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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark one)

 

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

 

For the fiscal year ended December 31, 2021

 

OR

 

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

 

For the transition period __________ to ___________

 

Commission File Number: 333-198435

 

EDGE DATA SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   46-3892319
(State or Other Jurisdiction of
Incorporation or Organization)		  

(IRS Employer

Identification Number)

     
3550 Lenox Road NE. 21st Floor    
Atlanta, GA 30326    
(State or Other Jurisdiction of
Incorporation or Organization)		    

 

 

(833) 682-2428
(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
None.   None.   None.

 

Securities registered pursuant to Section 12(g) of the Act: None.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ 

 

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

 

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

  

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant as of the close of business on December 31, 2021, the last business day of the registrant’s most recently completed fiscal quarter, determined by the lack of an active market for the Company’s common stock, was approximately $0. This computation assumes that all executive officers, directors and persons known to the registrant to be the beneficial owners of more than ten percent of the registrant’s common stock are affiliates of the registrant. Such assumption should not be deemed conclusive for any other purpose.

 

As of March 31, 2022, there were outstanding 10,983,832 shares of our common stock, par value $0.0001 per share, 7,000,000 shares of the Company’s Class A Super Majority Voting preferred stock, par value $0.001 per share, and 7,000,000 shares of the Company’s Class C preferred stock, par value $0.001 per share

 

Documents incorporated by reference:

None. 

 

 

 

 

 

 

TABLE OF CONTENTS

 

ITEM DESCRIPTION PAGE
Part I    
Item 1. Business 3
Item 1A. Risk Factors 9
Item 1B. Unresolved Staff Comments 9
Item 2. Description of Properties 9
Item 3. Legal Proceedings 9
Item 4. Mine Safety Disclosures 9
Part II    
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 9
Item 6. [Removed and Reserved] 10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 16
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 35
Item 9A. Controls and Procedures 35
Item 9B. Other Information 35
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 35
Part III    
Item 10. Directors, Executive Officers and Corporate Governance 36
Item 11. Executive Compensation 37
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 39
Item 13. Certain Relationships and Related Transactions and Director Independence 40
Item 14. Principal Accountant Fees and Services 40
Part IV    
Item 15. Exhibits and Financial Statement Schedules 41
  Signatures 42

 

2
 

 

FORWARD-LOOKING STATEMENTS

 

In addition to historical information, some of the information presented in this Annual Report on Form 10-K contains “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Although Edge Data Solutions, Inc. (“EDSI” or the “Company”, which may also be referred to as “we”, “us” or “our”) believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations: there can be no assurance that actual results will not differ materially from our expectations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Cautionary statements regarding the risks, uncertainties and other factors associated with these forward-looking statements are discussed under “Risk Factors” in this Form 10-K. You are urged to carefully consider these factors, as well as other information contained in this Form 10-K and in our other periodic reports and documents filed with the SEC.

 

PART I

 

ITEM 1. BUSINESS

 

Company History and Overview

 

History of Edge Data Solutions, Inc., a Delaware corporation

 

EDGE DATA SOLUTIONS, INC. (the “Company”), formerly Blockchain Holdings Capital Ventures, Inc. (formerly Southeastern Holdings, Inc., formerly Safe Lane Systems, Inc.) was incorporated in the State of Colorado on September 10, 2013. Safe Lane Systems, Inc. redomiciled to become a Delaware holding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned subsidiaries, SLS Industrial, Inc and Southeastern Holdings, Inc. (both Delaware corporations) and on September 30, 2016 completed a merger and reorganization in which Southeastern Holdings, Inc. (now Edge Data Solutions, Inc.) became the holding company. On December 1, 2016, the Company spun off its wholly owned subsidiary, SLS Industrial, Inc., along with its assets and liabilities, leaving Southeastern Holdings, Inc. as the only surviving entity.

 

On August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“BH LLC”) pursuant to which the Company purchased all of the assets of BH LLC which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 shares of its common stock, par value $.0001 valued at $300,000 to the members of Blockchain in exchange for the assets of Blockchain.

 

The Company accounted for this transaction as a reverse recapitalization under ASC 805, under which the operating entity, Blockchain Holdings, LLC, adopted the assets, liabilities and equity structure of Edge Data Solutions, Inc. on August 23, 2018, while retaining its historical activity. The financial statements therefore present activity beginning with Blockchain Holdings, LLC’s inception date of February 5, 2018 through September 30, 2018.

 

On August 30, 2018 the Company changed its name to Blockchain Holdings Capital Ventures, Inc.

 

On January 13, 2020, the Company changed its name to Edge Data Solutions, Inc.

 

Edge Data Solutions, Inc believes it is poised to be an industry-leading infrastructure provider. In an increasingly data-driven world, GPU computing is changing the way we create, learn, and play. Through strategic partners, the Company has assembled a full-stack solution to help businesses realize the potential of CPU/GPU computing, backed by a rapidly growing network of high-density modular data centers that place compute directly at the point of data collection, reducing latency, improving performance and security.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the above conditions raise substantial doubt about the Company’s ability to do so. New business opportunities may never emerge, and we may not be able to sufficiently fund the pursuit of new business opportunities should they arise.

 

As of December 31, 2021, we had approximately $831,209 in cash on hand. Our current monthly operating cash requirement is approximately $170,000, and it is expected that rate will continue and will increase as we execute on our business plan. There can be no assurances that our operations will generate sufficient revenues, profits and cash to cover operating costs.

 

3
 

 

Company Business Overview

 

Edge Data Solutions, Inc. (EDSI) believes it is poised to be an industry-leading edge data center, cryptocurrency mining and cloud infrastructure provider. EDSI’s unique Edge Performance Platform (EPP) brings sustainable next-generation immersion-cooled high-performance computing to where it is needed most.

 

Compared to air-cooled solutions, EDSI’s EPP offers reduced carbon footprint and increased ROI through:

 

●Energy Efficiency – Environmentally friendly, lower PuE, lower operating costs
●Scalability – Easy, rapid and flexible deployment
●High-density – More computing power in a much smaller footprint
●Reduced CapEx – Longer equipment life, efficient structure
●Boosted Computing Power – Highly conducive environment for optimization without stressing equipment

 

EPP serves efficient next-generation immersion-cooled computing power for a variety of applications, including sustainable cryptocurrency mining, edge computing. Long-term, opting for EPP significantly reduces investment, and certain edge computing applications require less up-front investment.

 

Industries that will benefit from low-latency technology with a lower carbon footprint include cryptocurrency mining, public and private cloud providers, data centers, high-performance computing providers, virtual desktop infrastructure providers, telecom, cybersecurity and disaster recovery providers, streaming providers, artificial intelligence innovators, colleges, hospitals, governments, and enterprise blockchain infrastructure providers.

 

Our Products

 

Edge Performance Platform (EPP)

 

EDSI’s Edge Performance Platform (EPP) offers customers next-generation high-density, energy-efficient, scalable, and decentralized immersion-cooled data centers in a box – complete with industry-leading expertise. Our refined approach provides a cohesive solution from power equipment, immersion systems, custom fluid, computing equipment, project management, and consulting to deliver a turnkey operation:

 

  ● The Right Form Factor – Cryptocurrency mining, enterprise, general High-Performance Computing in next-generation, scalable, high-density liquid immersion-cooled data centers in a box:

 

  ○ Crypto Arctic™ Tank Chainable – A light, low profile tank specifically designed to fit as many immersion-cooled ASIC miners as possible, including up to 33 S19 or S19J Pro miners.
  ○ Micro-Edge 12U Data Center – Capacity of up to 25kW of power each, perfect for any small unused space such as a storage closet, equal to the power of up to 3 traditional 7kW air cooled data center racks.
  ○ Micro-Edge 50U Data Center – Capacity of up to 200kW each, perfect for larger computing needs at a fraction of the size of a traditional air cooled, equal to up to 28 traditional 7kW air cooled data center racks.
  ○ Pro-Edge 200U – 500U Data Centers – Containers with capacity up to 2MW of power per container, fully customized to meet any mobile or computing needs without the need for water. The modular design allows for rapid deployment with maximum compute power at the heart of the network, where the connectivity is needed most.
  ○ Ultra-Edge 7.5MW+ supporting up to 50MW facilities to replace traditional data centers, and has the similar net carbon footprint as taking the same size coal plant offline.

 

  ● Power Systems – State-of-the-Art electrical equipment and components uniquely designed to deliver sufficient and efficient energy to high-performance computing operations.
  ● Cooling Systems – Complete effective and efficient systems to keep high-performance computing equipment comfortably cool with a longer lifespan.
  ● Fluids – Equipment stays cool and enjoys long life when immersed in EDSI’s VHP1200 low viscosity, non-conductive fluid.
  ● Computing Equipment – ASIC miners and custom servers for any high-performance computing application, including cloud, VDI, AI, rendering and other compute-intensive tasks sourced for clients.
  ● Design and Project Management Services – Services from expertise to boots on the ground to simplify and speed the implementation process.
  ● Optimization Solutions – Additional expert-tested computing power and performance gains.

 

4
 

 

Computing as a Service

 

EDSI has offered and plans to expand its offerings in computing power to customers for a variety of applications, including rendering, Virtual Desktop Infrastructure, cloud gaming, artificial intelligence, and other high-performance computing needs.

 

Servers Designed and Optimized for Immersion Cooling

 

EDSI offers custom servers that are optimized and specifically designed for immersion cooling to deliver maximum compute power, density and lifespan of hardware. We have server designs to meet any HPC needs, whether that be Artificial Intelligence, Video Rendering, Machine Learning, Virtual Desktop, or any other Edge optimized needs.

 

Sales Strategy

 

The core sales strategy of EDSI is to continue to design, innovate and provide industry leaders and our other clients with next-generation immersion-cooled solutions that increase performance and reduce carbon footprint.

 

To support education and sales efforts for our immersion cooling technology, we have in-house sales staff to reach out to new customers, open new markets and handle incoming questions and referrals. We work with channel partners that introduce our products to their customer base as well as projects both parties can add value to. Co-marketing and partnering with other integrators, manufacturers and software companies allows EDSI to offer a total cohesive solution to meet any company’s needs.

 

Primary Marketing Campaign Strategy

 

EDSI plans to focus strongly on marketing and generating awareness of the brand and product, with particular attention to industry-wide conferences and events, strategic partners, and word of mouth referrals from our current customers. In addition to these efforts, we plan to launch the following marketing efforts:

 

● Relationships – Our most effective channel for sales and marketing is our relationships with current vendors and growing relationships with current customers.
   
● Industry events and exhibitions – Having a presence at industry events and conventions can further increase brand awareness and industry reputation, and allow opportunities to interact with key decision makers at other businesses, organizations, consultancy partners, or technology companies. This can potentially result in new leads or other opportunities in future. Similarly, sponsoring or co-sponsoring such events or conferences can provide another effective backdrop to promote the Company.
   
● Internet Marketing – One of the most effective marketing channels for businesses is the internet, and the Company maintains an engaging web presence as a passive marketing placeholder, offering useful information about the history of EDSI and its services.
   
● Search Engine Optimization (SEO) – By utilizing SEO the Company can work on improving the visibility of the website on all major search engines such as Google, Bing, Ask, Yahoo, etc.
   
● Paid Online Advertisements – Pay per click (PPC) keyword advertising will help to promote contextual search results for the Company, and paying for advertisements with Google, AdSense, and other platforms to display ads on major search results and Facebook pages will help to promote contextual search results for the Company.
   
● Social Media Marketing (SMM) – Social Media Marketing is fast becoming the most popular channel by which businesses can engage with their target market and client base. The business, and its growing network of data centers, may establish social media channels on platforms such as Facebook, Twitter, and LinkedIn, providing an outlet to stay in touch with clients and interact with the market.
   
● Traditional Marketing – Any comprehensive marketing campaign will include traditional marketing channels. This may include having print media advertisements in specialist interest magazines or periodicals, and EDSI will launch full press and PR campaigns, including press releases, articles or leaders in local newspapers or industry periodicals, announcements, white papers in industry press, investor or stock-market related publications, and notices and other engaging events. Direct marketing will also be utilized, including mailings of promotional literatures to key target markets, and supported by a growing team of sales representatives who will be approaching and engaging directly with prospective clients and showcasing the value proposition of EDSI full data center solutions.

 

Growth Strategy

 

According to the IDC Data Age 2025 report, nearly 30% of data by 2025 will require real-time processing. Data consumption shows no signs of slowing down and this ever-increasing demand will need to be addressed at a hyper-local level. EDSI’s scalable high-density immersion-cooled technology solutions, which can be deployed rapidly and cost effectively with the ability to provide high density data delivery at the edge, are an effective method to roll out capacity and meet growing demand.

 

To meet this demand, EDSI plans to continue development of and sell its EPP and focus on relationships and growth in the cryptocurrency mining and enterprise spaces. Further, EDSI plans to deploy its next-generation immersion-cooled edge data centers to strategic locations based on demand, such as real estate properties, Tier 2 and Tier 3 cities, outside of major metropolitan areas, and underserved markets. With the rise and proliferation of technology adoption across many devices, we seek to solidify our footprint by deepening our relationships with enterprise customers, developing strategic partnerships and securing multiple locations across the US.

 

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Acquisitions

 

A facet of our business strategy includes acquiring complimentary businesses that are established where together we support the growth of both companies. We believe these acquisitions will bring growth through additional next-generation technologies and access to new customers and markets.

 

Innovation and Next Generation Products

 

We continuously research the market and attend industry conferences to deliver innovative products and integrating the most powerful computing solutions available to set us apart from the competition. As new technologies continue to develop at a rapid pace with more powerful and hotter equipment, the infrastructure to support it is crucial to the success and ability to develop even more into the future.

 

Additionally, EDSI has jointly invested in two sites with two partners – one enterprise and one cryptocurrency mining – that provide access to further develop and test its EPP and develop cloud service offerings. We anticipate that these joint ventures will be revenue-generating innovation labs for EDSI to develop and improve on its current and future product lines.

 

Competitive Edge

 

Compared to air-cooled solutions, EDSI’s EPP offers reduced carbon footprint and increased ROI through:

 

●Energy Efficiency – Environmentally friendly, lower PuE, lower operating costs
●Scalability – Easy, rapid and flexible deployment
●High-density – More computing power in a much smaller footprint
●Reduced CapEx – Longer equipment life
●Boosted Computing Power – Highly conducive environment for optimization without stressing equipment
●Lower Maintenance Costs – Less equipment downtime, reduced need for dispatching labor for repairs

 

6
 

 

RELATIONSHIPS, COMPETITION, AND REGULATION

 

Strategic Relationships

 

EDSI provides an industry leading decentralized Edge Data Center/Cloud Infrastructure with several strategic advantages in the market. We offer one of the most cost effective, high-density, and profitable edge solutions on the market. EDSI has successfully secured agreements with leaders in the markets they serve.

 

Midas Green Technologies: Midas Green Technologies and EDSI have partnered to utilize Midas Green Technologies’ next generation immersion cooling solution to bring maximum density to EDSI’s Edge Data solutions with a minimal footprint. The challenges facing data centers today are the high costs, energy inefficiencies, and noise pollution. The ever-increasing demand for computing power further exacerbates these challenges and reduces the useful life of hardware with added stress from increased workloads. Midas Green Technologies’ immersion tanks, cooled by dielectric fluid, provide a 200+ kw per 50U with a minimal footprint, thus providing an ideal environment to safely maximize workloads, while solving the cost, energy and noise issues. The Company has entered into a reseller agreement whereby the Company resells Midas Green’s liquid immersion tank technology and EDSI owns the only global licensing to sell their technology, allows us to develop our own innovative products.

 

Raptor Power Systems: EDSI exclusively offers Raptor’s power distribution solutions into the immersion cooled crypto mining market. Raptor Power Systems designs and manufactures power distribution units (PDUs) and breaker panels specially designed for crypto mining applications. Raptor focuses on density and reliability while maintaining competitive value with a USA-made and supported product line. The engineering team from Raptor has meticulously designed a PDU and breaker panel that seamlessly integrates into Edge Data Solutions, Inc’s technology, providing one of the highest density immersion tank and power distribution combinations in the industry. Beyond crypto mining applications, Raptor and Edge Data Solutions, Inc. are developing solutions for enterprise and government data center markets.

 

SG Blocks: SG Blocks is a global leader and innovator in the realm of modular and dynamic infrastructure. By repurposing traditional maritime containers through a combination of engineering efficiency and artistic design, they have created iconic, compact, and easily deployable structures that are specifically purposed for the client’s needs. With EDSI providing turnkey edge data center solutions in a box to give our clients maximum flexibility at a much lower cost point than traditional data center solutions, such creations are vital to our strategy. EDSIs proprietary Edge data centers are specifically designed to fully enclose all power, cooling equipment and can be built in units from 320 – 5,000 square foot centers. The robust nature of such Edge data centers (hurricane resistance, security, decentralized disaster recovery options, flexibility, recycled, IBC Certified), lets EDSI offer a robust comprehensive solution to static data centers, allowing companies to build as they grow. As a global leader, SG Blocks has the experience and the capabilities to produce these Edge data centers not only to specification, but under traditional construction costs as well. Most notably, EDSI has signed an exclusive agreement with SG Blocks (NASDAQ: SGBX) for the Edge data center design and roll out program. Their patent on the interlocking design, ability to stack 9 modules high, and code compliance will allow for rapid deployment and scalability. Our data centers will be shipped approximately 90% complete and can be added to as needed to both fulfil demand and remain uniquely adaptable to our client’s needs.

 

Rovisys: EDSI has partnered with Rovisys, a leading independent provider of information management solutions, manufacturing automation solutions, control systems integration, building automation, discrete automation solutions and enterprise and industrial networks. Rovisys has built a reputation of quality and continuity, technical expertise, and attentive customer service. EDSI and Rovisys will work together to deliver solutions that drive productivity, improve product quality, increase asset utilization and integrate technology for the Chemical, Petrochemical, Life Science, Consumer Packaged Goods, Glass, Metals, Power & Energy, Data Center, Building Management, Water & Wastewater, Paper & Wood and Oil & Gas industries. Rovisys’ offices are located across North America, and in Singapore, Taiwan, and the Netherlands.

 

Forgeworks: Over the past year the Company and Forgeworks have partnered together to understand and implement the best market fit, identify key economic drivers, and develop a financial and business model to best position EDSI in the marketplace. EDSI has leveraged Forgeworks’ engine for launching and building companies to best position the Company as a next-generation market leader in the immersion-cooled data center technology space.

 

Competition

 

Our competition lies in immersion-cooled modular edge data center markets. We see our direct competitors as the below listed companies in that they invest and offer similar products and services independently. There are other entities which may also compete with us in certain aspect in these markets.

 

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Submer: Submer was founded in 2015 and provides modular immersion-cooled data centers, along with other products, platforms, APIs, processes and installations that intend to move hyperscalers, colocation and key industries to new levels of efficiency and innovation. Submer offers its MicroPod, SmartPod, MegaPod modular datcenters and offers SmartCoolant liquid to a variety of industries, including rendering, gaming, colocation, education and research, hyperscalers, blockchain, government, banking and fintech, and telecommunications. Submer generated $14.5 Billion of sales in Fiscal Year 2021.

 

Green Revolution Cooling: Founded in 2009, GRC has developed single-phase immersion-cooling technology and offers ICEraQ®, ICEtank®, HashRaQ®, and HashTank® as its modular immersion-cooled data center products aimed at reduced up front capital costs, energy cost savings, rapid deployment and environmental resilience. GRC generated estimated revenues of $4.1 Million in 2021.

