false 2023 FY 0001652958 0001652958 2023-01-01 2023-12-31 0001652958 2023-06-30 0001652958 2024-04-26 0001652958 2023-12-31 0001652958 2022-12-31 0001652958 2022-01-01 2022-12-31 0001652958 us-gaap:PreferredStockMember 2021-12-31 0001652958 us-gaap:CommonStockMember 2021-12-31 0001652958 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001652958 us-gaap:RetainedEarningsMember 2021-12-31 0001652958 2021-12-31 0001652958 us-gaap:PreferredStockMember 2022-12-31 0001652958 us-gaap:CommonStockMember 2022-12-31 0001652958 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001652958 us-gaap:RetainedEarningsMember 2022-12-31 0001652958 us-gaap:PreferredStockMember 2022-01-01 2022-12-31 0001652958 us-gaap:CommonStockMember 2022-01-01 2022-12-31 0001652958 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-12-31 0001652958 us-gaap:RetainedEarningsMember 2022-01-01 2022-12-31 0001652958 us-gaap:PreferredStockMember 2023-01-01 2023-12-31 0001652958 us-gaap:CommonStockMember 2023-01-01 2023-12-31 0001652958 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-12-31 0001652958 us-gaap:RetainedEarningsMember 2023-01-01 2023-12-31 0001652958 us-gaap:PreferredStockMember 2023-12-31 0001652958 us-gaap:CommonStockMember 2023-12-31 0001652958 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001652958 us-gaap:RetainedEarningsMember 2023-12-31 0001652958 EDGM:EdgeModeMember EDGM:SoleShareholderMember 2022-01-29 2022-01-31 0001652958 EDGM:EdgeModeMember EDGM:JosephIsaacsMember 2022-01-29 2022-01-31 0001652958 EDGM:EdgeModeMember EDGM:JosephIsaacsMember 2022-01-31 0001652958 EDGM:EdgeModeMember 2022-01-29 2022-01-31 0001652958 us-gaap:FairValueInputsLevel1Member 2023-12-31 0001652958 us-gaap:FairValueInputsLevel2Member 2023-12-31 0001652958 us-gaap:FairValueInputsLevel3Member 2023-12-31 0001652958 EDGM:EdgeModeMember 2022-01-31 0001652958 EDGM:MrIsaacsMember 2022-01-29 2022-01-31 0001652958 EDGM:JosephIsaacsMember 2022-01-01 2022-12-31 0001652958 EDGM:MrIsaacsMember 2023-01-01 2023-12-31 0001652958 EDGM:OfficersAndAConsultantMember 2022-01-01 2022-12-31 0001652958 EDGM:MrIsaacsMember 2023-01-24 2023-01-25 0001652958 EDGM:OfficersMember 2022-09-10 2022-09-12 0001652958 srt:ChiefExecutiveOfficerMember 2024-03-02 2024-03-03 0001652958 srt:ChiefFinancialOfficerMember 2024-03-02 2024-03-03 0001652958 2023-01-01 2023-01-31 0001652958 EDGM:UndeliveredEquipmentMember 2022-01-01 2022-12-31 0001652958 EDGM:CryptominingEquipmentMember 2022-01-01 2022-12-31 0001652958 EDGM:CryptominingEquipmentMember EDGM:SwitchFromEtheriumMiningMember 2022-01-01 2022-12-31 0001652958 EDGM:CryptominingEquipmentMember EDGM:PurchaseOfMiningEquipmentMember 2022-01-01 2022-12-31 0001652958 EDGM:CryptominingEquipmentMember EDGM:EquipmentPurchased2020Member 2022-01-01 2022-12-31 0001652958 us-gaap:SeriesAPreferredStockMember 2020-12-31 0001652958 us-gaap:SeriesAPreferredStockMember 2022-03-30 0001652958 us-gaap:SeriesBPreferredStockMember 2022-07-19 0001652958 2022-07-19 0001652958 us-gaap:SeriesBPreferredStockMember 2022-07-18 2022-07-19 0001652958 us-gaap:SeriesBPreferredStockMember 2022-01-01 2022-12-31 0001652958 us-gaap:SeriesBPreferredStockMember EDGM:DiagonalLendingMember 2022-12-31 0001652958 us-gaap:SeriesBPreferredStockMember 2023-01-24 2023-01-25 0001652958 EDGM:StockIssuedForCashAndCrytocurrencyMember 2022-01-01 2022-12-31 0001652958 EDGM:ThirdPartyMember 2022-01-01 2022-12-31 0001652958 us-gaap:CommonStockMember 2023-01-01 2023-12-31 0001652958 2023-03-29 2023-03-30 0001652958 EDGM:CEOAndCFOMember 2023-01-01 2023-12-31 0001652958 EDGM:GeneralGrantMember 2022-01-01 2022-12-31 0001652958 EDGM:CEOAndCFOMember 2022-01-01 2022-12-31 0001652958 EDGM:ForCompanyListingOnNasdaqMember 2022-01-01 2022-12-31 0001652958 EDGM:CryptoMiningMilestoneMember 2023-12-31 0001652958 EDGM:VestingTermsMember 2023-12-31 0001652958 EDGM:OptionsInDisputeMember 2023-12-31 0001652958 us-gaap:WarrantMember 2023-01-01 2023-12-31 0001652958 us-gaap:WarrantMember 2022-01-01 2022-12-31 0001652958 us-gaap:OptionMember 2021-12-31 0001652958 us-gaap:OptionMember 2022-01-01 2022-12-31 0001652958 us-gaap:OptionMember 2022-12-31 0001652958 us-gaap:OptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:OptionMember 2023-12-31 0001652958 us-gaap:WarrantMember 2021-12-31 0001652958 us-gaap:WarrantMember 2022-12-31 0001652958 us-gaap:WarrantMember 2023-12-31 0001652958 EDGM:EdgeModeMember 2023-01-31 0001652958 EDGM:EquipmentNotesPayableMember EDGM:EdgeModeMember 2022-01-01 2022-01-31 0001652958 EDGM:NotesPayablesMember 2023-04-30 0001652958 EDGM:NotesPayablesMember 2023-04-29 2023-04-30 0001652958 EDGM:EquipmentNotePayableMember 2021-01-01 2021-12-31 0001652958 EDGM:EquipmentNotePayableMember 2021-12-31 0001652958 EDGM:EquipmentNotesPayableMember 2022-01-01 2022-12-31 0001652958 EDGM:EquipmentNotesPayableMember 2022-12-31 0001652958 EDGM:EquipmentNotesPayableMember 2023-12-31 0001652958 EDGM:AprilPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-04-11 0001652958 EDGM:AprilPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-04-10 2023-04-11 0001652958 EDGM:AprilPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-12-31 0001652958 EDGM:ConvertibleNoteMember EDGM:SecuritiesPurchaseAgreementMember 2023-04-11 0001652958 EDGM:ConvertibleNoteMember EDGM:SecuritiesPurchaseAgreementMember 2023-04-10 2023-04-11 0001652958 EDGM:ConvertibleNoteMember EDGM:SecuritiesPurchaseAgreementMember 2023-12-31 0001652958 EDGM:AugustPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-08-04 0001652958 EDGM:AugustPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-08-03 2023-08-04 0001652958 EDGM:AugustPromissoryNoteMember EDGM:DiagonalLending1800Member 2023-12-31 0001652958 EDGM:AprilPromissoryNotesMember EDGM:SecuritiesPurchaseAgreementMember 2023-04-25 0001652958 EDGM:AprilPromissoryNotesMember EDGM:SecuritiesPurchaseAgreementMember 2023-04-24 2023-04-25 0001652958 EDGM:AprilPromissoryNotesMember EDGM:SecuritiesPurchaseAgreementMember 2023-12-31 0001652958 EDGM:AprilPromissoryNotesMember EDGM:PromissoryNotePurchaseAgreementMember 2023-04-26 0001652958 EDGM:AprilPromissoryNotesMember EDGM:PromissoryNotePurchaseAgreementMember 2023-04-24 2023-04-26 0001652958 EDGM:AprilPromissoryNotesMember EDGM:PromissoryNotePurchaseAgreementMember 2023-12-31 0001652958 us-gaap:MeasurementInputPriceVolatilityMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputPriceVolatilityMember EDGM:WarrantsMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputExpectedDividendRateMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputExpectedDividendRateMember EDGM:WarrantsMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputRiskFreeInterestRateMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputRiskFreeInterestRateMember EDGM:WarrantsMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputExpectedTermMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputExpectedTermMember EDGM:ConversionOptionMember 2022-01-01 2022-12-31 0001652958 us-gaap:MeasurementInputSharePriceMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputSharePriceMember EDGM:ConversionOptionMember 2022-01-01 2022-12-31 0001652958 us-gaap:MeasurementInputExercisePriceMember EDGM:ConversionOptionMember 2023-01-01 2023-12-31 0001652958 us-gaap:MeasurementInputExercisePriceMember EDGM:ConversionOptionMember 2022-01-01 2022-12-31 0001652958 EDGM:ConversionOptionMember 2023-12-31 0001652958 EDGM:WarrantsMember 2023-12-31 0001652958 2022-02-08 0001652958 2023-10-01 2023-12-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023

 

OR

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM __________________ TO __________________________

 

COMMISSION FILE NUMBER: 000-55647

 

Edgemode, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   47-4046237

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

110 E. Broward Blvd., Suite 1700, Ft. Lauderdale, FL   33301
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code:   707-687-9093

 

Securities registered under Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None   Not applicable   Not applicable

 

Securities registered under Section 12(g) of the Act:

 

Common stock, par value $0.001 per share

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes   No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.4.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act 915 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $3,217,231 on June 30, 2023.

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 390,687,459 shares of common stock are issued and outstanding as of April 26, 2024.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the registrant’s Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement (or alternatively, a Form 10-K/A) will be filed with the Securities and Exchange Commission (the “SEC”) within 120 days of the registrant’s fiscal year ended December 31, 2023.

 

 

 

   

 

 

TABLE OF CONTENTS

 

    Page No.
Part I  
     
Item 1. Business. 1
Item 1A. Risk Factors. 2
Item 1B. Unresolved Staff Comments. 6
Item 1C. Cybersecurity. 6
Item 2. Properties. 6
Item 3. Legal Proceedings. 6
Item 4. Mine Safety Disclosures. 6
     
Part II  
     
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 7
Item 6. Reserved 7
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 10
Item 8. Financial Statements and Supplementary Data. 10
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 11
Item 9A. Controls and Procedures. 11
Item 9B. Other Information. 12
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 12
     
Part III  
     
Item 10. Directors, Executive Officers and Corporate Governance. 13
Item 11. Executive Compensation. 13
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 13
Item 13. Certain Relationships and Related Transactions, and Director Independence. 13
Item 14. Principal Accounting Fees and Services. 13
     
Part IV  
     
Item 15. Exhibits, Financial Statement Schedules. 14
Item 16. Form 10-K Summary 15

 

 

 

 

 i 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

This report contains forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about risks associated with:

 

  · Risks related to our business, including:

 

  · we have a history of losses;
  · our auditors have raised substantial doubts about our ability to continue as a going concern;
  · we have a working capital deficit and need to raise capital; and
  · we are a shell company and lack current business operations.

 

  · Risks related to the ownership of our securities, including:

 

  · the applicability of penny stock rules; and
  · material weaknesses in our internal controls over financial reporting; and
  · the significant dilution to our shareholders upon the exercise of options and warrants and conversion of outstanding notes.

 

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in our Risk Factors appearing elsewhere in this report. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

 

 

 

 ii 

 

 

PART I

 

Item 1. Business.

 

Overview

 

Edgemode, Inc. (Formerly Fourth Wave Energy, Inc.) (“we”, “our”, the “Company”) was incorporated in Nevada on January 21, 2011. Effective January 31, 2022, the Company, FWAV Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the Company and EdgeMode, a Wyoming corporation (“Edgemode Wyoming”) closed on an Agreement and Plan of Merger and Reorganization dated December 2, 2021 (the “Merger Agreement”). In accordance with the Merger Agreement, FWAV Acquisition Corp. merged with and into Edgemode Wyoming, with Edgemode Wyoming becoming a wholly owned subsidiary of the Company. The merger was accounted for as a reverse merger, whereby EdgeMode Wyoming was considered the accounting acquirer and became our wholly-owned subsidiary. On June 3, 2022 the Company changed its name from Fourth Wave Energy Inc. to Edgemode, Inc.

 

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 mine Bitcoin, subject to financing. However, we require significant financing to commence Bitcoin mining. Since late 2022 we have focused on securing a debt facility. We cannot provide any assurances we will receive any capital under a debt facility. Any debt financing will be used to finance the purchase of Bitcoin mining hardware and hosting contracts. We have suspended our daily operations subject to receiving additional funding. 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. We are not currently a party to any agreement or understandings with any third parties, and there are no assurances even if our management locates an opportunity which it believes will be in the best interests of our shareholders that we will ever consummate such a transaction. Accordingly, investors should not place undue reliance on these efforts.

 

As stated above, at present, the Company has 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 (a “Business Combination”). As a result, the Company is considered a “blank check” or “shell” company. See the Risk Factors beginning on page 2. Management does not intend to undertake any efforts to cause a market to develop in the Company’s securities until such time as the Company has successfully implemented its business plan and/or closed on a suitable Business Combination. 

 

Although we have been in discussions with potential partners or targets, we have not entered into any definitive agreements. The evaluation and selection of a business opportunity is a complex and uncertain process, and we have not yet identified a target operating business for acquisition. 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. There is no assurance that we will be able to locate compatible business opportunities for the Company. See Item 1A - Risk Factors.

 

Human Capital/Employees

 

We have two full-time employees and no part-time employees. Our employees also serve as our officers and directors. None of our employees are parties to any collective bargaining arrangement. We believe our relationships with our employees are good.

 

 

 

 1 

 

 

History

 

We are 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. Prior to the closing of the acquisition of Edgemode, we were a shell company with nominal assets and liabilities. Our website address is www.edgemode.io. We have not incorporated by reference into this report the information that can be accessed through our website and you should not consider such information to be part of this report.

 

Competition and Market Conditions

 

We will face substantial competition in our efforts to identify and pursue a business partner. The primary source of competition is expected to be from other companies organized and funded for similar purposes, including small venture capital firms, blank check companies, and wealthy investors, many of which may have substantially greater financial and other resources than we do. Considering our limited financial and human resources, we are at a competitive disadvantage compared to many of our competitors in our efforts to obtain an operating business or assets necessary to commence our operations in a new field. Additionally, with the economic downturn caused by the coronavirus pandemic, many venture capital firms and similar firms and individuals have been seeking to acquire businesses at discounted rates, and we therefore currently face additional competition and resultant difficulty obtaining a business. We expect these conditions to persist at least until such time as the economy recovers. Further, even if we are successful in obtaining a business or assets for new operations, we expect there to be enhanced barriers to entry in the marketplace in which we decide to operate because of reduced demand and/or increased raw material costs caused by the pandemic and other economic forces that are beyond our control.

 

In order for us to be attractive to a business partner or opportunity, we may need to convince our outstanding debt holders, to convert their outstanding debt income common stock upon the closing of any such transaction. If any of them are unwilling to do so, our ability to close a transaction will be adversely affected. Additionally, we are currently in the process of increasing our authorized shares of common stock. Any such acquisition would be made using the Company’s common stock as currency to fund such acquisition.

 

Item 1A. Risk Factors

 

Any investment in our securities involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this filing before deciding whether to purchase our securities. Our business, financial condition and results of operations could be materially adversely affected by these risks if any of them actually occur. This filing also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this report.

 

There is substantial doubt about our ability to continue operating as a going concern.

