UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~(Mark one)~~

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

For the quarterly period ended September 30, ~~2021~~2022

☐	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~~000-56419

EDGE DATA SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

delaware		46-3892319
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~incorporation or Organization)		(IRS Employer Identification No.)

~~Identification Number)~~3550 Lenox Road NE, 21^stFloor, Atlanta, GA		30326
(Address of principal executive offices)		(Zip Code)

~~3550 Lenox Road NE. 21st Floor Atlanta GA 30326~~(833)682-2428

(~~Address and~~Registrant’s telephone number, ~~of principal executive offices)~~including area code)

~~Mr. Delray Wannemacher, CEO, (833~~) ~~682-2428~~

~~3550 Lenox Road NE~~. ~~21st FloorAtlanta~~GA~~30326~~N/A

(~~Name,~~Former name, former address and ~~telephone number~~former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of ~~agent for service)~~the Act:

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~☒	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 ☒

As of ~~December 2, 2021,~~November 14, 2022, there were outstanding ~~9,063,079~~ 11,658,832shares of our common stock, par value $0.0001 per share, 7,000,000 shares of the Company’s Class A Super 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

EDGE DATA SOLUTIONS, INC.

FORM 10-Q for the Quarter Ended September 30, ~~2021~~2022

INDEX

		Page
PART I - FINANCIAL INFORMATION

	Cautionary Note About Forward Looking Statements

Item 1.	Financial Statements	34

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1922

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2226

Item 4.	Controls and Procedures	2326

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	2327

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	2327

Item 3.	Defaults Upon Senior Securities	2527

Item 4.	Mine Safety Disclosures	2527

Item 5.	Other Information	2527

Item 6.	Exhibits	2527

Signatures		2628

CAUTIONARY NOTE ABOUT FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are based upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual events or our actual results, performance or achievements to be materially different from the future events, results, performance or achievements expressed or implied by any forward-looking statements. There can be no assurance that future events, results, performance or achievements will be in accordance with our expectations or that the effect of future events, results, performance or achievements will be those anticipated by us.

Factors and risks that may cause or contribute to actual events, results, performance or achievements differing from these forward-looking statements include, but are not limited to, for example:

	●	regulatory limitations on our products and services;

	●	our ability to complete and integrate announced acquisitions;

	●	general industry and economic conditions;

	●	our ability to access adequate capital upon terms and conditions that are acceptable to us;

	●	volatility in credit and market conditions;

	●	other risks and uncertainties related to the cryptocurrency markets and our business strategy.

We operate in very competitive and rapidly changing markets. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Stockholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this Quarterly Report on Form 10-Q are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

All forward-looking statements speak only as of the date of this this Quarterly Report on Form 10-Q. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether because of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Edge Data Solutions, Inc. ~~(Formerly Southeastern Holdings, Inc.)~~

A Delaware Corporation

Financial Statements

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~months~~ and Nine months Then Ended (Unaudited)

Edge Data Solutions, Inc. ~~(Formerly Southeastern Holdings, Inc.)~~

TABLE OF CONTENTS

		Page
Condensed Financial Statements as of September 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020,~~2021 (Unaudited), and for the Three and Nine months Ended September 30, ~~2021~~2022 (Unaudited):
Balance Sheets (Unaudited)		56
Statements of Operations – for the Three and Nine months ended September 30, ~~2021~~2022 (Unaudited)		67
Statements of Cash Flows ~~(Unaudited)~~	7
~~Statement of Stockholders’ Deficiency~~ – ~~for~~For the ~~Three and~~ Nine months ended September 30, ~~2020~~2022 (Unaudited)		8
Statement of Stockholders’ Deficiency – for the Three and Nine months ended September 30, 2021 (Unaudited)		9
Statement of Stockholders’ Equity/(Deficiency) – for the Three and Nine months ended September 30, 2022 (Unaudited)		10
Notes to Financial Statements (Unaudited)		1011

~~EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)~~

~~BALANCE SHEETS~~

September 30, 2021 December 31, 2020
As of
September 30, 2021 December 31, 2020
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 147,261 $ 80,368
Accounts receivable 56,097 651
Deposits 57,083 46,122
Inventory 11,530 -
Crypto assets held 187 1,197
Other current assets 6,021 4,668
Prepaid expense 1,568 4,409
Total Current Assets 279,747 137,415

Non-Current Assets:
Right of use asset - finance lease 19,448 29,171
Property and equipment, net 47,413 67,492
Security deposit 7,753 7,753
Total Non-Current Assets 74,614 104,416

TOTAL ASSETS $ 354,361 $ 241,831

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable $ 182,990 $ 118,608
Accrued liabilities 139,432 45,548
Customer deposits 391,555 -
Deferred revenue 9,478 1,035
Convertible notes payable, short-term 720,000 720,000
Advances from related parties - 51,510
Lease liability - finance, current portion 16,949 15,703
Accrued compensation - related party - 35,000
Total Current Liabilities 1,460,404 987,404

Non-Current Liabilities:
Lease liability - finance, non-current portion 6,260 16,730
Total Non-Current Liabilities 6,260 16,730

Total Liabilities 1,466,664 1,004,134

Commitments and Contingencies (Note 10) - -

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, September 30, 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, September 30, 2021 and December 31, 2020. 7,000 7,000
Preferred Stock
Common stock, $0.0001 par value; 150,000,000 shares authorized, 9,063,079 and 8,321,079 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. 906 832
Additional paid-in capital 774,405 633,499
Accumulated deficit (1,901,614 ) (1,410,634 )
Total Stockholders’ Deficiency (1,112,303 ) (762,303 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY $ 354,361 $ 241,831

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

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

~~STATEMENTS OF OPERATIONS~~BALANCE SHEETS

	September 30, 2022			December 31, 2021
	As of
	September 30, 2022			December 31, 2021
	(Unaudited)			(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	67,592		$	831,209
Accounts receivable		15,523			2,781
Deposits		347,528			2,161,683
Inventory		27,050			11,530
Crypto assets held		3,940			3,940
Other current assets		6,021			6,021
Prepaid expense		30,966			13,806
Total Current Assets		498,620			3,030,970

Non-Current Assets:
Right of use asset - finance lease		6,482			16,206
Intangible assets, net		16,600			-
Property and equipment, net		6,668			40,248
Construction in progress – data centers		90,741			-
Security deposit		7,753			7,753
Total Non-Current Assets		128,244			64,207

TOTAL ASSETS	$	626,864		$	3,095,177

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable	$	502,755		$	186,523
Accrued liabilities		181,109			451,944
Customer deposits		540,028			3,197,990
Deferred revenue		9,478			9,478
Convertible notes payable, short-term		100,000			749,500
Advances from related parties		18,800			11,968
Lease liability - finance, current portion		6,284			17,389
Total Current Liabilities		1,358,454			4,624,792

Non-Current Liabilities:
Lease liability - finance, non-current portion		-			2,543
Total Non-Current Liabilities		-			2,543

Total Liabilities		1,358,454			4,627,335

Commitments and Contingencies (Note 7)		-			-

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, September 30, 2022 and December 31, 2021.		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, September 30, 2022 and December 31, 2021.		7,000			7,000
Preferred stock, value		7,000			7,000
Common stock, $0.0001 par value; 150,000,000 shares authorized, 11,658,832 and 9,159,079 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.		1,166			916
Additional paid-in capital		1,609,197			792,635
Accumulated deficit		(2,355,953	)		(2,339,709	)
Total Stockholders’ (Deficiency)		(731,590	)		(1,532,158	)

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY)	$	626,864		$	3,095,177

(Unaudited) (Unaudited) (Unaudited) (Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Hardware sales, net $ 144,733 $ - $ 942,173 $ -
Computing revenues, net - 14,317 29,483 20,624
Total Revenue 144,733 14,317 971,656 20,624

Cost of goods sold (105,138 ) - (783,888 ) -
Cost of computing revenues (5,378 ) - (9,506 ) -
Total Cost of Revenue (110,516 ) - (793,394 ) -

Gross Margin 34,217 14,317 178,262 20,624

Operating Expenses:
Sales and marketing 6,169 974 20,645 899
General and administrative 74,378 51,369 217,003 184,432
Compensation - related party 87,835 20,000 205,335 95,000
Stock-based compensation expense 121,980 218,500 140,980 381,900
Depreciation expense 7,165 6,303 21,231 10,513
Total Operating Expenses 297,527 297,146 605,194 672,744

(Loss) from operations (263,310 ) (282,829 ) (426,932 ) (652,120 )

Other Income/(Expense):
Interest expense (22,921 ) (17,955 ) (73,266 ) (42,064 )
Loss on termination of prospective acquisition - - - (23,000 )
Gain on debt forgiveness - - - 12,250
Gain on disposal of equipment - 4,965 - 4,965
Cryptocurrency mining income 1,234 716 12,025 716
Loss on disposal of cryptocurrency (3,285 ) - (2,807 ) -
Small business grant income - - - 1,000
Total Other Income/(Expense) (24,972 ) (12,274 ) (64,048 ) (46,133 )

Net Loss $ (288,282 ) $ (295,103 ) $ (490,980 ) $ (698,253 )

Net Loss per share (basic and diluted) $ (0.03 ) $ (0.04 ) $ (0.06 ) $ (0.10 )

Weighted average number of common shares outstanding 8,803,144 8,118,362 8,540,676 6,923,362

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

EDGE DATA SOLUTIONS, INC.

