Edgemode, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. F-1 Report of Independent Registered Public Accounting Firm (PCAOB ID 2738 ) (PCAOB ID 206 ) F-3 Balance Sheets as of December 31, 2021 and 2020; F-4 Statements of Operations for the years ended December 31, 2021 and 2020 F-5 Statements of Stockholders’ Deficit for the years ended December 31, 2021 and 2020; F-6 Statements of Cash Flows for years ended December 31, 2021 and 2020; F-7 Notes to Financial Statements 26 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Fourth Wave Energy, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Fourth Wave Energy, Inc. (the Company) as of December 31, 2021, the related statements of operations, changes in stockholders’ deficit, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. The financial statements of Fourth Wave Energy, Inc., as of December 31, 2020, were audited by other auditors whose report dated March 31, 2021, expressed an unqualified opinion on those financial statements. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered net losses from operations since inception and has an accumulated deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion 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 audit. 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 audit 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. 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was 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. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. F- 1 Derivative Liability As discussed in Note 7, the Company borrows funds through the use of convertible notes payable that contain a conversion price that fluctuates with the stock price. Due to the fluctuation of the conversion price, the embedded conversion feature requires bifurcation from the host contract and is recorded as a liability subject to market adjustments as of each reporting period. Significant judgment is exercised by the Company in determining derivative liability values for these convertible note agreements, including the use of a specialist engaged by management. We evaluated management’s conclusions regarding their derivative liability and reviewed support for the significant inputs used in the valuation model, as well as assessing the model for reasonableness. /s/ M&K CPAS, PLLC Houston, TX April 12, 2022 F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Fourth Wave Energy, Inc Opinion on the Financial Statements We have audited the accompanying balance sheet of Fourth Wave Energy, Inc (the “Company”) as of December 31, 2020 and the related statements of operations, stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion 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 audit. 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 audit 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. 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 audit 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 audit 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 audit 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 audit provides a reasonable basis for our opinion. /s/ MaloneBailey, LLP www.malonebailey.com We have served as the Company's auditor from 2019 to 2021. Houston, Texas March 31, 2021 F- 3 Fourth Wave Energy, Inc. Balance Sheets December 31, 2021 December 31, 2020 ASSETS Current assets: Cash $ 29,649 $ 25,786 Funds held in escrow 1,970,537 – Prepaid assets 147,500 264,667 Notes receivable 1,620,000 – Interest receivable 40,447 – Total current assets 3,808,133 290,453 Deposits – 25,000 Total assets $ 3,808,133 $ 315,453 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable and accrued expenses $ 300,131 $ 657,806 Accounts payable - related party 1,373 21,837 Notes payable 285,000 235,900 Convertible notes, net of unamortized discount of $ 3,108,930 and $ 350,258 , respectively 1,376,070 608,144 Derivative liability 12,033,840 676,022 Total current liabilities 13,996,414 2,199,709 Total liabilities 13,996,414 2,199,709 STOCKHOLDERS' DEFICIT Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, Series A Preferred stock, $ 0.001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding 1 1 Common stock, $ 0.001 par value, 200,000,000 shares authorized, 50,960,140 and 40,647,329 shares issued and outstanding, respectively 50,960 40,647 Additional paid in capital 7,810,759 4,379,732 Accumulated deficit ( 18,050,001 ) ( 6,304,636 ) Total stockholders' deficit ( 10,188,281 ) ( 1,884,256 ) Total liabilities and stockholders' deficit $ 3,808,133 $ 315,453 The accompanying notes are an integral part of these financial statements. F- 4 Fourth Wave Energy, Inc. Statements of Operations For the years ended December 31, 2021 and 2020 December 31, 2021 December 31, 2020 Operating expenses: General and administrative $ 1,846,741 $ 4,494,039 Total operating expenses ( 1,846,741 ) ( 4,494,039 ) Other income (expense) Interest income 40,447 – Interest expense ( 1,480,954 ) ( 460,738 ) Loss on settlement of debt ( 365,546 ) ( 32,900 ) Change in fair value of derivative liability ( 8,092,571 ) ( 96,804 ) Total other income (expense) ( 9,898,624 ) ( 590,442 ) Net loss $ ( 11,745,365 ) $ ( 5,084,481 ) Net loss per common share: Basic and diluted $ ( 0.26 ) $ ( 0.14 ) Weighted average common shares outstanding: Basic and diluted 44,866,744 35,412,848 The accompanying notes are an integral part of these financial statements. F- 5 Fourth Wave Energy, Inc. Statements of Changes in Stockholders’ Deficit For the years ended December 31, 2021 and 2020 Series A Preferred Common Stock Additional paid-in Accumulated Shares Amount Shares Amount capital Deficit Total Balance, December 31, 2019 – $ – 29,288,163 $ 29,288 $ 348,680 $ ( 1,220,155 ) $ ( 842,187 ) Stock based compensation 1,000 1 6,600,000 6,600 2,999,854 – 3,006,455 Sale of common stock – – 400,000 400 99,600 – 100,000 Common shares issued for conversion of liabilities – – 4,359,166 4,359 708,941 – 713,300 Extinguishment of derivative liability due to conversion – – – – 222,657 – 222,657 Net loss – – – – – ( 5,084,481 ) ( 5,084,481 ) Balance, December 31, 2020 1,000 1 40,647,329 40,647 4,379,732 ( 6,304,636 ) ( 1,884,256 ) Stock based compensation – – 4,350,000 4,350 942,825 – 947,175 Common shares issued for settlement of convertible note payable – – 4,486,364 4,486 445,514 – 450,000 Common shares issued for settlement of note payable and accrued interest – – 2,026,447 