Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 09, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | MEGA MATRIX CORP. | |
Trading Symbol | MPU | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 31,724,631 | |
Amendment Flag | false | |
Entity Central Index Key | 0001036848 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-13387 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3263974 | |
Entity Address, Address Line One | 3000 El Camino Real | |
Entity Address, Address Line Two | Bldg. 4, Suite 200 | |
Entity Address, City or Town | Palo Alto | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94306 | |
City Area Code | (650) | |
Local Phone Number | 340-1888 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 6,847,700 | $ 7,263,600 |
Stable coins | 198,200 | 2,972,000 |
Digital assets | 2,108,600 | 459,300 |
Due from a related party | 4,200 | |
Taxes receivable | 1,095,600 | |
Prepaid expenses and other assets | 512,500 | 761,300 |
Total current assets | 9,671,200 | 12,551,800 |
Non-current Assets: | ||
Long-term investments | 1,135,500 | |
Total non-current assets | 1,135,500 | |
Total assets | 10,806,700 | 12,551,800 |
Current liabilities: | ||
Accounts payable and accrued expenses | 233,400 | 254,700 |
Accrued payroll | 132,700 | 132,700 |
Income taxes payable | 4,900 | 18,500 |
Subscription fee advanced from the shareholders | 5,184,000 | |
Total liabilities | 371,000 | 5,589,900 |
Commitments and contingencies (Note 10) | ||
Equity: | ||
Preferred stock, $0.001 par value, 2,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.001 par value, 40,000,000 and 40,000,000 shares authorized, 31,724,631 and 26,484,055 shares outstanding at June 30, 2023 and December 31, 2022, respectively | 31,800 | 26,500 |
Paid-in capital | 28,114,600 | 21,372,100 |
Accumulated deficit | (16,392,300) | (13,420,400) |
Total Mega Matrix Corp. Stockholders’ Equity | 11,754,100 | 7,978,200 |
Non-controlling interests | (1,318,400) | (1,016,300) |
Total equity | 10,435,700 | 6,961,900 |
Total liabilities and equity | $ 10,806,700 | $ 12,551,800 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares outstanding | 31,724,631 | 26,484,055 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues and other income: | ||||
Operating lease revenue | $ 120,000 | |||
Gamefi revenue | 3,200 | 326,800 | ||
Revenue from solo staking | 4,200 | 9,600 | ||
Revenue from provision of staking technology tools | 8,800 | 10,000 | ||
Revenues and other income | 13,000 | 3,200 | 19,600 | 446,800 |
Cost of revenues | (15,100) | (533,300) | (244,900) | (561,100) |
Gross loss | (2,100) | (530,100) | (225,300) | (114,300) |
Operating expenses (income): | ||||
Impairment of digital assets | 8,300 | 223,000 | 8,300 | |
Loss from exchange of digital assets | 18,500 | 11,500 | ||
Professional fees, general and administrative and other | 960,900 | 449,500 | 1,791,300 | 1,001,400 |
Salaries and employee benefits | 594,200 | 603,800 | 940,200 | 1,236,300 |
IT expenses | 3,300 | 8,000 | ||
Insurance | 98,900 | 100,500 | 197,800 | 186,700 |
Marketing expenses | 15,800 | 21,100 | ||
Interest | 120,000 | |||
Other taxes | 2,800 | 2,800 | ||
Reversal of bad debt expense | (300,000) | |||
Total operating expenses | 1,691,600 | 1,164,900 | 3,192,900 | 2,255,500 |
Other expenses: | ||||
Share of equity loss in an equity method investee | (14,500) | (14,500) | ||
Other income | 8,300 | 10,200 | ||
Total other expenses, net | (6,200) | (4,300) | ||
Loss from operations before income tax expenses | (1,699,900) | (1,695,000) | (3,422,500) | (2,369,800) |
Income tax (expenses) benefits | (1,700) | (2,600) | 59,600 | (4,100) |
Net loss and comprehensive loss | (1,701,600) | (1,697,600) | (3,362,900) | (2,373,900) |
Less: Net loss and comprehensive loss attributable to non-controlling interests | 243,600 | 339,000 | 391,000 | 479,000 |
Net loss and comprehensive loss attributable to Mega Matrix Corp.’s shareholders | $ (1,458,000) | $ (1,358,600) | $ (2,971,900) | $ (1,894,900) |
Loss per share: | ||||
Basic (in Dollars per share) | $ (0.05) | $ (0.06) | $ (0.1) | $ (0.09) |
Diluted (in Dollars per share) | $ (0.05) | $ (0.06) | $ (0.1) | $ (0.09) |
Weighted average shares used in loss per share computations: | ||||
Basic (in Shares) | 31,608,169 | 22,084,055 | 30,914,963 | 22,084,055 |
Diluted (in Shares) | 31,608,169 | 22,084,055 | 30,914,963 | 22,084,055 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) | Common Stock | Paid-in Capital | Accumulated Deficits | Non- Controlling Interests | Total |
Balance at Dec. 31, 2021 | $ 22,100 | $ 16,982,700 | $ (4,954,400) | $ (237,100) | $ 11,813,300 |
Balance (in Shares) at Dec. 31, 2021 | 22,084,055 | ||||
Share based compensation | 65,000 | 65,000 | |||
Net loss | (536,300) | (140,000) | (676,300) | ||
Balance at Mar. 31, 2022 | $ 22,100 | 16,982,700 | (5,490,700) | (312,100) | 11,202,000 |
Balance (in Shares) at Mar. 31, 2022 | 22,084,055 | ||||
Cancellation of share-based compensation due to one management | (12,000) | (12,000) | |||
Net loss | (1,358,600) | (339,000) | (1,697,600) | ||
Balance at Jun. 30, 2022 | $ 22,100 | 16,982,700 | (6,849,300) | (663,100) | 9,492,400 |
Balance (in Shares) at Jun. 30, 2022 | 22,084,055 | ||||
Balance at Dec. 31, 2022 | $ 26,500 | 21,372,100 | (13,420,400) | (1,016,300) | 6,961,900 |
Balance (in Shares) at Dec. 31, 2022 | 26,484,055 | ||||
Issuance of common stocks pursuant to private placement | $ 5,100 | 6,533,900 | 6,539,000 | ||
Issuance of common stocks pursuant to private placement (in Shares) | 5,079,999 | ||||
Net loss | (1,513,900) | (147,400) | (1,661,300) | ||
Balance at Mar. 31, 2023 | $ 31,600 | 27,906,000 | (14,934,300) | (1,163,700) | 11,839,600 |
Balance (in Shares) at Mar. 31, 2023 | 31,564,054 | ||||
Issuance of common stocks to a service provider | $ 200 | 208,600 | 208,800 | ||
Issuance of common stocks to a service provider (in Shares) | 160,577 | ||||
Capital injection from non-controlling shareholder | 88,900 | 88,900 | |||
Net loss | (1,458,000) | (243,600) | (1,701,600) | ||
Balance at Jun. 30, 2023 | $ 31,800 | $ 28,114,600 | $ (16,392,300) | $ (1,318,400) | $ 10,435,700 |
Balance (in Shares) at Jun. 30, 2023 | 31,724,631 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net cash used in operating activities | $ (959,800) | $ (3,413,300) |
Investing activities: | ||
Investment in equity investees | (850,000) | |
Net cash used in investing activities | (850,000) | |
Financing activities: | ||
Proceeds from issuance of common stocks pursuant to private placements | 1,305,000 | |
Capital injection from non-controlling shareholders | 88,900 | |
Net cash provided by financing activities | 1,393,900 | |
Net increase (decrease) in cash and cash equivalents | (415,900) | (3,413,300) |
Cash, cash equivalents, beginning of period | 7,263,600 | 7,380,700 |
Cash, cash equivalents, end of period | 6,847,700 | 3,967,400 |
Supplemental Cash Flow Information | ||
Payment of interest expenses | 120,000 | |
Payment of income tax expenses | ||
Non-cash Investing and Financing activities | ||
Collection of USDC from subscription fee from investors | 50,000 | |
Investment in equity investees in USDC | 300,000 | |
Issuance of common stocks to settle advance from subscription fee from investors | $ 6,539,000 |
Organization and Principal Acti