~~EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)~~STATEMENTS OF OPERATIONS

	2022			2021			2022			2021
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Data center infrastructure and equipment sales, net	$	53,745		$	144,733		$	9,255,987		$	942,173
Data center services, net		33,500			-			88,345			-
Computing revenues, net		-			-			-			29,483
Total Revenue		87,245			144,733			9,344,332			971,656

Cost of data center infrastructure and equipment sales		(76,358	)		(105,138	)		(6,488,888	)		(783,888	)
Cost of data center services		-			-			(38,864	)		-
Cost of computing revenues		-			(5,378	)		-			(9,506	)
Total Cost of Revenue		(76,358	)		(110,516	)		(6,527,752	)		(793,394	)

Gross Profit		10,887			34,217			2,816,580			178,262

Operating Expenses:
Sales and marketing		185,156			6,169			477,685			20,645
General and administrative		493,572			74,378			1,044,070			217,003
Compensation - related party		221,250			87,835			1,059,251			205,335
Stock-based compensation expense		137,100			121,980			178,152			140,980
Losses on property and equipment		21,323			-			21,323			-
Depreciation expense		5,523			7,165			20,535			21,231
Total Operating Expenses		1,063,924			297,527			2,801,016			605,194

(Loss)/Income from operations		(1,053,037	)		(263,310	)		15,564			(426,932	)

Other Income/(Expense):
Interest expense		(4,759	)		(22,921	)		(29,832	)		(73,266	)
Cryptocurrency mining income		-			1,234			-			12,025
(Loss)/Gain on disposal of cryptocurrency		-			(3,285	)		(1,976	)		(2,807	)
Total Other Income/(Expense)		(4,759	)		(24,972	)		(31,808	)		(64,048	)

Net (Loss)	$	(1,057,796	)	$	(288,282	)	$	(16,244	)	$	(490,980	)

Deemed dividend - Class C Preferred Stock (See Note 4)		-			-			(3,781,868	)		-

Net (Loss) attributable to common stockholders	$	(1,057,796	)	$	(288,282	)	$	(3,798,112	)	$	(490,980	)

Net (Loss) per Common Share
Basic Income (Loss) per share attributable to common stockholders	$	(0.09	)	$	(0.03	)	$	(0.35	)	$	(0.06	)
Diluted Income (Loss) per share attributable to common stockholders	$	(0.09	)	$	(0.03	)	$	(0.35	)	$	(0.06	)

Basic weighted average number of common shares outstanding		11,625,408			8,803,144			10,845,790			8,540,676
Diluted weighted average number of common shares outstanding		11,625,408			8,803,144			10,845,790			8,540,676

~~STATEMENTS OF CASH FLOWS~~

(Unaudited) (Unaudited)
For the Nine Months Ended
September 30, 2021 September 30, 2020
(Unaudited) (Unaudited)
Cash Flows from Operating Activities
Net Loss $ (490,980 ) $ (698,253 )
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation 21,231 10,513
Gain on disposal of equipment - (4,965 )
Stock-based compensation 140,980 381,900
Loss on prospective acquisition - 23,000
Changes in operating assets and liabilities:
Change in accounts receivable (55,446 ) (3,193 )
Change in deposits (10,961 ) -
Change in crypto assets held 1,010 -
Change in inventory (11,530 ) -
Change in other current assets (1,353 ) (2,516 )
Change in prepaid expenses 2,841 (8,452 )
Change in security deposits - (7,753 )
Change in accounts payable 64,382 8,501
Change in accrued compensation - related party (35,000 ) (41,000 )
Change in accrued liabilities 93,884 18,261
Change in customer deposits 391,555 -
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 119,056 (315,956 )

Cash Flows from Investing Activities
Purchase of property and equipment (1,152 ) (128,228 )
Proceeds from disposal of property and equipment - 10,170
Deposits on prospective acquisition - (23,000 )
Net Cash (Used in) Investing Activities (1,152 ) (141,058 )

Cash Flows from Financing Activities
Proceeds from issuance of short-term convertible debt - 510,000
Related party advances 60,182 168,191
Repayment of related party advances (111,692 ) (211,489 )
Deferred offering costs - (13,500 )
Change in finance lease assets and liabilities 12,128 8,577
Payments on finance lease (11,629 ) (5,669 )
Sale of equity units - 50,000
Net Cash Provided by/(Used in) Financing Activities (51,011 ) 506,110

Net Change In Cash 66,893 49,096

Cash at Beginning of Period 80,368 14,453
Cash at End of Period $ 147,261 $ 63,549

Supplemental Disclosure of Cash Flow Information:
Convertible debt principal and accrued interest converted to equity units $ - $ 106,966
Issuance of common stock for equipment purchases $ - $ 6,083

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

EDGE DATA SOLUTIONS, INC.

~~EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)~~

~~STATEMENT~~STATEMENTS OF ~~STOCKHOLDERS’ DEFICIENCY~~

~~As of and for the three and nine months ended September 30, 2020 (Unaudited)~~CASH FLOWS

Shares Amount Shares Amount Shares Amount Capital Deficit Deficiency
Common Stock Class A Preferred Class C
Convertible
Preferred Additional
Paid-in Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Deficiency
Balance, July 1, 2020 7,171,079 $ 717 7,000,000 $ 7,000 7,000,000 $ 7,000 $ 415,114 $ (962,848 ) $ (533,017 )

Debt conversions into equity units
Debt conversions into equity units, shares
Subscriptions to equity units
Subscriptions to equity units, shares
Common shares issued as compensation 1,150,000 115 - - - - 218,385 218,500
Related party debt forgiveness
Issuance of common stock for equipment
Issuance of common stock for equipment, shares
Net loss (295,103 ) (295,103 )
Balance, September 30, 2020 8,321,079 $ 832 7,000,000 $ 7,000 7,000,000 $ 7,000 $ 633,499 $ (1,257,951 ) $ (609,620 )

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 (698,253 ) (698,253 )
Balance, September 30, 2020 8,321,079 $ 832 7,000,000 $ 7,000 7,000,000 $ 7,000 $ 633,499 $ (1,257,951 ) $ (609,620 )

	2022			2021
	For the Nine Months Ended September 30,
	2022			2021
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net (Loss)	$	(16,244	)	$	(490,980	)
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Depreciation		20,535			21,231
Stock-based compensation		178,152			140,980
Impairment of joint venture site		36,401			-
Losses on property and equipment		21,323			-
Changes in operating assets and liabilities:
Change in accounts receivable		(12,742	)		(55,446	)
Change in deposits		1,814,155			(10,961	)
Change in crypto assets held		-			1,010
Change in inventory		(15,520	)		(11,530	)
Change in finance lease assets and liabilities		7,705			12,128
Change in other current assets		-			(1,353	)
Change in prepaid expenses		(17,160	)		2,841
Change in accounts payable		316,232			64,382
Change in accrued compensation - related party		-			(35,000	)
Change in accrued liabilities		(270,835	)		93,884
Change in customer deposits		(2,657,962	)		391,555
Change in deferred revenue		-			8,443
Change in accrued interest related to note conversions		89,160			-
Net Cash (Used in)/Provided by Operating Activities		(506,800	)		131,184

Cash Flows from Investing Activities
Purchase of property and equipment		(8,278	)		(1,152	)
Web development costs		(16,600	)		-
Investments in joint ventures		(127,142	)		-
Net Cash (Used in) Investing Activities		(152,020	)		(1,152	)

Cash Flows from Financing Activities
Repayment of convertible note principal		(100,000	)		-
Related party advances		125,039			60,182
Repayment of related party advances		(118,207	)		(111,692	)
Payments on finance lease		(11,629	)		(11,629	)
Net Cash (Used in)/Provided by Financing Activities		(104,797	)		(63,139	)

Net Change In Cash		(763,617	)		66,893

Cash at Beginning of Period		831,209			80,368
Cash at End of Period	$	67,592		$	147,261

Supplemental Disclosure of Cash Flow Information:
Convertible debt principal and accrued interest converted to equity units	$	638,660		$	-

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

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

STATEMENT OF STOCKHOLDERS’ DEFICIENCY

As of and for the three and nine months ended September 30, 2021 (Unaudited)

	Common Stock				Class A Preferred				Class C Convertible Preferred				Additional								Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency
													Paid-in		Accumulated			Stockholders’			Common Stock				Class A Preferred				Class C Convertible Preferred				Additional Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency			Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency
Balance, July 1, 2021		8,421,079	$	842		7,000,000	$	7,000		7,000,000	$	7,000	$	652,489	$	(1,613,332	)	$	(946,001	)
Balance, June 30, 2021 (unaudited)																						8,421,079	$	842		7,000,000	$	7,000		7,000,000	$	7,000	$	652,489	$	(1,613,332	)	$	(946,001	)

Common shares issued as compensation		642,000		64		-		-		-		-		121,916					121,980			642,000		64										121,916					121,980
Net loss																(288,282	)		(288,282	)						-		-		-		-				(288,282	)		(288,282	)
Balance, September 30, 2021		9,063,079	$	906		7,000,000	$	7,000		7,000,000	$	7,000	$	774,405	$	(1,901,614	)	$	(1,112,303	)
Balance, September 30, 2021 (unaudited)																						9,063,079	$	906		7,000,000	$	7,000		7,000,000	$	7,000	$	774,405	$	(1,901,614	)	$	(1,112,303	)

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	)		8,321,079	$	832		7,000,000	$	7,000		7,000,000	$	7,000	$	633,499	$	(1,410,634	)	$	(762,303	)
Beginning balance		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		742,000		74		-		-		-		-		140,906					140,980			742,000		74										140,906					140,980
Net loss																(490,980	)		(490,980	)						-		-		-		-				(490,980	)		(490,980	)
Balance, September 30, 2021		9,063,079	$	906		7,000,000	$	7,000		7,000,000	$	7,000	$	774,405	$	(1,901,614	)	$	(1,112,303	)
Ending balance		9,063079	$	906		7,000,000	$	7,000		7,000,000	$	7,000	$	774,405	$	(1,901,614	)	$	(1,112,303	)
Balance, September 30, 2021 (unaudited)																						9,063,079	$	906		7,000,000	$	7,000		7,000,000	$	7,000	$	774,405	$	(1,901,614	)	$	(1,112,303	)

