What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-22 · 72 added, 73 removed, 70 unchanged (67% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion

and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and

other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements

and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the annual financial statements

The following discussion and

analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other

financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and

notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the annual financial statements

of Edgemode, a Wyoming corporation and our wholly owned subsidiary, filed with the SEC on Form 8-K.

The following discussion and analysis

compares our consolidated results of operations for the three months ended June 30, 2022 (the “2022 Quarter”) with those for

the three months ended June 30, 2021 (the “2021 Quarter”).

Additionally, the six months ending June 30, 2022 and six

months ending June 30, 2021 are referred to as the “2022 Period” and “2021 Period”) respectively.

compares our consolidated results of operations for the three months ended September 30, 2022 (the “2022 Quarter”) with those

for the three months ended September 30, 2021 (the “2021 Quarter”).

Additionally, the nine months ending September 30,

2022 and nine months ending September 30, 2021 are referred to as the “2022 Period” and “2021 Period”) respectively.

Cautionary Note Regarding Forward-Looking Statements

19 unchanged sentences

Business Overview

We are an early-stage cryptocurrency mining Company.

Although Edgemode,

our new wholly-owned subsidiary, has historically mined Ethereum, we are now focused on expanding the operations by mining Bitcoin which

we anticipate to begin in the second half of 2022.

Due to the imminent change of Ethereum (ETH) from Proof of Work (POW) to Proof of stake

(POS), the Company has terminated all rental agreements and future purchase orders related to Ethereum mining operations.

We are an early-stage

cryptocurrency mining Company.

Although Edgemode, our new wholly-owned subsidiary, has historically mined Ethereum, we are now

focused on expanding the operations by mining Bitcoin which we anticipate to begin in the first half of 2023, subject to financing.

Due to the imminent change of Ethereum (ETH) from Proof of Work (POW) to Proof of stake (POS), the Company is in negotiations to terminate all rental agreements and future purchase orders related to Ethereum mining operations.

Critical Accounting Policies and Estimates

4 unchanged sentences

Recent Accounting Pronouncements

For information on recent

accounting pronouncements and impacts, see Note 1 to the unaudited condensed consolidated financial statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS

ENDED JUNE 30, 2022 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2021

Our revenues for the 2022

Quarter was $165,118 compared to $500,692 for the 2021 Quarter.

The reason for the decrease was the decline in the price of Ethereum during

the 2022 Quarter compared to prices during the 2021 Quarter.

For information on recent accounting

pronouncements and impacts, see Note 1 to the unaudited condensed consolidated financial statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2022 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2021

Our revenues for the 2022 Quarter

were $1,805 compared to $605,945 for the 2021 Quarter.

The reason for the decrease was the decline in the price of Ethereum during the

2022 Quarter compared to prices during the 2021 Quarter.

Also the Company experienced power outages at our data center in Rouses Point

As we have terminated our rental agreements as referenced above, we do not anticipate power outages in the future materially effecting

our operations.

Our cost of revenues for

the 2022 Quarter was $382,908 compared to $401,629 for the 2021 Quarter.

and returned equipment related to Etherium mining.

As we have terminated our rental agreements as referenced above, we do not anticipate

power outages in the future materially effecting our operations.

Our cost of revenues for the

2022 Quarter were $6,204 compared to $456,163 for the 2021 Quarter.

The reason for the decrease was a decrease in hosting fees incurred

as a result of the power outages and lower revenues.

Our operating expenses for

the 2022 Quarter was $2,874,473 compared to $218,942 for the 2021 Quarter.

Our operating expenses for the

2022 Quarter were $1,162,200 compared to $2,790,197 for the 2021 Quarter.

In the 2022 Quarter, the Company incurred stock-based compensation

expense of $318,000 compared to $2,511,421 for the 2021 Quarter.

In addition, the company began initial operations in 2021 versus having full

operations during 2022.

Our other expenses for the 2022

2022 Quarter was $109,363 compared to $148,065 for the 2021 Quarter.

The reason for the decrease was a decrease in interest expense from

additional loans as well as a decreased loss on cryptocurrencies due to decreased transactions and changes in market prices.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED

JUNE 30, 2022 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2021

Our revenues for the 2022

Quarter were $15,616 compared to $21,221 for the 2021 Quarter.

The reason for the decrease was increased loss on cryptocurrencies due

to increased transactions and changes in market prices, offset by a decrease in interest expense from the termination of the loans.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2022 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2021

Our revenues for the 2022 Period

was $438,042 compared to $1,145,466 for the 2021 Period.

The reason for the decrease was the decline in the price of Ethereum during the

2022 Period compared to prices during the 2021 Period, in addition to the power outages at our data center in disclosed above.

