UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended SeptemberJune 30, 20162021

OR

OR

¨

For the transition period __________ to __________

Commission File Number:333-198435

SAFE LANE SYSTEMS, Inc.EDGE DATA SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

1624 Market Street, Suite #202, Denver, Colorado 80202/ Phone (949) 825-65123550 Lenox Road NE. 21st Floor Atlanta GA 30326

(Address and telephone number of principal executive offices)

Paul D. Dickman, Chief Executive Officer, President and Chairman of the BoardMr. Delray Wannemacher, CEO, (833)682-2428

1624 Market Street, Suite #202, Denver, Colorado 80202/ Phone (949) 825-65123550 Lenox Road NE. 21st FloorAtlantaGA30326

(Name, address and telephone number of agent for service)

COPIES OF ALL COMMUNICATIONS TO:

Michael A. Littman, Attorney at Law

7609 Ralston Road, Arvada, CO, 80002 phone 303-422-8127 / fax 303-431-1567

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. Yesx ☒ 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). Yesx ☒ No o☐

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

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

As of November 21, 201617, 2021, there were outstanding 40,000,000 8,421,079 shares of the issuer’sour common stock, par value $0.0001 per share, and 10,000,0007,000,000 shares of the issuer’s classCompany’s Class A Super Voting preferred stock, par value $0.0001$0.001 per share.share, and 7,000,000 shares of the Company’s Class C preferred stock, par value $0.001 per share

SAFE LANE SYSTEMS, INC.

EDGE DATA SOLUTIONS, INC.

FORM 10-Q for the Quarter Ended SeptemberJune 30, 20162021

INDEX

PART I - FINANCIAL INFORMATION

Item 1.1 - Financial Statements

Safe Lane Systems,Edge Data Solutions, Inc. (Formerly Southeastern Holdings, Inc.)

Balance SheetA Delaware Corporation

Financial Statements

See accompanying notes to financial statements.As of June 30, 2021 (Unaudited) and for the Three months and Six Months Then Ended (Unaudited)

Safe Lane Systems,Edge Data Solutions, Inc. (Formerly Southeastern Holdings, Inc.)

Statement of Operations

For the Three and Nine Months Ended September 30, 2016 and 2015TABLE OF CONTENTS

See accompanying notes to financial statements.

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

Safe Lane Systems, Inc.

Statement of Cash Flow

For the Nine Months Ended September 30, 2016 and 2015BALANCE SHEETS

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

SAFE LANES SYSTEMS,EDGE DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO THE FINANCIAL STATEMENTS OF OPERATIONS

September 30, 2016

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

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

STATEMENTS OF CASH FLOWS

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 six months ended June 30, 2020 (Unaudited)

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 six months ended June 30, 2021 (Unaudited)

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

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three and Six Months Then Ended (Unaudited)

NOTE 1.  1: ORGANIZATION OPERATIONS AND SUMMARYNATURE OF SIGNIFICANT ACCOUNTING POLICIES:OPERATIONS

SAFE LANES SYSTEMS,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. The Company was formed to engage in the sale of traffic safety equipment. The Company may also engage in any other business permitted by law, as designated by the Board of Directors of the Company. During the second quarter of 2014 the Company secured a perpetual license to all of the intellectual property of Superior Traffic Control in exchange for the issuance of nonvoting convertible stock in the company. In the second quarter of 2016 the Company determined that license and related intellectual property should be written off as worthless due to problems with the engineering provided and the inability to obtain meaningful sales. The Company wasSafe Lane Systems, Inc. redomiciled to become a Delaware Holding Corporationholding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned subsidiaries, SLS Industrial, Inc and is currently pursuing newSoutheastern 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 opportunities.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) is poised to be an industry-leading edge data center and cloud infrastructure provider. EDSI’s proprietary Edge Performance Platform (EPP) allows us to deploy next-generation edge data centers where they are needed most. EDSI’s data centers provide next-generation immersion Cooling technology that improves performance, reduces energy costs and latency. Key industries we serve more computing power are fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video streaming, remote desktop, IoT, autonomous vehicles. Centralized infrastructure facilities servicing multiple geographical areas encounter many issues with data latency, congestion and weak network connections. To address this, data processing is moving closer to the customer. EDSI offers green, low-cost, secure colocation and private data hosting to meet this demand for Edge data centers. EDSI plans to deploy to strategic locations based on demand for Tier 2 and Tier 3 cities outside the major metropolitans to underserved markets, supporting both edge customers and areas of projected growth. With the rise and proliferation of this technology adoption we plan to solidify our footprint by securing multiple locations across the US, while generating revenue from our operations. The modular design and ability to add additional data centers as needed, preserves up front capital allowing for rapid deployment and scalability as business demand increases.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation -

The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principlesaccounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. All such adjustments are of a normal, recurring nature.

Reclassifications - Certain amounts in the prior period’s financial statements have been reclassified to conform to the current quarter’s presentation and to correct prior period errors.

Cash and Cash Equivalents

Cash Flows - During the period ending September 30, 2016, the Company primarily utilized cash proceeds from an unsecured short term loan and proceeds from a convertible note payable to fund its operations.

Cash flows used by operations for the period ended September 30, 2016 and 2015 were $34,911 and $186,689 respectively.

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. As of September 30, 2016, the Company had cash and cash equivalents of $7,871 as compared to cash and cash equivalents of $15,282 as of December 31, 2015.

Impairment of Long-life Assets

In accordance with ASC Topic 360, the Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. No impairment was deemed necessary as of September 30, 2016 and December 31, 2015.

Intangible Assets, Patents

During the second quarter of 2014 fiscal year the Company acquired the exclusive license rights and intellectual property for the patent of the Kone General device which expires July 2022. As payment for the license rights the company agreed to issue 22,768,273 shares of class B preferred, nonvoting shares to the shareholders of the original license holders “Superior Traffic Controls”(GAAP). The Company accounts formaintains the calendar year as its patent sub-license in accordance with ASC 350-30-30 “Intangibles – goodwill and other” and 805-50-30 and 805-50-15 related to “Business Combinations” by recognizing the fair value to the amount paid by the company for the asset at the timebasis of purchase. Since Safe Lanes Systems has a limited operating history management determined to use par value as the value recognized for the transaction. Since the patent has a predetermined, finite life span, the cost of the asset will be recognized on a straight line basis over the remaining life of the patent.reporting.

At the conclusion of each reporting period the patent is evaluated for impairment. As of September 30, 2016 due to the lack of sales and determining that incomplete engineering plans were provided the Company determined it should impair the entire remaining value of the intangible asset and at that time the remaining value was of $1,683 was written off to impairment expense.

Amortization expense for the NINE-month period ended September 30, 2016 and 2015 was $149 and $29 respectively.

Accounts payable and accrued liabilities

Accounts payable consisted of $42,092 at September 30, 2016 and $1,080 at December 31, 2015 respectively. Accrued expense consisted of $11,308 at September 30, 2016 and $0 at December 31, 2015 respectively. Accrued interest consisted of $27,404 at September 30, 2016 and $14,942 at December 31, 2015 respectively.

Unsecured, short-term notes payable

The company obtained an unsecured, short-term note of $250,000 at 4% from the original holder of the license to the Kone-General patent in the second quarter of 2014. As of September 30, 2016 the Company had received funding of $250,000 on the note payable and an additional $165,000 under the same terms with a verbal agreement in place and had recognized $27,404 in accrued interest expense.

Convertible, long-term notes payable

The company obtained five unsecured, long-term notes totaling $7,500 in the third quarter of 2016. The notes do not bear interest until December 31, 2016, after which they will bear interest at 10% per year. The notes are due and payable December 31, 2017 but can be converted into the company’s common stock at the holders request at any time before they are due. Each note will convert into approximately 4% of the companies then outstanding common stock. The Notes are convertible into shares of the Company's common stock representing a value of $805 or $0.0009 per share. Since the stock price was determined to be below this at the time of signing, the notes were issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value at that time.