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

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

STATEMENT OF STOCKHOLDERS’ EQUITY/(DEFICIENCY)

As of and for the three and nine months ended September 30, 2022 (Unaudited)

	Common Stock				Class A Preferred				Class C Convertible Preferred				Additional Paid-in		Accumulated			Stockholders’ Equity/
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficiency)
Balance, June 30, 2022 (unaudited)		11,133,832	$	1,113		7,000,000	$	7,000		7,000,000	$	7,000	$	1,472,150	$	(1,298,157	)	$	189,106

Stock-based compensation expense		525,000		53										137,047					137,100
Net (loss)						-		-		-		-				(1,057,796	)		(1,057,796	)
Balance, September 30, 2022 (unaudited)		11,658,832	$	1,166		7,000,000	$	7,000		7,000,000	$	7,000	$	1,609,197	$	(2,355,953	)	$	(731,590	)

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	)
Beginning balance		9,159,079	$	916		7,000,000	$	7,000		7,000,000	$	7,000	$	792,635	$	(2,339,709	)	$	(1,532,158	)

Debt conversions into equity units		1,824,753		182										638,478					638,660
Stock-based compensation expense		675,000		68										178,084					178,152
Net (loss)						-		-		-		-				(16,244	)		(16,244	)
Net income (loss)																(16,244	)		(16,244	)
Balance, September 30, 2022 (unaudited)		11,658,832	$	1,166		7,000,000	$	7,000		7,000,000	$	7,000	$	1,609,197	$	(2,355,953	)	$	(731,590	)
Ending balance		11,658,832	$	1,166		7,000,000	$	7,000		7,000,000	$	7,000	$	1,609,197	$	(2,355,953	)	$	(731,590	)

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

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited)

NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS

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.~~

~~Business description~~

Edge Data Solutions, Inc. ~~(EDSI)~~(the “Company,” “EDGE”), a Delaware Corporation, believes it is poised to be an industry-leading edge data center, cryptocurrency mining and cloud infrastructure provider. ~~EDSI’s proprietary~~EDGE’s unique Edge Performance Platform (EPP) ~~allows us~~brings sustainable immersion-cooled high-performance computing to ~~deploy next-generation~~where it is needed most.

EPP offers efficient 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 EDGE believes will benefit from low-latency technology with a lower carbon footprint include cryptocurrency mining, public and private cloud providers, edge cloud providers, data centers, ~~where they are needed most. EDSI’s data centers provide next-generation immersion Cooling technology that improves performance, reduces energy costs~~high-performance computing providers, virtual desktop infrastructure providers, telecom, cybersecurity and ~~latency. Key industries we serve more computing power are fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video~~disaster recovery providers, streaming ~~remote desktop, IoT, autonomous vehicles. Centralized~~providers, artificial intelligence innovators, colleges, hospitals, governments, and enterprise blockchain 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.providers.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management’s Representation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of the Company’s financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2021 and 2020, as presented in the Company’s 2021 Annual Report on Form 10-K, as filed on April 1, 2022 with the SEC.

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 September 30, ~~2021,~~2022, and December 31, ~~2020,~~2021, the Company’s cash balances ~~did not exceed federally insured limits.~~exceeded federal insurance limits by $0 and $581,209, respectively.

1011

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~Months~~and Nine months Then Ended (Unaudited)

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.

Deposits

From time to time, the Company makes payments to vendors, resulting in classification as deposits on the company’s balance sheets until the vendors have delivered the goods and services. As of September 30, 2022 and December 31, 2022, the company’s deposits with vendors totaled $347,528 and $2,161,683 and consisted of the following:

SCHEDULE OF DEPOSITS

	2022		2021
	As of
	September 30,		December 31,
	2022		2021
	(Unaudited)		(Unaudited)
Deposits on inventory	$	240,125	$	2,161,683
Deposits on enterprise computing equipment		79,673		-
Deposit on manufacturer’s tooling fee		27,730		-
Total accrued liabilities	$	347,528	$	2,161,683

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 September 30, 2022 and December 31, 2021, the ~~Company’s~~Company had $27,050 and $11,530 of inventory and had outstanding deposits of $~~57,083~~240,125 and $2,161,683 with vendors for the purchase of equipment for resale to ~~customers.~~customers, all respectively. As of September 30, 2022 and December 31, 2021, respectively, these deposits consisted of:

	●	$0 and $34,000 of equipment in transit and not yet delivered
	●	$240,125 and $2,127,683 of equipment in production and not yet shipped or delivered to customers

As of September 30, 2022 and December 31, 2021, total remaining costs of equipment not yet shipped and services yet to be provided totaled $225,893 and $3,951,547, respectively. These costs are included in the Deposits item on the Company’s balance sheets. Terms with the Company’s vendors call for full payment prior to shipment when equipment is ready for shipment.

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.

In September 2022, the facility holding the Company’s server equipment flooded, resulting in the impairment of $85,285 of server equipment. The Company recorded a net loss of $21,321 on impairment during the three months ended September 30, 2022. Additionally, the Company repurposed $9,199 of equipment for research and development purposes during the quarter.

As of September 30, 2022 and December 31, 2021, the Company’s property and equipment consisted of $~~71,938~~8,278 and $84,133 of ~~data center~~computing equipment, ~~and~~net of $~~13,347~~1,610 ~~of capitalized labor associated with readying the equipment for service, net of~~and $37,872 of accumulated ~~depreciation.~~depreciation, all respectively. Depreciation expense for three and nine months ended September 30, 2022 and 2021 was $5,523 and $20,535 and $7,165 and $21,231, respectively.

Intangible Assets – Website Development Costs

The Company accounts for its website development costs in accordance with FASB Accounting Standards Codification ASC 350-40, Intangibles-Goodwill and Other, Internal-Use Software, and ASC 350-50, Intangibles-Goodwill and Other, Website Development Costs. During the infrastructure development stage of its website, the Company capitalizes development and other costs associated with preparing the website for use. When the website or an individual module of the website is ready for its internal use, amortization will begin on a straight-line basis over its estimated useful life. The Company estimates that the website’s estimated useful life will be approximately three years, after taking into account the effects of obsolescence, technology, competition and other economic factors.

During the nine months ended September 30, 2022, the Company capitalized $56,600 of web development costs pertaining to a new website. In August 2022, the Company terminated its relationship with the original website developers, resulting in loss of the in-progress website. Accordingly, the Company expensed $40,000 of capitalized costs to sales and marketing expenses during the three and nine months ended September 30, 2022. The remaining $16,600 of capitalized website costs as of September 30, 2022 consisted of payments to a new website developer for a new in-progress website. The website was not yet fully in service as of September 30, 2022, and the Company therefore recognized no amortization expense for the three and nine months ended September 30, ~~2021 was $7,165~~ ~~and $21,231, respectively, compared to $6,303~~ ~~and $10,513~~ ~~for the three and nine months ended September 30, 2020, all respectively.~~2022.

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 September 30, ~~2021,~~2022, the Company determined that its long-lived assets have not been impaired.

Accounts Payable and Accrued Liabilities

Accounts payable consisted of $26,424 and $74,434of liabilities incurred by the issuer prior to the merger as of ~~each~~ September 30, 2022 and December 31, 2021, ~~and 2020.~~respectively. The remaining accounts payable ~~of $108,556~~ ~~and $44,174~~ ~~as of September 30, 2021 and December 31, 2020, respectively,~~ consisted of amounts due to vendors for delivered product, professional services and various other general and administrative expenses incurred after the acquisition.

As of September 30, 2022 and December 31, ~~2020, accrued liabilities consisted of $1,811~~ ~~of state and local taxes payable, $1,903~~ ~~of accrued interest due to a vendor and $45,548~~ ~~of accrued interest on convertible debt. As of September 30,~~ 2021, accrued liabilities consisted of $~~104,244~~ ~~of accrued interest on convertible debt and $35,188~~ ~~for state and local taxes.~~the following:

SCHEDULE OF ACCRUED LIABILITIES

	2022		2021
	As of
	September 30,		December 31,
	2022		2021
	(Unaudited)		(Unaudited)
State and local tax liabilities	$	2,317	$	201,559
Accrued interest		39,084		119,889
Payroll liabilities		113,094		117,976
Reserve for Sales Returns		-		-
Accrued expenses		-		6,967
Accrued commissions		26,614		5,553

Total accrued liabilities	$	181,109	$	451,944

1113

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~Months~~and Nine months Then Ended (Unaudited)

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 in 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.

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~~activities consist of:

1.	~~GPU as a Service~~Data center infrastructure and equipment sales – The Company ~~owns~~resells immersion-cooled data center products, equipment and ~~operates~~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 – During the interim period ended September 30, 2021, the Company operated 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~~other high-performance computing tasks. The Company’s performance obligation with respect to computing revenue is the provision of specified computing services to the client. The Company did not generate revenue from ~~mining when~~cloud computing services during the ~~servers are not processing other jobs to ensure zero idle time and have the ability to run AI and HPC processing as well.~~
2.	~~Hardware sales – The Company resells mobile and immersion-cooled data center solutions and other high-powered computing equipment.~~three or nine months ended September 30, 2022.

