Item 1A. Risk Factors.
Not applicable to small reporting companies. However,
our principal risk factors are described under “Management’s Discussions and Analysis of Financial Condition and Results of Operations.”
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Risk Management and Strategy
During 2024 and parts of 2025 we were a “blank
check” company with no business operations and only recently entered into the JVA, as amended. Therefore, we did not consider that
we face significant cybersecurity risk and have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity
risk. Our board of directors is generally responsible for the oversight of risks from cybersecurity threats, if any. Our management
will use its best efforts to adopt a cybersecurity risk management program and formal processes for assessing cybersecurity risk as we
develop our HPC operations and AI Data Center Infrastructure.
Item 2. Properties.
We maintain our corporate
offices at 110 East Broward Blvd, Fort Lauderdale, Florida. We lease these premises under a monthly rental agreement at a nominal cost.
We also obtained a 20,000 sqm Freehold plot of land located at Marviken Kraftverk, 610 27 Vikbolandet, Sweden. However, as stated above,
we are in the process of rescinding our transaction with SAPL.
Additionally, DC Estate
Solutions, of which the Company owns 50.1%, has acquired 8 property leases, which were previously assigned to and held by BAIF, consisting
of approximately 100 hectares of land located in the Spain cities of Malpica, Caceres, Vianos, Cordoba, Torrecampo, Villasequilla and
Tomelloso and the Panamanian city of Tocumen. As disclosed, all leases are held by wholly owned subsidiaries of DC Estate Solutions. The
Spain Leases and the lease in Tocumen, Panama are for an average term of 35 years at an initial total average cost of $96,000 per month
for all sites. As a condition of each lease, the payments are subject to meeting certain milestones, such as obtaining a favorable urban
compatibility reports and connection points. Under the terms of the Spain Leases, the Company will pay approximately $15,000 to the owners
of the Cordoba site in 2026. No further payments are expected in 2026.
Item 3. Legal Proceedings.
As discussed above, the Employment Agreement between
the Company and Dr. Adler was terminated and the Company has recently discovered that SAPL and ACL breached material representations and
warranties under the Share Exchange. Pursuant to a letter dated December 8, 2025, the Company intends to seek rescission of the Share
Exchange and rescind the shares of Company common stock issued to ACL pursuant to the Share Exchange. The Company has also sent notice
to Dr. Adler for the termination of the option to purchase common stock issued to Dr. Adler under the Employment Agreement and the termination
of such agreement for “cause” as defined under the agreement. Among other material breaches, without limitation, the Company
has discovered that the real property and material assets of SAPL were encumbered at the time of the closing of the Share Exchange and
remain encumbered and subject to liens.
On December 19, 2025, a lawsuit was filed in the
Clark County District Court of Nevada against the Company, Charles Faulkner and Simon Wajcenberg, the Company’s Chief Executive
Officer and Chief Financial Officer, respectively. The plaintiffs were Dr. Niclas Adler, who previously acted as Chief Technology Officer
of the Company and as a member of the Company’s board of directors, and Adler Capital Limited.
The complaint alleged breaches of fiduciary duty,
wrongful termination and breach of contract in connection with Dr. Adler’s employment agreement with the Company and the related
equity awards. The relief sought against the Company included enforcement of the Share Exchange, employment agreement and option agreement,
compensatory damages, punitive damages, accounting, prejudgment and post judgement interest, reasonable attorney fees, cost of suit, a
judicial declaration of the parties’ respective rights and obligations. On January 21, 2026, Dr. Adler and Adler Capital Limited
voluntarily dismissed the lawsuit without prejudice.
On January 15, 2026, the Company filed a lawsuit
against SAPL and ACL in the United States District Court for the Southern District of Florida. The Company is seeking rescission of the
Share Exchange and temporary injunctive relief to prevent SAPL and ACL from transferring the shares of common stock received pursuant
to the Share Exchange and damages related thereto. The Company expects SAPL and ACL to file a counterclaim.
At this time, the Company is unable to predict
the outcome of the litigation or estimate the ultimate financial exposure, if any, that may result from the proceedings. An adverse judgement
or settlement could have a material adverse effect on the financial condition and results of operations of the Company.
See “Note 12. Commitments and Contingencies”
to the Financial Statements included in this report.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Market Information and Holders
Our common stock is quoted on the OTCID Basic
Market under the symbol “EDGM.” As of April 10, 2026, the last reported sale price of our common stock as reported by the
OTC Markets was $.0055 per share. Any over the counter market quotation reflects inter-dealer prices, without retail mark-up, mark-down
or commission and may not necessarily represent actual transactions. As of December 31, 2025, there were approximately 198 shareholders
of record. This number does not include beneficial owners whose shares are held in the names of various securities brokers, dealers and
registered clearing agencies.
The following table sets forth for the periods
indicated, high and low sales prices of the Company’s common stock as reported by the OTCID Basic Market.
Fiscal Year Ended December 31, 2025 High Price Low Price
Fiscal Year Ended December 31, 2024 High Price Low Price
Dividends
The Company has not paid dividends on its common
stock to date and does not intend to pay cash dividends in the foreseeable future. The payment of cash dividends in the future will be
dependent upon the terms of agreements restricting our ability to pay dividends, revenues and earnings, if any, capital requirements and
general financial condition and the discretion of the Company’s Board of Directors. It is the present intention of the Company’s
Board of Directors to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board of Directors
does not anticipate declaring any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
In addition to the equity securities sold by the
Company that were previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company, the following
sales of equity securities during the period covered by this Report that were not registered under the Securities Act are disclosed below:
On October 7, 2025, the Company issued 6,666,667
shares of restricted common stock to an accredited investor pursuant to a subscription agreement between the Company and the investor
dated October 7, 2025. The 6,666,667 shares of restricted common stock were issued pursuant to an exemption from registration under
Section 4(a)(2) of the Securities Act.
