Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-56419 | |
Entity Registrant Name | EDGE DATA SOLUTIONS, INC. | |
Entity Central Index Key | 0001614826 | |
Entity Tax Identification Number | 46-3892319 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 3550 Lenox Road NE | |
Entity Address, Address Line Two | 21st Floor | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30326 | |
City Area Code | (833) | |
Local Phone Number | 682-2428 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,658,832 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
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 |
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): | ||
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 |
Class A Super Voting Preferred Stock [Member] | ||
Stockholders’ (Deficiency): | ||
Preferred stock, value | 7,000 | 7,000 |
Class C Convertible Preferred Non Voting Stock [Member] | ||
Stockholders’ (Deficiency): | ||
Preferred stock, value | $ 7,000 | $ 7,000 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 11,658,832 | 9,159,079 |
Common stock, shares outstanding | 11,658,832 | 9,159,079 |
Class A Super Voting Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 7,000,000 | 7,000,000 |
Preferred stock, shares outstanding | 7,000,000 | 7,000,000 |
Preferred stock, liquidation preferences | $ 26,317 | $ 26,317 |
Class C Convertible Preferred Non Voting Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 7,000,000 | 7,000,000 |
Preferred stock, shares outstanding | 7,000,000 | 7,000,000 |
Preferred stock, liquidation preferences | $ 3,500 | $ 3,500 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
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 |
Data Center Infrastructure And Equipment Sales [Member] | ||||
Revenues: | ||||
Total Revenue | $ 53,745 | $ 144,733 | $ 9,255,987 | $ 942,173 |
Data Center Services [Member] | ||||
Revenues: | ||||
Total Revenue | 33,500 | 88,345 | ||
Computing Revenues [Member] | ||||
Revenues: | ||||
Total Revenue | $ 29,483 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
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 |
Statement of Stockholders' Defi
Statement of Stockholders' Deficiency (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Beginning balance | $ 189,106 | $ (946,001) | $ (1,532,158) | $ (762,303) |
Stock-based compensation expense | 137,100 | 121,980 | 140,980 | |
Net income (loss) | (1,057,796) | (288,282) | (16,244) | (490,980) |
Ending balance | (731,590) | (1,112,303) | (731,590) | (1,112,303) |
Debt conversions into equity units | 638,660 | |||
Stock-based compensation expense | 178,152 | 140,980 | ||
Common Stock [Member] | ||||
Beginning balance | $ 1,113 | $ 842 | $ 916 | $ 832 |
Beginning balance, shares | 11,133,832 | 8,421,079 | 9,159,079 | 8,321,079 |
Stock-based compensation expense | $ 53 | $ 64 | $ 74 | |
Stock-based compensation expense, shares | 525,000 | 642,000 | 675,000 | 742,000 |
Ending balance | $ 1,166 | $ 906 | $ 1,166 | $ 906 |
Ending balance, shares | 11,658,832 | 9,063,079 | 11,658,832 | 9,063,079 |
Debt conversions into equity units | $ 182 | |||
Debt conversions into equity units, shares | 1,824,753 | |||
Stock-based compensation expense | $ 68 | |||
Preferred Stock [Member] | Preferred Class A [Member] | ||||
Beginning balance | $ 7,000 | $ 7,000 | $ 7,000 | $ 7,000 |
Beginning balance, shares | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
Net income (loss) | ||||
Ending balance | $ 7,000 | $ 7,000 | $ 7,000 | $ 7,000 |
Ending balance, shares | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
Preferred Stock [Member] | Class C Convertible Preferred Stock [Member] | ||||
Beginning balance | $ 7,000 | $ 7,000 | $ 7,000 | $ 7,000 |
Beginning balance, shares | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
Net income (loss) | ||||
Ending balance | $ 7,000 | $ 7,000 | $ 7,000 | $ 7,000 |
Ending balance, shares | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
Additional Paid-in Capital [Member] | ||||
Beginning balance | $ 1,472,150 | $ 652,489 | $ 792,635 | $ 633,499 |
Stock-based compensation expense | 137,047 | 121,916 | 140,906 | |
Ending balance | 1,609,197 | 774,405 | 1,609,197 | 774,405 |
Debt conversions into equity units | 638,478 | |||
Stock-based compensation expense | 178,084 | |||
Retained Earnings [Member] | ||||
Beginning balance | (1,298,157) | (1,613,332) | (2,339,709) | (1,410,634) |
Net income (loss) | (1,057,796) | (288,282) | (16,244) | (490,980) |