2,027 566,165 – 568,192 Common shares issued for cash – – 3,400,000 3,400 404,600 – 408,000 Returned common shares and liability extinguishment related to GeoSolar – – ( 4,700,000 ) ( 4,700 ) 384,550 – 379,850 Extinguishment of derivative liability due to conversion – – – – 609,373 – 609,373 Common stock issued for deferred offering costs and debt discounts – – 750,000 750 78,000 – 78,750 Net loss – – – – – ( 11,745,365 ) ( 11,745,365 ) Balance, December 31, 2021 1,000 $ 1 50,960,140 $ 50,960 $ 7,810,759 $ ( 18,050,001 ) $ ( 10,188,281 ) The accompanying notes are an integral part of these financial statements. F- 6 Fourth Wave Energy, Inc. Statements of Cash Flows For the years ended December 31, 2021 and 2020 December 31, 2021 December 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 11,745,365 ) $ ( 5,084,481 ) Adjustment to reconcile net loss to cash used in operating activities: Stock based compensation 947,175 3,006,455 Amortization of debt discount 1,240,546 370,814 Loss on change in derivative liability 8,092,571 96,806 Loss on settlement of liabilities 365,547 392,900 Net change in: Interest receivable ( 40,447 ) – Prepaid assets 117,167 149,351 Other deposits 25,000 ( 25,000 ) Accounts payable and accrued expenses 235,883 535,149 Accounts payable - related party ( 20,464 ) ( 62,786 ) CASH FLOWS USED IN OPERATING ACTIVITIES ( 782,387 ) ( 620,792 ) CASH FLOWS FROM INVESTING ACTIVITIES Payments on notes receivable ( 850,000 ) – CASH FLOWS USED IN INVESTING ACTIVITIES ( 850,000 ) – CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sale of common stock 408,000 100,000 Proceeds from convertible notes 1,492,000 581,350 Payments on convertible notes ( 513,750 ) ( 33,463 ) Proceeds from notes payable 250,000 10,000 Payments on notes payable – ( 13,000 ) CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 1,636,250 644,887 NET CHANGE IN CASH 3,863 24,095 Cash, beginning of period 25,786 1,691 Cash, end of period $ 29,649 $ 25,786 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid on interest expenses $ 91,043 $ – Cash paid for income taxes $ – $ – NON-CASH TRANSACTIONS Debt discount created by derivative liability $ 3,874,620 $ 616,578 Common shares issued for conversion of debt and accrued interest $ 450,000 $ 320,400 Common shares issued for settlement of notes payable and accrued interest $ 202,645 $ – Common stock issued for deferred offering costs and debt discounts $ 283,750 $ – Deferred offering costs offset against additional paid in capital $ 205,000 $ – Extinguishment of liability related to Geosolar $ 379,850 $ – Extinguishment of derivative liability due to conversion $ 609,373 $ 222,657 Prepaid expenses financed with convertible notes payable $ – $ 390,000 Funds received in escrow $ 3,115,000 $ – Funds distributed from escrow $ ( 1,144,463 ) $ – The accompanying notes are an integral part of these financial statements. F- 7 Fourth Wave Energy, Inc. Notes to the Financial Statements December 31, 2021 Note 1. Basis of Presentation Fourth Wave Energy, Inc. (formerly Wadena Corp. and Pierre Corp.) (“we”, “our”, the “Company”) was incorporated in Nevada on January 21, 2011. Since its incorporation, the Company has attempted to become involved in a number of business ventures, all of which were unsuccessful and which it has abandoned. On March 16, 2020 we acquired all of the outstanding shares of Fourth Wave Energy, Inc., a Colorado corporation (“FWI”), for 6,200,000 restricted shares of our common stock. On March 20, 2020, shareholders owning a majority of the Company’s outstanding shares of common stock amended the Company’s Articles of Incorporation to change the name of the Company from Pierre Corp. to Fourth Wave Energy, Inc. In connection with the acquisition of FWI in March 2020, the Company entered into consulting agreements with certain founders of FWI. The consulting agreements require the Company to collectively pay $379,850 in consulting fees during the terms of the consulting agreements. In March 2021 the Company agreed to sell the FWI technologies and its business plan to GeoSolar Technologies, Inc. a Colorado corporation (“GST”) in exchange for 10,000,000 shares of GST common stock (the “GST Shares”), such GST Shares distributable to the Company’s shareholders. As a part of this transaction, the consultants agreed to release the Company from any liability for any consulting fees owed to them by the Company and return a portion of the Company’s common stock held by such consultants. During the year ended December 31, 2021, 4,700,000 shares of the Company's common stock were returned to the Company and cancelled. The technology granted to GST was carried on our balance sheet at zero value and the shares received were also recorded at no value. FWI was voluntarily dissolved on December 8, 2021. The ex-dividend date, record date and distribution date for the registered distribution of the GST Shares to the Company's shareholders, subject to FINRA clearance, is the following: Ex-Dividend Date: 12/06/2021 Record Date: 12/07/2021 Distribution Date: 12/14/2021 Merger Agreement Effective January 31, 2022 (the “Effective Time”), the Company, FWAV Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the Company (the “Acquisition Subsidiary”) and EdgeMode, a Wyoming corporation (“EdgeMode”) closed on the previously disclosed Agreement and Plan of Merger and Reorganization dated December 2, 2021 (the “Merger Agreement”). In accordance with the Merger Agreement, Acquisition Subsidiary merged with and into EdgeMode (the “Merger” or “Transaction”), with EdgeMode remaining as the surviving entity after the Merger and becoming a wholly owned subsidiary of the Company. In the Merger, the shares of common stock, no par value per share, of EdgeMode issued and outstanding immediately prior to the Effective Time, represent 80% of the Company’s outstanding common stock on a fully diluted basis (or 313,950,672 shares of common stock). Furthermore, pursuant to the terms of the Merger the Company’s sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock. Joseph Isaacs, the Company’s sole officer and director resigned as an executive officer and director. Pursuant to the terms of the Merger Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $ 0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $ 250,000 cash bonus. Charlie Faulkner and Simon Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers. Simultaneously with the Merger, approximately $ 4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. In addition, the Company has repaid approximately $ 988,000 of principal amount of notes. At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of EdgeMode. Prior to the closing of the Transaction, the Company was a shell company. F- 8 Note 2. Summary of Significant Accounting Policies The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below: Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original purchase maturity of three months or less to be cash equivalents. Property and Equipment Property and equipment is carried at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the useful lives as follows: Schedule of property and equipment Furniture and fixtures 7 years Equipment 5 years Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value F- 9 Fair Value Measurements The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2021 and 2020: Schedule of assets and liabilities Fair value measured at December 31, 2021 Total carrying value at December 31, 2021 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 12,033,840 $ – $ – $ 12,033,840 Fair value measured at December 31, 2020 Total carrying value at December 31, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 676,022 $ – $ – $ 676,022 There were no transfers between Level 1, 2 or 3 during the period. The table below presents the change in the fair value of the derivative liability during the years ended December 31, 2021 and 2020: Schedule of change in the fair value of the derivative liability Fair value as of December 31, 2019 $ 185,295 Fair value on the date of issuance recorded as a debt discount 616,580 Fair value on the date of issuance recorded as a loss on derivatives 82,818 Extinguishment of liability to equity due to conversions ( 222,657 ) Extinguishment of liability due to payoff of debt 83,083 Loss on change in fair value of derivatives 96,804 Fair value as of December 31, 2020 676,022 Fair value on the date of issuance recorded as a debt discount 3,874,620 Extinguishment of liability to equity due to conversions ( 609,373 ) Loss on change in fair value of derivatives 8,092,571 Fair value as of December 31, 2021 $ 12,033,840 Convertible debt The Company records a beneficial conversion feature related to the issuance of convertible debt that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional noncash interest expense over the expected life of the convertible notes. F- 10 Beneficial Conversion Features If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Income Taxes The Company uses the assets and liability method of accounting for income taxes. Under the assets and liability method deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Basic and Diluted Loss Per Share The Company presents both basic and diluted net loss per share on the face of the statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method for stock options and warrant and the “if converted” method for convertible notes payable and preferred stock. If anti-dilutive, the effect of potentially dilutive shares of common stock is ignored. During the year ended December 31, 2021, 9,442,857 of warrants and 17,786,270 shares issuable from convertible notes were considered for their dilutive effects. During the year ended December 31, 2020, 1,142,857 of warrants and 10,191,928 shares issuable from convertible notes were considered for their dilutive effects. As a result of the Company’s net losses for the years ended December 31, 2021 and 2020, all potentially dilutive instruments were excluded as their effect would have been anti-dilutive. Stock-based Compensation The Company determines the fair value of stock option awards granted to employees and nonemployees in accordance with FASB ASC Topic 718 – 10. Compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. F- 11 Related Parties The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Note 3. Going Concern These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2021 the Company had not yet achieved profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. Note 4. Note Receivable On August 20, 2021 the Company entered into a Letter of Intent with EdgeMode. Pursuant to the Letter of Intent, the Company will, at the closing, acquire all of the issued and outstanding shares of EdgeMode for that number of shares of the Company's common stock which, at closing, will represent 80% of the Company's outstanding shares of common stock. During the year ended December 31, 2021, the Company loaned EdgeMode $ 1,620,000 to assist in securing hosting facilities. The notes bear interest at 16% per annum and are due and payable March 2022 through June 2022. As of December 31, 2021, the Company recorded interest receivable of $ 40,447 related to the notes. Upon closing of the Merger Agreement, amounts due to the Company from Edgemode will be consolidated as part of the ongoing business. Effective January 31, 2022, the Company and EdgeMode , closed on the Merger Agreement. Note 5. Related Party Transactions Effective April 30, 2019, the Company agreed to increase compensation to the President of the Company to $11,500 per month for management services if funds are available or to accrue such amount if funds are not available. The agreement is verbal and can be cancelled at any time. In addition, the President of the Company advances cash to fund operations and periodically pays expenses on behalf of the Company subject to reimbursement. Fees earned during the period are as follows: Schedule of related party transactions Year ended December 31, 2021 Year ended December 31, 2020 Prior period balance $ 21,837 $ 104,623 Management fees 138,000 138,000 Cash advances – 9,305 Expenses paid on behalf of Company 10,503 4,229 Non-cash repayments – ( 20,000 ) Repayments ( 168,967 ) ( 214,320 ) End of period balance $ 1,373 $ 21,837 F- 12 On October 28, 2020, the Company’s President converted $ 20,000 of accrued management fees for 2,000,000 shares of common stock at a conversion price of $ 0.01 . As result of the conversion, the Company recognized a $ 360,000 loss on conversion of debt. During the year ended December 31, 2020, the Company paid $ 2,625 to a relative of the President for consulting services. On April 1, 2021, the Company entered into a services agreement with Axiom Group, which is owned by the President of the Company. The services agreement includes investor relation services for a term of eighteen