 2025, the Company and the Lender agreed to extend the maturity date of the April 2025 Note, which was accounted for as a modification

under ASC 470—Debt.

In connection with this modification, the Company issued Modification Warrants to the Lender.

The fair value

of the Modification Warrants, determined to be $ 277,000 as of the extension date, was recorded as a debt discount.

This amount will be

amortized over the remaining term of the modified debt.

April 2025, the Company issued a $ 250,000

note payable to Lender (“April

The April 2025 Note has an interest rate of 10 %

and the outstanding principal and interest were initially payable on August

31, 2025 , which was

extended to January 31, 2026, as described below.

Also, the Company issued the Lender a warrant to purchase 500,000

shares (“April 2025 Warrant”)

of the Company’s common stock at $ 0.49

The April 2025 Warrant

grant date fair value of approximately $ 291,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the date

volatility of 214.75 %,

the fair value of common stock $ 0.59 ,

estimated life of 5.0

years, risk-free rate of 3.98 %

and dividend rate of $ 0 .

In accordance with ASC 470 – Debt, the gross proceeds of $ 250,000

was allocated between the April 2025 Note and the April 2025 Warrant on a relative fair value basis, therefore, the warrant was recorded

at $ 134,000 .

As an inducement to the Lender, the Company agreed to modify the terms of certain Exchange Warrants (as described

below) to reduce the exercise price from $ 2.00 to $ 0.49 .

The Company accounted for the warrant modification as a financing cost in accordance

with ASC 815, Derivatives and Hedging, which requires recognition of any increase in the fair value of the warrant resulting from the

modification.

The fair value of the warrants was determined using the Black-Scholes option pricing model, with a fair value of $ 1,066,000

prior to modification and $ 1,086,000 after modification, based on a 4.7 -year term, volatility of 214.59 %, a risk-free interest rate of

3.9 %, and a market price of $ 0.49 per share.

The resulting increase in fair value of approximately $ 20,000 was recorded as a financing

cost – related party.

February 2024, the Company issued a promissory note (“Promissory Note”), to Nanosha, in the principal amount of $ 1,000,000 that bears

interest at the rate of 10 % per annum and originally matured on May 31, 2024 (“Maturity Date”).

24 unchanged sentences

had amortized approximately $ 921,000 of the value of the Extension Warrant.

December 15, 2024 (“Exchange Date”), the Company entered into an exchange agreement (“Exchange Agreement”)

to settle the Promissory Note based on the Exchange Agreement, the Promissory Note was extinguished, as of the Exchange Date and the

Extension Warrant and Additional Extension Warrants (collectively “The Extension Warrants”) were cancelled .

exchange the Company (i) made a payment of $100,000 for the accrued and unpaid interest, (ii) issued 500,000 shares of the

Company’s common stock with a fair value of $ 1.75

per share (based on the Company’s closing on the Exchange Date) (“Exchange Shares”), and issued a warrant to purchase 2,258,877

shares of the Company’s common stock as a price of $ 2.00

per share for a period of five

years (“Exchange Warrant’).

On the Exchange Date the Exchange Warrant had a fair value of $ 3,196,000

calculated using the Black Scholes fair value option-pricing model with key input variables provided by management:

volatility of 166 %,

the fair value of common stock $ 1.75 ,

estimated life range 2.5

years, risk-free rate of 4.25 %

and dividend rate of nil .

December 15, 2024 (“Exchange Date”), the Company entered into an exchange agreement (“Exchange Agreement”) to

settle the Promissory Note , pursuant to the Exchange Agreement, the Promissory Note was extinguished as of the Exchange Date and the Extension

Warrant and Additional Extension Warrants (collectively “The Extension Warrants”) were cancelled.

In exchange, the Company

(i) made a payment of $100,000 for the accrued and unpaid interest, (ii) issued 500,000 shares of the Company’s common stock with

a fair value of $ 1.75 per share (based on the Company’s closing on the Exchange Date) (“Exchange Shares”), and issued

a warrant to purchase 2,258,877 shares of the Company’s common stock at a price of $ 2.00 per share for a period of five years (“Exchange

On the Exchange Date, the Exchange Warrant had a fair value of $ 3,197,000 calculated using the Black Scholes fair value

option-pricing model with key input variables provided by management:

volatility of 166 %, the fair value of common stock $ 1.75 , estimated

life range 2.5 years, risk-free rate of 4.25 % and dividend rate of nil .

Company accounted for the Exchange agreement in accordance with ASC 470 – Debt.

Therefore, the Company incurred a $ 2,317,000

loss on extinguishment, which was the difference between the fair value of The Extension Warrants compared to the aggregate fair

value of the Exchange Warrants and Exchange

The loss on extinguishment of note payable – related party was

calculated as follows:

Therefore, the Company incurred a $ 2,317,000 loss

on extinguishment, which was the difference between the fair value of The Extension Warrants compared to the aggregate fair value of

the Exchange Warrants and Exchange Shares.

The loss on extinguishment of note payable – related party was calculated

OF LOSS ON EXTINGUISHMENT OF NOTE PAYABLE RELATED PARTY

Loan - principal balance

Value The Extension Warrants - cancelled

Total Consideration

Share received

Common stock value

Value of Exchange Warrant

Value received

- principal balance

The Extension Warrants - cancelled

Consideration

of Exchange Warrant

Loss on extinguishment of note payable – related party

the Exchange Date the 600,000 Extension Warrants had a fair value of $ 755,000

calculated using the Black Scholes fair value option-pricing model with key input variables provided by management:

volatility of 166 %,

the fair value of common stock $ 1.75 ,

estimated life range 2.5

years, risk-free rate of 4.25 %

and dividend rate of nil .

expense on the Promissory Note amounted to $ 103,000

for the years ended December 31, 2024

and 2023, respectively, of which approximately $ 60,000

the Exchange Date the Extension Warrants had a fair value of $ 755,000 calculated using the Black Scholes fair value option-pricing model

with key input variables provided by management:

volatility of 166 %, the fair value of common stock $ 1.75 , estimated life range 2.5 years,

risk-free rate of 4.25 % and dividend rate of nil .

cost for the notes payable – related party amounted to $ 656,000

and $ 2,398,000 for

the years ended December 31, 2025 and 2024, respectively, of which approximately nil

and $ 60,000 ,

respectively, were capitalized as data center development cost.

