Notes to the Consolidated Financial Statements
March 31, 2023
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited interim financial statements
of Edgemode, Inc. (“we”, “our”, “Edgemode” or the “Company”) have been prepared in accordance
with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission
(“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s
Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected
herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year.
Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for
fiscal 2022, as reported in the Form 10-K of the Company, have been omitted.
On March 20, 2020, shareholders owning a majority
of the Company's outstanding shares of common stock amended the Company's Articles of Incorporation to change the name of the Company
from Pierre Corp. to Fourth Wave Energy, Inc.
Effective January 31, 2022 (the “Effective
Time”), the Company, FWAV Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the Company (the “Acquisition
Subsidiary”) and EdgeMode, a Wyoming corporation (“EdgeMode”) closed on the previously disclosed Agreement and Plan
of Merger and Reorganization dated December 2, 2021 (the “Merger Agreement”). In accordance with the Merger Agreement, Acquisition
Subsidiary merged with and into EdgeMode (the “Merger” or “Transaction”), with EdgeMode remaining as the surviving
entity after the Merger and becoming a wholly owned subsidiary of the Company. In the Merger, the shares of common stock, no par value
per share, of EdgeMode issued and outstanding immediately prior to the Effective Time, represent 80% of the Company’s outstanding
common stock on a fully diluted basis (or 313,950,672 shares of common stock). Furthermore, pursuant to the terms of the Merger the Company’s
sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock.
Joseph Isaacs, the Company’s sole officer
and director resigned as an executive officer and director. Pursuant to the terms of the Merger Mr. Isaacs will provide services to the
Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095
shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40 per share. The consulting agreement may
be terminated by the Company without cause after three months. In addition, Mr. Isaacs received a $250,000 cash bonus and the Company
entered into a contract with a company owed by Joe Isaacs to perform services for total value of $240,000. Charlie Faulkner and Simon
Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers.
Simultaneously with the Merger, approximately
$4,574,132 of principal and interest of outstanding notes previously issued by the Company automatically converted into an aggregate of
18,296,528 shares of the Company’s common stock issued to 31 former noteholders. In addition, the Company has repaid approximately
$988,000 of principal amount of notes. At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of
EdgeMode.
The merger was accounted for as a reverse merger,
whereby EdgeMode was considered the accounting acquirer and became our wholly-owned subsidiary. In accordance with the accounting treatment
for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced
with the historical financial statements of EdgeMode prior to the reverse merger. The financial statements after completion of the reverse
merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse
merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements.
On June 3, 2022 the Company changed its name from
Fourth Wave Energy Inc. to Edgemode, Inc.
NOTE 2 – Summary of significant Accounting
Policies
Use of Estimates
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that
affect the amounts reported in the financial statements and footnotes thereto. Actual results could materially differ from these estimates.
It is reasonably possible that changes in estimates will occur in the near term.
Principals of consolidation
The accompanying consolidated financial statements
include the accounts of Edgemode, Inc., the accounts of its 100% owned subsidiaries, EdgeMode and Edgemode Mine Co UK Limited. All intercompany
transactions and balances have been eliminated in consolidation.
Fair Value Measurements
Generally accepted accounting principles define
fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market
participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs
used to measure fair value using the following definitions (from highest to lowest priority):
| |
· |
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| |
· |
Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
| |
· |
Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. |
The Company has no assets or liabilities valued
using level 1, level 2, or level 3 inputs as of March 31, 2023.
Revenue Recognition
We recognize revenue in accordance with ASC 606,
Revenue from Contracts with Customers. This standard provides a single comprehensive model to be used in the accounting for revenue arising
from contracts with customers and supersedes current revenue recognition guidance, including industry-specific guidance. The standard’s
stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve
this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying
the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations,
and recognizing revenue when, or as, an entity satisfies a performance obligation.
The Company has entered into digital asset mining
pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool.
The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the
Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a
fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining
pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The terms of
the agreement provides that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s
fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing
power contributed by all mining pool participants in solving the current algorithm.
Providing computing power in digital asset transaction
verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the
only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives,
if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than
the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because
it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining
pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration
it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.
Fair value of the cryptocurrency award received
is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance
under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has
exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by
the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial
position and results from operations.
Stock-Based Compensation
The Company accounts for equity instruments issued
to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant
to ASC 2018-07 (ASC 2018-07). All transactions in which the consideration provided in exchange for the purchase of goods or services consists
of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued
is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance
by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.
The Company accounts for equity-based transactions
with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No.
505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value
of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.