 

EdgeConneX: Founded in 2009, EdgeConneX is focused on driving next-generation data center innovation and helping customers define and deliver their own unique vision for the Edge networks. EdgeConneX delivers proximate data center solutions ranging from 40kW to 40MW or more and provides the scalable capacity, power, and connectivity to meet the growing demands of businesses and end users. Since late 2013, EdgeConneX has built over 40 data centers, including Edge Data Centers and a growing number of regional and hyperscale solutions across North America, Europe, and South America.

 

Markets

 

According to the IDC Data Age 2025 report, nearly 30% of data by 2025 will require real-time processing. Data consumption shows no signs of slowing down and this ever-increasing demand will need to be addressed at a hyper-local level. EDSI’s scalable high-density immersion-cooled technology solutions, which can be deployed rapidly and cost effectively with the ability to provide high density data delivery at the edge, are an effective method to roll out capacity and meet growing demand.

 

Industries that will benefit from low-latency technology with a lower carbon footprint include cryptocurrency mining, public and private cloud providers, data centers, high-performance computing providers, virtual desktop infrastructure providers, telecom, cybersecurity and disaster recovery providers, streaming providers, artificial intelligence innovators, colleges, hospitals, governments, and enterprise blockchain infrastructure providers.

 

Number of Persons Employed

 

As of March 31, 2022, we have approximately 10 total employees and contractors facilitating operations, including our executive officers and staff.

 

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ITEM 1A. RISK FACTORS

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None

 

ITEM 2. DESCRIPTION OF PROPERTIES

 

Our mailing address is 3550 Lenox Road NE. 21st Floor Atlanta GA 30326. The Company does not hold any real property. The Company’s staff operate virtually via the internet.

 

ITEM 3. LEGAL PROCEEDINGS

 

To the best of our knowledge and belief, there is no pending legal action against the Company.

 

ITEM 4. MINE SAFETY DISCLOSURE.

 

Not Applicable.

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

Our common stock is currently listed on the OTC Pink Sheets as “EDGS”. As of December 31, 2021, there have been no public sales transactions, and there is currently no active market for the Company’s common stock.

 

Holders. As of March 31, 2022, there were approximately 159 holders of record of the common stock.

 

Dividends. We have not paid or declared cash distributions or dividends on our common stock and do not intend to pay cash dividends in the foreseeable future due to our illiquidity and inability to support operations to support our operations without funding from our officers, directors and shareholders. Future cash dividends will be determined by our Board of Directors based upon our earnings, financial condition, capital requirements and other relevant factors. We cannot provide any assurances or guarantees that any agreement for financing will not provide for restrictions on any future dividend payments, though our existing promissory notes do not have any such provisions.

 

9
 

 

Recent Sales of Unregistered Securities

 

Pursuant to a service agreement entered on January 25, 2021, the Company issued 100,000 common shares to OHGODACOMPANY, LLC in exchange for advisory services rendered.

 

Pursuant to the board approval of future share issuances to officers and directors in 2020, the Company issued 125,000 common shares in 2021 to Delray Wannemacher, CEO, for services rendered.

 

Pursuant to the board approval of future share issuances to officers and directors in 2020, the Company issued 125,000 common shares in 2021 to Daniel Wong, President, for services rendered.

 

Pursuant to the board approval of future share issuances to officers and directors in 2020, the Company issued 125,000 common shares in 2021 to Austin Bosarge, Director, for services rendered.

 

Pursuant to an advisory agreement in effect in September 2020, the Company issued 50,000 common shares in 2021 to Joshua Holmes as compensation for services rendered.

 

Pursuant to a service agreement entered on September 17, 2020, the Company issued 25,000 common shares to Levi Volk in 2021 in exchange for services rendered.

 

Pursuant to a service agreement entered on April 23, 2021, the Company issued a total of 288,000 common shares to Avanzar Oak LLC d/b/a Forgeworks.

 

The sales described in the preceding paragraphs were made in private placement transactions, pursuant to the exemption provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act (“Regulation D”), as a sale to “accredited investors,” as defined in Rule 501(a) of the Regulation D. The issuances did not involve any public offering; no general solicitation or general advertising was used in connection with the offering. The Company intends to use the proceeds from these transactions to fund its operations.

 

ITEM 6. [REMOVED AND RESERVED]

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.

 

10
 

 

The independent registered public accounting firm’s report on the Company’s consolidated financial statements as of December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020, includes a “going concern” explanatory paragraph, that describes substantial doubt about the Company’s ability to continue as a going concern.

 

General

 

EDGE DATA SOLUTIONS, INC. (the “Company”), formerly Blockchain Holdings Capital Ventures, Inc. (formerly Southeastern Holdings, Inc., formerly Safe Lane Systems, Inc.) was incorporated in the State of Colorado on September 10, 2013. Safe Lane Systems, Inc. redomiciled to become a Delaware holding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned subsidiaries, SLS Industrial, Inc and Southeastern Holdings, Inc. (both Delaware corporations) and on September 30, 2016 completed a merger and reorganization in which Southeastern Holdings, Inc. (now Edge Data Solutions, Inc.) became the holding company. On December 1, 2016, the Company spun off its wholly owned subsidiary, SLS Industrial, Inc., along with its assets and liabilities, leaving Southeastern Holdings, Inc. as the only surviving entity.

 

On August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”), pursuant to which the Company purchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 (equivalent to 3,000,000 after the reverse split) shares of its common stock, par value $.0001 to the members of Blockchain in exchange for the assets of Blockchain.

 

On August 30, 2018 the Company changed its name to Blockchain Holdings Capital Ventures, Inc.

 

On January 13, 2020, the Company changed its name to Edge Data Solutions, Inc.

 

Edge Data Solutions, Inc. (EDSI) believes it is poised to be an industry-leading edge data center and cloud infrastructure provider. EDSI’s proprietary Edge Performance Platform (EPP) allows us to deploy next-generation edge data centers where they are needed most. EDSI’s data centers provide next-generation immersion Cooling technology that improves performance, reduces energy costs and latency. Key industries we believe we can serve more computing power to include fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video streaming, remote desktop, IoT, autonomous vehicles. Centralized infrastructure facilities servicing multiple geographical areas encounter many issues with data latency, congestion and weak network connections. To address this, data processing is moving closer to the customer. EDSI offers green, low-cost, secure colocation and private data hosting to meet this demand for Edge data centers. EDSI plans to deploy to strategic locations based on demand for Tier 2 and Tier 3 cities outside the major metropolitans to underserved markets, supporting both edge customers and areas of projected growth. With the rise and proliferation of this technology adoption we plan to solidify our footprint by securing multiple locations across the US, while generating revenue from our operations. The modular design and ability to add additional data centers as needed, preserves up front capital allowing for rapid deployment and scalability as business demand increases.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, certain conditions raise substantial doubt about the Company’s ability to do so. New business opportunities may never emerge, and we may not be able to sufficiently fund the pursuit of new business opportunities should they arise.

 

As of December 31, 2021, we had $831,209 in cash on hand. Our current monthly cash requirement for basic operations is approximately $175,000, and the Company anticipates it will require significant additional sales or capital to fully execute our business plan. We are currently dependent on the successful generation of sufficiently profitable sales and on necessary capital to continue to operate. While we have generated sales, there can be no guarantee that we will continue to generate sales, generate sufficient cash or raise sufficient capital to continue to fund operations.

 

PLAN OF OPERATIONS

 

During 2021, we commenced sales of our Edge Performance Platform, including data center infrastructure, equipment and services, and have continued to generate these sales. There can be no assurances that these sales will continue or that customers will execute upon their commitments to purchase our solutions. EDSI’s business is young and may also be adversely affected by issues with product, supply chain challenges, operational issues, and competition.

 

We are currently seeking to grow our customer base and to increase our current customers’ reliance on and usage of our resources. Further, we are seeking to expand into the sale and resale of modular data centers and related infrastructure and equipment. While our efforts have generated limited revenue and gross profit, there can be no assurances that these efforts will be successful or produce sufficient income or cash inflows from operations. As a result, we are dependent upon additional sales that generate sufficient profit and may require additional capital from investors to finance our operations and continue as a going concern.

 

11
 

 

Our goals for the next year are as follows:

 

●Significantly grow sales through our current partnerships and customer relationships
●Enhance the profitability of current data center sales
●Develop new products and services
●Establish strategic revenue-generating partnerships

 

APPLICATION OF FUNDS (1)

 

The following represents our estimated use of cash for operations over the next year to fully implement our business plan in addition to our current operations.

 

Item  Amount (1) 
Go-to-market sales, marketing, branding, events  $1,128,000 
General, administrative, and public company costs   1,374,000 
Research, product and software development   406,000 
Solutions delivery staffing and other costs   216,000 
Capital investment in joint ventures and testing facilities   276,000 
Total  $3,400,000 

 

We expect to expend funds from operations and capital on a quarterly basis, as follows:

 

Period  Amount (1) 
Q1 2022  $1,541,000 
Q2 2022   809,000 
Q3 2022   525,000 
Q4 2022   525,000 
Total Cash Required  $3,400,000 

 

(1)All budget-related items listed are estimates that may change at the discretion of management, depending on business needs and priorities and available capital.

 

The Company may change any or all of the budget categories in the execution of its business model. None of the line items are to be considered fixed or unchangeable. The Company may need substantial additional revenues and/or capital to fully implement its business plan and support its budget.

 

OFF BALANCE SHEET ARRANGEMENTS

 

In 2021, management entered informal agreements to co-fund 50% of the capital expenditures, including equipment, leasehold improvements and other similar costs, for immersion-cooled data center test sites with one of its customers. As of December 31, 2021, the Company had not yet expended its portion of the cash and thus excluded its share of costs from the investments section of the balance sheet. In February 2022, the Company remitted $54,575, representing 50% of $109,950 in leasehold improvements, electrical and mechanical costs, to the entity that controls the property.

 

Management has not identified any other material off balance sheet arrangements.

 

12
 

 

Results of Operations for the Years Ended December 31, 2021 and 2020

 

During the years ended December 31, 2021 and 2020, the Company generated total net revenues of 1,566,617 and $34,670 and incurred associated costs of $1,207,151 and $24,092, for gross profit of $359,466 and $10,578, all respectively, representing increases of $1,531,947 (4,419%), $1,183,059 (4,911%) and $348,888 (3,299%), all respectively, due to new sales of its Edge Performance Platform solutions in 2021. While the Company generated revenue in 2021, the customer base is heavily concentrated, volume is limited, and there can be no guarantee of future revenues or growth.

 

During the years ended December 31, 2021 and 2020, the Company incurred $64,072 and $1,059, respectively, of sales and marketing expenses and $587,947 and $221,942, respectively, of general and administrative costs, including consulting fees, professional services fees and other administrative costs. Sales and marketing costs increased by $63,013, or 5,950%, as a result of commissions paid. General and administrative costs increased by $366,005, or 165%, primarily due to executive bonuses.

 

During the years ended December 31, 2021 and 2020, the Company incurred depreciation expense of $28,396 and $17,519, respectively, with the increase being a result of ongoing depreciation on equipment purchased in prior periods.

 

During 2021 and 2020, the Company recognized $159,220 and $381,900 of stock-based compensation expense, respectively, from the issuance of its common shares to executives, consultants, and advisors. The Company also paid total compensation of $359,145 to the CEO and $280,000 to its President in 2020, as compared to $90,000 and $84,040, respectively in 2020, for increases of $269,145 and $195,960, respectively.

 

During the year ended December 31, 2021, the Company recognized $122,732 of interest expense, as compared to $66,135 for the year ended December 31, 2020. The increase of $56,597 or 86%, is primarily attributable to the accrual of interest on significant new convertible debt issuances in 2020 and also includes interest charges incurred by related parties who paid expenses on behalf of the Company.

 

Aside from interest expense, during the years ended December 31, 2021 and 2020, the Company recognized net other income of $12,971 and $1,081, respectively, for an increase of $11,890 or 1,100%. The change was driven by cryptocurrency mining and selling activities and impairment losses during 2021.

 

As a result, the Company incurred net operating losses of $929,075 and $850,936 for years ended December 31, 2021 and 2020, respectively, for an increase of $78,139, or 9%, to net losses. This change was primarily a result of increased stock-based compensation and increases in executive compensation, offset by new sales.

 

13
 

 

Liquidity and Capital Resources

 

In January 2020, the Company issued 627,862 equity units, each consisting of three-year warrant to purchase two shares of the Company’s common stock for $0.50 each and one share of the Company’s common stock, to two individuals in exchange for conversion of $100,000 of convertible notes and $6,966 of accrued interest and an additional $50,000 of cash.

 

In February 2020, the Company issued two one-year convertible notes for total proceeds of $110,000, each bearing interest at 10% annually and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

In April 2020, the Company issued three one-year convertible notes for total proceeds of $150,000, bearing interest at rates ranging from 10-12% per annum and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

In June 2020, the Company issued a one-year convertible note for total proceeds of $50,000, bearing interest at 12% per annum and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

In July 2020, the Company issued a one-year convertible note for total proceeds of $25,000, bearing interest at 10% per annum and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

In August 2020, the Company issued three one-year convertible notes for total proceeds of $175,000, each bearing interest at 10% per annum and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

In December 2020, the Company issued five one-year convertible notes for total proceeds of $110,000, each bearing interest at 15% per annum and calling for conversion at a 30% discount in the event of a financing event exceeding $1,000,000.

 

As discussed in Note 7 to the financial statements, the Company defaulted on $749,500 of these notes, as amended. In February 2022, the Company cured the default on $649,500 of convertible debt and associated accrued interest through (a) repayment of a $100,000 note and (b) conversion of $549,500 of convertible notes. As of the date of this filing, management is negotiating an extension on the remaining $100,000 of convertible debt.

 

During the twelve months ending December 31, 2022, the Company estimates it will need approximately $3,400,000 to continue to implement its business plan and operations. The Company currently generates revenues from its data center offerings. However, there can be no assurances that the Company will be successful in its efforts to generate enough sufficiently profitable sales and growth to continue current operations and to fully implement its business plan. Other than the foregoing, the Company is not currently aware of any significant trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on sales or income from continuing operations, or liquidity and capital resources.

 

14
 

 

Short Term

 

On a short-term basis, we anticipate continued generation of data center infrastructure and equipment revenues. Based on prior history, we anticipate that short-term sales may be insufficient to satisfy current and future liabilities as we continue to pursue expansion of our current customer base and product and service offerings.

 

No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred, in the event that profits are insufficient to fund operations.

 

Capital Resources

 

Our capital resources currently consist of cash, convertible debt financing, and the sale of equity subscriptions.

 

Need for Additional Financing

 

While we have sufficient capital to meet our near-term obligations, there can be no assurances that we will generate sufficient revenues and profits to fund operations. Our capital is currently insufficient to fully execute upon our business plan. We plan to seek debt or equity financing to cover such cash needs, which we anticipate will significantly increase to execute on the business plan.

 

Within the next twelve months, we will need to generate profits of or raise an additional $1 million in financing to continue operations. To fully execute upon our business plan, we estimate that we will need approximately $10 million to fully execute on our business plan.

 

No commitments have been made to provide additional funding by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.

 

Critical Accounting Policies

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

 

15
 

 

Impairment of Long-life Assets

 

In accordance with ASC Topic 360, the Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Income Tax

 

The Company accounts for income taxes under ASC 740, “Income Taxes.” Under ASC 740, deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Fiscal year

 

The Company employs a fiscal year ending December 31.

 

Net Income (Loss) per share

 

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock warrants, and common stock issuable upon the conversion of the Company’s preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments, including cash and cash equivalents, as reported in the accompanying balance sheet, are stated at fair value.

 

Stock-Based Compensation

 

The Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of the effective date and are subsequently modified.

 

Fair Value of Financial Instruments

 

The carrying amount of accounts payable is considered to be representative of respective fair values because of the short-term nature of these financial instruments.

 

Revenue Recognition

 

The Company recognizes revenue under ASC 606, using the following five-step model, which requires that the Company: (1) identify a contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to performance obligations and (5) recognize revenue as performance obligations are satisfied. The Company’s current and anticipated revenue streams consist of:

 

  1. Data center infrastructure and equipment sales – The Company resells immersion-cooled data center products, equipment and project management services.
  2. Computing – The Company owns and operates high performance servers to provide hardware acceleration for rendering farms to process 3D and video rendering and gaming. In addition, these multi-purpose servers produce revenue from mining when the servers are not processing other jobs to ensure zero idle time and have the ability to run AI and HPC processing as well.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

16
 

  

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Edge Data Solutions, Inc.

A Delaware Corporation

 

Financial Statements and Report of Independent Registered Public Accounting Firm

 

As of December 31, 2021 and 2020 and for the
Years Ended December 31, 2021 and 2020

 

17
 

 

Edge Data Solutions, Inc.

 

TABLE OF CONTENTS

 

  Page
Financial Statements as of December 31, 2021 and 2020 and for the Years Ended December 31, 2021 and 2020:  
   
Report of Independent Registered Public Accounting Firm (PCAOB #76) 20
   
Balance Sheets 21
   
Statements of Operations 22
   
Statement of Changes in Stockholders’ Deficiency 23
   
Statements of Cash Flows 24
   
Notes to Financial Statements 25

 

18
 

 

 

 

Your Vision Our Focus

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Edge Data Solutions, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Edge Data Solutions, Inc. (the “Company”) as of December 31, 2021 and 2020 and the related statements of operations, changes in stockholders’ deficiency and cash flows for the years ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph – Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses since inception and has a working capital deficiency both of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Turner, Stone & Company, L.L.P.

 

Dallas, Texas

March 31, 2022

 

We have served as the Company’s auditor since 2019.

 

Turner, Stone & Company, L.L.P.

Accountants and Consultants

12700 Park Central Drive, Suite 1400

Dallas, Texas 75251

Telephone: 972-239-1660 ⁄ Facsimile: 972-239-1665

Toll Free: 877-853-4195

Web site: turnerstone.com

 

19
 

 

EDGE DATA SOLUTIONS, INC.

BALANCE SHEETS

As of December 31, 2021 and 2020

 

         
   As of 
   December 31, 2021   December 31, 2020 
         
ASSETS          
Current Assets:          
Cash and cash equivalents  $831,209   $80,368 
Accounts receivable   2,781    651 
Deposits   2,161,683    46,122 
Inventory   11,530    - 
Crypto assets held   3,940    1,197 
Other current assets   6,021    4,668 
Prepaid expense   13,806    4,409 
Total Current Assets   3,030,970    137,415 
           
Non-Current Assets:          
Right of use asset - finance lease   16,206    29,171 
Property and equipment, net   40,248    67,492 
Security deposit   7,753    7,753 
Total Non-Current Assets   64,207    104,416 
           
TOTAL ASSETS  $3,095,177   $241,831 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY          
Current Liabilities:          
Accounts payable  $186,523   $118,608 
Accrued liabilities   451,944    45,548 
Customer deposits   3,197,990    - 
Deferred revenue   9,478    1,035 
Convertible notes payable, short-term   749,500    720,000 
Advances from related parties   11,968    51,510 
Lease liability - finance, current portion   17,389    15,703 
Accrued compensation - related party   -    35,000 
Total Current Liabilities   4,624,792    987,404 
           
Non-Current Liabilities:          
Lease liability - finance, non-current portion   2,543    16,730 
Total Non-Current Liabilities   2,543    16,730 
           
Total Liabilities   4,627,335    1,004,134 
           
Commitments and Contingencies (Note 9)   -    - 
           
Stockholders’ Deficiency:          
Class A super majority voting preferred stock, $0.001 par value;
10,000,000 shares authorized, 7,000,000 issued and outstanding
with liquidation preference of $26,317 as of each, December 31,
2021 and December 31, 2020.		   7,000    7,000 
Class C convertible preferred non-voting stock, $0.001 par value,10,000,000 shares authorized, 7,000,000 issued and outstanding with liquidation preference of $3,500 as of each, December 31, 2021 and December 31, 2020.   7,000    7,000 
Preferred stock, value          
Common stock, $0.0001 par value; 150,000,000 shares authorized, 9,159,079 and 8,321,079 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively.   916    832 
Additional paid-in capital   792,635    633,499 
Accumulated deficit   (2,339,709)   (1,410,634)
Total Stockholders’ Deficiency   (1,532,158)   (762,303)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY  $3,095,177   $241,831 

 

See accompanying notes, which are an integral part of these financial statements.