In October 2025, the Company issued an aggregate
of 16,826,087 shares of common stock upon the cashless exercise of a warrant, which had an exercise price of $0.01 per share and was originally
issued on September 17, 2021. The shares were issued in reliance upon an exemption from registration provided by Section 3(a)(9) of the
Securities Act.
On November 4, 2025, the Company issued 1,833,333
shares of restricted common stock to a service provider pursuant to a services agreement between the Company and the services provider
dated October 31, 2025. The 1,833,333 shares of restricted common stock were issued pursuant to an exemption from registration under
Section 4(a)(2) of the Securities Act.
On November 26, 2025, the Company entered into
a securities purchase agreement with an accredited investor dated November 18, 2025. Pursuant to the securities purchase agreement, the
Company sold to the accredited investor a convertible promissory note in the principal amount of $143,750 for which the Company received
net proceeds of $125,000. The Company also issued to the accredited investor 1,250,000 shares of the Company’s common stock as commitment
shares. The unsecured original issue discount promissory note and shares were issued in a private placement in reliance upon an exemption
from registration provided by Section 4(a)(2) of the Securities Act.
In November 2025, the Company issued an aggregate
of 96,332,497 shares of common stock upon the cashless exercise of a warrant, which had an exercise price of $0.01 per share and was originally
issued on September 17, 2021. The shares were issued in reliance upon an exemption from registration provided by Section 3(a)(9) of the
Securities Act.
In December 2025, the Company issued an aggregate
of 7,892,519 shares of common stock upon the cashless exercise of a warrant, which had an exercise price of $0.01 per share and was originally
issued on September 17, 2021. The shares were issued in reliance upon an exemption from registration provided by Section 3(a)(9) of the
Securities Act.
Under the terms of the respective employment agreements
of Charles Faulkner and Simon Wajcenberg, Mr. Faulkner and Mr. Wajcenberg each had accrued salaries of $386,000 as of October 31, 2025
(each an “Accrued Salary”). On December 10, 2025, in full satisfaction of the entirety of the Accrued Salary for each of Mr.
Faulkner and Mr. Wajcenberg, the Company issued 1 share of Series D Preferred Stock to each of Charles Faulkner and Simon Wajcenberg.
Item 6. [Reserved]
The following discussion and analysis should be
read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report on Form 10-K.
Overview
Edgemode was incorporated under the laws of the
State of Nevada in 2011. Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020. Between 2021 and 2023,
we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware
and hosting contracts. As a result, since late 2023 and throughout 2024 and 2025, our business activities primarily consisted of identifying
and evaluating suitable acquisition transaction candidates, which led to transition from cryptocurrency mining to AI data center infrastructure
and energy infrastructure development.
On October 15, 2025, the Company and BAIF entered
into the MOU for the purposes of organizing DC Estate Solutions, which was organized by the Company on October 23, 2025. On November 6,
2025, DC Estate Solutions and BAIF entered into the SPV SPA. DC Estate Solutions was initially owned and controlled 75% by the Company
and 25% by BAIF. The principal of BAIF is Jose Mora. DC Estate Solutions acquired the Spain Leases, which were previously assigned to
and held by BAIF, consisting of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba and Torrecampo.
The Spain Leases are held by wholly owned subsidiaries of DC Estate Solutions. The Spain Leases are for an average term of 35 years at
an initial total average cost of $96,000 per month for all sites. As a condition of each lease, the payments are subject to meeting certain
milestones, such as obtaining a favorable urban compatibility reports and connection points. Under the terms of the Spain Leases, the
Company will pay approximately $15,000 to the owners of the Cordoba site in 2026. No further payments are expected in 2026.
The Company and BAIF intend to use the Spain Leases
to develop and operate AI data center sites. The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the
closing of the SPV SPA. Pursuant to the JVA, the Company granted to BAIF, or its assignee, the First Mora Option to purchase up to 250,000,000
shares of the Company’s common stock at an exercise price of $0.02 per share. The Company intends to develop the sites as gas powered
fully autonomous energy islands for Tier 3 level uptime AI data centers. The total capacity to be developed across the 5 sites is anticipated
to be up to 1.8 Gigawatts. We believe that since the sites will be autonomous energy islands no grid connection is required and there
will be no material reliance on grid infrastructure. Thereby, subject to financing, reducing time to power for our data center clients
to 18 months. The total capacity of the sites is planned to be 360 MW per site. An application to connect to the local gas pipeline for
gas supply has already been made and approval has been received. The Company is negotiating a power purchase agreement with an energy
company to develop a 360MW gas turbine facility to convert gas fuel into electricity. In addition, the Company is in negotiation for a
90 MW gas Fuel cell power facility to be supplied under a power purchase agreement for each site. The Company will need to secure fibre
connections, environmental permits and all necessary contractor permits. The sites will then be classed at RTB as the Company intends
to sell the sites on a RTB basis. We estimate the Company will require $5 million of working capital to achieve full RTB status on all
5 sites. Additional capital is required to develop the sites and the further development of the data centers to RTB will require substantial
capital. There are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition,
there are no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately
developed and sold or become operational.
The Company’s goal is to utilize the assets
we have acquired via the purchase of BAIF sites to develop AI data center and energy infrastructure, 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 AI Data center customer base.
