NOTES
TO FINANCIAL STATEMENTS
As
of September 30, 2021 (Unaudited) and for the Three and Nine months Then Ended (Unaudited)
NOTE
1: ORGANIZATION AND NATURE OF OPERATIONS
EDGE
DATA SOLUTIONS, INC. (the “Company”), formerly Blockchain Holdings Capital Ventures, Inc. (formerly Southeastern Holdings,
Inc., formerly Safe Lane Systems, Inc.) was incorporated in the State of Colorado on September 10, 2013. Safe Lane Systems, Inc. redomiciled
to become a Delaware holding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned
subsidiaries, SLS Industrial, Inc and Southeastern Holdings, Inc. (both Delaware corporations) and on September 30, 2016 completed a
merger and reorganization in which Southeastern Holdings, Inc. (now Edge Data Solutions, Inc.) became the holding company. On December
1, 2016, the Company spun off its wholly owned subsidiary, SLS Industrial, Inc., along with its assets and liabilities, leaving Southeastern
Holdings, Inc. as the only surviving entity.
On
August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”),
pursuant to which the Company purchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining
equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work
on such equipment. The Company issued 300,000,000 (equivalent to 3,000,000 after the reverse split) shares of its common stock, par value
$.0001 to the members of Blockchain in exchange for the assets of Blockchain.
On
August 30, 2018, the Company changed its name to Blockchain Holdings Capital Ventures, Inc.
On January 13, 2020, the Company changed its name to Edge Data Solutions, Inc.
Business
description
Edge
Data Solutions, Inc. (EDSI) is poised to be an industry-leading edge data center and cloud infrastructure provider. EDSI’s proprietary
Edge Performance Platform (EPP) allows us to deploy next-generation edge data centers where they are needed most. EDSI’s data centers
provide next-generation immersion Cooling technology that improves performance, reduces energy costs and latency. Key industries we serve
more computing power are fintech, cloud gaming, telecom 5G, 3D/video/AI rendering, video streaming, remote desktop, IoT, autonomous vehicles.
Centralized infrastructure facilities servicing multiple geographical areas encounter many issues with data latency, congestion and weak
network connections. To address this, data processing is moving closer to the customer. EDSI offers green, low-cost, secure colocation
and private data hosting to meet this demand for Edge data centers. EDSI plans to deploy to strategic locations based on demand for Tier
2 and Tier 3 cities outside the major metropolitans to underserved markets, supporting both edge customers and areas of projected growth.
With the rise and proliferation of this technology adoption we plan to solidify our footprint by securing multiple locations across the
US, while generating revenue from our operations. The modular design and ability to add additional data centers as needed, preserves
up front capital allowing for rapid deployment and scalability as business demand increases.
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
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). The standard requires lessees to recognize almost all leases
on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either
an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for
the Company beginning January 1, 2019. Since the Company had no leases in place prior to or during 2019, the Company has adopted ASC
842 prospectively and has applied it to its first lease agreement in 2020.
Under
ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement
date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments
that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the
Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any
lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’ lease terms may include
options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.
Inventory
The
Company values inventory at its original cost, adjusted to approximate the lower of actual cost or estimated net realizable value using
assumptions about future demand and market conditions. In determining excess or obsolescence reserves for its products, the Company considers
assumptions such as changes in business and economic conditions, other-than-temporary decreases in demand for its products, and changes
in technology or customer requirements. In determining the lower of cost or net realizable value reserves, the Company considers assumptions
such as recent historical sales activity and selling prices, as well as estimates of future selling prices. The Company fully reserves
for inventories and non-cancellable purchase orders for inventory deemed obsolete. The Company performs periodic reviews of inventory
items to identify excess inventories on hand by comparing on-hand balances and non-cancellable purchase orders to anticipated usage using
recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions
become less favorable than those projected by the Company, additional inventory carrying value adjustments may be required.
As
of September 30, 2021, the Company’s had $11,530 of inventory and had outstanding deposits of $57,083 with vendors for the purchase
of equipment for resale to customers.
Property
and Equipment
Property
and equipment are stated at cost net of accumulated depreciation and amortization, and accumulated impairment, if any. Depreciation and
amortization of property and equipment is provided using the straight-line method over estimated useful lives, which are all currently
estimated at three years.
