What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2025-03-12 · 153 added, 108 removed, 40 unchanged (87% of the section changed)

1 unchanged sentence

The following discussion and analysis should be

read in conjunction with our unaudited 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, 2023.

The following discussion and analysis compares our consolidated results

of operations for the three months ended September 30, 2024 (the “2024 Quarter”) with those for the three months ended September

30, 2023 (the “2023 Quarter”) and our consolidated results of operations for the nine months ended September 30, 2024 (the

“2024 Period”) with those for the nine months ended September 30, 2023 (the “2023 Period”).

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, 2024.

The following discussion and analysis compares our consolidated

results of operations for the three months ended March 31, 2025 (the “2025 Quarter”) with those for the three months ended

March 31, 2024 (the “2024 Quarter”).

Cautionary Note Regarding Forward-Looking Statements

16 unchanged sentences

Business Overview

Since our incorporation, the Company has attempted

to become involved in a number of business ventures, all of which, excluding Edgemode Wyoming, were unsuccessful and which have been abandoned.

Edgemode Wyoming historically mined Ethereum from late 2020 until September 2022.

Although Edgemode

Wyoming historically mined Ethereum, due to the change of Ethereum (ETH) from Proof of Work (POW) to Proof of stake (POS), the Company

terminated all rental agreements and future purchase orders related to Ethereum mining operations.

We now intend to build Tier 3 AI data

center infrastructure and lease our data centers to tenants who require custom built high performance computing facilities, subject to

However, we require significant financing to commence building these data centers.

Since late 2024 we have focused on

securing equity and debt capital.

We cannot provide any assurances we will receive any capital under a debt facility.

Any financing will

be used to finance the build of High Performance computing data centers.

We have suspended our daily operations subject to receiving additional

There are no assurances we will receive adequate financing.

Our management has also begun exploring possible opportunities for

the Company involving mergers, acquisitions or other business combination transactions in an effort to diversify our business.

not currently a party to any definitive agreement with any third parties, and there are no assurances that we will ever consummate any

merger, acquisition or business combination.

Accordingly, investors should not place undue reliance on these efforts.

Although we have been in discussions with potential

partners and acquisition targets, we have not entered into any definitive agreements.

The evaluation and selection of a business opportunity

is a complex and uncertain process.

Business opportunities that we believe are in the best interests of the Company and its shareholders

may be scarce, or we may be unable to attract the businesses we identify as viable for our objectives, including due to competitive forces

in the marketplace beyond our control.

As stated above, at September 30, 2024, the Company

had no sources of revenue and has no specific business plan or purpose without significant financing.

Therefore, the Company’s business

plan is to also seek an acquisition or merger candidate.

As a result, the Company is considered a “blank check” or “shell”

See the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Edgemode was incorporated under the laws of the

State of Nevada in 2011.

Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020.

Between 2021 and 2023,

we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware

and hosting contracts.

As a result, since late 2023 and throughout 2024, our business activities primarily consisted of identifying and

evaluating suitable acquisition transaction candidates, which led to transition from cryptocurrency mining to digital infrastructure colocation

services and HPC hosting.

Effective April 7, 2025, Edgemode, SAPL, and ACL

closed on the Share Exchange dated April 7, 2025.

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.

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.

Our goal is to utilize the assets we have acquired

via the purchase of SAPL for HPC hosting operations, which will provide consistent dollar-based revenue and which represent substantially

less risk than our historical digital asset self-mining operations.

Our intent is to focus our business on development and marketing efforts

to build data centers and expand our foundational HPC hosting customer base.

Business Strategy

Our business strategy is to generate revenue and

achieve profitability by building large-scale data center infrastructure configured for specialized computers performing specific, high-value

applications such as cloud computing, machine learning, and artificial intelligence and maximizing the use of assets acquired in the SAPL

We intend to strategically develop and to work to make operational the infrastructure necessary to support our contractual

commitments to our HPC customers and to support expected customer growth and additional demand by leveraging our data center expertise

and capabilities.

We intend to seek additional opportunities and to engage additional customers in the HPC hosting market to expand our

business using our knowledge, expertise, and existing and future infrastructure where favorable market opportunities exist.

Our strategy is focused on hyperscale cloud-based

providers and enterprises, including potential customers that we believe have significant data center infrastructure needs that have not

yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology

infrastructure in their operations.

We believe our capabilities for serving the needs of large hyperscale providers and enterprises will

continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where

our customers are located or plan to be located in the future.