Recent Developments
Subsequent to December 31, 2025, and effective
January 22, 2026, the Company entered into the JVA by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates
the MOU and (ii) supplements the SPV SPA. Pursuant to the SPA, DC Estate Solutions acquired the equity interests of the five SPVs: (i)
DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL
300 MW and (v) DC Estate Torrecampo SL 300 MW. As a result of the acquisition of the SPVs, DC Estate Solutions also acquired the Spain
Leases.
Pursuant to the JVA, DC Estate Solutions shall
be owned and controlled 50.1% by the Company and 49.9% by BAIF. The purpose of the JVA is to manage and coordinate the development of
the Data Center sites on the properties governed by the Spain Leases. Substantially, all material decisions of the JVA and Joint Venture
Company shall require the unanimous consent of the Company and BAIF. Under the JVA, the Company agreed to fund DC Estate Solutions with
$3,500,000 USD as follows: (i) $250,000 USD, which was previously paid upon the execution of the MOU, (ii) $250,000 USD, which was previously
paid upon execution of the SPA, (iii) $375,000 USD paid on the effectiveness of a notarial public deed in Spain in connection with the
transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD payable in monthly installments of $125,000 USD commencing
on March 1, 2026. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee,
the First Mora Option to purchase up to 250,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share.
The First Mora Option is fully vested and exercisable upon the grant date and terminates on the earlier of (i) five years following the
date of the First Mora Option or (ii) the termination of the JVA.
Additionally, pursuant to the JVA, DC Estate Solutions’
equity interests in the SPVs are subject to the Company making minimum aggregate cash payments and contributions to DC Estate Solutions
(including amount payable under the SPV SPA) in the amount of $8,750,000 USD, which shall be distributed to BAIF. If the Company fails
to make such payments, BAIF may foreclose on the pro rata amount of equity interests in the SPVs. In the event of any sale or lease of
a Data Center, profits of DC Estate Solutions shall be shared equally by and between the Company and BAIF. In the event DC Estate Solutions
develops the Data Centers and sells such Data Centers, BAIF will be entitled to a bonus as defined under the JVA.
Further, effective January 27, 2026, the Company,
BAIF and DC Estate Solutions entered into the Addendum to the JVA to account for the development of additional data centers in (i) Villasequilla,
Spain 600 MW, (ii) Tomelloso, Spain 450 MW and (iii) Tocumen, Panama 1000 MW. The Villasequilla and Tomelloso data centers shall each
be owned by Spanish special purpose vehicles, DC Villasequilla SL and DC Tomelloso SL, respectively, and shall subsequently be assigned
to DC Estate Solutions. The Tocumen data center shall be owned by a Panamanian special purpose vehicle, DC Tocumen SA, which shall subsequently
be assigned to DC Estate Solutions. The Company, in addition to the already agreed upon $125,000 USD monthly payments, agreed to fund
the development of the additional Data Centers by paying a minimum of $2,400,000 USD payable in monthly installments of $100,000 USD monthly
payments to DC Estate Solutions commencing on May 1, 2026 for a minimum of 24 months, thereby increasing the minimum BAIF Funding amount
to a total of $11,150,000 USD. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF,
or its assignee, the Second Mora Option to acquire 150,000,000 shares of the Company’s common stock at an exercise price of $0.02
per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the earlier of (i) five years
following the date of the Second Mora Option or (ii) the termination of the JVA.
On March 23, 2026, the Company, BAIF and DC Estate
Solutions entered into the Second Addendum to the JVA. Pursuant to the Second Addendum, the parties agreed to: (1) increase the capacity
of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate of 400,000,000 shares of common
stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the Company’s restricted common
stock to BAIF or its assignees with the such shares being fully paid and non-assessable on the date of execution of the Second Addendum.
Business Strategy
Our business strategy is to generate revenue and
achieve profitability by building large-scale data center infrastructure configured for specialized computers performing specific, high-value
applications such as cloud computing, machine learning, and artificial intelligence and maximizing the use of assets acquired in the BAIF
acquisition. We intend to strategically develop and to work to make operational the infrastructure necessary to support our contractual
commitments to our AI data center infrastructure customers and to support expected customer growth and additional demand by leveraging
our data center expertise and capabilities. We intend to seek additional opportunities and to engage additional customers in the AI Data
center and Energy infrastructure market to expand our business using our knowledge, expertise, and existing and future infrastructure
where favorable market opportunities exist.
Our business strategy requires immediate funding
of approximately $5,000,000 to enable us to commence our new operations and repay debt, as well as additional significant financing to
develop and expand our new operations. There are no assurances that we will raise sufficient capital to execute our business plan or satisfy
our liabilities. See the “Risk Factors.”
12 Months Ended December 31, 2025 (“2025
Period”) Compared to the 12 Months Ended December 31, 2024 (“2024 Period”).
Results of operations
Our operating expenses for the 2025 Period were $37,271,945
compared to $1,408,528 for the 2024 Period. In the 2025 Period, the Company incurred stock-based compensation expense of $29,302,270 compared
to $0 for the 2024 Period and an impairment charge of $4,828,220 during the 2025 period.
Our other income for the 2025 Period was $12,642,654 compared to other
expense of $181,531 for the 2024 Period. Other income in the 2025 Period was comprised of $6,101,722 in interest expense and $148,053
for the loss on settlement of debt, offset by the $18,892,429 gain in the change in fair value of derivative liabilities. Other expense
in the 2024 period was comprised of $56,488 in interest expense and $1,795,664 for the loss on the change in fair value of derivative
liabilities offset by income of $425,000 on the refund of an equipment deposit and settlement of outstanding liabilities of $1,245,621.