 

We have experienced losses from operations since inception and have never generated positive cash flow. The success of our business plan during the next 12 months and beyond will be contingent upon obtaining sufficient financing to cover our operating costs and business plan initiatives. This is because we do not anticipate generating any revenue from operations nor being able to raise capital (prior to consummating a business combination). As of December 31, 2023, the Company had approximately $1,600,000 of outstanding debt, not including interest, penalties and other fees due under the notes. The reports from our independent registered public accounting firm for the fiscal year ended December 31, 2023, and prior years include an explanatory paragraph stating the Company has recurring net losses from operations, negative operating cash flows, does not yet generate revenue from operations and will need additional working capital for ongoing operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. If we are unable to obtain sufficient funding and/or generate material revenue to fund our operations and business plan, our business, prospects, financial condition and results of operations will be materially and adversely affected, we may be unable to continue as a going concern in which case you in turn would lose your investment.

 

 

 

 2 

 

 

We currently have no operations, and investors therefore have no basis on which to evaluate the Companys future prospects.

 

We currently have no operations and will be reliant upon a merger with or acquisition of an operating business to commence operations and generate material revenue. Because we have little operations, investors have no basis upon which to evaluate our ability to achieve our business objective of locating and completing a business combination with a target business. We have no current arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete a business combination in a reasonable timeframe, on reasonable terms or at all. If we fail to complete a business combination as planned, we will never generate any operating revenues.

 

We may face difficulties or delays in our search for a business combination, and we may not have access to sufficient capital to consummate a business combination.

 

We may face difficulty identifying a viable business opportunity or negotiating or paying for any resulting business combination. Economic factors that are beyond our control, including the economic downturns, as well as increased competition for acquisitions of operating entities that we expect to encounter as a result thereof, may hinder our efforts to locate and/or obtain a business that is suitable for our business goals at a price we can afford and on terms that will enable us to sufficiently grow our business to generate value to our shareholders. We have no capital, and we may not be able to take advantage of any available business opportunities on favorable terms or at all due to the limited availability of capital. There can be no assurance that we will have sufficient capital to provide us with the necessary funds to successfully develop and implement our plan of operation or acquire a business we deem to be appropriate or necessary to accomplish our objectives, in which case we may be forced to terminate our business plan and your investment in the Company could become worthless.

 

If we are not successful in acquiring a new business and generating material revenues, investors will likely lose their investment.

 

If we are not successful in developing a viable business plan and acquiring a new business through which to implement it, our investors’ entire investment in the Company could become worthless. Even if we are successful in combining with or acquiring the assets of an operating entity, we can provide no assurances that the Company will be able to generate significant revenue therefrom in the short-term or at all or that investors will derive a profit from their investment. If we are not successful, our investors will likely lose their entire investment.

  

Because we have no capital, we may need to raise additional capital in the future by issuing debt or equity securities, the terms of which may dilute our current investors and/or reduce or limit their liquidation or other rights.

 

We may require additional capital to acquire a business. We may not be able to obtain additional capital when required. Future business development activities, as well as administrative expenses such as salaries, insurance, general overhead, legal and compliance expenses and accounting expenses will require a substantial amount of additional capital. The terms of securities we issue in future capital raising transactions may be more favorable to new investors, and may include liquidation preferences, superior voting rights or the issuance of other derivative securities, which could have a further dilutive effect on or subordinate the rights of our current investors. Any additional capital raised through the sale of equity securities will likely dilute the ownership percentage of our shareholders. Additionally, any debt securities we issue would likely create a liquidation preference superior that of our current investors and, if convertible into shares of common stock, would also pose the risk of dilution.

 

We may encounter difficulty locating and consummating a business combination, including as a result of the competitive disadvantages we have.

 

We expect to face intense competition in our search for a revenue-producing business to combine with or acquire. Given the current economic climate, venture capital firms, larger companies, blank check companies such as special purpose acquisition companies and other investors are purchasing operating entities or the assets thereof in high volumes and at relatively discounted prices. These parties may have greater capital or human resources than we do and/or more experience in a particular industry within which we choose to search. Most of these competitors have a certain amount of liquid cash available to take advantage of favorable market conditions for prospective business purchaser such as those caused by the recent pandemic. Any delay or inability to locate, negotiate and enter into a business combination as a result of the relative illiquidity of our current asset or other disadvantages we have relative to our competitors could cause us to lose valuable business opportunities to our competitors, which would have a material adverse effect on our business.

 

 

 

 3 

 

 

We may expend significant time and capital on a prospective business combination that is not ultimately consummated.

 

The investigation of each specific target business and any subsequent negotiation and drafting of related agreements, SEC disclosure and other documents will require substantial amounts of management’s time and attention and material additional costs in connection with outsourced services from accountants, attorneys and other professionals. We will likely expend significant time and resources searching for, conducting due diligence on, and negotiating transaction terms in connection with a proposed business combination that may not ultimately come to fruition. Unanticipated issues which may be beyond our control or that of the seller of the applicable business may arise that force us to terminate discussions with a target company, such as the target’s failure or inability to provide adequate documentation to assist in our investigation, a party’s failure to obtain required waivers or consents to consummate the transaction as required by the inability to obtain the required audits, applicable laws, charter documents and agreements, the appearance of a competitive bid from another prospective purchaser, or the seller’s inability to maintain its operations for a sufficient time to allow the transaction to close. Such risks are inherent in any search for a new business and investors should be aware of them before investing in an enterprise such as ours.

 

We may engage in a business combination that causes tax consequences to us and our shareholders.

 

Federal and state tax consequences will, in all likelihood, be a significant factor in considering any business combination that we may undertake. Under current federal law, such transactions may be subject to significant taxation to the buyer and its shareholders under applicable federal and state tax laws. While we intend to structure any business combination so as to minimize the federal and state tax consequences to the extent practicable in accordance with our business objectives, there can be no assurance that any business combination we undertake will meet the statutory or regulatory requirements of a tax-free reorganization or similar favorable treatment or that the parties to such a transaction will obtain the tax treatment intended or expected upon a transfer of equity interests or assets. A non-qualifying reorganization, combination or similar transaction could result in the imposition of significant taxation, both at the federal and state levels, which may have an adverse effect on both parties to the transaction, including our shareholders.

 

It is unlikely that our shareholders will be afforded any opportunity to evaluate or approve a business combination.

 

It is unlikely that our shareholders will be afforded the opportunity to evaluate and approve a proposed business combination. In most cases, business combinations do not require shareholder approval under applicable law, and our Articles of Incorporation and Bylaws do not afford our shareholders with the right to approve such a transaction. In order to develop and implement our business plan, we may in the future hire lawyers, accountants, technical experts, appraisers, or other consultants to assist with determining the Company’s direction and consummating any transactions contemplated thereby. We may rely on such persons in making difficult decisions in connection with the Company’s future business and prospects. The selection of any such persons will be made by our Board, and any expenses incurred, or decisions made based on any of the foregoing could prove to be adverse to the Company in hindsight, the result of which could be diminished value to our shareholders.

 

We may attempt to complete a business combination with a private target company about which little information is available, and such target entity may not generate revenue as expected or otherwise by compatible with us as expected.

 

In pursuing our search for a business to acquire, we will likely seek to complete a business combination with a privately held company. Very little public information generally exists about private companies, and the only information available to us prior to making a decision may be from documents and information provided directly to us by the target company in connection with the transaction. Such documents or information or the conclusions we draw therefrom could prove to be inaccurate or misleading. As such, we may be required to make our decision on whether to pursue a potential business combination based on limited, incomplete or faulty information, which may result in our subsequent operations generating less revenue than expected, which could materially harm our financial condition and results of operations.

 

Our ability to assess the management of a prospective target business may be limited and, as a result, we may acquire a target business whose management does not have the skills, qualifications or abilities to enable a seamless transition, which could, in turn, negatively impact our results of operations.

 

When evaluating the desirability of a potential business combination, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our management’s assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities expected. Further, in most cases the target’s management may be expected to want to manage us and replace our Chief Executive Officer. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company or assist with their former entity’s merger or combination into ours, the operations and profitability of the post-acquisition business may be negatively impacted, and our shareholders could suffer a reduction in the value of their shares.

 

 

 

 4 

 

 

Changes in laws or regulations, or a failure to comply with the laws and regulations applicable to us, may adversely affect our business, ability to negotiate and complete a business combination, and results of operations.

 

We are subject to laws and regulations enacted by federal, state and local governments. In addition to SEC regulations, any business we acquire in the future may be subject to substantial legal or regulatory oversight and restrictions, which could hinder our growth and expend material amounts on compliance. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application by courts and administrative judges may also change from time to time, and any such changes could be unfavorable to us and could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in material defense or remedial costs and/or damages have a material adverse effect on our financial condition.

 

Future issuance of our common stock could dilute the interests of our existing shareholders, particularly in connection with an acquisition and any resulting financing.

 

We may issue additional shares of our common stock in the future. The issuance of a substantial amount of our common stock could substantially dilute the interests of our shareholders. In addition, the sale of a substantial amount of common stock in the public market, either in the initial issuance or in a subsequent resale by the target company in a business combination which received our common stock as consideration or by investors who has previously acquired such common stock could have an adverse effect on the market price of our common stock.

 

Our registration under the Securities Exchange Act of 1934 could be revoked by the Securities and Exchange Commission if we fail to file required reports.

 

If we fail to file reports as required under the Exchange Act, we may lose our registration. While we intend to comply with the Exchange Act’s reporting requirements moving forward, due to lack of working capital we may be unable to comply in the future as we did in the past. If we are unable to comply with the SEC reporting provisions in the future, such failure will affect the liquidity of our common stock and act as a depressant to the price.

 

Due to recent changes to Rule 15c2-11 under the Exchange Act, our common stock may become subject to limitations or reductions on stock price, liquidity or volume.

 

On September 16, 2020, the SEC adopted amendments to Rule 15c2-11 under the Exchange Act. This Rule applies to broker-dealers who quote securities listed on over-the-counter markets such as our common stock. The Rule as amended prohibits broker-dealers from publishing quotations on OTC markets for an issuer’s securities unless they are based on current publicly available information about the issuer. When it becomes effective, the amended Rule will also limit the Rule’s “piggyback” exception, which allows broker-dealers to publish quotations for a security in reliance on the quotations of a broker-dealer that initially performed the information review required by the Rule, to issuers with current publicly available information or issuers that are up to date in their Exchange Act reports. As of this date, we are uncertain as to what actual effect the Rule may have on us. The Rule changes could harm the liquidity and/or market price of our common stock by either preventing our shares from being quoted or driving up our costs of compliance.

 

We are subject to the penny stock rules which will adversely affect the liquidity of our common stock.

 

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. We do not expect our stock price to be above $5.00 in the foreseeable future. The “penny stock” designation will require any broker-dealer selling our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules will limit the ability of broker-dealers to solicit purchases of our common stock and therefore reduce the liquidity of the public market for our shares.

 

Broker-dealers are increasingly reluctant to permit investors to buy or sell speculative unlisted stock and often impose costs which make it uneconomical for small shareholders to do so. Moreover, as a result of apparent regulatory pressure from the SEC and the Financial Industry Regulatory Authority (“FINRA”), a growing number of broker-dealers decline to permit investors to purchase and sell or otherwise make it difficult to sell shares of penny stocks. The “penny stock” designation may have a depressive effect upon our common stock price.

 

 

 

 5 

 

 

The issuance of shares upon exercise of our outstanding options or warrants or the conversion of the outstanding promissory notes may cause immediate and substantial dilution to our existing shareholders.

 

We presently have options and warrants that if exercised would result in the issuance of an additional 402,814,669 shares of our common stock, and our outstanding convertible notes are presently convertible into approximately 179,123,056 shares of common stock. However, 307,239,206 of the outstanding options are only exercisable upon the company reaching certain capital purchasing requirements. The issuance of shares upon exercise of warrants and options and/or the conversion of shares underlying our convertible notes will result in dilution to the interests of other shareholders.

 

We are a shell company and as such shareholders can only rely on the provisions of Rule 144 for the resale of their shares when certain conditions are met.

 

We are a shell company as defined under Rule 405 of the Securities Act of 1933 (“Securities Act”). As securities issued by a former shell company, the securities issued by us can only be resold under Rule 144 when certain conditions are met, including that: (i) we are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and (ii) we have filed all required reports under the Exchange Act of the preceding 12 months.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

Item 1C. Cybersecurity.

 

We are a “blank check” company with no business operations. Since late 2023, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. Our board of directors is generally responsible for the oversight of risks from cybersecurity threats, if any.

 

Item 2. Properties.

 

We maintain our corporate offices at 110 East Broward Blvd, Fort Lauderdale, Florida. We lease these premises under a monthly rental agreement at a nominal cost.

  

Item 3. Legal Proceedings.

 

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 $250,008.99, together with accrued interest and default interest as provided for in the 1800 Notes. As a result of the default, the 1800 Notes are convertible into common stock.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

 

 

 

 

 

 6 

 

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Our common stock is quoted on the OTC Pink Markets under the symbol “EDGM”. Our common stock was previously quoted under the symbol “FWAV.” As of April 25, 2024, the last reported sale price of our common stock as reported by the OTC Markets was $0.002 per share. As of that date, there were approximately 200 shareholders of record. This number does not include beneficial owners whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.

 

Recent Sales of Unregistered Securities

 

None.

 

Item 6. [Reserved]

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report on Form 10-K.

 

Overview

 

The Company currently has no sources of revenue and absent significant financing to fund Bitcoin mining operations, has no specific business plan or purpose. The Company’s business plan is to seek a business combination. The evaluation and selection of a business opportunity is a complex and uncertain process, and the Company not yet identified a target operating business for acquisition. 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.  There is no assurance that we will be able to locate compatible business opportunities for the Company. 

 

12 Months Ended December 31, 2023 (“2023 Period”) Compared to the 12 Months Ended December 31, 2022 (“2022 Period”).

 

Results of operations

 

We had no revenues for the 2023 Period compared to $438,042 for the 2022 Period. The reason for the decrease was that we ceased Ethereum mining operations in September 2022 when Ethereum switched its consensus protocol to proof of stake.

 

We had no cost of revenues for the 2023 Period compared to $812,882 for the 2022 Period. The reason for the decrease was a decrease in hosting fees incurred as a result of the power outages and seizing of Ethereum mining operations in September 2022.

 

Our operating expenses for the 2023 Period was $3,133,679 compared to $31,014,864, for the 2022 Period. In the 2023 Period, the Company incurred stock-based compensation expense of $1,236,487 compared to $24,582,181 for the 2022 Period, along with decreased loss on cryptocurrencies due to decreased transactions and changes in market prices.

 

 

 

 7 

 

 

Our other income for the 2023 Period was $347,933 compared to other expense of $856,293 for the 2022 Period. Other income for the 2023 period was comprised primarily of $700,000 related to a refund of equipment deposit offset by interest expense of $346,162 and a prepayment penalty on the preferred B shares of $51,859. Other expense for the 2022 Period was comprised of $148,119 in interest expense and $708,174 in loss related to the termination of a prepaid hosting arrangement

 

Subject to receiving funding, we expect that our operating expenses will increase as we attempt to develop our new mining operations and we 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 and we are unable to quantify at this time the expected increases in operating expenses in future periods.

 

Liquidity and Capital Resources

 

As of April 26, 2024, the Company had approximately $3,500 of cash. Our liquidity was primarily derived from debt and equity investments from accredited investors and also from selling the crypto that we mined through September 2022. To recommence our mining operations and fund operations for the next 12 months, the Company is seeking to raise $45 million in debt facility. We currently have no available sources for capital and we can provide no assurances that any debt financings will be available in the future. Therefore, we primarily intend to seek a business combination.

 

We have suspended our operations. If we fail to close on a debt facility or raise sufficient additional funds from other sources, we will be required to abandon our plan of operations.

 

The Company has terminated the 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 liabilities. The Company is making no further payments against the potential balance. No confirmation has been received from 2CRSI and as such the balance remains outstanding on the Company’s balance sheet in the accompanying financial statements.

 

Convertible notes payable

 

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 the date of filing, the note is in default.   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% of the average of the three 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, 2023, the balance on the notes is $136,701. The notes are in default.

 

 

 

 8 

 

 

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 net 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, 2023, the balance on the note is $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, 2023, the balance on the note is $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. 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.

 

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, 2023, the balance on the note is $99,529. The note is in default.