Organization and Principal Activities | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Mega Matrix Corp. (the “Company”, formerly “AeroCentury Corp.” and “ACY”) is a Delaware corporation incorporated in 1997. Through the Company’s emergence from bankruptcy on September 30, 2021, and new investors and management, the Company became a holding company located in Palo Alto, California, with two subsidiaries: Mega Metaverse Corp., a California corporation (“Mega”) and JetFleet Holdings Corp., a California corporation (“JHC”). On January 1, 2022, JetFleet Management Corp. (“JMC”), a wholly-owned subsidiary of JHC, was merged with and into JHC, with JHC being the surviving entity. As part of the merger, JHC changed its name to JetFleet Management Corp. On March 25, 2022, the Company changed its name from “AeroCentury Corp” to “Mega Matrix Corp.” (“Name Change”) to better reflect its expansion into Metaverse and GameFi business. In connection with the Name Change, the Company changed its ticker symbol from “ACY” to “MTMT” on the NYSE American, effective on March 28, 2022. All references to the “Company,” or “AeroCentury” refers to AeroCentury Corp. together with its consolidated subsidiaries prior to March 25, 2022 and renamed “Mega Matrix Corp.” commencing on March 25, 2022. Effective on February 6, 2023, the Company changed its ticker symbol from “MTMT” to “MPU” on the NYSE American. On August 31, 2022, we acquired all of the equity interest in Saving Digital Pte, Ltd., a Singapore corporation (“SDP”) with no operations and approximately $3,800 in cash, from our chairman Yucheng Hu for a nominal consideration of $10,000. We intend to use SDP to explore other crypto related business in Singapore. On September 19, 2022, through SDP, we purchased 37 Ethereum (ETH) for the purpose of exploring Ethereum staking opportunities following the transition by Ethereum on September 15, 2022 from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism referred to as the “Merge.” Prior to the Merge, Ethereum utilized a PoW validation method for digital asset transactions. Following the Merge, Ethereum shifted to a PoS validation system where validators stake their ETH into a smart contract on Ethereum to serve as collateral that can be destroyed if the validator behaves dishonestly or lazily. The validator (selected randomly) is then responsible for processing the blockchain transactions, storing data and adding new blocks to the blockchain. Validators receives a transaction fee on their staked coins in ETH as a reward for their active participation in the network. To become a validator on Ethereum, a participant must stake 32 ETH. Till first quarter ended June 30, 2023, SDP explored Solo-Staking by staking 256 ETH to become eight (8) validators to Ethereum to earn ETH rewards and yield. Solo-Staking enables SDP to utilize its ETH treasury to stake on the Ethereum beacon chain and to earn ETH-denominated rewards directly from the Ethereum protocol. On March 1, 2023, SDP and Bit Digital Singapore Pte. Ltd. (“Bit Digital”), entered into a shareholders’ agreement (the “Shareholders Agreement”) with Marsprotocol Technologies Pte. Ltd. (“MTP”), to provide proof-of-stake technology tools for digital assets through the staking platform “MarsProtocol”, an institutional grade non-custodial staking technology. Pursuant to the Shareholders Agreement, SDP will own 60% and Bit Digital will own 40% of MTP. Through the MarsProtocol platform, MTP will seek to provide non-custodial staking tools whereby users’ private keys are not stored in its database to ensure the safety of its users’ digital assets. As of the date of this report, such services will not be available to U.S. residents. Till first quarter ended June 30, 2023, Bit Digital has staked 9,248 ETH to become two hundred and eighty-nine (289) validators to Ethereum to earn ETH rewards and yield through the staking technology tools provided by “MarsProtocol”. On April 14, 2023, we entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) with MarsProtocol Inc., an exempted company incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of the Company (“MPU Cayman”), amending and restating the Agreement and Plan of Merger, dated December 7, 2022. The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, the Company will merge with and into MPU Cayman (the “Redomicile Merger”), with MPU Cayman being the surviving company in the Redomicile Merger. Upon the effectiveness of the Redomicile Merger, (i) MPU Cayman will change its name from MarsProtocol Inc. to Mega Matrix Inc., and (ii) MPU Cayman, together with its subsidiaries, will own and continue to conduct the Company’s business in substantially the same manner as is currently being conducted by the Company and its subsidiaries. The consent of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote is required to approve and adopt the Merger Agreement. |
Summary of Principal Accounting
Summary of Principal Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented on a consolidated basis in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other period. All intercompany balances and transactions have been eliminated on consolidation. Non-controlling interests Non-controlling interests represent the equity interests of MTP and JMC that are not attributable, either directly or indirectly, to the Company. As of June 30, 2023, non-controlling equity holders held 40% equity interest in MTP and 45.81% equity interest in JMC. As of December 31, 2022, non-controlling equity holders held 45.81% equity interest in JMC. Going concern For the six months ended June 30, 2023 and 2022, the Company reported net losses of $3.4 million and $2.4 million, respectively, and cash flows of $1.0 million and $3.4 million used in operating activities. In addition, the Company had accumulated deficits of $16.4 million and $13.4 million as of June 30, 2023 and December 31, 2022 respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s liquidity is based on its ability to generate cash from operating activities and obtain financing from investors to fund its general operations and capital expansion needs. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources. As of June 30, 2023, the Company had working capital of $9.3 million, among which the Company held cash of $6.8 million, stable coins of $0.2 million and digital assets of $2.1 million, which were highly liquid and easily convertible into cash over the market. Given the financial condition of the Company and its operating performance, the Company assesses current working capital is sufficient to meet its obligations for the next 12 months from the issuance date of this report. Accordingly, management continues to prepare the Company’s consolidated financial statements on going concern basis. Digital assets Digital assets (including Ethereum, or ETH) are included in current assets in the accompanying unaudited condensed consolidated balance sheets. Digital assets purchased are recorded at cost and digital assets awarded to the Company through its GameFi and Solo-Staking business are accounted for in connection with the Company’s revenue recognition policy disclosed below. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Digital assets are measured on a first-in-first-out (“FIFO”) basis and measured for impairment whenever indicators of impairment are identified based on the intraday low quoted price of digital assets. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the digital assets. Subsequent reversal of impairment losses is not permitted. Digital assets are classified on our balance sheet as a current asset due to the Company’s ability to sell it in a highly liquid marketplace and its intent to liquidate its digital assets to support operations when needed. Purchases of digital assets by the Company, if any, will be included within investing activities in the accompanying unaudited condensed consolidated statements of cash flows, while digital assets awarded to the Company through its GameFi and Solo-staking business are included within operating activities on the accompanying unaudited condensed consolidated statements of cash flows. The sales of digital assets are included within operating activities in the accompanying unaudited condensed consolidated statements of cash flows and any realized gains or losses from such sales are included in “realized gain (loss) on exchange of digital assets” in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company accounts for its gains or losses in accordance with the first-in first-out method of accounting. As of June 30, 2023 and December 31, 2022, the Company did not sell its digital assets for cash. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The Company determines CoinMarketCap as its principal market, as it is one of the earliest and the most trusted sources by users, institutions, and media for comparing thousands of crypto assets and selected by the U.S. government. Long-term investments As of June 30, 2023, long-term investments represents the Company’s investment in one equity method investee over which the Company has significant influence, and investment in two privately held companies over which the Company neither has control nor significant influence through investments in ordinary shares. Investment in equity method investee In accordance with ASC 323, Investments - Equity Method and Joint Ventures Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net income or loss into its consolidated statements of operations. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. Investment in one privately held companies Equity investments not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations, according to ASC 321, Investments - Equity Securities Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities, including consideration of the impact of the COVID-19 pandemic. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established. Revenue Recognition Revenue from Solo-Staking business The Company generates revenue through staking rewards. The Company has entered into network-based smart contracts by running its own digital assets validating nodes. Through these contracts, the Company provides Ethereum (“ETH”) to stake on a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The term of a smart contract can vary based on the rules of the respective blockchain and typically last a few weeks to months after it is canceled by the operator and requires that the ETH staked remain locked up during the duration of the smart contract. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to all of the fixed ETH award for running the Company’s own node, for successfully validating or adding a block to the blockchain. The provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation or validation under a smart contract with a network represents a performance obligation. The transaction consideration the Company receives - the ETH awards - is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the ETH award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The satisfaction of the performance obligation for transaction verification services occurs at a point in time when confirmation is received from the network indicating that the validation is complete, and the awards are available for transfer. At that point, revenue is recognized. Revenue from provision of staking technology tools Commencing in March 2023, the Company, through The Company charged its customers at a fixed fee rate on each unit of digital assets earned from staking business. The Company identified one performance obligation from the staking services. Because the customers simultaneously receives and consumes the services provided by the Company, the Company recognized the revenues over period using output method as measurement. Revenue from GameFi business In late March 2022, the Company released its first NFT game “Mano” in the Mega’s metaverse universe platform“alSpace”. Mano is a competitive idle role-playing game (RPG) deploying the concept of GameFi in the innovative application of NFTs (non-fungible token) based on blockchain technology, with a “Play-to-earn” business model that the players can earn while they play in the alSpace. The Company earns transaction fees from players based on a fixed number of Binance Coin (BNB) of each transaction when they want to upgrade or reset their NFT in Mano. When a player executes a game transaction through Binance Smart Chain (“BSC”), transaction fee is recognized upon the completion of this game transaction. Only a single performance obligation is identified for each game transaction, and the performance obligation is satisfied on the trade date because that is when the underlying game service is identified, the pricing of transaction fee is agreed upon and the promised services are delivered to customers. All of the Company’s revenues from contracts with customers are recognized at a point in time. The game service could not be cancelled once it’s executed and is not refundable, so returns and allowances are not applicable. The Company recognizes revenues on a gross basis as the Company is determined to be the primary obligor in fulfilling the trade order initiated by the player. The revenue is in the form of BNB, which is a cryptocurrency that is primarily used in payment of paying transactions and trading fees through BSC. BNB is convertible to cash or other digital assets. Due to regulatory challenges, the Company decided to suspend the Mano game and the alSpace platform, and on November 4, 2022, the Company discontinued the Mano game and the alSpace platform. Revenue from leasing of aircraft assets Revenue from leasing of aircraft assets pursuant to operating leases is recognized on a straight-line basis over the terms of the applicable lease agreements. Deferred payments are recorded as accrued rent when the cash rent received is lower than the straight-line revenue recognized. Such receivables decrease over the term of the applicable leases. Interest income is recognized on finance leases based on the interest rate implicit in the lease and the outstanding balance of the lease receivable. Maintenance reserves retained by the Company at lease-end are recognized as maintenance reserves revenue. In instances where collectability is not reasonably assured, the Company recognizes revenue as cash payments are received. The Company estimates and charges to income a provision for bad debts based on its experience with each specific customer, the amount and length of payment arrearages, and its analysis of the lessee’s overall financial condition. If the financial condition of any of the Company’s customers deteriorates, it could result in actual losses exceeding any estimated allowances. Taxes As part of the process of preparing the Company’s consolidated financial statements, management estimates income taxes in each of the jurisdictions in which the Company operates. This process involves estimating the Company’s current tax exposure under the most recent tax laws and assessing both permanent and temporary differences resulting from differing treatment of items for tax and US GAAP purposes. The temporary differences result in deferred tax assets and liabilities, which are included in the balance sheet. In assessing the valuation of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or availability to carryback the losses to taxable income during periods in which those temporary differences become deductible. The Company considered several factors when analyzing the need for a valuation allowance including the Company’s three-year book cumulative loss through June 30, 2023, the financial forecast, the Company’s recent filing for protection under Chapter 11 of the bankruptcy code, the operation uncertainty of the Company’s new business. Based on this analysis, the Company has concluded that a valuation allowance is necessary for its U.S. and foreign deferred tax assets not supported by either future taxable income or availability of future reversals of existing taxable temporary differences and has recorded a full valuation allowance on its deferred tax assets. Reclassification Certain items in the financial statements of comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of June 30, 2023 or on the statements of operations for the three and six months ended June 30, 2023. A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. |