 

20
 

 

EDGE DATA SOLUTIONS, INC.

STATEMENT OF OPERATIONS

For the Years Ended December 31, 2021 and 2020

 

   2021   2020 
   For the Year Ended December 31, 
   2021   2020 
         
Revenues:          
Data center infrastructure and equipment sales, net  $1,537,060   $- 
Computing revenues, net   29,557    34,670 
Total Revenue   1,566,617    34,670 
           
Cost of data center infrastructure sales   (1,177,668)   - 
Cost of computing revenues   (29,483)   (24,092)
Total Cost of Revenue   (1,207,151)   (24,092)
           
Gross Margin   359,466    10,578 
           
Operating Expenses:          
Sales and marketing   64,072    1,059 
General and administrative   587,947    221,942 
Compensation - related party   339,145    174,040 
Stock-based compensation expense   159,220    381,900 
Depreciation expense   28,396    17,519 
Total Operating Expenses   1,178,780    796,460 
           
(Loss) from operations   (819,314)   (785,882)
           
Other Income/(Expense):          
Interest expense   (122,732)   (66,135)
Loss on termination of prospective acquisition   -    (23,000)
Gain on debt forgiveness   -    12,250 
Gain on disposal of equipment   -    4,965 
Cryptocurrency mining income   16,972    4,847 
(Loss)/Gain on disposal of cryptocurrency   (2,807)   1,018 
Impairment of crypto assets held   (1,194)   - 
Small business grant income   -    1,001 
Total Other Income/(Expense)   (109,761)   (65,054)
           
Net Loss  $(929,075)  $(850,936)
           
Net Loss per share (basic and diluted)  $(0.11)  $(0.12)
           
Weighted average number of common shares outstanding   8,679,978    7,274,701 

 

See accompanying notes, which are an integral part of these financial statements.

 

21
 

 

EDGE DATA SOLUTIONS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICICIENCY

For the Years Ended December 31, 2021 and 2020

 

                                     
   Common Stock   Class A Preferred   Class C
Convertible
Preferred		   Additional         
                           Paid-in   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Deficiency 
Balance, December 31, 2019   5,651,217   $565    7,000,000   $7,000    7,000,000   $7,000   $55,817   $(559,698)  $       (489,316)
                                              
Debt conversions into equity units   427,862    43                        106,923         106,966 
Subscriptions to equity units   200,000    20    -    -    -    -    49,980         50,000 
Common shares issued as compensation   2,010,000    201              -         381,699         381,900 
Related party debt forgiveness                                 33,000         33,000 
Issuance of common stock for equipment   32,000    3                        6,080         6,083 
Net loss             -    -    -    -         (850,936)   (850,936)
Balance, December 31, 2020   8,321,079   $832    7,000,000   $7,000    7,000,000   $7,000   $633,499   $(1,410,634)  $(762,303)
                                              
Common shares issued as compensation   838,000    84              -         159,136         159,220 
Net loss             -    -    -    -    -    (929,075)   (929,075)
Balance, December 31, 2021   9,159,079   $916    7,000,000   $7,000    7,000,000   $7,000   $792,635   $(2,339,709)  $(1,532,158)

 

See accompanying notes, which are an integral part of these financial statements.

 

22
 

 

EDGE DATA SOLUTIONS, INC.

STATEMENT OF CASH FLOWS

For the Years Ended December 31, 2021 and 2020

 

   2021   2020 
   For the Year Ended December 31, 
   2021   2020 
         
Cash Flows from Operating Activities          
Net Loss  $(929,075)  $(850,936)
Adjustments to reconcile net loss to net cash (used in) operating activities:          
Depreciation   28,396    

17,519

 
Gain on disposal of equipment   

-

    (4,965)
Stock-based compensation   159,220    381,900 
Loss on prospective acquisition   -    23,000 
Gain on debt forgiveness   

-

    

(12,250

)
Changes in operating assets and liabilities:          
Change in accounts receivable   (2,130)   (651)
Change in deposits   (2,115,561)   (46,122)
Change in crypto assets held   (2,743)   (1,197)
Change in inventory   (11,530)   - 
Change in finance lease assets and liabilities   

15,969

    

12,980

 
Change in other current assets   (1,353)   (4,668)
Change in prepaid expenses   (9,397)   (4,409)
Change in security deposits   -    (7,753)
Change in accounts payable   67,915    498 
Change in accrued compensation - related party   (35,000)   (6,000)
Change in accrued liabilities   435,896    

34,568

 
Change in customer deposits   3,197,990    - 
Change in deferred revenue   8,443    1,035 
Change in accrued interest related to note conversions   -    6,966 
Net Cash Provided by/(Used in) Operating Activities   807,040    (460,485)
           
Cash Flows from Investing Activities          
Purchase of property and equipment   (1,152)   (84,133)
Proceeds from disposal of property and equipment   -    10,170 
Deposits on prospective acquisition   -    (23,000)
Net Cash (Used in) Investing Activities   (1,152)   (96,963)
           
Cash Flows from Financing Activities          
Proceeds from issuance of short-term convertible debt   -    620,000 
Related party advances   86,091    174,570 
Repayment of related party advances   (125,633)   (211,489)
Payments on finance lease   (15,505)   (9,718)
Sale of equity units   -    50,000 
Net Cash Provided by/(Used in) Financing Activities   (55,047)   623,363 
           
Net Change In Cash   750,841    65,915 
           
Cash at Beginning of Period   80,368    14,453 
Cash at End of Period  $831,209   $80,368 
           
Supplemental Disclosure of Cash Flow Information:          
Cash paid for interest 

$

17,081

   $

22,698

 
Cash paid for taxes 

$

-

   $

-

 
Convertible debt principal and accrued interest converted to equity units  $-   $106,966 
Issuance of common stock for equipment purchases  $-   $6,083 
Reclassification of accrued interest to principal on amended and restated convertible debt  $

29,500

   $

-

 
           
Supplemental Disclosure of Non-Cash Financing Activities          
Forgiveness of related party debt 

$

-

   $

33,000

 

 

See accompanying notes, which are an integral part of these financial statements.

 

23
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS

 

EDGE DATA SOLUTIONS, INC. (the “Company”), was incorporated in the State of Colorado on September 10, 2013. Safe Lane Systems, Inc. redomiciled to become a Delaware holding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned subsidiaries, SLS Industrial, Inc and Southeastern Holdings, Inc. (both Delaware corporations) and on September 30, 2016 completed a merger and reorganization in which Southeastern Holdings, Inc. (now Edge Data Solutions, Inc.) became the holding company. On December 1, 2016, the Company spun off its wholly owned subsidiary, SLS Industrial, Inc., along with its assets and liabilities, leaving Southeastern Holdings, Inc. as the only surviving entity.

 

On August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”), pursuant to which the Company purchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 (equivalent to 3,000,000 after the reverse split) shares of its common stock, par value $.0001 to the members of Blockchain in exchange for the assets of Blockchain.

 

On August 30, 2018, the Company changed its name to Blockchain Holdings Capital Ventures, Inc.

 


On January 13, 2020, the Company changed its name to Edge Data Solutions, Inc.

 

Business description

 

Edge Data Solutions, Inc. (EDSI) believes it is poised to be an industry-leading edge data center and cloud infrastructure provider. EDSI’s proprietary Edge Performance Platform (EPP) allows us to deploy next-generation edge data centers where they are needed most. EDSI’s data centers provide next-generation immersion Cooling technology that improves performance, reduces energy costs and latency. Key industries we believe we can serve more computing power to include fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video streaming, remote desktop, IoT, autonomous vehicles. Centralized infrastructure facilities servicing multiple geographical areas encounter many issues with data latency, congestion and weak network connections. To address this, data processing is moving closer to the customer. EDSI offers green, low-cost, secure colocation and private data hosting to meet this demand for Edge data centers. EDSI plans to deploy to strategic locations based on demand for Tier 2 and Tier 3 cities outside the major metropolitans to underserved markets, supporting both edge customers and areas of projected growth. With the rise and proliferation of this technology adoption we plan to solidify our footprint by securing multiple locations across the US, while generating revenue from our operations. The modular design and ability to add additional data centers as needed, preserves up front capital allowing for rapid deployment and scalability as business demand increases.

 

24
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP). The Company maintains the calendar year as its basis of reporting.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash Equivalents and Concentration of Cash Balance

 

The Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits. As of December 31, 2021 and 2020, the Company’s cash balances exceeded insurance limits by $581,209 and $0, respectively.

 

25
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

Right of Use Assets and Lease Liabilities

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. Since the Company had no leases in place prior to or during 2019, the Company has adopted ASC 842 prospectively and has applied it to its first lease agreement in 2020.

 

Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’ lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

 

Inventory

 

The Company values inventory at its original cost, adjusted to approximate the lower of actual cost or estimated net realizable value using assumptions about future demand and market conditions. In determining excess or obsolescence reserves for its products, the Company considers assumptions such as changes in business and economic conditions, other-than-temporary decreases in demand for its products, and changes in technology or customer requirements. In determining the lower of cost or net realizable value reserves, the Company considers assumptions such as recent historical sales activity and selling prices, as well as estimates of future selling prices. The Company fully reserves for inventories and non-cancellable purchase orders for inventory deemed obsolete. The Company performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances and non-cancellable purchase orders to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by the Company, additional inventory carrying value adjustments may be required.

 

As of December 31, 2021, the Company’s had $11,530 of inventory and had outstanding deposits of $2,161,683 with vendors for the purchase of equipment for resale to customers. As of December 31, 2021, these deposits consist of:

 

●$34,000 of equipment in transit and not yet delivered
●$2,127,683 of equipment in production and not yet shipped or delivered to customers

 

As of December 31, 2021, remaining costs of in-production equipment not yet shipped totaled $3,951,547. Terms with the Company’s vendors call for full payment prior to shipment when equipment is ready for delivery.

 

Property and Equipment

 

Property and equipment are stated at cost net of accumulated depreciation and amortization, and accumulated impairment, if any. Depreciation and amortization of property and equipment is provided using the straight-line method over estimated useful lives, which are all currently estimated at three years.

 

As of December 31, 2021, the Company’s property and equipment consisted of $84,133 of servers and other computing equipment, net of $16,641 of accumulated depreciation. Depreciation expense for year ended December 31, 2021 and 2020 was $28,396 and $17,519, respectively.

 

Long-Lived Assets

 

The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. Long-lived assets are grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. As of December 31, 2021, the Company determined that its long-lived assets have not been impaired.

 

Deferred Offering Costs

 

The Company accumulates costs incurred directly in connection with its unclosed securities offering, as announced on October 13, 2020, as deferred offering costs. In the event the offering is successful, the Company will record all related costs as an offset to additional paid-in capital. In the even the Company terminates the offering or management deems the offering will not likely be successful, the Company will charge these costs to expense in the period in which such a determination is made. During the year ended December 31, 2020, the Company incurred $21,000 of costs related to this offering. In March 2021, the Company terminated the offering and wrote off the $21,000 of deferred offering costs to general and administrative expense in 2020.

 

Fair Value of Financial Instruments

 

Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

 

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities inactive markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

 

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

 

The carrying amounts reported in the balance sheets approximate their fair value.

 

26
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

Revenue Recognition

 

Revenue Recognition

The Company recognizes revenue under ASC 606, using the following five-step model, which requires that the Company: (1) identify a contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to performance obligations and (5) recognize revenue as performance obligations are satisfied. The Company’s current and anticipated revenue streams consist of:

 

  1.

Data center infrastructure and equipment sales – The Company resells immersion-cooled data center products, equipment and project management services. Performance obligations include:

     
    ● Delivery of physical products
    ●

Provision of any agreed-upon project management and other services

    ● Conclusion of defined period for any support services
       
  2. Computing – The Company owns and operates high performance servers to provide hardware acceleration for rendering farms to process 3D and video rendering and gaming. In addition, these multi-purpose servers produce revenue from mining when the servers are not processing other jobs to ensure zero idle time and have the ability to run AI and HPC processing as well. The Company’s performance obligation with respect to computing revenue is the provision of specified computing services to the client.

 

During the years ended December 31, 2021 and 2020, the Company recognized $29,557 and $34,670 of revenue from its customers’ usage of computing credits, with associated costs of $46,525 and 24,092, all respectively. The Company further recognized a deferred revenue liability of $9,478 and $1,035, respectively for prepaid usage credits not yet used by its customers as of December 31, 2021 and 2020, respectively.

 

As of December 31, 2021, the Company recognized $3,197,990 in deposits representing cash paid by customers for data center infrastructure products to be delivered in subsequent periods and had corresponding deposits with vendors of $2,161,683 for product to be delivered.

 

Crypto Assets Held

 

The crypto assets held by the Company are accounted for as intangible assets with indefinite useful lives and are initially measured at cost. Crypto assets accounted for as intangible assets are not amortized, but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the crypto asset at the time its fair value is being measured. Impairment expense is reflected in other operating expense in the consolidated statements of operations. The Company assigns costs to transactions on a first-in, first-out basis.

 

As of December 31, 2021 and 2020, the carrying value of crypto assets held by the Company was $3,940 and $1,197, respectively.

 

Cryptocurrency Income

 

The Company records cryptocurrency generated, net of fees and valuation adjustments, as other income and classifies the cryptocurrency as crypto assets held at cost in its balance sheets. When the company sells its cryptocurrencies, it recognizes a gain or loss for the difference between original cost and the selling price, net of fees.

 

During the year ended December 31, 2020, the Company recognized $4,847 of cryptocurrency mining income, and gains of $1,018 on the sale of cryptocurrency.

 

During the year ended December 31, 2021, the Company recognized $16,972 of cryptocurrency mining income, losses of $2,807 on the sale of cryptocurrency and an impairment loss of $1,194 on cryptocurrencies held due to fair market value falling below original cost.

 

Stock-Based Compensation

 

The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model.

 

Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately when stock or options are awarded for previous or current service without further recourse.

 

Income Taxes

 

The Company is subject to taxation in various jurisdictions and may be subject to examination by various authorities.

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

 

27
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 3: GOING CONCERN

 

As shown in the accompanying financial statements as of December 31, 2021, the Company had $831,209 of cash and $3,030,970 of current assets, as compared to total current liabilities of $4,624,792, has incurred substantial operating losses, and had an accumulated deficit of $2,339,709. Furthermore, the Company’s revenue history is limited, and there can be no assurances of future revenues or sufficient profits to fund operations.

 

Given these factors, the Company may require financing from outside parties, and management intends to pursue outside capital through debt and equity vehicles. There is no assurance that these efforts will materialize or be successful or sufficient to fund operations and meet obligations as they come due.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

NOTE 4: STOCKHOLDERS’ DEFICIENCY

 

The Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class A Preferred Super Majority Voting Stock (“Class A”). The Class A shares have the right to vote upon matters submitted to the holders of common stock, par value $0.0001 of the Company. Class A shares have a vote equal to the number of shares of common stock of the Company which would give the holders of the Class A shares a vote equal to sixty percent (60%) of the common stock. This vote shall be exercised pro-rata by the holders of the Class A. The Company shall have the right to redeem, in its sole and absolute discretion, at any time one (1) year after the date of issuance of such Class A shares, all or any portion of the shares of Class A at a price of one cent ($0.01) per share. On October 4, 2018, the Company issued a total of 7,000,000 Class A shares to its CEO and President (formerly COO) as stock-based compensation for services rendered.

 

The Company has not currently authorized a Class B designation of Preferred Stock.

 

The Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class C Convertible Preferred Non-Voting Stock (“Class C”). Each share of Class C shall be convertible into one (1) shares of common stock. The holders of Class C shall be entitled to receive the same dividend as the holders of the common stock and such dividend shall be paid pro rata per share on a fully converted basis. The holders of Class C shall have piggyback registration rights. The Company shall have the right to redeem, in its sole and absolute discretion, at any time after five (5) years, all or any portion of the shares of Class C at a price of five dollars ($5.00) per share. The Class C shares shall be considered to have a junior liquidation preference to Class A shares and a senior dividend preference to Class A shares. On October 4, 2018, the Company issued a total of 7,000,000 Class C shares to its CEO and President (formerly COO) as stock-based compensation for services rendered. Subsequently, in April 2019, the Company filed an amended and restated certificate of designation, which restricts the CEO and President from converting the 7,000,000 shares into common stock for 36 months from the issuance date.

 

28
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

As of December 31, 2021, the Company was authorized to issue 150,000,000 shares of common stock. All common stock shares have full dividend and voting rights. However, it is not anticipated that the Company will be declaring dividends in the foreseeable future.

 

Financing Activities

 

On January 20, 2020, the Company purchased data center equipment components for 32,000 shares of common stock and capitalized $6,083 based on the estimated value of surrounding equity transactions.

 

In January 2020, the Company issued 627,862 equity units at $0.25 to two individuals in exchange for conversion of $100,000 of convertible notes and $6,966 of accrued interest and an additional $50,000 of cash. Each equity unit consists of one three-year warrant to purchase two shares of the Company’s common stock for $0.50 each, and one share of the Company’s common stock. The Company may call the warrants in the event its common stock trades for $1.00 or more per share for ten out of fifteen consecutive trading days. In connection with these transactions, the Company assigned $119,665 of value to the common stock and $37,301 to the warrants using the Black-Scholes model with the following inputs:

 

Risk-free interest rate  1.44%-1.51%
Expected life of warrants  3 years 
Annualized volatility   60%
Dividend rate   0%

 

The following table sets forth the Company’s warrant activity through December 31, 2021:

 

   Warrants   Shares Under Warrant   Term   Exercise Price   Remaining Life 
Balance, December 31, 2020  -   -             
                         
Warrants issued with equity units   627,862    1,255,724    3 years    $0.50     
                          
Balance, December 31, 2021   627,862    1,255,724               

 

Stock-Based Compensation

 

On February 18, 2020, the Company issued 50,000 shares of common stock to an advisor and recorded $9,500 of stock-based compensation expense.

 

On May 6, 2020, the Company agreed to issue 60,000 shares of common stock to a consultant for services rendered, resulting in stock-based compensation expense of $11,400.

 

On June 19, 2020, the Board of Directors approved the issuance of 750,000 fully vested common shares to its board members and officers as compensation for services rendered, consisting of 250,000 shares to Delray Wannemacher, CEO and Director, 250,000 shares to Daniel Wong, President and Director, and 250,000 shares to Austin Bosarge, Director. In connection with this issuance, the Board further approved the issuance of 375,000 common shares on July 1, 2021 and 375,000 common shares on July 1, 2022. Each of these future issuances will result in the issuance of 125,000 common shares to each director and officer. The Company recorded stock-based compensation expense of $142,500 upon approving issuance of the first 750,000 shares.