Deferred Offering Costs
The Company has capitalized qualified direct costs
related to its efforts to raise capital through a sale of its common stock in a private offering. Deferred offering costs will be deferred
until the completion of the private offering, at which time they will be reclassified to additional paid-in capital as a reduction of
the offering proceeds. If the Company terminates the planned offering or there is a significant delay, all of the deferred offering costs
will be immediately written off to operating expenses. As of March 31, 2023, $264,706 of deferred offering costs were capitalized.
Long-Lived Assets – Cryptocurrencies
We account for our cryptocurrencies, intangible
assets and long-term license agreement in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for
the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration
given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable.
Our cryptocurrencies are deemed to have an indefinite useful life; therefore amounts are not amortized, but rather are assessed for impairment
as further discussed in our impairment policy. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized
over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision
to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset
is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible
assets are recognized as an expense when incurred.
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.
Note 3 - Going Concern
These financial statements have been prepared
in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able
to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying
values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification
of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2023, the Company had not yet achieved
profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about
the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon
its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers
that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance
of additional funding being available.
NOTE 4 – Related Party Transactions
The Company’s former CEO, Mr. Isaacs,
agreed to provide services to the Company in a consultancy capacity at a fee of $11,500 per month and was issued a stock option
grant to purchase up to 19,987,095
shares of the Company’s common stock, vesting in 90 days, at an exercise price of $0.40
per share. The consulting agreement may be terminated by the Company without cause after three months. As of March 31, 2023, the
Company has accrued $80,500
for services performed from Mr. Isaacs. Subsequent to March 31, 2023, the Company and Mr. Isaacs, entered into a settlement and
release agreement whereby Mr. Isaacs agreed to a reduction in the compensation to a total of $55,000,
subject to the Company making payments on or before May 14, 2023 and June 14, 2023.
On January 25, 2023, the Company amended stock
option grants dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial
Officer of the Company, respectively. The amendment reduces the exercise price of the options from $0.40 per share to $0.06 per share.
On March 3, 2023, the board of directors of
the Company granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the
Company, respectively, options to purchase up to 77,000,000
shares of the Company’s common stock at an exercise price of $0.04
per share, exercisable for 5 five years (the “Stock Options”). The Stock Options shall each be a non-qualified option
and shall become vested and exercisable upon the Company closing on the purchase of at least $15 million of crypto mining
equipment.
On March 3, 2023, the Company amended stock option
grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer
of the Company, respectively. The amendment provides for the vesting to be only upon the closing of the purchase of at least $15 million
of crypto mining equipment, rather than conditioned on an uplisting. its shares on the NASDAQ Global Market, New York Stock Exchange,
or another equivalent market.
As of March 31, 2023 the Company owed the executive
officers of the Company $357,199 in accrued payroll for services performed.
NOTE 5 - Prepaid Hosting Services
Prepaid hosting services are amounts paid to
secure the use of data hosting services at a future date or continuously over one or more future periods. When the prepaid hosting
services are eventually consumed, they are charged to expense. As of December 31, 2022, the Company had prepaid a total of $1,586,297.
In January 2023, the Company was notified of the Chapter 11 bankruptcy filing of the hosting company and in January 2023 the Company
received $894,355
in return of the initial deposit and the remainder of the deposit is subject to bankruptcy claims. As a result, the Company impaired
$691,942,
the remaining amount of the claim, as of December 31, 2022, due to the uncertainty of collectability through the bankruptcy claim. As of March 31, 2023, the Company has $0 of amounts recorded related to the remaining claims due to the uncertainty
of collectability.
NOTE 6 – Equity
Preferred shares
We are authorized to issue 4,999,000 shares of
preferred stock. Shares of preferred stock may be issued from time to time in one or more series as may be determined by our Board. The
voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions of each series
will be established by the Board. Our directors may issue preferred stock with multiple votes per share and dividend rights which would
have priority over any dividends paid with respect to the holders of our common stock. In connection with the Transaction, the only outstanding
preferred stock was converted into common stock. As of the date of this report, there are no outstanding shares of preferred stock.