Liquidity and Capital Resources
As of December 31, 2025, the Company had approximately
$250,000 of cash on hand. Historically, our liquidity was primarily derived from debt and equity investments from accredited investors.
During the year ended December 31, 2025, we received an initial payment of approximately $303,000 for colocation services to be provided
by the Company. In addition, during the year ended December 31, 2025, we sold 45,177,578 shares of restricted common stock to accredited
investors in consideration of $500,000. On April 7, 2025, we executed the Share Exchange with SAPL. On October 15, 2025, we entered into
a binding memorandum of understanding with BAIF to acquire 5 properties in Spain and we are now seeking to raise at least $5,000,000 to
commence our HPC hosting operations and develop our gas powered AI data centers and generate revenue. We require significant funding to
develop our HPC operations. Furthermore, potential legal proceedings relating to SAPL and its affiliates may cause us to incur significant
expenses or liability. Adverse outcomes in such proceedings or claims could result in significant liabilities which may materially affect
our financial condition, results of operations, or cash flows. We have received cash proceeds of $1,327,000 from the issuance of convertible
notes payable during 2025 and an additional $373,500 in 2026 through April 13, 2026. Subject to receiving funding, we expect that our
operating expenses will increase as we attempt to develop our new HPC operations and we will devote additional resources toward new business
opportunities. However, as set forth elsewhere in this report, our ability to develop our business and achieve our operational goals is
dependent upon our ability to raise significant additional working capital. As the availability of this capital is unlikely, at this time,
we are unable to quantify the expected increases in operating expenses in future periods.
Convertible Notes Payable
On August 15, 2025, the Company entered into
a securities purchase agreement with an accredited investor, pursuant to which the Company sold the accredited investor an
unsecured original issue discount promissory note in the principal amount of $81,600. The Company received net proceeds of $60,000
after original issue discount of $13,600 and legal fees of $8,000. The Promissory Note shall incur a one-time interest charge of
15%, which is added to the principal balance, has a maturity date of May 16, 2026. The note is convertible into common shares of the
Company upon an event of default, at a rate of 71% of the lowest price for the preceding 20 trading days.
On September 2, 2025, the Company entered into a securities
purchase agreement with ClearThink Capital Partners, LLC (“ClearThink”), pursuant to which the Company sold ClearThink a promissory
note in the principal amount of $172,500 for which the Company received net proceeds of $150,000 after original issue discount of $22,500.
The promissory note shall incur a one-time interest charge of 12%, which is added to the principal balance, has a maturity date of August
31, 2026. The note is convertible into common shares of the Company after 180 days, at a rate of $0.01, but in the event the trading price
is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive
days, the fixed price is eliminated and re-adjusted every 21 days.
On September 9, 2025, the Company entered into
a securities purchase agreement with an accredited investor, pursuant to which the Company sold the accredited investor an unsecured original
issue discount promissory note in the principal amount of $81,600 for which the Company received net proceeds of $60,000 after original
issue discount of $13,600 and legal fees of $8,000. The note is convertible into common shares of the Company upon an event of default,
at a rate of 71% of the lowest price for the preceding 20 trading days.
On September 15, 2025, the Company entered into
a securities purchase agreement with an accredited investor, pursuant to which the Company sold an accredited investor an unsecured original
issue discount promissory note in the principal amount of $287,500 for which the Company received net proceeds of $244,000 after original
issue discount of $37,500 and legal fees of $6,000. The Promissory Note shall incur a one-time interest charge of 10%, which is added
to the principal balance, and has a maturity date of September 15, 2026. In connection with the agreement, the Company issued to the accredited
investor 8,500,000 shares of common stock as inducement shares with relative fair value of $174,517 which was recorded as a discount on
the note. The note is convertible into common shares of the Company, at the lower of $0.01 or 65% of the lowest price for the preceding
10 trading days.
On September 18, 2025, the Company entered into a
securities purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured original issue discount promissory
note in the principal amount of $115,000 for which the Company received net proceeds of $94,000 after original issue discount of
$15,000 and legal fees of $6,000. The promissory note shall incur a one-time interest charge of 10%, which is added to the principal
balance, and has a maturity date of September 18, 2026. In connection with the agreement, the Company issued to the accredited investor
3,400,000 shares of common stock as commitment shares with a relative fair value of $59,826 which was recorded as a discount on the note.
The proceeds from the sale of the unsecured original issue discount promissory note shall be used for working capital. The Company
paid $6,000 to the accredited investor and its counsel for legal fees. The note is convertible into common shares of the Company, at a
rate of $0.01 and if after 180 days, the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075;
if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On September 23, 2025, the Company entered into a
security purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured original issue discount promissory
note in the principal amount of $143,750 for which the Company received net proceeds of $119,000 after original issue discount of
$18,750 and legal fees of $6,000. The promissory note shall incur a one-time interest charge of 10%, which is added to the principal
balance, and has a maturity date of September 23, 2026. In connection with the agreement, the Company issued to the accredited investor
4,250,000 shares of common stock as inducement shares with a relative fair value of $71,400 which was recorded as a discount on the note. The
note is convertible into common shares of the Company, at the lower of $0.01 or 65% of the lowest price for the preceding 10 trading days.