Our cost of revenues for the

2022 Period was $812,882 compared to $935,273 for the 2021 Period.

The reason for the decrease was the decline in the price of Ethereum during

the 2022 Period compared to prices during the 2021 Period, in addition to the power outages at our data center in disclosed above.

Our cost of revenues for

the 2022 Period was $806,678 compared to $479,110 for the 2021 Period.

The primary reason for the increase was the Company began operations

in March of 2021 versus having a full six months of operations for the 2022 Year.

Our operating expenses for

the 2022 Period was $26,836,972 compared to $304,944 for the 2021 Period.

The reason for the decrease was a decrease in hosting fees incurred

as a result of the power outages and lower revenues

Our operating expenses for the

2022 Period was $27,999,172 compared to $3,095,141 for the 2021 Period.

In the 2022 Period, the Company incurred stock-based compensation

1 unchanged sentence

In addition, the Company began operations in March of 2021 for initial

operations versus having a full six months of operations for the 2022 Period.

operations versus having a full nine months of operations for the 2022 Period.

Our other expenses for the 2022

Period was $253,356 compared to $181,917 for the 2021 Period.

The reason for the increase was an increase in interest expense from

additional loans as well as an increased loss on cryptocurrencies due to increased transactions and changes in market prices.

The reason for the increase was increased loss on cryptocurrencies due to

increased transactions and changes in market prices, offset by a decrease in interest expense from the termination of the loans.

LIQUIDITY AND CAPITAL RESOURCES

As of August 22, 2022, the

As of November 14, 2022, the

Company had approximately $20,000 of cash.

5 unchanged sentences

We can provide no assurances that any such financings will be completed or successful, nor will they be on terms that we can

The Company has signed $66

million in hardware purchase orders.

Assuming we close on the $400 million debt facility, the debt facility will be used in order to make

payments on these purchase orders.

The Company has signed $66 million

in hardware purchase orders.

Assuming we close on the $400 million debt facility, the debt facility will be used in order to make payments

on these purchase orders.

There are no assurances the purchase will be completed.

1 unchanged sentence

additional funds, we will be required to suspend or cease our operations.

The Company has terminated the agreements for approximately $2.2 million

of debt for equipment that the Company was using for mining and is negotiating the return of the equipment to the vendor to settle the

outstanding liabilities.

Additionally, we have a significant amount funds committed to the purchase of new Bitcoin miners.

We can provide

no assurance that we will have the ability to meet these payment requirements or that we will be successful raising capital to meet our

working capital requirements.

The Company has terminated the

agreements for approximately $2.2 million of debt for equipment that the Company was using for mining and returned the equipment to the

vendor to settle the outstanding liabilities, which is still being negotiated with the vendor.

Additionally, we have a significant amount

funds committed to the purchase of new Bitcoin miners.

We can provide no assurance that we will have the ability to meet these payment

requirements or that we will be successful raising capital to meet our working capital requirements.

Summary of cash flows

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Net cash (used) in operating activities

Net cash provided by (used in) investing activities

$ (2,060,941 )

Net cash provided by investing activities

Net cash provided by financing activities

9 unchanged sentences

Investing Activities

Cash provided by investing

activities in the 2022 Period of $943,423 resulted from the $743,513 cash acquired from the reverse merger acquisition and the proceeds

of $510,886 from sale of cryptocurrency assets, offset by the purchase of equipment of $370,976.

Cash used in investing activities

Cash provided by investing activities

in the 2022 Period of $942,534 resulted from the $743,513 cash acquired from the reverse merger acquisition and the proceeds of $509.997

from sale of cryptocurrency assets, offset by the purchase of equipment of $370,976.

Cash provided by investing activities

in the 2021 Period of $45,672 resulted from proceeds of $734,873 from the sale of cryptocurrency assets, offset by the purchase of equipment

of $1,009,863.

Financing Activities

In the 2022 Period, cash

provided by financing activities of $860,712 consisted of $688,864 in net proceeds from the issuance of common shares, $380,000 in proceeds

from the issuance of notes payable, offset by payments on equipment notes payable of $208,152.

In the 2021 Period, cash

provided by financing activities of $1,080,397 consisted of $1,311,163 in net proceeds from the sale of common shares, $334,980 in net

proceeds from the sale of preferred shares, offset by payments on equipment notes payable of $645,746.

In the 2022 Period, cash provided

by financing activities of $1,097,963 consisted of $724,865 in net proceeds from the issuance of common shares, $380,000 in proceeds from

the issuance of notes payable, and $201,250 of proceeds from the issuance of Series B preferred shares, offset by payments on equipment

notes payable of $208,152.

In the 2021 Period, cash provided

by financing activities of $2,109,415 consisted of $1,807,574 in net proceeds from the sale of common shares, $334,980 in net proceeds

from the sale of preferred shares, and $830,000 in proceeds from notes payable, offset by payments on equipment notes payable of $861,564.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis