Edgemode, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. F-1 Report of Independent Registered Public Accounting Firm F-3 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-4 Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 F-5 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2024 and 2023 F-6 Consolidated Statements of Cash Flows for years ended December 31, 2024 and 2023 F-7 Notes to Consolidated Financial Statements 22 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Edgemode, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Edgemode, Inc. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (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 results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the company has incurred recurring losses from operations and had not yet achieved profitable operations as of December 31, 2024 which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 audits to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F- 1 Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated 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 consolidated 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 consolidated 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. Derivatives Arising from Convertible Notes The valuation of derivative liabilities arising from convertible notes payable represents a significant aspect of the audit due to its materiality and the complexity involved in its assessment. These liabilities are recognized based on the fair value of embedded conversion features associated with convertible notes. The determination of fair value necessitates intricate valuation models, incorporating various assumptions, which are inherently subjective and involve substantial management judgment. To form our overall opinion on the financial statements, our audit procedures included assessing the reasonableness of key inputs used in the company’s valuation models, evaluating the appropriateness of management's valuation methodologies and assumptions, and assessing the impact of changes in these inputs on the fair value measurement. Given the significance of these liabilities to the financial statements and the complexity inherent in their valuation, our audit required significant auditor judgment and involved challenging evaluations of subjective inputs. /s/ M&K CPAS, PLLC PCAOB ID 2738 We have served as the Company’s auditor since 2021. The Woodlands, TX May 2, 2025 F- 2 Edgemode, Inc. Consolidated Balance Sheets December 31, 2024 December 31, 2023 ASSETS Current assets: Cash $ 103 $ 298 Prepaid expenses and other current assets 1,368 20,258 Total current assets 1,471 20,556 Intangible assets - cryptocurrencies 32 32 Total assets $ 1,503 $ 20,588 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable and accrued expenses $ 724,217 $ 721,780 Accrued payroll 1,616,090 661,201 Equipment notes payable – 1,179,972 Notes payable 35,000 35,000 Notes payable – related parties 32,725 16,000 Convertible notes payable 323,732 342,501 Derivative liabilities 1,992,754 197,090 Total current liabilities 4,724,518 3,153,544 Total liabilities 4,724,518 3,153,544 Commitments and contingencies – – – Stockholders' deficit: Preferred shares, $ 0.001 par value, 5,000,000 shares authorized; zero issued and outstanding December 31, 2024 and 2023 – – Common shares, $ 0.001 par value, 950,000,000 shares authorized; 390,687,459 and 390,687,459 shares issued and outstanding, December 31, 2024 and 2023, respectively 390,687 390,687 Additional paid-in capital 35,371,266 35,371,266 Accumulated deficit ( 40,484,968 ) ( 38,894,909 ) Stockholders' deficit ( 4,723,015 ) ( 3,132,956 ) Total liabilities and stockholders' deficit $ 1,503 $ 20,588 The accompanying notes are an integral part of these consolidated financial statements. F- 3 Edgemode, Inc. Consolidated Statements of Operations For the Year Ended December 31, 2024 December 31, 2023 Revenue $ – $ – Cost of revenue – – Gross margin – – Operating expenses: General and administrative expenses 1,403,929 3,352,607 Loss on cryptocurrencies 4,599 10,107 Total operating expenses 1,408,528 3,362,714 Loss from operations ( 1,408,528 ) ( 3,362,714 ) Other income (expense): Interest expense ( 56,488 ) ( 346,162 ) Penalty on prepayment of Preferred B shares – ( 51,859 ) Refund of equipment deposit 425,000 700,000 Change in fair value of derivatives ( 1,795,664 ) 6,709 Loss on settlement – ( 9,975 ) Gain on settlement of liabilities 1,245,621 50,000 Other expense – ( 780 ) Total other income (expense), net ( 181,531 ) 347,933 Loss before provision for income taxes ( 1,590,059 ) ( 3,014,781 ) Provision for income taxes – – Net loss $ ( 1,590,059 ) $ ( 3,014,781 ) Loss per common share - basic and diluted $ ( 0.00 ) $ ( 0.01 ) Weighted average shares outstanding - basic and diluted 390,687,459 390,626,500 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Edgemode, Inc. Consolidated Statements of Changes in Stockholders’ Equity (Deficit) For the years ended December 31, 2024 and 2023 Mezzanine Equity Total Preferred Common Additional Stockholders’ Preferred Stock Common Stock Paid-In Accumulated Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance December 31, 2022 – $ – 390,437,459 $ 390,437 $ 33,896,019 $ ( 35,880,128 ) $ ( 1,593,672 ) Common shares issued for settlement of claims – – 250,000 250 9,725 – 9,975 Stock-based compensation – – – – 1,465,522 – 1,465,522 Net loss – – – – – ( 3,014,781 ) ( 3,014,781 ) Balance December 31, 2023 – $ – 390,687,459 $ 390,687 $ 35,371,266 $ ( 38,894,909 ) $ ( 3,132,956 ) Net loss – – – – – ( 1,590,059 ) ( 1,590,059 ) Balance December 31, 2023 (Restated) – $ – 390,687,459 $ 390,687 $ 35,371,266 $ ( 40,484,968 ) $ ( 4,723,015 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 Edgemode, Inc. Consolidated Statements of Cash Flows For the Year Ended December 31, 2024 December 31, 2023 Operating Activities: Net loss $ ( 1,590,059 ) $ ( 3,014,781 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Amortization 11,231 25,215 Interest expense on