Stockholders’ Equity

At March 31, 2016 and December 31, 2015, the Company was authorized to issue 500,000,000 shares of common stock, $0.0001 par value per share. In addition, 10,000,000 shares of Class A preferred super majority voting stock, $.0001 par value and 50,000,000 shares of Class B preferred, $.0001 par value nonvoting convertible shares were authorized. All common stock shares have full dividend rights. However, it is not anticipated that the Company will be declaring distributions in the foreseeable future.

Upon formation, the Company sold the founder 2,000,000 shares of $0.0001 par value common stock for $1,000 cash. Also upon formation, the Company paid the founder stock based compensation for services rendered of 10,000,000 shares of $0.0001 par value class A preferred super majority voting stock. These preferred shares have a stated value of par value of $0.0001. The holder of the Class Stock shall have the right to vote on any matter with holders of Common Stock and may vote as required on any action, which Colorado law provides may or must be approved by vote or consent of the holders of the specific series of voting preferred shares and the holders of common shares. The Record Holders of the Class B Preferred Shares shall have that number of votes equal to that number of common shares which is not less than 60% of the vote required to approve any action, which Colorado law provides may or must be approved by vote or consent of the holders of other series of voting preferred shares and the holders of common shares or the holders of other securities entitled to vote, if any

Upon execution of a patent sublicense agreement the Company issued 22,768,273 shares of its class B preferred convertible stock to a trustee on behalf of shareholders of the original license agreement. These shares were converted into regular common stock upon the company registering the underlying shares with the SEC and distribution to stockholders which occurred in the 2015 fiscal year.

In the last quarter of 2015 the Company issued 350,000 shares of stock to two contractors for past work. As the Company has issued no stock for cash the Company valued the compensation based upon par value of $.0001 per share resulting in a compensation expense of $35 per share in the period the stock was issued.

In the third quarter of 2016 the Company issued 14,881,727 shares to the Company CEO as part of the reorganization into the Delaware Holding Corporation. As the Company has issued no stock for cash the Company valued the transaction based upon par value of $.0001 per share, resulting in general and administrative expense of $1,488 in the current period.

Professional and contractor expenses

Professional and contractor expenses are comprised of the following in the nine-month period ended September 30, 2016:

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuredisclosures 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 June 30, 2021, and December 31, 2020, the Company’s cash balances did not exceed federally insured limits.

Stock Based Compensation

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three 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.

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 June 30, 2021, the Company had 0inventory or outstanding deposits with vendors for the purchase of equipment for resale to customers.

Property and Equipment

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

As of June 30, 2021, the Company’s property and equipment consisted of $71,938 of datacenter equipment and $13,347 of capitalized labor associated with readying the equipment for service, net of $30,707 of accumulated depreciation. Depreciation expense for the three and six months ended June 30, 2021 was $7,088 and $14,066, respectively, compared to $4,129 and $4,210 for the three and six month ended June 30, 2020

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

Accounts Payable and Accrued Liabilities

Accounts payable consisted of $74,434 of liabilities incurred by the issuer prior to the merger as of each June 30, 2021 and 2020. The remaining accounts payable of $92,499 and $44,174 as of June 30, 2021 and December 31, 2020, respectively, consisted of amounts due for professional services and various other general and administrative expenses incurred after the acquisition.

As of December 31, 2020, accrued expenses 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 June 30, 2021, accrued expenses consisted of $83,955 of accrued interest on convertible debt.

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three 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 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 consist of:

During the three and six months ended June 30, 2021, the Company recognized $12,709 and $29,483 of revenue from its customers’ usage of datacenter credits, respectively. The Company further recognized a deferred revenue liability of $6,978 for prepaid usage credits not yet used by its customers as of June 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.

Net hardware sales during the six months ended June 30, 2021 totaled $797,440 and had associated costs of goods sold of $641,174.

The Company recognizes prepayments for equipment not yet delivered at the end of a given period as a customer deposit liability. As of June 30, 2021, outstanding customer deposit liabilities totaled $56,533.

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 in the consolidated statements of operations. The Company assigns costs to transactions on a first-in, first-out basis.

As of June 30, 2021 and December 31, 2020, the carrying value of crypto assets held by the Company was $997 and $1,197, respectively.

Cryptocurrency Income

The Company records cryptocurrency generated, net of fees and valuation adjustments, as other income and classifies the cryptocurrency as crypto assets held at cost in its balance sheets. When the company sells its cryptocurrencies, it recognizes a gain or loss for the difference between original cost and the selling price, net of fees. During the three and six months ended June 30, 2021, the Company recognized $5,320 and $10,067 of cryptocurrency mining income and gains of $537 and $478 on the sale of cryptocurrency, all respectively.

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 under ASC 718 and EITF 96-18 when stock or options are givenawarded for previous or current service without further recourse. The Company issued stock options to contractors that had been providing services to the Company upon their termination of services. Under ASC 718 and EITF 96-18 these options were recognized as expense in the period issued because they were given as a form of compensation for services already rendered with no recourse.

The following table summarizes  share-based compensation expense recorded in selling, general and administrative expenses during each period presented:

In the last quarter of 2015 the Company issued 350,000 shares of stock to two contractors for past work. As the Company has issued no stock for cash the Company valued the compensation based upon par value of $.001 per share resulting in a compensation expense of $35 per share in the period the stock was issued.

Stock option activity was as follows:

The following table presents information regarding options outstanding

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and exercisable as of September 30, 2016:for the Three Months Then Ended (Unaudited)

The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option pricing model with weighted average assumptions for grants as follows:Income Taxes

Income Tax

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 (“SFAS 109”).  Under SFAS 109 deferred taxes are provided on a liability method whereby deferredis subject to taxation in various jurisdictions and may be subject to examination by various authorities.

Deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the future tax consequences attributable to differences between the reportedfinancial 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. Deferred tax assets and liabilities are adjusted

The Company recognizes the amount of taxes payable or refundable for the effectscurrent year and recognizes deferred tax liabilities and assets for the expected future tax consequences of changesevents and transactions that have been recognized in tax laws and rates on the date of enactment.

Fiscal year

The Company employs a fiscal year ending December 31.

Net Income (Loss) per share

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

Revenue Recognition

The Company is currently in the Development stage and has very limited revenues. Revenue will be recognized on an accrual basis as earned once operations commence.

Financial Instruments

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

Going Concern and Managements’ PlansNOTE 3: GOING CONCERN

As shown in the accompanying financial statements for the period ended Septemberas of June 30, 2016,2021, the Company had $20,521 of cash and $29,858 of current assets, as compared to total current liabilities of $1,050,601, has aincurred substantial operating losses, and had an accumulated deficit of $1,613,332. Furthermore, the Company’s revenue history has been limited operating history.and unstable, and there can be no assurances of future revenues.

Given these factors, the Company is dependent on 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 do so.continue as a going concern. The financial statements do not include any adjustmentadjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 4: STOCKHOLDERS’ DEFICIENCY

The Company has a plan in placedesignated 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 remove this threat through the issuance of notes payable and common stocks offerings. If the Offering raises at least $250,000, then the Company’s estimated expenses relatedvote upon matters submitted to the Offering andholders of common stock, par value $0.0001 of the expenses relatedCompany. Class A shares have a vote equal to initial projected operating coststhe number of shares of common stock of the Company willwhich would give the holders of the Class A shares a vote equal to sixty percent (60%) of the common stock. This vote shall be covered. However,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 will needissued a total of 7,000,000 Class A shares to generate more than the expensesits CEO and President (formerly COO) as stock-based compensation for services rendered.

The Company has not currently authorized a Class B designation of the Offering in order to have enough capital to execute its business plan.Preferred Stock.