On September 23, 2025, the Company entered into a
series of securities purchase agreements with accredited investors. Pursuant to the first securities purchase agreement on September 23,
the Company sold an unsecured original issue discount promissory note in the principal amount of $143,750 for which the Company received
net proceeds of $119,000 after original issue discount of $18,750 and legal fees of $6,000. In connection with the agreement, the Company
issued to the accredited investor 4,250,000 shares of common stock as inducement shares with a relative fair value of $71,400 which was
recorded as a discount on the note. The proceeds from the sale of the unsecured original issue discount promissory note shall be used
for working capital. The note is convertible into common shares of the Company, at a rate of $0.01 and if after 180 days, the trading
price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for
5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
Effective October 3, 2025, the Company entered into a securities purchase
agreement dated September 30, 2025 with an accredited investor, pursuant to which the Company sold an unsecured original issue discount
promissory note in the principal amount of $287,500. The Company received net proceeds of $250,000 in consideration of issuance of the
unsecured original discount promissory note and the proceeds from the sale shall be used for working capital. The promissory note shall
incur a one-time interest charge of 12%, which is added to the principal balance and matures on August 31, 2026. Pursuant to the securities
purchase agreement, as consideration for the purchase of the unsecured original issue discount promissory note, the Company issued 17,000,000
shares of the Company’s common stock to the accredited investor with a relative fair value of $178,620 which was recorded as a discount
on the note. The note is convertible into common shares of the Company after 180 days, at a rate of $0.01, but in the event the trading
price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075; if the trading price falls below $0.0075 for
5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On October 8, 2025, the Company issued a
convertible promissory note to an accredited investor for $20,000 to settle outstanding amounts owed to the investor. The note has a maturity
date of October 8, 2026 and bears interest at a rate of 10%. The note is convertible into common shares of the Company after 180 days,
at a rate of 85% of the lowest closing bid price for the five trading days preceding the conversion date.
On October 9, 2025, the Company sold ClearThink
a second promissory note in the principal amount of $115,000 (the “Second ClearThink Note”). The Company received net proceeds
of $100,000 after original discount of $15,000. The Second ClearThink Note shall incur a one-time interest charge of 12%, which is added
to the principal balance and matures on August 31, 2026. The note is convertible into common shares of the Company after 180 days,
at a rate of $0.01, but in the event the trading price is below $0.01 for 5 consecutive trading days the conversion price resets to $0.0075;
if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every 21 days.
On November 26, 2025, the Company entered into
a securities purchase agreement with an accredited investor dated November 18, 2025. Pursuant to the securities purchase agreement, the
Company sold to the accredited investor a convertible promissory note in the principal amount of $143,750 for which the Company received
net proceeds of $125,000. The proceeds from the sale shall be used for working capital. Pursuant to the securities purchase agreement,
the Company issued to the accredited investor 1,250,000 shares of the Company’s common stock as commitment shares. The note carries
a one-time interest charge of 12%, which was applied to the principal on the issuance date, and matures on November 20, 2026. The note
is convertible into common stock of the Company 180 days after the date of issuance or at any time following an event of default at a
conversion price of $0.01 per share. In the event the trading price is below $0.01 for 5 consecutive trading days, the conversion price
resets to $0.0075; if the trading price falls below $0.0075 for 5 consecutive days, the fixed price is eliminated and re-adjusted every
21 days.
Subsequent to December 31, 2025, on January 12,
2026, the Company entered into a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement,
the Company sold the investor an original issue discount promissory note in the principal amount of $81,250 for which the Company received
net proceeds of $75,000. The promissory note carries an interest of 12% per annum and has maturity date of January 12, 2027. The promissory
note is convertible into shares of the Company’s common stock 180 days after issuance at a price equal to 70% of the lowest traded
price of the Company’s common stock on its principal trading market during the 20 trading days preceding the date of conversion.
On January 27, 2026, the Company entered into a securities
purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the Investor an unsecured
original issue discount promissory note in the principal amount of $86,250 for which the Company received net proceeds of $75,000. Further,
as consideration for the purchase of the promissory note, the Company also issued 1,050,000 shares of the Company’s common stock
to the investor as commitment shares. The promissory note carries a one-time interest charge of 10%, payable on the maturity date of January
27, 2027 or upon acceleration or prepayment of the promissory note. The promissory note is convertible into common stock of the Company
at any time after the date of issuance at a conversion price equal to 70% of the lowest closing price of the Company’s common stock
on its principal trading market during the 10 trading days preceding the date of conversion.
On February 24, 2026, the Company entered into
a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor
a convertible promissory note in the principal amount of $150,000 for which the Company received net proceeds of $130,000. The promissory
note carries an interest rate of 6% per annum and has a maturity date of February 24, 2027. The Promissory Note is convertible into shares
of the Company’s common stock after the sixth month anniversary of the date of issuance at a conversion price equal to 60% of the
lowest trading price of the Company’s common stock as reported on the OTC Markets (or the securities exchange on which the common
stock is then-listed) for the 15 trading days preceding the date of conversion.
On March 5, 2026, the Company entered into a securities
purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor a convertible
promissory note in the principal amount of $120,000 for which the Company received net proceeds of $92,000. The promissory note carries
a one time interest charge of 15% and has a maturity date of December 15, 2026. The Promissory Note is convertible into shares of the
Company’s common stock at any time following an event of default at a conversion price equal to 61% of the lowest closing price
of the Company’s common stock on its principal trading market during the 20 trading days preceding the date of conversion.
On September 4, 2025, the Company also entered
into a Securities Purchase Agreement (the “ELOC Agreement”) with the Investor. Pursuant to the ELOC Agreement, the Company
agreed to sell, and the Investor agreed to purchase up to $50,000,000 (the “Commitment Amount”) of the Company’s common
stock, par value $0.001 per share (the “Purchase Shares”). Subsequent to December 31, 2025, and through the date of this filing,
we have received approximately $632,125 in cash proceeds related to the sale of 55,397,351 shares of common stock under this agreement
and expect to continue to utilize it to fund current operational needs.