4 – Convertible Debentures

CONVERTIBLE DEBENTURES

debentures transactions for the years ended December 31, are summarized as follows:

OF CONVERTIBLE DEBENTURES

Balance, beginning of period

Balance, end of period

Debt issuance cost

debentures transactions are summarized as follows for the years ended December 31,

SCHEDULE OF CONVERTIBLE DEBENTURES

beginning of period

balance, beginning of period

end of period

balance, end of period

Net book value

June 2024, the Company initiated a private place offering for its convertible promissory notes (the “Debentures”).

December 31, 2024, the net proceeds were approximately $ 1,304,000 , due to approximately $ 106,000 paid as debt issuance cost in connection

with the issuance of the Debentures.

The Debentures bears interest at 10.0 % per annum with a default interest rate of 15.0 % per annum.

The principal amount and all accrued interest are payable on December 31, 2026.

The holder of the Debentures has the option to convert

the unpaid principal and interest into shares of the Company’s common stock at the conversion rate of $ 2.00 per share, subject

to adjustment for stock splits, stock dividends and the like and for issuances by the Company of common stock at a price per share that

is less than the then-current conversion price, subject to certain exceptions.

accordance with the Debenture, the Company has the right to prepay the Debentures upon providing 45 days of its intention to prepay.

issuance cost

beginning of period

issuance cost balance,

beginning of period

end of period

issuance cost balance,

end of period

June 2024, the Company initiated a private placement offering for its convertible debentures (the “Debentures”).

The Debentures

bear interest at 10.0 % per annum with a default interest rate of 15.0 % per annum.

The principal amount and all accrued interest are payable

on December 31, 2026.

The holder of the Debentures has the option to convert the unpaid principal and interest into shares of the Company’s

common stock at the conversion rate of $ 2.00 per share, subject to adjustment for stock splits, stock dividends and the like and for

issuances by the Company of common stock at a price per share that is less than the then-current conversion price, subject to certain

accordance with the Debenture, the Company has the right to prepay the Debentures upon providing 45 day notice of its intention to prepay.

outstanding principal amount of the Debentures and all accrued interest thereon shall automatically be converted into shares of common

3 unchanged sentences

of a long-term lease with a data center client for all or a substantial portion of the Company’s planned data center development

December 2023, the Company offered the holders of the Company’s outstanding convertible promissory notes in the aggregate principal

amount of $ 341,000 the option to convert such notes into the Company’s common stock at a price ranging from $ 0.51 to $ 0.54 per

During the three months ended March 31, 2024, the Company converted principal and interest of approximately $ 341,000 and $ 119,000 ,

respectively (a total of $ 460,000 ), for 884,942 shares of the Company’s common stock with a fair market value of approximately

$ 6,928,000 as of the dates of conversion.

As the terms of the conversion were not in accordance with the original conversion feature,

the holders of such notes did not provide any concession to the Company, and there was not an inducement to the holders to convert.

the offer did not have a time limit, the Company has accounted for the conversion in accordance with ASC 470-50-40-4.

The difference

between the fair value of the consideration paid of approximately $ 6,928,000 and the liability of $ 460,000 was approximately $ 6,468,000 ,

which was accounted for as a loss on liability settlement.

The loss on the settlement was recorded as a loss on extinguishment of debt

on the statement of operations for the three months ended March 31, 2024.

expense on these convertible promissory notes amounted to $ 32,000

and $ 439,000

for the years ended December 31, 2024

and 2023, respectively, of which $ 21,000

and $ 2 03 ,000 ,

respectively, was capitalized as Data Center Campus Cost.

the year ended December 31, 2025, the Company issued Debentures in the principal

amount of $ 225,000

for net proceeds of approximately $ 215,000 .

expense on convertible promissory notes amounted to $ 159,000 and $ 32,000 for the years ended December 31, 2025 and 2024, respectively,

of which $ 26,000 and $ 21,000 , respectively, was capitalized as data center campus cost.

5 – Commitments and Contingencies

4 unchanged sentences

such litigation be resolved unfavorably.

Operating Officer

June 2023, the Company executed an employment agreement (“Employment Agreement”) to employ an individual to be the Company’s

President and Chief Operating Officer (“Executive”).

As compensation for services rendered, the Executive will be paid a

base salary of $ 250,000 per annum.

The Executive’s base salary may be increased as certain milestones are met, such as 1) when

the necessary governmental permits are granted to start construction of the Company’s initial data center, 2) once the initial

data center is operational and at least 25% of the planned megawatts of collation capacity is leased.

Also, at the discretion of the

Company, following each calendar year of continued employment, the Executive shall be eligible to receive a discretionary bonus of up

to fifty percent (50%) of Executive’s base salary during the first year of employment, up to seventy-five percent (75%) of Executive’s

then-current base salary during the second year of employment, and up to one-hundred percent (100%) of Executive’s then-current

base salary during Executive’s third year of employment.

Payment of any bonus will be based on achieving certain goals and performance

criteria established by the Company.

In addition, the Executive was granted options to purchase 600,000 and 1,900,000 shares of the Company’s

common stock.

Employment Agreement also provides for certain severance benefits upon termination of the Executive by the Company without “cause”

or by the Executive for good reason.

In the event of a termination by the Company without cause or by the Executive for good reason after

the first full year of employment, the Executive would be entitled to (i) continued payment of the base salary for the lesser of six

months or the remaining term of the Employment Agreement, subject to the Executive signing a timely and effective separation agreement

containing a release of all claims against the Company and other customary terms.

President of Data Center Development

March 1, 2024, the Company hired an individual as vice president of data center development with an annual salary of $ 225,000 .

The salary increases to $ 240,000

and $ 250,000

on the first and second anniversary dates, respectively.

the individual is eligible for an annual bonus of up to 25%, 35% and 40% of the annual salary for the first, second and third

calendar years, respectively.