Series B
On July 19, 2022, the Company designated 1,000,000
shares of its original 5,000,000 authorized shares of Preferred Stock as Series B Preferred Stock (“Series B”) with a $0.001
par value and a stated value of $1.00 per share. The Series B Convertible Preferred Stock ranks senior to the common stock with respect
to dividends and right of liquidation and has no voting rights. The Series B Convertible Preferred Stock has a 8% cumulative annual
dividend. In the event of default, the dividend rate increases to 22%. The Company may not, with consent of a majority of the holders
of Series B Convertible Preferred Stock, alter or changes the rights of the Series B Convertible Preferred Stock, amend the articles of
incorporation, create any other class of stock ranking senior to the Series B Convertible Preferred Stock, increase the authorized shares
of Series B Convertible Preferred Stock, or liquidate or dissolve the Company. Beginning 180 days from issuance, the Series B Convertible
Preferred Stock may be converted into common stock at a price based on 65% of the average of the two lowest trading prices during the
15 days prior to conversion. The Company may redeem the Series B Convertible Preferred Stock during the first 180 days from issuance,
subject to early redemption penalties of up to 25%. The Series B Convertible Preferred Stock must be redeemed by the Company 12 months
following issuance if not previously redeemed or converted. Based on the terms of the Series B Convertible Preferred Stock, the Company
determined that the preferred stock is mandatorily redeemable and will be accounted for as a liability under ASC 480.
During the year ended December 31, 2022, the Company
entered into purchase agreements for the sale of 212,500 shares of Series B Convertible Preferred Stock with 1800 Diagonal Lending, LLC,
with $11,250 of proceeds being kept by the lender for legal fees, resulting in cash proceeds of $201,250.
On January 25, 2023, the Company redeemed the
Preferred B shares and paid to the holder a total of $270,549 which included the stated value of $212,500, $6,190 in accrued dividends
and the early redemption premium of $51,859.
Common shares
The Company has authorized 950,000,000 shares
of common stock, par value of $0.001, and as of March 31, 2023 has issued 390,687,459 shares of common stock. All of the common shares
have the same voting rights and liquidation preferences.
On March 30, 2023, the Company entered into a settlement agreement
with a previous note holder for settlement of outstanding claims of a note payable that had been paid in full previously. Per the terms of the settlement agreement, the
Company issued 250,000 shares of common stock, and as a result the Company recorded a loss on settlement of $9,975
Stock Options
During the three months ended March 31,
2023, the Company granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer
of the Company, respectively, options to purchase up to 77,000,000
shares of the Company’s common stock at an exercise price of $0.04
per share, exercisable for 5
five years (the “Stock Options”). The Stock Options shall each be a non-qualified option and shall become vested and
exercisable upon the Company closing on the purchase of at least $15
million of crypto mining equipment. The Company used the black-scholes option pricing model to value the options and determined a
fair value of $4,814,035. As of March 31, 2023, the Company had not met the contingent vesting requirements, and as such no amounts have
been expensed related to these options.
On January 25, 2023, the Company amended stock
option grants dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial
Officer of the Company, respectively. The amendment reduces the exercise price of the options from $0.40 per share to $0.06 per share.
As a result of the amendment, the Company recorded an additional $1,236,487 of stock-based compensation expense based on the incremental
fair value resulting from the change in exercise price.
On March 3, 2023, the Company amended stock option
grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer
of the Company, respectively. The amendment provides for the vesting to be only upon the closing of the purchase of at least $15 million
of crypto mining equipment, rather than conditioned on an uplisting. its shares on the NASDAQ Global Market, New York Stock Exchange,
or another equivalent market. No additional expense incurred as a result of the amendment as it was determined there was no change to
any of the inputs in the black-scholes option pricing model.
As of March 31, 2023, the Company has $22,529,707
of value remaining to be expensed based upon completions of milestones, of which $21,679,711 is contingently subject to expense recognition
based on the timing of when the Company is able to close on a purchase of at least $15 million of crypto mining equipment as describe
above, and $0 of remaining amortization to expensed pursuant to the vesting terms.
The following table summarizes the stock option
activity for the three months ended March 31, 2023:
| Schedule of option activity | |
| | |
| |
| | |
Options | | |
Weighted-Average Exercise Price Per Share | |
| | |
| | |
| |
| Outstanding, December 31, 2022 | |
| 239,284,669 | | |
$ | 0.12 | |
| Granted | |
| 154,000,000 | | |
| 0.04 | |
| Exercised | |
| – | | |
| – | |
| Forfeited | |
| – | | |
| – | |
| Expired | |
| – | | |
| – | |
| Outstanding, March 31, 2023 | |
| 393,284,669 | | |
$ | 0.09 | |
As of March 31, 2023, the Company had 85,907,990
stock options that were exercisable and 137,473 that are in dispute. The weighted average remaining life of all outstanding stock options
was 4.75 years as of March 31, 2023. Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end. As of March
31, 2023, the intrinsic value for the options vested and outstanding was $0 and $4,385, respectively.