Our business strategy requires immediate funding of approximately $2,000,000

to enable us to commence our new operations and repay debt, as well as additional significant financing to develop and expand our new

There are no assurances that we will raise sufficient capital to execute our business plan or satisfy our liabilities.

the “Risk Factors” in our Form 10-K for the fiscal year ended December 31, 2024 and Form 8-K Current Report dated April 8,

Products and Services

High-Performance Computing Hosting

HPC is a technology that uses clusters of powerful

processors that work in parallel to process massive data sets and solve complex problems at extremely high speeds.

The proliferation of

data, as well as data-intensive and AI enabled applications and use cases, is driving demand for the computing power of HPC.

Traditionally,

HPC has involved an on-premises infrastructure, investing in supercomputers or computer clusters.

Our HPC hosting revenue will be generated by licensing

colocation data center space and related services to a licensee at our Marviken data center.

These licensing agreements and orders include

lease components, non-lease components (such as power delivery, physical security, maintenance and other billable expenses), as well as

non-component elements such as taxes.

Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments

on a recurring basis.

HPC colocation leases may include all or portions of a data center, where customers may also lease office space

to support their colocation operations where revenue is primarily based on power usage as well as square footage.

On January 21, 2025, the Company entered into

the Master Services Agreement with Cudo, a cloud computing company.

Under this agreement, the Company will provide Tier 3 data center

hosting infrastructure and colocation services to Cudo.

The Master Services Agreement supports a 1 MW capacity during a 5 year term at

our Marviken data center and is accompanied by a strict service level agreement to ensure 99% up time which 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 multiplied be estimated usage plus an admin charge capped at 5%.

The minimum fee increase of 3% is waived for the first 3 years

and the annual CPI increase is capped at 2% for the first three years and 5% for the final two years.

The monthly rental payable is $75,887.

On February 18, 2025, an initial payment of $303,549 was made to the Company consisting of a $227,661 deposit, which is refundable at

the end of the term of the Master Services Agreement, and the first month’s rental payment of $75,887.

The initial payment was primarily

used to buildout the data center, including installing electrical and other infrastructure in order to support Cudo’s hardware through

the advance of $183,000 to SAPL.

The Master Services Agreement term commenced on April 8, 2025 when Cudo’s hardware was delivered

to our data center.

Critical Accounting Policies and Estimates

1 unchanged sentence

are critical in making the estimates and judgments in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under

the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates”.

There has been

the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates.” There has been

no material change in critical accounting policies or estimates during the period covered by this report.

1 unchanged sentence

For information on recent accounting pronouncements

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

Three Months Ended September 30, 2024 Compared

to the Three Months Ended September 30, 2023

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

Three Months Ended March 31, 2025 Compared

to the Three Months Ended March 31, 2024

Results of operations

Our operating expenses for the 2024 Quarter was

$380,738 compared to $647,078, for the 2023 Quarter, a decrease of 41%.

The 2024 Quarter had lower expenses as the Company continues to

reduce cost compared to the 2023 Quarter.

Our other expense for the 2024 Quarter was $1,017,534

Our operating expenses for the three months ended

March 31, 2025 (the “2025 Quarter”) was $22,115,041 compared to $336,599, for the three months ended March 31, 2024 (the “2024

Quarter”), an increase of 6,470%.

In the 2025 Quarter, the Company incurred stock-based compensation expense of $21,679,711 compared

to $0 for the 2024 Quarter.

The stock-based compensation for the 2025 Quarter was related to the amendment of options to the officers

of the Company.

Our other income for the 2025 Quarter was $1,243,060

compared to other expense of $114,605 for the 2024 Quarter.

Other expense in the 2024 quarter was comprised of $13,493 in interest expense

and $1,279,091 for the loss on the change in fair value of derivative liabilities offset by income of $275,000 on the refund of an equipment

Other expense for the 2023 quarter was comprised of $20,323 in interest expense.

Nine Months Ended September 30, 2024 Compared

to the Nine Months Ended September 30, 2023

Results of operations

Our operating expenses for the 2024 Period was

$1,102,756 compared to $3,006,483, for the 2023 Period, a decrease of 63%.

In the 2024 Quarter, the Company incurred stock-based compensation

expense of $0 compared to $1,465,522 for the 2023 Quarter.

The stock-based compensation for the 2023 Quarter was related to the amendment

of options to the officers of the Company and new options issued to a consultant.

Our other expense for the 2024 Period was $1,062,198

compared to other income of $394,676 for the 2023 Period.

Other expense in the 2024 quarter was comprised of $56,045 in interest expense

and $1,431,143 for the loss on the change in fair value of derivative liabilities offset by income of $425,000 on the refund of an equipment

Other income for the 2023 quarter was comprised of $42,710 in interest expense, $51,859 in prepayment penalties on the preferred

B shares, loss on legal settlement of $9,975, offset by income of $500,000 in deposits from equipment refunds.