Recent Accounting Pronouncements

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)

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

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

SCHEDULE OF WARRANT ACTIVITY

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

As of June 30, 2021, the Company was authorized to issue 150,000,000 shares of common stock. All common stock shares have full dividend and voting rights. However, it is not anticipated that the Company will be declaring dividends in the foreseeable future.

As of June 30, 2021, the Company had 8,421,079 common shares outstanding.

As of June 30, 2021, 7,000,000 shares of Class A Preferred Stock and 7,000,000 shares of Class C Preferred Stock were issued and outstanding.

NOTE 5: RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2021, the Company paid out previously accrued consulting fees payable to the CEO and President of $5,000 and $30,000, respectively, paid $72,500 and $45,000 of current compensation to the CEO and President, respectively. 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 neither 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 June 30, 2021, the Company owed $0 of outstanding compensation to the CEO and COO.

During the six months ended June 30, 2021, the Company’s CEO and President paid expenses on behalf of the Company totaling $34,309 and $4,648, and the Company repaid $85,716 and $4,648 of related party advances, respectively. As of June 30, 2021, the Company was indebted to the CEO for $103 and to the President for $0, respectively, for expenses paid on behalf of the company.

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)

NOTE 6: CONVERTIBLE NOTES

As of June 30, 2021 and December 31, 2020, the Company owed $720,000 and $720,000 on outstanding convertible notes, respectively.

On February 3, 2021, the Company extended its convertible note for $100,000 with Clearvoyance Ventures. The original note matured on November 26, 2020 and bore interest at 10%. According to the 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 accrued interest would convert at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000.

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.

During the three and six months ended June 30, 2021, the Company recognized $19,066 and $40,217 of interest expense on convertible debt. As of June 30, 2021 and December 31, 2020, outstanding accrued interest on convertible debt totaled $83,955 and $43,738, respectively.

NOTE 7: SIGNIFICANT AGREEMENTS

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

NOTE 8: FINANCE LEASE

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

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

During the six months ended June 30, 2021, the Company paid a total of $7,752, including $6,055 of principal and $1,697 of interest, to the lessor and recognized $3,241 of lease expense for the three months ended June 30, 2021.

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)

As of June 30, 2021, lease-related assets and liabilities consisted of:

SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES

Future maturities of the lease liability are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITY

NOTE 9: CUSTOMER DEPOSIT LIABILITY

As discussed in Note 2, during the three months ended June 30, 2021, the Company collected $56,533 for orders of its datacenter hardware solutions that were not yet fulfilled as of June 30, 2021. Accordingly, the Company recognized a deposit liability of $56,533 as of June 30, 2021 and will release the liability to revenue during the period in which the orders are delivered.

NOTE 10: CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES

During the three months ended June 30, 2021, one customer comprised 93% of computing revenues, and the loss of this would be detrimental to the Company’s recently formed revenue stream. Management has determined that no other significant concentrations, commitments, or contingencies existed as of June 30, 2021.

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

NOTES TO FINANCIAL STATEMENTS

As of June 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)

NOTE 11: RECENT ACCOUNTING PRONOUNCEMENTS

Management does not believe that any recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to causestandards could have a material impacteffect on itsthe accompanying financial condition or results of operations.statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Related Party TransactionsNOTE 12: SUBSEQUENT EVENTS

The Company pays its Chief Executive Officer, Paul Dickman through Mr. Dickman’s consulting company, Breakwater Finance, LLC. For the nine-month period ended

On September 30, 2016 and June 30, 2015, management fees were $48,600 and $48,600 respectively. In the third quarter of 201617, 2021, the Company accrued the issuance of 25,000 common shares due to a consultant under a service agreement, resulting in compensation expense of $4,750.

Management has evaluated significant subsequent events through the date these financial statements were available to be issued 14,881,727 shares to the Company CEO as part of the reorganization into the Delaware Holding Corporationand has identified no significant events requiring further disclosure.

