| Summary of Significant Accounting Policies | Note 4 - Summary of Significant Accounting
Policies There have been no material
changes in the Company’s significant accounting policies to those previously disclosed in the 2019 Annual Report. Digital Assets Translations and Remeasurements Digital Assets are included
in current assets in the balance sheets. Digital Assets are recorded at cost less impairment. 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. Impairment exists when
the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative
assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely
than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is
required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new
cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Realized gain (loss) on
sale of Digital Assets are included in other income (expense) in the statements of operations. The Company assesses impairment
of Digital Assets quarterly if the fair value of digital assets is less than its cost basis. The Company recognizes impairment
losses on Digital Assets caused by decreases in fair value using the average U.S. dollar spot price of the related Digital Asset
as of each impairment date. Such impairment in the value of Digital Assets are recorded as a component of costs and expenses in
our statements of operations. Use of Estimates The accompanying unaudited
condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States
of America (“US GAAP”). This requires management to make estimates and assumptions that affect certain reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenue and expenses during the period. The Company’s significant estimates and assumptions include the
recoverability and useful lives of long-lived assets, stock-based compensation, the valuation of derivative liabilities, and the
valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates, including the
carrying amount of the intangible assets, if any, could be affected by external conditions, including those unique to the Company
and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s
estimates and could cause actual results to differ from those estimates and assumptions. Net Loss per Share Basic loss per share is
computed by dividing the net income or loss applicable to common shares by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive,
potential common shares outstanding during the period. Potential common shares consist of the Company’s convertible preferred
stock, convertible notes and warrants. Diluted loss per share excludes the shares issuable upon the conversion of preferred stock,
notes and warrants from the calculation of net loss per share if their effect would be anti-dilutive. The following financial
instruments were not included in the diluted loss per share calculation as of March 31, 2020 and 2019 because their effect was
anti-dilutive:
As of March 31,
2020 2019
Warrants to purchase common stock 920,424 1,229,700
Series C-1 Convertible Preferred stock 196,093 196,093
Convertible notes 4,032,258 -
Total 5,148,775 1,425,793 Recent Accounting Pronouncements In December 2019, the Financial
Accounting Standards Board (“FASB”) issued Accounting standards Update (“ASU”) No. 2019-12, “Income
Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various
aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and
also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently
evaluating the impact of this standard on its financial statements and related disclosures. Other recent accounting
pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants,
and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future financial statements. | Note 4- Summary of Significant Accounting
Policies A summary of the significant
accounting policies applied in the preparation of the accompanying financial statements is as follows: Concentration of Cash The Company maintains cash
balances at two financial institutions in checking accounts and money market accounts. The Company considers all highly liquid
investments with original maturities of six months or less when purchased to be cash and cash equivalents. As of December 31, 2019
and 2018, the Company had approximately $143,000 and $52,000 in cash. The Company has not experienced any losses in such accounts
and believes it is not exposed to any significant credit risk on cash. Financial instruments that
potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution
are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2019 and 2018,
the Company had $0 in excess of the FDIC insured limit. Digital Assets Translations and Remeasurements Digital Assets are included
in current assets in the balance sheets. Digital Assets are recorded at cost less impairment. 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. Impairment exists when
the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative
assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely
than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is
required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new
cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Realized gain (loss) on
sale of Digital Assets are included in other income (expense) in the statements of operations. The Company assesses impairment
of Digital Assets quarterly if the fair value of digital assets is less than its cost basis. The Company recognizes impairment
losses on Digital Assets caused by decreases in fair value using the average U.S. dollar spot price of the related Digital Asset
as of each impairment date. Such impairment in the value of Digital Assets are recorded as a component of costs and expenses in
our statements of operations. Property and Equipment Property and equipment
consists of leasehold improvements, computer, equipment and office furniture and fixtures, all of which are recorded at cost. Depreciation
and amortization is recorded using the straight-line method over the respective useful lives of the assets ranging from three to
five years. Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of
these assets may not be recoverable. Fair Value of Financial Instruments Financial instruments,
including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates
fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities
based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three
levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active
markets for identical assets or liabilities Level 2 - quoted prices for similar
assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable
(for example, cash flow modeling inputs based on assumptions) Use of Estimates The accompanying financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US
GAAP”). This requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue
and expenses during the period. The Company’s significant estimates and assumptions include the recoverability and useful
lives of indefinite life intangible assets, stock-based compensation, the valuation of derivative liabilities, and the valuation
allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates, including the carrying
amount of the indefinite life intangible assets, could be affected by external conditions, including those unique to the Company
and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s
estimates and could cause actual results to differ from those estimates and assumptions. Income Taxes The Company recognizes
income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns. A tax position is defined
as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring
current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (i.e.,
likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities.
Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount
of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset
and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of events that have been recognized in the Company’s financial statements or tax returns. A valuation allowance is established
to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized. Should they occur,
the Company’s policy is to classify interest and penalties related to tax positions as income tax expense. Since the Company’s
inception, no such interest or penalties have been incurred. Employee Stock-Based Compensation The Company accounts for
stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses
all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock
incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on
the estimated number of awards that are expected to vest and will result in a charge to operations. Advertising Expense Advertisement costs are
expensed as incurred and included in marketing expenses. Advertising expenses amounted to approximately $10,000 and $4,000 for
the years ended December 31, 2019 and 2018, respectively. Net Loss per Share Basic loss per share is
computed by dividing the net income or loss applicable to common shares by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive,
potential common shares outstanding during the period. Potential common shares consist of the Company’s convertible preferred
stock, convertible notes and warrants. Diluted loss per share excludes the shares issuable upon the conversion of preferred stock,
notes and warrants from the calculation of net loss per share if their effect would be anti-dilutive. The following financial
instruments were not included in the diluted loss per share calculation as of December 31, 2019 and 2018 because their effect was
anti-dilutive:
As of December 31,
2019 2018
Warrants to purchase common stock 937,904 1,955,264
Series C-1 Convertible Preferred stock 196,093 196,093
Convertible notes 3,676,471 -
Total 4,810,468 2,151,357 Preferred Stock The Company applies the
guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement
of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured
at fair value. The Company classifies conditionally redeemable preferred shares (if any), which includes preferred shares that
feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control, as temporary equity. At all other times, the Company classifies its preferred
shares in stockholders’ equity. The Company’s preferred shares do not feature any redemption rights within the holders’
control or conditional redemption features not within the Company’s control as of December 31, 2019 and 2018. Accordingly,
all issuances of preferred stock are presented as a component of stockholders’ equity. Convertible Instruments The
Company has evaluated the Series A Convertible Preferred Stock (“Preferred Stock”) component of the Private Placement
and determined it should be considered an “equity host” and not a “debt host” as defined by ASC 815, Derivatives
and Hedging. This evaluation is necessary in order to determine if any embedded features require bifurcation and, therefore, separate
accounting as a derivative liability. The Company’s analysis followed the “whole instrument approach,” which
compares an individual feature against the entire preferred stock instrument which includes that feature. The Company’s analysis
was based on a consideration of the Preferred Stock’s economic characteristics and risks and more specifically evaluated
all the stated and implied substantive terms and features including (i) whether the Preferred Stock included redemption features,
(ii) whether the preferred stockholders were entitled to dividends, (iii) the voting rights of the Preferred Stock and (iv) the
existence and nature of any conversion rights. As a result of the Company’s determination that the Preferred Stock is an
“equity host,” the embedded conversion feature is not considered a derivative liability. Beneficial Conversion Feature of Convertible
Notes Payable The
Company accounts for convertible notes payable in accordance with the guidelines established by the FASB Accounting Standards Codification
(“ASC”) Topic 470-20, Debt with Conversion and Other Options. The beneficial conversion feature of a convertible note
is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that
is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance
of a convertible note when issued. The
discounted face value is then used to measure the effective conversion price of the note. The effective conversion price and the
market price of the Company’s common stock are used to calculate the intrinsic value of the conversion feature. The intrinsic
value is recorded in the financial statements as a debt discount from the face amount of the note and such discount is amortized
over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense. Recent Accounting Pronouncements In May 2014, the FASB issued
ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09) as modified by ASU No. 2015-14,
“Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” ASU 2016-08, “Revenue from
Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No.
2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” and
ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.”
The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of 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. In addition, new and enhanced disclosures will be required. Companies may adopt the new standard either using
the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption
approach. The Company adopted ASU 2014-09 on January 1, 2018, using the modified retrospective approach. Because the Company doesn’t
have any customer contracts as of January 1, 2018, the adoption of ASU 2014-09 did not have a material impact on the Company’s
financial position, results of operations, equity or cash flows. In December 2019, the
FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”),
which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to
the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption
permitted. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures. |
