EDGE DATA SOLUTIONS, INC. The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. 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
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The independent registered public accounting firm's report on the Company's
consolidated financial statements as of
General
On
On
On
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the above conditions raise substantial doubt about the Company's ability to do so. New business opportunities may never emerge, and we may not be able to sufficiently fund the pursuit of new business opportunities should they arise.
As of
PLAN OF OPERATIONS
During 2020, we generated limited revenues from customers' usage of our data center resources. We generated a net loss and have negative capital and no intangible assets. We are illiquid and need cash infusions from investors or shareholders to provide capital, or loans from any sources, none of which have been committed nor assured.
We are currently seeking to grow our customer base and to increase our current customers' reliance on and usage of our resources. Further, we are seeking to expand into the sale and resale of modular data centers and related equipment. While our efforts have generated limited revenue and gross margins, there can be no assurances that these efforts will be successful or produce sufficient income or cash inflows from operations. As a result, we are dependent upon capital from investors to finance our operations and continue as a going concern.
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Our goals for the next year are as follows:
Future Milestones ? Plan on raising capital to fully execute on the business plan ? Plan on up-listing to OTCQB ? Plan on filing an S-1 to register stock and build a market
APPLICATION OF FUNDS (1)
Item Amount (1)
Compensation of officers $ 210,000
Legal and professional fees 50,000
Audit fees 25,000
Other general and administrative costs 135,000
Total $ 420,000 (1) These items are variable and no commitment has been obtained from any source.
The Company may change any or all of the budget categories in the execution of its business model. None of the line items are to be considered fixed or unchangeable. The Company may need substantial additional capital to support its budget.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements. Our Budget for operations in next year is as follows:
Item Amount (1)
Compensation of officers $ 210,000
Legal and professional fees 50,000
Audit fees 25,000
Other general and administrative costs 135,000
Total $ 420,000 (1) These items are variable and no commitment has been obtained from any source.
We will need substantial additional capital to support our future operations. We have no revenues and have no committed source for any funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties. If our initial prospect appears uneconomical after evaluation we will seek other prospects it the area to acquire or farm into.
We may also consider a private placement or public offering of our common stock, if the market conditions allow at the time. No price, schedule or terms for such an offering has been determined at this time. We expect to expend funds on a quarterly basis, as follows:
Period Amount
Q1 2021 (cash on hand 12/31/2020) $ 80,368
Q2 2021 105,000
Q3 2021 105,000
Q4 2021 105,000
Total Cash Burn $ 395,368
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Results of Operations for the Years Ended
During the years ended
During the years ended
During the years ended
During 2020 and 2019, the Company recognized
During the year ended
Aside from interest expense, during the years ended
As a result, the Company incurred net operating losses of
Liquidity and Capital Resources
During 2019, the Company sold 266,667 shares (equivalent to 2,667 post-split) of
common stock to its former CEO for proceeds of
In
In
15
In
In
In
In
In
In
In
During the twelve months ending
16 Short Term
On a short-term basis, we anticipate continued generation of edge computing revenues and the use of idle capacity to mine cryptocurrency. Based on prior history, we anticipate that short-term revenues and other cryptocurrency-related income will be insufficient to satisfy current and future liabilities as we continue to pursue expansion of our current customer base and expand into the hardware business.
No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.
Capital Resources
Our capital resources currently consist of cash, advances from and expenses paid on the Company's behalf by the CEO and President, convertible debt financing, and the sale of equity units.
Need for Additional Financing
We do not have sufficient capital to meet our cash needs. Nor do we have sufficient capital to meet our short-term trade and debt obligations. We plan to seek loans or equity placements to cover such cash needs. Once full business operations commence, our needs for additional financing will likely face substantial increases.
Within the next twelve months we will need to secure an additional
No commitments have been made to provide additional funding by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.
Critical Accounting Policies
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
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Impairment of Long-life Assets
In accordance with ASC Topic 360, the Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure 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.
Income Tax
The Company accounts for income taxes under ASC 740, "Income Taxes." Under ASC 740, deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Fiscal year
The Company employs a fiscal year ending
Net Income (Loss) per share
The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock warrants, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.
Financial Instruments
The carrying value of the Company's financial instruments, including cash and cash equivalents, as reported in the accompanying balance sheet, are stated at fair value.
Stock-Based Compensation
The Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of the effective date and are subsequently modified.
Fair Value of Financial Instruments
The carrying amount of accounts payable is considered to be representative of respective fair values because of the short-term nature of these financial instruments.
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.
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