Subsequent Events

Subsequent to period end the Company finalized a reorganization into a Delaware holding corporation and changed its name to Southeastern Holdings, Inc. Additional information related to this transaction has been presented in our 8-K filed November 3, 2016.

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'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations

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

The CompanyGeneral

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 2013.2016. 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.

TheOn August 23, 2018, the Company had minimal operations from inceptionentered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”), pursuant to December 31, 2015.

Thewhich the Company ispurchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 (equivalent to 3,000,000 after the reverse split) shares of its common stock, par value $.0001 to the members of Blockchain in exchange for the assets of Blockchain.

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

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

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

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

As of June 30, 2021, we had approximately $20,521 of cash on hand. Our current monthly cash burn rate is approximately $35,000, and it is expected that burn rate will continue and is expected to continue at $35,000 until significant additional capital is raised and our marketing plan is executed. Our trade creditors may call debts at any time, and our cash reserves would not be sufficient to satisfy all balances. We are currently dependent 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.

Operating results for the three months ended June 30, 2021 and 2020:

During the three months ended June 30, 2021, the Company generated revenues of $776,080 from operations, compared to $6,307 for the three months ended June 30, 2020, an increase of $769,773 or 12,205%. This increase is a result of (i) customers purchasing and consuming datacenter credits for use of the Company’s computing equipment and (ii) the sale of datacenter hardware solutions. The Company anticipates future revenue from its current efforts, but there can be no assurances that such efforts will be successful.

For the three months ended June 30, 2021, costs of net revenues were $660,091, compared to $0 for the three months ended June 30, 2020, for an increase of 100%. The change is a result of direct costs associated with the Company’s revenue streams.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross margin was $115,989 and $6,307 for the three months ended June 30, 2021 and 2020, respectively.

For the three months ended June 30, 2021, selling, traffic safety equipment. We have licensedgeneral and sub-licensed I.P.administrative expenses were $94,530, as compared to $55,788 during the three months ended June 30, 2020, an increase of $38,742, or 69%. The increase in these expenses was attributable to increased legal, accounting and other professional fees.

The Company recognized stock-based compensation expense of $0 for the three months ended June 30, 2021, as compared to $153,900 for the three months ended June 30, 2020, for a spring traffic cone dispenser designed to protect highway workers, first responders to vehicle collisions and highway incidents, law enforcement personnel, towing operators, private and public utility workers, as well as pedestrians and motorists. Our flagship product, The Kone General Automatic Safety Cone Deployment System, is the world’s first and only portable safety cone dispensing system. Safe D-Ploy Spring Cones are patented MUTCD (Manual on Uniform Traffic Control Devices) compliant highway safety cones. However, due to lackdecrease of success in developing a market for our current product we have fully impaired the intellectual property and license agreement and are currently seeking a new product to take to market.

We have begun initial minimal operations and are currently without revenue. We engaged a marketing consultant to develop a marketing and sales plan for both the spring traffic cone and our automatic traffic cone dispenser in 2015. We have engaged and are currently under agreement with a globally recognized manufacturer’s representation firm, The Johander Company of Minneapolis, to help guide us into retail markets, build a manufacturer’s representative network, and drive retail sales of our Spring Cone and Safe-D-ploy product accessories. Up to this point these efforts have not resulted in sustainable sales and the company is currently looking for additional product lines that it can add to its product offerings though none have been identified at this time.

We are in the developmental stage of our business. Since our incorporation September 2013, we have been engaged in securing both exclusive and non-exclusive license agreements for our key products, designing a marketing plan, and lining up suppliers and manufacturers for production.

During the 2016 fiscal year, we intend to focus our efforts on raising additional operating capital and finding additional business areas we can expand into.

Results of Operations

There were no revenues in the nine months ended September 30, 2016 and one sale resulting in revenue of $1,725 in the similar calendar period of 2015.

Expenses decreased from $188,519 in the nine-month period ended September 30, 2015 to $90,550 in the nine-month period ending September 30, 2016.$153,900, or 100%. This decrease was a result of no new consulting agreements in the second quarter of 2021.

