EDGM 10-K & 10-Q changes, risk factors and insider trading
Edgemode, Inc. · OTC · Services-Home Health Care Services · CIK 1652958 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to Operating in Spain and Europe”
New heading “Risks Related to our Financial Position and Capital Needs”
New heading “We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risk, which may increase our exposure to cybersecurity incidents.”
New heading “Rising threats of international tariffs may materially and adversely affect our business.”
New heading “Risks Related to Operating in Spain, Europe and Panama.”
New heading “Our proposed operations in Spain, Panama and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.”
New heading “Our business and operating results may fluctuate significantly and be adversely affected by geopolitical factors beyond our control.”
New heading “Pending litigation arising from our dispute with Synthesis Analytics Production, Ltd. and Adler Capital Limited may materially adversely affect us.”
New heading “Our auditors have issued a “going concern” audit opinion.”
New heading “We have issued convertible promissory notes which we may not have the ability to repay and may have an adverse effect on our stock price.”
New heading “Due to factors beyond our control, our stock price may be volatile.”
New heading “Control of the Company is concentrated between two shareholders.”
New heading “Our common stock is subject to the “penny stock” rules.”
New heading “As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144.”
New heading “An adverse judgment in our pending litigation with a former officer and director of the Company may have a materially adverse effect on our financial condition and results of operations.”
Removed heading “At the outset, our HPC business will be highly dependent on a single customer.”
Removed heading “Even if we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power.”
Removed heading “Our operations in Sweden, Europe, and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.”
Removed heading “As of the year ended December 31, 2024, we were a shell company and as such shareholders cannot rely on the provisions of Rule 144 for the resale of their shares until certain conditions are met.”
Removed heading “We are subject to the “penny stock” rules which will adversely affect the liquidity of our common stock.”
Removed heading “The issuance of shares upon exercise of our outstanding options or warrants or the conversion of outstanding promissory notes may cause immediate and substantial dilution to our existing shareholders.”
Largest changes
“As our currently planned data centers and operations will be located in Europe, specifically Spain, and Panama, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Spain, Europe and Panama may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. …”see in full comparison
“As our currently planned data center and operations will be located in Europe, specifically Sweden, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Sweden and Europe may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. …”see in full comparison
“Our auditors have issued a “going concern” audit opinion.”see in full comparison
“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. …”see in full comparison
“SAPL has not generated any revenues to date and, subject to the availability of sufficient capital, does not expect to generate revenues until mid-2025 or later. We also require funding or revenues to satisfy outstanding debt. We require funding of approximately $70,000,000 to develop our operations. In order to support our initiatives, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships, or other arrangements with well-capitalized companies. …”see in full comparison
“An adverse judgment in our pending litigation with a former officer and director of the Company may have a materially adverse effect on our financial condition and results of operations.”see in full comparison
Full comparison: every changed paragraph (72)
Risks Related to Operating in Spain and Europe
Risks Related to our Financial Position and Capital Needs
We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risk, which may increase our exposure to cybersecurity incidents.
We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risks designed to protect our information technology systems, networks, data and infrastructure. As a result, the confidentiality, availability and integrity of our systems and data, including information relating to our customers and business partners, may be more vulnerable to unauthorized access, data breaches, ransomware attacks or other cybersecurity incidents. Any such compromise of our information technology systems could disrupt our business operations, damage our reputation, result in the loss or unauthorized disclosure of confidential or proprietary information and subject us to claims, liabilities and costs which could have a material adverse effect on our business.
Additionally, we may incur significant expenses to comply with data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations which could further materially adversely affect our financial condition and results of operations.
The Company and BAIF entered into the MOU for the purposes of organizing DC Estate Solutions which was organized by the Company on October 23, 2025. On November 6, 2025, DC Estate Solutions and BAIF entered into the SPV SPA. DC Estate Solutions is owned and controlled 50.1% by the Company and 49.9% by BAIF. The principal of BAIF is Jose Mora. DC Estate Solutions acquired seven Spain Leases, which were previously assigned to and held by BAIF, consisting of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba, Torrecampo, Villasequilla and Tomelloso and one lease located Tocumen, Panama.
The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the closing of the SPV SPA and has agreed to fund the data center development with a minimum amount of $11,150,000. The development will require additional significant working capital to achieve full RTB status on all eight sites. Additional capital is required to develop the sites and the further development of the data centers to RTB will require substantial capital. There are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately developed and sold or become operational.
SAPL has not generated any revenues to date and,
subject to the availability of sufficient capital, does not expect to generate revenues until mid-2025 or later. We also require funding
or revenues to satisfy outstanding debt. We require funding of approximately $70,000,000 to develop our operations. In order to support
our initiatives, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships,
or other arrangements with well-capitalized companies. Our ability to raise additional financing depends on many factors beyond our control,
including the current volatility in the capital markets, risks associated with investing in a pre-revenue company with no assurances our
products can be commercialized, the lack of a public market for our common stock, and the development or prospects for development of
competitive technology by others. Sufficient additional financing may not be available to us or may be available only on terms that would
result in further dilution to the current owners of our common stock. If we are unsuccessful in raising additional capital, or the terms
of raising such capital are unacceptable, we may never be able to effectively monetize our SAPL assets and/or we may default on the SAPL
note. In that event, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.
Our new focus on HPCAI hostingdata center development
may not be successful
and depends on the continuing development and resource and computational requirements of HPC hosting applications
such as cloud computing,
machine learning and AI, and the continuing need for the infrastructure and services we provide.
We currently have no customers. If our target customer markets, which are new and still developing, do not grow or develop as expected or in a manner consistent with our current business model, our business, financial condition, and results of operation would be adversely affected. Further, increases in power costs could negatively impact our hosting customers’ demand for services, harm our growth prospects, and could have a material adverse effect on our business, financial condition, and results of operations.
We have limited resources which may affect
our abilities to develop our SAPLBlackberry AIF S.L. operations.
With the limited resources we have available,
we may
experience difficulties in developing our SAPLBAIF operations, including, but not limited to, our colocation data center, services,
and colocation
to commence generating revenues and compete in the HPC hosting industry. Competition from existing and future competitors, particularly
particularly those better capitalized, could result in our inability to secure acquisitions and partnerships that we may need to expand
our business
in the future. This competition from other entities with greater resources, experience, and reputations may result in our
failure to maintain
or expand our business, as we may never be able to successfully execute our business plan. If we are unable to develop,
expand, and remain
competitive, our business could be negatively affected, which would have an adverse effect on the trading price of
our ordinarycommon shares,stock, which
would harm our investors.
At the outset, our HPC business will be highly
dependent on a single customer.
One customer, Cudo Ventures Ltd (“Cudo Ventures”),
will initially account for 100% of our HPC Hosting segment revenue. Our success in the HPC Hosting segment is highly dependent on the
success of our master services agreement with Cudo Ventures and the fulfillment by it of its obligations under the master services agreement.
Any failure to meet Cudo Ventures’ expectations, including, but not limited to, failure to fulfill our contractual obligations,
could result in cancellation or non-renewal of our business relationship, or harm to our business relationship that could impact our future
growth and which could have a material adverse effect on our business, financial condition, and results of operations.
Our business will dependdepends on providing customers with
with highly reliable services, including, but not limited to, power supply, physical security, cybersecurity, maintenance of environmental
conditions, and other mission-critical infrastructure services. We may fail to provide such services because our operations are vulnerable
to, among other things, mechanical or telecommunications failure, power outage, human error, physical or electronic security breaches,
cyberattacks, war, terrorism, fire, earthquake, pandemics, hurricane, flood and other natural disasters, sabotage, and vandalism.
Our future customer agreements will include terms
requiring requiring
us to meet certain service level commitments. A failure to meet these or other commitments or equipment damage in our data centers
could could
subject us to contractual liability, including service level credits against customer rent payments, legal liability and monetary
damages, damages,
regulatory sanctions, or, in certain cases of repeated failures, the right by the customer to terminate the agreement. Service
interruptions, interruptions,
equipment failures, or security breaches could also materially impact our brand and reputation globally and lead to customer
contract contract
terminations or non-renewals and an inability to attract customers in the future.
Our contracts with our currentcustomers or future customers
could subject
us to significant liability.
Many factors, including global economic conditions,
may cause our current and future HPC data center customers to experience a downturn in their businesses or otherwise experience a lack
of liquidity,
which may weaken their financial condition and impact our estimates as to the probability of collectability of payments,
and ultimately
result in their failure to make timely rental and other payments or their default under their agreements with us. Further,
the development
of new technologies, the adoption of new industry standards or other factors could render our HPC data center customers’ current
current products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that
that they default under their leases, become insolvent, or file for bankruptcy. If a customer defaults or fails to make timely rent or other
other payments, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment, which
which could adversely affect our financial condition and results of operations.