Ending balance | $ (2,355,953) | $ (1,901,614) | $ (2,355,953) | $ (1,901,614) |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS Edge Data Solutions, Inc. (the “Company,” “EDGE”), a Delaware Corporation, believes it is poised to be an industry-leading edge data center, cryptocurrency mining and cloud infrastructure provider. EDGE’s unique Edge Performance Platform (EPP) brings sustainable immersion-cooled high-performance computing to 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, high-performance computing providers, virtual desktop infrastructure providers, telecom, cybersecurity and disaster recovery providers, streaming providers, artificial intelligence innovators, colleges, hospitals, governments, and enterprise blockchain infrastructure providers. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2022, and December 31, 2021, the Company’s cash balances exceeded federal insurance limits by $ 0 581,209 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three 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 2,161,683 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 had $ 27,050 11,530 240,125 2,161,683 ● $ 0 34,000 ● $ 240,125 2,127,683 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 3,951,547 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 21,321 9,199 As of September 30, 2022 and December 31, 2021, the Company’s property and equipment consisted of $ 8,278 84,133 1,610 37,872 5,523 20,535 7,165 21,231 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 Intangibles-Goodwill and Other, Website Development Costs During the nine months ended September 30, 2022, the Company capitalized $ 56,600 40,000 16,600 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, 2022, the Company determined that its long-lived assets have not been impaired. Accounts Payable and Accrued Liabilities Accounts payable consisted of $ 26,424 74,434 As of September 30, 2022 and December 31, 2021, accrued liabilities consisted of 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 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three 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 revenue activities consist of: 1. Data center infrastructure and equipment sales – The Company resells immersion-cooled data center products, equipment and project management services. Performance obligations include: ● Delivery of physical products ● Provision of any agreed-upon project management and other services ● Conclusion of defined period for any support services 2. Computing – During the interim period ended September 30, 2021, the Company operated high performance servers to provide hardware acceleration for rendering farms to process 3D video rendering and 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 cloud computing services during the three or nine months ended September 30, 2022. During the three and nine months ended September 30, 2022 and 2021, the Company recognized $ 0 0 0 29,483 0 5,378 0 9,506 9,478 9,478 As of September 30, 2022 and December 31, 2021, the Company recognized $ 540,028 3,197,990 240,125 2,161,683 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 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 expenses in the consolidated statements of operations. The Company assigns costs to transactions on a first-in, first-out basis. As of September 30, 2022 and December 31, 2021, the carrying value of crypto assets held by the Company was $ 3,940 3,940 1,976 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. The Company generated no cryptocurrency income and did not record an impairment loss during the three and nine months ended September 30, 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 ) EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three 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. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3: GOING CONCERN As shown in the accompanying financial statements as of September 30, 2022, the Company had $ 67,592 731,590 Given these factors, the Company may require financing from outside parties, and management intends to pursue outside capital through debt and equity vehicles. There is no assurance that these efforts will materialize or be successful or sufficient to fund operations and meet obligations as they come due. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
STOCKHOLDERS_ EQUITY_(DEFICIENC