We cannot assure you, however, that any additional
capital will be available to us on favorable terms or at all. Our capital expenditures could be curtailed if our cash flows decline from
expected levels.
Summary of cash flows
Net cash provided by (used in) operating activities $ (825,713 ) $ 17,680
Net cash provided by (used in) investing activities $ (744,743 ) $ (4,600 )
Net cash provided by (used in) financing activities $ 1,818,720 $ (13,275 )
Critical accounting policies
See Note 2 to the December 31, 2025 financial
statements included as part of this report for a discussion of our Significant Accounting Policies.
Recent Accounting Pronouncements
The Company does not believe that any recently
issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying
financial statements.
Off Balance Sheet Arrangements
As of the date of this report, we do not have
any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material
to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement
to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative
instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that
serves as credit, liquidity or market risk support for such assets.
Risk Factors
Summary Risk Factors
Any investment in our securities involves a high
degree of risk. Investors should carefully consider the risks described below and all of the information contained in this filing before
deciding whether to purchase our securities. Our business, financial condition, and results of operations could be materially adversely
affected by these risks if any of them actually occur. This filing also contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including the risks we face as described below and elsewhere in this report.
Risks Relating to Our Business Operations
· Our business depends upon the demand for data centers.
Risks Related to Our Limited Operating History
and Transition
Risks Related to Operating in Spain and Europe
Risks of Regulatory Laws, Regulatory Frameworks,
and Legal Action
Risks Related to our Financial Position and
Capital Needs
· Our auditors have issued a “going concern” audit opinion.
Risks Related to Ownership of Our Common Stock
· Our common stock is subject to “penny stock” rules.
· We are a former shell company.
There are numerous and varied risks, known and
unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition, or results
of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could
lose all or part of their investment.
Risks Related to Our Business and Operations
We have not adopted a cybersecurity risk management
program or formal processes for assessing cybersecurity risk, which may increase our exposure to cybersecurity incidents.
We have not adopted a cybersecurity risk management
program or formal processes for assessing cybersecurity risks designed to protect our information technology systems, networks, data and
infrastructure. As a result, the confidentiality, availability and integrity of our systems and data, including information relating to
our customers and business partners, may be more vulnerable to unauthorized access, data breaches, ransomware attacks or other cybersecurity
incidents. Any such compromise of our information technology systems could disrupt our business operations, damage our reputation, result
in the loss or unauthorized disclosure of confidential or proprietary information and subject us to claims, liabilities and costs which
could have a material adverse effect on our business.
Additionally, we may incur significant expenses
to comply with data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations which
could further materially adversely affect our financial condition and results of operations.
We require significant capital to fund our
operations and we may have difficulty raising capital, which could deprive us of necessary revenues.
The Company and BAIF entered into the MOU for
the purposes of organizing DC Estate Solutions which was organized by the Company on October 23, 2025. On November 6, 2025, DC Estate
Solutions and BAIF entered into the SPV SPA. DC Estate Solutions is owned and controlled 50.1% by the Company and 49.9% by BAIF. The principal
of BAIF is Jose Mora. DC Estate Solutions acquired seven Spain Leases, which were previously assigned to and held by BAIF, consisting
of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba, Torrecampo, Villasequilla and Tomelloso
and one lease located Tocumen, Panama.
The Company paid BAIF $250,000 upon execution of the
MOU and an additional $250,000 on the closing of the SPV SPA and has agreed to fund the data center development with a minimum amount
of $11,150,000. The development will require additional significant working capital to achieve full RTB status on all eight sites. Additional
capital is required to develop the sites and the further development of the data centers to RTB will require substantial capital. There
are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are
no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately developed
and sold or become operational.
Our business depends upon the demand for data
centers.
We are venturing into the business of owning,
acquiring, developing, and operating data centers. A reduction in the demand for data center space, power or connectivity would have a
greater adverse effect on our business and financial condition than if we owned a portfolio with a less specialized use. Our substantial
development activities make us particularly susceptible to general economic slowdowns as well as adverse developments in the data center,
Internet and data communications and broader technology industries. Any such slowdown or adverse development could lead to reduced corporate
IT spending, reduced demand for HPC hosting applications, such as cloud computing, machine learning, and AI, and overall reduced demand
for data center space. Changes in industry practice or in technology could also reduce demand for the physical data center space we provide.
In addition, our customers may choose to develop
new data centers or expand their own existing data centers or consolidate into data centers that we do not own or operate, which could
reduce demand for our newly developed data centers or result in the loss of one or more key customers. If any of our key customers were
to do so, it could result in a loss of business to us or put pressure on our pricing. Mergers or consolidations of technology companies
could reduce further the number of our customers and potential customers and make us more dependent on a more limited number of customers.
If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our
data centers in the future. Our financial condition, results of operations, cash flow, cash available for distribution, and ability to
satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.
Our new focus on AI data center development
may not be successful and depends on the continuing development and resource and computational requirements of HPC hosting applications
such as cloud computing, machine learning and AI, and the continuing need for the infrastructure and services we provide.
We currently have no customers. If our target
customer markets, which are new and still developing, do not grow or develop as expected or in a manner consistent with our current business
model, our business, financial condition, and results of operation would be adversely affected. Further, increases in power costs could
negatively impact our hosting customers’ demand for services, harm our growth prospects, and could have a material adverse effect
on our business, financial condition, and results of operations.
Our success also depends in large part on our
ability to attract additional customers and retain our existing customer for our HPC hosting capabilities in a profitable manner, which
we may not be able to do if:
· we are unable to strengthen awareness of our brand; or
We face significant competition, which may
adversely affect the occupancy and rental rates of our data centers.