Even if we have additional space available
for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability
to provide sufficient electrical power.
Customers may increase their power footprint in
our data centers over time and the corresponding reduction in available power could limit our ability to increase occupancy rates or network
density within our existing data centers. Our aggregate maximum contractual obligation to provide power and cooling to our customers may
exceed the physical capacity at such data centers if customers were to quickly increase their demand for power and cooling. If we are
not able to increase the available power and/or cooling or move the customer to another location within our data centers with sufficient
power and cooling to meet such demand, we could lose the customer as well as be exposed to liability under our customer agreements. In
addition, our power and cooling systems will be difficult and expensive to upgrade, especially as we plan to design our data centers to
the specifications of new and evolving technologies, such as AI, which are more power-intensive. Accordingly, we may not be able to efficiently
upgrade or change these systems to meet new demands without incurring significant costs that we may not be able to pass on to our customers.
Any such material loss of customers, liability, or additional costs could adversely affect our business, financial condition, and results
of operations.
We will continue to depend upon third-party suppliers for power, and we may be vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market.
WeIn the event we develop data centers, we will
continue to rely on third parties to provide power
to our data centers and we cannot ensure that these third parties will deliver such
power in adequate quantities or on a consistent basis.
We will also be reliant on third parties to deliver additional power capacity to
support the growth of our business. If the amount of
power available to us is inadequate to support our customer requirements, we may
be unable to satisfy our obligations to our customers
or grow our business. In addition, our data centers may be susceptible to power
shortages and planned or unplanned power outages caused
by these shortages. Power outages may last beyond our backup and alternative power
arrangements, which would harm our customers and our
business. Any loss of services or equipment damage could adversely affect both our
ability to generate revenues and our operating results,
harm our reputation, and potentially lead to customer disputes or litigation.
We will continue to depend on third parties
to provide
network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely
affect affect
our operating results and cash flow.
We are not a telecommunications carrier. Although we anticipate our customers generally will be responsible for providing their own network connectivity, we will still depend upon the presence of telecommunications carriers’ fiber networks serving our data centers in order to attract and retain customers. We believe that the availability of carrier capacity will directly affect our ability to achieve our projected results. Any carrier may elect not to offer its services within our data centers. Any carrier that decides to provide network connectivity to our data centers may not continue to do so for any period of time. Further, some carriers are experiencing business difficulties or have announced consolidations. As a result, some carriers may be forced to downsize or eventually terminate connectivity within our data centers, which could have an adverse effect on the business of our customers and, in turn, our own development and operating results.
The consumer price index has increased substantially
year over year. Federal policies and recent global events,events such as the rising price of oil and the conflict between Russia and Ukraine,
may have exacerbated, and may continue
to exacerbate, inflation and increases in the consumer price index. A sustained or further increase
in inflation could have an adverse
impact on our operating expenses incurred in connection with, among others, the property-related contracted
services such as repairs,
maintenance, utilities, security, and insurance. With regard to utilities expenses, which we anticipate to be
our largest expense category,
the vast majority of the expense will be passed directly through to our customers which significantly mitigates
our exposure to increases
in power costs. For our other operating expenses, we expect to recover some increases from our customers
through our planned lease structures,
annual rent escalations, or from the resetting of rents from our renewal and re-leasing activities.
As a result, we do not believe that
inflation would result in a significant adverse effect on our net operating income and operating cash
flows at the property level. However,
there can be no assurance that the impact of inflation will be adequately offset by some of our
annual rent escalations contained in our
leases, and it is possible that the resetting of rents from our renewal and re-leasing activities
would not fully offset the impact of
higher operating expenses resulting from inflationary pressure. As a result, during inflationary
periods in which the inflation rate exceeds
the annual rent escalation percentages within our customer contracts, we may not adequately
mitigate the impact of inflation, which may
adversely affect our business, financial condition, results of operations, and cash flows.
Additionally, inflationary pricing may have a
negative effect on the construction costs necessary to complete our development projects, including, but not limited to, costs of construction
equipment, materials, labor, and services from third-party contractors and suppliers. We will rely on a number of third-party suppliers
and contractors to supply raw materials, skilled labor, and services for our construction projects. Certain increases in the costs of
construction equipment and materials can often be managed in development projects through either general budget contingencies built into
overall construction cost estimates for projects or guaranteed maximum price construction contracts, which stipulate a maximum price for
certain construction costs and shift inflation risk to our construction general contractors. However, no assurance can be given that our
budget contingencies would accurately account for potential construction cost increases given the current severity of inflation and variety
of contributing factors or that our general contractors would be able to absorb such increases in costs and complete our construction
projects timely, within budget, or at all. Higher construction costs could adversely impact our investments in real estate assets and
expected yields on our development projects, which may adversely impact our returns on our investments. As a result, our business, financial
condition, results of operations, cash flows, liquidity, and ability to satisfy our debt service obligations, and to pay dividends and distributions
to security holdersobligations could be adversely affected
over time.
Rising threats of international tariffs may materially and adversely affect our business.
As a result of the United States presidential election, President Trump imposed tariffs on the importation of goods from countries around the world. This increase in tariffs imposed could materially and adversely affect our business and results of operations. Under the current administration, the imposition of additional tariffs fluctuates dramatically and has created uncertainty in the global markets. Future tariffs or any further costs or restrictions imposed on materials on which we rely may limit our revenue and harm our business operations.
ExpandingDeveloping and expanding our business will require
significant significant
capital. In addition, we may be required to commit significant operational and financial resources in connection with the
organic growth
of our business substantially in advance of such newly developed data centers generating revenue.
Our ability to obtain, retain, increase, and engage
our our
customer base and to increase our revenue will depend heavily on our ability to continue to evolve our services and to create successful
new services, both independently and in conjunction with developers or other third parties. We may introduce significant changes to our
services or acquire or introduce new and unproven services, including using technologies with which we have little or no prior development
or operating experience. These efforts, including the introduction of new services or changes to existing services, may result in new
or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications that could adversely affect our
business, reputation, or financial results. If our services fail to engage users or developers, or if our business plans are unsuccessful,
we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments
and our business may be adversely affected.
Risks Related to Operating in Spain, Europe and Panama.
Our proposed operations in Spain, Panama and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.
As our currently planned data centers and operations will be located in Europe, specifically Spain, and Panama, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Spain, Europe and Panama may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. trade policies and tariffs have created uncertainties affecting business operations in the U.K., European Union (“EU”), and a number of other countries, which could increase volatility in exchange rates, market instability, costs, and other risks.
In 2022, amid the war between Russia and Ukraine, the European energy crisis escalated as the costs of electricity and gas increased, along with fueling supply uncertainties, and the risk of an energy shortage across Europe due to the lack of gas from Russia. This resulted in decisive measures implemented by the EU to help manage security of supply and establish new sources of gas. Our business will be heavily exposed to both gas and electricity prices used to power our data centers and operating equipment. Consequently, the rising energy costs may negatively affect our profitability and reduce our competitive position compared to competitors operating outside Europe where the energy crisis has been less pronounced.
Our business and operating results may fluctuate significantly and be adversely affected by geopolitical factors beyond our control.
In addition to the ongoing conflict between Russia and Ukraine, geopolitical instability in other regions, including the Middle East, specifically Iran, and Latin America, may disrupt global markets and supply chains. Such events may lead to increases in the cost of energy and other materials necessary for the development and operation of data centers. Increases in cost or disruptions in the supply chain could have a material adverse effect on our business and results of operations.
As our business operations are located outside of the United States, specifically in the Cayman Islands and Spain, we anticipate that our business will be conducted in currencies other than the U.S. dollar. Any fluctuation in the value of the EURO or other European currencies relative to the U.S. dollar, could impact the financial result when converting foreign revenue, expenses, and profits into U.S. dollars. Although we will closely monitor potential exposures as a result of these fluctuations in currencies and, where cost-justified, we may adopt strategies that are designed to reduce the impact of these fluctuations on our financial performance, there can be no assurance that we will be successful in managing our foreign exchange risk. Any material fluctuations in currencies could have a material effect on our financial condition, results of operations, and cash flows.
Pending litigation arising from our dispute with Synthesis Analytics Production, Ltd. and Adler Capital Limited may materially adversely affect us.