 

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 $250,008.99, together with accrued interest and default interest as provided for in the 1800 Notes. As a result of the default, the 1800 Notes are convertible into common stock.

 

Summary of cash flows

 

   December 31, 2023   December 31, 2022 
Net cash provided by (used in) operating activities  $42,237   $(2,169,308)
Net cash provided by (used in) investing activities  $34,100   $1,047,473 
Net cash provided by (used in) financing activities  $(76,109)  $1,097,963 

 

Critical accounting policies

 

See Note 2 to the December 31, 2023 financial statements included as part of this report for a discussion of our Significant Accounting Policies. 

 

 

 

 9 

 

 

Recent Accounting Pronouncements

 

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

 

Off Balance Sheet Arrangements

 

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable for a smaller reporting company.

 

Item 8. Financial Statements and Supplementary Data.

 

F-1 Report of Independent Registered Public Accounting Firm
F-2 Consolidated Balance Sheets as of December 31, 2023 and 2022
F-3 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022
F-4 Connsolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022
F-5 Consolidated Statements of Cash Flows for years ended December 31, 2023 and 2022
F-6 Notes to Consolidated Financial Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 10 

 

 

 

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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023 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, 2023 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.

 

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.

 

 

 

 F-1 

 

 

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. We also performed sensitivity analyses to inspect the potential effects of variations in key assumptions on the reported fair value of the derivative liabilities.

 

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

April 26, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-2 

 

 

Edgemode, Inc.

Consolidated Balance Sheets

 

         
   December 31, 2023   December 31, 2022 
         
ASSETS          
Current assets:          
Cash  $298   $70 
Prepaid expenses and other current assets   20,258    27,638 
Prepaid hosting services       894,355 
Deferred offering costs       264,706 
           
Total current assets   20,556    1,186,769 
           
Intangible assets - cryptocurrencies   32    2,630 
           
Total assets  $20,588   $1,189,399 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
Current liabilities:          
Accounts payable and accrued expenses  $721,780   $869,524 
Accrued payroll   661,201    487,159 
Accrued dividends       6,190 
Equipment notes payable   1,179,972    1,179,972 
Notes payable   35,000    35,000 
Notes payable – related parties   16,000     
Convertible notes payable   342,501     
Derivative liabilities   197,090     
Series B preferred shares liability, net       205,226 
           
Total current liabilities   3,153,544    2,783,071 
           
Total liabilities   3,153,544    2,783,071 
           
Commitments and contingencies        
           
Stockholders' deficit:          
Preferred shares, $0.001 par value, 4,999,000 shares authorized; zero issued and outstanding December 31, 2023 and 2022        
Common shares, $0.001 par value, 950,000,000 shares authorized; 390,687,459 and 390,437,459 shares issued and outstanding, December 31, 2023 and 2022, respectively   390,687    390,437 
Additional paid-in capital   35,142,231    33,896,019 
Accumulated deficit   (38,665,874)   (35,880,128)
Stockholders' deficit   (3,132,956)   (1,593,672)
           
Total liabilities and stockholders' deficit  $20,588   $1,189,399 

 

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, 2023   December 31, 2022 
         
Revenue  $   $438,042 
Cost of revenue       812,882 
Gross margin       (374,840)
           
Operating expenses:          
General and administrative expenses   3,123,572    27,784,864 
Loss on sale of equipment and impairment       3,075,748 
Loss on cryptocurrencies   10,107    154,252 
Total operating expenses   3,133,679    31,014,864 
           
Loss from operations   (3,133,679)   (31,389,704)
           
Other income (expense):          
Interest expense   (346,162)   (148,119)
Penalty on prepayment of Preferred B shares   (51,859)    
Refund of equipment deposit   700,000     
Change in fair value of derivatives   6,709     
Loss on settlement   (9,975)    
Gain on settlement of liabilities   50,000     
Other expense   (780)   (708,174)
Total other income (expense), net   347,933    (856,293)
           
Loss before provision for income taxes   (2,785,746)   (32,245,997)
           
Provision for income taxes        
           
Net loss  $(2,785,746)  $(32,245,997)
           
Loss per common share - basic and diluted  $(0.01)  $(0.09)
           
Weighted average shares outstanding - basic and diluted   390,626,500    377,574,305 

 

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, 2023 and 2022

 

                             
   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, 2021   127,207   $341,730    292,179,345   $292,179   $5,476,850   $(3,634,131)  $2,134,898 
                                    
Conversion of preferred shares into common   (127,207)   (341,730)   20,796,933    20,797    363,776        384,573 
                                    
Recapitalization of reverse merger           69,257,668    69,258    2,600,694        2,669,952 
                                    
Common shares issued in exchange for cash           1,617,756    1,617    564,398        566,015 
                                    
Common shares issued in exchange for cryptocurrency           78,638    79    49,921        50,000 
                                    
Common shares issued in exchange for compensation           4,000,000    4,000    314,000        318,000 
                                    
Common shares issued in exchange for deferred financing costs           2,521,008    2,521    262,185        264,706 
                                    
Common shares cancelled pursuant to SEC Legal case           (13,889)   (14)   14         
                                    
Stock-based compensation                   24,264,181        24,264,181 
                                    
Net loss                       (32,245,997)   (32,245,997)
                                    
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                   1,236,487        1,236,487 
                                    
Net loss                       (2,785,746)   (2,785,746)
                                    
Balance December 31, 2023      $    390,687,459   $390,687   $35,142,231   $(38,665,874)  $(3,132,956)

 

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, 2023   December 31, 2022 
         
Operating Activities:          
Net loss  $(2,785,746)  $(32,245,997)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation       630,670 
Amortization   25,215    3,976 
Interest expense on principal default   88,618    95,926 
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   (6,709)    
Loss on sale of equipment and impairment       3,075,748 
Stock-based compensation   1,236,487    24,582,181 
Cryptocurrency used for compensation       144,423 
Loss on cryptocurrency transactions   10,107    154,252 
Loss on settlement   9,975     
Gain on settlement of liabilities   (50,000)    
Loss on prepaid hosting termination       691,942 
Changes in operating assets and liabilities:          
Prepaid expenses and other current assets   1,166,441    151,815 
Prepaid expenses and other current assets – related parties       (7,500)
Cryptocurrencies - mining       (438,042)
Accounts payable and accrued expenses   (93,739)   504,139 
Accrued payroll   185,930    487,159 
Lease liabilities        
Net cash provided by (used in) operating activities   42,237    (2,169,308)
           
Investing Activities:          
Cash acquired in acquisition       743,513 
Purchase of equipment       (245,976)
Proceeds from sale of equipment       60,000 
Proceeds from sale of cryptocurrencies   34,100    489,936 
Net cash provided by investing activities   34,100    1,047,473 
           
Financing Activities:          
Proceeds from issuance of common shares, net of offering costs       566,015 
Proceeds from subscription receivable       158,850 
Proceeds from issuance of preferred shares, net of offering costs       201,250 
Payments on equipment notes payable       (208,152)
Proceeds from notes payable   220,000    380,000 
Proceeds from related party advances   16,000     
Payments of convertible notes   (41,560)    
Payments on notes payable   (270,549)    
Net cash provided by (used in) financing activities   (76,109)   1,097,963 
           
Net change in cash   228    (23,872)
Cash - beginning of period   70    23,942 
Cash - end of period  $298   $70 
           
Supplemental Disclosures:          
Interest paid  $4,388   $89,993 
Income taxes paid  $   $ 
           
Supplemental Disclosures of Noncash Financing Information:          
Shares issued for deferred financing costs  $   $264,706 
Shares issued for cryptocurrency assets  $   $50,000 
Conversion of preferred shares into common shares  $   $384,573 
Common shares cancelled pursuant to SEC legal case  $   $14 
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.

 

On March 16, 2020 we acquired all of the outstanding shares of Fourth Wave Energy, Inc., a Colorado corporation (“FWI”), for 6,200,000 restricted shares of our common stock. On March 20, 2020, shareholders owning a majority of the Company’s outstanding shares of common stock amended the Company’s Articles of Incorporation to change the name of the Company from Pierre Corp. to Fourth Wave Energy, Inc.

 

Effective January 31, 2022 (the “Effective Time”), the Company, FWAV Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the Company (the “Acquisition Subsidiary”) and EdgeMode, a Wyoming corporation (“EdgeMode”) closed on the previously disclosed Agreement and Plan of Merger and Reorganization dated December 2, 2021 (the “Merger Agreement”). In accordance with the Merger Agreement, Acquisition Subsidiary merged with and into EdgeMode (the “Merger” or “Transaction”), with EdgeMode remaining as the surviving entity after the Merger and becoming a wholly owned subsidiary of the Company. In the Merger, the shares of common stock, no par value per share, of EdgeMode issued and outstanding immediately prior to the Effective Time, represent 80% of the Company’s outstanding common stock on a fully diluted basis (or 313,950,672 shares of common stock). Furthermore, pursuant to the terms of the Merger the Company’s sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock.

 

Joseph Isaacs, the Company’s sole officer and director resigned as an executive officer and director. Pursuant to the terms of the Merger Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus and the Company entered into a contract with a company owned by Joe Isaacs to perform services for total value of $240,000. Charlie Faulkner and Simon Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers. 

 

Simultaneously with the Merger, approximately $4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. In addition, the Company has repaid approximately $988,000 of principal amount of notes. At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of EdgeMode.

 

The merger was accounted for as a reverse merger, whereby EdgeMode was considered the accounting acquirer and became our wholly-owned subsidiary. In accordance with the accounting treatment for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced with the historical financial statements of EdgeMode prior to the reverse merger. The financial statements after completion of the reverse merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements.

 

On June 3, 2022 the Company changed its name from Fourth Wave Energy Inc. to Edgemode, Inc.

 

 

 

 F-7 

 

 

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.

 

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.

 

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.

 

 

 

 F-8 

 

 

The following fair value hierarchy table presents information about the Company’s liabilities measured at fair value on a recurring basis:

            
   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, 2023.

 

The Company had no assets or liabilities valued using level 1, level 2, or level 3 inputs as of December 31, 2022.

 

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.

 

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.

 

 

 

 F-9 

 

 

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.

 

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 Recently 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, 2022. 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.

 

 

 

 F-10 

 

 

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Additionally, ASU 2020-06 affects the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. ASU 2020-06 allows entities to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt the provision of the ASU as of January 1, 2023 and has applied the guidance to the accounting of the convertible debt and treatment of derivative liabilities. In addition, there was no retrospective impact upon adoption.

 

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 is currently evaluating the effect of this pronouncement on its disclosures.

 

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 earning 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-11 

 

 

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, 2023 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. Reverse Merger Transaction

 

Pursuant to the terms of the Merger Agreement, and in exchange for all 100% of the issued and outstanding shares of EdgeMode Wyoming, the shareholders of EdgeMode received an aggregate of 313,950,672 shares of common stock, par value $.001 per share, of the Company.

 

Prior to the Merger, EdgeMode Wyoming was authorized to issue 300,000 shares of preferred stock with no par value per share, of which 261,438 were designated as Series Seed Preferred Stock (“Series Seed Preferred”). Immediately prior to the Merger, the holders of the Series Seed Preferred stock converted the shares into 261,438 shares of EdgeMode Wyoming common stock.

 

As a result of the Reverse Merger, the Company acquired the following assets and liabilities which were recorded at the pre-combination carrying basis. The assets acquired and liabilities assumed are as follows:

    
   January 31, 2022 
     
Cash  $743,513 
Prepaids   149,580 
Note receivable - EdgeMode   2,040,447 
Accounts payable   (7,774)
Other accrued expenses   (196,500)
Accrued interest   (24,314)
Notes payable   (35,000)
Total identified net assets  $2,669,952 

 

 

 

 F-12 

 

 

Note 5. Related Party Transactions

 

Pursuant to the terms of the Merger, Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus and the Company entered into a contract with a company owed by Joe Isaacs to perform services for total value of $240,000, which were expensed during the year ended December 31, 2022. During the year ended December 31, 2023, the Company and Mr. Isaacs, 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, 2023.

 

On January 31, 2022, the Company granted options to the officers and a consultant of the Company to purchase up to 65,920,895 shares of the Company’s stock, vesting immediately, at an exercise price of $0.40 per share. On January 25, 2023, the Company amended 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 September 12, 2022, the Company granted options to the officers of the Company to purchase up to 153,239,206 shares of the Company’s 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. On March 3, 2023, the Company amended 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, 2023 and 2022 the Company owed the executive officers of the Company $661,201 and $487,159 in accrued payroll for services performed, respectively.

 

During the year ended December 31, 2023, the executive officers of the Company advanced 16,000 to the Company for working capital needs. The advances are non-interest bearing and are due on demand.

 

Note 6. Prepaid Hosting Services

 

Prepaid hosting services are amounts paid to secure the use of data hosting services at a future date or continuously over one or more future periods. When the prepaid hosting services are eventually consumed, they are charged to expense. As of December 31, 2022 the company had prepaid a total of $1,586,297. In January 2023, the Company was notified of the Chapter 11 bankruptcy filing of the hosting company and in January 2023 the Company received $894,355 in return of the initial deposit and the remainder of the deposit is subject to bankruptcy claims. As a result, the Company has expensed $691,942 during the year ended December 31, 2022, the remaining amount of the claim, due to the uncertainty of collectability through the bankruptcy claim. As of December 31, 2023, the Company has $0 of amounts recorded related to the remaining claims due to the uncertainty of collectability.

 

 

 

 F-13 

 

 

Note 7. Fixed Assets

 

Total depreciation expense for the year ended December 31, 2023 and 2022, was $0 and $630,670 respectively.

 

During the year ended December 31, 2022, the Company terminated all future purchase orders related to Ethereum mining equipment and related hosting services, as the Company will focus on Bitcoin mining, and returned equipment not yet placed in service and investing in new Bitcoin mining equipment. The remaining equipment not placed in service as of December 31, 2022 has been delayed and it is unknown when or if it will be delivered to the Company. As a result of the delays and uncertainties, the Company recorded an impairment expense of $1,138,687 related to undelivered equipment. During the year ended December 31, 2023, the Company received refunds totaling $700,000 as a result of these delays, which were recorded as other income in the accompanying statement of operations.

 

During the year ended December 31, 2022 the Company recorded an impairment to cryptomining equipment in the amount of $1,937,061 as a result of the Company terminating the financing agreements with the equipment manufactures. Of the total impairment, $131,232 relates to assets the company disposed of due to the switch away from Etherium mining, and the other $1,545,829 was related to mining equipment purchased with the Equipment Notes Payable discussed below in Note 9. The remaining $260,000 of impairment was related to the equipment acquired in 2020. A portion of this equipment was sold for $60,000 during the year ended December 31, 2022.

 

Note 8. Equity

 

Preferred shares

 

We are authorized to issue 4,999,000 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 A

 

On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares have the voting power of 250% of the outstanding common shares at the time of any vote. The holders of the Series A shares are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available, annual dividends payable in cash on the 31st day of December in each year, commencing on December 31, 2020 at the rate of $0.10 per share per year. As part of the recapitalization, the 1,000 shares were converted into 1,000 common shares.

 

On March 30, 2022 the Company reduced its authorized preferred shares from 5,000,000 to 4,999,000 shares and removed the 1,000 shares of Series A from the designation.

 

 

 

 F-14 

 

 

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, with $11,250 of proceeds being kept by the lender for legal fees, resulting in cash proceeds of $201,250. As of December 31, 2022, the Company owes $6,190 in accrued dividends, reflected as interest expense, and the carrying value of the Series B Preferred stock was $205,226, net of unamortized discount of $7,274.

 

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.

 

Common shares

 

The Company has authorized 950,000,000 shares of common stock, par value of $0.001, and as of December 31, 2022 has issued 390,437,459 shares of common stock. All of the common shares have the same voting rights and liquidation preferences.

 

On March 30, 2022 the Company increased its authorized common shares from 500,000,000 to 950,000,000.

 

During the year ended December 31, 2022, the Company issued 1,696,394 common shares for cash and cryptocurrency proceeds of $616,015. In connection with the stock purchases, the company issued warrants to purchase 300,000 shares of common stock with an exercise price of $0.50, which expire five years from the date of grant.