months for compensation of $ 90,000 . During the year ended December 31, 2021, the Company prepaid the $90,000 services agreement and will amortize the prepayment over the term on the agreement. As of December 31, 2021, $ 45,000 of the services agreement is reflected in prepaid expenses. Note 6. Notes Payable On January 15, 2020, the Company converted $ 20,000 in advances from a third party into a promissory note. The unsecured note bears an interest rate of 8 % and matures on January 15, 2021 . The advances are unsecured, non-interest bearing and have no specific terms for repayment and payable on demand. On February 16, 2021, the Company settled the $ 20,000 promissory note and $ 1,745 of accrued interest and issued 217,447 shares of common stock as consideration for the debt settlement. As a result, the Company recognized a loss on settlement of debt of $ 76,106 . On September 30, 2020, the Company issued a $ 10,000 promissory note to a third party. The unsecured note bears an interest rate of 8 % and matures on September 30, 2021 . During the year ended December 31, 2020, the Company repaid the $ 10,000 promissory note. On December 15, 2020, $ 94,000 of advances were converted into 940,000 common shares of the Company at a conversion price of $ 0.10 per share. As a result of the conversion, the Company recorded a $ 32,900 loss on conversion of debt. During the year ended December 31, 2020, the Company repaid advances of $ 3,000 . The advances are unsecured, non-interest bearing and have no specific terms for repayment and payable on demand. On April 16, 2021, the Company converted $ 180,900 of advances into 1,809,000 shares of common stock at a conversion price of $0.10. As a result, the Company recognized a loss on settlement of debt of $ 289,440 . On December 21, 2021, the Company issued a $ 250,000 promissory note. The unsecured note bears an interest rate of 3 % and matures on January 30, 2022 . As of December 31, 2021, the Company recorded accrued interest of $ 205 related to this note. As of December 31, 2021 and 2020 the combined advances and notes payable totaled $ 285,000 and $ 235,900 , respectively. Note 7. Convertible Notes Payable and Derivative Liability On April 25, 2019, the Company borrowed $ 30,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $ 2,500 plus an additional $ 2,500 to pay for transaction fees of the lender, which amounts will be amortized over the life of the note. The loan bears interest at a rate of 9 % and was due and payable on October 25, 2019 and became past due. If a default notice is received the interest rate will be 18%. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 28,112 which was recorded as a discount on the note payable and a day one loss on the derivative liability of $ 9,362 . In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $ 6,250 which was recorded as a debt discount and will be amortized over the life of the note. On June 15, 2020, the Company converted the $ 30,000 note and $ 2,862 of accrued interest into 438,166 shares of common stock with a fair value of $ 32,862 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . F- 13 On June 4, 2019, the Company borrowed $ 55,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $ 5,000 which will be amortized over the life of the note. The loan bears interest at a rate of 10 % and is due and payable on March 4, 2020 and is currently past due. If a default notice is received the interest rate will be 20%. At any time on or before December 1, 2019 the Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 20% to 40%. After December 1, 2019, the Company may not repay the loan without the consent of the lender. At any time after December 1, 2019, the unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 33,615 which was recorded as a discount on the note payable. On June 1, 2021, $ 15,000 of the unsecured convertible note principal was converted into 136,364 shares of common stock at $0.11 per share. On July 2, 2021, the Company repaid $ 40,000 in principal, $ 11,310 in accrued interest and $ 28,690 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 0 , was $ 55,000 . On September 9, 2019, the Company borrowed $ 30,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $ 2,500 plus an additional $ 2,500 to pay for transaction fees of the lender, which will be amortized over the life of the note. The loan bears interest at a rate of 9 % and is due and payable on March 9, 2020 and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 31,581 , of which $ 20,291 was recorded as a day one loss on the derivative liability and an additional $ 11,290 was recorded as a discount on the notes payable. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $13,710 which was recorded as a debt discount and will be amortized over the life of the note. On February 11, 2021, the Company repaid $ 30,000 in principal, $ 3,854 in accrued interest and $ 11,146 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 0 , was $ 30,000 . On November 14, 2019, the Company entered into a debt agreement to borrow $ 85,000 . The unsecured note had an original issuance discount of $ 20,000 , which will be amortized over the life of the note. The loan bears interest at a rate of 9 % and is due and payable on May 14, 2020 and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 89,071 , of which $ 24,071 was recorded as a day one loss on the derivative liability and an additional $ 65,000 was recorded as a discount on the convertible notes payable. As of December 31, 2021 and 2020, the balance on the loan, net of unamortized discount of $ 0 , was $ 85,000 . On January 23, 2020, the Company entered into an agreement for up to $ 120,000 in debt financing. The unsecured note had an original issuance discount of $ 10,500 , which will be amortized over the life of the note. The loan bears interest at a rate of 10 % and each tranche is due and payable twelve months from the date funded. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 45% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days immediately prior to the date of conversion. On January 23, 2020, the Company received $40,000 with original issuance discount of $5,000 from the first tranche of the note. On August 12, 2020, the Company received $20,000 with original issuance discount of $4,150 from the second tranche of the note. In addition, the note holder was issued 45,777 common stock warrants with a fair value of $ 6,249 which was recorded as a day one loss on the derivative liability. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The first tranche day one derivative liability was $ 50,164 , of which $ 15,164 was recorded as a day one loss on the derivative liability and an additional $ 35,000 was recorded as a discount on the notes payable. The second tranche day one derivative liability was $ 18,135 , of which $ 2,285 was recorded as a day one loss on the derivative liability and an additional $ 15,850 was recorded as a discount on the notes payable. During the year ended December 31, 2020, $ 6,538 of the unsecured convertible note principal and $ 3,000 of interest was converted into 325,000 shares of common stock, of which 125,000 shares at a conversion price of $0.02275 per share and 175,000 shares at $0.035 per share. On November 20, 2020, the Company paid $ 33,463 in principal payments, $ 2,765 of accrued expense and $ 50,772 of additional interest expense on the note. On January 15, 2021, the Company repaid $ 20,000 in principal, $ 882 in accrued interest and $ 12,118 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 12,000 , was $ 8,000 . F- 14 During the year ended December 31, 2020, the Company issued convertible notes in the principal amount of $ 164,000 . The notes are unsecured, bear interest at 8 % per year, and are due and payable on February 15, 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 81,686 and recorded as a discount on the notes payable. In September 2020, $ 164,000 of unsecured convertible notes were converted into 656,000 shares of common stock at a conversion price of $0.25 per share. As of December 31, 2020, the balance on the loans, net of unamortized discount of $ 0 , was $ 0 . During the year ended December 31, 2020, the Company issued convertible notes in the principal amount of $ 285,000 . The notes are unsecured, have a six-month maturity, bear interest at 8 % per year, and are due and payable at various dates from April through June 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.10. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 254,317 , of which $ 10,317 was recorded as a day one loss on the derivative liability and an additional $ 244,000 was recorded as a discount on the convertible notes payable. On January 15, 2021, the Company converted a $ 10,000 promissory note into 100,000 shares of common stock at a conversion price of $0.10. In May 2021, the Company converted $ 275,000 of promissory notes into 2,750,000 shares of common stock at a conversion price of $0.10. As of December 31, 2021, the balance on the loans, net of unamortized discount of $ 0 , was $ 0 . As of December 31, 2020, the balance on the loans, net of unamortized discount of $ 160,412 , was $ 124,588 . On August 6, 2020, the Company issued a note in the principal amount of $ 390,000 for payment of investor relations services. The note does not bear interest, is unsecured and is due and payable on August 6, 2023. At the option of the holder, the note is convertible into shares of the Company's common stock. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price shall be the lesser of $0.40 or 85% of the trading price of the Company’s common stock on the day immediately preceding the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 158,542 , which was recorded as a discount on the convertible notes payable and will be amortized over the life of the note. On November 24, 2021, the Company and the noteholder agreed to exchange the August 6, 2020 note for a new note. The new note is unsecured, bear interest at 8% per year, and is due and payable in November 2022. At the option of the lenders the loans may be converted into shares of the Company's common stock at a conversion price of $0.25 per share. In conjunction the convertible note payable 780,000 common stock warrants were issued with a fair value of $ 253,994 which was recorded as a day one loss on the derivative liability. The warrants have a five year life and an exercise price of $0.50. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 was $ 390,000 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 94,691 was $ 295,309 . On November 17, 2020, the Company entered into a debt agreement to borrow $ 85,000 . The unsecured note had an original issuance discount of $ 3,500 , which will be amortized over the life of the note. The loan bears interest at a rate of 8 % and is due and payable on November 17, 2021. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the average two lowest trading price of the Company’s common stock during the 15 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $ 130,303 , of which $ 48,803 was recorded as a day one loss on the derivative liability and an additional $ 81,500 was recorded as a discount on the convertible notes payable. On February 3, 2021, the Company repaid $ 85,000 in principal, $ 1,453 in accrued interest and $ 21,590 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . As of December 31, 2020, the balance on the loan, net of unamortized discount of $ 74,753 , was $ 10,247 . On June 25, 2021, the Company entered into a debt agreement to borrow $ 88,750 . The unsecured note had an original issuance discount of $ 3,750 , which will be amortized over the life of the note. The loan bears interest at a rate of 8 % and is due and payable on June 25, 2022. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. Commencing one hundred eighty (180) days following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price is 65% of the average two lowest trading price of the Company’s common stock during the 15 consecutive trading days immediately prior to the date of conversion. On November 3, 2021, the Company repaid $ 88,750 in principal, $ 2,548 in accrued interest and $ 26,326 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . F- 15 On July 21, 2021, the Company entered into a debt agreement to borrow $ 58,750 . The unsecured note had an original issuance discount of $ 3,750 , which will be amortized over the life of the note. The loan bears interest at a rate of 8 % and is due and payable on July 21, 2022. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. Commencing one hundred eighty (180) days following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price is 65% of the average two lowest trading price of the Company’s common stock during the 15 consecutive trading days immediately prior to the date of conversion. On December 6, 2021, the Company repaid $ 58,750 in principal, $ 1,777 in accrued interest and $ 15,944 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . On September 17, 2021, the Company entered into a debt agreement to borrow $ 150,000 . The unsecured note bears interest at a rate of 8 % and is due and payable on September 17, 2022. Following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at fixed conversion price of $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 54,188 , which was recorded as a discount on the convertible notes payable and will be amortized over the life of the note. In addition, the note holder was issued 300,000 common stock warrants with a fair value of $ 7,378 which was recorded as a day one loss on the derivative liability. The warrants have an exercise price of $0.50 and expire five years following issuance. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 38,769 , was $ 111,231 . On September 21, 2021, the Company entered into a debt agreement to borrow $ 110,000 . The unsecured note had an original issuance discount of $ 13,000 , which will be amortized over the life of the note. The loan bears interest at a rate of 8 % and is due and payable on September 21, 2022. Following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at fixed conversion price of $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 57,628 , which was recorded as a discount on the convertible notes payable and will be amortized over the life of the note. In addition, the note holder was issued 220,000 common stock warrants with a fair value of $ 6,391 which was recorded as a day one loss on the derivative liability. The warrants have an exercise price of $0.50 and expire five years following issuance. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 41,682 , was $ 68,318 . On September 28, 2021, the Company entered into a debt agreement to borrow $ 500,000 . The secured note bears interest at a rate of 1.67 % per month and is due and payable on December 30, 2021. The note is currently past due, and the Company has not received a default notice. The note is secured by the 1,000 issued and outstanding shares of the Company’s Series A Preferred Stock. The unpaid principal is convertible into shares of the Company’s common stock at the fixed conversion price of $0.25. The note holder was issued 250,000 shares of common stock with a fair value of $ 78,750 which was recorded as debt discount. Due to the other variable convertible notes, the fixed convertible note is treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability of $ 158,623 was recorded as a day one loss on the derivative liability and will be amortized over the life of the note. In December 2021, the Company repaid $ 250,000 in principal and $ 25,000 in accrued interest on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 250,000 . On September 28, 2021, the Company entered into a debt agreement to borrow $ 103,750 . The unsecured note had an original issuance discount of $ 3,750 , which will be amortized over the life of the note. The loan bears interest at a rate of 8 % and is due and payable on September 28, 2022. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. Commencing one hundred eighty (180) days following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price is 65% of the average two lowest trading price of the Company’s common stock during the 15 consecutive trading days immediately prior to the date of conversion. On December 6, 2021, the Company repaid $ 103,750 in principal, $ 1,569 in accrued interest and $ 26,019 additional interest expense on the convertible note payable. As of December 31, 2021, the balance on the loan, net of unamortized discount of $ 0 , was $ 0 . F- 16 During the year ended December 31, 2021, the Company issued convertible notes in the principal amount of $ 150,000 . The notes are unsecured, have a six-month maturity, bear interest at 8% per year, and are due and payable at various dates from July through August 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.10. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 360,675 , of which $ 213,495 was recorded as a day one loss on the derivative liability and an additional $ 147,180 was recorded as a discount on the convertible notes payable. On May 18, 2021, the Company converted $ 150,000 of promissory notes into 1,500,000 shares of common stock at a conversion price of $0.10. As of December 31, 2021, the balance on the loans, net of unamortized discount of $ 0 , was $ 0 . In October and November of 2021, the Company issued convertible notes in the principal amount of $ 3,500,000 . The notes are unsecured, bear interest at 8 % per year, and are due and payable at various dates in October and November 2022. One of the unsecured notes had an original issuance discount of $ 30,000 , which will be amortized over the life of the note. At the option of the lenders the loans may be converted into shares of the Company's common stock at a conversion price of $0.25 per share. In conjunction the convertible notes payables 7,000,000 warrants were issued common stock warrants were issued with a fair value of $ 2,689,807 , of which $ 2,420,617 was recorded as a day one loss on the derivative liability and an additional $ 269,190 was recorded as a discount on the convertible notes payable. The warrants have a five year life and an exercise price of $0.50. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $ 4,080,819 , of which $ 850,009 was recorded as a day one loss on the derivative liability and an additional $ 3,230,810 was recorded as a discount on the convertible notes payable. Of the $3,500,000 in convertible notes, the Company received $ 355,000 in cash proceeds. The remainder of the funds remain in an escrow account and will be released upon execution of the Merger Agreement. As of December 31, 2021, $ 1,970,537 remained in escrow. See Footnote 11. As of December 31, 2021, the total derivative liability on the above notes was adjusted to a fair value of $ 12,033,840 . During the year ended December 31, 2021, $ 1,240,546 of the discount was amortized leaving an unamortized balance of $ 3,108,930 . The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.16 - $0.58, volatility of 42.59% - 149.77% based on a comparable company peer group, expected term of 0.50 - 5.00 years, risk-free rate of 0.03% - 1.26% and a dividend yield of 0%. As of December 31, 