10-K: Edgemode Transitions to HPC Hosting After Share Exchange, Faces Funding Challenges

Edgemode, Inc. shifts its focus from cryptocurrency mining to high-performance computing (HPC) hosting following a share exchange agreement, but requires significant funding to execute its new business plan.

Summary

• Edgemode, Inc. has transitioned from Bitcoin mining to digital infrastructure colocation services and high-performance computing (HPC) hosting.
• The company closed a Share Exchange Agreement on April 7, 2025, with Synthesis Analytics Production Ltd (SAPL) and Adler Capital Limited (ACL), resulting in Edgemode acquiring 100% of SAPL in exchange for 1,260,246,354 shares of Edgemode common stock, representing approximately 55% of the company's outstanding common stock.
• Edgemode, through its subsidiary SAPL (to be renamed EdgeMode Europe Limited), plans to design, build, and operate digital infrastructure for HPC, aiming to become a leading provider of digital colocation services.
• The company's business strategy involves building large-scale data center infrastructure for cloud computing, machine learning, and artificial intelligence, leveraging assets acquired in the SAPL acquisition.
• Edgemode requires immediate funding of approximately $2,000,000 to commence new operations and repay debt, as well as additional significant financing to develop and expand its new operations.
• The company has secured a 95MW power purchase agreement and a 10-year lease on a 1,050 square meter building space in Marviken, Sweden.
• Edgemode plans to build a Tier 3 specification datacenter with a total of 16MW IT load capacity (a 20MW gross) at an estimated cost of $70 million.
• The company also obtained a 20,000 sqm plot of land in Marviken, Sweden, where it plans to build an additional datacenter with 75MW gross capacity at an estimated cost of $400-470 million.
• Edgemode assumed a 5% promissory note in the principal amount of $1,750,000 issued by SAPL to Marviken Two on December 4, 2024, due on or before December 3, 2027.
• For the 12 months ended December 31, 2024, Edgemode's operating expenses were $1,408,528, compared to $3,362,714 for the 12 months ended December 31, 2023.
• As of April 30, 2025, the company had approximately $100,000 of cash on hand.
• In April 2025, Edgemode sold 38,510,911 shares of restricted common stock to an accredited investor for $300,000.
• The company is currently engaged with one customer, Cudo Ventures Ltd, who will initially account for 100% of the HPC Hosting segment revenue.

Sentiment

Score: 4

Explanation: The document highlights a strategic shift and potential growth in the HPC market, but is tempered by significant financial challenges, funding needs, and operational risks. The transition is promising, but the company's ability to execute its plan is uncertain.

Positives

• The acquisition of SAPL provides Edgemode with existing infrastructure and expertise to enter the HPC hosting market.
• The company has secured a 95MW power purchase agreement and a 10-year building lease in Sweden.
• Edgemode has secured its first client for an initial 1MW of capacity.
• Operating expenses decreased from $3,362,714 in 2023 to $1,408,528 in 2024.
• The company has acquired intellectual property related to immersion cooling and heat exchange technology.

Negatives

• Edgemode requires significant funding to develop its new business and satisfy its debts.
• The company has a limited operating history and no history of generating revenue from colocation services.
• Edgemode's HPC business will be highly dependent on a single customer at the outset.
• The company has material weaknesses in its internal control over financial reporting.
• The company has a history of losses and expects to incur further losses in the development of its business.

Risks

• The company may not be able to raise sufficient capital to execute its business plan or satisfy its liabilities.
• Demand for data centers may decrease, affecting occupancy and rental rates.
• The company faces significant competition in the HPC market.
• Failure of physical or IT infrastructure could lead to significant costs and disruptions.
• The company is vulnerable to cyberattacks and security breaches.
• The company depends on third-party suppliers for power and is vulnerable to service failures and price increases.
• The company may not be able to adapt to changing technologies and customer requirements.
• Regulatory developments surrounding HPC may negatively impact the company's efforts to expand into HPC hosting.
• The company is a former shell company, which may affect the resale of its shares.
• The issuance of shares upon exercise of options or warrants may cause dilution to existing shareholders.

Future Outlook

Edgemode intends to strategically develop and make operational the infrastructure necessary to support its contractual commitments to HPC customers and to support expected customer growth and additional demand by leveraging its data center expertise and capabilities. The company also intends to seek additional opportunities and engage additional customers in the HPC hosting market to expand its business where favorable market opportunities exist.

Management Comments

• Our goal is to utilize the assets we have acquired via the purchase of SAPL for HPC hosting operations which will provide consistent dollar-based revenue and which represent substantially less risk than our historical digital asset self-mining operations.
• Our intent is to focus our business on development and marketing efforts to build data centers and expand our foundational HPC hosting customer base.

Industry Context

The HPC market is highly competitive, with established data center providers like Equinix, Digital Realty Trust, NTT, Switch, Inc., and Core Scientific, Inc., as well as private operators specializing in HPC or colocation services, and digital asset miners looking to convert existing digital mining facilities into HPC colocation facilities.

Comparison to Industry Standards

• Edgemode will compete with established data center providers such as Equinix, Digital Realty Trust, NTT, Switch, Inc., and Core Scientific, Inc.
• Many competitors are better capitalized and have better brand recognition.
• Competitors seek to establish data centers in the same geographic regions and compete for the same sources of power, equipment, and customers.
• Competitors compete on price, facility location, reputation, and perceived skill with respect to performance.

Management Changes

Legal Proceedings

• The Company was notified of a potential lawsuit related to the termination of our Advisory Panel Membership agreement with Taylor Black Wealth, Ltd.

Related Party Transactions

• Executive officers advanced funds to the company for working capital needs.
• Executive officers had accrued salaries that were settled with shares of common stock and amendments to stock options.
• Dr. Adler, an officer and director of our company effective April 7, 2025, is the chief executive officer of SAPL, an executive officer and beneficial owner of Marviken One and Marviken Two, and the sole shareholder ACL.

Stakeholder Impact

• Shareholders face potential dilution from the issuance of new shares.
• Employees may be impacted by the company's ability to secure funding and execute its business plan.
• Customers in the HPC market may benefit from the company's new data center infrastructure.
• Suppliers and creditors may be impacted by the company's ability to meet its financial obligations.

Next Steps

• Secure additional funding through public or private debt or equity financing.
• Develop and make operational the infrastructure necessary to support contractual commitments to HPC customers.
• Engage additional customers in the HPC hosting market to expand the business.
• Remediate material weaknesses in internal control over financial reporting.

Key Dates

Keywords

HPC hosting, data centers, colocation, Edgemode, SAPL, cryptocurrency, funding, acquisition, power purchase agreement, digital infrastructure