 

During the year ended December 31, 2022, the Company amortized $44,875 of stock compensation expense related to shares issued for services pursuant to a consulting agreement entered into during 2021. As of December 31, 2022, $0 of unrecognized expense remains to be amortized.

 

During the year ended December 31, 2022, the Company issued 4,000,000 common shares as compensation to a third party for advisory services with a fair value of $318,000 which was expensed in the current period. In addition, the Company was to pay $50,000 in cash compensation each quarter for ongoing advisory services. As of December 31, 2022 the Company had accrued the first $50,000 that was owed. During the year ended December 31, 2023, no additional services were provided and the Company and the advisor agreed to settle the first $50,000 in exchange for the Company removing the Rule 144 restrictive legend. As a result, the Company recorded a gain on settlement in the amount of $50,000.

 

During the year ended December 31, 2022, the Company had 13,889 of its common stock cancelled and returned to treasury as a result of the settlement of a legal case.

 

 

 

 F-15 

 

 

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 expires upon the earlier of the aggregate gross proceeds from the sale of shares meeting the Maximum or December 31, 2023.

 

Among other limitations, unless otherwise agreed upon by Alumni Capital, each sale of shares will be limited to 50,000 shares and further limited to no more than the number of shares that would result in the beneficial ownership by Alumni Capital and its affiliates, at any single point in time, of more than 9.99% of the then-outstanding shares of Common Stock. Alumni Capital will purchase the shares of Common Stock under the Agreement at a discount 20% of the lowest traded price of the Common Stock in the five business days preceding the Company delivering notice of the required purchase of shares to Alumni Capital.

 

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.

 

The Purchase Agreement provides that the Company will file a registration statement under the Securities Act covering the resale of the shares issued to Alumni Capital. Alumni Capital’s obligation to purchase shares of Common Stock under the Purchase Agreement is conditioned upon, among other things, the registration statement having been declared effective by the Securities and Exchange Commission.

 

As of December 31, 2023, no shares have been 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, 2023, the Company had not met the contingent vesting requirements, and as such no amounts have been expensed related to these options.

 

 

 

 F-16 

 

 

During the year ended December 31, 2022, the Company issued a stock option grant to purchase up to 85,907,990 shares of the Company’s common stock, vesting immediately and in 90 days, at an exercise price of $0.40 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. The Company used the black-scholes option pricing model to value the options and expensed $24,219,306 during the year ended December 31, 2022. During the year ended December 31, 2023, the Company amended 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. 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. On March 3, 2023, the Company amended 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. The amendment resulted in no additional incremental fair value being recorded.

 

As of December 31, 2023, 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.

 

The following table summarizes the stock option activity for the years ended December 31, 2023 and 2022:

        
   Options   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   137,473   $0.00 
Granted   239,147,196    0.21 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2022   239,284,669   $0.21 
Granted   154,000,000    0.04 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   393,284,669   $0.09 

 

As of December 31, 2023, the Company had 85,907,990 stock options that were exercisable and 137,473 that are in dispute. The weighted average remaining life of all outstanding stock options was 3.75 years as of December 31, 2023. 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, 2023, the intrinsic value for the options vested and outstanding was $0 and $302, respectively.

 

 

 

 F-17 

 

 

Stock Warrants

 

Pursuant to the reverse merger transaction, the 11,515,714 issued and outstanding warrants of the Company prior to the merger transaction remain outstanding and are shown as granted as part of the recapitalization as described in Note 4. Of the total recapitalized, 1,142,857 are presented as reclassified in the year ended 2022 as they were not previously shown as outstanding in the pre-merger Edgemode, Inc. December 31, 2021 10-K. These warrants were subsequently forfeited as discussed below and as such have no material impact on the financial statements.

 

During the year ended December 31, 2022, the Company had 2,285,714 warrants to purchase shares of common stock forfeited as a result of the settlement of a SEC legal case.

 

The following table summarizes the stock warrant activity for the year ended December 31, 2023 and 2022:

        
   Warrants   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   300,000   $0.63 
Granted   10,372,857    0.45 
Exercised   1,142,857    0.04 
Forfeited   (2,285,714)   0.04 
Expired        
Outstanding, December 31, 2022   9,530,000   $0.50 
Granted        
Recapitalization        
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   9,530,000   $0.50 

 

Note 9. Notes Payable

 

Notes Payable

 

Pursuant to the merger agreement, the Company acquire 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.

 

Simultaneously with the Merger, approximately $4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. The conversion and issuance of shares of the Company’s common stock is presented as part of the recapitalization on the equity statement.

 

 

 

 F-18 

 

 

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. During the year ended December 31, 2022 the company made payments of $248,184, of which $40,032 was recorded as interest expense.

 

On July 11, 2022, the Company terminated its agreements with the vendor for the financed equipment described above. As of December, 31, 2023, and through the date of this filing, no agreement or communication from the vendor has been received confirming the terms of the termination, and therefore the Company has maintained these balances in equipment notes payable on the Company's balance sheet. In addition the Company has recorded the remaining $95,926 of interest amounts owed under the agreements as of December 31, 2022 as the Company is in technical default due to lack of payments.

 

The balance of the loans as of December 31, 2023 is $1,179,972.

 

The following table presents the future maturities and principal payments of all notes payable listed above for the next five years and thereafter are as follows:

    
Year  Principal Amount 
2023  $1,179,972 
2024    
2025    
2026    
2027    
Remaining    
Total  $1,179,972 

 

 

 

 F-19 

 

 

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, 2023, the balance on the note is $42,262, with a remaining unamortized discount of $2,280.

  

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, 2023, the balance on the note is $94,439, with a remaining unamortized discount of $1,940.

 

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, 2023, the balance on the note is $99,529, with a remaining unamortized discount of $5,647.

 

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 $250,008.99, 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.

 

 

 

 F-20 

 

 

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, 2023, the balance on the note is $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, 2023, the balance on the note is $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.

 

Note 10. 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:

          
   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-21 

 

 

The table below presents the change in the fair value of the derivative liability during the year ended December 31, 2023:

     
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 

 

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 gain of $8,081 during the year ended December 31, 2023. 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 11. 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, 2023 and 2022:

    
Cryptocurrency at December 31, 2021  $303,199 
Revenue recognized from cryptocurrency mined   438,042 
Additions of cryptocurrency - sale of common stock   50,000 
Sale of cryptocurrencies for cash proceeds   (489,936)
Cryptocurrency used for officer compensation   (144,423)
Realized loss on sale/exchange of cryptocurrencies   (154,252)
Cryptocurrency at December 31, 2022   2,630 
Additions of cryptocurrency – convertible notes   57,502 
Additions of cryptocurrency – other notes   50,142 
Cryptocurrency used for payment of accounts 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 

 

 

 

 F-22 

 

 

Note 12. 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:

         
   December 31, 2023   December 31, 2022 
Deferred tax asset attributable to:          
Net operating loss  $1,252,700   $996,800 
Valuation allowance   (1,252,700)   (996,800)
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:

        
   December 31, 2023   December 31, 2022 
Benefit attributable to operating loss  $585,000   $6,771,700 
Non-deductible   (286,400)   (5,985,900)
Valuation allowance   (298,600)   (785,800)
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, 2023, the Company has net operating loss carry forwards totaling approximately $6,000,000, which will be carried forward to future periods.

 

Note 13. 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 8 above.

 

 

 

 F-23 

 

 

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on their evaluation as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

 

Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

 

  · pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
     
  · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
     
  · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls. Based on this assessment our management has concluded that as of December 31, 2023, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of material weaknesses. These material weaknesses in our internal control over financial reporting result from limited segregation of duties and limited multiple levels of review in the financial close process, along with a lack of well-established policies and procedures to identify, approve, and report related party transactions.

 

 

 

 11 

 

 

The existence of the continuing material weaknesses in our internal control over financial reporting increases the risk that a future restatement of our financials is possible. In order to remediate these material weaknesses, we will need to expand our accounting resources. We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis, however, we do not expect that the deficiencies in our disclosure controls will be remediated until such time as we have remediated the material weaknesses in our internal control over financial reporting. In order to do so, we will need to hire employees and put the requisite controls in place.

 

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 

Not Applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 12 

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

The information required by this item is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2023.

 

Our Board has adopted a Code of Ethics applicable to all officers, directors and employees, which furnished as Exhibit 14.1 to this report. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Ethics and by posting such information on our website at the address and location specified above.

  

Item 11. Executive Compensation.

 

The information required by this item is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2023.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The information required by this item is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2023.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Effective January 31, 2022, pursuant to the Transaction, the Company entered into a Consulting Agreement with Mr. Isaacs whereby he will provide services to the Company in a consultancy capacity at a fee of $11,500 per month. Additionally, he was issued 19,987,095 stock options, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months.

 

On January 31, 2022, the Company granted options to the officers and a consultant of the Company to purchase up to 65,920,895 shares of the Company’s stock, vesting immediately, at an exercise price of $0.40 per share. On January 25, 2023, the Company amended 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 September 12, 2022, the Company granted options to the officers of the Company to purchase up to 153,239,206 shares of the Company’s 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. On March 3, 2023, the Company amended 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.

 

During the year ended December 31, 2023, the executive officers of the Company advanced $16,000 to the Company for working capital needs. The advances are non-interest bearing and are due on demand.

 

Item 14. Principal Accountant Fees and Services.

 

The information required by this item is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2023.

 

 

 

 13 

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

(1)

Financial Statements. See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item.

 

(2)

Financial Statements Schedules. All schedules are omitted because they are not applicable or because the required information is contained in the Consolidated Financial Statements or notes included herein.

 

(3) Exhibits.

 

EXHIBIT INDEX

 

        Incorporated by Reference   Filed or Furnished
Exhibit #   Exhibit Description   Form   Date   Number   Herewith
2.1   Agreement and Plan of Merger and Reorganization (1)   8-K   12/8/2021   2.1    
3.1   Certificate of Incorporation, As Amended and Restated   10-K   4/12/2022    3.1    
3.2   Bylaws   8-K   2/7/2022   3.2    
3.2(a)   Amendment No. 1 to the Bylaws   8-K   4/15/2022   3.1    
3.3   Certificate of Designation of Series B Preferred Stock filed July 20, 2022   8-K   7/27/2022   3.1    
4.1   Description of Securities   10-K    4/12/2022    4.1     
10.1   Form of Executive Employment Agreement (2)   8-K   2/7/2022   10.1    
10.2   Consulting Agreement - Isaacs (2)   8-K   2/7/2022   10.2    
10.3   Form of Option Agreement   8-K   2/7/2022   10.3    
10.4   Form of Note Conversion   8-K   2/7/2022   10.4    
10.5   Compute North Master Agreement   8-K   2/7/2022   10.5    
10.6   Trinity Mining Technologies   8-K   2/7/2022   10.6    
10.7   2CRSI Agreements   8-K   2/7/2022   10.7    
10.8   Series A Preferred Stock Purchase Agreement, dated as of July 18, 2022, by and between Edgemode, Inc. and 1800 Diagonal Lending LLC   8-K   7/27/2022   10.1    
10.9   Series B Preferred Stock Purchase Agreement, effective as of August 26, 2022, by and between Edgemode, Inc. and 1800 Diagonal Lending LLC   8-K   8/29/2022   10.1    
10.10   Charlie Faulkner Stock Option Grant dated September 12, 2022 (2)   8-K   9/12/2022   10.1    
10.11   Simon Wajcenberg Stock Option Grant dated September 12, 2022 (2)   8-K   9/12/2022   10.2    
10.12   Common Stock Purchase Agreement between EdgeMode, Inc. and Alumni Capital LP dated September 19, 2022   8-K   9/23/2022   10.1    
10.13   Series B Preferred Stock Purchase Agreement, effective as of September 28, 2022, by and between Edgemode, Inc. and 1800 Diagonal Lending LLC   8-K   9/28/2022   10.1    

 

 

 

 14 

 

 

        Incorporated by Reference   Filed or Furnished
Exhibit #   Exhibit Description   Form   Date   Number   Herewith
10.14   Amendment to Charlie Faulkner Stock Option Grant dated January 25, 2023 (2)   8-K   1/26/2023   10.1    
10.15   Amendment to Simon Wajcenberg Stock Option Grant dated January 25, 2023 (2)   8-K   1/26/2023   10.2    
10.16   Stock Option Grant to Charlie Faulkner dated March 3, 2023 (2)   8-K   3/7/2023   10.1    
10.17   Stock Option Grant to Simon Wajcenberg dated March 3, 2023 (2)   8-K   3/7/2023   10.2    
10.18   Amendment to Charlie Faulkner Stock Option Grant dated January 25, 2023 (2)   8-K   3/7/2023   10.3    
10.19   Amendment to Simon Wajcenberg Stock Option Grant dated January 25, 2023 (2)   8-K   3/7/2023   10.4    
10.20   Securities Purchase Agreement between Edgemode, Inc. and 1800 Diagonal Lending LLC effective April 20, 2023 for purchase of Promissory Note   8-K   4/24/2023   10.1    
10.21   Promissory Note issued by Edgemode, Inc. in favor of 1800 Diagonal Lending LLC effective April 20, 2023   8-K   4/24/2023   10.2    
10.22   Securities Purchase Agreement between Edgemode, Inc. and 1800 Diagonal Lending LLC dated April 20, 2023 for purchase of Convertible Promissory Note   8-K   4/24/2023   10.3    
10.23   Convertible Promissory Note issued by Edgemode, Inc. in favor of 1800 Diagonal Lending LLC effective April 20, 2023   8-K   4/24/2023   10.4    
10.24   Form of Securities Purchase Agreement for purchase of Promissory Note   8-K   4/28/2023   10.1    
10.25   Form of Promissory Note   8-K   4/28/2023   10.2    
10.26   Securities Purchase Agreement between Edgemode, Inc. and 1800 Diagonal Lending LLC effective August 4, 2024   8-K   8/8/2023   10.1    
10.27   Promissory Note issued by Edgemode, Inc. in favor of 1800 Diagonal Lending LLC effective August 4, 2023   8-K   8/8/2023   10.2    
14.1   Code of Ethics and Business Conduct   10-K   4/17/2023   14.1    
16.1   Letter from MaloneBailey, LLP to the SEC dated January 7, 2022   8-K   1/7/2022   16.1    
19.1   Insider Trading Policy               Filed
21.1   List of Subsidiaries   10-K   4/17/2023   21.1    
31.1   Certification of Principal Executive Officer (Section 302)               Filed
31.2   Certification of Principal Financial Officer (Section 302)               Filed
32.1   Certification of Principal Executive Officer (Section 906) (3)               Furnished
32.2   Certification of Principal Financial Officer (Section 906) (3)               Furnished
101.INS   Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)               Filed
101.SCH   Inline XBRL Taxonomy Extension Schema Document               Filed
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document               Filed
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document               Filed
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document               Filed
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document               Filed
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).               Filed 

______________________

(1)   Exhibits and/or Schedules have been omitted. The Company hereby agrees to furnish to the Staff of the Securities and Exchange Commission upon request any omitted information.
(2)   Management contract or compensatory agreement plan or arrangement.
(3)   This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

 

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our stockholders who make a written request to EdgeMode, Inc., 110 E. Broward Blvd., Suite 1700, Ft. Lauderdale, FL 33301, Attention: Corporate Secretary.

 

Item 16. Form 10-K Summary.

 

None.

 

 

 

 15 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on April 16, 2024.

 

    EDGEMODE, INC.
     
Date: April 26, 2024 /s/ Charlie Faulkner
    Charlie Faulkner
   

Chief Executive Officer

(Principal Executive Officer)

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Edgemode, Inc. and in the capacities and on the dates indicated.