STOCKHOLDERS’ EQUITY/(DEFICIENCY) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY/(DEFICIENCY) | NOTE 4: STOCKHOLDERS’ EQUITY/(DEFICIENCY) Class A Preferred Super Majority Voting Stock The Company has designated ten million ( 10,000,000 0.001 0.0001 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. 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 ($0.01) per share. 7,000,000 As of September 30, 2022, 7,000,000 The Company has not currently authorized a Class B designation of Preferred Stock. EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) Class C Preferred Non-Voting Stock The Company has designated ten million ( 10,000,000 0.001 3,781,868 The holders of Class C shall be entitled to receive the same dividend as the holders of the common stock and such dividend shall be paid pro rata per share on a fully converted basis. The holders of Class C shall have piggyback registration rights. The Company shall have the right to redeem, in its sole and absolute discretion, at any time after five (5) years, all or any portion of the shares of Class C at a price of five dollars ($ 5.00 7,000,000 Subsequently, in April 2019, the Company filed an amended and restated certificate of designation, which restricted the CEO and President from converting the 7,000,000 shares into common stock for 36 months from the issuance date. After October 2021, this restriction expired, and the CEO and President are free to convert these shares. As of September 30, 2022, 7,000,000 Common Stock The Company is authorized to issue 150,000,000 In April 2022, the Company agreed to issue 50,000 100,000 In July 2022, the Company issued 375,000 125,000 100,000 50,000 As of September 30, 2022, the Company had 11,658,832 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 $ 1.00 35 Balance, September 30, 2022 (Unaudited) 2,452,613 3,080,475 On February 28, 2022, convertible noteholders converted $ 638,660 549,500 89,160 1,824,751 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. 456,188 0.25 182,472 ● Time to Maturity: 3 ● Risk-Free Rate: 1.68 ● Volatility: 103 Stock Options The Company has reserved 446,054 In April 2022, the Company agreed to issue 200,000 10 1.00 On July 18, 2022, the Board appointed a new director, who received 200,000 1.00 three years 100,000 100,000 Using the following inputs, the Company estimated the aggregate value of the grants to be $ 55,999 ● Time to Maturity: 5 ● 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 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 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 5: RELATED PARTY TRANSACTIONS During the three and nine months ended September 30, 2022, the Company recognized compensation expense totaling $ 96,250 478,750 77,500 460,501 34,500 101,000 3,000 9,000 10,000 During the nine months ended September 30, 2022, the Company’s CEO, President and CFO paid expenses on behalf of the Company totaling $ 67,264 41,075 15,404 70,422 31,085 16,700 1,296 0 18,800 0 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | NOTE 6: CONVERTIBLE NOTES On February 15, 2022, the Company repaid the entire outstanding balance of $ 118,725 100,000 18,725 On February 28, 2022, convertible debtholders converted a total of $ 638,660 549,500 89,160 1,824,751 0.35 Each unit consists of one (1) share of Common Stock and one (1) Class B Warrant. Holders of Class B Warrants are entitled to purchase one (1) share of Common Stock at a strike price of $1.00 within three years of the issuance date. 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 $ 100,000 749,500 100,000 During the three and nine months ended September 30, 2022, the Company recognized $ 3,781 11,219 39,084 149,389 |
CONCENTRATIONS, COMMITMENTS AND
CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES | NOTE 7: CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES During the 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 losses. Furthermore, the 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) |
FINANCE LEASE
FINANCE LEASE | 9 Months Ended |
Sep. 30, 2022 | |
Finance Lease | |
FINANCE LEASE | NOTE 8: FINANCE LEASE On March 27, 2020, the Company entered into a 36 36 1,292 7,753 3,140 500 12,685 12,685 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 3,140 38,895 12.55 During the three months ended September 30, 2022, the Company paid a total of $ 3,876 3,485 391 3,241 As of September 30, 2022, lease-related assets and liabilities consisted of: SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES Assets Prepaid expense $ 523 Right of use asset – finance lease 6,482 Security deposit 7,753 Total lease-related assets $ 14,758 Liabilities Lease liability – finance, current portion $ 6,284 Lease liability – finance, non-current portion - Total lease-related liabilities $ 6,284 Future maturities of the lease liability are as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITY 2022 (Q4) $ 3,741 2023 2,543 Total future maturities $ 6,284 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