2020, the total derivative liability on the above notes was adjusted to a fair value of $ 676,022 . During the year ended December 31, 2020, $ 370,814 of the discount was amortized leaving an unamortized balance of $ 341,856 . The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.12 - $0.55, volatility of 50% - 73% based on a comparable company peer group, expected term of 1.00 - 5.00 years, risk-free rate of 0.10% - 1.55% and a dividend yield of 0%. Note 8. Equity Common Stock Fiscal Year 2021 On December 1, 2020, the Company entered into a three month consulting agreement for investor relation services. Upon signing the agreement, the Company agreed to pay the consultant a monthly fee of $ 10,000 plus 400,000 shares of common stock. In December 2020, 400,000 shares of common stock were issued for services. The shares were valued at $ 0.23 , the closing price of the Company’s stock on December 1, 2020. During year ended December 31, 2021, the Company issued the remaining 800,000 shares related to the agreement and recognized $ 182,000 of expense. On January 28, 2021, the Company entered into a purchase agreement with an investor, Tysadco Partners LLC, (the “Investor”) providing for the purchase of up to $ 10,000,000 of the Company’s common stock (“the Equity Line”) over a 24-month-term that commenced on January 28, 2021. In February 2021, the Investor purchased 1,700,000 restricted shares of the Company’s common stock for $ 204,000 ($0.12 per share). There are no registration rights with respect to these shares. On April 16, 2021, the Investor purchased 1,700,000 restricted shares of the Company’s common stock for $ 204,000 at a value of $0.12 per share. As consideration for entering into the purchase agreement, the Company issued 500,000 shares of common stock to the Investor as a commitment fee. The shares were valued at approximately $205,000 and were recorded as deferred offering costs on the balance sheet. The deferred charges will be charged against paid-in capital upon future proceeds from the sale of common stock under this agreement. During the year ended December 31, 2021, $ 205,000 of deferred offering cost was charged against paid-in capital. As of December 31, 2021, unamortized deferred offering costs totaled $ 0 . F- 17 On July 24, 2021, the Company entered into a six month consulting agreement for investor relation services. Upon signing the agreement, the Company agreed to pay the consultant 300,000 shares of common stock. On August 13, 2021, 300,000 shares of common stock were issued for services. The shares were valued at $0.18, the closing price of the Company’s stock on date of issuance. During the year ended December 31, 2021, the Company recognized $44,750 of expense and will recognize the remaining expense over the service period of the consulting agreement. On August 26, 2021, the Company entered into a consulting agreement for investor relation services. Upon signing the agreement, the Company agreed to pay the consultant 3,000,000 shares of common stock. On August 26, 2021, 3,000,000 shares of common stock were issued for services. The shares were valued at $ 0.225 , the closing price of the Company’s stock on date of issuance. During the year ended December 31, 2021, the Company recognized $ 675,000 of expense related to the consulting agreement. On September 28, 2021, the Company issued 250,000 shares of common stock with a convertible note payable. The shares were valued at $ 78,750 which were recorded a debt discount. See Note 7. On November 1, 2021, the Company entered into a four month consulting agreement for investor relation services. Upon signing the agreement, the Company agreed to pay the consultant 250,000 shares of common stock. The shares were valued at $0.36 the closing price of the Company’s stock on date of issuance for a total of $ 90,000 , which was recorded in additional paid in capital. During the year ended December 31, 2021, the Company recognized $ 44,875 of expense and will recognize the remaining expense over the service period of the consulting agreement. During the year ended December 31, 2021, the Company issued 4,486,364 shares of common stock, upon settlement of convertible notes in the principal amount of $ 450,000 . See Note 7. During the year ended December 31, 2021, the Company settled notes payable of $ 200,900 and accrued interest of $1,745 by issuing 2,026,447 shares of common stock as consideration for the debt settlement. As a result, the Company recognized a loss on settlement of debt of $ 365,547 . See Note 6. During the year ended December 31, 2021, 4,700,000 shares of the Company's common stock were returned to the Company and cancelled. See Note 1. Fiscal Year 2020 On March 16, 2020 the Company acquired all of the outstanding shares of Fourth Wave Energy, Inc. for 6,200,000 restricted shares of the Company’s common stock. At the time of acquisition, Fourth Wave Energy, Inc. had no assets, liabilities and no current or prior operations. The fair value of the shares issues was $ 2,170,000 and recorded as share-based compensation. During the year ended December 31, 2020, the Company issued 400,000 shares of common stock for cash proceeds of $ 100,000 . On October 28, 2020, the Company issued 2,000,000 shares of common stock upon the conversion of $ 20,000 in accrued management fees. See Note 5. On December 1, 2020, the Company entered into a three month consulting agreement for investor relation services. Upon signing the agreement, the Company agrees to compensate the Consultant a monthly fee of $10,000 plus 400,000 shares of common stock. In December 2020, 400,000 shares of common stock were issued for services. The shares were valued at $0.23, the closing price of the Company’s stock on December 1, 2020. During the year ended December 31, 2020, the Company issued 940,000 shares of common stock upon the conversion of debt $ 94,000 of principal. See Note 6. During the year ended December 31, 2020, the Company issued 1,419,166 shares of common stock upon the conversion of debt $ 200,538 of principal and $ 5,862 of accrued interest. See Note 7. F- 18 Preferred Stock On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $ 0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares have the voting power of 250% of the outstanding common shares at the time of any vote. The holders of the Series A shares are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available, annual dividends