principal default – 88,618 Interest expense charge for day one derivative loss – 203,799 Prepayment on penalty of Preferred B shares – 51,859 Change in fair value of derivative liabilities 1,795,664 ( 6,709 ) Stock-based compensation – 1,465,522 Loss on cryptocurrency transactions 4,599 10,107 Loss on settlement – 9,975 Gain on settlement of liabilities ( 1,245,621 ) ( 50,000 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets 18,890 1,166,441 Accounts payable and accrued expenses 68,087 ( 93,739 ) Accrued payroll 954,889 185,930 Net cash provided by operating activities 17,680 42,237 Investing Activities: Proceeds from sale of cryptocurrencies – 34,100 Purchase of cryptocurrencies ( 4,600 ) – Net cash provided by (used in) investing activities ( 4,600 ) 34,100 Financing Activities: Proceeds from notes payable – 220,000 Proceeds from related party advances 16,725 16,000 Payments of convertible notes ( 30,000 ) ( 41,560 ) Payments on notes payable – ( 270,549 ) Net cash used in financing activities ( 13,275 ) ( 76,109 ) Net change in cash ( 195 ) 228 Cash - beginning of period 298 70 Cash - end of period $ 103 $ 298 Supplemental Disclosures: Interest paid $ – $ 4,388 Income taxes paid $ – $ – Supplemental Disclosures of Noncash Financing Information: Convertible notes issued in exchange for cryptocurrency $ – $ 57,502 Note payable issued in exchange for cryptocurrency $ – $ 50,142 Repayment of note payable using cryptocurrency $ – $ 50,142 Cryptocurrency used to pay accrued salaries $ – $ 11,888 Cryptocurrency used to pay accounts payable $ – $ 4,005 The accompanying notes are an integral part of these consolidated financial statements. F- 6 Edgemode, Inc. Notes to the Consolidated Financial Statements Note 1. Basis of Presentation Edgemode, Inc. (“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 prior business ventures, all of which were unsuccessful and which it has abandoned. After the merger described below, the Company became a cryptocurrency mining company and is currently in the process of purchasing cryptocurrency mining equipment to restart its mining operations. See Note 12: Subsequent Events. On June 3, 2022 the Company changed its name from Fourth Wave Energy Inc. to Edgemode, Inc. Note 2. Summary of Significant Accounting Policies Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying financial statements include all the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the years presented have been included. Principles of consolidation The accompanying consolidated financial statements include the accounts of Edgemode, Inc., the accounts of its 100% owned subsidiaries, EdgeMode and Edgemode Mine Co UK Limited. All intercompany transactions and balances have been eliminated in consolidation. Segments Reporting The Company manages its operations as a single segment for the purpose of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about net income from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term. Risks and Uncertainties The Company's business and operations are sensitive to general business and economic conditions in the United States and other countries that the Company operates in. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations. F- 7 Cash and Cash Equivalents The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. Fair Value Measurements Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): · Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. · Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. The following fair value hierarchy table presents information about the Company’s liabilities measured at fair value on a recurring basis: Schedule of liabilities measured at fair value Fair Value Measurements at December 31, 2024 Level 1 Level 2 Level 3 Liabilities: Derivative liabilities $ – $ – $ 1,992,754 Fair Value Measurements at December 31, 2023 Level 1 Level 2 Level 3 Liabilities: Derivative liabilities $ – $ – $ 197,090 The Company had no assets valued using level 1, level 2, or level 3 inputs as of December 31, 2024 and 2023. Derivative Financial Instruments Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses a binomial calculator model. Changes in fair value are recorded in the consolidated statements of operations. F- 8 Income Taxes Income taxes are provided for the tax effects of transactions reporting in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, and accrued expenses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Any deferred tax items of the Company have been fully valued based on the determination of the Company that the utilization of any deferred tax assets is uncertain. The Company complies with FASB ASC 740 for accounting for uncertainty in income taxes recognized in a company’s financial statements, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. FASB ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Revenue Recognition We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. This standard provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided by us to the mining pool as a percentage of total network hash rate, and other inputs. We are entitled to consideration even if a block is not successfully placed by the mining pool operator. The terms of the agreement provides that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s Full-Pay-Per-Share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the amount of consideration recognized is constrained to the amount of consideration received, at which time revenue is recognized. There is no significant financing component in these transactions. F- 9 Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Under current GAAP, crypto assets held by the Company are accounted for as indefinite-lived intangible assets. Those assets are tested for impairment annually and more frequently if events or circumstances indicate that it is more likely than not that an asset is impaired. If the carrying amount of the asset exceeds its fair value, an entity is required to recognize an impairment loss and reduce the carrying amount of the asset to its fair value. See further discussion under Recent Accounting Pronouncements. Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 2018-07 (ASC 2018-07). All transactions in which the consideration provided in exchange for the purchase of goods or services consists of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. Advertising The Company expenses advertising costs as they are incurred. Deferred Offering Costs The Company had capitalized qualified direct costs related to its efforts to raise capital through a sale of its common stock in a private offering as of December 31, 2023. Deferred offering costs will be deferred until the completion of the private offering, at which time they will be reclassified to additional paid-in capital as a reduction of the offering proceeds. Due to the delays in the financing, during the year ended December 31, 2023, $ 264,706 of deferred offering costs were expensed, which included in general and administrative expenses in the accompanying statement of operations. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company has implemented this ASU during the year ended December 31, 2024, and determined no retrospective changes were necessary. In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). This ASU is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which the entity adopts the amendment and is effective for all reporting companies for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact that this ASU may have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) : Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. F- 10 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, 2024 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. Related Party Transactions During the year ended December 31, 2023, the Company and Mr. Isaacs, the former CEO of the Company, entered into a settlement and release agreement whereby Mr. Isaacs agreed to a reduction in the compensation to a total of $55,000, subject to the Company making payments on or before May 14, 2023 and June 14, 2023. During the year ended, December 31, 2023, the Company made total payments in the aggregate of $ 65,000 in accordance with the terms of the settlement agreement. No additional amounts are owed to Mr. Isaacs as of December 31, 2024. On January 25, 2023, the Company amended the 65,920,895 stock option grants dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively. The amendment reduces the exercise price of the options from $0.40 per share to $ 0.06 per share. On March 3, 2023, the Company amended 153,239,206 stock option grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively. The amendment provides for the vesting to be only upon the closing of the purchase of at least $15 million of crypto mining equipment, rather than conditioned on an uplisting of the Company’s shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market. On March 3, 2023, the Company granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, options to purchase up to 77,000,000 shares of the Company’s common stock at an exercise price of $0.04 per share, exercisable for five years (the “Stock Options”). The Stock Options shall each be a non-qualified option and shall become vested and exercisable upon the Company closing on the purchase of at least $15 million of crypto mining equipment. As of December 31, 2024 and 2023 the Company owed the executive officers of the Company $ 1,616,090 and $ 661,201 in accrued payroll for services performed, respectively. During the year ended December 31, 2024 and 2023, the executive officers of the Company advanced $ 16,725 and $ 16,000 to the Company for working capital needs. The advances are non-interest bearing and are due on demand. F- 11 Note 5. Equity Preferred shares We are authorized to issue 5,000,000 shares of preferred stock. Shares of preferred stock may be issued from time to time in one or more series as may be determined by our Board. The voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions of each series will be established by the Board. Our directors may issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. Series B On July 19, 2022, the Company designated 1,000,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series B Preferred Stock (“Series B”) with a $ 0.001 par value and a stated value of $1.00 per share. The Series B Convertible Preferred Stock ranks senior to the common stock with respect to dividends and right of liquidation and has no voting rights. The Series B Convertible Preferred Stock has a 8 % cumulative annual dividend. In the event of default, the dividend rate increases to 22%. The Company may not, with consent of a majority of the holders of Series B Convertible Preferred Stock, alter or changes the rights of the Series B Convertible Preferred Stock, amend the articles of incorporation, create any other class of stock ranking senior to the Series B Convertible Preferred Stock, increase the authorized shares of Series B Convertible Preferred Stock, or liquidate or dissolve the Company. Beginning 180 days from issuance, the Series B Convertible Preferred Stock may be converted into common stock at a price based on 65% of the average of the two lowest trading prices during the 15 days prior to conversion. The Company may redeem the Series B Convertible Preferred Stock during the first 180 days from issuance, subject to early redemption penalties of up to 25%. The Series B Convertible Preferred Stock must be redeemed by the Company 12 months following issuance if not previously redeemed or converted. Based on the terms of the Series B Convertible Preferred Stock, the Company determined that the preferred stock is mandatorily redeemable and will be accounted for as a liability under ASC 480. During the year ended December 31, 2022, the Company entered into purchase agreements for the sale of 212,500 shares of Series B Convertible Preferred Stock with 1800 Diagonal Lending, LLC,. On January 25, 2023, the Company redeemed the Preferred B shares and paid to the