 

Signature   Title   Date
         
/s/ Charlie Faulkner   Chief Executive Officer   April 26, 2024
Charlie Faulkner   (Principal Executive Officer) and Director    
         
/s/ Simon Wajcenberg   Chief Financial Officer   April 26, 2024
Simon Wajcenberg   (Principal Financial Officer)(Principal Accounting Officer) and Director    

 

 

 

 

 

 

 16 

 

 

 

Exhibit 19.1

 

  

 

 

 

MEMORANDUM

 

 

TO: All Insiders
   
FROM: Simon Wajcenberg, Chief Financial Officer
   
DATE: April 26, 2024
   
RE: Insider Trading Policy

 

======================================================================

 

We believe that the best way to protect Edgemode, Inc. (the “Company”) and its executive officers, directors and employees from potential liability from the insider trading under the federal securities laws is to adopt and implement and enforce a clear policy that defines insider trading and prohibits all employees, officers, directors and other individuals who are aware of Material Non-Public Information (as defined below) from trading in the Company’s securities or providing Material Non-Public Information to other persons who may trade on the basis of that information.

 

Engaging in securities transactions on the basis of Material Non-Public Information or the communication of such information to others who use it in securities trading violates the federal securities laws. Such violations are likely to result in harsh consequences for the individuals involved including exposure to investigations by the Securities and Exchange Commission (“SEC”), criminal and civil prosecution, and disgorgement of any profits realized or losses avoided and penalties three times any profits gained or losses avoided. Insider trading violations expose the Company, its management, and other personnel acting in supervisory capacities to potential civil liabilities and penalties for the actions of employees under their control who engage in insider trading violations.

 

This Memorandum constitutes the Company’s implementation and the requirements of the Policy and sets forth procedures to assure that Material Non-Public Information will not be used by Insiders (as defined below) in securities transactions and that the confidentiality of such information will be maintained. Strict compliance with these policies and procedures is expected of all Insiders, including members of their households, and any infringement thereof may result in sanctions, including termination of office or employment.

 

 

 

 1 

 

 

The Statement of Policy

 

What is Material Non-Public Information?

 

Material Information

 

What is “material” is often difficult to evaluate and is always judged in hindsight. Generally, information is material if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to buy, hold or sell a security. Both positive and negative information can be considered material. While it is not possible to define all categories of material information, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information include:

 

·Gain or loss of a substantial customer or supplier;
·News relating to new agreements or revenue events;
·New technology or improvements to existing technology;
·Financial results;
·Projections of future earnings or losses or other earnings guidance;
·News of a pending or proposed merger or an acquisition or disposition of significant assets;
·Stock splits or similar events;
·New equity or debt offerings;
·Significant litigation exposure due to actual or threatened litigation;
·Major changes in management;
·Certain transactions with related parties including our principal shareholder;
·Important changes in the Company’s business;
·Certain cybersecurity events;
·Initiation of a governmental investigation concerning the Company which may include informal inquiries in addition to formal investigations; and
·Impending bankruptcy or financial liquidity problems

 

Non-Public Information

 

Non-public information is information that has not been disclosed to the general public and is not available to the general public. For most companies including the Company, disclosure on its website is still not considered public by the SEC. One common misconception is that material information loses its “non-public” status as soon as a press release is issued. Non-public information will generally be deemed to be public when (i) it is filed with the SEC or (ii) a press release is issued, and in either case the public has had a period of time (as much as 24 hours) to fully absorb the information.

 

Who Does This Policy Apply To?

 

“Insiders” are directors, officers and all employees of the Company and its subsidiaries. Additionally, the following persons may also be subject to the restrictions contained in this Policy (i) the Company’s independent contractors and consultants (any, a “Contractor”); and (ii) other persons associated with the Company and its subsidiaries who receive or have access to Material Non-Public Information. As an Insider this Policy applies to you. The same restrictions that apply to you, also apply to your family members who reside with you, anyone else who lives in your household and any family members who do not live in your household but whose transactions in Company securities are directed by you or are subject to your influence or control. You are responsible for making sure that the purchase or sale of any security covered by this Policy by any such person complies with this Policy.

 

 

 

 2 

 

 

Please note that certain restrictions and requirements under this Policy are applicable to only certain individuals. The Blackout Periods apply to executive officers, directors, in the finance/accounting department and any other employee or Contractors of the Company and each subsidiary who are notified by the Compliance Officer. The Event-Specific Trading Restriction Periods apply to all directors, officers and the persons designated by the Compliance Officer. Additionally, the pre-clearance requirements apply to our executive officers, directors, and employees in the finance/accounting department, any other employee at the vice president level or above and others who are uniquely situated to know of material financial or other information and are given notice in writing from an officer. If you have any doubt regarding whether you fall within these categories, please contact the Compliance Officer. For purposes of this Policy, our Compliance Officer is the Chief Financial Officer or in his absence the Chief Executive Officer.

 

All Insiders are expected to maintain the confidentiality of Material Non-Public Information. Disclosure of such information to any individual outside of the Company, whether or not in the form of a recommendation to purchase or sell the securities of the Company, is prohibited and may be criminal. If anyone becomes aware of a leak of Material Non-Public Information, whether inadvertent or otherwise, they should immediately be reported to our Compliance Officer. This duty of confidentiality does not preclude an Insider from using Non-Public Material Information in connection with such person’s duties to the Company.

 

As a general policy, the Company and all Insiders shall follow all laws, rules and regulations relating to Insider trading. This includes Regulation FD which provides that selective disclosure of Material Non-Public Information is generally illegal.

 

What are the Prohibited Activities?

 

·No Transactions Based on Material Non-Public Information. The Policy prohibits transactions in the Company’s securities based on Material Non-Public Information. The SEC will presume that if you are in possession of Material Non-Public Information, your trading is based on it.
   
·No Transactions in Other Corporations. You may not engage in transactions in the securities of any other company if you are aware of Material Non-Public Information about that company which you obtained in the course of your employment or other association with the Company.
   
·No Tipping. You may not pass Material Non-Public Information on to others or recommend to anyone the purchase or sale of any securities when you are aware of such information. This practice known as “tipping,” also violates the securities laws and can result in the same civil and criminal penalties that apply to insider trading, even though you did not trade and did not gain any benefit from another’s trading. While the law is developing in this area, the Policy prohibits the disclosure of Material Non-Public Information in the same manner as other Company policies protect its confidential information.
   
·Social Media. Social Media including Facebook, X and Instagram are public communications. The prohibition against using Material Non-Public Information in this Memorandum applies to using any form of social media. Further, without approval from our Compliance Officer, no one shall use social media on behalf of the Company.
   
·Expert Networks. A phenomenon called Expert Networks developed a number of years ago. Essentially Expert Networks are consulting companies formed for the purpose of gathering information from employees of public companies and then selling the information to hedge funds. The law is evolving and the line between immaterial and material information is often blurred. However, it is the Company’s policy that Insiders may not speak or otherwise communicate with third parties about the Company’s business unless it is part of their duties as an Insider. For example, our officers may discuss information about the Company that is not Material Non-Public Information in order to generate business or develop partnerships.

 

 

 

 3 

 

 

·No Dissemination of Material Non-Public Information. You should not discuss any confidential information within the hearing range of outsiders, including friends and relatives. It is particularly important to exercise care and refrain from discussing Material Non-Public Information in public places such as elevators, trains, taxis, airplanes, lavatories, restaurants, or other places where the discussions might be overheard.
   
·No Short-Term Trading. No Insider who purchases Company securities in the open market may sell any Company securities of the same class during the 30 days following the purchase. Executive officers and directors must wait more than six months to buy or sell after an offsetting or opposite way transaction.
   
·Short Sale Transactions. No Insider may engage in short sales of the Company’s securities. Short sales are the sale of securities which the seller does not own. The seller is speculating that the price will fall, in the hope of later purchasing the same number of securities at a lower price, thereby making a profit. An Insider who bets against the Company sends an alarming signal to his or her broker. In addition, Section 16(c) of the Securities Exchange Act of 1934 prohibits officers and directors from engaging in short sales.
   
·Hedging Transactions. No Insider may enter into a hedging transaction. When an Insider engages in this type of transaction, this Insider may no longer have the same objectives as the Company’s other stockholders.
   
·Margin Accounts and Pledges. No Insider may hold Company securities in a margin account or pledge Company securities as collateral for a loan.

 

What Transactions Does this Policy Apply To?

 

·Personal Transactions. This Policy applies to your personal transactions and those indirectly through a family member (or equivalent), friend, corporation or other entity.
   
·Types of Securities. Purchases and sales of stock, derivative securities such as options, warrants and convertible notes or preferred stock.
   
·Stock Options/Warrants. This Policy applies to: (i) any sale of stock as part of a broker-assisted cashless exercise of options or warrants, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option or warrants and (ii) any sale of common stock received upon exercise of options or warrants.
   
·Former Insiders. This Policy continues to apply to former Insiders in possession of Material Non-Public Information at the time their status as an Insider terminates. No former Insider may trade Company securities until that information has become public or is no longer material.

 

Rule 10b5-1 Plans as an Exception1

 

Rule 10b5-1 under the Securities Exchange Act of 1934 provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company securities that meets certain conditions specified in the Rule (a “Plan”) and trading must be in accordance with this Policy. If the Plan meets the requirements of Rule 10b5-1, transactions in Company securities may occur even when the person who has entered into the plan is aware of Material Non-Public information.

 

 

 

________________________

 

1Our counsel uses a service called the corporatecounsel.net which publishes an 111 page handbook on 10b5-1 plans.

 

 

 

 4 

 

 

The restrictions outlined above shall not prohibit purchases or sales of Company securities made pursuant to a written contract, letter of instruction or plan that (a) complies with the requirements of Rule 10b5-1 (a “Plan”) and (b) complies with all of the following:

 

·Review and Approve the Proposed Arrangement in Advance. The Company will require all Plans to be in writing and submitted to the Compliance Officer for approval prior to any transactions under the Plan. This will allow the Company to ensure that each Plan is in compliance with the requirements of Rule 10b5-1 and Company policies with regard to lock-up agreements, among other items, allowing the individual to conduct transactions under the Plan without preclearance by the Company. Because of recent concerns arising from possible abuses of Plans, the Company may require evidence that the party exercising trading authority has no personal or substantial business relationship with the Insider. The Blackout Periods and Event-Specific Trading Restrictions do not apply to transactions conducted pursuant to a Plan. If you are subject to and within either a Blackout Period or Event Specific Trading Restriction period, you may not enter into, modify or terminate a Plan.
   
·Add Additional Safeguards. Once the Plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. It is essential that the Company ensure that there is no Material Non-Public Information that the Insider has knowledge of that has not been publicly disclosed at the time the Plan is adopted. In addition, if the Plan is going to be modified or terminated, notice must immediately be given to the Company and all transactions effected pursuant to the Plan must cease. Any change to an approved Plan will necessitate submission of the revised Plan to the Company for review and approval before transactions may resume.
   
·Recent SEC Rules. The SEC has recently been active publishing new Rule sin 2022 and 2023 affecting Plans. Most importantly, there is now a cooling off period required under the Rules.2 Further Forms 10-Q and 10-K have required disclosure on Plans adopted and with Form 10-k whether or not any Plans have been adopted. The Rules also impose a good faith requirement and require executive officers and directors to provide certifications of compliance in their Plans.
   
·Consider a Public Announcement. On a case-by-case basis, the Company will consider whether a public announcement in connection with each Plan under Rule 10b5-1 is appropriate.
   
·Establish Procedures with Third Parties. In order to ensure that a Plan complies with Rule 10b5-1 in all respects, the Company will set up procedures with the parties handling the transactions under the Plan, including reminding them of the need to file Form 144s and Form 4s (where applicable).

 

Any involvement by the Company and its counsel in reviewing a 10b5-1 Plan does not constitute approval or legal advice.

 

Blackout Periods/Event-Specific Trading Restriction Periods

 

Blackout Periods for All Insiders

 

All executive officers, directors, employees and certain other persons notified by the Company’s Compliance Officer are prohibited from trading in the Company’s securities during certain “Blackout Periods.”

 

The regular quarterly Blackout Periods begin on the 16th day of the last month of each fiscal quarter and end on the close of business on the second trading day following the date of public disclosure of Company’s quarterly (or annual) earnings release or the filing of the Company’s financial statements with the SEC if no earnings release is issued (an “Earnings Announcement”).

 

 

 

________________________

 

2 The cooling-off period relates to executive officers and directors but not the Company.

 

 

 

 5 

 

 

Example: If the quarter ends on June 30th, the Blackout Period begins after the market closes on June 10th (or prior trading day if the 10th is not a trading day) and all trading of the Company’s securities by Insiders must cease until an Earnings Announcement is released. If the Earnings Announcement is made after the market close on August 14th, the Blackout Period would end at the market opening on August 17th. Therefore, your Trading Window (when you can trade) for a quarter ending June 30th, in this example, would begin August 17th (or the next trading day) and would end after the market close on September 10th (or the prior trading day as explained above).

 

The Company reserves the right to shorten or close the Trading Window without prior notice.

 

Event Specific Blackout Periods

 

From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, all directors, executive officers and the persons designated by the Compliance Officer may not trade Company common stock. The Compliance Officer shall provide such notice in writing to designated persons including directors who may not know of the event. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company common stock even sooner than the typical Blackout Period described above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company’s common stock, without disclosing the reason for the restriction.

 

The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. Even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while aware of Material Non-Public Information. Exceptions will not be granted during an event-specific trading restriction period.

 

G.        Preclearance

 

Due to the Company’s size, preclearance is required for all Insiders. Of course, family members of any of these people require preclearance. A request for pre-clearance must be submitted to the Compliance Officer on the form attached to this Policy as Exhibit A at least two days in advance of the proposed transaction. Preclearance requires the approval of the Compliance Officer and our SEC counsel. If your trade is pre-cleared by the Compliance Officer, the transaction must be effected within five trading days. If the transaction is not effected within that time period will be subject to pre-clearance again.

 

The responsibility for determining whether the Insider has Material Non-Public Information rests with the Insider, and preclearance of the transaction does not constitute legal advice and does not in any way insulate the Insider from liability under the securities laws. For executive officers and directors, pre-clearance permits our legal counsel to review the proposed trade to ascertain if there is any possible violation of the short-swing trading rules.

 

H.       Compliance and Company Assistance

 

The Company is indebted to all Insiders who have helped to make the Company successful and is appreciative of all efforts on its behalf. To protect the Company and its shareholders, it is necessary to implement the foregoing Policy. The Company appreciates your continued cooperation and support in this effort.

 

You should remember that the ultimate responsibility for adhering to this Policy and avoiding improper trading rests with you. If you violate this Policy, the Company may take disciplinary action, including dismissal for cause. Each of you should sign one copy of this Policy and return it to the Company acknowledging that you have read and understand it. If anyone has any questions or wants to have an office conference concerning the issues raised by this Policy, please contact the Compliance Officer.

 

 

 

 6 

 

 

I.       Transactions with the Company

 

While there can be no anti-fraud issues with transactions with an issuer since there is no deception or breach of duty, because of optics, transactions of an Insider with the Company may be permitted if precleared. An example is the cashless exercise of an option granted by the Company.

 

J.       Transactions by the Company.

 

It is also the policy of the Company that the Company will not engage in transactions in the Company’s securities while in possession of Material Non-Public Information relating to the Company or its securities.

 

K.       Annual Update

 

On an annual basis (as well as initially with all new employees or material consultants who may acquire access to Material Non-Public Information), this Policy will be distributed to all recipients who will be asked to acknowledge receipt in writing.

 

 

 

I acknowledge that I have read and understand this Memorandum and to abide by the Company’s Policy on stock trading.

 

 

 

Dated: ______________ ___, 2024    
    Signature
     
     
    Print Name

 

 

 

 

 

 

 7 

 

 

Exhibit A

 

REQUEST FOR PRECLEARANCE OF

PURCHASE OR SALE OF SECURITIES

 

Name: _______________________________________________________________

 

Date: ______________________

 

Proposed Transaction: Purchase of Stock      
  Sale of Stock      
  Exercise of Options Incentive Stock Options  
      Non-Qualified Options  
  Exercise of Warrants      
    Date of Grant of Options, Warrants or Other Securities:
       
  Other [Please explain]    
           

 

Number of Shares/Options: ________________________

 

Date of Proposed Transaction: ________________________

 

1. Have you made purchase(s) of Edgemode, Inc. (the “Company”) stock within the last six months?

 

  Yes   No    
If so, please complete:              
               
Date(s) of Purchase(s):     No. of Shares:    
           
           

 

2. Have you made sales of the Company’s stock within the last six months?

 

  Yes   No    
If so, please complete:              
               
Date(s) of Sale(s):     No. of Shares:    
           
           

 

 

 

 8 

 

 

3. Have you made exercises or conversions of the Company’s options/warrants or other securities of the Company within the last six months?