Stable Coins
Stable Coins | 6 Months Ended |
Jun. 30, 2023 | |
Stable Coins [Abstract] | |
STABLE COINS | 3. STABLE COINS Stable coins were comprised of the following: June 30, December 31, 2023 2022 USDC $ 198,200 $ 2,972,000 The following table presents additional information about USDC for the six months ended June 30, 2023 and 2022: For the Six Months Ended 2023 2022 Opening balance $ 2,972,000 $ - Collection of USDC from subscription fee from investors 50,000 - Collection of USDC from provision of staking technology tools 3,900 - Collection of USDC from exchange of BNB - 297,400 Investment in an equity-method investee in USDC (300,000 ) - Purchase of ETH (2,001,900 ) - Payment of service fees and other expenses (525,800 ) - Ending balance $ 198,200 $ 297,400 A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. |
Digital Assets
Digital Assets | 6 Months Ended |
Jun. 30, 2023 | |
Digital Assets [Abstract] | |
DIGITAL ASSETS | 4. DIGITAL ASSETS Digital asset holdings were comprised of the following: June 30, December 31, 2023 2022 ETH $ 2,106,300 $ 369,200 USDT* 2,300 90,100 $ 2,108,600 $ 459,300 * A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. For the six months ended June 30, 2023 and 2022, the Company recognized impairment loss of $223,000 and $8,300 on ETH. Additional information about digital assets The following table presents additional information about ETH for the six months ended June 30, 2023 and 2022: June 30, June 30, 2023 2022 Opening balance $ 369,200 $ - Addition of ETH staking reward 9,600 - Purchases of ETH in exchange of USDC 1,983,300 - Collection of ETH from other services 2,000 - Return of ETH to a third party (34,600 ) - Payment of ETH for other services (200 ) - Impairment of ETH (223,000 ) - Ending balance $ 2,106,300 $ - The following table presents additional information about USDT for the six months ended June 30, 2023 and 2022: For the Six Months Ended 2023 2022 Opening balance $ 90,100 $ - Collection of USDT from exchange of BNB - 10,200 Payment of service fees (87,800 ) - Ending balance $ 2,300 $ 10,200 |
Long-Term Investments
Long-Term Investments | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Investments [Abstract] | |
LONG-TERM INVESTMENTS | 5. LONG-TERM INVESTMENTS Long-term investments were comprised of the following: June 30, December 31, Investment in MarsLand Global Limited (“MarsLand”) (a) $ 285,500 $ - Investment in Quleduo Technology Co., (“Quleduo”) (b) 500,000 - Investment in DaoMax Technology Co., Ltd, (“DaoMax”) (c) 350,000 - Total $ 1,135,500 $ - (a) Investment in MarsLand MarsLand is a privately held company. In May 2023, the Company, through Saving Digital Pte. Ltd. (“Saving Digital”), its wholly owned subsidiary, invested consideration of $300,000 in USDC, which represents 30% of equity interest in MarsLand. The Company used equity method to measure the investment in the MarsLand. For the three and six months ended June 30, 2023, the Company recorded a loss of $14,500 and $14,500 for its share of the results of MarsLand. As of June 30, 2023, the Company did not recognize impairment against the investment in MarsLand. (b) Investment in Quleduo Quleduo is a privately held company which engaged in software design and development. In May 2023, the Company invested cash consideration of $500,000 which represents 10% of equity interest in Quleduo. Quleduo is a privately held company, over which the Company neither has control nor significant influence through investment in ordinary shares. The Company accounted for the investment in Quleduo using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. For the three and six months ended June 30, 2023, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2023, the Company did not recognize impairment against the investment security. (c) Investment in DaoMax In June 2023, the Company, through Saving Digital, invested cash consideration of $350,000 in DaoMax in exchange for 5% equity interest in the investee. DaoMax is a privately held company, over which the Company neither has control nor significant influence through investment in ordinary shares. The Company accounted for the investment in DaoMax using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. For the three and six months ended June 30, 2023, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2023, the Company did not recognize impairment against the investment security. |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2023 | |
Operating Leases [Abstract] | |
OPERATING LEASES | 6. OPERATING LEASES As of June 30, 2023 and December 31, 2022, the Company leases office spaces in the United States under non-cancelable operating leases, with terms ranging within 12 months. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. The Company records the straight-line lease expense and any contingent rent, if applicable, in the account of “professional fees, general and administrative and other expenses” on the unaudited condensed consolidated statements of operations and comprehensive losses. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company applied practical expedient to account for short-term leases with lease term within 12 months. The Company records operating lease expense in its consolidated statements of income and comprehensive income on a straight-line basis over the lease term and record variable lease payments as incurred. For the three months ended June 30, 2023 and 2022, the Company recorded rent expenses of $20,000 and $41,500, respectively. For the six months ended June 30, 2023 and 2022, the Company recorded rent expenses of $31,900 and $84,000, respectively. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2023 | |
Common Stock [Abstract] | |
COMMON STOCK | 7. COMMON STOCK As of December 31, 2022, the Company authorized 40,000,000 shares of common stocks, and had 26,484,055 shares issued and outstanding. On December 23, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors named in the Purchase Agreement (collectively, the “Purchasers”), pursuant to which the Company agreed to sell up to an aggregate of 5,280,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at a purchase price of $1.30 per share, or $6.9 million (the “Private Placement”). On January 20, 2023, the Company completed an initial sale of 4,314,615 shares of Common Stock pursuant to the Private Placement to certain Purchasers for an aggregate purchase price of $5.6 million, or $1.30 per share. On February 15, 2023, the Company completed the final sale of 765,384 shares of Common Stock pursuant to the Private Placement to a Purchaser for an aggregate purchase price of $1.0 million, or $1.30 per share, for combined total issuance of 5,079,999 shares of Common Stock for gross proceeds of approximately $6.6 million to the Company under the Private Placement, before deducting estimated offering expenses payable by the Company. On June 5, 2023, the Company issued 160,577 Common Stock to a third party provider which provided network security services to the Company. The service fee was agreed at $208,800. As of June 30, 2023, the Company authorized 40,000,000 shares of common stocks, and had 31,724,631 shares issued and outstanding. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Company recorded income tax expense of $1,700 in the three months ended June 30, 2023, or negative 0.1% of pre-tax loss, compared to $2,600 income tax expense, or negative 0.15% of pre-tax loss in the three months ended June 30, 2022. The Company recorded income tax benefits of $59,600 in the six months ended June 30, 2023, or 1.76% of pre-tax loss, compared to $4,100 income tax expense, or negative 0.17% of pre-tax loss in the six months ended June 30, 2022. The difference in the effective federal income tax rate from the normal statutory rate in the three and six months ended June 30, 2023 was primarily because we got refund of income taxes and the company applied a full valuation allowance on its deferred tax assets. In assessing the valuation of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or availability to carryback the losses to taxable income during periods in which those temporary differences become deductible. The Company considered several factors when analyzing the need for a valuation allowance including the Company’s current three-year cumulative loss through June 30, 2023, the current year operation forecast, the Company’s recent filing for protection under Chapter 11 of the bankruptcy code, the operation uncertainty of the Company’s new business. Based on this analysis, the Company has concluded that a valuation allowance is necessary for its U.S. and foreign deferred tax assets not supported by either future taxable income or availability of future reversals of existing taxable temporary differences and has recorded a full valuation allowance on its deferred tax assets. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2023 | |
Operating Segments [Abstract] | |
OPERATING SEGMENTS | 9. OPERATING SEGMENTS ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different services. Due to regulatory challenges, the Company, on November 4, 2022, discontinued the Mano game and the alSpace platform. Accordingly as of June 30, 2023 and December 31, 2022, and f For the three and six months ended June 30, 2022, the Company had two business segments which were comprised of 1) the newly launched GameFi business, and 2) the leasing of regional aircraft to foreign and domestic regional airlines. The following tables present summary information of operations by segment for the three months ended June 30, 2023 and 2022. For the Three Months Ended June 30, 2023 Staking Leasing Business Business Total Revenue and other income $ 13,000 $ - $ 13,000 Gross loss $ (2,100 ) $ - $ (2,100 ) Total operating expenses $ (949,200 ) $ (742,400 ) $ (1,691,600 ) Loss before income tax provision $ (965,800 ) $ (734,100 ) $ (1,699,900 ) Net loss $ (966,200 ) $ (735,400 ) $ (1,701,600 ) For the Three Months Ended June 30, 2022 GameFi Leasing Business Business Total Revenue and other income $ 3,200 $ - $ 3,200 Gross loss $ (530,100 ) $ - $ (530,100 ) Total operating expenses $ (547,400 ) $ (617,500 ) $ (1,164,900 ) Loss before income tax provision $ (1,077,500 ) $ (617,500 ) $ (1,695,000 ) Net loss $ (1,077,900 ) $ (619,700 ) $ (1,697,600 ) The following tables present summary information of operations by segment for the six months ended June 30, 2023 and 2022. For the Six Months Ended June 30, 2023 Staking Leasing Business Business Total Revenue and other income $ 19,600 $ - $ 19,600 Gross loss $ (225,300 ) $ - $ (225,300 ) Total operating expenses $ (2,064,100 ) $ (1,128,800 ) $ (3,192,900 ) Loss before income tax provision $ (2,303,900 ) $ (1,118,600 ) $ (3,422,500 ) Net loss $ (2,304,700 ) $ (1,058,200 ) $ (3,362,900 ) For the Six Months Ended June 30, 2022 GameFi Leasing Business Business Total Revenue and other income $ 326,800 $ 120,000 $ 446,800 Gross loss $ (234,300 ) $ 120,000 $ (114,300 ) Total operating expenses $ (1,026,000 ) $ (1,229,500 ) $ (2,255,500 ) Loss before income tax provision $ (1,260,300 ) $ (1,109,500 ) $ (2,369,800 ) Net loss $ (1,261,100 ) $ (1,112,800 ) $ (2,373,900 ) The following tables present total assets by segment as of June 30, 2023 and December 31, 2022: June 30, December 31, 2023 2022 ETH Staking Business $ 10,315,400 $ 11,120,100 Lease Business 491,300 1,431,700 $ 10,806,700 $ 12,551,800 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of the Company’s business, the Company may be subject to lawsuits, arbitrations and administrative proceedings from time to time. The Company believes that the outcome of any existing or known threatened proceedings, even if determined adversely, should not have a material adverse effect on the Company’s business, financial condition, liquidity or results of operations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS On August 4, 2023, Bit Digital, SDP and MTP entered into a termination agreement whereby the parties agreed that SDP purchased Bit Digital’s 40% interest, consisting of 120,000 ordinary shares, in MTP for SGD$120,000. As a result of the transaction, SDP owns all outstanding ordinary shares of MTP. As a result of the purchase of Bit Digital’s interest in MTP, MTP will no longer provide non-custodial staking tools to third parties. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented on a consolidated basis in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other period. All intercompany balances and transactions have been eliminated on consolidation. |
Non-controlling interests | Non-controlling interests Non-controlling interests represent the equity interests of MTP and JMC that are not attributable, either directly or indirectly, to the Company. As of June 30, 2023, non-controlling equity holders held 40% equity interest in MTP and 45.81% equity interest in JMC. As of December 31, 2022, non-controlling equity holders held 45.81% equity interest in JMC. |
Going concern | Going concern For the six months ended June 30, 2023 and 2022, the Company reported net losses of $3.4 million and $2.4 million, respectively, and cash flows of $1.0 million and $3.4 million used in operating activities. In addition, the Company had accumulated deficits of $16.4 million and $13.4 million as of June 30, 2023 and December 31, 2022 respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s liquidity is based on its ability to generate cash from operating activities and obtain financing from investors to fund its general operations and capital expansion needs. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources. As of June 30, 2023, the Company had working capital of $9.3 million, among which the Company held cash of $6.8 million, stable coins of $0.2 million and digital assets of $2.1 million, which were highly liquid and easily convertible into cash over the market. Given the financial condition of the Company and its operating performance, the Company assesses current working capital is sufficient to meet its obligations for the next 12 months from the issuance date of this report. Accordingly, management continues to prepare the Company’s consolidated financial statements on going concern basis. |