As discussed, we are rescinding the Share Exchange with SAPL and have terminated the agreements with SAPL, ACL and their affiliates. Legal proceedings relating to these matters may be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability. Adverse outcomes in such proceedings or claims could result in significant liabilities which may materially affect our financial condition, results of operations, or cash flows.
Risks Related to OperatingOur inFinancial SwedenPosition
and and
EuropeCapital Needs
Our auditors have issued a “going concern” audit opinion.
Our independent auditors have indicated in their report on our December 31, 2025 and December 31, 2024 financial statements that there is substantial doubt about our ability to continue as a going concern. A “going concern” opinion indicates that the financial statements have been prepared assuming we will continue as a going concern for one year from the date the financial statements are issued and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders, in the event of liquidation. We require significant working capital for our plan of operations.
We have issued convertible promissory notes which we may not have the ability to repay and may have an adverse effect on our stock price.
We have issued and outstanding convertible promissory notes in an aggregate principal amount of $2,235,005, as of April 13, 2026, each of which is convertible into shares of our common stock at the option of the note holders at a conversion price that is below the current market price. A majority of the convertible notes mature during 2026. If we are unable to generate sufficient revenues or raise additional capital, we may not have the ability to repay the convertible notes when due. In such event, the noteholders may elect to convert the convertible notes into equity at a discount to market, which could result in substantial dilution to our existing stockholders. If we are unable to repay or restructure our obligations under the convertible notes, it could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, such notes convert at discount to market and upon conversion will have an adverse effect on our stock price.
Our operations in Sweden, Europe, and internationally
as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.
As our currently planned data center and operations
will be located in Europe, specifically Sweden, we may be exposed to substantial risks associated with doing business in Europe, such
as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market,
property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Sweden and
Europe may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. trade policies
and tariffs have created uncertainties affecting business operations in the U.K., EU, and a number of other countries, which could increase
volatility in exchange rates, market instability, costs, and other risks.
In 2022, amid the war between Russia and Ukraine,
the European energy crisis escalated as the costs of electricity and gas increased, along with fueling supply uncertainties, and the risk
of an energy shortage across Europe due to the lack of gas from Russia. This resulted in decisive measures implemented by the European
Union (“EU”) to help manage security of supply and establish new sources of gas. Our business will be heavily
exposed to both gas and electricity prices used to power our data centers and operating equipment. Consequently, the rising energy costs
may negatively affect our profitability and reduce our competitive position compared to competitors operating outside Europe where the energy crisis
has been less pronounced.
As our business operations are located outside
of the United States, specifically in Sweden and throughout Europe, we anticipate that our business will be conducted in currencies other
than the U.S. dollar. Any fluctuation in the value of the Swedish krona (“SEK”), or other European currencies relative to
the U.S. dollar, could impact the financial result when converting foreign revenue, expenses, and profits into U.S. dollars. Although
we will closely monitor potential exposures as a result of these fluctuations in currencies and, where cost-justified, we may adopt strategies
that are designed to reduce the impact of these fluctuations on our financial performance, there can be no assurance that we will be successful
in managing our foreign exchange risk. Any material fluctuations in currencies could have a material effect on our financial condition,
results of operations, and cash flows.
Due to factors beyond our control, our stock price may be volatile.
Any of the following factors could affect the market price of our common stock:
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. A securities class action suit against us could result in substantial costs and divert our management’s time and attention, which would otherwise be used to benefit our business.
As of the year ended December 31, 2024, we
were a shell company and as such shareholders cannot rely on the provisions of Rule 144 for the resale of their shares until certain conditions
are met.
We have been 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 pursuant to an effective registration statement and not by utilizing the provisions of Rule 144 until
certain conditions are met, including that: (i) we are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,
(ii) we have filed all required reports under the Exchange Act of the preceding 12 months and (iii) one year has elapsed since we filed
“Form 10” information (e.g. audited financial statements, management information and compensation, shareholder information,
etc.). Thus, a shareholder of ours will not be able to sell its shares until such time as a registration statement for those shares is
filed or we become a reporting company, we have remained current on our Exchange Act filings for 12 months and we have filed the information
as would be required by a “Form 10” filing.
We require significant financing which may involve
the issuance of our securities. We may issue additional shares of our common stock
in the future. The issuance of a substantial amount
of ofour common stock or securities convertible into 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 stockmarket could have an adverse effect on the market price of our common stock.
We have also issued the 2025 Convertible Notes with a conversion price below the current market price of our common stock. The noteholders may elect to convert their notes into equity at a discount to market, which could result in substantial dilution to our existing stockholders and negatively affect the trading price of our common stock.
Further, pursuant to that certain securities purchase agreement entered into on September 4, 2025, establishing an equity line of credit, we may sell additional shares of our common stock from time to time. Any such sale and issuance of common stock would increase the number of shares outstanding and may result in substantial dilution to our existing shareholders and adversely affect the trading price of our common stock.
Control of the Company is concentrated between two shareholders.
Charles Faulkner and Simon Wajcenberg (the “Majority Shareholders”) own in excess of 50% of the voting power of the Company. The Majority Shareholders own an aggregate of 2 shares of the Company’s Series D Preferred Stock. Pursuant to the Series D Preferred Stock Certificate of Designation, holders of Series D Preferred Stock are entitled to vote together with the holders of common stock on all matters submitted to a vote of shareholders and each share of Series D Preferred Stock entitles the holder to voting power equal to 25.5% of the issued and outstanding shares of the Company’s common stock. This concentration of control by the Majority Shareholders means that they may unilaterally affect the decision-making and strategic decisions of the Company and may delay or prevent a change in control transaction, including those that other shareholders may view as beneficial. Further, such concentration of voting power may discourage, prevent, or delay the consummation of transactions that stockholders may consider favorable.
Our common stock is subject to the “penny stock” rules.
Our common stock is classified as a “penny stock.” The SEC has adopted regulations which generally define a penny stock as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our Common Stock and may affect the ability of investors to sell their shares, until our Common Stock no longer is considered a penny stock.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “Business Strategy”
New heading “Risks Related to Operating in Spain and Europe”
New heading “Risks Related to our Financial Position and Capital Needs”
New heading “We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risk, which may increase our exposure to cybersecurity incidents.”
New heading “Rising threats of international tariffs may materially and adversely affect our business.”
New heading “Risks Related to Operating in Spain, Europe and Panama.”
New heading “Our proposed operations in Spain, Panama and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.”
New heading “Our business and operating results may fluctuate significantly and be adversely affected by geopolitical factors beyond our control.”
New heading “Pending litigation arising from our dispute with Synthesis Analytics Production, Ltd. and Adler Capital Limited may materially adversely affect us.”
New heading “Our auditors have issued a “going concern” audit opinion.”
New heading “We have issued convertible promissory notes which we may not have the ability to repay and may have an adverse effect on our stock price.”
New heading “Due to factors beyond our control, our stock price may be volatile.”
New heading “Control of the Company is concentrated between two shareholders.”
New heading “Our common stock is subject to the “penny stock” rules.”
New heading “As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144.”
New heading “An adverse judgment in our pending litigation with a former officer and director of the Company may have a materially adverse effect on our financial condition and results of operations.”
Removed heading “At the outset, our HPC business will be highly dependent on a single customer.”
Removed heading “Even if we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power.”
Removed heading “Our operations in Sweden, Europe, and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.”
Removed heading “As of the year ended December 31, 2024, we were a shell company and as such shareholders cannot rely on the provisions of Rule 144 for the resale of their shares until certain conditions are met.”
Removed heading “We are subject to the “penny stock” rules which will adversely affect the liquidity of our common stock.”
Removed heading “The issuance of shares upon exercise of our outstanding options or warrants or the conversion of outstanding promissory notes may cause immediate and substantial dilution to our existing shareholders.”
Largest changes
“As our currently planned data centers and operations will be located in Europe, specifically Spain, and Panama, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Spain, Europe and Panama may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. …”see in full comparison
“As our currently planned data center and operations will be located in Europe, specifically Sweden, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Sweden and Europe may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. …”see in full comparison
“Our auditors have issued a “going concern” audit opinion.”see in full comparison
“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. …”see in full comparison
“SAPL has not generated any revenues to date and, subject to the availability of sufficient capital, does not expect to generate revenues until mid-2025 or later. We also require funding or revenues to satisfy outstanding debt. We require funding of approximately $70,000,000 to develop our operations. In order to support our initiatives, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships, or other arrangements with well-capitalized companies. …”see in full comparison
“An adverse judgment in our pending litigation with a former officer and director of the Company may have a materially adverse effect on our financial condition and results of operations.”see in full comparison
Full comparison: every changed paragraph (113)
Edgemode was incorporated under the laws of the State of Nevada in 2011. Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020. Between 2021 and 2023, we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware and hosting contracts. As a result, since late 2023 and throughout 2024 and 2025, our business activities primarily consisted of identifying and evaluating suitable acquisition transaction candidates, which led to transition from cryptocurrency mining to AI data center infrastructure and energy infrastructure development.