We will compete with numerous data center providers
globally, many of whom own or operate properties similar to ours, as well as private operators specializing in HPC hosting or colocation
services, and digital asset miners seeking to convert existing mining facilities into HPC colocation facilities. In addition, we may in
the future face competition from new entrants into the data center market, including new entrants who may acquire our current competitors.
Some of our competitors and potential competitors have significant advantages over us, including greater name recognition, longer operating
histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing, and other resources
and more ready access to capital which allow them to respond more quickly to new or changing opportunities.
If our competitors offer space that our customers
or potential customers perceive to be superior to ours based on factors such as available power, security, location, or connectivity,
or if they offer rental rates below current market rates, or below the rental rates we are offering, we may lose customers or potential
customers or be required to incur costs to improve our data centers or reduce our rental rates. In addition, many of our competitors have
developed and continue to develop additional data center space. If the supply of data center space continues to increase as a result of
these activities or otherwise, rental rates may be reduced or we may face delays in leasing or be unable to lease our vacant space, including
space that we develop. Further, if customers or potential customers desire services that we do not offer, we may not be able to lease
our space to those customers. Our financial condition, results of operations, cash flow, cash available for distribution, and ability
to satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.
We have limited resources which may affect
our abilities to develop our Blackberry AIF S.L. operations.
With the limited resources we have available, we may
experience difficulties in developing our BAIF operations, including, but not limited to, our colocation data center, services, and colocation
to commence generating revenues and compete in the HPC hosting industry. Competition from existing and future competitors, particularly
those better capitalized, could result in our inability to secure acquisitions and partnerships that we may need to expand our business
in the future. This competition from other entities with greater resources, experience, and reputations may result in our failure to maintain
or expand our business, as we may never be able to successfully execute our business plan. If we are unable to develop, expand, and remain
competitive, our business could be negatively affected, which would have an adverse effect on the trading price of our common stock, which
would harm our investors.
We have no operating history, require significant
capital to develop our business, expect negative cash flows from our operations to continue for the foreseeable future, and we expect
that our net losses will continue for the foreseeable future as we seek to develop and increase the efficiency of our operations and find
new colocation customers.
Any failure of our physical or IT or operational
technology infrastructure or services could lead to significant costs and disruptions.
Our business depends on providing customers with
highly reliable services, including, but not limited to, power supply, physical security, cybersecurity, maintenance of environmental
conditions, and other mission-critical infrastructure services. We may fail to provide such services because our operations are vulnerable
to, among other things, mechanical or telecommunications failure, power outage, human error, physical or electronic security breaches,
cyberattacks, war, terrorism, fire, earthquake, pandemics, hurricane, flood and other natural disasters, sabotage, and vandalism.
Our future customer agreements will include terms
requiring us to meet certain service level commitments. A failure to meet these or other commitments or equipment damage in our data centers
could subject us to contractual liability, including service level credits against customer rent payments, legal liability and monetary
damages, regulatory sanctions, or, in certain cases of repeated failures, the right by the customer to terminate the agreement. Service
interruptions, equipment failures, or security breaches could also materially impact our brand and reputation globally and lead to customer
contract terminations or non-renewals and an inability to attract customers in the future.
We and our third-party providers are vulnerable
to cyberattacks and security breaches that could materially disrupt or compromise our operations, data, and results.
We will rely on computer systems, hardware, software,
online sites and networks, as well as physical, digital, and operational technology infrastructure to support our internal and external
operations (collectively, “Information Systems”). We will own, operate, and manage complex, global information systems and
also rely on third-party providers for a range of information systems and other products and services, such as cloud computing. As a result,
we face evolving risks that threaten the confidentiality, integrity, and availability of information systems and data, including from
state-sponsored espionage actors, financially motivated hackers, hacktivists and insiders, as well as through diverse attack vectors,
such as social engineering/phishing, malware (including ransomware), human or technological error, or due to “bugs,” misconfigurations
and known and unknown vulnerabilities in hardware, software, systems and processes that support our business.
Unauthorized access to our or our customers’
physical assets or information systems, misappropriation of our or our customers’ sensitive or proprietary information, or disruptions
to our or our customers’ operations as a result of attacks, breaches or disruptions to our, or any providers’ or our customers’,
information systems or controls could lead to material breaches of legal and regulatory (e.g., privacy laws such as GDPR) or contractual
obligations, and/or other operational and business impacts. The foregoing could expose us to material lawsuits, regulatory actions, penalties
or fines, monetary damages, loss of existing or potential customers, harm to our reputation, and significant increases in our security
and insurance costs, and other adverse effects on our business and results.
Our contracts with our customers could subject
us to significant liability.
In the ordinary course of business, we will enter
into agreements with our customers pursuant to which we provide data center space, power, environmental controls, physical security and
connectivity products to our customers. These contracts typically contain indemnification and liability provisions, in addition to service
level commitments, which could potentially impose a significant cost on us in the event of losses arising out of certain breaches of such
agreements, services to be provided by us or our subcontractors, or from third-party claims. Customers increasingly are looking to pass
through their regulatory obligations and other liabilities to their outsourced data center providers and we may not be able to limit our
liability or damages in an event of loss suffered by such customers whether as a result of our breach of an agreement or otherwise. Further,
liabilities and standards for damages and enforcement actions, including the regulatory framework applicable to different types of losses,
vary by jurisdiction, and we may be subject to greater liability for certain losses in certain jurisdictions.