SIGNIFICANT AGREEMENTS
SIGNIFICANT AGREEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Significant Agreements | |
SIGNIFICANT AGREEMENTS | 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 ● $ 2,990,564 ● $ 2,840,564 ● $ 3,787,418 In March 2022, the total amount of the contract was reduced by $ 86,347 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 10,000 627,245 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. 8,360,508 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 3 5,000 |
CONSTRUCTION IN PROGRESS _ DATA
CONSTRUCTION IN PROGRESS – DATA CENTERS | 9 Months Ended |
Sep. 30, 2022 | |
Construction In Progress Data Centers | |
CONSTRUCTION IN PROGRESS – DATA CENTERS | NOTE 10: CONSTRUCTION IN PROGRESS – DATA CENTERS During the nine months ended 2022, the Company made total payments of $ 127,142 ● Site A (Colorado Springs, Colorado) - $ 90,741 ● Site B (Carlsbad, California) - $ 36,401 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 each reporting period. The Company does not own the underlying real estate and 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 the Company’s assets at such sites. Management evaluated the construction in progress for impairment as of September 30, 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 As of September 30, 2022, in-progress construction on data centers totaled $ 90,741 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12: SUBSEQUENT EVENTS On October 12, 2022, the Company’s president advanced the Company $ 40,000 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 Management has evaluated significant subsequent events through the date these financial statements were issued and has identified no other significant events requiring further disclosure. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Management’s Representation of Interim Financial Statements | 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 | 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 | 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 | 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, 2022, and December 31, 2021, the Company’s cash balances exceeded federal insurance limits by $ 0 581,209 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
Right of Use Assets and Lease Liabilities | 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 2,161,683 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 | 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 had $ 27,050 11,530 240,125 2,161,683 ● $ 0 34,000 ● $ 240,125 2,127,683 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 3,951,547 |
Property and Equipment | 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 21,321 9,199 As of September 30, 2022 and December 31, 2021, the Company’s property and equipment consisted of $ 8,278 84,133 1,610 37,872 5,523 20,535 7,165 21,231 |
Intangible Assets – Website Development Costs | 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 Intangibles-Goodwill and Other, Website Development Costs During the nine months ended September 30, 2022, the Company capitalized $ 56,600 40,000 16,600 |
Long-Lived Assets | 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, 2022, the Company determined that its long-lived assets have not been impaired. |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities Accounts payable consisted of $ 26,424 74,434 As of September 30, 2022 and December 31, 2021, accrued liabilities consisted of 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 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
Fair Value of Financial Instruments | 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 | 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 revenue activities consist of: 1. Data center infrastructure and equipment sales – The Company resells immersion-cooled data center products, equipment and project management services. Performance obligations include: ● Delivery of physical products ● Provision of any agreed-upon project management and other services ● Conclusion of defined period for any support services 2. Computing – During the interim period ended September 30, 2021, the Company operated high performance servers to provide hardware acceleration for rendering farms to process 3D video rendering and 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 cloud computing services during the three or nine months ended September 30, 2022. During the three and nine months ended September 30, 2022 and 2021, the Company recognized $ 0 0 0 29,483 0 5,378 0 9,506 9,478 9,478 As of September 30, 2022 and December 31, 2021, the Company recognized $ 540,028 3,197,990 240,125 2,161,683 EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