During the three months ended June 30, 2021, the Company recognized $7,088 of depreciation expense, as compared to $4,129, for an increase of $2,959 or 71%, during the three months ended June 30, 2020, as a result of added equipment during the later periods of 2020 and during 2021.

During the three months ended June 30, 2021, the Company recognized $23,260 of interest expense, as compared to $15,171 for the three months ended June 30, 2020. The increase of $8,089, or 53%, is primarily causedattributable to the accrual of interest on significant new convertible debt issuances to fund operations throughout the end of 2020 and he beginning of 2021.

The Company also generated cryptocurrency mining income of $5,320 and a gain of $537 on the sale of cryptocurrency during the three months ended June 30, 2021, as compared to $0 and $0, respectively during the three months ended June 30, 2020. The change was a result of the use of excess datacenter capacity after the Company built out its datacenters during 2020.

As a result of the changes in operating expenses and other expenses, the Company generated a net operating loss of $79,827 for the three months ended June 30, 2021, as compared to a net loss of $307,431 for the three months ended June 30, 2020, a change of $227,604, or 74%.

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 reducing professionalwill be successful in doing so.

Operating results for the six months ended June 30, 2021 and 2020:

During the six months ended June 30, 2021, the Company generated revenues of $826,923 from operations, compared to $6,307 for the six months ended June 30, 2020, an increase of $820,616 or 13,011%. This increase is a result of (i) customers purchasing and consuming datacenter credits for use of the Company’s computing equipment and (ii) the sale of datacenter hardware solutions. The Company anticipates future revenue from its current efforts, but there can be no assurances that such efforts will be successful.

For the six months ended June 30, 2021, costs of net revenues were $697,025, compared to $0 for the six months ended June 30, 2020, for an increase of 100%. The change is a result of direct costs associated with the Company’s revenue streams.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross margin was $129,898 and $6,307 for the six months ended June 30, 2021 and 2020, respectively.

For the six months ended June 30, 2021, selling, general and administrative expenses were $142,230, compared to $132,990 during the six months ended June 30, 2020, an increase of $9,240, or 7%. The increase in these expenses was primarily attributable to recognition of licensing fees paid pursuant to a reseller agreement.

The Company recognized stock-based compensation expense of $19,000 for the six months ended June 30, 2021, as compared to $9,500 for the six months ended June 30, 2020, for an increase of $9,500, or 100%. This increase was attributable to an issuance to a consultant for support of operations in 2021.

During the six months ended June 30, 2021, the Company recognized $14,066 of depreciation expense, as compared to $4,210, for an increase of $9,856 or 234%, during the six months ended June 30, 2020, as a result of added equipment during the later periods of 2020 and services while it determinesduring 2021.

During the six months ended June 30, 2021, the Company recognized $50,345 of interest expense, as compared to $24,108 for the six months ended June 30, 2020. The increase of $26,237, or 109%, is primarily attributable to the accrual of interest on significant new convertible debt issuances to fund operations throughout 2020.

The Company also generated cryptocurrency mining income of $10,067 and a gain of $478 on the sale of cryptocurrency during the six months ended June 30, 2021, as compared to $0 and $0, respectively during the six months ended June 30, 2020. The change was a result of the use of excess datacenter capacity after the Company built out its ongoing financing strategy.datacenters during 2020 and the sale of mined cryptocurrency.

As a result of the changes in operating expenses and other expenses, the Company incurred a net loss of $202,698 for the six months ended June 30, 2021, compared to a net loss of $403,151 for the six months ended June 30, 2020, a change of $200,453, or 48%.

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.

Liquidity and Capital Resources

During the nine-months ended September

The Company’s cash position at June 30, 2016 the Company received $20,000 from the issuance of notes payable2021 decreased by $59,847 to $20,521, as compared to no funding duringa balance of $80,368, as of December 31, 2020. The decrease in cash for the nine-monthssix months ended June 30, 2015. In addition2021 was attributable to net cash used in operating activities of $7,714, $1,152 of net cash used in investing activities, and net cash used in financing activities of $50,981.