In the future, we may also develop space specifically
for HPC data center customers pursuant to agreements signed prior to beginning or early in the development process. In those cases, if
we fail to meet our development obligations under those agreements, these customers may be able to terminate their agreements, and we
would be required to find a new customer for this space. In addition, in certain circumstances we may lease HPC data center facilities
prior to their completion. If we fail to complete the facilities in a timely manner, the customer may be entitled to terminate its agreement,
seek damages or penalties against us or pursue other remedies and we may be required to find a new customer for the space. If we are not
able to complete an HPC data center in a timely manner, if development costs are higher than we currently estimate, our financial condition,
results of operations, and cash flow could be materially adversely affected.
We may depend on significant customers for
our HPC data centers.
Many factors, including global economic conditions,
may cause our future HPC data center customers to experience a downturn in their businesses or otherwise experience a lack of liquidity,
which may weaken their financial condition and impact our estimates as to the probability of collectability of payments, and ultimately
result in their failure to make timely rental and other payments or their default under their agreements with us. Further, the development
of new technologies, the adoption of new industry standards or other factors could render our HPC data center customers’ current
products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that
they default under their leases, become insolvent, or file for bankruptcy. If a customer defaults or fails to make timely rent or other
payments, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment, which
could adversely affect our financial condition and results of operations.
We will continue to depend upon third-party
suppliers for power, and we may be vulnerable to service failures and price increases by such suppliers and to volatility in the supply
and price of power in the open market.
In the event we develop data centers, we will
continue to rely on third parties to provide power to our data centers and we cannot ensure that these third parties will deliver such
power in adequate quantities or on a consistent basis. We will also be reliant on third parties to deliver additional power capacity to
support the growth of our business. If the amount of power available to us is inadequate to support our customer requirements, we may
be unable to satisfy our obligations to our customers or grow our business. In addition, our data centers may be susceptible to power
shortages and planned or unplanned power outages caused by these shortages. Power outages may last beyond our backup and alternative power
arrangements, which would harm our customers and our business. Any loss of services or equipment damage could adversely affect both our
ability to generate revenues and our operating results, harm our reputation, and potentially lead to customer disputes or litigation.
In addition, we may be subject to risks and unanticipated
costs associated with obtaining power from various utility companies. Utilities that serve our data centers may be dependent on, and sensitive
to price increases for, a particular type of fuel, such as natural gas, coal, or nuclear. In addition, the price of these fuels and the
total cost of delivered electricity could increase as a result of: regulations intended to regulate carbon emissions and other pollutants,
ratepayer surcharges related to recovering the cost of extreme weather events and natural disasters, geopolitical conflicts, military
conflicts, grid modernization charges, as well as other charges borne by ratepayers. Increases in the cost of power at any of our planned
data centers could put those locations at a competitive disadvantage relative to data centers that are supplied power at a lower price.
If we do not accurately predict our facility
requirements, it could have a material adverse effect on our business, financial condition, and results of operations.
The costs of building out, leasing, and maintaining
our facilities will constitute a significant portion of our capital and operating expenses. In order to develop, manage potential growth,
and ensure adequate capacity for any new and existing HPC hosting customers while minimizing unnecessary excess capacity costs, we will
continuously evaluate our short- and long-term data center capacity requirements. If we overestimate our business’s capacity requirements
or the demand for our services and therefore secure excess data center capacity, our operating margins could be materially reduced. If
we underestimate our data center capacity requirements, we may not be able to service the required or expanding needs of our existing
customers and may be required to limit new customer acquisition, which could have a material adverse effect on our business, financial
condition, and results of operations.
We will continue to depend on third parties
to provide network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely
affect our operating results and cash flow.
We are not a telecommunications carrier. Although
we anticipate our customers generally will be responsible for providing their own network connectivity, we will still depend upon the
presence of telecommunications carriers’ fiber networks serving our data centers in order to attract and retain customers. We believe
that the availability of carrier capacity will directly affect our ability to achieve our projected results. Any carrier may elect not
to offer its services within our data centers. Any carrier that decides to provide network connectivity to our data centers may not continue
to do so for any period of time. Further, some carriers are experiencing business difficulties or have announced consolidations. As a
result, some carriers may be forced to downsize or eventually terminate connectivity within our data centers, which could have an adverse
effect on the business of our customers and, in turn, our own development and operating results.
Our data centers may require construction and
operation of a sophisticated redundant fiber network. The construction required to connect multiple carrier facilities to data centers
is complex and involves factors outside of our control, including regulatory requirements and the availability of construction resources.
We have obtained the right to use network resources owned by other companies, including rights to use dark fiber, in order to attract
telecommunications carriers and customers to our portfolio. If the establishment of highly diverse network connectivity to our data centers
does not occur, is materially delayed or is discontinued, or is subject to failure, our operating results and cash flow may be materially
adversely affected. Additionally, any hardware or fiber failures on this network may result in significant loss of connectivity to our
data centers. This could negatively affect our ability to attract or retain customers, which could have an adverse effect on our business,
financial condition, and results of operations.
Many of our costs, such as operating, general
and administrative expenses, interest expenses, and real estate acquisition and construction costs, could be adversely impacted by periods
of heightened inflation.
The consumer price index has increased substantially
year over year. Federal policies and global events such as the conflict between Russia and Ukraine, may have exacerbated, and may continue
to exacerbate, inflation and increases in the consumer price index. A sustained or further increase in inflation could have an adverse
impact on our operating expenses incurred in connection with, among others, the property-related contracted services such as repairs,
maintenance, utilities, security, and insurance. With regard to utilities expenses, which we anticipate to be our largest expense category,
the vast majority of the expense will be passed directly through to our customers which significantly mitigates our exposure to increases
in power costs. For our other operating expenses, we expect to recover some increases from our customers through our planned lease structures,