Crypto Assets Held | 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 expenses in the consolidated statements of operations. The Company assigns costs to transactions on a first-in, first-out basis. As of September 30, 2022 and December 31, 2021, the carrying value of crypto assets held by the Company was $ 3,940 3,940 1,976 |
Cryptocurrency Income | 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. The Company generated no cryptocurrency income and did not record an impairment loss during the three and nine months ended September 30, 2022. |
Stock-Based Compensation | 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 | 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 ) EDGE DATA SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS As of September 30, 2022 (Unaudited) and for the Three and Nine months Then Ended (Unaudited) |
Income Taxes | 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DEPOSITS | 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 |
SCHEDULE OF ACCRUED LIABILITIES | As of September 30, 2022 and December 31, 2021, accrued liabilities consisted of 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 |
SCHEDULE OF NET INCOME (LOSS) PER SHARE | 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 ) |
STOCKHOLDERS_ EQUITY_(DEFICIE_2
STOCKHOLDERS’ EQUITY/(DEFICIENCY) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
SCHEDULE OF WARRANTS ACTIVITY | 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 $ 1.00 35 Balance, September 30, 2022 (Unaudited) 2,452,613 3,080,475 |
SCHEDULE OF OPTIONS ACTIVITY | 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 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 |
FINANCE LEASE (Tables)
FINANCE LEASE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Finance Lease | |
SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES | As of September 30, 2022, lease-related assets and liabilities consisted of: SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES Assets Prepaid expense $ 523 Right of use asset – finance lease 6,482 Security deposit 7,753 Total lease-related assets $ 14,758 Liabilities Lease liability – finance, current portion $ 6,284 Lease liability – finance, non-current portion - Total lease-related liabilities $ 6,284 |
SCHEDULE OF MATURITIES OF LEASE LIABILITY | Future maturities of the lease liability are as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITY 2022 (Q4) $ 3,741 2023 2,543 Total future maturities $ 6,284 |
SCHEDULE OF DEPOSITS (Details)
SCHEDULE OF DEPOSITS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Inventory [Line Items] | |||
Total accrued liabilities | $ 347,528 | $ 2,161,683 | $ 2,161,683 |
Deposits On Inventory [Member] | |||
Inventory [Line Items] | |||
Total accrued liabilities | 240,125 | 2,161,683 | |
Deposits On Enterprise Computing Equipment [Member] | |||
Inventory [Line Items] | |||
Total accrued liabilities | 79,673 | ||
Deposit On Manufacturer Tooling Fee [Member] | |||
Inventory [Line Items] | |||
Total accrued liabilities | $ 27,730 |
SCHEDULE OF ACCRUED LIABILITIES
SCHEDULE OF ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
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 |
SCHEDULE OF NET INCOME (LOSS) P
SCHEDULE OF NET INCOME (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Income available to common stockholders, Net Income | $ (1,057,796) | $ (288,282) | $ (3,798,112) | $ (490,980) |
Income available to common stockholders, Weighted Average Common Shares | 11,625,408 | 8,803,144 | 10,845,790 | 8,540,676 |
Income available to common stockholders, Per Share Amount | $ (0.09) | $ (0.03) | $ (0.35) | $ (0.06) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Cash FDIC insured amount | $ 0 | $ 0 | $ 581,209 | ||
Deposits assets current | 347,528 | $ 2,161,683 | 347,528 | $ 2,161,683 | 2,161,683 |
Inventory net | 27,050 | 27,050 | 11,530 | ||
Inventory work in process | 225,893 | 225,893 | 3,951,547 | ||
Depreciation expense | 5,523 | 7,165 | 20,535 | 21,231 | |
Recapitalization costs | 56,600 | ||||
Selling and marketing expense | 40,000 | 40,000 | |||
Finite lived intangible assetsNet | 16,600 | 16,600 | |||
Accounts payable other | 26,424 | 26,424 | 74,434 | ||
Revenue | 87,245 | 144,733 | 9,344,332 | 971,656 | |