 

On July 7, 2020, the Company issued a total of 1,000,000 common shares, consisting of 500,000 to Delray Wannemacher, CEO and Director, and 500,000 to Daniel Wong, President and Director, as compensation for services rendered, resulting in stock compensation expense of $190,000.

 

On September 15, 2020, the Company granted 50,000 common shares to a consultant in exchange for services rendered, resulting in $9,500 of stock compensation expense. Under the advisory agreement, the Company will issue an additional 50,000 common shares to the advisor over the next two years.

 

On September 16, 2020, the Company granted 100,000 common shares to an advisor in exchange for services rendered, resulting in $19,000 of stock compensation expense. Under the advisory agreement, the Company will issue an additional 100,000 common shares to the advisor over the next two years.

 

During 2020, the Company issued a total of 1,150,000 common shares and 1,910,000 common shares to management, board members and consultants for services rendered, resulting in stock-based compensation expense of $381,900 for the year ended December 31, 2020.

 

Pursuant to a service agreement entered on January 25, 2021, the Company issued 100,000 common shares to OHGODACOMPANY, LLC in exchange for advisory services rendered, resulting in $19,000 of stock-based compensation expense.

 

In June 2020, the Board authorized the issuance of 125,000 common shares each to the CEO (Delray Wannemacher), President (Daniel Wong) and a Director (Austin Bosarge) on July 1, 2021 and July 1, 2022 for services rendered. Accordingly, the Company issued 375,000 common shares, resulting in stock-based compensation expense of $71,250.

 

Pursuant to consulting and advisory agreements, the Company issued 313,000 common shares due to consultants and 50,000 common shares to an advisor for services rendered in September 2021, resulting in compensation expense of $59,470 and $9,500, respectively.

 

Outstanding Shares

 

As of December 31, 2021, the Company had 9,159,079 common shares outstanding.

 

As of December 31, 2021, 7,000,000 shares of Class A Preferred Stock and 7,000,000 shares of Class C Preferred Stock were issued and outstanding and are held by the Company’s CEO and President.

 

29
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 5: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

Accounts payable consisted of $74,434 of liabilities incurred by the issuer prior to the merger as of each December 31, 2021 and 2020. The remaining accounts payable of $112,089 and $44,174 as of December 31, 2021 and 2020, respectively, consisted of amounts due for professional services and various other general and administrative expenses incurred after the acquisition.

 

As of December 31, 2021 and 2020, accrued liabilities consisted of the following:

   2021   2020 
   As of December 31, 
   2021   2020 
State and local tax liabilities  $

201,559

   $1,811 
Accrued interest   119,889    43,737 
Payroll liabilities   117,976    - 
Accrued expenses   6,967    - 
Accrued commissions   5,553    - 
           
Total accrued liabilities  $

451,944

   $45,548 

 

As of December 31, 2021 and 2020, there was $0 and $0 and $5,000 and $30,000 of accrued compensation due to entities controlled by the CEO and President, all respectively.

 

NOTE 6: RELATED PARTY TRANSACTIONS

 

During the year ended December 31, 2020, the Company paid out previously accrued consulting fees payable to the CEO and President of $22,000 and $19,000, respectively, recognized $90,000 and $84,039 of current compensation expense, and paid $6,600 and $3,909 in health insurance premiums for the CEO and President, all respectively.

 

During the year ended December 31, 2021, the Company paid out previously accrued consulting fees of $5,000 and $30,000, along with current period compensation of $209,145 and $30,000 to entities controlled by the CEO and President, for management services, all respectively. Furthermore the Company paid the CEO and President bonuses of $150,000 each.

 

The Company did not have consulting or employment agreements with these individuals or their entities, and as a result, these fees fluctuated from time to time. While the Company believed these individuals were appropriately classified as contractors during the respective periods and has accordingly neither paid nor accrued payroll taxes, these payments through December 31, 2021 may result in future tax liabilities should the Internal Revenue Service deem these individuals to be employees.

 

On December 31, 2021, the Board of Directors appointed Paul Manos as the Company’s interim CFO for compensation of $10,000 monthly and subsequently increased compensation to $12,500 per month. The Board of Directors also established salaries of $275,000 and $210,000 per year for the CEO and President and subsequently increased compensation to $385,000 and $310,000 per year, respectively.

 

As of December 31, 2021 and 2020, the Company owed $0, $0, $5,000 and $30,000 of outstanding compensation to the CEO and President, all respectively.

 

During the year ended December 31, 2020, the Company’s CEO and President paid expenses on behalf of the Company totaling $112,922 and $61,648, and the Company repaid $120,652 and $90,838 of related party advances, respectively.

 

In June 2020, Austin Bosarge joined the Company’s Board of Directors. In connection with his appointment to the Board of Directors, he forgave $33,000 of outstanding fees due to his company for previous professional services rendered, resulting in a deemed contribution of $33,000 for the year ended December 31, 2020.

 

During the year ended December 31, 2021, the Company’s CEO, President, and Interim CFO paid expenses on behalf of the Company totaling $72,634, $13,458 and $1,504, and the Company repaid $120,985, $4,648 and $208 of related party advances, respectively.

 

As of December 31, 2021 and 2020, the Company was indebted to the CEO for $3,158 and $51,510, to the President for $8,810 and $0, and to the Interim CFO for $1,296 and $0, all respectively, for expenses paid on behalf of the company.

 

30
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 7: CONVERTIBLE NOTES

 

In November 2019, the Company issued a convertible note for $100,000. This note matured one year from execution and accrued interest at a rate of 10% per annum. Conversion terms call for conversion of principal and accrued interest at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000. On February 2, 2021, the parties amended the convertible note, resulting in (a) interest accruing at 15% per annum and (b) extended maturity through February 2022. As amended, conversion terms called for conversion to common stock at $0.35 per share at the Holder’s option, or in the event of an equity offering of at least $1 million in aggregate at the lesser of (a) 70% of the offering price, (b) $0.50 per share.

 

In January 2020, two individuals converted a total of $100,000 of outstanding principal and $6,966 of accrued interest into 427,862 equity units, each consisting of one common share and a three-year warrant to purchase two shares of common stock at $0.50 per share, in connection with additional subscriptions totaling $50,000 to purchase 200,000 of these equity units.

 

In February 2020, the Company issued two short-term convertible notes for total proceeds of $110,000. These notes mature one year from execution and accrue interest at a rate of 10% per annum. Conversion terms originally called for conversion of principal and accrued interest at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000. On September 14, 2021, the parties amended one of these convertible notes having original principal of $100,000, resulting in (a) the reclassification of $10,000 of accrued interest to principal, (b) the accrual of 15% interest on the amended principal of $110,000, and (c) a new maturity date of December 31, 2021. Terms of the Amended and Restated Convertible Note called for conversion upon closing of any aggregated equity offering of at least $1 million at the lesser of (a) $0.35 per share or (b) 80% of the price per common share of the offering.

 

In April 2020, the Company issued three short-term convertible notes for total proceeds of $150,000. These notes mature one year from execution and accrue interest at rates ranging from 10-12% per annum. Conversion terms call for conversion of principal and accrued interest at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000. In September 2021, the parties amended two of these convertible notes totaling $100,000, resulting in (a) the reclassification of $11,000 of accrued interest to principal, (b) the accrual of 15% interest on the amended principal of $111,000, and (c) a new maturity date of December 31, 2021. Terms of the Amended and Restated Convertible Note called for conversion upon closing of any aggregated equity offering of at least $1 million at the lesser of (a) $0.35 per share or (b) 80% of the price per common share of the offering.

 

In June 2020, the Company issued another short-term convertible note for total proceeds of $50,000. This note matures one year from execution and accrues interest at 12% per annum. Conversion terms call for conversion of principal and accrued interest at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000. On September 3, 2021, the parties amended the note, resulting in (a) the reclassification of $6,000 of accrued interest to principal, (b) the accrual of 15% interest on the amended principal of $56,000, and (c) a new maturity date of December 31, 2021. Terms of the Amended and Restated Convertible Note called for conversion upon closing of any aggregated equity offering of at least $1 million at the lesser of (a) $0.35 per share or (b) 80% of the price per common share of the offering.

 

In July 2020, the Company issued a short-term convertible note for total proceeds of $25,000. This note matures one year from execution and accrues interest at 10% per annum. Conversion terms call for conversion of principal and accrued interest at 85% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000.

 

In August 2020, the Company issued a short-term convertible note for total proceeds of $100,000. This note matures one year from execution and accrues interest at 10% per annum. Conversion terms call for conversion of principal and accrued interest at 85% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000. On February 4, 2021, the parties amended the convertible note, resulting in (a) interest accruing at 15% per annum and (b) extended maturity through August 2021. As amended, conversion terms called for conversion to common stock at $0.35 per share at the Holder’s option, or in the event of an equity offering of at least $1 million in aggregate at the lesser of (a) 70% of the offering price, (b) $0.50 per share.

 

In August 2020, the Company issued two short-term convertible notes totaling $75,000. The notes mature one year from execution and accrue interest at 10% per annum. Conversion terms call for conversion of principal and accrued interest at the lesser of (i) 70% of the stock price or (ii) $0.50 per share, upon closing any offering resulting in aggregate financing of at least $1,000,000. On September 14, 2021, the parties amended one of these convertible note having original principal of $25,000, resulting in (a) the reclassification of $2,500 of accrued interest to principal, (b) the accrual of 15% interest on the amended principal of $27,500, and (c) a new maturity date of December 31, 2021. Terms of the Amended and Restated Convertible Note called for conversion upon closing of any aggregated equity offering of at least $1 million at the lesser of (a) $0.35 per share or (b) 80% of the price per common share of the offering.

 

In December 2020, the Company issued five short-term convertible notes totaling $110,000. The notes mature one year from execution and accrue interest at 15% per annum. Conversion terms call for conversion of principal and accrued interest at the lesser of (i) 70% of the stock price or (ii) $0.50 per share, upon closing any offering resulting in aggregate financing of at least $1,000,000.

 

During the year ended 2021, the Company determined that all notes were in default and accrued default interest at 15% per annum while it worked with the noteholders to address the defaults.

 

The Company evaluated the convertible notes in light of ASC 470 and determined that a beneficial conversion feature exists, due to the fixed discount on conversion established in the notes. However, given the contingent nature and lack of a market for the Company’s stock and no imminent conversion events, the Company concluded that such a feature would be trivial in value and allocated the full principal amount to the convertible note liability.

 

Furthermore, the Company evaluated whether the features in these notes constitute embedded derivatives and should therefore be accounted for under ASC 815 – Derivatives and Hedging and has determined that there are no embedded derivatives.

 

During the years ended December 31, 2021 and 2020, the Company recognized $105,651 and $43,437 of interest expense on convertible debt, respectively. As of December 31, 2021 and 2020, accrued interest on convertible debt was $149,389 and $43,737, net of converted interest of $0 and $6,966 during the years then ended, respectively.

 

As of December 31, 2021, the Company was in default on $345,000 of its convertible notes, and subsequently, the Company was in default on the remaining $404,500 notes, as amended. As further discussed below, the Company cured the default on (a) a $100,000 convertible note by repaying outstanding balances in full on February 15, 2022 and (b) $549,500 of convertible notes through conversion on February 28, 2022. As of the date of this filing, the Company is currently negotiating extended terms with the Holder of the remaining $100,000 note in default.

 

Subsequently, on February 15, 2022, the Company repaid the entire outstanding balance of $118,725 on a convertible note, consisting of $100,000 original principal and $18,725 of accrued interest.

 

On February 28, 2022, convertible debtholders converted a total of $624,752, consisting of $549,500 of amended principal and $75,252 of accrued interest, into 1,824,751 equity units at a rate of $0.35 per unit. Each unit consists of one (1) share of Common Stock and one (1) Class B Warrant. Holders of Class B Warrants are entitled to purchase one (1) share of Common Stock at a strike price of $1.00 within three years of the issuance date.

 

31
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 8: INCOME TAX

 

The Company recorded no deferred income tax provision or benefit for the years ended December 31, 2021 or 2020, because the Company believes it is more likely than not that net operating loss carryforwards will not be utilized in the near future due to net losses. The Company has generated no taxable income. The income tax provision (benefit) differs from the amount computed by applying the U.S. Federal income tax rate of 21% plus applicable state rates to the loss before income taxes due to the unrecognized benefit resulting from the Company’s valuation allowance, as well as due to nondeductible expenses. The Company’s blended tax rate of 21% currently consists of 21% for U.S. Federal income tax and 0% for Delaware state income taxes. The following tables set forth the Company’s analysis of its deferred tax assets and related valuation allowances:

 

Income Tax Valuation Allowance

 

   As of 
   December 31, 2021 
     
Net loss before income taxes  $(929,075)
Adjustments to net loss:     
Permanent book-tax differences:     
IRS deduction limitations   1,747 
Net taxable income (loss)   (927,328)
Income tax rate   21%
Income tax recovery   (194,739)
      
Valuation allowance change   194,739 
      
Provision for income taxes  $- 

 

Components of Deferred Income Tax Assets

 

   December 31, 2021   December 31, 2020 
   As of 
   December 31, 2021   December 31, 2020 
Net operating loss carryforward  $336,983   $209,116 
Temporary differences – stock compensation   33,436    80,199 
Valuation allowance   (370,419)   (289,315)
Net deferred income tax asset  $-   $- 

 

NOTE 9: CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES

 

During the year ended December 31, 2021, three customers comprised 76% of data center revenues:

 

  ● Customer A: 39%
  ● Customer B: 33%
  ● Customer C: 15%

 

Three vendors also comprised 78% of the Company’s data center equipment and infrastructure purchases:

 

  ● Vendor A: 48%
  ● Vendor B: 20%
  ● Vendor C: 11%

 

The loss of or disruption to the Company’s relationships with these customers or vendors may be detrimental to the Company’s operations. Management has determined that no other significant concentrations, commitments, or contingencies existed as of December 31, 2021.

 

32
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

NOTE 10: SIGNIFICANT AGREEMENTS

 

On January 29, 2020, the Company entered into a master service agreement with Charter Trading Corporation (“Charter”), a Texas company, under which Charter will provide Ballistics materials for hardened Edge Data centers, for use by military contractors.

 

On June 24, 2020, the Company entered into a reseller agreement with Midas Green Technologies, LLC, a Texas-based technology company under which it can purchase and resell data center-related equipment. The Company has not yet realized any financial impacts.

 

On August 31, 2020, the Company engaged CIM Securities, LLC (“CIM”) as a financial advisor and its exclusive lead placement agent for the securities offering announced on October 13, 2020. The agreement called for cash advisory fees of $15,000 and the reimbursement of expenses and up to $5,000 in legal fees, among other fees. The parties terminated the agreement in March 2021.

 

On November 2, 2020, the Company entered into a reseller agreement with Lambda Labs, Inc., a provider of GPU-driven computing equipment and cloud services. The Company has not yet realized any financial impacts from this agreement.

 

On March 17, 2021, the Company entered into a joint marketing agreement with RoviSys Building Technologies, LLC (“RoviSys”), under which it will comarket its mobile and immersion-cooled data center solutions and other related services. The agreement grants a license to RoviSys to market the Company’s products.

 

On December 2, 2021, the Company entered into an agreement with a customer, under which EDSI will supply data center equipment and related components, along with optional project management services.

 

The total sale price of $9,074,100 and applicable sales taxes is receivable on the following schedule:

 

  ● $2,990,564 is due upon execution.
  ● $2,840,564 plus applicable sales tax, is due 30 days from execution.
  ● $3,787,418 is due prior to final shipment of the equipment.

 

Delivery commitments under this agreement range from 3-19 weeks from the date of execution, and the agreement provides for penalties paid by Company of $5,000 for each day in the event deliveries are ten or more days late and penalties of $10,000 per day after fifteen days past the estimated delivery date. Certain portions of the equipment have been delivered beyond the original 19-week window due to unforeseen logistics and collections delays, but management anticipates no actual penalties will result.

 

Under this agreement, EDSI warrants that the failure rate for miners in the liquid immersion-cooling system will not materially exceed that of miners in an air-cooled system. In the event that the cause of miner failures within three years of the date of delivery is proximally linked to the liquid immersion cooling systems, EDSI is liable to the Customer for liquidated damages equal to the purchase price less accumulated depreciation to date based on a five-year schedule. Management is currently evaluating estimates and any accounting impacts to future periods of this arrangement.

 

Through the date of this filing, the Company has collected $8,390,308, and the Company anticipates delivery of the equipment will conclude in April 2022.

 

NOTE 11: FINANCE LEASE

 

On March 27, 2020, the Company entered into a 36-month lease for data center equipment. Terms of the lease call for 36 monthly payments of $1,292, with the first payment due at inception, together with a $7,753 security deposit, $3,140 of sales tax and a $500 origination fee, for a total of $12,685 due up front. The Company paid the $12,685 on March 27, 2020.

 

The Company evaluated the lease in light of ASC 842 and determined that it was a long-term finance lease, since (a) the lease term is for the major part of the remaining economic life of the underlying asset and (b) the present value of the sum of lease payments equals or substantially exceeds the fair value of the underlying asset. At lease inception, the Company recognized a right of use asset for $38,895, prepaid tax of $3,140 and a lease liability of $38,895. The Company will ratably amortize the right of use asset and prepaid tax to lease expense over the lease’s life. Based on the present value, term and payment schedule, the Company determined the lease’s implicit rate to be 12.55% and will record interest expense accordingly over the life of the lease.

 

During the year ended December 31, 2021, the Company paid a total of $15,505, including $12,500 of principal and $3,005 of interest, to the lessor and recognized $10,247 of lease expense for the year ended December 31, 2021.

 

33
 

 

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2021 and 2020 and for the Years then Ended

 

As of December 31, 2021, lease-related assets and liabilities consisted of:

 

Assets    
Prepaid expense  $

1,308

 
Right of use asset - finance lease   16,206 
Security deposit   7,753 
Total lease-related assets  $25,268 
      
Liabilities     
Lease liability - finance, current portion  $

17,389

 
Lease liability - finance, non-current portion   2,543 
Total lease-related liabilities  $

19,932

 

 

Future maturities of the lease liability are as follows:

 

      
2022   14,186 
2023   2,543 
Total future maturities  $16,729 

 

NOTE 12: SUBSEQUENT EVENTS

 

On January 27, 2022, the Board of Directors approved bonuses of $190,000 and $228,000 to the Company’s CEO and President, respectively. The Board also increased the CEO and President’s annual base salaries to $385,000 and $310,000, respectively, with the increases taking retroactive effect as of January 1, 2022.

 

Management has evaluated all significant events through the date the financial statements were available to be issued, noting no further subsequent events requiring disclosure.

 

34
 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

Not Applicable.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective.

 

Management’s Annual Report On Internal Control Over Financial Reporting

 

Our management, including the Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, as appropriate and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

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

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. Based on this assessment, management believes that as of December 31, 2021, our internal control over financial reporting is not effective based on those criteria.

 

Specifically, management’s evaluation identified the following material weaknesses, which existed as of December 31, 2021:

 

  (1) Financial Reporting Systems: We did not maintain a fully integrated financial consolidation and reporting system throughout the period and as a result, extensive manual analysis, reconciliation and adjustments were required in order to produce financial statements for external reporting purposes.
     
  (2) Segregation of Duties: We do not currently have a sufficient complement of technical accounting and external reporting personal commensurate to support standalone external financial reporting under public company or SEC requirements. Specifically, the Company did not effectively segregate certain accounting duties due to the small size of its accounting staff, and maintain a sufficient number of adequately trained personnel necessary to anticipate and identify risks critical to financial reporting and the closing process. In addition, there were inadequate reviews and approvals by the Company’s personnel of certain reconciliations and other processes in day-to-day operations due to the lack of a full complement of accounting staff.