As
of September 30, 2021, the Company’s property and equipment consisted of $71,938 of data center equipment and $13,347 of capitalized
labor associated with readying the equipment for service, net of $37,872 of accumulated depreciation. Depreciation expense for the three
and nine months ended September 30, 2021 was $7,165 and $21,231, respectively, compared to $6,303 and $10,513 for the three and nine
months ended September 30, 2020, all respectively.
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 of liabilities incurred by the issuer prior to the merger as of each September 30, 2021 and 2020. The remaining
accounts payable of $108,556 and $44,174 as of September 30, 2021 and December 31, 2020, respectively, consisted of amounts due for professional
services and various other general and administrative expenses incurred after the acquisition.
As
of December 31, 2020, accrued liabilities consisted of $1,811 of state and local taxes payable, $1,903 of accrued interest due to a vendor
and $45,548 of accrued interest on convertible debt. As of September 30, 2021, accrued liabilities consisted of $104,244 of accrued interest
on convertible debt and $35,188 for state and local taxes.
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 and $29,483 of revenue from its customers’ usage
of data center credits, respectively. The Company further recognized a deferred revenue liability of $9,478 for prepaid usage credits
not yet used by its customers as of September 30, 2021. While the Company plans to continue to generate revenue, there can be no assurances
that service lines will generate satisfactory revenue or continue to generate revenue.
Net
hardware sales during the three and nine months ended September 30, 2021 totaled $144,743 and $942,173 and had associated costs of goods
sold of $105,138 and $783,888, all respectively.
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 and $1,197, respectively.
Cryptocurrency
Income
The
Company records cryptocurrency generated, net of fees and valuation adjustments, as other income and classifies the cryptocurrency as
crypto assets held at cost in its balance sheets. When the company sells its cryptocurrencies, it recognizes a gain or loss for the difference
between original cost and the selling price, net of fees. During the three and nine months ended September 30, 2021, the Company recognized
$1,234and $12,025 of cryptocurrency mining income and losses of $3,285 and $2,807 on the sale of cryptocurrency, all respectively.
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.
NOTE
3: GOING CONCERN
As
shown in the accompanying financial statements as of September 30, 2021, the Company had $147,261 of cash and $279,747 of current assets,
as compared to total current liabilities of $1,460,404, has incurred substantial operating losses, and had an accumulated deficit of
$1,901,614. Furthermore, the Company’s revenue history has been limited and unstable, and there can be no assurances of future
revenues.
Given
these factors, the Company is dependent on financing from outside parties, and management intends to pursue outside capital through debt
and equity vehicles. There is no assurance that these efforts will materialize or be successful or sufficient to fund operations and
meet obligations as they come due.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions
raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications
of liabilities that may result should the Company be unable to continue as a going concern.
NOTE
4: STOCKHOLDERS’ DEFICIENCY
The
Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class A Preferred Super Majority Voting
Stock (“Class A”). The Class A shares have the right to vote upon matters submitted to the holders of common stock, par value
$0.0001 of the Company. Class A shares have a vote equal to the number of shares of common stock of the Company which would give the
holders of the Class A shares a vote equal to sixty percent (60%) of the common stock. This vote shall be exercised pro-rata by the holders
of the Class A. The Company shall have the right to redeem, in its sole and absolute discretion, at any time one (1) year after the date
of issuance of such Class A shares, all or any portion of the shares of Class A at a price of one cent ($0.01) per share. On October
4, 2018, the Company issued a total of 7,000,000 Class A shares to its CEO and President (formerly COO) as stock-based compensation for
services rendered.
The
Company has not currently authorized a Class B designation of Preferred Stock.
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)
The
Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class C Convertible Preferred Non-Voting
Stock (“Class C”). Each share of Class C shall be convertible into one (1) shares of common stock. The holders of Class C
shall be entitled to receive the same dividend as the holders of the common stock and such dividend shall be paid pro rata per share
on a fully converted basis. The holders of Class C shall have piggyback registration rights. The Company shall have the right to redeem,
in its sole and absolute discretion, at any time after five (5) years, all or any portion of the shares of Class C at a price of five
dollars ($5.00) per share. The Class C shares shall be considered to have a junior liquidation preference to Class A shares and a senior
dividend preference to Class A shares. On October 4, 2018, the Company issued a total of 7,000,000 Class C shares to its CEO and President
(formerly COO) as stock-based compensation for services rendered. Subsequently, in April 2019, the Company filed an amended and restated
certificate of designation, which restricts the CEO and President from converting the 7,000,000 shares into common stock for 36 months
from the issuance date.