Strategy and Development Officer

April 1, 2024, the Company hired an individual as chief strategy and development officer vice president with an annual salary of $ 250,000 .

The salary increases to $ 275,000 and $ 300,000 on the first and second anniversary dates, respectively.

Also, the individual is eligible

for an annual bonus of up to 25%, 35% and 40% of the annual salary for the first, second and third calendar year end, respectively.

6 – Stockholders Equity

STOCKHOLDERS EQUITY

November 15, 2024, the Company issued, to a consultant, a non-qualified stock option to purchase 350,000 shares of the Company’s

common stock at an exercise price of $ 5.00 per share, the fair market value of the Company’s common stock as of November 15, 2024

(the “Grant Date’).

350,000 options vests as follows:

shares on each of the following dates July 16, 2025, July 17, 2026, July 16, 2027 and July 16,2028;

(a) 17,500 shares upon the award of a GMP contract to a construction manager/company;

(b) 35,000 shares upon completion of the initial site development plan and data center design and 100% construction documents;

necessary to start construction of the data center site and facilities (including but not limited to power substation, water delivery,

pumping, storage and on- site distribution systems, fiber conduit lines and communications systems, and on-site roads, water, power

and communications grid, buildings, perimeter walls and security systems);

(d) 35,000 upon the completion of all Network Ready meet me rooms in the first data center;

(e) 70,000 shares upon the completion of construction of a customer-ready data center facility and receipt of a conditional occupancy

permit for a Data Center facility.

Company’s management has accounted for the options in accordance with ASC 718 – Stock Compensation (“ASC 718”).

ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized.

Management has estimated

that the first development phase (a) will be completed by June 30, 2026, the second development phase (b) by December 31, 2025, the third

development phase (c) by March 31, 2026, and the fourth and fifth development phases (d) and (e) by June 30, 2029.

The estimated service

period will be adjusted for actual and expected completion date changes.

Any such change will be recognized prospectively, and the remaining

deferred compensation will be recognized over the remaining service period.

option grant date fair value of $ 1,727,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility range 217.4 %

the fair value of common stock $ 5.00 ,

estimated life range 4.5

years, risk-free rate of range 4.3 %

and dividend rate of nil .

For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $ 124,000

and nil , respectively, which was capitalized as data center cost.

On April 1, 2024 for the Chief Strategy

and Development officer, the Company awarded a non-qualified stock option to purchase 1,000,000

shares of the Company’s common stock at a purchase price of $ 2.62 ,

which was the fair market value of the Company’s common stock on the date of issuance.

1,000,000 options vests as follows:

shares on the date of issuance;

shares on each the 1 st , 2 nd and 3 rd anniversary dates of the issuance date;

(a) 32,500 shares upon the Award of a GMP contract to a construction manager/company;

shares upon completion of the initial site development

plan and data center design and 100% construction documents;

(c) 32,500 shares upon the Company receiving permits necessary to start construction of the data center site and facilities;

(d) 65,000 shares upon the completion of an all-network ready meeting rooms in the first data center;

(e) 130,000 shares upon the completion of construction of a customer-ready data center facility

and receipt of a conditional

permit for a data center facility.

SCHEDULE OF STOCK OPTION ACTIVITIES

December 31, 2023

December 31, 2024

December 31, 2025

and exercisable, December 31, 2025

December 31, 2025

Company had 6,716,500 outstanding stock options as of December 31, 2025, of which 4,291,500 outstanding options had a time-based vesting

requirement, and the remaining 2,425,000 outstanding options had a performance-based vesting requirement, as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING FOR TIME-BASED AND PERFORMANCE-BASED ACTIVITIES

Performance-based

- Senior Counsel

employees - vested

Non-employees

-Vested on issuance

May 2025, as described in Note 1 – Organization and Accounting Policies, the Company’s management shifted the core focus

of the Company’s operations.

As a result of this strategic shift, the original performance-based milestone included in the employee

stock option agreements were determined to be no longer achievable.

The original milestones, which were tied to specific legacy business

objectives, were rendered obsolete by the revised operational direction of the Company.

The stock option agreements provided for the

milestones to be modified with the mutual consent of the Company and the employees.

In accordance with the terms of the stock option

agreements, these milestones were modified by agreement of the Company and the affected employees to better align with the new business

plan, as follows:

1 - Upon the execution by the Company of an agreement to lease or purchase land for (a) a geothermal well field, geothermal power plant

or geothermal cooling/heating plant, (b) another type of clean energy power plant, or (c) pre- permitted construction-ready building

sites for a data center or other facilities to be constructed pursuant to the Company’s data center infrastructure platform.

2 - Upon the Company receiving all required approvals from local, county and state agencies to allow the Company to proceed with the

construction and development of an exploratory geothermal well, a geothermal power plant, a geothermal cooling/heating plant, or another

type of clean energy power plant or for the Company’s data center infrastructure platform.

3 - Upon the execution by the Company (or by a partnership or joint venture to which the Company is a party) of an agreement pursuant

to which a third party (a) will purchase power or heating/cooling, either as an off-taker of power or heating/cooling, (b) will purchase

infrastructure under an Infrastructure-as-a- Service Agreement, (c) as a utility company, will purchase power or heating/cooling under

a power or heating/cooling purchase agreement, or (d) through a partnership or joint venture agreement to which the Company is a party,

will purchase power or heating/cooling the partnership or joint venture produces or for data center infrastructure that the partnership

or joint venture provides to such third party.

4 - Upon completion by the Company of construction of (a) a geothermal power plant, a geothermal heating/cooling plant, or other type

of clean energy power plant, or (b) a data center infrastructure platform, and the receipt by the Company of all required operating permits

from local, county or state officials for the operation of such plant or platform.

5 - Upon the operation by the Company, either directly or indirectly, of a power plant, heating/cooling plant or other type of clean

energy power plant, or an infrastructure platform, at an operating expense (OPEX) of 40% or less in any full fiscal year.

outstanding performance-based awards at December 31, 2025 are as follows:

SCHEDULE OF OUTSTANDING PERFORMANCE-BASED AWARDS ACTIVITY

Senior Counsel

revised performance-based milestones were at the time of the modification directly linked to the execution of the Company’s new

business model at such time, most notably, the acquisition or leasing of land suitable for geothermal development.