Other income in the 2025 quarter was comprised of $11,187 in interest expense

and $1,254,247 for the gain on the change in fair value of derivative liabilities.

Other expense for the 2024 quarter was comprised of

$24,420 in interest expense and $90,185 for the loss on the change in fair value of derivative liabilities.

Liquidity and Capital Resources

As of September 30, 2024, Company had approximately

As of May 15, 2025, the Company had approximately

$35,000 of cash on hand.

Our liquidity was primarily derived from debt and equity investments from accredited investors and the refund

of deposits paid to suppliers in 2022.

To commence our Tier 3 data center colocation operations and fund operations for the next 12 months,

the Company is seeking to raise $2 million in equity capital.

We currently have no available sources of capital and we can provide no

assurances that any debt financings will be available in the future.

Additionally, the Company is (i) in default under the 1800 Notes

in the sum of 150% of the remaining outstanding principal balances of the 1800 Notes in the aggregate of approximately $206,000, plus

accrued interest and default interest as defined under such notes, (ii) in default under two other notes in the aggregate principal amount

of approximately $120,000 and (iii) owes a significant amount of money to its executive officers for accrued salary.

If we fail to close on a debt or equity facility

or raise sufficient additional funds from other sources, we will be required to abandon our plan of operations.

The Company has terminated agreements for approximately

$1.6 million of debt for equipment that the Company was using for mining and returned the equipment to the vendor to settle the outstanding

The Company is making no further payments against the potential balance.

Subsequent to September 30, 2024, the Company received

a debt waiver from the vendor in which they agreed to waive the debt completely with no additional amount owed.

See Note 10 – Subsequent Events to the unaudited

consolidated financial statements including in this report.

Historically, our liquidity was primarily derived from debt and equity investments from accredited investors.

During the three months ended March 31, 2025, we received an initial payment of approximately $303,000 for colocation services to be provided

by the Company.

In addition, in April 2025 we sold 38,510,911 shares of restricted common stock to an accredited investor in consideration

On April 7, 2025, we executed the Share Exchange with SAPL and, now, we are seeking to raise at least $2,000,000 to commence

our HPC hosting operations and generate revenue.

We require significant funding to develop our HPC operations.

Subject to receiving funding,

we expect that our operating expenses will increase as we attempt to develop our new HPC operations and we will devote additional resources

toward new business opportunities.

However, as set forth elsewhere in this report, our ability to develop our business and achieve our

operational goals is dependent upon our ability to raise significant additional working capital.

As the availability of this capital is

unlikely, at this time, we are unable to quantify the expected increases in operating expenses in future periods.

Summary of cash flows

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

2 unchanged sentences

Operating Activities

During the 2024 Period, cash provided by operating

activities of $22,740 primarily resulted from the refund of prepaid hosting services, offset by the net loss of $2,164,954, change in

fair value of derivative liabilities of $1,431,143, increases in accounts payable and accrued expenses of $68,492 and increases in accrued

payroll of $653,338.

During the 2023 Period, cash provided by operating

activities of $51,683 primarily resulted from the refund of prepaid hosting services, offset by the net loss of $2,611,807 and stock-based

compensation of $1,465,522.

During the 2025 Quarter, cash provided by operating

activities of $74,858 primarily resulted from the Prepaid AI hosting services (customer deposits), offset by the net loss of $20,872,081

and stock-based compensation of $21,679,711, and change in the fair value of derivative liabilities of $1,254,247.

During the 2024 Quarter, cash used in operating

activities of $298 primarily resulted from the net loss of $451,204 offset by change in fair value of derivative liabilities of $90,185,

increases in accounts payable and accrued expenses of $60,221, and increases in accrued payroll of $300,500.

Investing Activities

Cash used in investing activities in the 2024

Period of $4,600 resulted from the purchase of cryptocurrency assets.

Cash provided by investing activities in the 2023

Period of $31,999 resulted from the sale of cryptocurrency assets.

During the 2025 Quarter, the Company advanced

$183,000 of cash for working capital needs in connection with the business acquisition of SAPL for purposes of financing the construction

of the HPC facility.

The Company had no investing activities during

the 2024 Quarter.

Financing Activities

In the 2024 Period, cash used in financing activities

of $13,275 consisted of $30,000 for the repayment of convertible notes payable, offset by proceeds from related party advances of $16,725.

In the 2023 Period, cash used in financing activities

of $76,109 consisted of the repayment of Series B preferred shares of $270,549 and payments on convertible notes of $41,560, offset by

proceeds from convertible notes payable of $220,000.

During the 2025 Quarter, the Company received

$300,000 in cash proceeds in connection with the sale of shares of common stock of the Company, offset by repayments of related party

advances of $9,900.

The Company had no financing activities during

the 2024 Quarter.

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