During the three and nine months ended September 30, 2022 and 2021, the Company recognized $0 and $0 and $0 and $29,483 of revenue from its customers’ usage of ~~data center~~computing credits, with associated costs of $0 and $5,378 and $0 and $9,506, all respectively. The Company further recognized a deferred revenue liability of $9,478 and $9,478, respectively for prepaid usage credits not yet used by its customers as of September 30, ~~2021. While the Company plans to continue to generate revenue, there can be no assurances that service lines will generate satisfactory revenue or continue to generate revenue.~~2022 and December 31, 2021, respectively.

~~Net hardware sales during the three and nine months ended~~As of September 30, 2022 and December 31, 2021, ~~totaled~~the Company recognized $~~144,743~~540,028 and $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 $240,125 and $~~942,173~~2,161,683 ~~and had associated costs of goods sold of $105,138~~ ~~and $783,888~~,for product to be delivered, all respectively.

~~The Company recognizes prepayments for equipment not yet delivered at the end of a given period as a customer deposit liability.~~

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021, outstanding customer deposit liabilities totaled $391,555~~.2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited)

Crypto Assets Held

The crypto assets held by the Company, with no qualifying fair value hedge, 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~~expenses in the consolidated statements of operations. The Company assigns costs to transactions on a first-in, first-out basis.

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying value of crypto assets held by the Company was $~~187~~3,940 and $~~1,197~~3,940, respectively. During the three months ended September 30, 2022, the Company recognized a loss of $1,976 related to the collection and immediate liquidation of cryptocurrency as payment for a customer order.

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~~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 Company generated no cryptocurrency income and did not record an impairment loss during the three and nine months ended September 30, ~~2021, the Company recognized $1,234and $12,025~~ ~~of cryptocurrency mining income and losses of $3,285~~ ~~and $2,807~~ ~~on the sale of cryptocurrency, all respectively.~~2022.

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.

Net (Loss) per Common Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents.

For the three and nine months ended September 30, 2022, certain potentially dilutive securities and derivatives were excluded from the computation of diluted loss per share as the effect would be to reduce the net loss per common share. Therefore, the weighted-average common stock outstanding used to calculate both basic and diluted net loss per share is the same for these loss periods. The following table sets forth the net loss per common share computation for the three and nine months ended September 30, 2022:

SCHEDULE OF NET INCOME (LOSS) PER SHARE

				Weighted Average
	Net (Loss)			Common Shares		Per Share
	(Numerator)			(Denominator)		Amount

Three Months Ended September 30, 2022 (Unaudited)
Basic and Diluted (Loss) Per Common Share
(Loss) available to common stockholders	$	(1,057,796	)		11,625,408	$	(0.09	)
Nine months Ended September 30, 2022 (Unaudited)
Basic and Diluted (Loss) Per Common Share
(Loss) available to common stockholders	$	(3,798,112	)		10,845,790	$	(0.35	)

1215

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~Months~~and Nine months Then Ended (Unaudited)

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.

NOTE 3: GOING CONCERN

As shown in the accompanying financial statements as of September 30, ~~2021,~~2022, the Company had $~~147,261~~67,592 of cash, ~~and $279,747~~ ~~of current assets, as compared to total current liabilities of $1,460,404~~, has incurred substantial historical operating losses, and had an accumulated deficit of $~~1,901,614~~731,590. Furthermore, the Company’s revenue history ~~has been~~is limited, ~~and unstable,~~the Company is currently not on a trajectory to meet originally anticipated revenues for 2022, and there can be no assurances of future ~~revenues.~~revenues or sufficient profits to fund operations.

Given these factors, the Company ~~is dependent on~~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~~EQUITY/(DEFICIENCY)

Class A Preferred Super Majority Voting Stock

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~~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.

As of September 30, 2022, 7,000,000shares of Class A Preferred Stock were issued and outstanding.

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

1316

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~Months~~and Nine months Then Ended (Unaudited)

Class C Preferred Non-Voting 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~~As amended and filed with the State of Delaware on December 17, 2020, each share of Class C ~~shall be~~would have been convertible into one (1) ~~shares~~share of common stock. In mid-2021, the State of Delaware rejected the December 17, 2020 amendment, as filed. On April 13, 2022, the Company elected to not adjust or re-file the amendment, resulting in the Class C Preferred shares retaining the original conversion rate of five (5) common shares per Class C share. Although the change was never deemed effective by the State of Delaware, the Company previously accrued the change on the filing date for US GAAP accounting purposes and has deemed the subsequent termination of efforts as a separate transaction solely for US GAAP accounting purposes. Therefore, for accounting purposes, the Company presented the change as a deemed dividend of $3,781,868, based on the price of recent private transactions of the Company’s common stock and adjusted for dilutive effects.

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~~restricted the CEO and President from converting the 7,000,000 shares into common stock for 36 months from the issuance date.

~~The following table sets forth the Company’s warrant activity through September 30, 2021:~~

~~SCHEDULE OF WARRANT ACTIVITY~~

Warrants Shares Under Warrant Term Exercise Price Remaining Life
Balance, December 31, 2019 - -

Warrants issued with equity units 627,862 1,255,724 3 years $ 0.50
Balance, December 31, 2020 627,862 1,255,724

No new issuances
Warrant issued with equity units - -
Balance, September 30, 2021 627,862 1,255,724

~~Pursuant to a service agreement entered on January 25,~~ After October 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~~this restriction expired, and the CEO ~~(Delray Wannemacher),~~and President ~~(Daniel Wong) and a Director (Austin Bosarge) on July 1, 2021 and July 1, 2022 for services rendered. Accordingly, the Company accrued totals of~~ ~~375,000~~ ~~common shares and stock-based compensation expense of $71,250~~are free to convert these ~~individuals during the three months ended September 30, 2020.~~

shares.

~~Pursuant to consulting and advisory agreements, the Company accrued~~ ~~217,000~~ ~~common shares due to consultants and~~ ~~50,000~~ ~~common shares to an advisor~~ ~~for services rendered in September 2021, resulting in compensation expense of $41,230~~ ~~and $9,500, respectively.~~

As of September 30, ~~2021, the~~2022, 7,000,000 shares of Class C Preferred Stock were issued and outstanding.

Common Stock

The Company ~~was~~is 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.

~~As of September 30, 2021,~~In April 2022, the Company ~~had~~agreed to issue ~~9,063,079~~50,000 fully vested common shares to an employee and 100,000 fully vested common shares to an advisor for services rendered.

In July 2022, the Company issued 375,000 fully vested common shares, or 125,000 shares each, to its board members as compensation for services rendered. Furthermore, the Company issued 100,000 common shares ~~outstanding.~~to an advisory group for services rendered and 50,000 common shares to a newly appointed board member.

As of September 30, ~~2021,~~2022, the Company had 11,658,832 common shares outstanding.

~~7,000,000~~

Warrants

The following table sets forth the Company’s warrant activity through September 30, 2022:

SCHEDULE OF WARRANTS ACTIVITY

	Warrants		Shares Under Warrant		Term		Exercise Price		Remaining Life
Balance, December 31, 2021		627,862		1,255,724

Class B Warrants Issued as part of equity units from debt conversions – February 28, 2022		1,824,751		1,824,751		3 years	$	1.00	35 months

Balance, September 30, 2022 (Unaudited)		2,452,613		3,080,475

On February 28, 2022, convertible noteholders converted $638,660, consisting of $549,500 of outstanding principal and $89,160 of accrued interest, into 1,824,751 equity units, each consisting of (1) one share of the Company’s common stock and (1) Class B Warrant to purchase one share of common stock for $1.00 up to three years from the issuance date. The Company assigned a value of $456,188, based on a recent private transaction at $0.25 per share, to the common stock and the remaining value of $182,472 to the warrants, using the following Black-Scholes inputs:

	●	Time to Maturity: 3 years
	●	Risk-Free Rate: 1.68%
	●	Volatility: 103%

Stock Options

The Company has reserved 446,054 shares for its options pool.

In April 2022, the Company agreed to issue 200,000 options to an employee for services rendered. The options expire in 10 years, have a strike price of ~~Class A Preferred Stock~~$1.00, and vest ratably over 24 months, beginning in May 2022.

On July 18, 2022, the Board appointed a new director, who received 200,000 options to purchase common stock at a strike price of $1.00 per share. The options have a rolling expiration of three years from each date of vesting, and 100,000 options vest on June 30, 2023 and the remaining ~~7,000,000~~100,000 options vest on June 30, 2024.

Using the following inputs, the Company estimated the aggregate value of the grants to be $55,999 based on the following inputs:

	●	Time to Maturity: 5 years
	●	Risk-Free Rate: 0.43% - 2.56%
	●	Volatility: 103%

The following tables set forth the Company’s options activity through September 30, 2022 and options attributes as of September 30, 2022:

SCHEDULE OF OPTIONS ACTIVITY ~~shares of Class C Preferred Stock were issued and outstanding.~~

Outstanding, December 31, 2021			-

Granted			-
Exercised			-
Forfeited			-
Outstanding, March 31, 2022 (unaudited)			-

Granted			400,000
Exercised			-
Forfeited			-
Outstanding, September 30, 2022 (unaudited)			400,000

	As of
	September 30, 2022
	(Unaudited)
Weighted average contractual remaining term – options outstanding (years)		6.9
Aggregate intrinsic value – options outstanding	$	-
Options exercisable		41,667
Aggregate intrinsic value – options exercisable	$	-
Weighted average contractual remaining term – options exercisable		9.5

NOTE 5: RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, ~~2021,~~2022, the Company ~~paid out previously accrued consulting fees payable to the CEO and President of~~recognized compensation expense totaling $~~5,000~~96,250 and $~~30,000~~478,750~~, respectively, and paid~~ to its CEO, $~~120,335~~77,500 and $~~85,000~~460,501 ~~of current compensation~~ to its President, $34,500 and $101,000 to Synergia CPA, LLC and $3,000 and $9,000 to Synergia Technology Services, LLC, both entities fully owned and controlled by the ~~CEO~~CFO, for contract CFO and ~~President, respectively.~~various accounting and IT services furnished to EDGE. The Company does not currently have consulting or employment agreements with these individuals, and as a result, these fees may fluctuate from time to time. While the Company believes these individuals were appropriately classified as contractors and has accordingly neitherfurther paid ~~nor accrued payroll taxes, these payments may result in future tax liabilities should the Internal Revenue Service deem these individuals to be employees. As of September 30, 2021, the Company owed~~ $010,000 of ~~outstanding~~ compensation to a board member during the ~~CEO~~three and ~~COO.~~nine months ended September 30, 2022.