Deferred revenue, current | 9,478 | 9,478 | 9,478 | ||
Deposits | 540,028 | 540,028 | 3,197,990 | ||
Crypto assets held | 3,940 | 3,940 | 3,940 | ||
Loss on disposal of cryptocurrency | 1,976 | ||||
Vendors [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Deposits assets current | 240,125 | 240,125 | 2,161,683 | ||
Computing Credits [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Revenue | 0 | 0 | 0 | 29,483 | |
Cost of goods and services sold | 0 | $ 5,378 | 0 | $ 9,506 | |
Computer Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of property and equipment | 85,285 | ||||
Impairment loss of property and equipment | 21,321 | ||||
Research and development expense | 9,199 | ||||
Servers and other computing equipment | 8,278 | 8,278 | 84,133 | ||
Accumulated depreciation | 1,610 | 1,610 | 37,872 | ||
Vendor [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Deposits assets current | 240,125 | 240,125 | 2,161,683 | ||
Equipment in transit and not yet delivered | 0 | 0 | 34,000 | ||
Inventory work in process | $ 240,125 | $ 240,125 | $ 2,127,683 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Cash and cash equivalents | $ 67,592 | $ 831,209 |
Retained earnings accumulated deficit | (2,355,953) | $ (2,339,709) |
Management [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Cash and cash equivalents | 67,592 | |
Retained earnings accumulated deficit | $ 731,590 |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrant issued with equity units of debt conversion, terms | 3 years |
Warrant issued with equity units of debt conversion, exercise price | $ / shares | $ 1 |
Warrant issued with equity units of debt conversion, remaining life | 35 months |
Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | 627,862 |
Warrant issued with equity units of debt conversion | 1,824,751 |
Ending balance | 2,452,613 |
Shares Under Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | 1,255,724 |
Warrant issued with equity units of debt conversion | 1,824,751 |
Ending balance | 3,080,475 |
SCHEDULE OF OPTIONS ACTIVITY (D
SCHEDULE OF OPTIONS ACTIVITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Equity [Abstract] | |||
Beginning balance | |||
Granted | 400,000 | ||
Exercised | |||
Forfeited | |||
Ending balance | 400,000 | 400,000 | |
Weighted average contractual remaining term - options outstanding (years) | 6 years 10 months 24 days | ||
Aggregate intrinsic value - options outstanding | |||
Options exercisable | 41,667 | 41,667 | |
Aggregate intrinsic value - options exercisable | |||
Weighted average contractual remaining term - options exercisable | 9 years 6 months |
STOCKHOLDERS_ EQUITY_(DEFICIE_3
STOCKHOLDERS’ EQUITY/(DEFICIENCY) (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jul. 31, 2022 | Feb. 28, 2022 | Oct. 04, 2018 | Apr. 30, 2022 | Jul. 31, 2018 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Feb. 15, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Dividends | $ 3,781,868 | ||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||
Issuance of vested common shares | 375,000 | 50,000 | |||||||||
Stock issued during period shares issued for services | 100,000 | ||||||||||
Common stock, shares, outstanding | 11,658,832 | 11,658,832 | 9,159,079 | ||||||||
Debt instrument face amount | $ 100,000 | ||||||||||
Interest payable current | $ 18,725 | ||||||||||
Payment award options vested in period fair value | $ 456,188 | ||||||||||
Average grant date fair value | $ 0.25 | ||||||||||
Warrnats outstanding | 182,472 | ||||||||||
Tme to maturity | 5 years | ||||||||||
Risk-free rate, minimum | 0.43% | ||||||||||
Volatility | 103% | ||||||||||
Number of reserved shares for options | 446,054 | ||||||||||
Stock issued during period value issued for services | $ 55,999 | ||||||||||
Risk-free rate, maximum | 2.56% | ||||||||||
Warrant [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Tme to maturity | 3 years | ||||||||||
Risk-free rate, minimum | 1.68% | ||||||||||
Volatility | 103% | ||||||||||
Employment Agreement [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares fully vested for service rendered | 100,000 | ||||||||||
Director [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock issued for compensation, shares | 125,000 | ||||||||||
Stock issued during period shares issued for services | 50,000 | ||||||||||
Noteholders [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion of stock description | 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. | ||||||||||
Debt conversion converted instrument amount | $ 638,660 | ||||||||||