The
following table sets forth the Company’s warrant activity through September 30, 2021:
SCHEDULE OF WARRANT ACTIVITY
|
|
Warrants
|
|
|
Shares Under Warrant
|
|
|
Term
|
|
|
Exercise Price
|
|
|
Remaining Life
|
|
Balance, December 31, 2019
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants issued with equity units
|
|
|
627,862
|
|
|
|
1,255,724
|
|
|
|
3 years
|
|
|
$
|
0.50
|
|
|
|
|
|
Balance, December 31, 2020
|
|
|
627,862
|
|
|
|
1,255,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No new issuances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant
issued with equity units
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2021
|
|
|
627,862
|
|
|
|
1,255,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pursuant
to a service agreement entered on January 25, 2021, the Company issued 100,000 common shares to OHGODACOMPANY, LLC in exchange for advisory
services rendered, resulting in $19,000 of stock-based compensation expense.
In June 2020, the Board authorized the issuance
of 125,000 common shares each to the CEO (Delray Wannemacher), President (Daniel Wong) and a Director (Austin Bosarge) on July 1, 2021
and July 1, 2022 for services rendered. Accordingly, the Company accrued totals of 375,000 common shares and stock-based compensation
expense of $71,250 to these individuals during the three months ended September 30, 2020.
Pursuant
to consulting and advisory agreements, the Company accrued 217,000
common shares due to consultants and 50,000
common shares to an advisor
for services rendered in September 2021, resulting in compensation expense of $41,230
and $9,500,
respectively.
As
of September 30, 2021, the Company was authorized to issue 150,000,000 shares of common stock. All common stock shares have full dividend
and voting rights. However, it is not anticipated that the Company will be declaring dividends in the foreseeable future.
As
of September 30, 2021, the Company had 9,063,079 common shares outstanding.
As
of September 30, 2021, 7,000,000 shares of Class A Preferred Stock and 7,000,000 shares of Class C Preferred Stock were issued and outstanding.
NOTE
5: RELATED PARTY TRANSACTIONS
During
the nine months ended September 30, 2021, the Company paid out previously accrued consulting fees payable to the CEO and President of
$5,000 and $30,000, respectively, and paid $120,335 and $85,000 of current compensation to the CEO and President, respectively. The Company
does not currently have consulting or employment agreements with these individuals, and as a result, these fees may fluctuate from time
to time. While the Company believes these individuals were appropriately classified as contractors and has accordingly neither paid nor
accrued payroll taxes, these payments may result in future tax liabilities should the Internal Revenue Service deem these individuals
to be employees. As of September 30, 2021, the Company owed $0 of outstanding compensation to the CEO and COO.
During
the nine months ended September 30, 2021, the Company’s CEO and President paid expenses on behalf of the Company totaling $55,534
and $4,648, and the Company repaid $107,044 and $4,648 of related party advances, all respectively. As of September 30, 2021, the Company
was indebted to the CEO for $0 and to the President for $0, respectively, for expenses paid on behalf of the company.
EDGE
DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)
NOTES
TO FINANCIAL STATEMENTS
As
of September 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)
NOTE
6: CONVERTIBLE NOTES
As
of September 30, 2021 and December 31, 2020, the Company owed $720,000 and $720,000 on outstanding convertible notes, respectively.
On
February 3, 2021, the Company extended its convertible note for $100,000 with Clearvoyance Ventures. The original note matured on November
26, 2020 and bore interest at 10%. According to the amended terms, the note will mature on February 3, 2022 and accrue interest at 15%.
The note continues to have a conversion feature, under which principal and accrued interest would convert at 70% of the stock price upon
closing any offering resulting in aggregate financing of at least $1,000,000.
The
Company evaluated the convertible notes in light of ASC 470 and determined that a beneficial conversion feature exists. However, given
the contingent nature of the holder’s option and the lack of a market for the Company’s stock, the Company concluded that
such a feature is not currently ascertainable and allocated the full principal amount to the convertible note liability.
During
the three and nine months ended September 30, 2021, the Company recognized $20,289 and $60,209 of interest expense on convertible debt.