During the nine months ended September 30, ~~2021,~~2022, the Company’s CEO, President and ~~President~~CFO paid expenses on behalf of the Company totaling $~~55,534~~67,264, $41,075 and $~~4,648~~15,404, and the Company repaid $~~107,044~~70,422, $31,085 and $~~4,648~~16,700 of related party advances, including previous amounts advanced to the company, all respectively. Of amounts repaid, $1,296 pertained to accounts payable due to Synergia Technology Services, LLC. As of September 30, ~~2021,~~2022, the Company was indebted to the CEO for $0 ~~and to~~, the President for $18,800 and the CFO for $0, all respectively, for expenses paid on behalf of the company. As of September 30, 2022, the Company did not owe accrued compensation to the CEO, President and CFO.

1418

EDGE DATA SOLUTIONS, INC. ~~(Formerly Southeastern Holdings, Inc.)~~

NOTES TO FINANCIAL STATEMENTS

As of September 30, ~~2021~~2022 (Unaudited) and for the Three ~~Months~~and Nine months Then Ended (Unaudited)

NOTE 6: CONVERTIBLE NOTES

~~As of September 30, 2021 and December 31, 2020,~~On February 15, 2022, the Company ~~owed~~repaid the entire outstanding balance of $~~720,000~~118,725 on a convertible note, consisting of $100,000 original principal and $~~720,000~~18,725 ~~on outstanding convertible notes, respectively.~~of accrued interest.

On February ~~3, 2021, the Company extended its~~28, 2022, convertible ~~note for~~debtholders converted a total of $~~100,000~~638,660, consisting of $549,500 ~~with Clearvoyance Ventures. The original note matured on~~ ~~November 26, 2020~~ ~~and bore interest at~~ ~~10%. According to the~~of amended ~~terms, the note will mature on~~ ~~February 3, 2022~~ ~~and accrue interest at~~ ~~15%. The note continues to have a conversion feature, under which~~ principal and $89,160 of accrued interest, ~~would convert~~into 1,824,751 equity units at a rate of $~~70%~~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 ~~stock price upon closing any offering resulting in aggregate financing of at least $1,000,000~~issuance date..

The Company evaluated the convertible notes in light of ASC 470 and determined that a beneficial conversion feature exists. However, given the contingent nature of the holder’s option and the lack of a market for the Company’s stock, the Company concluded that such a feature is not currently ascertainable and allocated the full principal amount to the convertible note liability.

As of September 30, 2022 and December 31, 2021, the Company owed $100,000 and $749,500 in outstanding principal on convertible notes, respectively. The Company is currently in default on the $100,000 note, but it is working with the noteholder to resolve the default.

During the three and nine months ended September 30, ~~2021,~~2022, the Company recognized $~~20,289~~3,781 and $~~60,209~~11,219 of interest expense on convertible ~~debt.~~debt, respectively. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, outstanding accrued interest on convertible debt totaled $~~104,244~~39,084 and $~~43,738~~149,389, respectively.

NOTE 7: ~~SIGNIFICANT AGREEMENTS~~CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES

~~On March 17, 2021,~~During the ~~Company entered into a joint marketing agreement with RoviSys Building Technologies, LLC (“RoviSys”), under which it will comarket its mobile and immersion-cooled~~three months ended September 30, 2022, the following customer concentrations existed in the Company’s data center solutions revenues:

	●	Customer A: 49%
	●	Customer B: 11%
	●	Customer C: 11%

During the three months ended September 30, 2022, the following vendors represented significant concentrations in the Company’s costs of data center solutions provided to customers:

	●	Vendor A: 50%
	●	Vendor B: 23%

The loss of or disruption to the Company’s relationships with these customers or vendors may be detrimental to the Company’s operations.

On July 27, 2022, the Company terminated its relationship with Midas Green Technologies, LLC, a major supplier of its immersion cooling tanks. While the Company has engaged a new manufacturer for its new tank line, unforeseen circumstances, such as materials availability, manufacturing issues or otherwise may hinder the Company’s ability to sell and deliver products to its customers, which may result in lost revenues and other ~~related services. The agreement grants a license to RoviSys to market~~losses. Furthermore, the ~~Company’s products.~~Company may sustain legal costs in the event legal action arises from the termination.

Management has determined that no other significant concentrations, commitments, or contingencies existed as of September 30, 2022.

EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited)

NOTE 8: FINANCE LEASE

On March 27, 2020, the Company entered into a ~~36-month~~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%~~12.55% and will record interest expense accordingly over the life of the lease.

During the ~~nine~~three months ended September 30, ~~2021,~~2022, the Company paid a total of $~~11,629~~3,876, including $~~6,055~~3,485 of principal and $~~2,405~~391 of interest, to the lessor and recognized $3,241 of lease expense for the three months ended September 30, ~~2021.~~

~~EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~As of September 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)~~2022.

As of September 30, ~~2021,~~2022, lease-related assets and liabilities consisted of:

SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES


Assets
Prepaid expense	$	1,830	$	523
Right of use asset - finance lease		22,688
Right of use asset – finance lease				6,482
Security deposit		7,753		7,753
Total lease-related assets	$	32,271	$	14,758

Liabilities
Lease liability - finance, current portion	$	16,099
Lease liability - finance, non-current portion		10,277
Lease liability – finance, current portion			$	6,284
Lease liability – finance, non-current portion				-
Total lease-related liabilities	$	26,376	$	6,284

Future maturities of the lease liability are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITY


2021	$	9,646
2022		14,186
2022 (Q4)			$	3,741
2023		2,543		2,543
Total future maturities	$	26,376	$	6,284

~~NOTE 9:~~ ~~CUSTOMER DEPOSIT LIABILITY~~EDGE DATA SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

As ~~discussed in Note 2, during the three months ended September 30, 2021, the Company collected $391,555~~ ~~for orders of its data center hardware solutions that were not yet fulfilled as~~ of September 30, ~~2021. Accordingly,~~2022 (Unaudited) and for the ~~Company recognized a deposit liability of $391,555~~ ~~as of September 30, 2021~~Three and ~~will release the liability to revenue during the period in which the orders are delivered.~~Nine months Then Ended (Unaudited)

NOTE 9: SIGNIFICANT AGREEMENTS

On December 2, 2021, the Company entered into an agreement with a customer, under which EDGE agreed to 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 was receivable on the following schedule:

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

In March 2022, the total amount of the contract was reduced by $86,347 as a result of a change order, for a new total sale price of $8,987,753.

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 customer-imposed logistics and collections delays and the extensive replacement of faulty infrastructure resulting from a supplier’s shipments of faulty equipment. Management believes that the Company’s exposure to claimed penalties, if any, will not exceed the $627,245 current outstanding balance due from the customer.

Under this agreement, the Company 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, the Company 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 $8,360,508. Management re-evaluated collectability under ASC 606, given the aforementioned significant facts and circumstances, and believes it is unlikely the Company will collect the $627,245 outstanding balance. Further, management believes this collectability issue is effectively a renegotiation of the purchase price. As such, the Company discontinued revenue recognition beyond the $8,360,508 collected.

On July 20, 2022, the Company entered into a business development agreement with a business development firm (“Firm”), under which Firm will receive a monthly retainer of $5,000 until the agreement terminates on December 31, 2022, with an option to renew for additional twelve month periods. The agreement calls for a 3% referral fee on any revenue Firm brings to EDGE, with the $5,000 retainers applied against referral fees. The referral fees from any clients Firm refers to EDGE continue until five years after the agreement terminates.

NOTE 10: ~~CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES~~CONSTRUCTION IN PROGRESS – DATA CENTERS

During the ~~three~~nine months ended ~~September 30, 2021, one customer comprised~~ 2022, the Company made total payments of $~~96%~~127,142 for data center related infrastructure, equipment and labor and installation costs for data center construction in progress for the following two sites:

	●	Site A (Colorado Springs, Colorado) - $90,741
	●	Site B (Carlsbad, California) - $36,401 – Impaired, as set forth below.

Since the assets are not yet ready for service and have not been placed in service, the Company has capitalized them and evaluates them for impairment at the end of ~~delivered hardware sales,~~each reporting period. The Company does not own the underlying real estate and ~~the loss~~is heavily dependent upon continued access to and permission to use such sites. Agreements between management and site ownership are currently informal and may change at any time, which could result in impairment of ~~this or another significant customer would be detrimental to~~ the Company’s ~~sales.~~ assets at such sites.

Management ~~has determined that no other significant concentrations, commitments, or contingencies existed~~evaluated the construction in progress for impairment as of September 30, ~~2021.~~2022 and determined that the Company would unlikely be able to proceed with or continue to access Site B, given the circumstances discussed with the customer in Note 9. As a result, management deemed this construction in progress to be fully impaired as of September 30, 2022 and wrote off the $36,401 of costs pertaining to Site B to cost of goods sold, as this build-out was linked directly to the sale connected in Note 9, and the customer retained the infrastructure and equipment.