 

  Yes   No    
If so, please complete:              
               
Date(s) of Exercises(s):     No. of Shares:    
           
           

 

4. Have you received grants of the Company’s options/warrants or other securities of the Company within the last six months?

 

  Yes   No    
If so, please complete:              
               
Date(s) of Purchase(s):     No. of Shares:    
           
           

 

 

 

In consideration of this approval, I affirm that I am not in possession of Material Non-Public Information.

 

 

 

________________________________

 

Request Approved: Yes   No    
               
If Denied, Reason:              
               
Date: ___________              

 

 

 

 

   
  Simon Wajcenberg, Chief Financial Officer
   
   
   
  SEC Counsel:________________________________

 

 

 9 

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Charlie Faulkner, certify that:

 

1.       I have reviewed this annual report on Form 10-K of Edgemode, Inc.;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: April 26, 2024

 

 

/s/ Charlie Faulkner                                  

Charlie Faulkner,

Chief Executive Officer

(Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

 

I, Simon Wajcenberg, certify that:

 

1.       I have reviewed this annual report on Form 10-K of Edgemode, Inc.;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: April 26, 2024

 

 

/s/ Simon Wajcenberg                                  

Simon Wajcenberg

Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the annual report of Edgemode, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, Charlie Faulkner, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

  1. The annual report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

 

  2. The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

   
/s/ Charlie Faulkner  

Charlie Faulkner

Chief Executive Officer

 
(Principal Executive Officer)  
Dated: April 26, 2024  

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the annual report of Edgemode, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, Simon Wajcenberg, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

  1. The annual report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

 

  2. The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

   
/s/ Simon Wajcenberg  

Simon Wajcenberg

Chief Financial Officer

 
(Principal Financial Officer)  
Dated: April 26, 2024  

 

v3.24.1.u1
Cover - USD ($)
12 Months Ended
Dec. 31, 2023
Apr. 26, 2024
Jun. 30, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Annual Report true    
Document Transition Report false    
Document Period End Date Dec. 31, 2023    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2023    
Current Fiscal Year End Date --12-31    
Entity File Number 000-55647    
Entity Registrant Name Edgemode, Inc.    
Entity Central Index Key 0001652958    
Entity Tax Identification Number 47-4046237    
Entity Incorporation, State or Country Code NV    
Entity Address, Address Line One 110 E. Broward Blvd.    
Entity Address, Address Line Two  Suite 1700    
Entity Address, City or Town  Ft. Lauderdale    
Entity Address, State or Province FL    
Entity Address, Postal Zip Code 33301    
City Area Code 707    
Local Phone Number 687-9093    
Title of 12(g) Security Common stock, par value $0.001 per share    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Shell Company true    
Entity Public Float     $ 3,217,231
Entity Public Float   390,687,459  
Documents Incorporated by Reference [Text Block] Portions of the registrant’s Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement (or alternatively, a Form 10-K/A) will be filed with the Securities and Exchange Commission (the “SEC”) within 120 days of the registrant’s fiscal year ended December 31, 2023.    
ICFR Auditor Attestation Flag false    
Document Financial Statement Error Correction [Flag] false    
Auditor Name M&K CPAS, PLLC    
Auditor Firm ID 2738    
Auditor Location The Woodlands, TX    
v3.24.1.u1
Consolidated Balance Sheets - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Current assets:    
Cash $ 298 $ 70
Prepaid expenses and other current assets 20,258 27,638
Prepaid hosting services 0 894,355
Deferred offering costs 0 264,706
Total current assets 20,556 1,186,769
Intangible assets - cryptocurrencies 32 2,630
Total assets 20,588 1,189,399
Current liabilities:    
Accounts payable and accrued expenses 721,780 869,524
Accrued payroll 661,201 487,159
Accrued dividends 0 6,190
Equipment notes payable 1,179,972 1,179,972
Notes payable 35,000 35,000
Notes payable – related parties 16,000 0
Convertible notes payable 342,501 0
Derivative liabilities 197,090 0
Series B preferred shares liability, net 0 205,226
Total current liabilities 3,153,544 2,783,071
Total liabilities 3,153,544 2,783,071
Commitments and contingencies
Stockholders' deficit:    
Preferred shares, $0.001 par value, 4,999,000 shares authorized; zero 0 issued and outstanding December 31, 2023 and 2022 0 0
Common shares, $0.001 par value, 950,000,000 shares authorized; 390,687,459 and 390,437,459 shares issued and outstanding, December 31, 2023 and 2022, respectively 390,687 390,437
Additional paid-in capital 35,142,231 33,896,019
Accumulated deficit (38,665,874) (35,880,128)
Stockholders' deficit (3,132,956) (1,593,672)
Total liabilities and stockholders' deficit $ 20,588 $ 1,189,399
v3.24.1.u1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 4,999,000 4,999,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 950,000,000 950,000,000
Common stock, shares issued 390,687,459 390,437,459
Common stock, shares outstanding 390,687,459 390,437,459
v3.24.1.u1
Consolidated Statements of Operations - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Revenue $ 0 $ 438,042
Cost of revenue 0 812,882
Gross margin 0 (374,840)
Operating expenses:    
General and administrative expenses 3,123,572 27,784,864
Loss on sale of equipment and impairment 0 3,075,748
Loss on cryptocurrencies 10,107 154,252
Total operating expenses 3,133,679 31,014,864
Loss from operations (3,133,679) (31,389,704)
Other income (expense):    
Interest expense (346,162) (148,119)
Penalty on prepayment of Preferred B shares (51,859) 0
Refund of equipment deposit 700,000 0
Change in fair value of derivatives 6,709 0
Loss on settlement (9,975) 0
Gain on settlement of liabilities 50,000 0
Other expense (780) (708,174)
Total other income (expense), net 347,933 (856,293)
Loss before provision for income taxes (2,785,746) (32,245,997)
Provision for income taxes 0 0
Net loss $ (2,785,746) $ (32,245,997)
Loss per common share - basic $ (0.01) $ (0.09)
Loss per common share - diluted $ (0.01) $ (0.09)
Weighted average shares outstanding - basic 390,626,500 377,574,305
Weighted average shares outstanding - diluted 390,626,500 377,574,305
v3.24.1.u1
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 341,730 $ 292,179 $ 5,476,850 $ (3,634,131) $ 2,134,898
Beginning balance , shares at Dec. 31, 2021 127,207 292,179,345      
Conversion of preferred shares into common $ (341,730) $ 20,797 363,776 384,573
Conversion of preferred shares into common, shares (127,207) (20,796,933)      
Conversion of preferred shares into common, shares 127,207 20,796,933      
Recapitalization of reverse merger $ 69,258 2,600,694 2,669,952
Recapitalization of reverse merger, shares   69,257,668      
Common shares issued in exchange for cash $ 1,617 564,398 566,015
Common shares issued in exchange for cash, shares   1,617,756      
Common shares issued in exchange for cryptocurrency $ 79 49,921 50,000
Common shares issued in exchange for cryptocurrency, shares   78,638      
Common shares issued in exchange for compensation $ 4,000 314,000 318,000
Common shares issued in exchange for compensation, shares   4,000,000      
Common shares issued in exchange for deferred financing costs $ 2,521 262,185 264,706
Common shares issued in exchange for deferred financing costs, shares   2,521,008      
Common shares cancelled pursuant to SEC Legal case $ (14) 14
Common shares cancelled pursuant to SEC legal case, shares   (13,889)      
Stock-based compensation 24,264,181 24,264,181
Net loss (32,245,997) (32,245,997)
Ending balance, value at Dec. 31, 2022 $ 0 $ 390,437 33,896,019 (35,880,128) (1,593,672)
Ending balance , shares at Dec. 31, 2022 0 390,437,459      
Common shares issued for settlement of claims $ 250 9,725 9,975
Common shares issued for settlement of claims, shares   250,000      
Stock-based compensation 1,236,487 1,236,487
Net loss (2,785,746) (2,785,746)
Ending balance, value at Dec. 31, 2023 $ 0 $ 390,687 $ 35,142,231 $ (38,665,874) $ (3,132,956)
Ending balance , shares at Dec. 31, 2023 0 390,687,459      
v3.24.1.u1
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Operating Activities:    
Net loss $ (2,785,746) $ (32,245,997)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation 0 630,670
Amortization 25,215 3,976
Interest expense on principal default 88,618 95,926
Interest expense charge for day one derivative loss 203,799 0
Prepayment on penalty of Preferred B shares 51,859 0
Change in fair value of derivative liabilities (6,709) 0
Loss on sale of equipment and impairment 0 3,075,748
Stock-based compensation 1,236,487 24,582,181
Cryptocurrency used for compensation 0 144,423
Loss on cryptocurrency transactions 10,107 154,252
Loss on settlement 9,975 (0)
Gain on settlement of liabilities (50,000) 0
Loss on prepaid hosting termination 0 691,942
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets 1,166,441 151,815
Prepaid expenses and other current assets – related parties 0 (7,500)
Cryptocurrencies - mining 0 (438,042)
Accounts payable and accrued expenses (93,739) 504,139
Accrued payroll 185,930 487,159
Lease liabilities 0 0
Net cash provided by (used in) operating activities 42,237 (2,169,308)
Investing Activities:    
Cash acquired in acquisition 0 743,513
Purchase of equipment 0 (245,976)
Proceeds from sale of equipment 0 60,000
Proceeds from sale of cryptocurrencies 34,100 489,936
Net cash provided by investing activities 34,100 1,047,473
Financing Activities:    
Proceeds from issuance of common shares, net of offering costs 0 566,015
Proceeds from subscription receivable 0 158,850
Proceeds from issuance of preferred shares, net of offering costs 0 201,250
Payments on equipment notes payable 0 (208,152)
Proceeds from notes payable 220,000 380,000
Proceeds from related party advances 16,000 0
Payments of convertible notes (41,560) 0
Payments on notes payable (270,549) 0
Net cash provided by (used in) financing activities (76,109) 1,097,963
Net change in cash 228 (23,872)
Cash - beginning of period 70 23,942
Cash - end of period 298 70
Supplemental Disclosures:    
Interest paid 4,388 89,993
Income taxes paid 0 0
Supplemental Disclosures of Noncash Financing Information:    
Shares issued for deferred financing costs 0 264,706
Shares issued for cryptocurrency assets 0 50,000
Conversion of preferred shares into common shares 0 384,573
Common shares cancelled pursuant to SEC legal case 0 14
Convertible notes issued in exchange for cryptocurrency 57,502 0
Note payable issued in exchange for cryptocurrency 50,142 0
Repayment of note payable using cryptocurrency 50,142 0
Cryptocurrency used to pay accrued salaries 11,888 0
Cryptocurrency used to pay accounts payable $ 4,005 $ 0
v3.24.1.u1
Pay vs Performance Disclosure - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure [Table]    
Net Income (Loss) Attributable to Parent $ (2,785,746) $ (32,245,997)
v3.24.1.u1
Insider Trading Arrangements
3 Months Ended
Dec. 31, 2023
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.u1
Basis of Presentation
12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

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.

 

On March 16, 2020 we acquired all of the outstanding shares of Fourth Wave Energy, Inc., a Colorado corporation (“FWI”), for 6,200,000 restricted shares of our common stock. On March 20, 2020, shareholders owning a majority of the Company’s outstanding shares of common stock amended the Company’s Articles of Incorporation to change the name of the Company from Pierre Corp. to Fourth Wave Energy, Inc.

 

Effective January 31, 2022 (the “Effective Time”), the Company, FWAV Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the Company (the “Acquisition Subsidiary”) and EdgeMode, a Wyoming corporation (“EdgeMode”) closed on the previously disclosed Agreement and Plan of Merger and Reorganization dated December 2, 2021 (the “Merger Agreement”). In accordance with the Merger Agreement, Acquisition Subsidiary merged with and into EdgeMode (the “Merger” or “Transaction”), with EdgeMode remaining as the surviving entity after the Merger and becoming a wholly owned subsidiary of the Company. In the Merger, the shares of common stock, no par value per share, of EdgeMode issued and outstanding immediately prior to the Effective Time, represent 80% of the Company’s outstanding common stock on a fully diluted basis (or 313,950,672 shares of common stock). Furthermore, pursuant to the terms of the Merger the Company’s sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock.

 

Joseph Isaacs, the Company’s sole officer and director resigned as an executive officer and director. Pursuant to the terms of the Merger Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus and the Company entered into a contract with a company owned by Joe Isaacs to perform services for total value of $240,000. Charlie Faulkner and Simon Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers. 

 

Simultaneously with the Merger, approximately $4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. In addition, the Company has repaid approximately $988,000 of principal amount of notes. At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of EdgeMode.

 

The merger was accounted for as a reverse merger, whereby EdgeMode was considered the accounting acquirer and became our wholly-owned subsidiary. In accordance with the accounting treatment for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced with the historical financial statements of EdgeMode prior to the reverse merger. The financial statements after completion of the reverse merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements.

 

On June 3, 2022 the Company changed its name from Fourth Wave Energy Inc. to Edgemode, Inc.

 

v3.24.1.u1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

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.

 

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.

 

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:

            
   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, 2023.

 

The Company had no assets or liabilities valued using level 1, level 2, or level 3 inputs as of December 31, 2022.

 

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.

 

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.

 

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 Recently 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, 2022. 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 August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Additionally, ASU 2020-06 affects the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. ASU 2020-06 allows entities to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt the provision of the ASU as of January 1, 2023 and has applied the guidance to the accounting of the convertible debt and treatment of derivative liabilities. In addition, there was no retrospective impact upon adoption.

 

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 is currently evaluating the effect of this pronouncement on its disclosures.

 

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 earning 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.

 

v3.24.1.u1
Going Concern
12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

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, 2023 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.

 

v3.24.1.u1
Reverse Merger Transaction
12 Months Ended
Dec. 31, 2023
Reverse Merger Transaction  
Reverse Merger Transaction

Note 4. Reverse Merger Transaction

 

Pursuant to the terms of the Merger Agreement, and in exchange for all 100% of the issued and outstanding shares of EdgeMode Wyoming, the shareholders of EdgeMode received an aggregate of 313,950,672 shares of common stock, par value $.001 per share, of the Company.

 

Prior to the Merger, EdgeMode Wyoming was authorized to issue 300,000 shares of preferred stock with no par value per share, of which 261,438 were designated as Series Seed Preferred Stock (“Series Seed Preferred”). Immediately prior to the Merger, the holders of the Series Seed Preferred stock converted the shares into 261,438 shares of EdgeMode Wyoming common stock.

 

As a result of the Reverse Merger, the Company acquired the following assets and liabilities which were recorded at the pre-combination carrying basis. The assets acquired and liabilities assumed are as follows:

    
   January 31, 2022 
     
Cash  $743,513 
Prepaids   149,580 
Note receivable - EdgeMode   2,040,447 
Accounts payable   (7,774)
Other accrued expenses   (196,500)
Accrued interest   (24,314)
Notes payable   (35,000)
Total identified net assets  $2,669,952 

 

v3.24.1.u1
Related Party Transactions
12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

Note 5. Related Party Transactions

 

Pursuant to the terms of the Merger, Mr. Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus and the Company entered into a contract with a company owed by Joe Isaacs to perform services for total value of $240,000, which were expensed during the year ended December 31, 2022. During the year ended December 31, 2023, the Company and Mr. Isaacs, 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, 2023.