payable in cash on the 31st day of December in each year, commencing on December 31, 2020 at the rate of $0.10 per share per year. The Company's President is the holder of all Series A Preferred shares. See Footnote 11. Stock Warrants On August 7, 2020, the Company issued 45,977 common stock warrants in conjunction with a convertible note. The warrants have a 5-year life and an exercise price of $ 0.87 . The common stock warrants had a fair value of $ 6,249 which was recorded as a day one loss on the derivative liability. In September 2020, there was a partial conversion of debt at a conversion price of $0.035 as described in Note 7. Due to a reset provision in the warrant agreement, the exercise price reset to $ 0.035 and the corresponding warrants increased to 1,142,857 . During the year ended December 31, 2021, the Company issued 8,300,000 common stock warrants in conjunction with convertible notes. The warrants have a 5-year life and an exercise price of $ 0.50 . The common stock warrants had a fair value of $ 2,610,419 which was recorded as a day one loss on the derivative liability. The following table summarizes the stock warrant activity for the years ended December 31, 2021 and 2020: Schedule of stock warrant activity Weight-Average Warrants Exercise Price Per Share Outstanding, December 31, 2019 – – Granted due to reset provision 1,142,857 $ 0.035 Exercised – Forfeited – Expired – Outstanding, December 31, 2020 1,142,857 $ 0.035 Granted 8,300,000 0.50 Exercised – Forfeited – Expired – Outstanding, December 31, 2021 9,442,857 $ 0.444 During the year ended December 31, 2021, the Company valued the warrants using the Black-Scholes model with the following key assumptions ranging from: fair value stock price, $ 0.135 - $0.40, Exercise price, $0.035 -$0.50, Term 3-5 years, Volatility 56.19% - 136.66%, and Discount rate 0.84% - 1.34% and a dividend yield of 0%. During the year ended December 31, 2020, the Company valued the warrants using the Black-Scholes model with the following key assumptions ranging from: fair value stock price, $0.135 - $0.40, Exercise price, $0.035 -$.087, Term 5 years, Volatility 58% - 63%, and Discount rate 0.23% - 0.36% and a dividend yield of 0%. As of December 31, 2021, the outstanding stock warrants have a weighted average remaining term of 4.71 years and an intrinsic value of $ 1,286,857 . F- 19 Note 9. Income Taxes The cumulative tax effect at the expected rate of 21 % of significant items comprising the Company’s net deferred tax amount is as follows: Schedule of deferred tax assets and liabilities December 31, 2021 December 31, 2020 Deferred tax asset attributable to: Net operating loss $ 330,700 $ 448,700 Valuation allowance ( 330,700 ) ( 448,700 ) Net deferred income tax assets $ – $ – A reconciliation of income tax provision to the provision that would be recognized under the statutory rates is as follows: Schedule of components of income tax expense (benefit) December 31, 2021 December 31, 2020 Benefit attributable to operating loss $ 2,466,500 $ 1,067,700 Non-deductible ( 2,584,500 ) ( 812,200 ) Valuation allowance 118,000 ( 255,500 ) Provisions for income taxes $ – $ – The amount taken into income as deferred tax assets must reflect that portion of the income tax loss carry forwards that is more likely-than-not to be realized from future operations. The Company has chosen to provide an allowance of 100% against all available income tax loss carry forwards, regardless of their time of expiry. No provision for income taxes has been provided in these financial statements due to the net loss. At December 31, 2021, the Company has net operating loss carry forwards totaling approximately $ 1,575,000 , which will be carried forward to future periods. Note 10. Commitments and Contingencies Legal Contingencies There are no material pending legal proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business. Note 11. Subsequent Events In January 2022, the Company borrowed an aggregate of $465,000 from a number of unrelated parties. The loans are unsecured, bear interest at 8% per year, and are due and payable at various dates in January 2023. At the option of the lenders, the loans may be converted into shares of the Company's common stock at a conversion price of $0.25 per share. In conjunction with the issuance of such convertible notes, an aggregate of 930,000 warrants were issued to the lenders. The warrants have a five year term and an exercise price of $0.50 per share. Effective January 31, 2022 (the “Effective Time”), the Company, the Acquisition Subsidiary and EdgeMode closed on the Merger Agreement. In accordance with the Merger Agreement, the Acquisition Subsidiary merged with and into EdgeMode, with EdgeMode remaining as the surviving entity after the Merger and becoming a wholly owned subsidiary of the Company. In the Merger, the shares of common stock, no par value per share, of EdgeMode issued and outstanding immediately prior to the Effective Time, represent 80% of the Company’s outstanding common stock on a fully diluted basis (or 313,950,672 shares of common stock). Furthermore, pursuant to the terms of the Merger the Company’s sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock. F- 20 Joseph Isaacs, the Company’s sole officer and director resigned as an executive officer and director. Pursuant to the terms of the Merger Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus. Charlie Faulkner and Simon Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers. Simultaneously with the Merger, approximately $4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. In addition, the Company has repaid approximately $988,000 of principal amount of notes. At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of EdgeMode. On February 24, 2022, the Company sold 600,000 shares of common stock at $0.25 per shares for total proceeds of $150,000. Each share issued included 0.5 warrants to purchase a common share at the exercise price of $0.50, which will expire five years from the issuance date. On March 31, 2022, the Company amended and restated its articles of incorporation to increase the number of authorized common shares to 950,000,000. Additionally, the Company authorized the withdrawal of the certificate of designation for the Series A Preferred Stock which effectively reduced the number of authorized preferred shares to 4,999,000. F- 21 PART III Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.