Digital assets | Digital assets Digital assets (including Ethereum, or ETH) are included in current assets in the accompanying unaudited condensed consolidated balance sheets. Digital assets purchased are recorded at cost and digital assets awarded to the Company through its GameFi and Solo-Staking business are accounted for in connection with the Company’s revenue recognition policy disclosed below. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Digital assets are measured on a first-in-first-out (“FIFO”) basis and measured for impairment whenever indicators of impairment are identified based on the intraday low quoted price of digital assets. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the digital assets. Subsequent reversal of impairment losses is not permitted. Digital assets are classified on our balance sheet as a current asset due to the Company’s ability to sell it in a highly liquid marketplace and its intent to liquidate its digital assets to support operations when needed. Purchases of digital assets by the Company, if any, will be included within investing activities in the accompanying unaudited condensed consolidated statements of cash flows, while digital assets awarded to the Company through its GameFi and Solo-staking business are included within operating activities on the accompanying unaudited condensed consolidated statements of cash flows. The sales of digital assets are included within operating activities in the accompanying unaudited condensed consolidated statements of cash flows and any realized gains or losses from such sales are included in “realized gain (loss) on exchange of digital assets” in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company accounts for its gains or losses in accordance with the first-in first-out method of accounting. As of June 30, 2023 and December 31, 2022, the Company did not sell its digital assets for cash. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The Company determines CoinMarketCap as its principal market, as it is one of the earliest and the most trusted sources by users, institutions, and media for comparing thousands of crypto assets and selected by the U.S. government. |
Long-term investments | Long-term investments As of June 30, 2023, long-term investments represents the Company’s investment in one equity method investee over which the Company has significant influence, and investment in two privately held companies over which the Company neither has control nor significant influence through investments in ordinary shares. Investment in equity method investee In accordance with ASC 323, Investments - Equity Method and Joint Ventures Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net income or loss into its consolidated statements of operations. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. Investment in one privately held companies Equity investments not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations, according to ASC 321, Investments - Equity Securities Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities, including consideration of the impact of the COVID-19 pandemic. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established. |
Revenue Recognition | Revenue Recognition Revenue from Solo-Staking business The Company generates revenue through staking rewards. The Company has entered into network-based smart contracts by running its own digital assets validating nodes. Through these contracts, the Company provides Ethereum (“ETH”) to stake on a node for the purpose of validating transactions and adding blocks to a respective blockchain network. The term of a smart contract can vary based on the rules of the respective blockchain and typically last a few weeks to months after it is canceled by the operator and requires that the ETH staked remain locked up during the duration of the smart contract. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to all of the fixed ETH award for running the Company’s own node, for successfully validating or adding a block to the blockchain. The provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation or validation under a smart contract with a network represents a performance obligation. The transaction consideration the Company receives - the ETH awards - is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the ETH award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The satisfaction of the performance obligation for transaction verification services occurs at a point in time when confirmation is received from the network indicating that the validation is complete, and the awards are available for transfer. At that point, revenue is recognized. Revenue from provision of staking technology tools Commencing in March 2023, the Company, through The Company charged its customers at a fixed fee rate on each unit of digital assets earned from staking business. The Company identified one performance obligation from the staking services. Because the customers simultaneously receives and consumes the services provided by the Company, the Company recognized the revenues over period using output method as measurement. Revenue from GameFi business In late March 2022, the Company released its first NFT game “Mano” in the Mega’s metaverse universe platform“alSpace”. Mano is a competitive idle role-playing game (RPG) deploying the concept of GameFi in the innovative application of NFTs (non-fungible token) based on blockchain technology, with a “Play-to-earn” business model that the players can earn while they play in the alSpace. The Company earns transaction fees from players based on a fixed number of Binance Coin (BNB) of each transaction when they want to upgrade or reset their NFT in Mano. When a player executes a game transaction through Binance Smart Chain (“BSC”), transaction fee is recognized upon the completion of this game transaction. Only a single performance obligation is identified for each game transaction, and the performance obligation is satisfied on the trade date because that is when the underlying game service is identified, the pricing of transaction fee is agreed upon and the promised services are delivered to customers. All of the Company’s revenues from contracts with customers are recognized at a point in time. The game service could not be cancelled once it’s executed and is not refundable, so returns and allowances are not applicable. The Company recognizes revenues on a gross basis as the Company is determined to be the primary obligor in fulfilling the trade order initiated by the player. The revenue is in the form of BNB, which is a cryptocurrency that is primarily used in payment of paying transactions and trading fees through BSC. BNB is convertible to cash or other digital assets. Due to regulatory challenges, the Company decided to suspend the Mano game and the alSpace platform, and on November 4, 2022, the Company discontinued the Mano game and the alSpace platform. Revenue from leasing of aircraft assets Revenue from leasing of aircraft assets pursuant to operating leases is recognized on a straight-line basis over the terms of the applicable lease agreements. Deferred payments are recorded as accrued rent when the cash rent received is lower than the straight-line revenue recognized. Such receivables decrease over the term of the applicable leases. Interest income is recognized on finance leases based on the interest rate implicit in the lease and the outstanding balance of the lease receivable. Maintenance reserves retained by the Company at lease-end are recognized as maintenance reserves revenue. In instances where collectability is not reasonably assured, the Company recognizes revenue as cash payments are received. The Company estimates and charges to income a provision for bad debts based on its experience with each specific customer, the amount and length of payment arrearages, and its analysis of the lessee’s overall financial condition. If the financial condition of any of the Company’s customers deteriorates, it could result in actual losses exceeding any estimated allowances. |