The identification

of prospective locations has emphasized areas with sufficient geothermal activity, evidenced by the presence of other operational or

in-development facilities in the same geographic regions.

However, as of the date of the modification, the Company remained in an exploratory

and negotiation stage and had not identified, nor entered into any definitive land lease or purchase agreements.

Also, if the Company

finds suitable land for the project, there can be no assurance that financing to lease or acquire

the land will be available in sufficient amounts and on acceptable terms.

Company evaluated the modification of the performance-based awards under ASC 718, Compensation – Stock Compensation and determined

that the change represented a Type IV “improbable-to-improbable” modification.

That is, both the original and new milestones

were not considered probable of achievement at the time of modification.

Because the Company is in the early stages of exploring and

negotiating suitable land, and considering potential challenges such as regulatory delays, market competition, or failure to reach agreement

with landowners, there remains substantial uncertainty regarding the achievement and timing of the new milestone;

Not probable of achievement, as the related business objective was discontinued.

Also, not probable at the time of modification, as substantial uncertainty remained regarding the successful acquisition

or leasing of suitable land.

a result, consistent with ASC 718-20-55-108, no compensation expense related to these performance-based stock options has been recognized

as of the modification date.

The fair value of the modified awards is measured as of the modification date, but compensation cost will

not be recognized until it becomes probable that the revised milestone will be satisfied.

Company will continue to evaluate, at each reporting date, whether it has become probable that the new performance milestone will be

Factors considered include, but are not limited to:

on negotiations for land acquisition or lease agreements.

in regulatory approvals or permitting for onsite power and geothermal projects.

in the competitive or market landscape for onsite power and geothermal sites.

management concludes that achieving the milestone has become probable, the Company will begin recognizing compensation cost for the modified

options, reflecting the fair value at the modification date.

If it becomes probable, the cumulative catch-up adjustment will be recognized

in that period, and expense will be recognized prospectively over the vesting period for any remaining requisite service.

following table summarizes the recapture of equity-based compensation as it pertains to each issuance and the breakdown between capitalized

and expensed for the year ended December 31, 2025

Schedule of Recapture of Equity-based Compensation pertains to each Issuance between Capitalized and Expensed

Q1 2025 - Employee Terminations (Capitalized)

Q2 2025 - Project Abandonment

Q1 2025 - Employee Terminations (Capitalized)

Vice President and Sr.

Counsel (January 2025)

Consultant (November 2024)

Chief Strategy and Development officer (December 2023

Date Center Development adviser (December 2023)

CEO and COO (December 2023)

COO (June 2023)

During the year ended December 31, 2025, the Company

recaptured approximately $ 2,258,000

of stock-based compensation expense, of which (i) $ 1,183,000

related to performance-based stock options with $ 947,000

classified as abandoned project cost and $ 236,000

classified as stock-based compensation expense, and (ii) $ 1,075,000

related to Q1 2025 terminated employees and classified as abandoned project cost.

ended December 31, 2025, the total equity-based compensation expense was a net recapture of $ 1,515,000 .

The Abandoned project cost included

an expense of $ 427,000 which was offset by the recapture of $ 2,022,000 .

The stock-based compensation expense was $ 316,000 offset by the

recapture of $ 236,000 related to the performance-based stock options for a net expense of $ 80,000 .

ended December 31, 2024, the total equity-based compensation was approximately $ 2,749,000 of which approximately $ 2,380,000 was capitalized

as Data Center Campus costs, and $ 369,000 was expensed.

January 2025, the Company issued to the Vice President and Sr.

counsel, Real Estate, Land Use and Governmental Affairs, a non-qualified

stock option agreement for the purchase of 350,000 shares of the Company’s common stock for an exercise price of $ 1.99 per share,

which was the fair value of the Company’s common stock on the grant date.

The option vesting as to 350,000 shares of common stock

option becomes exercisable as to 43,750 shares of common stock on January 16, 2026 and shall vest and become exercisable as to an

additional 43,750 shares of common stock on each of January 16, 2027, January 16, 2028, and January 16, 2029 provided that the optionee

is a consultant, an employee or a Board member in good standing with the Company on such applicable vesting date.

option vests as to the remaining 175,000 shares of common stock based on the employee completing the modified milestones, as disclosed

Company’s management has accounted for the options in accordance with ASC 718, which requires the Company to estimate the service

period over which the compensation cost will be recognized.

Management has estimated that the first development phase (a) will be completed

by June 30, 2026, the second development phase (b) by December 31, 2025, the third development phase (c) by March 31 , 2026, and the fourth

and fifth development phases (d) and (e) by June 30, 2029 .

The estimated service period will be adjusted for actual and expected

completion date changes.

Any such change will be recognized prospectively, and the remaining deferred compensation will be recognized

over the remaining service period.

option grant date fair value of $ 2,437,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility range 166.28 %

the fair value of common stock $ 2.62 ,

estimated life range 2.38

years, risk-free rate of range 4.34 %

and dividend rate of nil .

For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $ 1 , 317 ,000

and nil , respectively, which was capitalized as data center cost.

2023 Stock Options

December 2023, the Board of Directors approved the issuance of stock options to the directors for the purchase of 500,000 , 750,000 and

404,000 of the Company’s common stock, for a total of 1,654,000 shares, to the three directors (“Directors Options”)

for an exercise price of $ 0.54 , which was the fair market value of the Company’s common stock on the date of issuance.

Options vested on December 31, 2023 and expire on December 29, 2030.

Director Options grant date fair value of approximately $ 860,000 was calculated using the Black Scholes fair value option-pricing model

with key input variables provided by management as of the date of issuance:

volatility of 224.03 %, the fair value of common stock $ 0.54 ,

estimated life of 3.5 years, risk-free rate of 4.12 % and dividend rate of $ 0 .

The Director Options grant date fair value of $ 860,000

was included in the equity-based compensation in the Statement of Operations for the year ended December 31, 2023.