 

On January 31, 2022, the Company granted options to the officers and a consultant of the Company to purchase up to 65,920,895 shares of the Company’s stock, vesting immediately, at an exercise price of $0.40 per share. On January 25, 2023, the Company amended 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 September 12, 2022, the Company granted options to the officers of the Company to purchase up to 153,239,206 shares of the Company’s 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. On March 3, 2023, the Company amended 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, 2023 and 2022 the Company owed the executive officers of the Company $661,201 and $487,159 in accrued payroll for services performed, respectively.

 

During the year ended December 31, 2023, the executive officers of the Company advanced 16,000 to the Company for working capital needs. The advances are non-interest bearing and are due on demand.

 

v3.24.1.u1
Prepaid Hosting Services
12 Months Ended
Dec. 31, 2023
Prepaid Hosting Services  
Prepaid Hosting Services

Note 6. Prepaid Hosting Services

 

Prepaid hosting services are amounts paid to secure the use of data hosting services at a future date or continuously over one or more future periods. When the prepaid hosting services are eventually consumed, they are charged to expense. As of December 31, 2022 the company had prepaid a total of $1,586,297. In January 2023, the Company was notified of the Chapter 11 bankruptcy filing of the hosting company and in January 2023 the Company received $894,355 in return of the initial deposit and the remainder of the deposit is subject to bankruptcy claims. As a result, the Company has expensed $691,942 during the year ended December 31, 2022, the remaining amount of the claim, due to the uncertainty of collectability through the bankruptcy claim. As of December 31, 2023, the Company has $0 of amounts recorded related to the remaining claims due to the uncertainty of collectability.

 

v3.24.1.u1
Fixed Assets
12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Fixed Assets

Note 7. Fixed Assets

 

Total depreciation expense for the year ended December 31, 2023 and 2022, was $0 and $630,670 respectively.

 

During the year ended December 31, 2022, the Company terminated all future purchase orders related to Ethereum mining equipment and related hosting services, as the Company will focus on Bitcoin mining, and returned equipment not yet placed in service and investing in new Bitcoin mining equipment. The remaining equipment not placed in service as of December 31, 2022 has been delayed and it is unknown when or if it will be delivered to the Company. As a result of the delays and uncertainties, the Company recorded an impairment expense of $1,138,687 related to undelivered equipment. During the year ended December 31, 2023, the Company received refunds totaling $700,000 as a result of these delays, which were recorded as other income in the accompanying statement of operations.

 

During the year ended December 31, 2022 the Company recorded an impairment to cryptomining equipment in the amount of $1,937,061 as a result of the Company terminating the financing agreements with the equipment manufactures. Of the total impairment, $131,232 relates to assets the company disposed of due to the switch away from Etherium mining, and the other $1,545,829 was related to mining equipment purchased with the Equipment Notes Payable discussed below in Note 9. The remaining $260,000 of impairment was related to the equipment acquired in 2020. A portion of this equipment was sold for $60,000 during the year ended December 31, 2022.

 

v3.24.1.u1
Equity
12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Equity

Note 8. Equity

 

Preferred shares

 

We are authorized to issue 4,999,000 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 A

 

On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares have the voting power of 250% of the outstanding common shares at the time of any vote. The holders of the Series A shares are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available, annual dividends payable in cash on the 31st day of December in each year, commencing on December 31, 2020 at the rate of $0.10 per share per year. As part of the recapitalization, the 1,000 shares were converted into 1,000 common shares.

 

On March 30, 2022 the Company reduced its authorized preferred shares from 5,000,000 to 4,999,000 shares and removed the 1,000 shares of Series A from the designation.

 

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, with $11,250 of proceeds being kept by the lender for legal fees, resulting in cash proceeds of $201,250. As of December 31, 2022, the Company owes $6,190 in accrued dividends, reflected as interest expense, and the carrying value of the Series B Preferred stock was $205,226, net of unamortized discount of $7,274.

 

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.

 

Common shares

 

The Company has authorized 950,000,000 shares of common stock, par value of $0.001, and as of December 31, 2022 has issued 390,437,459 shares of common stock. All of the common shares have the same voting rights and liquidation preferences.

 

On March 30, 2022 the Company increased its authorized common shares from 500,000,000 to 950,000,000.

 

During the year ended December 31, 2022, the Company issued 1,696,394 common shares for cash and cryptocurrency proceeds of $616,015. In connection with the stock purchases, the company issued warrants to purchase 300,000 shares of common stock with an exercise price of $0.50, which expire five years from the date of grant.

 

During the year ended December 31, 2022, the Company amortized $44,875 of stock compensation expense related to shares issued for services pursuant to a consulting agreement entered into during 2021. As of December 31, 2022, $0 of unrecognized expense remains to be amortized.

 

During the year ended December 31, 2022, the Company issued 4,000,000 common shares as compensation to a third party for advisory services with a fair value of $318,000 which was expensed in the current period. In addition, the Company was to pay $50,000 in cash compensation each quarter for ongoing advisory services. As of December 31, 2022 the Company had accrued the first $50,000 that was owed. During the year ended December 31, 2023, no additional services were provided and the Company and the advisor agreed to settle the first $50,000 in exchange for the Company removing the Rule 144 restrictive legend. As a result, the Company recorded a gain on settlement in the amount of $50,000.

 

During the year ended December 31, 2022, the Company had 13,889 of its common stock cancelled and returned to treasury as a result of the settlement of a legal case.

 

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 expires upon the earlier of the aggregate gross proceeds from the sale of shares meeting the Maximum or December 31, 2023.

 

Among other limitations, unless otherwise agreed upon by Alumni Capital, each sale of shares will be limited to 50,000 shares and further limited to no more than the number of shares that would result in the beneficial ownership by Alumni Capital and its affiliates, at any single point in time, of more than 9.99% of the then-outstanding shares of Common Stock. Alumni Capital will purchase the shares of Common Stock under the Agreement at a discount 20% of the lowest traded price of the Common Stock in the five business days preceding the Company delivering notice of the required purchase of shares to Alumni Capital.

 

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.

 

The Purchase Agreement provides that the Company will file a registration statement under the Securities Act covering the resale of the shares issued to Alumni Capital. Alumni Capital’s obligation to purchase shares of Common Stock under the Purchase Agreement is conditioned upon, among other things, the registration statement having been declared effective by the Securities and Exchange Commission.

 

As of December 31, 2023, no shares have been 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, 2023, 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, 2022, the Company issued a stock option grant to purchase up to 85,907,990 shares of the Company’s common stock, vesting immediately and in 90 days, at an exercise price of $0.40 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. The Company used the black-scholes option pricing model to value the options and expensed $24,219,306 during the year ended December 31, 2022. During the year ended December 31, 2023, the Company amended 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. 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. On March 3, 2023, the Company amended 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. The amendment resulted in no additional incremental fair value being recorded.

 

As of December 31, 2023, 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.

 

The following table summarizes the stock option activity for the years ended December 31, 2023 and 2022:

        
   Options   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   137,473   $0.00 
Granted   239,147,196    0.21 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2022   239,284,669   $0.21 
Granted   154,000,000    0.04 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   393,284,669   $0.09 

 

As of December 31, 2023, the Company had 85,907,990 stock options that were exercisable and 137,473 that are in dispute. The weighted average remaining life of all outstanding stock options was 3.75 years as of December 31, 2023. 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, 2023, the intrinsic value for the options vested and outstanding was $0 and $302, respectively.

 

Stock Warrants

 

Pursuant to the reverse merger transaction, the 11,515,714 issued and outstanding warrants of the Company prior to the merger transaction remain outstanding and are shown as granted as part of the recapitalization as described in Note 4. Of the total recapitalized, 1,142,857 are presented as reclassified in the year ended 2022 as they were not previously shown as outstanding in the pre-merger Edgemode, Inc. December 31, 2021 10-K. These warrants were subsequently forfeited as discussed below and as such have no material impact on the financial statements.

 

During the year ended December 31, 2022, the Company had 2,285,714 warrants to purchase shares of common stock forfeited as a result of the settlement of a SEC legal case.

 

The following table summarizes the stock warrant activity for the year ended December 31, 2023 and 2022:

        
   Warrants   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   300,000   $0.63 
Granted   10,372,857    0.45 
Exercised   1,142,857    0.04 
Forfeited   (2,285,714)   0.04 
Expired        
Outstanding, December 31, 2022   9,530,000   $0.50 
Granted        
Recapitalization        
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   9,530,000   $0.50 

 

v3.24.1.u1
Notes Payable
12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Notes Payable

Note 9. Notes Payable

 

Notes Payable

 

Pursuant to the merger agreement, the Company acquire 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.

 

Simultaneously with the Merger, approximately $4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of 18,296,528 shares of the Company’s common stock issued to 31 former noteholders. The conversion and issuance of shares of the Company’s common stock is presented as part of the recapitalization on the equity statement.

 

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. During the year ended December 31, 2022 the company made payments of $248,184, of which $40,032 was recorded as interest expense.

 

On July 11, 2022, the Company terminated its agreements with the vendor for the financed equipment described above. As of December, 31, 2023, and through the date of this filing, no agreement or communication from the vendor has been received confirming the terms of the termination, and therefore the Company has maintained these balances in equipment notes payable on the Company's balance sheet. In addition the Company has recorded the remaining $95,926 of interest amounts owed under the agreements as of December 31, 2022 as the Company is in technical default due to lack of payments.

 

The balance of the loans as of December 31, 2023 is $1,179,972.

 

The following table presents the future maturities and principal payments of all notes payable listed above for the next five years and thereafter are as follows:

    
Year  Principal Amount 
2023  $1,179,972 
2024    
2025    
2026    
2027    
Remaining    
Total  $1,179,972 

 

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, 2023, the balance on the note is $42,262, with a remaining unamortized discount of $2,280.

  

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, 2023, the balance on the note is $94,439, with a remaining unamortized discount of $1,940.

 

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, 2023, the balance on the note is $99,529, with a remaining unamortized discount of $5,647.

 

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 $250,008.99, 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, 2023, the balance on the note is $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, 2023, the balance on the note is $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.

 

v3.24.1.u1
Derivative Liabilities
12 Months Ended
Dec. 31, 2023
Derivative Liabilities  
Derivative Liabilities

Note 10. 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:

          
   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.

 

The table below presents the change in the fair value of the derivative liability during the year ended December 31, 2023:

     
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 

 

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 gain of $8,081 during the year ended December 31, 2023. 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.

 

v3.24.1.u1
Cryptocurrency Assets
12 Months Ended
Dec. 31, 2023
Other Liabilities Disclosure [Abstract]  
Cryptocurrency Assets

Note 11. 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, 2023 and 2022:

    
Cryptocurrency at December 31, 2021  $303,199 
Revenue recognized from cryptocurrency mined   438,042 
Additions of cryptocurrency - sale of common stock   50,000 
Sale of cryptocurrencies for cash proceeds   (489,936)
Cryptocurrency used for officer compensation   (144,423)
Realized loss on sale/exchange of cryptocurrencies   (154,252)
Cryptocurrency at December 31, 2022   2,630 
Additions of cryptocurrency – convertible notes   57,502 
Additions of cryptocurrency – other notes   50,142 
Cryptocurrency used for payment of accounts 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 

 

v3.24.1.u1
Income Taxes
12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12. 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:

         
   December 31, 2023   December 31, 2022 
Deferred tax asset attributable to:          
Net operating loss  $1,252,700   $996,800 
Valuation allowance   (1,252,700)   (996,800)
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:

        
   December 31, 2023   December 31, 2022 
Benefit attributable to operating loss  $585,000   $6,771,700 
Non-deductible   (286,400)   (5,985,900)
Valuation allowance   (298,600)   (785,800)
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, 2023, the Company has net operating loss carry forwards totaling approximately $6,000,000, which will be carried forward to future periods.

 

v3.24.1.u1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 13. 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 8 above.

 

v3.24.1.u1
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation

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

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.

 

Use of Estimates

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

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.

 

Cash and Cash Equivalents

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

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:

            
   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, 2023.

 

The Company had no assets or liabilities valued using level 1, level 2, or level 3 inputs as of December 31, 2022.

 

Derivative Financial Instruments

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.

 

Income Taxes

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

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.

 

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 Recently Accounting Pronouncements.

 

Stock-Based Compensation

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

Advertising

 

The Company expenses advertising costs as they are incurred.

 

Deferred Offering Costs

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, 2022. 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

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Additionally, ASU 2020-06 affects the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. ASU 2020-06 allows entities to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt the provision of the ASU as of January 1, 2023 and has applied the guidance to the accounting of the convertible debt and treatment of derivative liabilities. In addition, there was no retrospective impact upon adoption.

 

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 is currently evaluating the effect of this pronouncement on its disclosures.

 

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 earning 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.

 

v3.24.1.u1
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Schedule of liabilities measured at fair value on recurring basis
            
   Fair Value Measurements at December 31, 2023 
   Level 1   Level 2   Level 3 
Liabilities:            
Derivative liabilities  $   $   $197,090 
v3.24.1.u1
Reverse Merger Transaction (Tables)
12 Months Ended
Dec. 31, 2023
Reverse Merger Transaction  
Schedule of assets acquired and liabilities
    
   January 31, 2022 
     
Cash  $743,513 
Prepaids   149,580 
Note receivable - EdgeMode   2,040,447 
Accounts payable   (7,774)
Other accrued expenses   (196,500)
Accrued interest   (24,314)
Notes payable   (35,000)
Total identified net assets  $2,669,952 
v3.24.1.u1
Equity (Tables)
12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Schedule of stock option activity
        
   Options   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   137,473   $0.00 
Granted   239,147,196    0.21 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2022   239,284,669   $0.21 
Granted   154,000,000    0.04 
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   393,284,669   $0.09 
Schedule of stock warrant activity
        
   Warrants   Weighted-Average Exercise Price Per Share 
         
Outstanding, December 31, 2021   300,000   $0.63 
Granted   10,372,857    0.45 
Exercised   1,142,857    0.04 
Forfeited   (2,285,714)   0.04 
Expired        
Outstanding, December 31, 2022   9,530,000   $0.50 
Granted        
Recapitalization        
Exercised        
Forfeited        
Expired        
Outstanding, December 31, 2023   9,530,000   $0.50 
v3.24.1.u1
Notes Payable (Tables)
12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Schedule of future maturities and principal payments
    
Year  Principal Amount 
2023  $1,179,972 
2024    
2025    
2026    
2027    
Remaining    
Total  $1,179,972 
v3.24.1.u1
Derivative Liabilities (Tables)
12 Months Ended
Dec. 31, 2023
Derivative Liabilities  
Schedule of fair value of derivative liabilities
          
   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 
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 
v3.24.1.u1
Cryptocurrency Assets (Tables)
12 Months Ended
Dec. 31, 2023
Other Liabilities Disclosure [Abstract]  
Schedule of cryptocurrency activities
    
Cryptocurrency at December 31, 2021  $303,199 
Revenue recognized from cryptocurrency mined   438,042 
Additions of cryptocurrency - sale of common stock   50,000 
Sale of cryptocurrencies for cash proceeds   (489,936)
Cryptocurrency used for officer compensation   (144,423)
Realized loss on sale/exchange of cryptocurrencies   (154,252)
Cryptocurrency at December 31, 2022   2,630 
Additions of cryptocurrency – convertible notes   57,502 
Additions of cryptocurrency – other notes   50,142 
Cryptocurrency used for payment of accounts 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 
v3.24.1.u1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of deferred tax assets and liabilities
         
   December 31, 2023   December 31, 2022 
Deferred tax asset attributable to:          
Net operating loss  $1,252,700   $996,800 
Valuation allowance   (1,252,700)   (996,800)
Net deferred income tax assets  $   $ 
Schedule of components of income tax expense (benefit)
        