Stock Warrants
The following table summarizes the stock warrant
activity for the three months ended March 31, 2022:
| Schedule of warrant activity | |
| | | |
| | |
| | |
Warrants | | |
Weighted-Average Exercise Price Per Share | |
| | |
| | |
| |
| Outstanding, December 31, 2022 | |
| 9,530,000 | | |
$ | 0.50 | |
| Granted | |
| – | | |
| – | |
| Exercised | |
| – | | |
| – | |
| Forfeited | |
| – | | |
| – | |
| Expired | |
| – | | |
| – | |
| Outstanding, March 31, 2023 | |
| 9,530,000 | | |
$ | 0.50 | |
NOTE 7 - Notes Payable
Notes Payable
Pursuant to the merger agreement, the Company
acquired outstanding note payables in the amount of $35,000. These loans were advanced as due on demand and no communication has been
received from the original lenders.
Equipment Notes Payable
In 2021, the Company entered into multiple financing
agreements whereby the company agreed to purchase assets related to its crypto mining operations. The financing agreements required a
down payments in the aggregate of $600,408 and 24 equal monthly payments. The Company used a 15% discount rate to determine the net present
value of the loan value in the aggregate of $2,441,591. During the years ended December 31, 2022 and 2021 the company made payments of
$248,184 and $1,366,860, respectively, of which $40,032 and $217,467 was recorded as interest expense.
On July 11, 2022, the Company terminated its
agreements with the vendor for the financed equipment described above. As of March, 31, 2023, and through the date of this filing, no
agreement or communication from the vendor has been received confirming the terms of the termination, and therefore the Company has maintained
these balances in equipment notes payable on the Company's balance sheet. The balance of the loans as of March 31, 2023 is $1,179,972.
| Schedule of future maturities and principal payments | |
| |
| Year | |
Principal Amount | |
| 2023 | |
$ | 1,179,972 | |
| 2024 | |
| – | |
| 2025 | |
| – | |
| 2026 | |
| – | |
| 2027 | |
| – | |
| Remaining | |
| – | |
| Total | |
$ | 1,179,972 | |
NOTE 8 – Cryptocurrency Assets
The Company began cryptocurrency mining activities
during the year ended December 31, 2021. In addition to mining activities, the Company conducts other business activities using its cryptocurrency
assets as compensation. The below table represents the cryptocurrency activities during the three months ended March 31, 2023:
| Schedule of cryptocurrency activities | |
| |
| Cryptocurrency at December 31, 2022 | |
$ | 2,630 | |
| Proceeds from sale of cryptocurrencies | |
| (2,598 | ) |
| | |
| | |
| Cryptocurrency at March 31, 2023 | |
$ | 32 | |
NOTE 9 – Commitments and Contingencies
Legal Contingencies
On February 8, 2022, the Company was notified
of a potential lawsuit related to the termination of our Advisory Panel Membership agreement with Taylor Black Wealth, Ltd. (“Taylor”).
The Company engaged Taylor for assistance with capital raises and was to be partially compensated with stock options, subject to vesting.
Taylor claims that the Company terminated the agreement unlawfully and therefore are still entitled to the remaining unvested options
which the Company believes to be cancelled. The total number of stock options being contested is 137,473. No additional communication
has been received related to the claims from Taylor.
NOTE 12 - Subsequent Events
On April 25, 2023, the Company
entered into a Securities Purchase Agreement (the “Promissory Note Purchase Agreement”) with an accredited investor (the “Investor”),
pursuant to which the Company sold the Investor an unsecured promissory note in the principal amount of $60,000 (the “Promissory
Note”). The Company received gross proceeds of $60,000 in consideration of issuance of the Promissory Note.
In addition, on April 26, 2023, the Company entered
into a Promissory Note Purchase Agreement with another Investor, pursuant to which the Company sold the Investor an unsecured convertible
promissory note in the principal amount of $57,502 Promissory Note. The Company received gross proceeds of $57,502 in consideration of
issuance of the Promissory Note.
The Promissory Notes shall bear interest at a
rate of ten percent (10%) and have a maturity date of May 25, 2023 and May 26, 2023, respectively. The Promissory Notes are convertible
into common shares of the Company beginning on the sixth-month anniversary if not repaid by the maturity date. The Promissory Notes have
a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date.
The Investors may in their option, at any time
following the 180-day anniversary from the issuance date, as defined in the Promissory Notes, convert all or any part of the outstanding
and unpaid amount of the Promissory Notes into fully paid and non-assessable shares of Common Stock. If the Promissory Notes are not
repaid on or prior to the maturity date, the conversion price will be $0.20 or 50% of the preceding five day VWAP on the six month anniversary,
which is lower, subject to a floor conversion price of $0.01 per share. Furthermore, the Notes contain a “most favored nation”
provision that allows each Investor to claim any preferable terms from any future securities, excluding certain exempt issuances.