~~EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)~~

~~NOTES TO FINANCIAL STATEMENTS~~

As of September 30, ~~2021 (Unaudited) and for the Three Months Then Ended (Unaudited)~~2022, in-progress construction on data centers totaled $90,741.

NOTE 11: 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.

NOTE 12: SUBSEQUENT EVENTS

On ~~December 2, 2021,~~October 12, 2022, the Company’s president advanced the Company ~~issued~~ $~~96,000~~40,000 ~~additional common shares~~ to ~~a consultancy group for services rendered.~~help fund operations. This advance bears no interest and is due on demand.

Effective November 2, 2022, the Company entered into a referral fee agreement with a green energy consultancy (“referrer”), under which the referrer will receive a 2% referral fee on net revenues from referrals initially introduced to EDGE that result in an executed sale within twelve months of the introduction. Referral fees are due within 30 days of the Company’s receipt of cash from any such referrals. The agreement is in effect for one year.

Management has evaluated significant subsequent events through the date these financial statements were ~~available to be~~ issued and has identified no other significant events requiring further disclosure.

1721

~~CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS~~

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking statement. 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.

The identification in this report of factors that may affect our future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein.

General

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~~Delaware 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)~~commenced its current operations after its reverse acquisition on August 23, 2018. Extended discussion of EDGE’s corporate history, including predecessor entities and affiliates, is incorporated by reference in the Company’s Form 10-K filed 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~~April 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.~~2022.

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.Business Description

~~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)~~, a Delaware Corporation, believes it is poised to be an industry-leading edge data center, cryptocurrency mining and cloud infrastructure provider. ~~EDSI’s proprietary~~EDGE’s unique Edge Performance Platform (EPP) ~~allows us~~brings sustainable immersion-cooled high-performance computing to ~~deploy next-generation~~where it is needed most.

Compared to air-cooled solutions, EDGE’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 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, edge cloud providers, data centers, ~~where they are needed most. EDSI’s data centers provide next-generation immersion Cooling technology that improves performance, reduces energy costs~~high-performance computing providers, virtual desktop infrastructure providers, telecom, cybersecurity and ~~latency. Key industries we serve more computing power are fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video~~disaster recovery providers, streaming ~~remote desktop, IoT, autonomous vehicles. Centralized~~providers, artificial intelligence innovators, colleges, hospitals, governments, and enterprise blockchain 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.providers.

1922

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, ~~the above~~certain conditions raise substantial doubt about the Company’s ability to do so. ~~New business opportunities may never emerge,~~The Company has incurred substantial operating losses in its history and ~~we may~~has an accumulated deficit of $731,590. Furthermore, the Company’s revenue history is limited, the Company is currently not on a trajectory to meet originally anticipated revenues for 2022, and there can be ~~able~~no assurances of future revenues or sufficient profits to ~~sufficiently~~ fund ~~the pursuit of new business opportunities should they arise.~~operations.

As of September 30, ~~2021,~~2022, we had ~~approximately $147,261~~$67,592 of cash on hand. ~~Our current monthly~~Currently, cash ~~burn rate~~required to sustain core operations each month is approximately ~~$35,000,~~$250,000, excluding one-time expenses, and ~~it is expected~~we anticipate that ~~burn rate~~cash requirement will ~~continue~~significantly increase over the next twelve months. We have few customers and ~~is expected~~are highly dependent on revenue growth and external capital to continue ~~at $35,000 until significant additional~~to execute on our business plan. Any lack of sufficiently profitable sales, changes in market conditions, or difficulty obtaining capital ~~is raised~~could be detrimental to operations and our ~~marketing plan is executed. Our trade creditors may call debts at any time, and our cash reserves would not be sufficient~~efforts to ~~satisfy all balances. We are currently dependent~~execute on ~~minimal expenses to be covered by a loan or other cash infusion from~~ the ~~Company’s CEO and Director Delray Wannamaker, and President and Director, Daniel Wong. There is no guarantee that this cash infusion will continue to be made.~~business plan.

Operating results for the three months ended September 30, ~~2021~~2022 and ~~2020:~~2021:

During the three months ended September 30, ~~2021,~~2022, the Company generated revenues of ~~$144,733~~$87,245 from operations, compared to ~~$14,317~~$144,733 for the three months ended September 30, ~~2020, an increase~~2021, a decrease of ~~$130,416~~$57,488 or ~~911%~~40%. This ~~increase~~change is primarily a result of ~~the sale~~timing of sales of data center ~~hardware~~ solutions. The Company anticipates future revenue from its current efforts, but there can be no assurances that such efforts will be sufficient or successful.

For the three months ended September 30, ~~2021,~~2022, costs of net revenues were ~~$110,516,~~$76,358, compared ~~to $0~~$110,516 for the three months ended September 30, ~~2020,~~2021, for ~~an increase~~a decrease of ~~100%.~~$34,158, or 31% The change is a result of direct costs associated with the Company’s data center sales.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross ~~margin~~profit was $10,887 and $34,217, ~~and $14,317~~a decrease of $23,331 or 68%, for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

For the three months ended September 30, ~~2021,~~2022, selling, general and administrative expenses were ~~$80,547,~~$678,728, as compared to ~~$52,343~~$80,547 during the three months ended September 30, ~~2020,~~2021, an increase of ~~$28,204,~~$598,181, or ~~54%~~743%. The increase in these expenses was attributable to increased ~~legal, accounting~~costs to support significantly increased operations and ~~other professional fees associated with operations.~~sales and marketing efforts in 2022.

The Company recognized stock-based compensation expense of $137,100 for the three months ended September 30, 2022, as compared to $121,980 for the three months ended September 30, 2021, for an increase of $15,120, or 12%. This increase resulted from the Company’s hiring efforts and entry into an advisory agreement resulting in stock-based compensation during the three months ended September 30, 2022. The Company also recognized losses of $21,323 on its computing equipment during the three months ended September 30, 2022, as compared to ~~$218,500~~$0 for the three months ended September 30, ~~2020, for a decrease of $96,520, or 44%. This decrease resulted from lower stock-based compensation commitments, as the Company entered fewer consulting and advisory agreements in~~ 2021, as ~~compared to significant agreements to issue shares in 2020.~~

a result of flooding at a facility.

During the three months ended September 30, ~~2021,~~2022, the Company recognized ~~$7,165~~$5,523 of depreciation expense, as compared to ~~$6,303,~~$7,165, for ~~an increase~~a decrease of ~~$862~~$1,642 or ~~14%~~23%, during the three months ended September 30, ~~2020,~~2021, as a result of ~~added~~the loss of computing equipment ~~during the later periods of 2020 and during 2021.~~due to flooding at a facility.

During the three months ended September 30, ~~2021, the Company recognized $22,921~~2022, $4,759 of interest expense, as compared to ~~$17,955~~$22,921 for the three months ended September 30, ~~2020.~~2021. The ~~increase~~decrease of ~~$4,966,~~$18,162, or ~~28%~~79%, is ~~primarily attributable to~~a result of the ~~accrual~~repayment of ~~interest on~~$100,000 and conversion of $549,500 of convertible debt ~~issuances near the end~~in February 2022, leaving $100,000 of ~~2020 to fund operations.~~convertible debt outstanding during much of 2022.

The Company ~~also generated cryptocurrency mining income~~recognized an impairment loss on computing equipment of ~~$1,234 and a loss of $3,285 on~~$21,323 during the ~~sale of cryptocurrency during~~three months ended September 30, 2022, as compared to $0 for the three months ended September 30, 2021, as ~~compared to $716~~a result of flooding in a facility. Furthermore, the Company generated cryptocurrency mining income of $0 and $1,234, respectively and realized losses on the sale of cryptocurrency of $0 ~~respectively~~and $3,285 during the three months ended September 30, ~~2020.~~2022 and 2021, respectively. The ~~change was~~changes were a result of the ~~use of excess data center capacity after the~~ Company ~~built out its data centers~~not being engaged in cryptocurrency-related activities during ~~2020 and cryptocurrency market fluctuations.~~Q3 2022.

2023

As a result of the changes in operating expenses and other expenses, the Company generated a net loss of $1,057,796 for the three months ended September 30, 2022, as compared to a net loss of $288,282 for the three months ended September 30, 2021, ~~as compared to a net loss of $295,103 for the three months ended September 30, 2020,~~ a change of ~~$6,821,~~$769,514, or 2%267%.

The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans. Furthermore, the Company’s ability to continue to fund operating expenses will depend on its ability to raise capital, ~~continue to~~ generate revenue and experience revenue growth. There can be no assurance that the Company will be successful in doing so.

Operating results for the nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:

During the nine months ended September 30, ~~2021,~~2022, the Company generated revenues of ~~$971,656~~$9,344,332 from operations, compared to ~~$20,624~~$971,656 for the nine months ended September 30, ~~2020,~~2021, an increase of ~~$951,032~~$8,372,676 or ~~46,113%~~862%. This increase is ~~a result of (i) customers purchasing and consuming data center credits for use of the Company’s computing equipment and (ii) the sale~~driven by deliveries on sales of data center ~~hardware~~ solutions. The Company ~~anticipates~~believes it will generate future revenue from its current efforts and future product lines, but there can be no assurances that such efforts will be sufficient or successful.