Debt instrument face amount | 549,500 | ||||||||||
Interest payable current | $ 89,160 | ||||||||||
Debt conversion converted instrument shares issued | 1,824,751 | ||||||||||
Employee [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock issued during period shares issued for services | 200,000 | ||||||||||
Options expire | 10 years | ||||||||||
Share price | $ 1 | ||||||||||
New Director [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Options expire | 3 years | ||||||||||
Share price | $ 1 | ||||||||||
Options to purchase shares of common stock | 200,000 | ||||||||||
New Director [Member] | June 30, 2023 [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of common stock option vested shares | 100,000 | ||||||||||
New Director [Member] | June 30, 2024 [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of common stock option vested shares | 100,000 | ||||||||||
Class A Super Voting Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Common stock voting rights | 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. | ||||||||||
Right to redeemable description | 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. | ||||||||||
Preferred stock, shares issued | 7,000,000 | 7,000,000 | 7,000,000 | ||||||||
Preferred stock, shares outstanding | 7,000,000 | 7,000,000 | 7,000,000 | ||||||||
Class A Super Voting Preferred Stock [Member] | Chief Executive Officer and President [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares based compensation gross | 7,000,000 | ||||||||||
Class C Convertible Preferred Non Voting Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 7,000,000 | 7,000,000 | 7,000,000 | ||||||||
Preferred stock, shares outstanding | 7,000,000 | 7,000,000 | 7,000,000 | ||||||||
Dividends | $ 3,781,868 | ||||||||||
Preferred stock redemption price per share | $ 5 | $ 5 | |||||||||
Class C Convertible Preferred Non Voting Stock [Member] | Chief Executive Officer and President [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares based compensation gross | 7,000,000 | ||||||||||
Conversion of stock description | Subsequently, in April 2019, the Company filed an amended and restated certificate of designation, which restricted the CEO and President from converting the 7,000,000 shares into common stock for 36 months from the issuance date. After October 2021, this restriction expired, and the CEO and President are free to convert these shares. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Proceeds from related party debt | $ 125,039 | $ 60,182 | |
Repayments of related party debt | 118,207 | $ 111,692 | |
Synergia CPALLC [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cost of good and service sold | $ 34,500 | 101,000 | |
Synergia Technology Services LLC [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cost of good and service sold | 3,000 | 9,000 | |
Repayments of related party debt | 1,296 | ||
Chief Executive Officer [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cost of good and service sold | 96,250 | 478,750 | |
Proceeds from related party debt | 67,264 | ||
Repayments of related party debt | 70,422 | ||
Accrued professional fees current and noncurrent | 0 | 0 | |
President [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cost of good and service sold | 77,500 | 460,501 | |
Proceeds from related party debt | 41,075 | ||
Repayments of related party debt | 31,085 | ||
Accrued professional fees current and noncurrent | 18,800 | 18,800 | |
Board of Directors Chairman [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cost of good and service sold | 10,000 | 10,000 | |
Chief Financial Officer [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Proceeds from related party debt | 15,404 | ||
Repayments of related party debt | 16,700 | ||
Accrued professional fees current and noncurrent | $ 0 | $ 0 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2022 | Feb. 15, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||
Repayment of debt | $ 118,725 | ||||
Outstanding principal | 100,000 | ||||
Accrued interest | $ 18,725 | ||||
Convertible Debt [Member] | |||||
Short-Term Debt [Line Items] | |||||
Accrued interest | $ 39,084 | $ 39,084 | $ 149,389 | ||
Convertible notes | 100,000 | 100,000 | $ 749,500 | ||
Debt default amount | 100,000 | 100,000 | |||
Interest expense | $ 3,781 | $ 11,219 | |||
Noteholders [Member] | |||||
Short-Term Debt [Line Items] | |||||
Outstanding principal | $ 549,500 | ||||
Accrued interest | 89,160 | ||||
Conversion of debt | $ 638,660 | ||||
Conversion of debt into shares | 1,824,751 | ||||