December 2023, the Board of Directors approved the issuance of stock options to the Company’s CEO and COO for the purchase of 1,000,000

and 1,000,000 , respectively (“2023 Executive Options”) for an exercise price of $ 0.54 , which was the fair market value of

the Company’s common stock on the date of issuance.

The 2023 Executive Options vest, as follows:

both the CEO and COO 1,000,000 options vest and become exercisable as follows:

shares on each of December 6, 2024, 2025 and 2026 for a total of 500,000 shares, upon vesting the options have a life of seven years.

remaining 500,000 shares based on the Company completing the following milestones (upon vesting the options have a life of seven

shares upon completion of the initial site development plan and Data Center design, and submission of a complete set of plans to Imperial

County Planning and Development Department for approvals and permits.

shares upon the Company receiving permits necessary to start construction of the data center site and facilities (including but not

limited to power substation, water delivery, pumping, storage and on- site distribution systems, fiber conduit lines and

communications systems, and on-site roads, water, power and communications grid, warehousing, offices, administration, support and

security buildings, perimeter walls and security systems).

shares) upon the completion of construction of a complete data center facility and receipt of an occupancy permit for such facility,

either for a Data Center facility to be built as a “build to suit” building for a hyperscale company or as a wholesale

colocation building for enterprise IT customers.

shares) upon the signing of a build-to-suit contract or one or more contracts being signed for 50% or more of a constructed and operational

wholesale colocation facility’s capacity.

Company’s management has accounted for the 2023 Executive Options in accordance with ASC 718 – Stock Compensation (“ASC

ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized.

has estimated that the first development phase (a) will be completed by December 31, 2025, the second development phase (b) by June 30, 2029, the third development phase (c) by April 1, 2025 and the fourth development phase (d) by June 30, 2027.

The estimated service

period will be adjusted for actual and expected completion date changes.

Any such change will be recognized prospectively, and the remaining

deferred compensation will be recognized over the remaining service period.

2023 Executive Options grant date fair value of $ 1,060,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility range of 232.67 %

the fair value of common stock $ 0.50 ,

estimated life range of 4.5

years to 4.77

years, risk-free rate of 4.12 %

and dividend rate of $ 0 .

For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $ 645,000 and $ 59,000 ,

respectively, of which approximately $ 253,000 and $ 21,000

was expensed as compensation expense and approximately $ 392,000 and $ 38,000

was capitalized as data center cost.

December 2023, the Board of Directors approved the issuance of stock options to two consultants, an executive advisor and data center

development advisor, for the purchase of 350,000 and 350,000 , for each consultant (collectively “2023 Consultant Options”)

for an exercise price of $ 0.54 , which was the fair market value of the Company’s common stock on the date of issuance.

350,000 options for data center development consultant vest, as follows:

shares on each of December 6, 2024, 2025 2026 and 2027 for a total of 175,000 shares, upon vesting the options have life of seven

remaining 175,000 shares based on the Company completing the following milestones (upon vesting the options have a life of seven

upon completion of the initial site development plan and Data Center design and 100% Construction Documents.

upon the Award of a GMP contract to a construction manager/company

shares upon the Company receiving permits necessary to start construction of the data center site and facilities (including but not

limited to power substation, water delivery, pumping, storage and onsite distribution systems, fiber conduit lines and communications

systems, and on-site roads, water, power and communications grid, buildings, perimeter walls and security systems).

upon the completion of all Network Ready meet me rooms in the first data center

shares upon the completion of construction of a customer-ready data center facility and receipt of a conditional occupancy permit

for a Data Center facility.

Company’s management has accounted for the data center development consultant options in accordance with ASC 718 – Stock

Compensation (“ASC 718”).

ASC 718 requires the Company to estimate the service period over which the compensation cost

will be recognized.

Management has estimated that the first development phase (a) will be

completed by June 30, 2026, the second development phase (b) by December 31, 2025, the third development phase (c) by March 31,

2026, and the fourth and fifth development phases (d) and (e) by June 30, 2029.

The estimated service period will be adjusted

for actual and expected completion date changes.

Any such change will be recognized prospectively, and the remaining deferred

compensation will be recognized over the remaining service period.

data center development consultant options grant date fair value of $ 189,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility 322.83 %,

the fair value of common stock $ 0.50 ,

estimated life of 5.5

years, risk-free rate of 4.12 %

and dividend rate of $ 0 .

For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $ 104,000 and $ 7,000 ,

which was capitalized as data center cost.

options for the executive advisor will vest based on the following performance milestones:

upon completion of the initial site development plan and data center design and 100% construction documents.

upon the award of a GMP contract to a construction manager/company.

options upon the Company receiving the permits necessary to start construction of the data center site and facilities.

options upon the completion of a network-ready meeting room in the first data center.

options upon the completion of construction of a customer-ready data center facility and receipt of a conditional occupancy permit

for a data center facility.

Company’s management has accounted for the executive advisors’ options in accordance with ASC 718 – Stock Compensation

ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized.

Management has estimated that the first development phase (a) will be completed by June 30, 2026,

the second development phase (b) by December 31, 2025, the third development phase (c) by March 31, 2026, and the fourth and fifth development

Management has estimated that the first and second development phase (a)

and (b) will be completed by December 31, 2025, the third development phase (c) by March 31, 2026, and the fourth and fifth development

phases (d) and (e) by June 30, 2029.

The estimated service period will be adjusted for actual and expected completion date changes.

Any such change will be recognized prospectively, and the remaining deferred compensation will be recognized over the remaining service

data center development consultant options grant date fair value of $ 182,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility of 224.03 %,

the fair value of common stock $ 0.50 ,

estimated life of 3.5

years, risk-free rate of 4.127 %

and dividend rate of $ 0 .

For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $ 94,000 and $ 8,000 ,

which was capitalized as data center cost.

2023 – Stock Options

part of the Employment Agreement, as defined in Note 6 – Commitments and Contingencies, the executive was granted an incentive

stock option (“Incentive Option”) and a non-qualified stock option (“Non-Qual Option”) (collectively “Stock

Options”) to purchase 600,000 and 1,900,000 , respectively, shares of the Company’s common stock for $ 0.50 per share.