On October 15, 2025, the Company and BAIF entered into the MOU for the purposes of organizing DC Estate Solutions, which was organized by the Company on October 23, 2025. On November 6, 2025, DC Estate Solutions and BAIF entered into the SPV SPA. DC Estate Solutions was initially owned and controlled 75% by the Company and 25% by BAIF. The principal of BAIF is Jose Mora. DC Estate Solutions acquired the Spain Leases, which were previously assigned to and held by BAIF, consisting of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba and Torrecampo. The Spain Leases are held by wholly owned subsidiaries of DC Estate Solutions. The Spain Leases are for an average term of 35 years at an initial total average cost of $96,000 per month for all sites. As a condition of each lease, the payments are subject to meeting certain milestones, such as obtaining a favorable urban compatibility reports and connection points. Under the terms of the Spain Leases, the Company will pay approximately $15,000 to the owners of the Cordoba site in 2026. No further payments are expected in 2026.
The Company and BAIF intend to use the Spain Leases to develop and operate AI data center sites. The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the closing of the SPV SPA. Pursuant to the JVA, the Company granted to BAIF, or its assignee, the First Mora Option to purchase up to 250,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The Company intends to develop the sites as gas powered fully autonomous energy islands for Tier 3 level uptime AI data centers. The total capacity to be developed across the 5 sites is anticipated to be up to 1.8 Gigawatts. We believe that since the sites will be autonomous energy islands no grid connection is required and there will be no material reliance on grid infrastructure. Thereby, subject to financing, reducing time to power for our data center clients to 18 months. The total capacity of the sites is planned to be 360 MW per site. An application to connect to the local gas pipeline for gas supply has already been made and approval has been received. The Company is negotiating a power purchase agreement with an energy company to develop a 360MW gas turbine facility to convert gas fuel into electricity. In addition, the Company is in negotiation for a 90 MW gas Fuel cell power facility to be supplied under a power purchase agreement for each site. The Company will need to secure fibre connections, environmental permits and all necessary contractor permits. The sites will then be classed at RTB as the Company intends to sell the sites on a RTB basis. We estimate the Company will require $5 million of working capital to achieve full RTB status on all 5 sites. Additional capital is required to develop the sites and the further development of the data centers to RTB will require substantial capital. There are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately developed and sold or become operational.
Following the closing of the Share Exchange, Edgemode,
through SAPL, its wholly owned subsidiary, is now designing, building, and operating digital infrastructure for HPC with the goal of becoming
a leading provider of digital colocation services. The acquisition of SAPL has positioned us to enter the rapidly evolving HPC hosting
market in an efficient and effective manner. The acquisition has enabled us to plan to leverage SAPL’s existing infrastructure and
expertise to meet the growing demand for data center facilities for third-party customers focused on cloud computing as well as machine
learning and artificial intelligence.
The acquisition of SAPL will enable us to become
a premier provider and operator of dedicated, purpose-built data center facilities for our third-party customers. We believe that opportunities
for growth exist in various applications of our data centers, which is another factor as to why we have decided to begin offering digital
infrastructure colocation services to third parties engaged in HPC.
OurThe Company’s goal is to utilize the assets
we have acquired
via the purchase of SAPLBAIF forsites HPCto hostingdevelop operationsAI data center and energy infrastructure, which will provide consistent dollar-based
revenue and which represent substantially
less risk than our historical digital asset self-mining operations. Our intent is to focus our
business on development and marketing efforts
to build data centers and expand our foundationalAI HPCData hostingcenter customer base.
Recent Developments
Subsequent to December 31, 2025, and effective January 22, 2026, the Company entered into the JVA by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates the MOU and (ii) supplements the SPV SPA. Pursuant to the SPA, DC Estate Solutions acquired the equity interests of the five SPVs: (i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW. As a result of the acquisition of the SPVs, DC Estate Solutions also acquired the Spain Leases.
Pursuant to the JVA, DC Estate Solutions shall be owned and controlled 50.1% by the Company and 49.9% by BAIF. The purpose of the JVA is to manage and coordinate the development of the Data Center sites on the properties governed by the Spain Leases. Substantially, all material decisions of the JVA and Joint Venture Company shall require the unanimous consent of the Company and BAIF. Under the JVA, the Company agreed to fund DC Estate Solutions with $3,500,000 USD as follows: (i) $250,000 USD, which was previously paid upon the execution of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPA, (iii) $375,000 USD paid on the effectiveness of a notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD payable in monthly installments of $125,000 USD commencing on March 1, 2026. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, the First Mora Option to purchase up to 250,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The First Mora Option is fully vested and exercisable upon the grant date and terminates on the earlier of (i) five years following the date of the First Mora Option or (ii) the termination of the JVA.
Additionally, pursuant to the JVA, DC Estate Solutions’ equity interests in the SPVs are subject to the Company making minimum aggregate cash payments and contributions to DC Estate Solutions (including amount payable under the SPV SPA) in the amount of $8,750,000 USD, which shall be distributed to BAIF. If the Company fails to make such payments, BAIF may foreclose on the pro rata amount of equity interests in the SPVs. In the event of any sale or lease of a Data Center, profits of DC Estate Solutions shall be shared equally by and between the Company and BAIF. In the event DC Estate Solutions develops the Data Centers and sells such Data Centers, BAIF will be entitled to a bonus as defined under the JVA.
Further, effective January 27, 2026, the Company, BAIF and DC Estate Solutions entered into the Addendum to the JVA to account for the development of additional data centers in (i) Villasequilla, Spain 600 MW, (ii) Tomelloso, Spain 450 MW and (iii) Tocumen, Panama 1000 MW. The Villasequilla and Tomelloso data centers shall each be owned by Spanish special purpose vehicles, DC Villasequilla SL and DC Tomelloso SL, respectively, and shall subsequently be assigned to DC Estate Solutions. The Tocumen data center shall be owned by a Panamanian special purpose vehicle, DC Tocumen SA, which shall subsequently be assigned to DC Estate Solutions. The Company, in addition to the already agreed upon $125,000 USD monthly payments, agreed to fund the development of the additional Data Centers by paying a minimum of $2,400,000 USD payable in monthly installments of $100,000 USD monthly payments to DC Estate Solutions commencing on May 1, 2026 for a minimum of 24 months, thereby increasing the minimum BAIF Funding amount to a total of $11,150,000 USD. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, the Second Mora Option to acquire 150,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the earlier of (i) five years following the date of the Second Mora Option or (ii) the termination of the JVA.
On March 23, 2026, the Company, BAIF and DC Estate Solutions entered into the Second Addendum to the JVA. Pursuant to the Second Addendum, the parties agreed to: (1) increase the capacity of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the Company’s restricted common stock to BAIF or its assignees with the such shares being fully paid and non-assessable on the date of execution of the Second Addendum.
Business Strategy
Our business strategy is to generate revenue and achieve profitability by building large-scale data center infrastructure configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning, and artificial intelligence and maximizing the use of assets acquired in the BAIF acquisition. We intend to strategically develop and to work to make operational the infrastructure necessary to support our contractual commitments to our AI data center infrastructure customers and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities. We intend to seek additional opportunities and to engage additional customers in the AI Data center and Energy infrastructure market to expand our business using our knowledge, expertise, and existing and future infrastructure where favorable market opportunities exist.
Our business strategy requires immediate funding of approximately $5,000,000 to enable us to commence our new operations and repay debt, as well as additional significant financing to develop and expand our new operations. There are no assurances that we will raise sufficient capital to execute our business plan or satisfy our liabilities. See the “Risk Factors.”
We are currently engaged with one customer, Cudo
Ventures Ltd (“Cudo”) who will initially account for 100% of our HPC Hosting segment revenue. Our success in the HPC Hosting
segment is highly dependent on the success of our master services agreement with Cudo Ventures and the fulfillment by it of its obligations
under the master services agreement.
Our operating expenses for the 20242025 Period were $37,271,945
$1,408,528 compared to $3,362,714,$1,408,528 for the 20232024 Period. In the 20242025 Period, the Company incurred stock-based compensation expense of $0$29,302,270 compared
compared to $1,465,522$0 for the 20232024 Period.Period Theand stock-basedan compensationimpairment forcharge of $4,828,220 during the 20232025 Period was related to the amendment of options to
the officers of the Company and new options issued to a consultant.period.