For the nine months ended September 30, ~~2021,~~2022, costs of net revenues were ~~$793,394,~~$6,527,752, compared to $0$793,394 for the nine months ended September 30, ~~2020,~~2021, for an increase of ~~100%~~$5,734,358, or 723%. The change is ~~primarily~~ a result of direct costs associated with the Company’s ~~hardware~~data center sales.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross ~~margin~~profit was $2,816,580 and $178,262, ~~and $20,624~~an increase of $2,638,318 or 1,480%, for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

For the nine months ended September 30, ~~2021,~~2022, selling, general and administrative expenses were ~~$237,648,~~$1,521,755, as compared to ~~$185,331~~$237,648 during the nine months ended September 30, ~~2020,~~2021, an increase of ~~$52,317,~~$1,284,107, or ~~29%~~540%. The increase in these expenses was attributable to increased ~~legal, accounting~~costs to support significantly increased operations and ~~other professional fees associated with operations.~~marketing efforts in 2022.

The Company recognized stock-based compensation expense of $178,152 for the nine months ended September 30, 2022, as compared to $140,980 for the nine months ended September 30, 2021, for an increase of $37,172, or 26%. This increase resulted from new issuances of stock and options in connection with the Company’s hiring efforts during 2022.

During the nine months ended September 30, 2022, the Company recognized $20,535 of depreciation expense, as compared to ~~$381,900~~$21,231, for a decrease of $696 or 3%, during the nine months ended September 30, 2021, with the decrease attributable to the loss of computing equipment due to flooding at a facility. The Company also recognized losses of $21,323 on its computing equipment during the nine months ended September 30, 2022, as compared to $0 for the nine months ended September 30, ~~2020, for~~2021, as a ~~decrease~~result of ~~$240,920, or 63%. This decrease was attributable to timing of significant compensation issuances in 2020, as compared to fewer grants in 2021.~~flooding at a facility.

During the nine months ended September 30, ~~2021,~~2022, the Company recognized $21,231 of depreciation expense, as compared to $10,513, for an increase of $9,282 or 89%, during the nine months ended September 30, 2020, as a result of added equipment during the later periods of 2020 and during 2021.

~~During the nine months ended September 30, 2021, the Company recognized $73,266~~$29,832 of interest expense, as compared to ~~$42,064~~$73,266 for the nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease of ~~$31,202,~~$43,434, or ~~74%~~59%, is ~~primarily attributable to~~a result of the ~~accrual~~repayment of ~~interest on significant new~~$100,000 and conversion of $549,500 of convertible debt ~~issuances to fund operations throughout 2020.~~in February 2022, leaving $100,000 of convertible debt outstanding for much of 2022.

The Company also generated cryptocurrency mining income of $0 and $12,025 and ~~a loss~~losses of ~~$3,285~~$1,976 and $2,807 on the sale of cryptocurrency during the nine months ended September 30, 2022 and 2021, as a result of limited cryptocurrency-related activities in 2022, as compared to $716 and $0, respectively during the nine months ended September 30, 2020. The change was a result of the use of excess data center capacity after the Company built out its data centers during 2020 and cryptocurrency market fluctuations.2021.

As a result of the changes in operating expenses and other expenses, the Company ~~incurred~~generated a net loss of $16,244 for the nine months ended September 30, 2022, as compared to a net loss of $490,980 for the nine months ended September 30, 2021, ~~compared to a net loss of $698,253 for the nine months ended September 30, 2020,~~ a change of ~~$207,273,~~$474,736, or ~~30%~~97%.

Liquidity and Capital Resources

The Company’s cash position at September 30, ~~2021 increased~~2022 decreased by ~~$66,893~~$763,617 to ~~$147,261,~~$67,592, as compared to a balance of ~~$80,368,~~$831,209, as of December 31, ~~2020.~~2021. The ~~decrease~~increase in cash for the nine months ended September 30, ~~2021~~2022 was attributable to net cash ~~provided by~~used in operating activities of ~~$119,056, $1,152~~$506,800, $152,020 of net cash used in investing activities, and net cash used in financing activities of ~~$51,011.~~$104,797.

As of September 30, ~~2021,~~2022, the Company had a deficit in working capital of ~~$1,180,657,~~$859,834, compared to a deficit in working capital of ~~$849,989~~$1,593,822 at December 31, ~~2020,~~2021, representing a decrease in working capital of ~~$330,668,~~$733,988, which was largely attributable to ~~the use of cash~~less sales closed and less collection activities in ~~operations, amortization of prepaid expenses, customer deposits, finance lease-related liabilities, deferred revenue~~Q2 and ~~short-term convertible debt.~~Q3 2022.

Net cash ~~provided by~~used in operating activities of ~~$119,056~~$506,800 during the nine months ended September 30, ~~2021,~~2022, as compared to net cash of ~~$315,956 used in~~$131,184 provided by operating activities for the nine months ended September 30, ~~2020,~~2021, was primarily attributable to ~~a significant net loss, which was offset by customer deposits, stock-based compensation, write-off of acquisition deposits~~changes in current assets and ~~increases~~liabilities in ~~accounts payable and increased by payment of accrued liabilities.~~2022, as compared to 2021.

Net cash used in investing activities ~~was $1,152~~of $152,020 for the nine months ended September ~~30, 2021 decreased by $139,906 from $141,058~~30,2022, as compared to $1,152 of cash used by investing activities for the nine months ended September 30, ~~2020. This is~~2021, was attributable primarily to payments made related to prospective joint ventures data center sites at which the Company ~~acquiring less data center equipment in 2021~~plans to perform research and ~~advancing funds pertaining to a prospective acquisition in the prior period.~~development and roll out cloud services.

Net cash used in financing activities was ~~$51,011~~$104,797 during the nine months ended September 30, 2022, as compared to net cash used in financing activities of $63,139 during the nine months ended September 30, 2021, ~~as compared to net cash provided by financing activities of $506,110 during the nine months ended September 30, 2020. The difference~~ was primarily a result of ~~changes in finance lease assets and liabilities, net repayments~~the repayment of ~~related party advances, and no new~~a convertible ~~debt issued in 2021.~~note.

As reported in the accompanying consolidated financial statements, for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company ~~incurred~~generated net losses of ~~$373,750~~$16,244 and ~~$698,253,~~$490,980, respectively. ~~The Company produced revenues during the nine months ended September 30, 2021 and limited revenue during the nine months ended September 30, 2020.~~ The Company’s ability to continue as a going concern is dependent upon its ability to continue to generate sufficiently profitable revenue ~~reach consistent profitability~~ and its ability to raise ~~additional capital. To date,~~capital in the ~~Company has raised funds from related party advances, convertible debt, subscriptions to equity units, and the sale of common stock to its former CEO.~~event it does not generate revenue. It intends to finance its future operating activities and its near-term working capital needs through the sale of immersion-cooled data center ~~hardware~~ solutions and ~~future convertible debt financings or stock subscriptions.~~through additional capital. The sale of equity and entry into other future financing arrangements may result in dilution to stockholders and those securities may have rights senior to those of common shares. If the Company raises additional funds through the issuance of convertible notes or other debt financing, these activities or other debt could contain covenants that would restrict the Company’s operations. Any other third-party funding arrangements could require the Company to relinquish valuable rights. The Company will require additional capital beyond its currently anticipated needs. Additional capital, if available, may not be available on reasonable terms or at all.

While the Company has generated revenues, itits revenues are currently composed of few customers, and the loss of any significant customer could be detrimental to its ability to execute on its business plan. Furthermore, the Company has not ~~generated substantial revenues or profits~~met its projected revenue targets from ~~its current operations.~~2022-to-date. The Company expects to continue to ~~incur operating losses as~~generate sufficiently profitable revenues, but there can be no assurance that it ~~incurs professional fees and other expenses related to implementing its business plan.~~will be successful in these efforts. The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans and continue to generate revenue. Furthermore, the Company’s ability to continue to fund operating expenses will depend on its ability to ~~raise capital and~~ generate sufficient ~~revenues.~~revenues and raise any necessary capital. There can be no assurance that the Company will be successful in doing so.

Financial Condition

The Company’s total assets as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$354,361~~$626,864 and ~~$241,831,~~$3,095,177, respectively, representing ~~an increase~~a decrease of ~~$112,530,~~$2,468,313, or ~~47%~~80%. Total liabilities as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$1,466,664~~$1,358,454 and ~~$1,004,134,~~$4,627,335, respectively, for ~~an increase~~a decrease of ~~$462,530,~~$3,268,881, or ~~46%~~71%. The significant change in the Company’s financial condition is attributable to ~~revenue generation, customer deposits on hardware, commencement~~the delivery of ~~a finance lease arrangement, cash burn from operations~~data center solutions and ~~increases in accounts payable~~repayments and ~~repayment~~conversions of ~~accrued expenses.~~convertible debt during the nine months ended September 30, 2022.

As a result of these ~~transactions,~~activities, the Company’s cash position ~~increased~~decreased from ~~$80,368~~$831,209 to ~~$147,261~~$67,592 during the nine months ended September 30, ~~2021.~~2022.

Off-Balance Sheet Arrangements

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4. 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 ~~President,~~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-Q. 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-Q, 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 September 30, ~~2021,~~2022, our disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, ~~2021~~2022 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

The Company is not a party to any legal proceeding that it believes will have a material adverse effect upon its business or financial position.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~During the period from January 1, 2020 through September 30, 2021, the Company issued the following unregistered securities.~~None.

~~On January 23, 2020, the Company entered into a~~ ~~Subscription Agreement and Conversion of Convertible Note~~ with FNFC Profit Sharing Plan and Trust (“FNFC”) to issue 206,986 equity units, each consisting of one share of the Company’s common stock and one three-year warrant to purchase two shares of common stock for $0.50. In exchange for the equity units, FNFC converted $25,000 of outstanding principal, $1,747 of accrued interest and invested an additional $25,000.