Stock Options are exercisable for a period of seven years from the date of grant, which was June 19, 2023 (“Grant Date”).

Incentive Option shall vest and become exercisable as follows:

(i) options to purchase up to 200,000

shares of Common Stock shall vest and become exercisable on

the first anniversary of the Grant Date;

(ii) options to purchase up to 200,000

shares of Common Stock shall vest and become exercisable on

the second anniversary of the Grant Date;

and (iii) options to purchase up to 200,000

shares of Common Stock shall vest and become exercisable on

the third anniversary of the Grant Date;

provided that the Optionee is an employee in good standing with the Company on such applicable

vesting date.

The Incentive Option Grant Date fair value of $ 300,000

was calculated using the Black Scholes fair value option-pricing

model with key input variables provided by management, as of the date of issuance:

volatility of 339 %,

the fair value of common stock $ 0.50 ,

estimated life of 5

years, risk-free rate of 3.99 %

and dividend rate of $ 0 .

Non-Qual Option shall vest and become exercisable as follows:

shares on each of the first two anniversaries of the Grant Date and 216,668 shares on the third anniversary of the Grant Date, provided

that the Optionee is an employee or Board member in good standing with the Company on such applicable vesting date.

remaining 1,250,000 shares based on the Company completing the following milestones:

shares upon completion of the initial site development plan and Data Center design, and submission of a complete set of plans to

Imperial County Planning and Development Department for approvals and permits.

shares upon the Company receiving permits necessary to start construction of the data center site and facilities (including but not

limited to power substation, water delivery, pumping, storage and on-site distribution systems, fiber conduit lines and communications

systems, and on-site roads, water, power and communications grid, warehousing, offices, administration, support and security buildings,

perimeter walls and security systems).

shares upon the completion of construction of a complete data center facility and receipt of an occupancy permit for such facility,

either for a Data Center facility to be built as a “build to suit” building for a hyperscale company or as a wholesale

colocation building for enterprise IT customers.

shares upon signing a build-to-suit contract or one or more contracts being signed for 50% or more of a constructed and operational

wholesale colocation facility’s capacity.

Company’s management has accounted for the Non-Qual Option in accordance with ASC 718 – Stock Compensation (“ASC 718”).

ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized.

Management has estimated that the first development phase (a) will be completed

by December 31, 2025, the second development phase (b) by June 30, 2029, the third development phase (c) by April 1, 2025 and the fourth

development phase (d) by June 30, 2027.

The estimated service period will

be adjusted for actual and expected completion date changes.

Any such change will be recognized prospectively, and the remaining deferred

compensation will be recognized over the remaining service period.

Non-Qual Option Grant Date fair value of $ 875,000

was calculated using the Black Scholes fair value option-pricing

model with key input variables provided by management, as of the date of issuance:

volatility range of 137 %

the fair value of common stock $ 0.50 ,

estimated life range of 3.9

years, risk-free rate range of 3.99 %

and dividend rate of $ 0 .

For the years ended December 31, 2024 and 2023, the Company recorded compensation

expenses of approximately $ 465,000 and $ 98,000 , respectively, of which approximately $ 116,000 and $ 25,000 was expensed as compensation

expense and approximately $ 349,000 and $ 73,000 was capitalized as data center cost.

OF STOCK OPTION ACTIVITIES

Number of Shares

Weighted Average Strike Price/Share

Weighted Average Remaining Contractual Term (Years)

Weighted Average Grant Date Fair Value/Share

Balance, January 1, 2023

Balance, December 31, 2023

Balance, December 31, 2024

Vested and exercisable, December 31, 2024

Unvested, December 31, 2024

the year ended December 31, 2024, the total equity-based compensation was approximately $ 2,749,000

of which approximately $ 2,380,000

was capitalized as Data Center Campus

the years ended December 31, 2023, the total equity-based compensation (for stock options and warrants) was approximately $ 3,368,000

of which approximately $ 336,000

was capitalized as Data Center Campus costs

November 2023, the Company issued two warrants to purchase 2,000,000

such change will be recognized prospectively, and the remaining deferred compensation will be recognized over the remaining service period.

option grant date fair value of $ 690,000 was calculated using the Black Scholes fair value option-pricing model with key input variables

provided by management, as of the date of issuance:

volatility range 223.09 to 237.39 %, the fair value of common stock $ 1.99 , estimated

life range 4.5 to 5.25 years, risk-free rate of 4.45 % and dividend rate of nil .

For the nine months ended September 30, 2025, the Company

recognized compensation expense of approximately $ 90,000 related to time-based equity awards, which was recorded as equity-based compensation.

During the same period, the Company recorded a reversal of approximately $ 54,000 of performance-based compensation expense that had been

capitalized in prior periods as data center campus costs.

This amount was recorded as abandoned project costs, upon the determination

that the related project would not be completed.

November 2024, the Company issued to a consultant a non-qualified stock option to purchase 350,000 shares of the Company’s common

stock at an exercise price of $ 5.00 per share, the fair market value of the Company’s common stock as of November 15, 2024 grant

In May 2025, the Company terminated the contract with the consultant.

As of the termination date, none of the stock options were

As a result, the stock option to purchase the 350,000 shares of the Company’s common stock was forfeited and the associated

compensation expense of approximately $ 366,000 was recaptured and classified as abandoned project costs.

In December 2023, the Company awarded an executive advisor a non-qualified

stock option to purchase 350,000 shares of the Company’s common stock.

In April 2024, the Company hired the executive advisor to

be its Chief Strategy and Development officer, at which time the Company issued a non-qualified stock option to purchase 1,000,000 shares

of the Company’s common stock.

In January 2025, the Company terminated the employment agreement.

As of the termination date, the

employee vested 168,750 time-based options to purchase shares of common stock, the remaining 1,181,250 options to purchase common stock

was cancelled and the estimated compensation expense capitalized in the prior year of approximately $ 987,000 was recaptured as a

reduction in abandoned project cost.