 

We believe that our weaknesses in internal control over financial reporting and our disclosure controls relate in part to the fact that we are a small reporting business with limited personnel. Management and the Board of Directors believe that the Company would need to allocate additional human and financial resources to address these matters, which at this time the Company does not have the financial capability to remediate. Management can give no assurances that it will ever be able to remediate such material weaknesses.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC to provide only management’s report in this annual report.

 

Changes in Internal Control Over Financial Reporting

 

During our most recent fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rule 13a- 15(f) or 15d-15(f) under the Securities Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 

None.

 

35
 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS AND EXECUTIVE OFFICERS

 

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

 

Name   Age   Position   Term
Delray Wannemacher   47   CEO, Chairman of the Board   Annual
Daniel Wong   38   President, Director   Annual
Paul Manos   31   Interim CFO   No set term
Austin Bosarge   56   Director   Annual

 

Our officers are elected by the board of directors at the first meeting after each annual meeting of our stockholders and hold office until their successors are duly elected and qualified under our bylaws.

 

The directors named above will serve until the next annual meeting of our stockholders. Thereafter, directors will be elected for one- year terms at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the board of directors absent any employment agreement. There is no arrangement or understanding between our directors and officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer.

 

BIOGRAPHICAL INFORMATION

 

DELRAY WANNEMACHER, CHIEF EXECUTIVE OFFICER AND DIRECTOR SINCE AUGUST 23, 2018

 

Delray Wannemacher, CEO, sets the strategic vision for the national and global operations of the Company. Mr. Wannemacher has more than 25 years of experience in building successful exits for investors, and his efforts have helped to raise hundreds of millions of dollars for a variety of public and private companies. He has extensive experience working with shifting regulatory environments, fintech and engineering trends, and possesses a global vision on how to leverage both technology and physical assets in tandem to maximize growth while minimizing risk. He has had the opportunity to work with emerging growth companies from a wide array of sectors, including the fields of real estate, energy, solar projects, blockchain, resources, biotech, fintech, media, internet, software, finance, crowdfunding portals, communications, international investments, and trade.

 

Mr. Wannemacher has successfully built and sold two private companies of his own and has helped to take another public. He has an extensive background in technology and applied science, holding over a dozen certifications with Cisco, AT&T, and various others. Most of these were acquired while working for MCI, Internet Communications, and HSA, where he was an integration engineer and managed over 174 locations. He gained extensive knowledge in WAN (Cloud) and LAN infrastructure, as well as a deep familiarity with designing, implementing and maintaining network operation centers (NOC), data centers, disaster recovery solutions, storage solutions, security solutions, cloud solutions, and other related matters.

 

In addition to championing the vision for the Company since 2018, Mr. Wannemacher holds several board seats including one with The World Trade Center of Atlanta (2016-2019) and ChineseInvestors.com, Inc. (2017-2020) Mr. Wannemacher also held an executive position as VP of Corporate Development with The World Trade Center of Atlanta from 2016 to 2019.

 

DANIEL WONG, CO-FOUNDER, PRESIDENT AND DIRECTOR SINCE AUGUST 23, 2018

 

Daniel Wong, Co-Founder and President, brings his diverse business experience to drive the company and build long term shareholder value. He spent his early in the telecom space helping expand Verizon’s footprint across the Southern California area before broadening his skills in the capital markets and founding companies of his own. In 2015, Mr. Wong launchedOmniVance Advisors, Inc., a capital markets consulting firm where he worked with companies in the biotech, telecom, blockchain, fintech, entertainment, and resources industries until 2018. He assisted publicly traded micro-cap companies to expand their market reach by creating solid business structures and effective communication with their clients and investors.

 

In 2018, he co-founded Blockchain Holdings, LLC that was soon after acquired by Edge Data Solutions, Inc and has been an executive and board member for the Company since. As President and Board Member for EDSI, Mr. Wong’s primary focus is to grow the company’s marketplace share using his expertise in blockchain technology, digital asset management, investment growth strategies, and customer and investor relations. His experience in launching multiple companies and assisting a variety of client companies to expand their market reach gives Mr. Wong the unique ability to make EDSI a leader in an emerging industry with unlimited potential.

 

PAUL MANOS, INTERIM CHIEF FINANCIAL OFFICER SINCE DECEMBER 31, 2021

 

Mr. Manos, 30, is a certified public accountant who has served as an accounting consultant to Edge Data Solutions, Inc. since August 2018. He is the Founder and President of Synergia CPA, LLC, SynergiaTech and Synergia Consultancy in Fort Collins, Colorado, which have provided public company accounting, management consulting and managed information technology services, to small businesses since 2016.

 

Previously, he served as GrowFlow Corp.’s interim CFO during 2018 and 2019 and has provided audit preparation, financial reporting, management consulting and controllership services to several other small public and private companies in SaaS, Technology, Education, Health and Wellness and other industries. He also served small- and mid-sized public and other entities with United States reporting requirements as an external auditor, in roles ranging from Staff to Manager to Director, at BF Borgers CPA PC (2020, 2013-2015), Artesian CPA, LLC (2016-2018) and several other public accounting firms from 2017 to 2021 .

 

AUSTIN BOSARGE, DIRECTOR SINCE JUNE 19, 2020

 

Austin Bosarge is an attorney focusing on corporate and intellectual property law, and real estate. He graduated cum laude from Suffolk University Law School in Boston and is licensed to practice in California. He is a licensed patent attorney and a California-licensed Real Estate Broker. Austin has had his own law firm since 1997, Turning Point Law, has practiced law with The Corporate Law Group in Burlingame, and is the former President and CEO of MagicHome, a Sausalito- based mortgage technology firm. Prior to MagicHome he held sales, marketing and business development positions with technology and entertainment related companies, including an executive role with Indiqu, Inc., a venture funded developer of mobile entertainment networks. Austin also owns a residential real estate brokerage firm, a commercial brokerage firm, and a commercial development company. Austin was a computer engineer in Boston for Prime Computer where he was a member of a 5 person team tasked with the design and development of a multiprocessor minicomputer. In addition to his law degree, Austin holds a Bachelor of Electrical Engineering from Georgia Tech where he was a walk-on member of the Yellow Jacket football team. 

 

In addition to his work with the Company since 2019, Mr. Bosarge has been General Counsel and Secretary for Neural Edge from 2017 to the present and Co-Founder and General Counsel for QuSecure, Inc., a leading post-quantum security company.

 

CONFLICTS OF INTEREST – GENERAL

 

Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts and corporation opportunity, involved in participation with such other business entities. While the officers and directors of our business are generally engaged full time in our business activities, the amount of time they devote to other business may be up to approximately 10 hours per week.

 

36
 

 

CONFLICTS OF INTEREST – CORPORATE OPPORTUNITIES

 

Certain of our officers and directors may be directors and/or principal stockholders of other companies and, therefore, could face conflicts of interest with respect to potential acquisitions. In addition, our officers and directors may in the future participate in business ventures, which could be deemed to compete directly with us. Additional conflicts of interest and non-arms length transactions may also arise in the future in the event our officers or directors are involved in the management of any firm with which we transact business. Our Board of Directors currently has no policy in place to address such possibilities.

 

Our officers and directors may actively negotiate or otherwise consent to the purchase of a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium over the initial cost of such shares may be paid by the purchaser in conjunction with any sale of shares by our officers and directors which is made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to our officers and directors to acquire their shares creates a potential conflict of interest for them in satisfying their fiduciary duties to us and our other stockholders. Even though such a sale could result in a substantial profit to them, they would be legally required to make the decision based upon the best interests of us and our other stockholders, rather than their own personal pecuniary benefit.

 

CODE OF ETHICS

 

The Board of Directors has adopted and approved the code of ethics included in Exhibit 14.1.

 

ITEM 11. EXECUTIVE COMPENSATION

 

Name & Position  Year   Contract Payments ($)   Bonus ($)   Stock Awards ($)   Option Awards ($)   Non-Equity Incentive Plan Compensation ($)   Non-Qualified Deferred Compensation Earnings ($)   All Other Compensation ($)  

Total

($)

 
Delray Wannemacher   2021   $209,145(1)  $150,000(4)  $23,750(2)  $-   $-   $-   $-   $382,895 
CEO   2020   $107,000(3)  $-   $142,500(2)  $-   $-   $-   $-   $249,500 
                                              
Daniel Wong   2021   $130,000(1)  $150,000(4)  $23,750(2)  $-   $-   $-   $-   $303,750 
President   2020   $73,039(3)  $-   $142,500(2)  $-   $-   $-   $-   $215,539 
                                              
Paul Manos   2021   $5,000(5)  $-(5)  $-   $-   $-   $-   $-   $5,000 
Interim CFO   2020   $-   $-   $-   $-   $-   $-   $-   $- 

 

(1) Mr. Wannemacher and Mr. Wong have no written contracts or employment agreements with the Company. The Company paid cash amounts of $209,145 to Wannemacher Corp., an entity owned and controlled by Mr. Wannemacher, and $130,000 to Omnivance Advisors, an entity owned and controlled by Mr. Wong, in 2021 for services rendered.
   
(2)

In June 2020, the Board approved the issuance of 750,000 common shares each to Mr. Wannemacher and Mr. Wong for services rendered. The Board further approved compensation of 125,000 additional common shares each on July 1, 2021 and July 1, 2022. Of these shares, the following pertained to Mr. Wannemacher and Mr. Wong’s services as directors and are also presented in DIRECTOR COMPENSATION:

 

●      2020: 250,000 common shares each, representing $47,500 of compensation

●      2021: 125,000 common shares each, representing $23,750 of compensation

●      2022: 125,000 common shares each

 

The Company valued the 2020 and 2021 issuances at $0.19 per share.

   
(3) Mr. Wannemacher and Mr. Wong have no written contracts or employment agreements with the Company. The Company paid aggregate cash amounts of $107,000 to Wannemacher Corp., an entity owned and controlled by Mr. Wannemacher, and $73,039 to Omnivance Advisors, an entity owned and controlled by Mr. Wong, during 2020 for accrued consulting fees for services rendered in 2020.
   
(4) On December 31, 2021, the Board approved and paid bonuses of $150,000 each to Mr. Wannemacher and Mr. Wong.
   
(5) In 2021 Company paid $5,000 of professional services fees to Synergia CPA, LLC, an entity owned and controlled by Mr. Manos, pertaining to services rendered as the Company’s Interim CFO. The Company paid total other professional services fees of $19,500 and $23,555 in 2021 and 2020, respectively, to entities owned and controlled by Mr. Manos for other professional services rendered prior to Mr. Manos’ appointment as Interim CFO. Payments to these entities consisted of $16,500 and $23,555 to Synergia CPA, LLC and $3,000 and $0 to Synergia Technology Services in 2021 and 2020, all respectively.

 

37
 

 

EMPLOYMENT AND CONSULTING AGREEMENTS

 

As approved by the Board on December 31, 2021 and adjusted on January 27, 2022, Mr. Wannemacher, the Company’s CEO and Chairman, receives a base salary of $385,000 per year, and Mr. Wong, the Company’s President, receives a base salary of $310,000.

 

The Company pays $12,500 monthly for Mr. Manos’ services as Interim CFO.

 

The Company’s executive officers may receive additional compensation as determined by the Board.

 

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

 

There are currently no employment contracts, compensatory plans or arrangements, including payments to be received from us, with respect to any of our directors or executive officers which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of employment with us. The aforementioned agreements do not provide for payments to be made as a result of any change in control of us, or a change in the person’s responsibilities following such a change in control.

 

DIRECTOR COMPENSATION

 

Name & Position  Year   Cash Compensation ($)   Bonus ($)   Stock Awards ($)   Option Awards ($)   Non-Equity Incentive Plan Compensation ($)   Non-Qualified Deferred Compensation Earnings ($)   All Other Compensation ($)  

Total

($)

 
Delray Wannemacher   2021   $-(1)  $-   $23,750(2)  $-   $-   $-   $-   $23,750 
Chairman   2020   $-(1)  $-   $47,500(2)  $-   $-   $-   $-   $47,500 
Daniel Wong   2021   $-(1)  $-   $23,750(2)  $-   $-   $-   $-   $23,750 
Director   2020   $-(1)  $-   $47,500(2)  $-   $-   $-   $-   $47,500 
Austin Bosarge,   2021   $-(1)  $-   $23,750(2)  $-   $-   $-   $-   $23,750 
Director   2020   $-(1)  $-   $47,500(2)  $-   $-   $-   $-   $47,500 

 

All of the Company’s officers and/or directors will continue to be active in other companies. All officers and directors have retained the right to conduct their own independent business interests.

 

The Company does not pay any Directors fees for meeting attendance.

 

(1) The Company does not currently pay separate cash compensation to its Directors. Mr. Wannemacher and Mr. Wong are also the Company’s key executives and receive cash compensation separately for their executive roles.
(2)

In June 2020, the Board approved the issuance of stock to each director in exchange for services rendered on the Company’s Board, consisting of:

  ● 250,000 common shares each to Mr. Wannemacher, Mr. Wong, and Mr. Bosarge on July 1, 2020. The Company valued these shares at $0.19.
  ● 125,000 common shares each to Mr. Wannemacher, Mr. Wong and Mr. Bosarge on July 1, 2021. The Company valued these shares at $0.19.
  ● 125,000 common shares each to Mr. Wanneamcher, Mr. Wong and Mr. Bosarge on July 1, 2022.

 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

 

As of December 31, 2021, Mr. Wannemacher (CEO and Chairman), Mr. Wong (President and Director), and Mr. Bosarge (Director) were each entitled to receive 125,000 common shares on July 1, 2022 for their services on the Company’s Board.

 

There were no other outstanding equity awards held by the Chief Executive Officer or the Company’s most highly compensated executive officers as of December 31, 2021 (the “Named Executive Officers”).

 

38
 

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

 

The following tables set forth certain information regarding beneficial ownership of our common stock, as of March 31, 2022.

 

  ● each person who is known by Edge Data Solutions, Inc. to own beneficially more than 5% of the Company’s outstanding common stock,
  ● each of the Company’s named executive officers and directors, and
  ● all executive officers and directors as a group.

 

Shares of common stock not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire the shares of common stock within 60 days are treated as outstanding only when determining the amount and percentage of common stock owned by such individual. Except as noted below the table, each person has sole voting and investment power with respect to the shares of common stock shown.

 

OFFICERS AND DIRECTORS

 

Title of Class  Name of Beneficial Owner (1)  Amount and Nature of Beneficial Owner  

Percent of

Class (2)

 
Common shares  Delray Wannemacher, CEO and Director   5,875,000(2)   42.6%(3)
Common shares  Daniel Wong, President and Director   4,875,000(4)   35.3%(5)
Common shares  Austin Bosarge, Director   575,000(6)   2.6%
Common shares  Paul Manos, Interim CFO   101,250(7)   0.5%
Common shares  All Directors and Executive Officers as a Group
(4 persons)		   11,426,250    81.0%

 

  (1) The address of each person listed above, unless otherwise indicated, is 3550 Lenox Road NE. 21st Floor Atlanta GA 30326
  (2) This number includes 1,000,000 shares of Common Stock owned by Wannemacher Corp., a company controlled by Mr. Wannemacher, 875,000 shares of Common Stock owned directly by Mr. Wannemacher, and 4,000,000 Preferred Class C shares that Mr. Wannemacher may convert 1:1 to common shares at any time after October 2021.
  (3) This percentage is based upon 10,983,832 shares issued and outstanding (22,261,189 on a fully diluted basis) and takes into account that holders of Common Stock only have 40% of the voting power due to the Class A Preferred Super Majority Voting Stock (“Class A”) and that as a holder of 4,000,000 Preferred Class A shares, Mr. Wannemacher has additional voting power of 16.2%.
  (4) This number includes 1,000,000 shares of Common Stock owned by Omnivance Advisors, Inc., a company controlled by Mr. Wong, 875,000 shares of Common Stock owned directly by Mr. Wong, and 3,000,000 Preferred Class C shares that Mr. Wong may convert 1:1 to common shares at any time after October 2021.
  (5) This percentage is based upon 10,983,832 shares issued and outstanding (22,261,189 on a fully diluted basis) and takes into account that holders of Common Stock only have 40% of the voting power due to the Class A and that as a holder of 3,000,000 Preferred Class A shares, Mr. Wong has additional voting power of 13.4%.
  (6) Mr. Bosarge directly owns these common shares.
  (7) Mr. Manos owns 100,000 common shares directly, and Paul Manos CPA LLC, an entity owned and controlled by Mr. Manos, owns 1,250 of these shares.
  (8) This percentage is based upon 10,983,832 shares issued and outstanding (22,261,189 on a fully diluted basis) and takes into account that holders of Common Stock only have 40% of the voting power due to the rights of the Class A stock held by the CEO and President.

 

GREATER THAN 5% STOCKHOLDERS

 

Title of Class  Name of Beneficial Owner  Amount and Nature of Beneficial Owner   Percent of
Class (1)		 
Common shares  Delray Wannemacher   5,875,000(2)   42.6%
Common shares  Daniel Wong   4,875,000(3)   35.3%
Common shares  Paul Dickman   1,153,534(4)   5.2%

 

  (1) Based upon 22,261,189 shares issued and outstanding on a fully diluted basis. This also takes into account that holders of Common Stock only have 40% of the voting power due to the Class A. As a result of the 60% Super Majority voting rights, Mr. Wannemacher and Mr. Wong have an additional 16.2% and 13.4% of effective common stock voting power, respectively.
  (2) This number includes 1,000,000 shares of Common Stock owned by Wannemacher Corp., a company controlled by Mr. Wannemacher, 875,000 shares of Common Stock owned directly by Mr. Wannemacher, and 4,000,000 Preferred Class C shares that Mr. Wannemacher may convert 1:1 to common shares at any time after October 2021.
  (3) This number includes 1,000,000 shares of Common Stock owned by Omnivance Advisors, Inc., a company controlled by Mr. Wong, 875,000 shares of Common Stock owned directly by Mr. Wong, and 3,000,000 Preferred Class C shares that Mr. Wong may convert 1:1 to common shares at any time after October 2021.
  (4) These are common shares owned directly by Mr. Dickman that comprise 5.2% of common stock on a fully diluted basis.

 

Rule 13d-3 under the Securities Exchange Act of 1934 governs the determination of beneficial ownership of securities. That rule provides that a beneficial owner of a security includes any person who directly or indirectly has or shares voting power and/or investment power with respect to such security. Rule 13d-3 also provides that a beneficial owner of a security includes any person who has the right to acquire beneficial ownership of such security within sixty days, including through the exercise of any option, warrant or conversion of a security. Any securities not outstanding which are subject to such warrants or conversion privileges are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person. Those securities are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person.

 

No shareholder meetings were held in the last fiscal year.

 

39
 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

Other than the stock transactions discussed above and related party advances and compensation disclosed in the financial statements, we have not entered into any transaction nor are there any proposed transactions in which any founder, director, executive officer, significant shareholder of our Company or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.

 

Director Independence

 

Our board of directors undertook its annual review of the independence of the directors and considered whether any director had a material relationship with us or our management that could compromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, the board of directors determined that the directors are not independent, as such term is used under the rules and regulations of the Securities and Exchange Commission. Delray Wannemacher, as Chief Executive Officer of the Company, Daniel Wong, as President, and Austin Bosarge in his capacity as General Counsel, are not considered to be “independent.”