holder a total of $ 270,549 which included the stated value of $ 212,500 , $ 6,190 in accrued dividends and the early redemption premium of $ 51,859 . As of December 31, 2024, there are no shares of the Series B preferred shares outstanding. Common shares The Company has authorized 950,000,000 shares of common stock, par value of $ 0.001 , and as of December 31, 2024 has issued 390,687,459 shares of common stock. All of the common shares have the same voting rights and liquidation preferences. On September 19, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP, a Delaware limited partnership (“Alumni Capital”), pursuant to which the Company agreed to sell, and Alumni Capital agreed to purchase, upon request of the Company in one or more transactions, a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) providing aggregate gross proceeds to the Company of up to $ 15,000,000 (the “Maximum”). The Purchase Agreement expired on December 31, 2023. F- 12 In exchange for Alumni Capital entering into the Purchase Agreement, the Company issued 2,521,008 shares of Common Stock to Alumni Capital upon execution of the Purchase Agreement (the “Initial Commitment Shares”). Alumni Capital represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)). The Company shares of Common Stock, including the Commitment Shares, are being offered and sold under the Purchase Agreement in reliance upon an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. As of December 31, 2023, no shares were sold or issued to Alumni Capital pursuant to the Purchase Agreement other than the 2,521,008 Commitment Shares. The Commitment shares were valued $ 0.105 per share for total value of $ 264,706 which were recorded as deferred offering costs and expensed due to the delays in the financing. On March 30, 2023, the Company entered into a settlement agreement with a previous note holder for settlement of outstanding claims of a note payable that had been paid in full previously. Per the terms of the settlement agreement, the Company issued 250,000 shares of common stock, and as a result the Company recorded a loss on settlement of $ 9,975 . Stock Options During the year ended December 31, 2023, the Company granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, options to purchase up to 77,000,000 shares of the Company’s common stock at an exercise price of $0.04 per share, exercisable for five years (the “Stock Options”). The Stock Options shall each be a non-qualified option and shall become vested and exercisable upon the Company closing on the purchase of at least $15 million of crypto mining equipment. The Company used the black-scholes option pricing model to value the options and determined a fair value of $ 4,814,035 . As of December 31, 2024, the Company had not met the contingent vesting requirements, and as such no amounts have been expensed related to these options. During the year ended December 31, 2023, the Company amended stock option grants to purchase 85,907,990 shares of common stock dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively. The amendment reduces the exercise price of the options from $0.40 per share to $0.06 per share. As a result of the amendment, the Company recorded an additional $ 1,236,487 of stock-based compensation expense based on the incremental fair value resulting from the change in exercise price. During the year ended December 31, 2022, the Company issued a stock option grant to purchase up to 153,239,206 shares of the Company’s common stock, which vest upon the Company listing its shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market, at an exercise price of $0.10 per share. The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term. During the year ended December 31, 2023, the Company amended stock option grants to purchase 153,239,206 shares of common stock dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively. The amendment provides for the vesting to be only upon the closing of the purchase of at least $15 million of crypto mining equipment, rather than conditioned on an uplisting of the Company’s shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market. The amendment resulted in no additional incremental fair value being recorded. As of December 31, 2024, the Company has $ 22,529,707 of value remaining to be expensed based upon completions of milestones, of which $ 21,679,711 is contingently subject to expense recognition based on the timing of when the Company is able to close on a purchase of at least $15 million of crypto mining equipment as describe above, and $ 0 of remaining amortization to expensed pursuant to the vesting terms. F- 13 The following table summarizes the stock option activity for the years ended December 31, 2024 and 2023: Schedule of stock option activity Options Weighted-Average Exercise Price Per Share Outstanding, December 31, 2022 239,284,669 $ 0.21 Granted 159,000,000 0.04 Exercised – – Forfeited – – Expired – – Outstanding, December 31, 2023 398,284,669 $ 0.09 Granted – – Exercised – – Forfeited – – Expired – – Outstanding, December 31, 2024 398,284,669 $ 0.09 As of December 31, 2024, the Company had 90,907,990 stock options that were exercisable and 137,473 that are in dispute. The weighted average remaining life of all outstanding stock options was 2.75 years as of December 31, 2024. Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end. As of December 31, 2024, the intrinsic value for the options vested and outstanding was $ 0 and $ 412 , respectively. Stock Warrants The following table summarizes the stock warrant activity for the year ended December 31, 2024 and 2023: Schedule of stock warrant activity Warrants Weighted-Average Exercise Price Per Share Outstanding, December 31, 2022 9,530,000 $ 0.50 Granted – – Exercised – – Forfeited – – Expired – – Outstanding, December 31, 2023 9,530,000 $ 0.50 Granted – – Recapitalization – – Exercised – – Forfeited – – Expired – – Outstanding, December 31, 2024 9,530,000 $ 0.50 As of December 31, 2024, the intrinsic value for the options vested and outstanding was $ 0 . F- 14 Note 6. Notes Payable Notes Payable Pursuant to the merger agreement, the Company acquired outstanding note payables in the amount of $ 35,000 . These loans were advanced as due on demand and no communication has been received from the original lenders. In April 2023, the Company utilized an existing marginal lending facility with SFOX, a digital assets broker. The marginal lending facility allows the Company to borrow funds up to a maximum aggregate amount of $ 50,000 to finance its investment activities in digital assets. The terms of the marginal lending facility include an interest rate on the borrowed funds of 11 % and the maximum borrowing period under the facility is 28 days, the facility can be rolled over provided there is sufficient collateral. The facility is secured by a pledged collateral of digital assets. The Company is required to maintain a collateral balance equal to 110% of the outstanding principal balance with the lender. As of December 31, 2023, the collateral balance was returned and the loan balance has been settled in full. Equipment Notes Payable In 2021, the Company entered into multiple financing agreements whereby the company agreed to purchase assets related to its crypto mining operations. The financing agreements required a down payments in the aggregate of $ 600,408 and 24 equal monthly payments. The Company used a 15% discount rate to determine the net present value of the loan value in the aggregate of $ 2,441,591 . On July 11, 2022, the Company terminated its agreements with the vendor for the financed equipment described above. As of December 31, 2023 the balance on the loans was $ 1,179,972 . As of December, 31, 2024, the Company received confirmation from the vendor that it accepted the termination and that no further amounts are due under the agreement. As such the Company has recorded a gain on settlement of liabilities of $ 1,245,621 for the equipment note payable and amounts recorded under accounts payable. Convertible notes payable 1800 Diagonal Lending Notes On April 11, 2023, the Company entered into a Securities Purchase Agreement effective April 20, 2023 with 1800 Diagonal Lending LLC, an accredited investor, pursuant to which the Company sold the investor an unsecured promissory note in the principal amount of $ 60,760 (the “April Promissory Note”). The Company received net proceeds of $ 50,000 in consideration of issuance of the April Promissory Note after original issue discount of $ 6,510 and legal fees of $ 4,250 . The aggregate debt discount of $ 10,760 is being amortized to interest expense over the respective term of the note. The April Promissory Note shall incur a one-time interest charge of 13 %, which is added to the principal balance, has a maturity date of March 11, 2024 , and requires monthly payments of $ 7,629 beginning on September 15, 2023. The April Promissory Note is convertible into common shares of the Company upon an event of default, at a rate of 71% of the lowest price for the preceding 20 trading days. In addition, upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined. As of December 31, 2024 and 2023, the balance on the note was $ 12,262 and $ 42,262 , respectively with a remaining unamortized discount of $ 0 as of December 31, 2024. In addition, on April 11, 2023, the Company entered into an additional Securities Purchase Agreement effective April 20, 2023 with the above investor, pursuant to which the Company sold the investor an unsecured promissory note in the principal amount of $ 56,962 (the “Convertible Note”), bears interest at a rate of 8 %, or 22% in the event of default, and matures on April 11, 2024. The Company received net proceeds of $ 50,000 in consideration of issuance of the Convertible Note after original issue discount of $ 2,712 and legal fees of $ 4,250 . The aggregate debt discount of $6,962 is being amortized to interest expense over the respective term of the note. The Convertible Note is convertible into common shares of the Company beginning on the sixth-month anniversary, at a rate of 65% average of the three of the lowest prices for the preceding 15 trading days. In addition, upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined. As of December 31, 2024 and 2023, the balance on the note was $ 94,439 , with a remaining unamortized discount of $ 0 as of December 31, 2024. F- 15 On August 4, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor, pursuant to which the Company sold the investor an unsecured original issuance discount promissory note in the principal amount of $ 71,450 (the “August Promissory Note”). The Company received net proceeds of $ 60,000 in consideration of issuance of the August Promissory Note after original issue discount of $ 7,200 and legal fees of $ 4,250 . The aggregate debt discount of $11,450 is being amortized to interest expense over the respective term of the note. The August Promissory Note shall incur a one-time interest charge of 13%, which is added to the principal balance, has a maturity date of May 24, 2024 , and requires monthly payments of $ 8,971 beginning on September 15, 2023. The August Promissory Note is convertible into common shares of the Company at any time following an event of default at a rate of 71% of the lowest trading price of the Company’s common stock during the twenty prior trading days. In addition, upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined. As of December 31, 2024 and 2023, the balance on the note was $ 99,529 , with a remaining unamortized discount of $ 0 as of December 31, 2024. On October 20, 2023 the Company received notice from 1800 Diagonal Lending LLC, the holder of the April Promissory Note, Convertible Note and August Promissory Note (collectively, the “1800 Notes”) that such notes were in default. The holder has made demand for the immediate payment of the 1800 Notes of a sum representing 150% of the remaining outstanding principal balances of the 1800 Notes in the aggregate of $250,009, together with accrued interest and default