SCHEDULE: Edgemode CEO Boosts Stake to 28.9%

Edgemode, Inc. CEO Charles Faulkner increased his beneficial ownership to 28.9% through salary conversion and option exercises.

Summary

• Charles Faulkner, Chief Executive Officer and a director of Edgemode, Inc., now beneficially owns 754,518,284 shares of the Issuer's common stock.
• This ownership represents approximately 28.9% of the 2,164,254,138 outstanding shares of common stock as of April 8, 2025.
• On February 20, 2025, Mr. Faulkner received 256,660,163 restricted common stock shares as partial consideration for converting $769,989 of accrued salary under his Employment Agreement.
• Additionally, on February 20, 2025, 77,000,000 stock options granted on March 3, 2023, and 76,619,603 stock options granted on September 12, 2022, were amended and restated to become immediately vested and exercisable.
• On April 7, 2025, Mr. Faulkner was granted an additional 257,193,113 fully vested and exercisable stock options.
• His total beneficial ownership includes 442,792,088 shares underlying vested stock options.
• Mr. Faulkner acquired these securities with the stated purpose of exercising control over the Issuer.

Sentiment

Score: 7

Explanation: The filing indicates a significant increase in the CEO's beneficial ownership, aligning his interests more closely with shareholders and demonstrating a strong commitment to exercising control. The conversion of accrued salary to equity also suggests a move to conserve company cash, which is generally positive.

Positives

• The significant increase in the CEO's beneficial ownership aligns his interests more closely with those of the shareholders, potentially fostering long-term value creation.
• The conversion of $769,989 of accrued salary into equity helps conserve the company's cash resources.
• The CEO's explicit statement of acquiring securities for the purpose of exercising control indicates a strong commitment to the company's future direction.

Negatives

• The issuance of new shares and options, even to an insider, results in dilution for existing shareholders.
• The conversion of accrued salary to stock, while conserving cash, could also signal potential cash flow constraints within the company.

Future Outlook

No specific forward-looking statements or guidance regarding the company's future performance or strategic direction are provided in this filing.

Management Comments

• I acquired all of my securities with the purpose of exercising control.

Industry Context

This filing indicates a substantial increase in insider ownership and control, which is generally viewed positively by the market as it aligns management's interests with shareholders. Such a move, especially involving the conversion of salary to equity, can signal strong confidence from leadership in the company's future prospects and a strategic decision to conserve cash, which is common in industries where cash flow management is critical or during periods of significant growth investment.

Comparison to Industry Standards

• A 28.9% beneficial ownership stake by a CEO is a significant position, often higher than the average for CEOs in large-cap public companies, but can be more common in smaller or growth-stage companies where founders or key executives retain substantial equity.
• The conversion of accrued salary to equity is a recognized practice for companies aiming to conserve cash, particularly in sectors where capital efficiency is paramount.
• The immediate vesting of a large volume of options, coupled with new grants, suggests a robust incentive structure designed to tie the CEO's long-term performance directly to the company's success and his continued control.

Legal Proceedings

• The Reporting Person, Charles Faulkner, has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the past five years.
• The Reporting Person was not a party to a civil proceeding or a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree, or final order related to federal or state securities laws.

Related Party Transactions

• Conversion Letter and Amendment to Option Grant Agreement dated February 20, 2025, between Charles Faulkner and Edgemode, Inc.
• Stock Option Grant dated April 7, 2025, between Charles Faulkner and Edgemode, Inc.
• Conversion of $769,989 of accrued salary into 256,660,163 restricted common stock for Charles Faulkner.
• Amendment and restatement of 77,000,000 stock options (granted March 3, 2023) and 76,619,603 stock options (granted September 12, 2022) to become immediately vested and exercisable for Charles Faulkner.
• Grant of 257,193,113 fully vested and exercisable stock options to Charles Faulkner on April 7, 2025.

Stakeholder Impact

• Shareholders: Increased alignment with the CEO's interests and potential for long-term value creation due to his strong commitment and control, though new share issuance results in some dilution.
• Creditors: The conversion of accrued salary to equity could be viewed positively as it helps conserve the company's cash flow, potentially improving its liquidity position.

Key Dates

Recommendation

The filing details a significant increase in the CEO's beneficial ownership, demonstrating strong insider confidence and alignment with shareholder interests. The conversion of accrued salary to equity is a positive for the company's cash flow. However, without broader financial performance data or strategic updates, a 'hold' recommendation is prudent. This move strengthens the CEO's control, which can be a double-edged sword depending on future performance and governance. Investors should monitor subsequent financial reports and strategic developments.

Keywords

Edgemode Inc, Charles Faulkner, Schedule 13D, beneficial ownership, common stock, stock options, CEO, insider ownership, equity conversion, corporate control