Taxes | Taxes As part of the process of preparing the Company’s consolidated financial statements, management estimates income taxes in each of the jurisdictions in which the Company operates. This process involves estimating the Company’s current tax exposure under the most recent tax laws and assessing both permanent and temporary differences resulting from differing treatment of items for tax and US GAAP purposes. The temporary differences result in deferred tax assets and liabilities, which are included in the balance sheet. In assessing the valuation of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or availability to carryback the losses to taxable income during periods in which those temporary differences become deductible. The Company considered several factors when analyzing the need for a valuation allowance including the Company’s three-year book cumulative loss through June 30, 2023, the financial forecast, the Company’s recent filing for protection under Chapter 11 of the bankruptcy code, the operation uncertainty of the Company’s new business. Based on this analysis, the Company has concluded that a valuation allowance is necessary for its U.S. and foreign deferred tax assets not supported by either future taxable income or availability of future reversals of existing taxable temporary differences and has recorded a full valuation allowance on its deferred tax assets. |
Reclassification | Reclassification Certain items in the financial statements of comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of June 30, 2023 or on the statements of operations for the three and six months ended June 30, 2023. A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. |
Stable Coins (Tables)
Stable Coins (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stable Coins [Abstract] | |
Schedule of Stable Coins were Comprised | Stable coins were comprised of the following: June 30, December 31, 2023 2022 USDC $ 198,200 $ 2,972,000 |
Schedule of Additional Information about USDC | The following table presents additional information about USDC for the six months ended June 30, 2023 and 2022: For the Six Months Ended 2023 2022 Opening balance $ 2,972,000 $ - Collection of USDC from subscription fee from investors 50,000 - Collection of USDC from provision of staking technology tools 3,900 - Collection of USDC from exchange of BNB - 297,400 Investment in an equity-method investee in USDC (300,000 ) - Purchase of ETH (2,001,900 ) - Payment of service fees and other expenses (525,800 ) - Ending balance $ 198,200 $ 297,400 |
Digital Assets (Tables)
Digital Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Digital Assets [Abstract] | |
Schedule of Digital Asset Holdings | Digital asset holdings were comprised of the following: June 30, December 31, 2023 2022 ETH $ 2,106,300 $ 369,200 USDT* 2,300 90,100 $ 2,108,600 $ 459,300 * A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. |
Schedule of Additional Information ETH | The following table presents additional information about ETH for the six months ended June 30, 2023 and 2022: June 30, June 30, 2023 2022 Opening balance $ 369,200 $ - Addition of ETH staking reward 9,600 - Purchases of ETH in exchange of USDC 1,983,300 - Collection of ETH from other services 2,000 - Return of ETH to a third party (34,600 ) - Payment of ETH for other services (200 ) - Impairment of ETH (223,000 ) - Ending balance $ 2,106,300 $ - |
Schedule of Additional Information USDT | The following table presents additional information about USDT for the six months ended June 30, 2023 and 2022: For the Six Months Ended 2023 2022 Opening balance $ 90,100 $ - Collection of USDT from exchange of BNB - 10,200 Payment of service fees (87,800 ) - Ending balance $ 2,300 $ 10,200 |
Long-Term Investments (Tables)
Long-Term Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Investments [Abstract] | |
Schedule of Long-Term Investments | Long-term investments were comprised of the following: June 30, December 31, Investment in MarsLand Global Limited (“MarsLand”) (a) $ 285,500 $ - Investment in Quleduo Technology Co., (“Quleduo”) (b) 500,000 - Investment in DaoMax Technology Co., Ltd, (“DaoMax”) (c) 350,000 - Total $ 1,135,500 $ - |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Operating Segments [Abstract] | |
Schedule of Operations by Segment | The following tables present summary information of operations by segment for the three months ended June 30, 2023 and 2022. For the Three Months Ended June 30, 2023 Staking Leasing Business Business Total Revenue and other income $ 13,000 $ - $ 13,000 Gross loss $ (2,100 ) $ - $ (2,100 ) Total operating expenses $ (949,200 ) $ (742,400 ) $ (1,691,600 ) Loss before income tax provision $ (965,800 ) $ (734,100 ) $ (1,699,900 ) Net loss $ (966,200 ) $ (735,400 ) $ (1,701,600 ) For the Three Months Ended June 30, 2022 GameFi Leasing Business Business Total Revenue and other income $ 3,200 $ - $ 3,200 Gross loss $ (530,100 ) $ - $ (530,100 ) Total operating expenses $ (547,400 ) $ (617,500 ) $ (1,164,900 ) Loss before income tax provision $ (1,077,500 ) $ (617,500 ) $ (1,695,000 ) Net loss $ (1,077,900 ) $ (619,700 ) $ (1,697,600 ) For the Six Months Ended June 30, 2023 Staking Leasing Business Business Total Revenue and other income $ 19,600 $ - $ 19,600 Gross loss $ (225,300 ) $ - $ (225,300 ) Total operating expenses $ (2,064,100 ) $ (1,128,800 ) $ (3,192,900 ) Loss before income tax provision $ (2,303,900 ) $ (1,118,600 ) $ (3,422,500 ) Net loss $ (2,304,700 ) $ (1,058,200 ) $ (3,362,900 ) For the Six Months Ended June 30, 2022 GameFi Leasing Business Business Total Revenue and other income $ 326,800 $ 120,000 $ 446,800 Gross loss $ (234,300 ) $ 120,000 $ (114,300 ) Total operating expenses $ (1,026,000 ) $ (1,229,500 ) $ (2,255,500 ) Loss before income tax provision $ (1,260,300 ) $ (1,109,500 ) $ (2,369,800 ) Net loss $ (1,261,100 ) $ (1,112,800 ) $ (2,373,900 ) |
Schedule of Total Assets by Segment | The following tables present total assets by segment as of June 30, 2023 and December 31, 2022: June 30, December 31, 2023 2022 ETH Staking Business $ 10,315,400 $ 11,120,100 Lease Business 491,300 1,431,700 $ 10,806,700 $ 12,551,800 |
Organization and Principal Ac_2
Organization and Principal Activities (Details) - USD ($) | 1 Months Ended | |
Mar. 01, 2023 | Aug. 31, 2022 | |
Organization and Principal Activities (Details) [Line Items] | ||
Cash | $ 3,800 | |
Nominal consideration | $ 10,000 | |
SDP [Member] | ||
Organization and Principal Activities (Details) [Line Items] | ||
Percentage of shareholders agreement | 60% | |
Bit Digital [Member] | ||
Organization and Principal Activities (Details) [Line Items] | ||
Percentage of shareholders agreement | 40% |
Summary of Principal Accounti_2
Summary of Principal Accounting Policies (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Summary of Principal Accounting Policies (Details) [Line Items] | |||
Cash outflows from operating activities | $ 3,400,000 | $ 2,400,000 | |
Cash flows used in operating activities | (1,000,000) | (3,400,000) | |
Accumulated deficits | 16,400,000 | $ 13,400,000 | |
Working capital | 9,300,000 | ||
Cash held | 6,800,000 | ||
Stable coins | 198,200 | 2,972,000 | |
Digital assets | 2,108,600 | $ 459,300 | |
Impairment charges | $ 223,000 | $ 8,300 | |
JMC [Member] | |||
Summary of Principal Accounting Policies (Details) [Line Items] | |||
Non-controlling equity holders held | 45.81% | 45.81% | |
JMC [Member] | |||
Summary of Principal Accounting Policies (Details) [Line Items] | |||
Equity interest percentage | 40% |
Stable Coins (Details) - Schedu
Stable Coins (Details) - Schedule of Stable Coins were Comprised - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Stable Coins Were Comprised [Abstract] | ||
USDC | $ 198,200 | $ 2,972,000 |
Stable Coins (Details) - Sche_2