~~On January 27, 2020, the Company entered into a~~ ~~Subscription Agreement and Conversion of Convertible Note~~ with JMA Enterprises (“JMA”) to issue 420,876 equity units, each consisting of one share of the Company’s common stock and one three-year warrant to purchase two shares of common stock for $0.50. In exchange for the equity units, FNFC converted $75,000 of outstanding principal, $5,219 of accrued interest and invested an additional $25,000.

On February 15, 2019, the Company agreed to issue 125,000 shares of common stock to Fisher Herman Construction, LLC in exchange for execution of a 24-month service contract with the Company. The agreement calls for 375,000 future shares to be issued over the term of the contract, so long as the contract is in full force and effect, consisting of (i) 50,000 shares every 90 days and (ii) 75,000 shares due upon completion of the contract. On February 15, 2020, the Company issued 50,000 shares of common stock under this agreement. The Company generated no proceeds from this transaction.

On February 19, 2020, the Company entered into a convertible note with Charles Horak for proceeds of $100,000. The note matures in one year, bears interest at 10% per annum and is convertible at a 30% discount in the event of a financing event of at least $1,000,000. On April 22, 2020, the Company received $50,000 of additional funds from Charles Horak under similar terms.

On February 27, 2020, the Company entered into a convertible note with Anthony Givogue for proceeds of $10,000. The note matures in one year, bears interest at 10% per annum and is convertible at a 30% discount in the event of a financing event of at least $1,000,000.

On April 9, 2020, the Company entered into a one-year convertible promissory note with Chuck Ruhmann for proceeds of $50,000. The note bears 10% interest per annum and is convertible at a 30% discount in the event of a $1,000,000 or greater financing.

On April 22, 2020, the Company entered into a convertible promissory note with Zoran Stojkov for proceeds of $50,000. The note matures in one year, bears 12% interest per annum and is convertible at a 30% discount in the event of a $1,000,000 or greater financing.

On April 22, 2020, the Company entered into a convertible promissory note with Charles Horak for proceeds of $50,000. The note matures in one year, bears 12% interest per annum and is convertible at a 30% discount in the event of a $1,000,000 or greater financing.

~~On May 6, 2020, the Company agreed to issue 60,000 shares of common stock to Paul Manos in exchange for professional services rendered.~~

On June 5, 2020, the Company entered into a one-year convertible promissory note with Chuck Ruhmann for proceeds of $50,000. The note bears 12% interest per annum and is convertible at a 30% discount in the event of a $1,000,000 or greater financing.

~~On June 19, 2020, the Company’s Board of Directors approved the issuance of 250,000 common shares to Delray Wannemacher, Chief Executive Officer and Director, as compensation for services rendered.~~

~~On June 19, 2020, the Company’s Board of Directors approved the issuance of 250,000 common shares to Daniel Wong President and Director, as compensation for services rendered.~~

~~On June 19, 2020, the Company’s Board of Directors approved the issuance of 250,000 common shares to Austin Bosarge, Director, as compensation for services rendered.~~

~~On July 7, 2020, the Company’s Board of Directors approved the issuance of 500,000 common shares to Delray Wannemacher, Chief Executive Officer and Director, as compensation for services rendered.~~

~~On July 7, 2020, the Company’s Board of Directors approved the issuance of 500,000 common shares to Daniel Wong President and Director, as compensation for services rendered.~~

On July 19, 2020, the Company entered into a convertible promissory note with Zoran Stojkov for proceeds of $25,000. The note matures in one year, bears 10% interest per annum and is convertible at a 15% discount in the event of a $1,000,000 or greater financing.

On August 7, 2020, the Company entered into a convertible promissory note with Intecon, LLC for proceeds of $100,000. The note matures in one year, bears 10% interest per annum and is convertible at a 15% discount in the event of a $1,000,000 or greater financing.

On August 28, 2020, the Company entered into a convertible promissory note with Dave Ellicott for proceeds of $50,000. The note matures in one year, bears 10% interest per annum and is convertible at the lesser of (i) a 30% discount of (ii) $0.50 per share, in the event of a $1,000,000 or greater financing.

On August 31, 2020, the Company entered into a convertible promissory note with Charles Horak for proceeds of $25,000. The note matures in one year, bears 10% interest per annum and is convertible at the lesser of (i) a 30% discount of (ii) $0.50 per share, in the event of a $1,000,000 or greater financing.

~~On September 15, 2020, the Company issued 50,000 common shares to Levi Volk as compensation for services rendered.~~

~~On September 16, 2020, the Company approved the issuance of 100,000 common shares to Joshua Holmes as compensation for services rendered and subsequently issued the shares on November 2, 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.~~

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

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

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

~~Pursuant to an advisory agreement in effect in September 2020, the Company issued 50,000 common shares 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 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, 192,000 of which were accrued in the third quarter, and 96,000 of which were due in the fourth quarter of 2021.

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 3. Defaults Upon Senior Securities.

There have been no defaults upon senior securities.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

a. Exhibits

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Schema Document

101.CAL		Inline XBRL Calculation Linkbase Document

101.DEF		Inline XBRL Definition Linkbase Document

101.LAB		Inline XBRL Label Linkbase Document

101.PRE		Inline XBRL Presentation Linkbase Document

104		Cover Page Interactive Data File (Embedded within the Inline XBRL document)

2527

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	~~Edge Data Solutions, Inc.~~EDGE DATA SOLUTIONS, INC.

Date: ~~December 2, 2021~~November 14, 2022

	By:	/s/ Delray Wannemacher
		Delray Wannemacher, Chairman and CEO
		(Chairman of the Board and Principal Executive Officer)

~~Acting~~
Dated: November 14, 2022
By: /s/ Paul Manos
Paul Manos, Interim CFO
(Principal Financial ~~Officer~~
and Accounting Officer)

2628

	September 30, 2021			December 31, 2020
	As of
	September 30, 2021			December 31, 2020
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	147,261		$	80,368
Accounts receivable		56,097			651
Deposits		57,083			46,122
Inventory		11,530			-
Crypto assets held		187			1,197
Other current assets		6,021			4,668
Prepaid expense		1,568			4,409
Total Current Assets		279,747			137,415

Non-Current Assets:
Right of use asset - finance lease		19,448			29,171
Property and equipment, net		47,413			67,492
Security deposit		7,753			7,753
Total Non-Current Assets		74,614			104,416

TOTAL ASSETS	$	354,361		$	241,831

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable	$	182,990		$	118,608
Accrued liabilities		139,432			45,548
Customer deposits		391,555			-
Deferred revenue		9,478			1,035
Convertible notes payable, short-term		720,000			720,000
Advances from related parties		-			51,510
Lease liability - finance, current portion		16,949			15,703
Accrued compensation - related party		-			35,000
Total Current Liabilities		1,460,404			987,404

Non-Current Liabilities:
Lease liability - finance, non-current portion		6,260			16,730
Total Non-Current Liabilities		6,260			16,730

Total Liabilities		1,466,664			1,004,134

Commitments and Contingencies (Note 10)		-			-

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, September 30, 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, September 30, 2021 and December 31, 2020.		7,000			7,000
Preferred Stock
Common stock, $0.0001 par value; 150,000,000 shares authorized, 9,063,079 and 8,321,079 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively.		906			832
Additional paid-in capital		774,405			633,499
Accumulated deficit		(1,901,614	)		(1,410,634	)
Total Stockholders’ Deficiency		(1,112,303	)		(762,303	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	354,361		$	241,831

	(Unaudited)			(Unaudited)
	For the Nine Months Ended
	September 30, 2021			September 30, 2020
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net Loss	$	(490,980	)	$	(698,253	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation		21,231			10,513
Gain on disposal of equipment		-			(4,965	)
Stock-based compensation		140,980			381,900
Loss on prospective acquisition		-			23,000
Changes in operating assets and liabilities:
Change in accounts receivable		(55,446	)		(3,193	)
Change in deposits		(10,961	)		-
Change in crypto assets held		1,010			-
Change in inventory		(11,530	)		-
Change in other current assets		(1,353	)		(2,516	)
Change in prepaid expenses		2,841			(8,452	)
Change in security deposits		-			(7,753	)
Change in accounts payable		64,382			8,501
Change in accrued compensation - related party		(35,000	)		(41,000	)
Change in accrued liabilities		93,884			18,261
Change in customer deposits		391,555			-
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		119,056			(315,956	)

Cash Flows from Investing Activities
Purchase of property and equipment		(1,152	)		(128,228	)
Proceeds from disposal of property and equipment		-			10,170
Deposits on prospective acquisition		-			(23,000	)
Net Cash (Used in) Investing Activities		(1,152	)		(141,058	)

Cash Flows from Financing Activities
Proceeds from issuance of short-term convertible debt		-			510,000
Related party advances		60,182			168,191
Repayment of related party advances		(111,692	)		(211,489	)
Deferred offering costs		-			(13,500	)
Change in finance lease assets and liabilities		12,128			8,577
Payments on finance lease		(11,629	)		(5,669	)
Sale of equity units		-			50,000
Net Cash Provided by/(Used in) Financing Activities		(51,011	)		506,110

Net Change In Cash		66,893			49,096

Cash at Beginning of Period		80,368			14,453
Cash at End of Period	$	147,261		$	63,549

Supplemental Disclosure of Cash Flow Information:
Convertible debt principal and accrued interest converted to equity units	$	-		$	106,966
Issuance of common stock for equipment purchases	$	-		$	6,083

Dated: November 14, 2022

	By:	/s/ Paul Manos
		Paul Manos, Interim CFO
		(Principal Financial ~~Officer~~ and Accounting Officer)