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

GENERAL. TURNER, STONE & COMPANY, L.L.P. (“TURNER, STONE & COMPANY”) is the Company’s independent registered public accounting firm. The Company’s Board of Directors has considered whether the provisions of audit services are compatible with maintaining TURNER, STONE & COMPANY’s independence. The engagement of our independent registered public accounting firm was approved by our board of directors functioning as our audit committee prior to the start of the audit of our consolidated financial statements for the year ended December 31, 2021.

 

The following table represents aggregate fees billed to the Company for the years ended December 31, 2021 and 2020.

 

   Year Ended December 31, 
   2021   2020 
Audit Fees  $25,750   $23,000 
Audit-related Fees   –    – 
Tax Fees  $–   $– 
All Other Fees  $–   $– 
Total Fees  $25,750   $23,000 
All audit work was performed by the auditor’s full-time employees.          

 

40
 

 

PART IV

 

ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS

 

The following is a complete list of exhibits filed as part of this Form 10-K. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

 

EXHIBIT

NUMBER

   DESCRIPTION
     
2.1   Agreement and Plan of Merger and Reorganization into Holding Company Structure – September 29, 2016
2.2   Bill of Sale and Assignment and Assumption Agreement – August 23, 2018
3.1   Articles of Incorporation – Southeastern Holdings, Inc. – September 22, 2016
3.2   Certificate of Amendment to Articles of Incorporation – Name Change to Blockchain Holdings Capital Ventures, Inc. – August 30, 2018
3.3   Certificate of Amendment to Articles of Incorporation – Name Change to Edge Data Solutions, Inc. – January 13, 2020
3.4   By-Laws of Edge Data Solutions, Inc. – January 13, 2020
4.1   Certificate of Designation – Class A Preferred Supermajority Voting Shares – September 17, 2018
4.2   Certificate of Designation – Class C Preferred Shares – September 17, 2018
4.3   Amended and Restated Certificate of Designation – Class C Preferred Shares – April 4, 2019
4.4   Amended and Restated Certificate of Designation – Class C Preferred Shares – December 17, 2020
10.1   Reseller Agreement – Midas Green Technologies, LLC – June 24, 2020
10.2   Joint Marketing Agreement – Raptor Power Systems – July 14, 2021
10.3   Product Reseller Agreement – Raptor Power Systems – July 16, 2021
10.4   Engagement Agreement – CIM Securities, LLC – August 31, 2020
10.5   License Agreement – Midas Green Technologies, LLC – November 23, 2020
10.6   Sale of 20 MegaWatt Immersion-Cooled Solution – December 1, 2021
10.7   Engagement Letter and Agreements – Synergia CPA, LLC and Synergia Technology Services, LLC – December 8, 2021
14.1   Code of Ethics
31.1   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1   Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.2   Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 

101.INS   Inline XBRL Instance Document
     
101.SCH   Inline XBRL Taxonomy Extension Schema Document
     
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

41
 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  EDGE DATA SOLUTIONS, INC.
   
Date: March 31, 2022    
     
  By: /s/ Delray Wannemacher
    Delray Wannemacher, Chairman and CEO
    (Chairman of the Board and Principal Executive Officer)

 

Dated: March 31, 2022    
     
  By: /s/ Paul Manos
    Paul Manos, Interim CFO
    (Principal Financial and Accounting Officer)

 

Dated: March 31, 2022    
     
  By: /s/ Daniel Wong
    Daniel Wong, President and Director
     

 

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act

 

Our financials are set forth herein and access is given to all shareholders to our filing via our website. No other annual report has been sent to shareholders and no proxy statements have been sent to 10 or more security holders in the past fiscal year.

 

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Exhibit 2.1

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 2.2

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 3.1

 

 

 

 

 

Exhibit 3.2

 

 

 
 

 

 

 

 

 

Exhibit 3.3

 

 

 

 

Exhibit 3.4

 

BY-LAWS

 

of

 

EDGE DATA SOLUTIONS, INC.,

a Delaware Corporation

 

ARTICLE I

 

The initial principal office of the Corporation shall be in Atlanta, Georgia. The Corporation may have offices at such other places within or without the State of Georgia as the Board of Directors may from time to time establish.

 

ARTICLE II

 

CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken in connection with corporate action, by any provisions of the statutes of the Certificate of Incorporation, the meeting and vote of stockholders may be dispensed with, if a majority of the stockholders who should have been entitled to vote upon the action if such meeting were held, shall consent in writing to such corporate action being taken, as allowed.

 

ARTICLE III

 

Board of Directors

 

Section 1. GENERAL POWERS. The business of the Corporation shall be managed by the Board of Directors, except as otherwise provided by statute or by the Articles of Incorporation.

 

Section 2. NUMBER AND QUALIFICATIONS. The Board of Directors shall consist of up to seven (7) members. This number may be increased only by the vote or written consent of the holders of fifty-one (51) percent of the stock of the Corporation outstanding and entitled to vote. The current number of Directors shall be determined by the Board of Directors at its annual meeting. No Director need be a stockholder. The initial Board of Directors needs only to be one persons until multiple shareholders have been obtained.

 

Section 3. ELECTION AND TERM OF OFFICE. The Directors shall be elected annually by the stockholders, and shall hold office until their successors are respectively elected and qualified.

 

Election of Directors need not be by ballot.

 

Section 4. COMPENSATION. The members of the Board of Directors shall be paid a fee of $500.00 for attendance at all annual, regular, special and adjourned meetings of the Board. No such fee shall be paid any director if absent. Any director of the Corporation may also serve the Corporation in any other capacity, and receive compensation therefore in any form. Members of special or standing committees may be allowed like compensation for attending committee meetings.

 

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Section 5. REMOVAL AND RESIGNATIONS. The stockholders may, at any meeting called for the purpose, by vote of a majority of the capital stock issued and outstanding, remove any directors from office, with or without cause; provided however, that no director shall be removed in case the vote of a sufficient number of shares are cast against his removal, which if cumulatively voted at any election of directors would be sufficient to elect him, if cumulative voting is allowed by the Articles of Incorporation.

 

Section 6. VACANCIES. Any vacancy occurring in the office of director may be filled by appointment approved by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, unless sooner displaced.

 

When one or more directors resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power of appointment to fill such vacancy or vacancies, the vote thereon to be effective when such resignation or resignations become effective.

 

ARTICLE IV

 

Meetings of Board of Directors

 

Section 1. REGULAR MEETINGS. A regular meeting of the Board of Directors may be held without call or formal notice immediately after and at the same place as the annual meeting of the stockholders or any special meeting of the stockholders at such places within or without the State of Georgia and at such times as the Board may by vote from time to time determine.

 

Section 2. SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any place whether within or without the State of Georgia at any time when called by the President, Treasurer, Secretary or two or more directors. Notice of the time and place thereof shall be given to each director at least three (3) days before the meeting if by mail or at least twenty-four hours if in person or by telephone or e-mail. A waiver of such notice in writing, signed by the person or persons entitled to said notice, either before or after the time stated therein, shall be deemed equivalent to such notice. Notice of any adjourned meeting of the Board of Directors need not be given.

 

Section 3. QUORUM. The presence, at any meeting, of one-third of the total number of directors, but in no case less than two (2) directors, shall be necessary and sufficient to constitute a quorum for the transaction of business except as otherwise required by statute or by the Certificate of Incorporation, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present at the time and place of any meeting may adjourn such meeting from time to time until a quorum be present.

 

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Section 4. a. CONSENT OF DIRECTORS IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting, if to authorize such action a written consent thereto is signed by all members of the Board or committee, and such written consent is filed within the minutes of the Corporation.

 

b. The Board of Directors may hold regular or special meetings by telephone conference call, provided that any resolutions adopted shall be recorded in writing within 3 days of such telephone conference, and written ratification of such resolutions by the directors shall be provided within 30 days thereafter.

 

ARTICLE V

 

Committees of Board of Directors

 

The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

 

The committees of the Board of Directors shall keep regular minutes of their proceedings and report the same to the Board of Directors when required.

 

ARTICLE VI

 

Officers

 

Section 1. DESIGNATED OFFICERS. The Corporation shall have a Chief Executive Officer who may also be President, a Chief Financial Officer, one or more Vice Presidents, a Secretary and a Treasurer, and such other officers, agents and factors as may be deemed necessary by the Board. One person may hold any two offices except the offices of President and Vice President and the offices of President and Secretary.

 

Section 2. APPOINTMENT, TERM OF OFFICE AND QUALIFICATION. The officers specifically designated in Section 1 of this Article VI shall be chosen annually and appointed by the Board of Directors and shall hold office until their successors are chosen and qualified. No officer need be a director.

 

Section 3. SUBORDINATE OFFICERS. The Board of Directors from time to time may appoint other non-executive officers and agents, including one or more Assistant Secretaries and one or more Assistant Treasurers, each of whom shall hold office for such period, have such authority and perform such ministerial duties as are provided in these By-Laws or as the Board of Directors from time to time may determine. The Board of Directors may delegate to any office the power to appoint any such subordinate officers, agents and factors and to prescribe their respective authorities and duties.

 

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Section 4. REMOVALS AND RESIGNATIONS. The Board of Directors may at any meeting called for the purpose, by vote of a majority of their entire number, remove from office any officer or agent of the Corporation, or any member of any committee appointed by the Board of Directors.

 

The Board of Directors may at any meeting, by vote of a majority of the directors present at such meeting, accept the resignation of any officer of the Corporation.

 

Section 5. VACANCIES. Any vacancy occurring in the office of President, Vice President, Secretary, Treasurer or any other office by death, resignation, removal or otherwise shall be filled for the expired portion of the term in the manner prescribed by these By-Laws for the regular election or appointment to such office.

 

Section 6. THE PRESIDENT. The President shall manage the staff of the Corporation and, subject to the direction and under the supervision of the Board of Directors, shall have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees. The President shall preside at all meetings of the stockholders and of the Board of Directors at which he is present. The President shall do and perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

 

Section 7. THE VICE PRESIDENT. At the request of the President or in the event of his absence or disability, the Vice President, or in case there shall be more than one Vice President, the Vice President designated by the President, or in the absence of such designation, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. Any Vice President shall perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors, or the President.

 

Section 8. THE SECRETARY. The Secretary shall:

 

a. Record all the proceedings of the meetings of the Corporation and directors in a book to be kept for that purpose;

 

b. Have charge of the stock ledger (which may, however, be kept by any transfer agent or agents of the Corporation under the direction of the Secretary), an original or duplicate of which shall be kept at the principal office or place of business of the Corporation in the State of Georgia;

 

c. Prepare and make, at least ten (10) days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order;

 

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d. See that all notices are duly given in accordance with the provisions of these By-Laws or as required by statute;

 

e. Be custodian of the records of the Corporation and the Board of Directors, and of the seal of the Corporation, and see that the seal is affixed to all stock certificates prior to their issuance and to all documents, the execution of which on behalf of the Corporation under its seal have been duly authorized;

 

f. See that all books, reports, statements, certificates and the other documents and records required by law to be kept or filed are properly kept or filed; and

 

g. In general, perform all duties and have all powers incident to the office of Secretary and perform such other duties and have such powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors or the President.

 

Section 9. THE TREASURER. The Treasurer shall:

 

1 a. Act as Chief Financial Officer unless the Board bifurcates the job descriptions by resolution.

 

b. Have supervision over the funds, securities, receipts, and disbursements of the Corporation;

 

c. Cause all monies and other valuable effects of the Corporation to be deposited in its name and to its credit, in such depositories as shall be selected by the Board of Directors or pursuant to authority conferred by the Board of Directors.

 

d. Cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositories of the Corporation, when such disbursements shall have been duly authorized;

 

e. Cause to be taken and preserved proper vouchers for all monies disbursed;

 

f. Cause to be kept at the principal office of the Corporation correct books of account of all its business and transactions;

 

g. Render to the President or the Board of Directors, whenever requested, an account of the financial condition of the Corporation and of his transactions as Treasurer;

 

h. Be empowered to require from the officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation; and

 

i. In general, perform all duties and have all powers incident to the office of Treasurer and perform such other duties and have such power as from time to time may be assigned to him by these By-Laws or by the Board of Directors or President.

 

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Section 10. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant Secretaries and Assistant Treasurers shall have such duties as from time to time may be assigned to them by the Board of Directors or the President.

 

Section 11. SALARIES. The salaries of the officers of the Corporation shall be fixed from time to time by the Board of Directors, except that the Board of Directors may delegate to any person the power to fix the salaries or other compensation of any officers or agents appointed in accordance with the provisions of Section 3 of this Article VI. No officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation.

 

Section 12. SURETY BOND. The Board of Directors may secure the fidelity of any or all of the officers of the Corporation by bond or otherwise.

 

ARTICLE VII

 

Execution of Instruments

 

Section 1. EXECUTION OF INSTRUMENTS GENERALLY. All documents or writings of any nature shall be signed, executed, verified, acknowledged and delivered by such officer or officers or such agent of the Corporation and in such manner as the Board of Directors from time to time may determine.

 

Section 2. CHECKS, DRAFTS, ETC. All notes, drafts, acceptances, checks, endorsements, and all evidence of indebtedness of the corporation whatsoever, shall be signed by such officer or officers or such agent or agents of the Corporation and in such manner as the Board of Directors from time to time may determine. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the Board of Directors from time to time may determine.

 

Section 3. PROXIES. Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the President or Vice President and the Secretary or Assistant Secretary of the Corporation or by any other person or persons duly authorized by the Board of Directors.

 

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ARTICLE VIII

 

Section 1. CERTIFICATES OF STOCK. Every holder of stock in the Corporation shall be entitled to have a certificate, signed in the name of the Corporation by the Chairman or Vice President of the Board of Directors, the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation; provided, however, that where such certificate is signed by a transfer agent or an assistant transfer agent or by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any such Chairman of the Board of Directors, President, Vice President, Treasurer, Assistant Treasurer, Secretary, or Assistant Secretary may be facsimile. In case any officer or officers who shall have signed, or whole facsimile signature or signatures shall have been used thereon, any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be such officer or officers of the Corporation, and any such delivery shall be regarded as an adoption by the Corporation of such certificate or certificates.

 

Certificates of stock shall be in such form as shall, in conformity to law, be prescribed from time to time by the Board of Directors.

 

Section 2. TRANSFER OF STOCK. Shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by his attorney duly authorized in writing, upon surrender to the Corporation of the certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer tax stamps. In that event, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction on its books.

 

Section 3. RIGHTS OF CORPORATION WITH RESPECT TO REGISTERED OWNERS. Prior to the surrender to the Corporation of the certificates for shares of stock with a request to record the transfer of such shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.

 

Section 4. CLOSING STOCK TRANSFER BOOK. The Board of Directors may close the Stock Transfer Book of the Corporation for a period not exceeding fifty (50) days preceding the date of any meeting of the stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect or for a period of not exceeding (50) days in connection with obtaining the consent of stockholders for any purpose. However, in lieu of closing the Stock Transfer Book, the Board of Directors may fix in advance a date, not exceeding fifty (50) days preceding the date of any meeting of stockholders or the date for the payment of any dividend or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders, and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

 

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Section 5. LOST, DESTROYED AND STOLEN CERTIFICATES. Where the owner of a Certificate for shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate in place of the original certificate if the owner (a) so requests before the Corporation has notice that the shares have been acquired by a bona fide purchaser; (b) files with the Corporation a sufficient indemnity bond unless waived by Board Resolution; and (c) satisfies such other reasonable requirements, including evidence of such loss, destruction, or wrongful taking, as may be imposed by the Corporation.

 

ARTICLE IX

 

Dividends

 

Section 1. SOURCES OF DIVIDENDS. The directors of the Corporation, subject to any restrictions contained in the statutes and Certificate of Incorporation, may declare and pay dividends upon the shares of the capital stock of the Corporation either (a) out of its new assets in excess of its capital, or (b) in case there shall be no such excess, out of its net profits for the fiscal year then current or the current and preceding fiscal year.

 

Section 2. RESERVES. Before the payment of any dividend, the directors of the Corporation may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose, and the directors may abolish any such reserve in the manner in which it was created.

 

Section 3. RELIANCE ON CORPORATE RECORDS. A director shall be fully protected in relying in good faith upon the books of account of the Corporation or statements prepared by any of its officials as to the value and amount of the assets, liabilities and net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

 

Section 4. MANNER OF PAYMENT. Dividends may be paid in cash, in property, or in shares of the capital stock of the Corporation at par.

 

ARTICLE X

 

Seal

 

The Corporate seal, may be a stamp and, shall be in the form of a circle and shall bear the name of the Corporation and shall indicate its formation under the laws of the State of Delaware. Such seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. No document shall be invalidated by the lack of a Seal.

 

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ARTICLE XI

 

Fiscal Year

 

Except as from time to time otherwise provided by the Board of Directors, the fiscal year of the Corporation shall be the calendar year.

 

ARTICLE XII

 

Amendments

 

Section 1. BY THE STOCKHOLDERS. Except as otherwise provided in the Certificate of Incorporation or in these By-Laws, these By-Laws may be amended or repealed, or new By-Laws may be made and adopted by a majority vote of all the stock of the Corporation issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided that notice of intention to amend shall have been contained in the notice of meeting.

 

Section 2. BY THE DIRECTORS. Except as otherwise provided in the Certificate of Incorporation or in these By-Laws, these By-Laws, including amendments adopted by the stockholders, may be amended or repealed by a majority vote of the whole Board of Directors at any regular or special meeting of the Board, provided that the stockholders may from time to time specify particular provisions of the By-Laws which shall not be amended by the Board of Directors.

 

ARTICLE XIII

 

Indemnification

 

The Board of Directors hereby adopt the provisions of C.R.S. 7-3-101 (as it may be amended from time to time) relating to Indemnification and incorporates such provisions by this reference as fully as if set forth herein.

 

Duly Adopted January 13, 2020

 

By: /s/ Daniel Wong  
  Daniel Wong, Secretary  

 

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Exhibit 4.1

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

Exhibit 4.2

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 4.3

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 4.4

 

CERTIFICATE OF DESIGNATION, PREFERENCES

AND OTHER RIGHTS OF THE OF

CLASS C CONVERTIBLE PREFERRED STOCK OF

EDGE DATA SOLUTIONS, INC.

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, Edge Data Solutions, Inc., a Delaware corporation (the “Company”), does hereby certify:

 

The Certificate of Amendment to the Certificate of Incorporation of the Company confers upon the Board of Directors of the Company (the “Board of Directors”) the authority to provide for the issuance of shares of preferred stock in classes and to establish the number of shares to be included in each such class and to fix the powers, designations, preferences and rights of the shares of each such class.

 

On September 14, 2018, the Board of Directors, by unanimous written consent, duly adopted a resolution creating a class of preferred stock designated as the Class C Convertible Preferred Stock;

 

On January 7, 2020, the Company changed its name to Edge Data Solutions, Inc.; and

 

On December 17, 2020, the Board of Directors duly adopted the following resolution amending and restating the rights and preferences of Class C Convertible Preferred Stock and incorporates the change of the name of Company as of January 7, 2020, and such resolution has not been modified and is in full force and effect on the date hereof:

 

RESOLVED, that the Company has authorized a class of preferred stock designated as Class C Convertible Preferred Stock and that the number of shares thereof and the powers, preferences and rights of the shares of such series, and the qualifications, limitations and restrictions thereof, as amended and restated, are as [follows:]

 

1. General.

 

A. Designation and Number. Ten million (10,000,000) shares of the preferred stock, par value $.001 of the Company are hereby designated as “Class C Convertible Preferred Stock” (“Preferred Stock”).