Our other income for the 2025 Period was $12,642,654 compared to other
expense of $181,531 for the 2024 Period. Other income in the 2025 Period was $181,531
compared to other incomecomprised of $347,933$6,101,722 in interest expense and $148,053
for the 2023loss Period.on settlement of debt, offset by the $18,892,429 gain in the change in fair value of derivative liabilities. Other expense
in the 2024 period was comprised of $56,488 in interest expense
and $1,795,664 for the loss on the change in fair value of derivative
liabilities offset by income of $425,000 on the refund of an equipment
deposit and settlement of outstanding liabilities of $1,245,621. Other income for the 2023 period was comprised of $346,162 in interest
expense, $51,859 in prepayment penalties on the preferred B shares, loss on legal settlement of $9,975 and $780 in other expenses, offset
by income of $700,000 in deposits from equipment refunds, a gain of $50,000 on the settlement of liabilities and $6,709 for the gain on
the change in fair value of derivative liabilities.
As of AprilDecember 30,31, 2025, the Company had approximately
$100,000$250,000 of cash on hand. WeHistorically, did not receive any funding or financing during the 2024 Period. Ourour liquidity was historicallyprimarily primarily
derived from debt and equity investments from accredited investors and also from sellinginvestors.
During the cryptoyear thatended weDecember mined through September 2022.
Subsequent to the period covered by this report, in February31, 2025, we received an initial payment of approximately $303,000 for colocation
services to be provide provided
by the Company. In addition, induring Aprilthe 2025year ended December 31, 2025, we sold 38,510,91145,177,578 shares of restricted common stock to an accredited
investorinvestors in consideration of $300,000.$500,000. On April 7, 2025, we executed the Share Exchange with SAPLSAPL. On October 15, 2025, we entered into
a binding memorandum of understanding with BAIF to acquire 5 properties in Spain and we are now seeking to raise at least
$2,000,000 $5,000,000 to
commence our HPC Hostinghosting operations and develop our gas powered AI data centers and generate revenue. We require significant funding to
develop our HPC operations. Furthermore, potential legal proceedings relating to SAPL and its affiliates may cause us to incur significant
expenses or liability. Adverse outcomes in such proceedings or claims could result in significant liabilities which may materially affect
our financial condition, results of operations, or cash flows. We have received cash proceeds of $1,327,000 from the issuance of convertible
notes payable during 2025 and an additional $373,500 in 2026 through April 13, 2026. Subject to receiving funding, we expect that our
operating expenses will increase as we attempt to develop our new HPC operations and
we will devote additional resources toward new business
opportunities. However, as set forth elsewhere in this report, our ability to develop
our business and achieve our operational goals is
dependent upon our ability to raise significant additional working capital. As the availability
of this capital is unlikelyunlikely, andat this time,
we are unable to quantify at this time the expected increases in operating expenses in future periods.
On AprilAugust 11,15, 2023,2025, the Company entered into
a a
Securitiessecurities Purchasepurchase Agreement effective April 20, 2023agreement with 1800 Diagonal Lending LLC, an accredited investor, pursuant to which the Company
sold the accredited investor an
unsecured unsecuredoriginal issue discount promissory note in the principal amount of $60,760 (the “April Promissory Note”).$81,600. The
Company received net proceeds of $50,000 in consideration of issuance of the April Promissory Note $60,000
after original issue discount
of $6,510$13,600 and legal fees of $4,250.$8,000. 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%,
15%, which is added to the principal balance,
has a maturity date of MarchMay 11,16, 2024, and requires monthly payments of $7,629 beginning on September 15, 2023.2026. The
April Promissory Notenote 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.
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 matured 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, 2024, the principal balance
on the April 11, 2023 notes is $106,701. The notes are in default.
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, 2024,
the balance on the note was $60,000 and the note was past due. On April 14, 2025, the note and accrued interest were converted in full
into 31,500,000 shares of common stock.
In addition, on April 26, 2023, the Company entered
into a Promissory Note Purchase Agreement with another investor, pursuant to which the Company sold the investor an unsecured convertible
promissory note in the principal amount of $57,502 Promissory Note. The Company received gross proceeds of $57,502 in consideration
of issuance of the Promissory Note. The Promissory Note shall bear interest at a rate of 10% and have a maturity date of May 26,
2023. The Promissory Note has a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity
date. As of December 31, 2024, the balance on the note was $57,502 and the Note was past due. On April 14, 2025, the note and accrued
interest were converted in full into 30,188,550 shares of common stock.
On AugustSeptember 4,2, 2023,2025, the Company entered into a securities
Securitiespurchase Purchase Agreementagreement with 1800ClearThink DiagonalCapital LendingPartners, LLC,LLC an accredited investor,(“ClearThink”), pursuant to which the Company sold theClearThink investor
an unsecured original issuance discounta promissory
note in the principal amount of $71,450$172,500 (for which the “August Promissory Note”).
The Company received net proceeds of $60,000 in consideration of issuance of the August Promissory Note$150,000 after original issue discount
of $7,200 and legal fees of $4,250. $22,500.
The aggregatepromissory debt discount of $11,450 is being amortized to interest expense over the respective
term of the note. The August Promissory Notenote shall incur a one-time interest charge of 13%,12%, which is added to the principal balance,
has a maturity date of MayAugust
31, 24, 2024, and requires monthly payments of $8,971 beginning on September 15, 2023.2026. The
August Promissory Notenote is convertible into common shares of the Company atafter any180 time following an event of defaultdays, at a rate of 71%$0.01, of
but in the lowestevent the trading price
is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price offalls below $0.0075 for 5 consecutive
days, the Company’sfixed commonprice stockis 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 principaleliminated and accruedre-adjusted interestevery combined.21 As of December 31, 2024,
the balance on the note is $99,529. The note is in default.days.
On September 9, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold the accredited investor an unsecured original issue discount promissory note in the principal amount of $81,600 for which the Company received net proceeds of $60,000 after original issue discount of $13,600 and legal fees of $8,000. The 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.
On September 15, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold an accredited investor an unsecured original issue discount promissory note in the principal amount of $287,500 for which the Company received net proceeds of $244,000 after original issue discount of $37,500 and legal fees of $6,000. The Promissory Note shall incur a one-time interest charge of 10%, which is added to the principal balance, and has a maturity date of September 15, 2026. In connection with the agreement, the Company issued to the accredited investor 8,500,000 shares of common stock as inducement shares with relative fair value of $174,517 which was recorded as a discount on the note. The note is convertible into common shares of the Company, at the lower of $0.01 or 65% of the lowest price for the preceding 10 trading days.
On September 18, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured original issue discount promissory note in the principal amount of $115,000 for which the Company received net proceeds of $94,000 after original issue discount of $15,000 and legal fees of $6,000. The promissory note shall incur a one-time interest charge of 10%, which is added to the principal balance, and has a maturity date of September 18, 2026. In connection with the agreement, the Company issued to the accredited investor 3,400,000 shares of common stock as commitment shares with a relative fair value of $59,826 which was recorded as a discount on the note. The proceeds from the sale of the unsecured original issue discount promissory note shall be used for working capital. The Company paid $6,000 to the accredited investor and its counsel for legal fees. The note is convertible into common shares of the Company, at a rate of $0.01 and if after 180 days, the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On September 23, 2025, the Company entered into a security purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured original issue discount promissory note in the principal amount of $143,750 for which the Company received net proceeds of $119,000 after original issue discount of $18,750 and legal fees of $6,000. The promissory note shall incur a one-time interest charge of 10%, which is added to the principal balance, and has a maturity date of September 23, 2026. In connection with the agreement, the Company issued to the accredited investor 4,250,000 shares of common stock as inducement shares with a relative fair value of $71,400 which was recorded as a discount on the note. The note is convertible into common shares of the Company, at the lower of $0.01 or 65% of the lowest price for the preceding 10 trading days.