As of September 30, 2021 and December 31, 2020, outstanding accrued interest on convertible debt totaled $104,244 and $43,738, respectively.
NOTE
7: SIGNIFICANT AGREEMENTS
On March 17, 2021, the Company entered into a
joint marketing agreement with RoviSys Building Technologies, LLC (“RoviSys”), under which it will comarket its mobile and
immersion-cooled data center solutions and other related services. The agreement grants a license to RoviSys to market the Company’s
products.
NOTE
8: FINANCE LEASE
On
March 27, 2020, the Company entered into a 36-month lease for data center equipment. Terms of the lease call for 36 monthly payments
of $1,292, with the first payment due at inception, together with a $7,753 security deposit, $3,140 of sales tax and a $500 origination
fee, for a total of $12,685 due up front. The Company paid the $12,685 on March 27, 2020.
The
Company evaluated the lease in light of ASC 842 and determined that it was a long-term finance lease, since (a) the lease term is for
the major part of the remaining economic life of the underlying asset and (b) the present value of the sum of lease payments equals or
substantially exceeds the fair value of the underlying asset. At lease inception, the Company recognized a right of use asset for $38,895,
prepaid tax of $3,140 and a lease liability of $38,895. The Company will ratably amortize the right of use asset and prepaid tax to lease
expense over the lease’s life. Based on the present value, term and payment schedule, the Company determined the lease’s
implicit rate to be 12.55% and will record interest expense accordingly over the life of the lease.
During
the nine months ended September 30, 2021, the Company paid a total of $11,629, including $6,055 of principal and $2,405 of interest,
to the lessor and recognized $3,241 of lease expense for the three months ended September 30, 2021.
EDGE
DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)
NOTES
TO FINANCIAL STATEMENTS
As
of September 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)
As
of September 30, 2021, lease-related assets and liabilities consisted of:
SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES
|
|
|
|
|
Assets
|
|
|
|
|
Prepaid expense
|
|
$
|
1,830
|
|
Right of use asset - finance lease
|
|
|
22,688
|
|
Security deposit
|
|
|
7,753
|
|
Total lease-related assets
|
|
$
|
32,271
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Lease liability - finance, current portion
|
|
$
|
16,099
|
|
Lease liability - finance, non-current portion
|
|
|
10,277
|
|
Total lease-related liabilities
|
|
$
|
26,376
|
|
Future
maturities of the lease liability are as follows:
SCHEDULE OF MATURITIES OF LEASE LIABILITY
|
|
|
|
|
2021
|
|
$
|
9,646
|
|
2022
|
|
|
14,186
|
|
2023
|
|
|
2,543
|
|
Total future maturities
|
|
$
|
26,376
|
|
NOTE
9: CUSTOMER DEPOSIT LIABILITY
As
discussed in Note 2, during the three months ended September 30, 2021, the Company collected $391,555 for orders of its data center hardware
solutions that were not yet fulfilled as of September 30, 2021. Accordingly, the Company recognized a deposit liability of $391,555 as
of September 30, 2021 and will release the liability to revenue during the period in which the orders are delivered.
NOTE
10: CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES
During
the three months ended September 30, 2021, one customer comprised 96% of delivered hardware sales, and the loss of this or another significant
customer would be detrimental to the Company’s sales. Management has determined that no other significant concentrations, commitments,
or contingencies existed as of September 30, 2021.
EDGE
DATA SOLUTIONS, INC. (Formerly Southeastern Holdings, Inc.)
NOTES
TO FINANCIAL STATEMENTS
As
of September 30, 2021 (Unaudited) and for the Three Months Then Ended (Unaudited)
NOTE
11: RECENT ACCOUNTING PRONOUNCEMENTS
Management
does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying
financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
NOTE
12: SUBSEQUENT EVENTS
On December 2,
2021, the Company issued 96,000 additional common shares to a consultancy group for services rendered.
Management
has evaluated significant subsequent events through the date these financial statements were available to be issued and has identified
no significant events requiring further disclosure.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This
report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently
available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”,
“plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking
statement. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere
in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange
Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently
subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results
and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on our behalf.
We disclaim any obligation to update forward-looking statements.
The
identification in this report of factors that may affect our future performance and the accuracy of forward-looking statements is meant
to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent
uncertainty.