Stable Coins (Details) - Schedule of Additional Information about USDC - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule of Additional Information About USDC [Abstract] | ||
Opening balance | $ 2,972,000 | |
Collection of USDC from subscription fee from investors | 50,000 | |
Collection of USDC from provision of staking technology tools | 3,900 | |
Collection of USDC from exchange of BNB | 297,400 | |
Investment in an equity-method investee in USDC | (300,000) | |
Purchase of ETH | (2,001,900) | |
Payment of service fees and other expenses | (525,800) | |
Ending balance | $ 198,200 | $ 297,400 |
Digital Assets (Details)
Digital Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
ETH [Member] | ||
Digital Assets (Details) [Line Items] | ||
Impairment loss | $ 223,000 | $ 8,300 |
Digital Assets (Details) - Sche
Digital Assets (Details) - Schedule of Digital Asset Holdings - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | ||
Digital Assets (Details) - Schedule of Digital Asset Holdings [Line Items] | |||
Digital asset | $ 2,108,600 | $ 459,300 | |
ETH [Member] | |||
Digital Assets (Details) - Schedule of Digital Asset Holdings [Line Items] | |||
Digital asset | 2,106,300 | 369,200 | |
USDT [Member] | |||
Digital Assets (Details) - Schedule of Digital Asset Holdings [Line Items] | |||
Digital asset | [1] | $ 2,300 | $ 90,100 |
[1]A reclassification of USDT from stable coin to digital assets has been made to the consolidated balance sheet as of December 31, 2022. |
Digital Assets (Details) - Sc_2
Digital Assets (Details) - Schedule of Additional Information ETH - ETH [Member] - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Digital Assets (Details) - Schedule of Additional Information ETH [Line Items] | ||
Opening balance | $ 369,200 | |
Addition of ETH staking reward | 9,600 | |
Purchases of ETH in exchange of USDC | 1,983,300 | |
Collection of ETH from other services | 2,000 | |
Return of ETH to a third party | (34,600) | |
Payment of ETH for other services | (200) | |
Impairment of ETH | (223,000) | |
Ending balance | $ 2,106,300 |
Digital Assets (Details) - Sc_3
Digital Assets (Details) - Schedule of Additional Information USDT - USDT [Member] - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Digital Assets (Details) - Schedule of Additional Information USDT [Line Items] | ||
Opening balance | $ 90,100 | |
Collection of USDT from exchange of BNB | 10,200 | |
Payment of service fees | (87,800) | |
Ending balance | $ 2,300 | $ 10,200 |
Long-Term Investments (Details)
Long-Term Investments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | May 31, 2023 | |
Long-Term Investments (Details) [Line Items] | |||
Long-term investments loss | $ 14,500 | $ 14,500 | |
Investment in Marsland [Member] | |||
Long-Term Investments (Details) [Line Items] | |||
Equity interest rate | 30% | ||
Long-term investments [Member] | Investment in Marsland [Member] | |||
Long-Term Investments (Details) [Line Items] | |||
Equity interest rate | 5% | ||
Long-term investments [Member] | Investment in Quleduo [Member] | |||
Long-Term Investments (Details) [Line Items] | |||
Equity interest rate | 10% | ||
Investment in Marsland [Member] | |||
Long-Term Investments (Details) [Line Items] | |||
Invested amount | $ 300,000 | ||
Invested cash consideration | 350,000 | ||
Investment in Quleduo [Member] | |||
Long-Term Investments (Details) [Line Items] | |||
Invested cash consideration | $ 500,000 |
Long-Term Investments (Detail_2
Long-Term Investments (Details) - Schedule of Long-Term Investments - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Long-Term Investments (Details) - Schedule of Long-Term Investments [Line Items] | ||
Total | $ 1,135,500 | |
Investment in Marsland Global Limited (“Marsland”) [Member] | ||
Long-Term Investments (Details) - Schedule of Long-Term Investments [Line Items] | ||
Total | 285,500 | |
Investment in Quleduo Technology Co., (“Quleduo”) [Member] | ||
Long-Term Investments (Details) - Schedule of Long-Term Investments [Line Items] | ||
Total | 500,000 | |
Investment in DaoMax Technology Co., Ltd, (“DaoMax”) [Member] | ||
Long-Term Investments (Details) - Schedule of Long-Term Investments [Line Items] | ||
Total | $ 350,000 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Leases [Abstract] | ||||
Rent expenses | $ 20,000 | $ 41,500 | $ 31,900 | $ 84,000 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | |||||
Jun. 05, 2023 | Feb. 15, 2023 | Jan. 20, 2023 | Dec. 23, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Common Stock (Details) [Line Items] | ||||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | ||||
Common stock, shares issued | 31,724,631 | 26,484,055 | ||||
Common stock, shares outstanding | 31,724,631 | 26,484,055 | ||||
Aggregate of shares | 5,280,000 | |||||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Price per share (in Dollars per share) | $ 1.3 | |||||
Aggregate gross proceeds (in Dollars) | $ 6,900,000 | |||||
Initial sale shares | 765,384 | 4,314,615 | ||||
Aggregate purchase price (in Dollars) | $ 1,000,000 | $ 5,600,000 | ||||
Aggregate purchase price per share (in Dollars per share) | $ 1.3 | $ 1.3 | ||||
Shares of common stock for gross proceeds | 5,079,999 | |||||
Gross proceeds (in Dollars) | $ 6,600,000 | |||||
Network security services fee (in Dollars) | $ 208,800 | |||||
Common Stock [Member] | ||||||
Common Stock (Details) [Line Items] | ||||||
Shares issued | 160,577 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes [Abstract] | ||||
Income tax expense | $ 1,700 | |||
Pre-tax loss percentage | 0.10% | 0.15% | 1.76% | 0.17% |
Tax expense | $ 2,600 | $ 59,600 | $ 4,100 |
Operating Segments (Details) -
Operating Segments (Details) - Schedule of Operations by Segment - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenue and other income | $ 13,000 | $ 3,200 | $ 19,600 | $ 446,800 |
Gross loss | (2,100) | (530,100) | (225,300) | (114,300) |
Total operating expenses | (1,691,600) | (1,164,900) | (3,192,900) | (2,255,500) |
Loss before income tax provision | (1,699,900) | (1,695,000) | (3,422,500) | (2,369,800) |
Net loss | (1,701,600) | (1,697,600) | (3,362,900) | (2,373,900) |
Staking Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue and other income | 13,000 | 19,600 | ||
Gross loss | (2,100) | (225,300) | ||
Total operating expenses | (949,200) | (2,064,100) | ||
Loss before income tax provision | (965,800) | (2,303,900) | ||
Net loss | (966,200) | (2,304,700) | ||
Leasing Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue and other income | 120,000 | |||
Gross loss | 120,000 | |||
Total operating expenses | (742,400) | (617,500) | (1,128,800) | (1,229,500) |
Loss before income tax provision | (734,100) | (617,500) | (1,118,600) | (1,109,500) |
Net loss | $ (735,400) | (619,700) | $ (1,058,200) | (1,112,800) |
GameFi Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue and other income | 3,200 | 326,800 | ||
Gross loss | (530,100) | (234,300) | ||
Total operating expenses | (547,400) | (1,026,000) | ||
Loss before income tax provision | (1,077,500) | (1,260,300) | ||
Net loss | $ (1,077,900) | $ (1,261,100) |
Operating Segments (Details) _2
Operating Segments (Details) - Schedule of Total Assets by Segment - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Schedule of Total Assets by Segment [Abstract] | ||
ETH Staking Business | $ 10,315,400 | $ 11,120,100 |
Lease Business | 491,300 | 1,431,700 |
Total Operating Segments | $ 10,806,700 | $ 12,551,800 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Aug. 04, 2023 SGD ($) shares |
Subsequent Events (Details) [Line Items] | |
Ordinary shares | shares | 120,000 |
Ordinary shares value | $ | $ 120,000 |
Bit Digital [Member] | |
Subsequent Events (Details) [Line Items] | |
Interest rate percentage | 40% |