On September 23, 2025, the Company entered into a series of securities purchase agreements with accredited investors. Pursuant to the first securities purchase agreement on September 23, the Company sold an unsecured original issue discount promissory note in the principal amount of $143,750 for which the Company received net proceeds of $119,000 after original issue discount of $18,750 and legal fees of $6,000. In connection with the agreement, the Company issued to the accredited investor 4,250,000 shares of common stock as inducement shares with a relative fair value of $71,400 which was recorded as a discount on the note. The proceeds from the sale of the unsecured original issue discount promissory note shall be used for working capital. The note is convertible into common shares of the Company, at a rate of $0.01 and if after 180 days, the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
Effective October 3, 2025, the Company entered into a securities purchase agreement dated September 30, 2025 with an accredited investor, pursuant to which the Company sold an unsecured original issue discount promissory note in the principal amount of $287,500. The Company received net proceeds of $250,000 in consideration of issuance of the unsecured original discount promissory note and the proceeds from the sale shall be used for working capital. The promissory note shall incur a one-time interest charge of 12%, which is added to the principal balance and matures on August 31, 2026. Pursuant to the securities purchase agreement, as consideration for the purchase of the unsecured original issue discount promissory note, the Company issued 17,000,000 shares of the Company’s common stock to the accredited investor with a relative fair value of $178,620 which was recorded as a discount on the note. The note is convertible into common shares of the Company after 180 days, at a rate of $0.01, but in the event the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On October 8, 2025, the Company issued a convertible promissory note to an accredited investor for $20,000 to settle outstanding amounts owed to the investor. The note has a maturity date of October 8, 2026 and bears interest at a rate of 10%. The note is convertible into common shares of the Company after 180 days, at a rate of 85% of the lowest closing bid price for the five trading days preceding the conversion date.
On October 9, 2025, the Company sold ClearThink a second promissory note in the principal amount of $115,000 (the “Second ClearThink Note”). The Company received net proceeds of $100,000 after original discount of $15,000. The Second ClearThink Note shall incur a one-time interest charge of 12%, which is added to the principal balance and matures on August 31, 2026. The note is convertible into common shares of the Company after 180 days, at a rate of $0.01, but in the event the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On November 26, 2025, the Company entered into a securities purchase agreement with an accredited investor dated November 18, 2025. Pursuant to the securities purchase agreement, the Company sold to the accredited investor a convertible promissory note in the principal amount of $143,750 for which the Company received net proceeds of $125,000. The proceeds from the sale shall be used for working capital. Pursuant to the securities purchase agreement, the Company issued to the accredited investor 1,250,000 shares of the Company’s common stock as commitment shares. The note carries a one-time interest charge of 12%, which was applied to the principal on the issuance date, and matures on November 20, 2026. The note is convertible into common stock of the Company 180 days after the date of issuance or at any time following an event of default at a conversion price of $0.01 per share. In the event the trading price is below $0.01 for 5 consecutive trading days, the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
Subsequent to December 31, 2025, on January 12, 2026, the Company entered into a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor an original issue discount promissory note in the principal amount of $81,250 for which the Company received net proceeds of $75,000. The promissory note carries an interest of 12% per annum and has maturity date of January 12, 2027. The promissory note is convertible into shares of the Company’s common stock 180 days after issuance at a price equal to 70% of the lowest traded price of the Company’s common stock on its principal trading market during the 20 trading days preceding the date of conversion.
On January 27, 2026, the Company entered into a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the Investor an unsecured original issue discount promissory note in the principal amount of $86,250 for which the Company received net proceeds of $75,000. Further, as consideration for the purchase of the promissory note, the Company also issued 1,050,000 shares of the Company’s common stock to the investor as commitment shares. The promissory note carries a one-time interest charge of 10%, payable on the maturity date of January 27, 2027 or upon acceleration or prepayment of the promissory note. The promissory note is convertible into common stock of the Company at any time after the date of issuance at a conversion price equal to 70% of the lowest closing price of the Company’s common stock on its principal trading market during the 10 trading days preceding the date of conversion.
On February 24, 2026, the Company entered into a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor a convertible promissory note in the principal amount of $150,000 for which the Company received net proceeds of $130,000. The promissory note carries an interest rate of 6% per annum and has a maturity date of February 24, 2027. The Promissory Note is convertible into shares of the Company’s common stock after the sixth month anniversary of the date of issuance at a conversion price equal to 60% of the lowest trading price of the Company’s common stock as reported on the OTC Markets (or the securities exchange on which the common stock is then-listed) for the 15 trading days preceding the date of conversion.
On March 5, 2026, the Company entered into a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor a convertible promissory note in the principal amount of $120,000 for which the Company received net proceeds of $92,000. The promissory note carries a one time interest charge of 15% and has a maturity date of December 15, 2026. The Promissory Note is convertible into shares of the Company’s common stock at any time following an event of default at a conversion price equal to 61% of the lowest closing price of the Company’s common stock on its principal trading market during the 20 trading days preceding the date of conversion.
On September 4, 2025, the Company also entered into a Securities Purchase Agreement (the “ELOC Agreement”) with the Investor. Pursuant to the ELOC Agreement, the Company agreed to sell, and the Investor agreed to purchase up to $50,000,000 (the “Commitment Amount”) of the Company’s common stock, par value $0.001 per share (the “Purchase Shares”). Subsequent to December 31, 2025, and through the date of this filing, we have received approximately $632,125 in cash proceeds related to the sale of 55,397,351 shares of common stock under this agreement and expect to continue to utilize it to fund current operational needs.
We cannot assure you, however, that any additional capital will be available to us on favorable terms or at all. Our capital expenditures could be curtailed if our cash flows decline from expected levels.
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 $257,151, 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.
Risks Related to Operating in Spain and Europe
Risks Related to our Financial Position and Capital Needs
We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risk, which may increase our exposure to cybersecurity incidents.
We have not adopted a cybersecurity risk management program or formal processes for assessing cybersecurity risks designed to protect our information technology systems, networks, data and infrastructure. As a result, the confidentiality, availability and integrity of our systems and data, including information relating to our customers and business partners, may be more vulnerable to unauthorized access, data breaches, ransomware attacks or other cybersecurity incidents. Any such compromise of our information technology systems could disrupt our business operations, damage our reputation, result in the loss or unauthorized disclosure of confidential or proprietary information and subject us to claims, liabilities and costs which could have a material adverse effect on our business.
Additionally, we may incur significant expenses to comply with data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations which could further materially adversely affect our financial condition and results of operations.
The Company and BAIF entered into the MOU for the purposes of organizing DC Estate Solutions which was organized by the Company on October 23, 2025. On November 6, 2025, DC Estate Solutions and BAIF entered into the SPV SPA. DC Estate Solutions is owned and controlled 50.1% by the Company and 49.9% by BAIF. The principal of BAIF is Jose Mora. DC Estate Solutions acquired seven Spain Leases, which were previously assigned to and held by BAIF, consisting of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba, Torrecampo, Villasequilla and Tomelloso and one lease located Tocumen, Panama.
The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the closing of the SPV SPA and has agreed to fund the data center development with a minimum amount of $11,150,000. The development will require additional significant working capital to achieve full RTB status on all eight sites. Additional capital is required to develop the sites and the further development of the data centers to RTB will require substantial capital. There are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately developed and sold or become operational.
SAPL has not generated any revenues to date and,
subject to the availability of sufficient capital, does not expect to generate revenues until mid-2025 or later. We also require funding
or revenues to satisfy outstanding debt. We require funding of approximately $70,000,000 to develop our operations. In order to support
our initiatives, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships,
or other arrangements with well-capitalized companies. Our ability to raise additional financing depends on many factors beyond our control,
including the current volatility in the capital markets, risks associated with investing in a pre-revenue company with no assurances our
products can be commercialized, the lack of a public market for our common stock, and the development or prospects for development of
competitive technology by others. Sufficient additional financing may not be available to us or may be available only on terms that would
result in further dilution to the current owners of our common stock. If we are unsuccessful in raising additional capital, or the terms
of raising such capital are unacceptable, we may never be able to effectively monetize our SAPL assets and/or we may default on the SAPL
note. In that event, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.
Our new focus on HPCAI hostingdata center development
may not be successful
and depends on the continuing development and resource and computational requirements of HPC hosting applications
such as cloud computing,
machine learning and AI, and the continuing need for the infrastructure and services we provide.
We currently have no customers. If our target customer markets, which are new and still developing, do not grow or develop as expected or in a manner consistent with our current business model, our business, financial condition, and results of operation would be adversely affected. Further, increases in power costs could negatively impact our hosting customers’ demand for services, harm our growth prospects, and could have a material adverse effect on our business, financial condition, and results of operations.
We have limited resources which may affect
our abilities to develop our SAPLBlackberry AIF S.L. operations.
With the limited resources we have available,
we may
experience difficulties in developing our SAPLBAIF operations, including, but not limited to, our colocation data center, services,
and colocation
to commence generating revenues and compete in the HPC hosting industry. Competition from existing and future competitors, particularly
particularly those better capitalized, could result in our inability to secure acquisitions and partnerships that we may need to expand
our business
in the future. This competition from other entities with greater resources, experience, and reputations may result in our
failure to maintain
or expand our business, as we may never be able to successfully execute our business plan. If we are unable to develop,
expand, and remain
competitive, our business could be negatively affected, which would have an adverse effect on the trading price of
our ordinarycommon shares,stock, which
would harm our investors.