   December 31, 2023   December 31, 2022 
Benefit attributable to operating loss  $585,000   $6,771,700 
Non-deductible   (286,400)   (5,985,900)
Valuation allowance   (298,600)   (785,800)
Provisions for income taxes  $   $ 
v3.24.1.u1
Basis of Presentation (Details Narrative) - USD ($)
12 Months Ended
Jan. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Repayments of Convertible Debt   $ 270,549 $ (0)
EdgeMode [Member]      
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Debt Conversion, Converted Instrument, Amount $ 4,574,132    
Debt Conversion, Converted Instrument, Shares Issued 18,296,528    
Repayments of Convertible Debt $ 988,000    
EdgeMode [Member] | Sole Shareholder [Member]      
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Conversion of stock, shares issued 1,000    
EdgeMode [Member] | Joseph Isaacs [Member]      
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]      
Stock option granted 19,987,095    
Exercise price $ 0.40    
Bonus paid $ 250,000    
v3.24.1.u1
Summary of significant Accounting Policies (Details) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilites $ 197,090 $ 0
Fair Value, Inputs, Level 1 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilites 0  
Fair Value, Inputs, Level 2 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilites 0  
Fair Value, Inputs, Level 3 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilites $ 197,090  
v3.24.1.u1
Summary of Significant Accounting Policies (Details Narrative)
12 Months Ended
Dec. 31, 2023
USD ($)
Accounting Policies [Abstract]  
Deferred offering costs expensed $ 264,706
v3.24.1.u1
Reverse Merger Transaction (Details) - EdgeMode [Member] - USD ($)
Jan. 31, 2023
Jan. 31, 2022
Restructuring Cost and Reserve [Line Items]    
Cash   $ 743,513
Prepaids   149,580
Note receivable - EdgeMode   2,040,447
Accounts payable   (7,774)
Other accrued expenses   (196,500)
Accrued interest   (24,314)
Notes payable $ (35,000) (35,000)
Total identified net assets   $ 2,669,952
v3.24.1.u1
Related Party Transactions (Details Narrative) - USD ($)
12 Months Ended
Mar. 03, 2024
Jan. 25, 2023
Sep. 12, 2022
Jan. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]            
Accrued payroll         $ 661,201 $ 487,159
Related party advances         16,000 0
Joseph Isaacs [Member]            
Related Party Transaction [Line Items]            
Cash bonus           $ 250,000
Officers And A Consultant [Member]            
Related Party Transaction [Line Items]            
Options granted           65,920,895
Officers [Member]            
Related Party Transaction [Line Items]            
Option granted     $ 0.10      
Chief Executive Officer [Member]            
Related Party Transaction [Line Items]            
Options granted 77,000,000          
Chief Financial Officer [Member]            
Related Party Transaction [Line Items]            
Options granted 77,000,000          
Mr Isaacs [Member]            
Related Party Transaction [Line Items]            
Options granted       19,987,095    
Option granted   $ 0.06   $ 0.40    
Payments on related party transactions         $ 65,000  
v3.24.1.u1
Prepaid Hosting Services (Details Narrative) - USD ($)
1 Months Ended 12 Months Ended
Jan. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Prepaid Hosting Services      
Prepaid hosting services     $ 1,586,297
Proceeds from initial deposit $ 894,355    
Loss on prepaid hosting termination   $ 0 $ 691,942
v3.24.1.u1
Fixed Assets (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Offsetting Assets [Line Items]    
Depreciation expense $ 0 $ 630,670
[custom:RefundOfEquipmentDeposit] $ 700,000 0
Undelivered Equipment [Member]    
Offsetting Assets [Line Items]    
Impairments of assets   1,138,687
Cryptomining Equipment [Member]    
Offsetting Assets [Line Items]    
Impairments of assets   1,937,061
Proceeds from sale of assets   60,000
Cryptomining Equipment [Member] | Switch From Etherium Mining [Member]    
Offsetting Assets [Line Items]    
Impairments of assets   131,232
Cryptomining Equipment [Member] | Purchase Of Mining Equipment [Member]    
Offsetting Assets [Line Items]    
Impairments of assets   1,545,829
Cryptomining Equipment [Member] | Equipment Purchased 2020 [Member]    
Offsetting Assets [Line Items]    
Impairments of assets   $ 260,000
v3.24.1.u1
Equity (Details - Stock option activity) - Options Held [Member] - $ / shares
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]    
Options outstanding, beginning balance 239,284,669 137,473
Weighted-average exercise price per share, beginning balance $ 0.21 $ 0.00
Options granted 154,000,000 239,147,196
Weighted-average exercise price per share, granted $ 0.04 $ 0.21
Options exercised 0 0
Options forfeited 0 0
Options expired 0 0
Options outstanding, ending balance 393,284,669 239,284,669
Weighted-average exercise price per share, ending balance $ 0.09 $ 0.21
v3.24.1.u1
Equity (Details - Warrant activity) - Warrant [Member] - $ / shares
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Warrant outstanding, beginning balance 9,530,000 300,000
Weighted-average exercise price per share, beginning balance $ 0.50 $ 0.63
Warrants granted 0 10,372,857
Weighted Average Exercise Price Per Share Warrants Granted $ 0 $ 0.45
Warrants exercised 0 1,142,857
Weighted Average Exercise Price Per Share Warrants Exercised $ 0 $ 0.04
Warrants forfeited 0 (2,285,714)
Weighted Average Exercise Price Per Share Warrants Forfeited $ 0 $ 0.04
Warrants expired 0 0
Warrants Recapitalization 0  
Warrant outstanding, ending balance 9,530,000 9,530,000
v3.24.1.u1
Equity (Details Narrative) - USD ($)
12 Months Ended
Mar. 30, 2023
Jan. 25, 2023
Jul. 19, 2022
Dec. 31, 2023
Dec. 31, 2022
Mar. 30, 2022
Dec. 31, 2020
Class of Stock [Line Items]              
Preferred stock, shares authorized     5,000,000 4,999,000 4,999,000    
Preferred stock, par value       $ 0.001 $ 0.001    
Preferred Stock, Value, Issued       $ 0 $ 0    
Common Stock, Shares Authorized       950,000,000 950,000,000    
Common Stock, par value       $ 0.001 $ 0.001    
Common stock, shares issued       390,687,459 390,437,459    
Gross proceeds       $ 0 $ 566,015    
Share-based compensation         44,875    
Unrecognized expenses         0    
[custom:GainOnSettlement]       $ 50,000 0    
Commitment shares       2,521,008      
Share price       $ 0.105      
Deferred offering costs expensed       $ 264,706      
Stock issued for settlement agreement, shares 250,000            
Loss on settlement $ 9,975     9,975 (0)    
Remaining share based compensation expense       $ 22,529,707      
Stock options exercisable       85,907,990      
Options outstanding, value       $ 0 $ 302    
Crypto Mining Milestone [Member]              
Class of Stock [Line Items]              
Remaining share based compensation expense       21,679,711      
Vesting Terms [Member]              
Class of Stock [Line Items]              
Remaining share based compensation expense       $ 0      
General Grant [Member]              
Class of Stock [Line Items]              
Option granted         85,907,990    
For Company Listing On Nasdaq [Member]              
Class of Stock [Line Items]              
Option granted         153,239,206    
Options In Dispute [Member]              
Class of Stock [Line Items]              
Stock options exercisable       137,473      
Warrant [Member]              
Class of Stock [Line Items]              
Warrants outstanding       11,515,714      
Warrants purchased         2,285,714    
Common Stock [Member]              
Class of Stock [Line Items]              
Number of shares issued as compensation, shares         4,000,000    
Number of shares cancelled         13,889    
Third Party [Member]              
Class of Stock [Line Items]              
Number of shares issued as compensation, shares         4,000,000    
Number of shares issued as compensation         $ 318,000    
Stock Issued For Cash And Crytocurrency [Member]              
Class of Stock [Line Items]              
Number of share issued         1,696,394    
Gross proceeds         $ 616,015    
Warrants issued, shares         300,000    
CEO and CFO [Member]              
Class of Stock [Line Items]              
Share-based compensation         $ 1,236,487    
Option granted       77,000,000      
Options granted, fair value       $ 4,814,035 $ 24,219,306    
Series A Preferred Stock [Member]              
Class of Stock [Line Items]              
Preferred stock, shares authorized           4,999,000 5,000,000
Series B Preferred Stock [Member]              
Class of Stock [Line Items]              
Preferred stock, shares authorized     1,000,000        
Preferred stock, par value     $ 0.001        
Preferred stock dividend rate     8.00%        
Trading price     65.00%        
Redemption rate     25.00%        
Sale of shares         212,500    
Legal fees         $ 11,250    
Cash proceeds         201,250    
Number of value redeemed   $ 270,549          
Redeemed stated value   212,500          
Accrued dividends   6,190          
Redemption premium   $ 51,859          
Series B Preferred Stock [Member] | 1800 Diagonal Lending LLC [Member]              
Class of Stock [Line Items]              
Dividends Payable         6,190    
Preferred Stock, Value, Issued         205,226    
Debt Instrument, Unamortized Discount         $ 7,274    
Common Stock [Member]              
Class of Stock [Line Items]              
Sale of shares       50,000      
Number of share issued       2,521,008      
Gross proceeds       $ 15,000,000      
v3.24.1.u1
Notes Payable (Details - Maturity)
Dec. 31, 2023
USD ($)
Debt Disclosure [Abstract]  
2023 $ 1,179,972
2024 0
2025 0
2026 0
2027 0
Remaining 0
Total $ 1,179,972
v3.24.1.u1
Notes Payable (Details Narrative) - USD ($)
1 Months Ended 12 Months Ended
Aug. 04, 2023
Apr. 30, 2023
Apr. 26, 2023
Apr. 25, 2023
Apr. 11, 2023
Jan. 31, 2022
Jan. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Jan. 31, 2023
Debt Instrument [Line Items]                      
Net proceeds               $ 220,000 $ 380,000    
Convertible note description               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 $250,008.99, together with accrued interest and default interest as provided for in the 1800 Notes.      
Equipment Notes Payable [Member]                      
Debt Instrument [Line Items]                      
Payments of notes payable                 248,184    
Interest expense                 40,032    
Remaining interest amount                 $ 95,926    
Loan amount               $ 1,179,972      
Notes Payables [Member]                      
Debt Instrument [Line Items]                      
Aggregate borrow of funds   $ 50,000                  
Interest rate   11.00%                  
Maximum borrowing period   28 days                  
Equipment Note Payable [Member]                      
Debt Instrument [Line Items]                      
Down payment                   $ 600,408  
Debt periodic payment frequency                   24  
Present value note payable                   $ 2,441,591  
April Promissory Note [Member] | 1800 Diagonal Lending LLC [Member]                      
Debt Instrument [Line Items]                      
Debt periodic payment frequency         monthly            
Debt face amount         $ 60,760            
Net proceeds         50,000            
Unamortized discount         6,510     2,280      
Debt legal fees         $ 4,250            
Debt stated interest rate         13.00%            
Debt maturity date         Mar. 11, 2024            
Debt periodic payment         $ 7,629            
Note payable balance               42,262      
Convertible Note [Member] | Securities Purchase Agreement [Member]                      
Debt Instrument [Line Items]                      
Debt face amount         56,962            
Net proceeds         50,000            
Unamortized discount         2,712     1,940      
Debt legal fees         $ 4,250            
Debt stated interest rate         8.00%            
Debt maturity date         Apr. 11, 2024            
Note payable balance               94,439      
August Promissory Note [Member] | 1800 Diagonal Lending LLC [Member]                      
Debt Instrument [Line Items]                      
Debt periodic payment frequency monthly                    
Debt face amount $ 71,450                    
Net proceeds 60,000                    
Unamortized discount 7,200             5,647      
Debt legal fees $ 4,250                    
Debt stated interest rate 13.00%                    
Debt maturity date May 24, 2024                    
Debt periodic payment $ 8,971                    
Note payable balance               99,529      
Additional principal amount               88,618      
April Promissory Notes [Member] | Securities Purchase Agreement [Member]                      
Debt Instrument [Line Items]                      
Debt face amount       $ 60,000              
Net proceeds       $ 60,000              
Debt stated interest rate       10.00%              
Debt maturity date       May 26, 2023              
Note payable balance               60,000      
April Promissory Notes [Member] | Promissory Note Purchase Agreement [Member]                      
Debt Instrument [Line Items]                      
Debt face amount     $ 57,502                
Net proceeds     $ 57,502                
Debt stated interest rate     10.00%                
Debt maturity date     May 26, 2023                
Note payable balance               $ 57,502      
EdgeMode [Member]                      
Debt Instrument [Line Items]                      
Outstanding note payable amount           $ 35,000 $ 35,000       $ 35,000
Principal and interest outstanding           $ 4,574,132          
Conversion of shares           18,296,528          
EdgeMode [Member] | Equipment Notes Payable [Member]                      
Debt Instrument [Line Items]                      
Principal and interest outstanding             $ 4,574,132        
Conversion of shares             18,296,528        
v3.24.1.u1
Derivative Liabilities (Details - Schedule of fair value of derivative liabilities) - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative liability fair value $ 196,593  
Shares issued upon conversion, exercise or satisfaction 179,123,059  
Warrants [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Derivative liability fair value $ 498  
Shares issued upon conversion, exercise or satisfaction 9,530,000  
Measurement Input, Price Volatility [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 120.13%  
Measurement Input, Price Volatility [Member] | Warrants [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 124.36%  
Measurement Input, Expected Dividend Rate [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 0%  
Measurement Input, Expected Dividend Rate [Member] | Warrants [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 0%  
Measurement Input, Risk Free Interest Rate [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 4.79%  
Measurement Input, Risk Free Interest Rate [Member] | Warrants [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 4.01%  
Measurement Input, Expected Term [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative 1 year 2.5-3.25 years
Measurement Input, Share Price [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative $0.0022 $0.0022
Measurement Input, Exercise Price [Member] | Conversion Option [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Valuation of derivative $0.0014-0.01 $0.5
v3.24.1.u1
Derivative Liabilities (Details -Schedule of change in the fair value of derivative liabilities)
12 Months Ended
Dec. 31, 2023
USD ($)
Derivative Liabilities  
Fair value of derivative liability, beginning $ 0
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 of derivative liability, ending $ 197,090
v3.24.1.u1
Derivative Liabilities (Details Narrative)
12 Months Ended
Dec. 31, 2023
USD ($)
Derivative Liabilities  
[custom:DerivativeGainOnDerivative1] $ 8,081
v3.24.1.u1
Cryptocurrency Assets (Details) - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Other Liabilities Disclosure [Abstract]    
Cryptocurrency, beginning balance $ 2,630 $ 303,199
Revenue recognized from cryptocurrency mined   438,042
Additions of cryptocurrency sale of common stock   50,000
Proceeds from sale of cryptocurrencies   (489,936)
Cryptocurrency used for officer compensation   (144,423)
Realized loss on sale/exchange of cryptocurrencies (10,107) (154,252)
Additions of cryptocurrencies from convertible notes 57,502  
Additions of cryptocurrencies from note payable 50,142  
Cryptocurrency used for payment of accounts 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)  
Cryptocurrency, ending balance $ 32 $ 2,630
v3.24.1.u1
Income Taxes (Details - Deferred taxes) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Deferred tax asset attributable to:    
Net operating loss $ 1,252,700 $ 996,800
Valuation allowance (1,252,700) (996,800)
Net deferred income tax assets $ 0 $ 0
v3.24.1.u1
Income Taxes (Details - Reconciliation of income tax) - USD ($)
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Benefit attributable to operating loss $ 585,000 $ 6,771,700
Non-deductible (286,400) (5,985,900)
Valuation allowance (298,600) (785,800)
Provisions for income taxes $ 0 $ 0
v3.24.1.u1
Income Taxes (Details Narrative)
12 Months Ended
Dec. 31, 2023
USD ($)
Income Tax Disclosure [Abstract]  
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00%
Net Operating CarryForward Loss $ 6,000,000
v3.24.1.u1
Commitments and Contingencies (Details Narrative)
Feb. 08, 2022
shares
Commitments and Contingencies Disclosure [Abstract]  
Stock options being contested 137,473

Fourth Wave Energy (PK) (USOTC:FWAV)
Gráfica de Acción Histórica
De Abr 2024 a May 2024 Haga Click aquí para más Gráficas Fourth Wave Energy (PK).
Fourth Wave Energy (PK) (USOTC:FWAV)
Gráfica de Acción Histórica
De May 2023 a May 2024 Haga Click aquí para más Gráficas Fourth Wave Energy (PK).