In December 2023, the Company awarded its Data

Center Development advisor a non-qualified stock option to purchase 350,000

shares of the Company’s common stock.

In February 2025, the Company terminated the employment agreement.

As of the termination

date, the employee vested 43,750

time-based options to purchase shares of common, the remaining 306,250

options to purchase common stock was cancelled and the estimated compensation expense capitalized in the prior year of approximately

was recaptured, as a reduction of abandoned in abandoned project cost.

December 2023, the Board of Directors approved the issuance of stock options to the Company’s CEO and COO for the purchase of 1,000,000

shares of common stock with an exercise price of $ 0.54 ,

per share, which was the fair market value of the Company’s common stock on the date of issuance.

For the year ended December 31,

2025, the Company recognized compensation expense of approximately $ 71,000

related to time-based equity awards, and upon the determination

that the related project would not be completed recorded a reversal of approximately $ 135,000

for performance-based awards, both of which were recorded as

equity-based compensation.

During the same period, the Company recorded a reversal of approximately $ 225,000

of performance-based compensation expense that had been capitalized

in prior periods as data center campus costs.

The $ 225,000

was recorded to abandoned project costs, upon the determination

that the related project would not be completed.

June 2023, the Board of Directors approved the issuance of stock options to the Company’s COO for the purchase of 1,000,000

shares of common stock with an exercise price of $ 0.54 ,

per share, which was the fair market value of the Company’s common stock on the date of issuance.

In June 2023, as part of an

employment agreement an executive was granted an incentive stock option and a non-qualified stock option to purchase 600,000

and 1,900,000 ,

(“2023 Warrants”) to two of the Company’s directors.

The 2023 Warrants have an exercise price of $ 0.54 ,

which was the fair value of the Company’s common stock on the date of issuance.

The 2023 Warrants vested on December 31, 2023

and expire on December 31, 2028.

The 2023 Warrants grant date fair value of approximately $ 2,056,000

was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the

date of issuance:

volatility of 123.0 %,

the fair value of common stock $ 0.54 ,

estimated life of 2.5

years, risk-free rate of 4.33 %

and dividend rate of $ 0 .

The 2023 Warrants’ grant date fair value of $ 2,056,000

was included in the equity-based compensation in the Statement of Operations for the year ended December 31, 2023.

the year ended December 31, 2024, 3,058,887

warrants were issued, 600,000

warrants forfeited (see Note 3) and 100,000 expired.

the year ended December 31, 2023, 100,804 warrants expired, and 1,567,500 warrants were forfeited with conversion of the associated Convertible

Promissory Notes (see Note 4).

OF WARRANTS ACTIVITY

Number of Shares

Weighted Average Strike Price/Share

Weighted Average Remaining Contractual Term (Years)

Weighted Average Grant Date Fair Value/Share

Balance, January 1, 2023

( 1,567,500 )

Balance, December 31, 2023

Balance, December 31, 2024

Vested and exercisable, December 31, 2024

Unvested, December 31, 2024

respectively, shares of the Company’s common stock for $ 0.50

The stock options are exercisable for a period of seven

years from the date of grant, which was June 19, 2023.

For the year ended December 31, 2025, the Company recognized

compensation expense of approximately $ 49,000

related to time-based equity awards, and upon the determination that the related project would not be completed recorded a reversal

of approximately $ 101,000

for performance-based awards, both of which were recorded as equity-based compensation.

During the same period, the Company recorded

a reversal of approximately $ 302,000

of performance-based compensation expense that had been capitalized in prior periods as data center campus costs.

The $ 302,000

was recorded to abandoned project costs, upon the determination that the related project would not be completed.

Warrants – related parties

following table summarized warrants outstanding as of December 31, 2025:

SCHEDULE OF WARRANTS ACTIVITY

December 31, 2023

December 31, 2024

December 31, 2025

and exercisable, December 31, 2025

December 31, 2025

the total warrant of 11,504,678 , SFO holds 7,958,877 and M1 Advisors LLC, an entity controlled by Michael Campbell a Company shareholder

and board member, holds 3,545,801 .

7 – INCOME TAXES

the period ended December 31, 2024, the Company generated a current income tax provision of $ 800 .

Additionally, no deferred income taxes

have been recorded due to the uncertainty of the realization of any tax assets.

On December 31, 2024, the Company has net operating loss

(“NOL”) carryforwards for Federal income tax purpose of $ 7,421,000 and for state income tax purpose of $ 7,411,000 that may

be offset against future taxable income.

For federal purposes, there is an unlimited carryforward period, and for state purposes, the

net operating losses begin to expire in 2037 if not utilized by then.

the years ended December 31, 2025 and 2024, the Company generated a current income tax provision of nil .

Additionally, no

deferred income taxes have been recorded due to the uncertainty of the realization of any tax assets.

On December 31, 2025, the

Company has net operating loss (“NOL”) carryforwards for Federal income tax purpose of $ 14,649,000

and for state income tax purpose of $ 14,639,000

that may be offset against future taxable income.

For federal purposes, there is an unlimited carryforward period, and for state

purposes, the net operating losses begin to expire

in 2038 if not utilized by then.

income tax (benefit)/expense attributable to loss consisted of the following for the year ended December 31,:

OF INCOME TAX (BENEFIT) EXPENSE

SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE

Current provision for income taxes:

5 unchanged sentences

SCHEDULE OF RECONCILIATION OF INCOME TAX

Taxes calculated at federal rate

Permanent differences

State tax, net of federal impact

Return to provision

Change in valuation allowance

Provision for income taxes

tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, are presented

calculated at federal rate

tax, net of federal impact

in valuation allowance

for income taxes

below are the tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31,:

SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS

operating loss carryforwards

based compensation

deferred tax assets

Net operating loss carryforwards

Stock based compensation

Intangible assets

Impairment loss

Total deferred tax assets

tax liability

deferred tax liability

Total deferred tax liability

Net deferred tax assets

Valuation allowance

deferred tax assets

( 4,552,000 )

( 2,566,000 )

Net deferred tax

tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary

14 unchanged sentences

December 31, 2025, the Company has federal and state net operating loss carryforwards, which are available to offset future taxable income,

of approximately $ 7,421,000 which for federal purposes has an unlimited carryforward period and $ 7,411,000 which for state purposes begins

to expire in 2037.

These carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code

of 1986, and similar state provisions if the Company experienced one or more ownership changes that would limit the amount of NOL and

tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively.

of approximately $ 14,649,000 which for federal purposes has an unlimited carryforward period and $ 14,639,000 which for state purposes

begins to expire in 2038 .

These carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue

Code of 1986, and similar state provisions if the Company experienced one or more ownership changes that would limit the amount of NOL

and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively.

In general, an ownership change,

8 unchanged sentences

Company files income tax returns in the United States and the state of California.

The statute of limitation is 3 and 4 years for Federal

and California, respectively.

The first year that remains open is tax year ended December 31, 2021 and December 31, 2020 for Federal

and California, respectively.

As of December 31, 2024 and 2023, there are no unrecognized tax benefits, and there are no significant

accruals for interest related to unrecognized tax benefits or tax penalties.

The statute of limitation is three and four years

for Federal and California purposes, respectively.

The first year that remains open is the tax year ended December 31, 2022 and

December 31, 2021 for Federal and California, respectively.

As of December 31, 2025 and 2024, there are no unrecognized tax

benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties.

Company is in the process of analyzing its NOL and has not determined if the company has had any change of control issues that could

6 unchanged sentences

if they must be reported.

The management determined there are no reportable events except for the following:

January 13, 2025 (“CSDO Termination Date”), the Company terminated the employment agreement with the Chief Strategy and Development

Officer (“CSDO”) with an effective date of January 15, 2025.

Based on the delays in the estimated milestone requirements

for the development of the Company’s Data Center, it was determined that CSDO role was not required.

As of the CSDO Termination

Date, the CSDO non-qualified stock option agreement for 1,000,000 shares of the Company’s common stock was cancelled.

Of the options

shares of 1,000,000 , the CSDO had vested 168,750 options shares, which are exercisable until the third anniversary date of the CSDO

Termination Date.

January 14, 2025 (“VPDCD Termination Date”), the Company terminated the employment agreement with the Vice President of Data

Center Development (“VPCSD”) with an effective date of February 15, 2025.

Based on the delays in the estimated milestone

requirements for the development of the Company’s Data Center, it was determined that VPDCD role was not required.

As of the VPDCD

Termination Date, the VPDCD non-qualified stock option agreement for 350,000 shares of the Company’s common stock was cancelled.

Of the options shares of 350,000 , the CSDO had vested 43,750 options shares, which are exercisable until the third anniversary date

of the CSDO Termination Date.

January 15, 2025, the Company issued, to a consultant, a Non-Qualified Stock Option Agreement for the purchase of 350,000 shares of the

Company’s common stock for an exercise price of $ 1.99 , which was the fair value of the Company’s common stock on the grant

The 350,000 options vest as follows:

exercisable as to 43,750 Option Shares on January 16, 2026 and shall vest and become exercisable

as to an additional 43,750 shares on each of January 16, 2027, January 16, 2028, and January

16, 2029 provided that the optionee is a consultant, an employee or a Board member in good

standing with the Company on such applicable vesting date.

remaining 175,000 Option Shares based on the Employee or consultant completing the following

vest as to 20% of such Option Shares (35,000 shares) upon completion, with respect to the

Company’s optioned real property in Imperial County, CA (the “Property”),

of a general plan amendment, zone change, and approved use for data center and/or onsite

power production use ;

vest as to 20% of such Option Shares (35,000 shares) upon the completion of a development

agreement with Imperial County, CA (the “County”) or similar land use and entitlement

to memorialize the approval of a data center use for the Property ;

vest as to 20% of such Option Shares (35,000 shares) upon the Company receiving from the

County permits necessary to start construction at the Property of either an onsite power

production of a 50MW generation system or a 60MW critical load data center facility (including

but not limited to power substations, on-site roads, water, power, fiber communications,

buildings, perimeter walls, and security systems) ;

vest as to 20% of such Option Shares (35,000 shares) upon the completion of binding agreements

for an external or onsite portfolio of power sources for a minimum of 500MW of power to support

the data center load at the Property ;

vest as to 20% of such Option Shares (35,000 shares) upon the completion of the sale or lease

of all or a portion of the Property for “powered dirt”, a “powered shell”

or a built-to-suit data center facility .

milestones can be altered or changed by the Company and the optionee mutually agreeing as

the data center site development, building designs, and construction plans are further defined

and timelines for permitting, construction, and customer contracts, occupancies, and operations’

milestones are established.

January 2025, the Company issued a Debenture in the amount of $ 25,000 , with a commission of $ 2,000 for net proceeds of $ 23,000 .

February 2025, the Company issued a Debenture in the amount of $ 100,000 , with a commission of $ 4,000 for net proceeds of $ 96,000 .

March 2025, the Company issued a Debenture in the amount of $ 100,000 , with a commission of $ 4,000 for net proceeds of $ 96,000 .

The management determined there are no reportable events.

Campbell became our Senior Vice President, Corporate Development on March 27, 2026.

Previously, he had been our Chief Executive Officer

since September 12, 2018, a position from which he resigned on March 27, 2026 because of health issues

On March 27, 2026, the Company into an Employment Agreement dated as of March 27, 2026 (the “Employment Agreement”) with Joel

Stone, to serve as our Chairman and Chief Executive Officer.

Prior to entering in the Employment Agreement, Mr.

Stone had been our

President and Chief Operating Officer.

Pursuant to the terms of the Employment Agreement, Mr.

Stone will receive (i) an annual base salary

of $ 300,000 , which amount may be increased upon our reaching certain benchmarks described in the Employment Agreement, as determined in

our sole discretion;

(ii) an additional option grant of seven-year fully-vested options to purchase 2,000,000 shares of our common stock

for a purchase price of $ 0.49 per share, and (iii) the right to participate in all benefit plans offered to our senior executive officers.

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 9A. Controls and Procedures