At the outset, our HPC business will be highly
dependent on a single customer.
One customer, Cudo Ventures Ltd (“Cudo Ventures”),
will initially account for 100% of our HPC Hosting segment revenue. Our success in the HPC Hosting segment is highly dependent on the
success of our master services agreement with Cudo Ventures and the fulfillment by it of its obligations under the master services agreement.
Any failure to meet Cudo Ventures’ expectations, including, but not limited to, failure to fulfill our contractual obligations,
could result in cancellation or non-renewal of our business relationship, or harm to our business relationship that could impact our future
growth and which could have a material adverse effect on our business, financial condition, and results of operations.
Our business will dependdepends on providing customers with
with highly reliable services, including, but not limited to, power supply, physical security, cybersecurity, maintenance of environmental
conditions, and other mission-critical infrastructure services. We may fail to provide such services because our operations are vulnerable
to, among other things, mechanical or telecommunications failure, power outage, human error, physical or electronic security breaches,
cyberattacks, war, terrorism, fire, earthquake, pandemics, hurricane, flood and other natural disasters, sabotage, and vandalism.
Our future customer agreements will include terms
requiring requiring
us to meet certain service level commitments. A failure to meet these or other commitments or equipment damage in our data centers
could could
subject us to contractual liability, including service level credits against customer rent payments, legal liability and monetary
damages, damages,
regulatory sanctions, or, in certain cases of repeated failures, the right by the customer to terminate the agreement. Service
interruptions, interruptions,
equipment failures, or security breaches could also materially impact our brand and reputation globally and lead to customer
contract contract
terminations or non-renewals and an inability to attract customers in the future.
Our contracts with our currentcustomers or future customers
could subject
us to significant liability.
Many factors, including global economic conditions,
may cause our current and future HPC data center customers to experience a downturn in their businesses or otherwise experience a lack
of liquidity,
which may weaken their financial condition and impact our estimates as to the probability of collectability of payments,
and ultimately
result in their failure to make timely rental and other payments or their default under their agreements with us. Further,
the development
of new technologies, the adoption of new industry standards or other factors could render our HPC data center customers’ current
current products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that
that they default under their leases, become insolvent, or file for bankruptcy. If a customer defaults or fails to make timely rent or other
other payments, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment, which
which could adversely affect our financial condition and results of operations.
Even if we have additional space available
for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability
to provide sufficient electrical power.
What changed in the latest 10-Q
Risk Factors
While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Our “Risk Factors” in the Form 10-K for the fiscal year ended December 31, 2025 and Form 8-K Current Report dated April 13, 2026 describe some of the risks and uncertainties associated with our business, which we strongly encourage you to review. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects. There have been no material changes in our risk factors from those disclosed in the Form 10-K for the fiscal year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025”
New heading “Results of operations”
Largest changes
During the 2026see in full comparisonQuarter,Period, cash used in operating activities of$571,920$1,181,372 primarily resulted from the net loss of$5,719,067$9,024,203 offset by stock-based compensation of$13,218,936,$13,255,936, amortization of debt discount of$361,546, day one$752,794, interest expense from derivativeliabilitiesliabilities, default provisions and true-up obligations of$830,699$1,647,450 and the gain on the change in the fair value of derivative liabilities of$9,724,722.$9,018,915.
“Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025”see in full comparison
“We have received cash proceeds of $365,500 from the issuance of convertible notes payable during three months ending March 31, 2026 and an additional $[125,000] in 2026 through May [15], 2026. Subject to receiving funding, we expect that our operating expenses will increase as we attempt to develop our new HPC operations and we will devote additional resources toward new business opportunities. However, as set forth elsewhere in this report, our ability to develop our business and achieve our operational goals is dependent upon our ability to raise significant additional working capital. …”see in full comparison
Our othersee in full comparisonincomeexpense for the 2026QuarterPeriod was$8,523,765$1,983,014 compared to otherincomeexpense of$1,243,060$564,873 for the 2025 Quarter. Otherincomeexpenses in the 2026quarterPeriodwaswere comprisedof $1,201,433 in interest expense,primarily ofwhich $830,699 is for the day one loss on the derivative liability valuation and $9,724,722 for the gain on the change$1,277,679 infair value of derivative liabilities. Other income in the 2025 Quarter was comprised of $11,187 ininterest expense and$1,254,247$705,807 for thegainloss on the change in fair value of derivative liabilities. Other expenses in the 2025 Period were comprised of $20,377 in interest expense, $396,443 for the loss on the change in fair value of derivative liabilities and $148,053 on the loss on settlement of debt.
“Our operating expenses for the 2026 Period were $15,564,954 compared to $25,377,549, for the 2025 Period, a decrease of 39%. In the 2026 Period, the Company incurred stock-based compensation expense of $13,255,936 compared to $24,273,137 for the 2025 Period. The stock-based compensation for the 2026 period was related to common shares issued for acquisition related costs and shares issued to our director compared to the 2025 Period which was related to the amendment of options to the officers of the Company and issuance of shares to an outside consultant.”see in full comparison
Full comparison: every changed paragraph (23)
The following discussion and analysis should be
read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information
appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The following discussion and analysis compares our consolidated
results of operations for the three months ended MarchJune 31,30, 2026 (the “2026 Quarter”) with those for the three months ended June
March 31,30, 2025 (the “2025 Quarter”) and our consolidated results of operations for the six months ended June 30, 2026 (the
“2026 Period”) with those for the six months ended June 30, 2025 (the “2025 Period”).
The Company and BAIF intend to use the Spain Leases
to develop and operate HPC data center sites. The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the
closing of the SPV SPA. The Company intends to develop the sites as gas powered fully autonomous energy islands for Tier 3 level uptime
AI data centers. The total capacity to be developed across the five sites is anticipated to be up to 1.8 Gigawatts. We believe that since
the sites will be autonomous energy islandsislands, no grid connection is required and there will be no material reliance on grid infrastructure.infrastructure,
Thereby,thereby, subject to financing, reducing time to power for our data center clients to 18 months. The total capacity of the sites is planned
to be 360 MW per site. An application to connect to the local gas pipeline for gas supply has already been made and approval has been
received. The Company is negotiating a power purchase agreement with an energy company to develop a 360MW gas Solid Oxide Fuel Cell facility
to convert gas fuel into electricity. The Company will need to secure fibre connections, environmental permits and all necessary contractor
permits. The sites will then be classed at Ready to Build (“RTB”) as the Company intends to sell the sites on a RTB basis.
We estimate the Company will require $5 million of working capital to achieve full RTB status on all five sites. Additional capital is
required to develop the sites and the further development of the data centers to RTB will require substantial capital. There are no assurances
that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are no assurances the
application and permits will be received or that agreements will be completed or the data centers ultimately developed and sold or become
operational.
Effective January 22, 2026, the Company entered into a Joint Venture Agreement (the “JVA”) by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates the MOU and (ii) supplements the SPV SPA. Pursuant to the SPV SPA, DC Estate Solutions acquired the equity interests of five special purpose vehicles (the “SPVs”): (i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW. As a result of the acquisition of the SPVs, DC Estate Solutions also acquired the Spain Leases.
Pursuant to the JVA, DC Estate Solutions shall
be owned and controlled 50.1% by the Company and 49.9% by BAIF. The purpose of the JVA is to manage and coordinate the development of
high-performance computing data center (the “Data Centers”) sites on the properties governed by the Spain Leases. Substantially,
all material decisions of the JVA and Joint Venture Company shall require the unanimous consent of the Company and BAIF. Under the JVA,
the Company agreed to fund DC Estate Solutions with $3,500,000 USD as follows: (i) $250,000 USD, which was previously paid upon the execution
of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPV SPA, (iii) $375,000 USD paid on the effectiveness of
a a
notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD
payable payable
in monthly installments of $125,000 USD commencing on March 1, 2026. The funds shall be distributed by DC Estate Solutions to
BAIF. The
Company also agreed to grant to BAIF, or its assignee, a non-qualified option to purchase up to 250,000,000 shares of the Company’s
common stock (the “First Mora Option”) at an exercise price of $0.02 per share. The First Mora Option is fully vested and
exercisable upon the grant date and terminates on the earlier of (i) five years following the date of the First Mora Option or (ii) the
termination of the JVA.
