| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America
(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, and December
31, 2020, the Company’s cash balances did not exceed federally insured limits. 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) Right
of Use Assets and Lease Liabilities In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) 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 September 30, 2021, the Company’s had $ 11,530 57,083 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 September 30, 2021, the Company’s property and equipment consisted of $ 71,938 13,347 37,872 7,165 21,231 6,303 10,513 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, the Company
determined that its long-lived assets have not been impaired. Accounts
Payable and Accrued Liabilities Accounts
payable consisted of $ 74,434 108,556 44,174 As
of December 31, 2020, accrued liabilities consisted of $ 1,811 1,903 45,548 104,244 35,188 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) 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:
1. GPU
as a Service – The Company owns and operates high performance servers to provide hardware acceleration for rendering farms
to process 3D and video rendering and gaming. In addition, these multi-purpose servers produce revenue from mining when the servers
are not processing other jobs to ensure zero idle time and have the ability to run AI and HPC processing as well.
2. Hardware
sales – The Company resells mobile and immersion-cooled data center solutions and other high-powered computing equipment. During
the three and nine months ended September 30, 2021, the Company recognized $ 0 29,483 9,478 Net
hardware sales during the three and nine months ended September 30, 2021 totaled $ 144,743 942,173 105,138 783,888 The
Company recognizes prepayments for equipment not yet delivered at the end of a given period as a customer deposit liability. As of September
30, 2021, outstanding customer deposit liabilities totaled $ 391,555 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 September 30, 2021 and December 31, 2020, the carrying value of crypto assets held by the Company was $ 187 1,197 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 nine months ended September 30, 2021, the Company recognized
$ 1,234 12,025 3,285 2,807 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. 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) 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. |