interest as provided for in the 1800 Notes. As a result of the default, the 1800 Notes became convertible into common stock and an additional $ 88,618 of principal was added to the note balance. In addition, as a result of the default the notes became convertible at a variable rate resulting in derivative liability accounting under ASC 815. The fair value of the derivative on the date of default was charged directly to interest expense, as the notes are passed due. See further discussion under Note 10. Other Convertible Promissory Notes On April 25, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company sold the investor an unsecured promissory note in the principal amount of $ 60,000 . The Company received proceeds of $ 60,000 in consideration of issuance of the Promissory Note. The Promissory Note shall bear interest at a rate of 10 % and have a maturity date of May 26, 2023 . The Promissory Note has a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date. As of December 31, 2024 and 2023, the balance on the note was $ 60,000 . The note is past due. In addition, on April 26, 2023, the Company entered into a Promissory Note Purchase Agreement with another investor, pursuant to which the Company sold the investor an unsecured convertible promissory note in the principal amount of $ 57,502 Promissory Note. The Company received gross proceeds of $ 57,502 in consideration of issuance of the Promissory Note. The Promissory Note shall bear interest at a rate of 10 % and have a maturity date of May 26, 2023 . The Promissory Note has a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date. As of December 31, 2024 and 2023, the balance on the note was $ 57,502 . The note is past due. The investors may in their option, at any time following the 180-day anniversary from the issuance date, as defined in the Promissory Notes, convert all or any part of the outstanding and unpaid amount of the Promissory Notes into fully paid and non-assessable shares of Common Stock. If the Promissory Notes are not repaid on or prior to the maturity date, the conversion price will be $0.20 or 50% of the preceding five day VWAP on the six month anniversary, which is lower, subject to a floor conversion price of $0.01 per share. On the 180-day anniversary date the resulting conversion price is equal to $0.01 Furthermore, the Promissory Notes contain a “most favored nation” provision that allows each investor to claim any preferable terms from any future securities, excluding certain exempt issuances. F- 16 Note 7. Derivative Liabilities The fair values of the conversion option of outstanding convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on convertible notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable. The fair value of the derivative liabilities was estimated using a binomial model with the following assumptions: Schedule of assumptions for derivative liabilities As of December 31, 2024 Conversion Option Warrants Volatility 406.93% 301.31% Dividend Yield 0% 0% Risk-free rate 4.16% 4.27% Expected term 1 year 1.96-2.40 years Stock price $ 0.003 $ 0.003 Exercise price $ 0.0004-0.01 $ 0.5 Derivative liability fair value $ 1,973,641 $ 19,112 Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of December 31, 2024 668,516,113 9,530,000 As of December 31, 2023 Conversion Option Warrants Volatility 120.13% 124.36% Dividend Yield 0% 0% Risk-free rate 4.79% 4.01% Expected term 1 year 2.5-3.25 years Stock price $ 0.0022 $ 0.0022 Exercise price $ 0.0014-0.01 $ 0.5 Derivative liability fair value $ 196,593 $ 498 Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of December 31, 2023 179,123,059 9,530,000 All fair value measurements related to the derivative liabilities are considered significant unobservable inputs (Level 3) under the fair value hierarchy of ASC 820. F- 17 The table below presents the change in the fair value of the derivative liability during the year ended December 31, 2024 and 2023: Schedule of change in the fair value of derivative liabilities Fair value as of December 31, 2022 $ – Fair value on the date of issuance related to principal default 203,799 Fair value on the date of issuance related to warrants issued 1,372 Change in fair value of derivatives ( 8,081 ) Fair value as of December 31, 2023 197,090 Extinguishment due to repayment ( 232,274 ) Change in fair value of derivatives 2,027,937 Fair value as of December 31, 2024 $ 1,992,754 The total impact of derivative liabilities recognized in the Company’s consolidated statements of operations includes the change in fair value of derivatives, with the Company recognizing a total loss of $ 1,795,664 during the year ended December 31, 2024. The fair value of the derivatives related to the principal default on the notes was charged directly to interest expense. In addition, as a result of the default, all other potentially dilutive instruments must also be recorded at fair value pursuant to ASC 815. The initial fair value of the outstanding warrants was charged to the change in fair value of derivatives. Note 8. Cryptocurrency Assets The Company began cryptocurrency mining activities during the year ended December 31, 2021. In addition to mining activities, the Company conducts other business activities using its cryptocurrency assets as compensation. The below table represents the cryptocurrency activities during the years ended December 31, 2024 and 2023: Schedule of cryptocurrency Cryptocurrency at December 31, 2022 $ 2,630 Additions of cryptocurrency – convertible notes 57,502 Additions of cryptocurrencies – other notes 50,142 Cryptocurrency used for payment of account payable ( 4,005 ) Cryptocurrency used for payment of salaries ( 11,888 ) Cryptocurrency used for payment of other notes ( 50,142 ) Sale of cryptocurrencies for cash proceeds ( 34,100 ) Realized loss on sale/exchange of cryptocurrencies ( 10,107 ) Cryptocurrency at December 31, 2023 32 Purchases of cryptocurrency 4,600 Loss on cryptocurrency ( 4,600 ) Cryptocurrency at December 31, 2024 $ 32 F- 18 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, 