As of June 30, 2021, the company received $7,500Company had a deficit in working capital of $1,020,743, compared to a deficit in working capital of $849,989 at December 31, 2020, representing a decrease in working capital of $170,754, which was largely attributable to the use of cash in operations, amortization of prepaid expenses, customer deposits, finance lease-related liabilities, deferred revenue and short-term convertible debt.

Net cash used in operating activities of $7,714 during the six months ended June 30, 2021, as compared to net cash of $266,003 used in operating activities for the six months ended June 30, 2020, was primarily attributable to a significant net loss, which was offset by customer deposits, stock-based compensation, write-off of acquisition deposits and increases in accounts payable and increased by payment of accrued liabilities.

Net cash used in investing activities was $1,152 for the six months ended June 30, 2021 decreased by $84,795 from $85,947 of cash used by investing activities for the six months ended June 30, 2020. This is attributable to the Company acquiring less datacenter equipment in 2021 and advancing funds pertaining to a prospective acquisition in the prior period.

Net cash used in financing activities was $50,981 during the six months ended June 30, 2021, as compared to net cash provided by financing activities of $390,898 during the six months ended June 30, 2020. The difference was a result of changes in finance lease assets and liabilities, net repayments of related party advances, and no new convertible debt issued in 2021.

As reported in the accompanying consolidated financial statements, for the six months ended June 30, 2021 and 2020, the Company incurred net losses of $202,698 and $403,151, respectively. The Company produced revenues during the six months ended June 30, 2021 and limited revenue during the six months ended June 30, 2020. The Company’s ability to continue as a going concern is dependent upon its ability to generate revenue, reach consistent profitability and raise additional capital. To date, 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. It intends to finance its future operating activities and its near-term working capital needs through the sale of datacenter hardware solutions and future convertible debt financings or stock subscriptions. 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 payable.

Duringor other debt financing, these activities or other debt could contain covenants that would restrict the twelve -months ending September 30, 2017Company’s operations. Any other third-party funding arrangements could require the Company estimatesto 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, it will need approximately $250,000has not generated substantial revenues or profits from its current operations. The Company expects to implementcontinue to incur operating losses as it incurs professional fees and other expenses related to implementing its business plan. Other thanThe future trends of all expenses are expected to be primarily driven by the foregoing,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. There can be no assurance that the Company does not knowwill be successful in doing so.

Financial Condition

The Company’s total assets as of any trends, eventsJune 30, 2021 and December 31, 2020 were $114,877 and $241,831, respectively, representing a decrease of $126,954, or uncertainties53%. Total liabilities as of June 30, 2021 and December 31, 2020 were $1,060,878 and $1,004,134, respectively, for an increase of $56,744, or 6%. The significant change in the Company’s financial condition is attributable to revenue generation, customer deposits on hardware, commencement of a finance lease arrangement, cash burn from operations and increases in accounts payable and repayment of accrued expenses.

As a result of these transactions, the Company’s cash position decreased from $80,368 to $20,521 during the six months ended June 30, 2021.

Off-Balance Sheet Arrangements

We have made no off-balance sheet arrangements that have had, or are reasonably expectedlikely to have a material impactcurrent or future effect on sales,our financial condition, changes in financial condition, revenues or income from continuingexpenses, results of operations, liquidity, capital expenditures or liquiditycapital resources that is material to investors.

Item 3. Quantitative and capital resources.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 PrincipalChief Executive Officer and Principal Financial Officer,President, 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 PrincipalChief Executive Officer and PrincipalChief 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 SeptemberJune 30, 2016,2021, 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 NINE-monthsquarter ended SeptemberJune 30, 20162021 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 June 30, 2021, the Company issued the following unregistered securities.

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.

None.

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.

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.

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

SIGNATURES

SIGNATURES

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

Date:  November 23, 2016