 

B. Ranking. The Preferred Stock shall, with respect to payment of dividends, redemption payments and rights upon liquidation, dissolution or winding-up of the affairs of the Company, rank:

 

i. Senior and prior to the common stock, par value $0.0001 of the Company (“Common Stock”) and any additional series of preferred stock which may in the future be issued by the Company and are designated in the amendment to the Certificate of Incorporation or the certificate of designation establishing such additional preferred stock as ranking junior to the Preferred Shares. Any shares of the Company’s capital stock which are junior to the Preferred Shares with respect to the payment of dividends are hereinafter referred to as “Junior Dividend Shares” and any shares which are junior to the Preferred Shares with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Company are hereinafter referred to as “Junior Liquidation Shares”.

 

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ii. Pari passu with any additional series of preferred stock which may in the future be issued by the Company and are designated in the amendment to the Certificate of Incorporation or the certificate of designation establishing such additional preferred stock as ranking equal to the Preferred Shares or which do not state they are Junior Dividend Shares or Senior Dividend Shares (as defined below). Any shares of the Company’s capital stock which are equal to the Preferred Shares with respect to the payment of dividends are hereinafter referred to as “Parity Dividend Shares” and any shares which are equal to the Preferred Shares with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Company are hereinafter referred to as “Parity Liquidation Shares”.

 

iii. Junior to any additional series of preferred stock which may in the future be issued by the Company and are designated in the amendment to the Certificate of Incorporation or the certificate of designation establishing such additional preferred stock as ranking senior to the Preferred Shares. Any shares of the Company’s capital stock which are senior to the Preferred Shares with respect to the payment of dividends are hereinafter referred to as “Senior Dividend Shares” and any shares which are senior to the Preferred Shares with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Company are hereinafter referred to as “Senior Liquidation Shares”.

 

2. Dividends. If, and when, the Board of Directors of the Company declares a dividend on the Common Stock, the holders of the Preferred Stock of the Company shall be entitled to receive the same dividend as the holders of the Common Stock. The dividend to be paid to the holders of the Preferred Stock shall be paid pro rata per share on a fully converted basis.

 

3. Rights on Liquidation, Dissolution or Winding Up.

 

A. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Preferred Stock then outstanding shall be entitled, on a pro rata basis, to be paid out of the assets of the Company available for distribution to its shareholders, whether from capital, surplus or earnings, $.01 per share of Preferred Stock plus an amount equal to the sum of all accumulated and unpaid dividends through the date fixed for the payment of the distribution on the shares of Preferred Stock, after any payment being made to the holders of shares of Senior Liquidation Shares, including the Class A Preferred Super Majority Voting Stock of the Company and prior to any payment being made to the holders of shares of Junior Liquidation Shares.

 

B. If, upon any liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its shareholders shall be insufficient to pay the holders of shares of Preferred Stock the full amounts to which they respectively shall be entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of assets in proportion to their respective ownership of Preferred Stock.

 

C. In the event of any liquidation, dissolution or winding up of the Company, after payment shall have been made to the holders of shares of Preferred Stock of the full amount to which they shall be entitled as aforesaid, the holders of shares of Junior Liquidation Shares, to the exclusion of the holders of shares of Preferred Stock, shall be entitled to share on a pro rata basis, according to their respective rights and preferences, in all remaining assets of the Company available for distribution to its shareholders.

 

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D. The consolidation or merger of the Company with one or more other entity, or the sale or transfer by the Company of all or substantially all of its assets shall not be deemed to be a liquidation, dissolution or winding up of the Company.

 

4. Voting.

 

A. Except as otherwise set forth in Paragraph “B” of this Article “4” of this Certificate of Designation or as required by law, the holders of shares of Preferred Stock shall not have the right to vote upon matters submitted to the shareholders of the Company or to receive notice of any meeting of the shareholders of the Company.

 

B. The Company shall not, without the affirmative vote or consent of the holders of shares of Preferred Stock representing a majority of the shares of Preferred Stock then outstanding, acting as a separate class:

 

i. in any manner authorize or create any Parity Dividend Shares, Parity Liquidation Shares, Senior Dividend Shares or Senior Liquidation Shares;

 

ii. in any manner alter or change the designations, powers, preferences or rights or the qualifications, limitations or restrictions of the Preferred Stock;

 

iii. authorize the issuance of any other preferred stock with terms which are more advantageous than those set forth herein;

 

iv. agree to any provision in any agreement which would otherwise impose any restriction upon the Company’s ability to honor the exercise of any rights of the holders of the Preferred Stock; or

 

v. agree or otherwise commit to take any of the actions set forth above; provided however, that except as otherwise provided by law, any such vote or consent as set forth in this Paragraph “B” of this Article “4” of this Certificate of Designation shall be sufficient authorization, by the holders of the Preferred Stock, for any such action, and when such action is effected upon such vote or consent, holders of shares of Preferred Stock dissenting from such action shall not have any rights other than the same rights as all holders of the Preferred Stock, including, but not limited to, the right to payment for their shares by reason of this provision.

 

5. Conversion.

 

A. Each share of Preferred Stock shall be convertible into one (1) share of Common Stock.

 

B. Each holder of Preferred Stock shall have the right to convert his, her or its shares of Preferred Stock into fully paid, validly issued and non-assessable shares of Common Stock at any time after the date of issuance of the Preferred Stock (the “Issuance Date”).

 

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C. Subject to, and in compliance with the provisions of this Article “5”, if the holder of Preferred Stock has not previously converted his, her of its shares of Preferred Stocks, such shares of Preferred Stock shall without any action on the part of the holder thereof or the Company, be automatically converted into validly issued and non-assessable shares of Common Stock, upon:

 

i. the date of the closing of a public offering of the Company’s securities;

 

ii. registration of the shares of Common Stock issuable upon conversion of the Preferred Stock;

 

iii. any consolidation, merger or other combination of the Company with or into another corporation; or

 

iv. the sale or conveyance to another corporation of all of substantially all of the Company’s assets.

 

D. Upon the conversion, all rights of the holders of the Preferred Stock including, but not limited to, any rights to future dividends shall cease and the person or persons in whose name or names the certificate or certificates for the Preferred Stock are held shall be treated for all purposes as having become record owners of the Common Stock of the Company at that time.

 

E. At the time of conversion, the Company shall pay to the holder of record of any share or shares of Preferred Stock surrendered for conversion any accrued and unpaid cumulative dividends on the shares being converted.

 

F. The issuance of certificates for shares of Common Stock upon the conversion of the Preferred Stock shall be made without charge for any tax with respect to the issuance. However, if any certificate is to be issued in a name or names other than the name or names of the holder of record of the Preferred Stock converted, the person or persons requesting the issuance shall pay to the Company the amount of any tax that may be payable in connection with any transfer involved in the issuance, or shall establish to the satisfaction of the Company that the tax has been paid or is not due and payable.

 

G. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all of the then outstanding shares of Preferred Stock, the Company shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

 

4

 

 

H. The Company shall not be required to issue fractional shares of Common Stock upon the conversion of the Preferred Stock. The number of full shares of Common Stock which shall be issued upon the conversion of the Preferred Stock shall be computed upon the basis of the aggregate number of shares of Preferred Stock. If any interest in a fractional share of Common Stock would otherwise be deliverable upon conversion of the Preferred Stock, such fractional share shall be rounded up to the nearest whole share if equal to or greater than one-half (½) of a share. Such fractional share shall be rounded down to the nearest whole share if less than one- half (½) of a share.

 

I. Upon conversion of all of the share of Preferred Stock, such shares shall be considered retired and shall have the status of authorized but unissued preferred stock of the Company which can be subdivided into various Classes or Series with Rights, Privileges and Preferences to be hereafter determined and designated by the Board of Directors, by filing a Certificate of Designation for each separate Class or Series.

 

6. Capital Changes.

 

A. If the Company takes any action to increase or decrease the number of outstanding shares of Common Stock (a “Capital Change”), then the number of shares of Common Stock issuable upon the conversion of the Preferred Stock shall be proportionately increased or decreased, as the case may be, so that, upon conversion into Common Stock, the percentage interest of any holder of shares of Preferred Stock shall not be modified from what his, her or its then current percentage interest in the Company would have been if the Preferred Stock had been converted into Common Stock immediately prior to any such Capital Change, effective in either case at the close of business on the date that the Capital Change becomes effective. Notwithstanding the foregoing, any transaction in which securities of the Company are, pursuant to the approval by the Board of Directors, issued for reasonable and fair consideration which is received by the Company after the date of the filing of this Certificate of Designation, shall be excluded from any adjustment pursuant to this Paragraph “A” of this Article “6” of this Certificate of Designation. Any Capital Change shall include, but shall not be limited to, any of the events which are set forth below:

 

i. a merger, reorganization or consolidation of the Company with or into another entity or entities, whether or not the Company is the surviving entity;

 

ii. the issuance of any newly authorized shares of the Common Stock of the Company;

 

iii. a recapitalization of the outstanding shares of the Common Stock of the Company, which has the effect of changing the percentage of shares of Common Stock which shall be received by holders of shares of Preferred Stock upon conversion in relation to the total number of outstanding shares of the Common Stock of the Company;

 

iv. stock split; and

 

v. if at any time or from time to time it shall appear to the Board of Directors that conditions may arise by reason of any action proposed to be taken by the Company, which conditions, in the opinion of the Board of Directors, are not adequately provided for by any of the other provisions hereof and which would affect the conversion rights of the holders of the Preferred Stock, the conversion ratio then in effect shall be adjusted in such manner as the Board of Directors, in its sole discretion, may determine to be equitable under the circumstances.

 

5

 

 

B. Upon the occurrence of any of the Capital Changes which are described in Paragraph “A” of this Article “6” of this Certificate of Designation, or any other event which might result in an adjustment to the number of shares of Common Stock issuable upon the conversion of the Preferred Stock (any of such Capital Changes is hereinafter referred to as an “Adjustment Event”), then, in any such event, the Company shall immediately take whatever measures are necessary, including, but not limited to, the issuance of additional shares of Common Stock of the Company or a surviving entity as the case may be, to ensure that the percentage interest in the Company of the holders of shares of Preferred Stock is not modified from the percentage of stock which the holders would own, had no Adjustment Event occurred. Any adjustment which is required pursuant to this Paragraph “B” of this Article “6” of this Certificate of Designation shall be deemed effective retroactive to the date of the Adjustment Event. These adjustments shall be made successively if more than one Adjustment Event occurs. The provisions of this Article “6” of this Certificate of Designation shall be applicable to any Adjustment Event which occurs commencing upon the filing date of this Certificate of Designation.

 

C. No adjustment shall be made pursuant to this Article “6” of this Certificate of Designation by reason of the issuance of any additional shares upon the exercise of options heretofore granted.

 

7. Redemption. The Company shall have the right to redeem, in its sole and absolute discretion, at any time after five (5) years after the Issuance Date, all or any portion of the shares of Preferred Stock at a price of five dollars ($5.00) per share.

 

8. Registration.

 

A. If the Company proposes to register any of its Common Stock (other than pursuant to a registration on Form S-8 or any successor form), it will give prompt written notice to the holder of Preferred Stock of its intention to effect such registration (the “Registration”). Within ten (10) business days after receiving such written notice of Registration, the holders of shares of Preferred Stock representing a majority of the shares of Preferred Stock then outstanding may make a written request that the Company include in the proposed Registration all of the Common Stock issuable upon conversion of the Preferred Stock (the “Registerable Securities”).

 

B. The Company will use its commercially reasonable efforts to include in any Registration all Registrable Securities.

 

C. The Company shall not be obligated pursuant to this Article “8” to effect a Registration of the Registrable Securities if the Company discontinues the related Registration at any time prior to the effective date of any Registration Statement filed in connection therewith.

 

6

 

 

IN WITNESS WHEREOF, Edge Data Solutions, Inc. has caused this Certificate of Designation to be duly executed in its corporate name on this 17th day of December 20.

 

  Edge Data Solutions, Inc.
     
  By:
    Delray Wannemacher, CEO

 

7

 

 

 

Exhibit 10.1

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 10.2

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 10.3

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

  

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 10.4

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 10.5

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

Exhibit 10.6

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

  

 

 

 

Exhibit 10.7

 

 

 

 

December 8, 2021

 

Edge Data Solutions, Inc.

Attn: Delray Wannemacher, CEO

3550 Lenox Road NE.

21st Floor

Atlanta GA 30326

 

Dear Mr. Wannemacher:

 

Synergia CPA, LLC (“Synergia”, “We”, “Us”) is pleased to provide Edge Data Solutions, Inc. (hereinafter “the Company”, “you”, “your”, “client”) with the professional services described below. This letter serves to confirm our understanding of the terms and objectives of our engagement and the nature and limitations of the services we will provide and serves to amend the engagement letter dated October 19, 2021. Changes are bold, italics and underlined.

 

Scope of Engagement

 

Synergia CPA, LLC is engaged to perform the following services concerning the Company and its subsidiary, Blockchain Holdings, LLC:

 

  1. SEC Filing Management and Audit Preparation – We will assist the Company in the preparation of the accounting portions of its SEC Form 10-Q, 10-K and other pertinent filings. Accordingly, we will:

 

  a. Manage the filing processes
  b. Coordinate with Turner, Stone & Company LLC, the Company’s auditor, on audit requests
  c. Coordinate with management and counsel on any necessary aspects of these filings
  d. Coordinate with M2 Compliance for EDGAR and XBRL processes
  e. Make adjustments deemed necessary to convert books to the appropriate financial reporting basis
  f. Prepare financial statements to be included in these filings
  g. Prepare financial portions of the filings for management and auditor review
  h. Prepare financial data for press releases and coordinate with management and counsel, as necessary
  i. Address accounting comments in any SEC comment letters arising from these filings and coordinate with management and counsel, as needed, to satisfy such communications

 

  2. Monthly US GAAP Accounting – As an addition to the existing month-end close process, we will prepare and post appropriate US GAAP adjustments to the Company’s accounting system each month. This also includes any necessary routine controllership, bookkeeping, accounts receivable, accounts payable and other accounting services necessary to maintain the Company’s accounting and finance function.
     
  3. Process Establishment and Improvement – We will work with the Company’s controller and senior management, as needed, to consult on, establish and improve finance-related processes, such as:

 

  a. Financial reporting and SEC filings
  b. Customer purchase orders, invoicing and tracking
  c. Payroll and reimbursement processes
  d. Receivables management
  e. Accounts payable and vendor management
  f. Establishment and improvement of internal controls.
  g. Other areas, as identified

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

  4. Financial Planning and Analysis – We will assist with budgeting, forecasting, profitability analysis, cash flow management, staffing analysis and other business consulting needs, as directed by management.
     
  5. Tax – We will consult on and assist with Federal, State and Local income and other tax filings, as needed.
     
  6. Operations – We will provide operational consulting and support to the Company as needed from time to time. For example, we will consult on and perform procurement functions, projects and other similar functions as designated by senior management.
     
  7. CFO – Upon approval by the Company’s Board of Directors, Paul Manos, will serve as the Company’s CFO, Principal Financial Officer and Principal Accounting Officer.

 

Synergia Technology Services, LLC d/b/a SynergiaTech (“STS”), our affiliate, will separately perform the information technology consulting services, as set forth in the separate agreement in APPENDIX A. Any references within this engagement letter to such services and the corresponding fees paid are referenced herein or collected together with Synergia’s fees strictly for convenience and shall in no way be deemed to have been provided by Synergia CPA, LLC. Any liability arising from performance of information technology consulting services shall pertain solely to STS.

 

This engagement only contemplates services provided to Edge Data Solutions, Inc. in its current legal structure and does not include services pertaining to prospective acquisitions or other external entities.

 

The engagement cannot be relied on to disclose errors, irregularities, or illegal acts, including fraud or theft. However, we will inform you if such matters come to our attention.

 

You may request that we perform additional services not contemplated by this engagement letter. If this occurs, we will communicate with you regarding the scope and estimated cost of these additional services. Engagements for additional services may necessitate that we amend this letter or issue a separate engagement letter or change order to reflect the obligations of both parties. Any such additions to the scope must be agreed upon in writing by both parties. In the absence of any articulated terms or other written communications from us documenting additional services, our services will be limited to and governed by the terms of this engagement letter.

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

Client Responsibilities

 

You authorize us to accept instructions from your representatives, Delray Wannemacher and Daniel Wong (and any personnel they designate), for this engagement.

 

You agree that we may communicate and share any necessary information or documentation with the Company’s auditors, counsel, tax accountants and anyone else you authorize us to on your behalf.

 

You agree that any decision you ask us to make on your behalf shall be deemed management’s decision and agree that management bears full responsibility for the results of such.

 

As a condition to our performing the services described above, you agree to:

 

  ● designate an individual within senior management, to oversee the services;
  ● evaluate the adequacy and results of the services performed;
  ● accept responsibility for the results of the services; and

 

While we may identify and bring internal control matters to your attention as they arise, we have no responsibility to identify and communicate deficiencies or material weaknesses in your internal control as part of this engagement.

 

You understand that effective and timely fulfillment of our obligations to you critically depends upon your full cooperation.

 

You agree to respond accurately and completely to our requests and inquiries in a timely manner.

 

You are not entitled to rely on any oral or written advice provided by us.

 

Service Provider Responsibilities

 

We will perform our services in accordance with applicable professional standards.

 

This engagement is strictly limited to the professional services outlined above. Synergia CPA, LLC, in its sole professional judgment, reserves the right to refuse to take any action that could be construed as making management decisions or performing management functions.

 

The above professional services will be performed based on information you provide or otherwise make available to us. We will not necessarily verify and will not audit this information. While we may prepare financial statements and other information during the course of this engagement, we will not audit, review, or compile your financial statements or issue any reports thereon. Our engagement cannot be relied upon to disclose irregularities, errors, fraud, or theft.

 

Term of Engagement

 

We anticipate that the Form 10-Q filings will be completed within 30 days of the close of each quarter and that the Form 10-K filings will be completed within 75 days of the end of the fiscal year. While we will dedicate our best efforts to this end, we do not guarantee these estimates, as they may be subject to unforeseen delays and are dependent upon cooperation of all parties.

 

Fees and Billings

 

Our fees are based upon the complexity of the work to be performed, our professional efforts, and the inherently high levels of risk associated with providing accounting services to public companies and other entities under the regulatory purview of the U.S. Securities and Exchange Commission. Fees for services rendered by Synergia and STS are due together on December 8, 2021 and on the 15th day of each following month for the duration of the contract, beginning on November 15, 2021, as follows:

 

Services performed by Synergia CPA, LLC (this engagement letter)  $9,000 
Services performed by Synergia Technology Services, LLC (APPENDIX A)   1,000 
Total fee remitted to Synergia CPA, LLC each month  $10,000 

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

The first $10,000 billing will take effect on December 15, 2021.

 

Fees are considered earned, as follows:

 

50% – 16th through last day of a given month, or any portion thereof in which services have been rendered

 

50% – 1st through 15th day of a given month, or any portion thereof in which services have been rendered

 

In addition to the fees outlined above, you agree to reimburse us for travel (actual incurred), mileage (at IRS rates for the year of incurrence), and direct out-of-pocket costs (actual) incurred in conjunction with performance of this engagement. Billings for these expenses shall be due on receipt.

 

During the course of this engagement, certain needs may arise outside the scope of this agreement. Changes in the business needs requiring additional attention may also arise and impact fees. We will be happy to discuss any such needs and communicate any additional costs.