2024 December 31, 2023 Deferred tax asset attributable to: Net operating loss $ 1,206,300 $ 1,252,700 Valuation allowance ( 1,206,300 ) ( 1,252,700 ) 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 component of income tax expense (benefit) December 31, 2024 December 31, 2023 Benefit attributable to operating loss $ 333,900 $ 633,800 Non-deductible ( 380,400 ) ( 335,100 ) Valuation allowance 46,500 ( 298,600 ) 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, 2024, the Company has net operating loss carry forwards totaling approximately $ 5,700,000 , which will be carried forward to future periods. Note 10. Commitments and Contingencies Legal Contingencies On February 8, 2022, the Company was notified of a potential lawsuit related to the termination of our Advisory Panel Membership agreement with Taylor Black Wealth, Ltd. (“Taylor”). The Company engaged Taylor for assistance with capital raises and was to be partially compensated with stock options, subject to vesting. Taylor claims that the Company terminated the agreement unlawfully and therefore are still entitled to the remaining unvested options which the Company believes to be cancelled. The total number of stock options being contested is 137,473 , which are still shown as issued and outstanding in Note 6 above. F- 19 Note 11. Subsequent Events On January 21, 2025, the Company entered into a Master Services Agreement with Cudo Ventures Ltd, a cloud computing company. Under this agreement, the Company will provide Tier 3 data center hosting infrastructure and colocation services to Cudo Ventures supporting 1 MW capacity for a term of 5 years, but can be terminated early by either party if certain conditions are met. the colocation space is designated for SingularityNet’s 1st modular datacenter container from Ecoblox. The Company will also provide optional smart hands engineering support at an hourly rate of $130 per hour, with a 50% premium for evening and weekend services. In consideration of the services the Company shall receive Electricity Fees: Passed through at a variable base cost x PUE + admin charge capped at 5%. The minimum fee increase of 3% is waived for the first 3 years and annual CPI increase is capped at 2% for the first 3 years and 5% for the final 2 years. The monthly rental payable is $75,887.18. An initial payment of $303,548.72 to the Company was made on February 18, 2025. The Company shall initially provide the services through Synthesis Group AB, a company located in Sweden (“SG”) pursuant to an oral agreement. The Company is negotiating a formal agreement with SG. There are no assurances that the Company will complete a transaction with SG. Under the terms of the respective employment agreements of Charles Faulkner and Simon Wajcenberg, Mr. Faulkner and Mr. Wajcenberg had accrued salaries of $906,229 and $819,989, respectively, as of February 1, 2025. On February 20, 2025, in full satisfaction of $769,989 of the accrued salary for each of Mr. Faulkner and Mr. Wajcenberg, the Company (1) issued to each of Charles Faulkner and Simon Wajcenberg 256,660,163 shares of restricted common stock at a conversion price of $0.003 per share, and (2) amended options held by each of Mr. Faulkner and Mr. Wajcenberg to (i) purchase up to 76,619,603 shares of the Company’s common stock at an exercise price of $0.10 per share, as amended on March 3, 2023 which vest upon the closing of the purchase of at least $15 million of crypto mining equipment (the “2022 Options”) and (ii) purchase up to 77,000,000 shares of the Company’s common stock at an exercise price of $0.04 per share, which shall vest upon the Company closing on the purchase of at least $15 million of crypto mining equipment (the “2023 Options”), to eliminate the vesting requirements of the 2022 Options and 2023 options. The 2022 Options and 2023 Options are fully vested as of February 1, 2025. Under the terms of the respective employment agreements of the Company’s executive officers, Charles Faulkner and Simon Wajcenberg, as of April 2, 2025, Mr. Faulkner and Mr. Wajcenberg had accrued salaries of approximately $173,110 and $130,010, respectively. On April 2, 2025, in satisfaction of $50,000 of the accrued salary for each of Mr. Faulkner and Mr. Wajcenberg, the Company amended each of Mr. Faulkner and Mr. Wajcenberg options to purchase up to: (1) 31,979,352 shares of the Company’s common stock dated January 31, 2022, exercisable at $0.06 per share (the “January 2022 Grants”); (2) 76,619,303 shares of the Company’s common stock dated September 12, 2022, as amended, exercisable at $0.10 per share (the “September 2022 Grants”) and (3) 77,000,000 shares of the Company’s common stock dated March 1, 2023 exercisable at $0.04 per share (the “2023 Grants”; the January 2022 Grants, September 2022 Grants and the March 2023 Grants; collectively the “Option Grants”), to reduce the exercise price of the Option Grants to $0.005 per share. On February 27, 2025 the board of directors of the Company adopted a resolution to amend the Company’s Articles of Incorporation to increase the number of authorized shares of common stock to 7 billion. On March 3, 2025, shareholder approval was obtained through the written consent of the holder of the Series C Preferred Stock. The Charter Amendment become effective on April 7, 2025. On March 3, 2025, the Company filed with the Nevada Secretary of State a Certificate of Designation of Series C Preferred Stock (the “Certificate of Designation”). Pursuant to the Certificate of Designation, the Company’s Board of Directors designated a new series of the Company’s preferred stock, the Series C Preferred Stock, par value $0.001 per share. The Certificate of Designation authorized the Company to issue one share of Series C Preferred Stock. The share was issued to the Company’s Chief Executive Officer. The Series C Preferred Stock is not convertible, and does not have any redemption, preferential dividend or liquidation rights. Holders of Series C Preferred Stock shall only be entitled to vote on