Debt conversion price per unit | $ 0.35 | ||||
Debt conversion, description | Each unit consists of one (1) share of Common Stock and one (1) Class B Warrant. Holders of Class B Warrants are entitled to purchase one (1) share of Common Stock at a strike price of $1.00 within three years of the issuance date. |
CONCENTRATIONS, COMMITMENTS A_2
CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES (Details Narrative) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 49% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 11% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 11% |
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Vendor A [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 50% |
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Vendor B [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 23% |
SCHEDULE OF LEASE RELATED ASSET
SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Mar. 27, 2020 |
Finance Lease | |||
Prepaid expense | $ 523 | ||
Right of use asset – finance lease | 6,482 | $ 16,206 | $ 38,895 |
Security deposit | 7,753 | 7,753 | |
Total lease-related assets | 14,758 | ||
Lease liability – finance, current portion | 6,284 | 17,389 | |
Lease liability – finance, non-current portion | $ 2,543 | ||
Total lease-related liabilities | $ 6,284 |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITY (Details) | Sep. 30, 2022 USD ($) |
Finance Lease | |
2022 (Q4) | $ 3,741 |
2023 | 2,543 |
Total future maturities | $ 6,284 |
FINANCE LEASE (Details Narrativ
FINANCE LEASE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 27, 2020 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Security deposit | $ 7,753 | $ 7,753 | $ 7,753 | ||
Initial payment | $ 12,685 | 3,876 | 11,629 | $ 11,629 | |
Right of use asset | 38,895 | 6,482 | $ 6,482 | $ 16,206 | |
Prepaid tax | 3,140 | ||||
Finance lease liability | $ 38,895 | ||||
Lease percentage | 12.55% | ||||
Lease expense | 3,241 | ||||
Principal [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Initial payment | 3,485 | ||||
Interest [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Initial payment | $ 391 | ||||
36 Monthly Payments [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Lease term | 36 months | ||||
Initial payment | $ 1,292 | ||||
Security deposit | 7,753 | ||||
Sales tax | 3,140 | ||||
Origination fee | 500 | ||||
Finance lease cost | $ 12,685 |
SIGNIFICANT AGREEMENTS (Details
SIGNIFICANT AGREEMENTS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jul. 20, 2022 | Dec. 02, 2021 | Mar. 31, 2022 | Sep. 30, 2022 | |
Total sale price | $ 9,074,100 | |||
Change in sale price | $ 86,347 | |||
Total sale price | $ 8,987,753 | |||
Proceeds from sale of property plant and equipment | $ 8,360,508 | |||
Description of collection of outstanding balance | 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. | |||
Business Development Agreement [Member] | ||||
Monthly retainer fees | $ 5,000 | |||
Percentage for referral fee on net revenues | 3% | |||
Retainer referral fees | $ 5,000 | |||
One Customer [Member] | ||||
Current outstanding balance due from the customer | $ 627,245 | |||
Upon Execution [Member] | ||||
Sales tax | 2,990,564 | |||
Applicable Sales Tax Due 30 Days [Member] | ||||
Sales tax | 2,840,564 | |||
Final Shipment Equipment [Member] | ||||
Sales tax | $ 3,787,418 | |||
Ten or More Days [Member] | ||||
Penalties | 5,000 | |||
Fifteen Days [Member] | ||||
Penalties | $ 10,000 |
CONSTRUCTION IN PROGRESS _ DA_2
CONSTRUCTION IN PROGRESS – DATA CENTERS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Payments to acquire interest in joint venture | $ 127,142 | |
Construction in progress, write off | 36,401 | |
Construction in progress – data centers | 90,741 | |
Site A [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Payments to acquire interest in joint venture | 90,741 | |
Site B [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Payments to acquire interest in joint venture | $ 36,401 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 9 Months Ended | |||
Nov. 02, 2022 | Oct. 12, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | ||||
Advanced to help fund operations | $ 125,039 | $ 60,182 | ||
President [Member] | ||||
Subsequent Event [Line Items] | ||||
Advanced to help fund operations | $ 41,075 | |||
Subsequent Event [Member] | Referral Fee Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage for referral fee on net revenues | 2% | |||
Subsequent Event [Member] | President [Member] | ||||
Subsequent Event [Line Items] | ||||
Advanced to help fund operations | $ 40,000 |