 

Termination and Other Terms

 

This agreement may be terminated at any time by either party without penalty. Earned portions of fees shall be retained or paid (if unpaid) promptly to us, and we will promptly return to you any unearned fees paid to us by you in such event.

 

You, as the Company’s representative, personally guarantee full and timely payment of all fees and expenses contemplated by this engagement letter, as well as any financed portions of such. This personal guarantee applies in the event of default for any reason and shall not be construed as a separate business relationship between Synergia and the individual guarantor.

 

The issuance of equity-based compensation directly to our managing member shall by no means create a separate business relationship between the Company and our Managing Member. The business relationship shall remain exclusive to the parties contemplated in the first paragraph of this letter.

 

We reserve the right to suspend services or withdraw from this engagement at any time, without completing the work and retaining all fees paid to date if you fail to comply with the terms of this engagement letter or if we discover any indication of fraud or ethical issues among management or as we determine professional standards require.

 

If any portion of this agreement is deemed invalid or unenforceable, such a finding shall not invalidate the remainder of the terms set forth in this engagement letter.

 

Our work product is valid only for the purpose stated herein. You agree not to reference our name, the fee you paid, or our report, in whole or in part, in any document distributed to third parties (beyond the company’s auditors, attorneys, investors and board members) without our written consent. This shall not apply to required disclosures in regulatory filings.

 

We will rely upon data provided to us by you without independent verification or confirmation. You warrant that all information provided to us is complete and accurate to the best of your knowledge. We will rely on your involvement in the development of required data and certain planning activities.

 

This letter of engagement, governed by Colorado law and establishing the only valid legal theatre as Larimer County, Colorado, represents the entire understanding and agreement between you and Synergia and supersedes all verbal or previous understandings and agreements relating to this engagement. This engagement agreement may not be modified except in writing signed by both you and Synergia.

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

You agree to indemnify and hold us harmless against any and all liability, claim, loss, cost, and expense, whatever kind or nature, which we may incur, or be subject to, as a party, expert witness, witness or participant in connection with any dispute or litigation involving you unless such liability, claim, loss, cost, and expense, whatever kind or nature, is due to our wrongdoing and such wrongdoing is not caused by, related to in any manner, or the result of information provided to us by you. The extent of Synergia’s liability for completeness and accuracy or any other aspect of our work shall not exceed the cash amount paid to Synergia for professional fees under this specific engagement. You are responsible for any liability to parties not included in this agreement and agree to furnish us and our officers with legal counsel and reimburse any pertinent expenses, should we be party to any legal or regulatory matter arising directly or indirectly from this engagement.

 

This indemnity includes all out-of-pocket expenses (including travel costs and attorney fees) and payment for all our staff members’ time at standard hourly rates in effect at the time rendered to the extent we attend, prepare for, or participate in meetings, hearings, depositions, trials, and all other proceedings, including travel time. If we must bring legal action to enforce this indemnity, you agree to pay all costs of such action, including any sum the court may fix as reasonable attorney fees.

 

If this agreement or any monies due under the terms hereof, is placed in the hands of an attorney or collections agency for collection of the account, you promise and agree to pay our attorney fees and collection costs, plus interest at the then legal rate, whether or not any legal action is filed. If any suit or action is brought to enforce, interpret, or collect damages for the breach of this agreement, you agree to pay our reasonable attorney fees and all costs of such suit or action, including any appeal as fixed by the applicable court or courts.

 

Plain English

 

As management, you are responsible for effective oversight and timely reviewing the Company’s financial information. While it is impossible to be 100% hands-off, and we do need timely, accurate and complete information and documents from you to properly prepare financial information, we strive to take ownership of the process and save you valuable time and headache. Please let us know if there is anything we can do to make your life easier.

 

We are committed to providing you with outstanding service and rely on timely and appropriate feedback from you to continue to do so. Please let us know promptly if any issues arise or if we can better serve you in any way.

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

  

 

 

Acceptance

 

We appreciate the opportunity to be of service to Edge Data Solutions, Inc. Please date and sign the enclosed copy of this engagement letter and return it to us to acknowledge your agreement with its terms.

 

Very truly yours,  
   
/s/ Paul Manos  
Paul Manos, Managing Member  
Synergia CPA, LLC  
   
APPROVED FOR:  
Edge Data Solutions, Inc.  
   
/s/ Delray Wannemacher  
Delray Wannemacher, CEO  
Edge Data Solutions, Inc.  
December 8, 2021  

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

EXHIBIT A

 

IT Consulting Agreement

Synergia Technology Services, LLC d/b/a SynergiaTech

 

IT CONSULTING AGREEMENT

 

 
 

 

 

 

This IT Consulting Agreement is made effective as of December 8, 2021, by and between:

 

Edge Data Solutions, Inc. (“client”), a Delaware Corporation having an address of 3550 Lenox Road NE, 21st Floor, Atlanta, Georgia 30326; and

 

Synergia Technology Services, LLC d/b/a SynergiaTech (“service provider”, “SynergiaTech”), a Colorado Limited Liability Company having an address of 19 Old Town Square, Suite 238, Fort Collins, Colorado 80524.

 

Whereas Client is the reseller of certain IT Systems (hereinafter defined) and Solutions (hereinafter defined) and utilizes various Cloud Services (hereinafter defined) for internal and external purposes, for which Client desires Service Provider to perform certain Services (hereinafter defined); and Whereas Service Provider desires to perform such Services on the terms and conditions set forth in this Agreement.

 

Now, therefore, in consideration of the mutual promises set forth herein, the parties agree as follows:

 

DEFINITIONS. For purposes of this Agreement, the following definitions shall apply:

 

(a) “IT System(s)” shall mean the computer hardware, software and related network infrastructure the Client desires to resell, assemble, deliver, maintain, monitor or otherwise place in operation for its Customers, or for Client’s use.

(b) “Cloud Services” shall mean software, web-based services and any other computer-related services hosted and delivered to and used by Client for internal or external purposes for a recurring fee.

(c) “Services” shall mean consultation regarding the Strategy, Design, Operation, Maintenance and Management of IT Systems and Cloud Services, as set forth in Description of Services.

(d) “Customer” shall mean individuals or other entities to which Client resells its products.

(e) “Strategy” shall mean the selection of IT Systems and Cloud Services, or a combination thereof, for Client’s internal and/or external purposes.

(f) “Design” shall mean planning and development of IT Systems and components.

(g) “Operation” shall mean the operation of the IT System, including, but not limited to manipulation and computation of data by the IT System, the outputting of such manipulated and computed data by the IT System, and communication between elements of the IT System.

(h) “Maintenance” shall mean remedial maintenance and preventive maintenance of the IT System(s).

(i) “Management” shall mean the scheduling of the use of the IT System(s), procurement of supplies and spare parts therefor, and recommendation or implementation of changes and additions thereto.

 

DESCRIPTION OF SERVICES. Beginning on December 8, 2021, SynergiaTech will provide to Edge Data Solutions, Inc. the following services (collectively, the “Services”):

 

(a) One site visit to the Client’s data center facility in Colorado Springs, Colorado to evaluate and consult on the Design, Operation, Maintenance and Management of the initial IT Systems to be sold to Client’s Customers;

(b) Ongoing consulting on standardizing Strategy, Design, Operation, Maintenance and Management of IT Systems the Client seeks to sell to its Customers;

(c) Assisting Client with developing and adjusting its product and service offerings to its Customers;

(d) Assisting Client with financial planning and analysis for internal and external IT Systems;

(e) Ongoing consulting, selection, implementation and training on Client’s Cloud Services

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

PAYMENT. Payment of $1,000 shall be due upon execution of this agreement and on the 15th day of each following month. Synergia CPA, LLC shall collect this payment on behalf of Service Provider, in aggregate with payment for services rendered by Synergia CPA, LLC, as set forth in the engagement letter dated December 8, 2021.

 

Payment shall be deemed earned under the following schedule:

 

50% – 16th through last day of a given month, or any portion thereof in which services have been rendered

50% – 1st through 15th day of a given month, or any portion thereof in which services have been rendered

 

In addition to any other right or remedy provided by law, if Edge Data Solutions, Inc. fails to pay for the Services when due, SynergiaTech has the option to treat such failure to pay as a material breach of this Agreement, and may cancel this Agreement and/or seek legal remedies.

 

TERM. Either party may terminate this agreement at any point in time for any reason.

 

In the event of any termination/cancellation of this Agreement, Service Provider:

 

(1) May declare all amounts owed to it hereunder to be immediately due and payable;

(2) Shall promptly return any unearned portion of fees paid, as defined in PAYMENT;

(3) Cease performance of all Services hereunder without liability to Service Recipient;

 

The foregoing rights and remedies of each party hereto shall be in addition to all other rights and remedies available to them in law and in equity.

 

DEFAULT. The occurrence of any of the following shall constitute a material default under this Agreement:

 

a. The failure to make a required payment when due.

b. The insolvency or bankruptcy of either party.

c. The subjection of any of either party’s property to any levy, seizure, general assignment for the benefit of creditors, application or sale for or by any creditor or government agency.

d. The failure to make available or deliver the Services in the time and manner provided for in this Agreement.

 

REMEDIES. In addition to any and all other rights a party may have available according to law, if a party defaults by failing to substantially perform any provision, term or condition of this Agreement (including without limitation the failure to make a monetary payment when due), the other party may terminate the Agreement by providing written notice to the defaulting party. This notice shall describe with sufficient detail the nature of the default. The party receiving such notice shall have seven (7) days from the effective date of such notice to cure the default(s). Unless waived by a party providing notice, the failure to cure the default(s) within such time period shall result in the automatic termination of this Agreement.

 

FORCE MAJEURE. If performance of this Agreement or any obligation under this Agreement is prevented, restricted, or interfered with by causes beyond either party’s reasonable control (“Force Majeure”), and if the party unable to carry out its obligations gives the other party prompt written notice of such event, then the obligations of the party invoking this provision shall be suspended to the extent necessary by such event. The term Force Majeure shall include, without limitation, acts of God, plague, epidemic, pandemic, outbreaks of infectious disease or any other public health crisis, including quarantine or other employee restrictions, fire, explosion, vandalism, storm or other similar occurrence, orders or acts of military or civil authority, or by national emergencies, insurrections, riots, or wars, or strikes, lock-outs, work stoppages. The excused party shall use reasonable efforts under the circumstances to avoid or remove such causes of non-performance and shall proceed to perform with reasonable dispatch whenever such causes are removed or ceased. An act or omission shall be deemed within the reasonable control of a party if committed, omitted, or caused by such party, or its employees, officers, agents, or affiliates.

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA
 

 

 

 

ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties, and there are no other promises or conditions in any other agreement whether oral or written concerning the subject matter of this Agreement. This Agreement supersedes any prior written or oral agreements between the parties.

 

SEVERABILITY. If any provision of this Agreement will be held to be invalid or unenforceable for any reason, the remaining provisions will continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision will be deemed to be written, construed, and enforced as so limited.

 

AMENDMENT. This Agreement may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.

 

GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of Colorado. The only valid legal theatre for this agreement shall be Larimer County, Colorado.

 

NOTICE. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered in person or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one party may have furnished to the other in writing.

 

WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement.

 

SIGNATURES. This Agreement is signed on behalf of the parties, as follows:

 

For Edge Data Solutions, Inc.:  
   
/s/ Delray Wannemacher  
Delray Wannemacher, CEO  
   
For Synergia Technology Services, LLC.:  
   
/s/ Paul Manos  
Paul Manos, President  

 

19 Old Town Square · Suite 238 · Fort Collins, Colorado 80524 · USA

 

 

Exhibit 14.1

 

EDGE DATA SOLUTIONS, INC.

 

Code of Business Conduct and Ethics

 

(Adopted by the Board of Directors on March 25, 2022)

 

INTRODUCTION

 

This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise but it sets out basic principles to guide all employees of Edge Data Solutions, Inc. and its subsidiaries, if any (the “Company”). All of our officers, directors and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The code should also be provided to and followed by the Company’s agents and representatives, including consultants.

 

If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.

 

Those who violate standards in this Code will be subject to disciplinary action, up to and including termination of employment. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 14 of this Code.

 

1. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

 

Obey the law, both in letter and in spirit, is the foundation on which our ethical standards are built. All employees must respect and obey the laws of the cities, states and countries in which we operate. Although not all employees are expected to know the details of these laws, it is important to know enough about them to determine when to seek advice from supervisors, managers or other appropriate personnel.

 

2. CONFLICTS OF INTEREST

 

A “conflict of interest” exists when a person’s private interests interfere in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and efficiently. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.

 

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf. Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by our Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with higher levels of management. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, a manager, or other appropriate personnel, or consult with the procedures described in Section 14 of this Code.

 

3. INSIDER TRADING

 

Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal.

 

 
 

 

4. CORPORATE OPPORTUNITIES

 

Employees, officer and directors are prohibited from taking for themselves personally, opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee may use corporate property, information or position for improper personal gain, and no employee may compete with the Company, directly or indirectly.

 

5. COMPETITION AND FAIR DEALING

 

We seek to outperform our competition fairly and honestly. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each officer, director and employee should respect the rights of and deal fairly with the Company’s customers, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

 

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift, or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent, unless it (a) is not in cash, (b) is consistent with customary business practices, (c) is not excessive in value, (d) cannot be construed as a bribe or payoff and (e) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts that you are not certain are appropriate.

 

6. DISCRIMINATION AND HARASSMENT

 

The diversity of the Company’s employees is a tremendous asset. We are firmly committed to providing equal opportunity in all respects aspects of employment and will not tolerate illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

 

7. HEALTH AND SAFETY

 

The Company strives to provide each employee with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

 

Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of alcohol and/or illegal drugs in the workplace will not be tolerated.

 

8. RECORD-KEEPING

 

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, only the true and actual number of hours worked should be reported.

 

Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or the Company’s controller or chief financial officer.

 

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform to both applicable legal requirements and to the Company’s systems of accounting and internal controls. Unrecorded or “off the books” finds or assets should not be maintained unless permitted by applicable laws or regulations.

 

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Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos and formal reports. Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with these policies, in the event of litigation or governmental investigation please consultant your supervisor. All e-mail communications are the property of the Company and employees, officers and directors should not expect that Company or personal e-mail communications are private. All e-mails are the property of the Company. No employee, officer or director shall use Company computers, including to access the internet, for personal or non-Company business.

 

9. CONFIDENTIALITY

 

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends. In connection with this obligation, employees, officers and directors may be required to execute confidentiality agreements confirming their agreement to be bound not to disclose confidential information. If you are uncertain whether particular information is confidential or non-public, please consult your supervisor.

 

10. PROTECTION AND PROPER USE OF COMPANY ASSETS

 

All officers, directors and employees should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business.

 

The obligation of officers, directors and employees to protect the Company’s assets includes it proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

 

11. PAYMENTS TO GOVERNMENT PERSONNEL

 

The Unites States Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

 

In addition, the U. S. government has a number of laws and regulations regarding business gratuities that may be accepted by U. S. government personnel. The promise, offer or delivery to an official or employee of the U. S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy, but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.

 

12. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

 

Any waiver of the provisions of this Code may be made only by the Board of Directors and will be promptly disclosed as required by law or stock exchange rule or regulation.

 

13. REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

 

Employees are encouraged to talk with supervisors, managers or Company officials about observed illegal or unethical behavior, and when in doubt about the best course of action in a particular situation. It is the Company’s policy not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct, and the failure to do so could serve as grounds for termination.

 

Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.

 

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14. COMPLIANCE PROCEDURES

 

We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations, it is difficult to know if a violation has occurred. Since we cannot anticipate every situation that may arise, it is important that we have a way to approach a new question or problem. These are steps to keep in mind:

 

Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.

 

● Ask yourself, what specifically you are being asked to do - does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.

 

● Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.

 

Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Keep in mind that it is your supervisor’s responsibility to help solve problems. If your supervisor does not or cannot remedy the situation, or you are uncomfortable bringing the problem to the attention of your supervisor, bring the issue to the attention of the human resources supervisor, or to an officer of the Company.

 

You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind for good faith reports of ethical violations.

 

Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.

 

EDGE DATA SOLUTIONS, INC.

 

Code of Ethics for the President

and Senior Financial Officers

(Adopted by the Board of Directors on March 25, 2022)

 

Edge Data Solutions, Inc. (the “Company”) has a Code of Business Conduct and Ethics applicable to all employees, officers and directors of the Company. The President, Chief Executive Officer (“CEO”) and senior financial officers who are in place at any given time in the employ of the Company are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest and compliance with law. In addition to the Code of Business Conduct and Ethics, the President, CEO and senior financial officers who are in place at any given time in the employ of the Company are also subject to the following specific policies:

 

1. The President, CEO and senior financial officers in the employ of the Company are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports and other filings required to be made by the Company with the Securities and Exchange Commission. Accordingly, it is the responsibility of the President, CEO and senior financial officers in the employ of the Company to promptly to bring to the attention of the Board of Directors any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise impairs the ability of the Company to make full, fair, accurate, timely and understandable public disclosures.

 

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2. The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Company’s Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.

 

3. The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Board of Directors and the Audit Committee any information he or she may have concerning any violation of the Company’s Code of Business Conduct and Ethics, including any actual or apparent conflicts of interest between personal and professional relationships, involving management or other employees who have a significant rule in the Company’s financial reporting, disclosures or internal controls.

 

4. The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Board of Directors and Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Code of Business Conduct and Ethics or of these additional procedures.

 

5. The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of the Code of Business Conduct and Ethics of these additional procedures by the CEO and the Company’s senior financial officers. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to the Code of Business Conduct and Ethics and to these additional procedures, and shall include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or reassignment of the individual involved, suspension with or without pay or benefits (as determined by the Board) and termination of the individual’s employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.

 

ADOPTED AND APPROVED this 25th day of March 2022.

 

  EDGE DATA SOLUTIONS, INC.
   
  /s/: Delray Wannemacher
  Delray Wannemacher,
  Chairman of the Board of Directors

 

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Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Delray Wannemacher, Chief Executive Officer, of Edge Data Solutions, Inc., a Delaware corporation (the “Registrant”), certify that:

 

1. I have reviewed this quarterly report on Form 10-K for the fiscal year ended December 31, 2021 of the Registrant;

 

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

 

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

 

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

 

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

 

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

 

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

 

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

 

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

 

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

 

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

 

Date: March 31, 2022

 

/s/ Delray Wannemacher  
Delray Wannemacher, CEO  

 

 

 

Exhibit 31.2

 

CERTIFICATION OF PRESIDENT

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Paul Manos, Interim CFO and Principal Financial Officer, of Edge Data Solutions, Inc., a Delaware corporation (the “Registrant”), certify that:

 

1. I have reviewed this quarterly report on Form 10-K for the fiscal year ended December 31, 2021 of the Registrant;

 

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

 

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

 

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

 

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

 

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

 

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

 

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

 

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

 

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

 

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

 

Date: March 31, 2022

 

/s/ Paul Manos  
Paul Manos, Interim CFO  
Principal Financial Officer  

 

 

 

Exhibit 32.1

 

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

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

 

In connection with the Annual Report of Edge Data Solutions, Inc. (the “Registrant”) on Form 10-K for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Delray Wannemacher, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

 

Date: March 31, 2022

 

/s/ Delray Wannemacher  
Delray Wannemacher, CEO  

 

 

 

Exhibit 32.2

 

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

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

 

In connection with the Annual Report of Edge Data Solutions, Inc. (the “Registrant”) on Form 10-K for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, Paul Manos, Interim CFO and Principal Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

 

Date: March 31, 2022

 

/s/ Paul Manos  
Paul Manos, CFO  
Principal Financial Officer