On March 23, 2026, the Company, BAIF and DC Estate
Solutions entered into a second addendum (the “Second Addendum”) to the JVA. Pursuant to the Second Addendum, the parties
agreed to: (1) increase the capacity of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate
of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the
Company’s restricted common stock to BAIF or its assignees with the such shares being fully paid and non-assessable on the date
of execution
of the Second Addendum.
Effective April 7, 2025 (the “Effective
Time” or “Closing Date”), the Company and Synthesis Analytics Production,Production Ltd. (“SAPL”) and Adler Capital
Limited (“ACL”) closed on a Share Exchange Agreement dated April 7, 2025 (the “Share Exchange”) and an employment
agreement between the Company and Mr.Dr. Niclas Adler (the “Employment Agreement”). In accordance with the Share Exchange, SAPL
agreed to transfer 100% of SAPL’s outstanding capital stock to Edgemode in exchange for 1,260,246,354 shares of Edgemode common
stock, par value $0.001 per share, which represented approximately 55% of the Company’s outstanding common stock at the Effective
Time. The Company accounted for the acquisition as an asset acquisition under ASC 805 as SAPL did not meet the definition of a business
as it did not contain a full set of integrated inputs and outputs at the time of closing.
On June 3, 2026, the Company entered into a non-binding term sheet with Ibersun Generacion, S.L. (“Ibersun”) pursuant to which the Company was to acquire 51% of the equity interests in Ibersun. The Company subsequently terminated the term sheet.
Three Months Ended MarchJune 31,30, 2026 Compared to
to the Three Months Ended MarchJune 31,30, 2025
Our operating expenses for the three months ended
March 31, 2026 (the “2026 Quarter”) was $14,242,832were
$1,322,122 compared to $22,115,041,$3,262,408, for the three months ended March 31, 2025 (the
“2025 Quarter”),Quarter, a decrease of 36%.61%. In the 2026 Quarter, the Company incurred stock-based compensation
expense of $13,218,936
$37,000 compared to $21,679,711$26,250 for the 2025 Quarter. The stock-based compensation for the 2026 quarter was for common stock options issued as
acquisition costs related to the DC Estates Solutions formation while the 2025 Quarter was related to theshares amendment of options issued
to the
officersour ofnewly theelected Company.board member services performed.
Our other incomeexpense for the 2026 QuarterPeriod was $8,523,765$1,983,014
compared to other incomeexpense of $1,243,060$564,873 for the 2025 Quarter. Other incomeexpenses in the 2026 quarterPeriod waswere comprised of $1,201,433 in interest
expense,primarily of which $830,699 is for the day one loss on the derivative liability valuation and $9,724,722 for the gain on the change$1,277,679 in
fair value of derivative liabilities. Other income in the 2025 Quarter was comprised of $11,187 in interest expense and $1,254,247$705,807 for
the gainloss on the change in fair value of derivative liabilities. Other expenses in the 2025 Period were
comprised of $20,377 in interest expense, $396,443 for the loss on the change in fair value of derivative liabilities and $148,053 on
the loss on settlement of debt.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Results of operations
Our operating expenses for the 2026 Period were $15,564,954 compared to $25,377,549, for the 2025 Period, a decrease of 39%. In the 2026 Period, the Company incurred stock-based compensation expense of $13,255,936 compared to $24,273,137 for the 2025 Period. The stock-based compensation for the 2026 period was related to common shares issued for acquisition related costs and shares issued to our director compared to the 2025 Period which was related to the amendment of options to the officers of the Company and issuance of shares to an outside consultant.
Our other income for the 2026 Period was $6,540,751 compared to other income of $678,187 for the 2025 Period. Other income in the 2026 Period was comprised primarily of $2,479,112 in interest expense and $9,018,915 for the gain on the change in fair value of derivative liabilities. Other income in the 2025 Period was comprised of $31,564 in interest expense, $857,804 for the gain on the change in fair value of derivative liabilities and $148,053 on the loss on settlement of debt.
As of MayAugust 15,14, 2026, the Company had approximately
$35,000$25,000 of cash on hand. Historically, our liquidity was primarily derived from debt and equity investments from accredited investors.
During the year ended December 31, 2025, we received an initial payment of approximately $303,000 for colocation services to be provided
by the Company. In addition, during the year ended December 31, 2025, we sold 45,177,578 shares of restricted common stock to accredited
investors in consideration of $500,000. On April 7, 2025, we executed the Share Exchange with SAPL. On October 15, 2025, we entered into
a binding memorandum of understanding with BAIF to acquire 5five properties in Spain and we are now seeking to raise at least $5,000,000
to to
commence our HPC hosting operations and develop our gas powered AI data centers and generate revenue. We require significant funding
to to
develop our HPC operations. Furthermore, potential legal proceedings relating to SAPL and its affiliates may cause us to incur significant
expenses or liability. Adverse outcomes in such proceedings or claims could result in significant liabilities which may materially affect
our financial condition, results of operations, or cash flows. We have received cash proceeds of $1,327,000 from the issuance of convertible
notes payable during 2025 and an additional $373,500$700,500 in 2026 through AprilAugust 13,14, 2026. Subject to receiving funding, we expect that our
operating expenses will increase as we attempt to develop our new HPC operations and we will devote additional resources toward new business
opportunities. However, as set forth elsewhere in this report, our ability to develop our business and achieve our operational goals is
dependent upon our ability to raise significant additional working capital. As the availability of this capital is unlikely, at this time,
we are unable to quantify the expected increases in operating expenses in future periods.
We have received cash proceeds of $365,500 from
the issuance of convertible notes payable during three months ending March 31, 2026 and an additional $[125,000] in 2026 through May [15],
2026. Subject to receiving funding, we expect that our operating expenses will increase as we attempt to develop our new HPC operations
and we will devote additional resources toward new business opportunities. However, as set forth elsewhere in this report, our ability
to develop our business and achieve our operational goals is dependent upon our ability to raise significant additional working capital.
As the availability of this capital is unlikely, at this time, we are unable to quantify the expected increases in operating expenses
in future periods.
On September 4, 2025, the Company also entered
into a Securities Purchase Agreement (the “ELOC Agreement”) with an accredited investor purchaser. Pursuant to the ELOC Agreement,
the Company agreed to sell, and the purchaser agreed to purchase up to $50,000,000 (the “Commitment Amount”) of the Company’s
common stock, par value $0.001 per share (the “Purchase Shares”). We have received cash proceeds of $632,125$702,125 from the issuance
of common shares during threesix months endingended MarchJune 31,30, 2026 and an additional $70,000 through May 15, 2026 related to the sale of an aggregate
of 70,781,966 shares of common stock under the ELOC Agreement and expect to continue to utilize it to fund current operational needs.2026.
During the 2026 Quarter,Period, cash used in operating
activities of $571,920$1,181,372 primarily resulted from the net loss of $5,719,067$9,024,203 offset by stock-based compensation of $13,218,936,$13,255,936, amortization
of debt discount of $361,546, day one$752,794, interest expense from derivative liabilitiesliabilities, default provisions and true-up obligations of $830,699$1,647,450 and
the gain on the change in the fair
value of derivative liabilities of $9,724,722.$9,018,915.
During the 2025 Quarter,Period, cash providedused byin operating
activities of $74,858$43,487 primarily resulted from the Prepaid AI hosting services (customer deposits), offset by the net loss of $20,872,081$24,699,362
and stock-based compensation of $21,679,711,$24,273,137, and change in the fair value of derivative liabilities of $1,254,247.$857,804.
During the 2026 Quarter,Period, the Company advancedused $425,500
$419,000 of cash for the development of the leased assets in the joint venture with DC Estate Solutions under the JVA.
During the 2025 Quarter,Period, the Company advancedpaid $47,915
$183,000 of cash for workingassets capitalin needsthe construction of the HPC facility as well as $183,000 in connection with the business acquisition of SAPL for purposes of financing the construction
of the HPC facility.SAPL.
During the 2026 Quarter,Period, the Company received $852,135
$782,135 in cash proceeds in connection with the sale of shares of common stock of the Company pursuant to the ELOC Agreement,Agreement and $365,500private placements,
and $700,500 in proceeds from convertible notes payable, offset by repayments of convertible notes of $42,420.$177,420.
During the 2025 Quarter,Period, the Company received $300,000
$300,000 in cash proceeds in connection with the sale of shares of common stock of the Company, offset by repayments of related party advances
advances of $9,900.
EDGM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-05 | Kiero-Watson Simon Scott |
Grant/award | 10,000,000 | — | — |
Well-known investors holding EDGM (13F)
None of the 59 investors we track reported a position in their latest 13F.