the approval of an amendment to the Company’s Articles of Incorporation authorizing an increase in the Company’s authorized capital stock (the “Charter Amendment”) and shall be entitled to a voting power equal to one vote more than the total combined voting power of the Company’s common stock. The Series C Preferred Stock issued and outstanding on the record date to consent to the Charter Amendment was automatically surrendered and cancelled for no consideration following the Charter Amendment. F- 20 Effective April 7, 2025 (the “Effective Time” or “Closing Date”), Edgemode, Inc., Synthesis Analytics Production Ltd, an England and Wales private limited company (“SAPL”), and Adler Capital Limited, a company registered in Hong Kong, and the sole shareholder of SAPL, (“ACL”) closed on a Share Exchange Agreement dated April 7, 2025 (the “Share Exchange” or “Transaction”). In accordance with the Share Exchange, SAPL agreed to transfer 100% of SAPL’s outstanding capital stock to Edgemode in exchange for 1,260,246,354 shares of Edgemode common stock, par value $0.001 per share, which represented approximately 55% of the Company’s outstanding common stock at the Effective Time. The Company accounted for the acquisition as an asset acquisition under ASC 805 as SAPL did not meet the definition of a business as it did not contain a full set of integrated inputs and outputs at the time of closing. Following the closing of the Share Exchange, Edgemode, through SAPL, its wholly owned subsidiary, is now designing, building, and operating digital infrastructure for HPC with the goal of becoming a leading provider of digital colocation services. SAPL is an entity organized in 2022 under the laws of England and Wales. SAPL will change its name to EdgeMode Europe Limited. The acquisition of SAPL has positioned us to enter the rapidly evolving HPC hosting market in an efficient and effective manner. The acquisition has enabled us to plan to leverage SAPL’s existing infrastructure and expertise to meet the growing demand for data center facilities for third-party customers focused on cloud computing as well as machine learning and artificial intelligence. The acquisition of SAPL will enable us to become a premier provider and operator of dedicated, purpose-built data center facilities for our third-party customers. We believe that opportunities for growth exist in various applications of our data centers, which is another factor as to why we decided to begin offering digital infrastructure colocation services to third parties engaged in HPC. Pursuant to the terms of the Share Exchange the Edgemode board of directors increased the number of seats on the board to three members and Niclas Adler, the chief executive officer of SAPL was appointed to fill the vacancy. The Board further approved Edgemode to enter into an employment agreement with Dr. Adler and appoint Dr. Adler as Chief Technology Officer of Edgemode (the “Adler Employment Agreement”). Pursuant to the terms of the Adler Employment Agreement, Dr. Adler will be paid an annual base salary of $400,000 and has been issued a five-year non-qualified stock option to purchase up to 385,789,700 shares of Edgemode common stock at an exercise price of $0.005. Additionally, based on Dr. Adler’s time devoted to Edgemode, he will be entitled to receive a quarterly bonus of $150,000. These terms are based on full-time engagement and it has been agreed that Dr. Adler will have a 50% engagement for the first three months of his employment. The Adler Employment Agreement may be terminated with cause at any time and, if terminated with cause, Dr. Adler would be entitled to compensation only for the period ending with the date of such termination. The Adler Employment Agreement may also be terminated by Edgemode without cause upon providing Dr. Adler 30 days’ prior written notice. In the event of termination without cause, Edgemode would continue to pay Dr. Adler his annual base salary and any benefits for the lesser of: (i) the balance of the term of the Adler Employment Agreement or (ii) 12 months from the date of termination, together with any performance bonuses (as defined in the Adler Employment) which may have been earned as of the date of termination. Furthermore, the Company entered into a consultancy agreement with AI Capital Mineco Limited, an affiliate of Adler, and agreed to pay the consultant a fee of $300,000, subject to the Company receiving financing in excess of $2,000,000. Charlie Faulkner and Simon Wajcenberg, the current executive officers of Edgemode, remain as directors and executive officers of Edgemode. F- 21 Pursuant to the Share Exchange, Mr. Faulkner and Mr. Wajcenberg entered into amendments to their Executive Employment Agreements, to increase their base salary to $400,000 per annum and a quarterly bonus of up to $150,000 at the discretion of the Board. Additionally, the Board approved the following stock option grants to Mr. Faulkner, Mr. Wajcenberg, and Dmitry Strukov, a consultant to the Company: · Faulkner an option to purchase 257,193,133 shares of common stock of the Company at an exercise price of $0.005 per share; · Wajcenberg an option to purchase 257,193,133 shares of common stock of the Company at an exercise price of $0.005 per share; and · Strukov an option to purchase 128,596,567 shares of common stock of the Company at an exercise price of $0.005. On April 11, 2025, the holders of two promissory notes issued by the Company on April 25, 2023 for $63,000 and April 26, 2023 for $60,377.10, converted the notes for 31,500,000 shares of common stock and 30,188,550 shares of common stock, respectively. On April 19, 2025, the Company issued 38,510,911 shares of restricted common stock to an accredited investor and received gross proceeds of $300,000. On April 28, 2025, the Company issued 7,500,000 shares of restricted common stock for services to be provided over three months. On the date of issuance the shares are fully earned and non-forfeitable. F- 22 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.