Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 07, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Crypto Co | |
Entity Central Index Key | 1,688,126 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 21,172,860 | |
Trading Symbol | CRCW | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 1,154,996 | $ 8,950,244 | |
Accounts receivable, net | 500 | ||
Loan receivable, related party | 168,423 | ||
Investment in cryptocurrency at fair value | 1,022,099 | 2,917,627 | |
Prepaid expenses and other current assets | 196,773 | 33,294 | |
Contract asset for commissions and incentives, current portion | 114,127 | ||
Total Current assets | 3,834,768 | 11,901,665 | |
Equipment, net of accumulated depreciation | 108,159 | 68,320 | |
Investments, non-cryptocurrency | 250,000 | ||
Contract asset for commissions and incentives, net of current portion | 44,233 | ||
Intangible assets, net | 176,989 | ||
Goodwill | 9,392,685 | [1] | |
Other assets | 36,566 | 1,500 | |
TOTAL ASSETS | 13,843,400 | 11,971,485 | |
CURRENT LIABILITIES | |||
Accounts payable and accrued expenses | 769,236 | 697,609 | |
Income taxes payable | 800 | 800 | |
Contract liabilities, current portion | 2,800,248 | ||
Total Current Liabilities | 3,570,284 | 698,409 | |
Contract liabilities, net of current portion | 1,408,208 | ||
TOTAL LIABILITIES | 4,978,492 | 698,409 | |
STOCKHOLDERS' EQUITY | |||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding | |||
Common stock, $0.001 par value; 50,000,000 shares authorized, 21,169,289 and 20,458,945 shares issued and outstanding, respectively | 21,169 | 20,459 | |
Additional paid-in-capital | 27,830,366 | 19,020,176 | |
Accumulated deficit | (18,198,814) | (7,767,559) | |
Accumulated other comprehensive income | (551,778) | ||
TOTAL CRYPTO COMPANY EQUITY | 9,100,943 | 11,273,076 | |
Noncontrolling interests | (236,035) | ||
TOTAL STOCKHOLDERS' EQUITY | 8,864,908 | 11,273,076 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 13,843,400 | 11,971,485 | |
CoinTracking [Member] | |||
CURRENT ASSETS | |||
Investment in cryptocurrency at fair value | $ 1,178,350 | ||
[1] | Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Investment cost | $ 1,304,457 | $ 1,131,885 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 21,169,289 | 20,458,945 |
Common Stock, shares outstanding | 21,169,289 | 20,458,945 |
CoinTracking [Member] | ||
Investment cost | $ 1,153,325 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | |
REVENUE | ||||
Net realized gain/(loss) on investment in cryptocurrency | $ (299,086) | $ 82,640 | $ 82,640 | $ 773,512 |
Total Revenue, net | 586,747 | 82,640 | 82,640 | 2,116,337 |
OPERATING EXPENSES | ||||
Cost of subscription revenues | 325,115 | 390,176 | ||
General and administrative expenses | 2,969,183 | 1,224,748 | 1,305,848 | 5,667,975 |
Share-based compensation | 4,757,580 | 166,717 | 366,717 | 4,049,441 |
Total Operating Expenses | 8,051,878 | 1,391,465 | 1,672,565 | 10,107,592 |
OPERATING LOSS | (7,465,131) | (1,308,825) | (1,589,925) | (7,991,255) |
NET CHANGE IN UNREALIZED GAINS/(LOSSES) ON INVESTMENT IN CRYPTOCURRENCY | ||||
Net change in unrealized gains/(losses) on investment in cryptocurrency | 249,487 | 389,071 | 389,071 | (2,745,337) |
OTHER INCOME | 70,101 | 70,101 | ||
LOSS BEFORE PROVISION FOR INCOME TAXES | (7,145,543) | (919,754) | (1,200,854) | (10,666,491) |
PROVISION FOR INCOME TAXES | 800 | 800 | 800 | |
NET LOSS | (7,145,543) | (920,554) | (1,201,654) | (10,667,291) |
INCOME/(LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 126,766 | (236,035) | ||
NET LOSS ATTRIBUATE TO CRYPTO COMPANY | (7,272,309) | (920,554) | (1,201,654) | (10,431,256) |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment | (557,606) | (551,778) | ||
COMPREHENSIVE LOSS ATTRIBUTABLE TO THE CRYPTO COMPANY | $ (7,829,915) | $ (920,554) | $ (1,201,654) | $ (10,983,034) |
Net loss attributable to the Crypto Company per common share - basic and diluted | $ (0.34) | $ (0.07) | $ (0.09) | $ (0.50) |
Weighted average common shares outstanding - basic and diluted | 21,131,457 | 13,179,033 | 12,746,973 | 21,003,328 |
Subscription Revenue, Net [Member] | ||||
REVENUE | ||||
Total Revenue, net | $ 884,587 | $ 1,341,284 | ||
Other [Member] | ||||
REVENUE | ||||
Total Revenue, net | $ 1,246 | $ 1,541 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 4 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,201,654) | $ (10,667,291) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Net change in unrealized losses/(gains) on investment in cryptocurrency | (389,071) | 2,745,337 |
Net realized gain on investment in cryptocurrency | (82,640) | (773,512) |
Customer payments received in cryptocurrency | (908,924) | |
Net proceeds from sales of investments in cryptocurrency | 538,289 | |
Depreciation and amortization | 541 | 186,359 |
Share-based compensation | 366,717 | 4,049,441 |
Change in operating assets and liabilities: | ||
Accounts receivable | 500 | |
Loan receivable, related party | 25,957 | |
Prepaid expenses | (166,069) | 121,198 |
Accounts payable and accrued expenses | 232,856 | (28,713) |
Value-added taxes payable | (111,082) | |
Contract liabilities | 785,854 | |
Net cash used in operating activities | (1,239,320) | (4,036,587) |
Cash flows from investing activities: | ||
Payments for purchase of other assets | (107,000) | (25,301) |
Payments for purchase of equipment | (20,185) | (64,641) |
Cash paid for acquisition, net of cash acquired | (3,189,303) | |
Purchase of investments, non-cryptocurrency | (250,000) | |
Capitalized software development | (130,771) | |
Net cash used in investing activities | (127,185) | (3,660,016) |
Cash flows from financing activities: | ||
Proceeds from common stock issuance | 2,756,036 | |
Proceeds from exercise of stock options | 25,058 | |
Net cash provided by financing activities | 2,756,036 | 25,058 |
Effect of exchange rate changes on cash | (123,703) | |
Net (decrease) increase in cash and cash equivalents | 1,389,531 | (7,795,248) |
Cash and cash equivalents at the beginning of the Period | 8,950,244 | |
Cash and cash equivalents at the end of the Period | 1,389,531 | 1,154,996 |
Noncash investment activities: | ||
Shares of common stock issued in exchange of investment in cryptocurrency | 100,000 | |
Issues of common stock for acquisition of CoinTracking GmbH | $ 4,736,400 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | NOTE 1 - THE COMPANY The Crypto Company was incorporated in the State of Nevada on March 9, 2017 (“Inception”) and is engaged in the business of building technological infrastructure, a proprietary investment portfolio and strategic alliances to facilitate the exchange of value in the digital asset market and, specifically, to assist third parties with investing in, trading and managing their own digital assets. From time to time, we may seek strategic acquisitions either by integrating third-party teams and technology with our core business or by funding third-party teams in which we may have interest. Unless expressly indicated or the context requires otherwise, the terms “Crypto,” the “Company,” “we,” “us,” and “our” in this Quarterly Report refer to The Crypto Company and, where appropriate, its wholly owned subsidiaries, Crypto Sub, Inc., a Nevada corporation (“Crypto Sub”); CoinTracking, LLC, a Nevada limited liability company (“CoinTracking”); Malibu Blockchain, LLC, a Nevada limited liability company (“Malibu Blockchain”); and, where applicable, CoinTracking’ s majority-owned subsidiary, CoinTracking GmbH. On January 26, 2018, CoinTracking, a Nevada limited liability company and wholly owned subsidiary of the Cypto Company, acquired 50.1% of CoinTracking GmbH. The remaining 49.9% of CoinTracking GmbH is owned by Kachel Holding GmbH, a private limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of the Federal Republic of Germany (“Kachel Holding”). CoinTracking GmbH operates as a Software as a Service (“SaaS”) platform that allows users to track and manage value, profit, loss and other information regarding their investments in cryptocurrencies (but not trade their cryptocurrencies) available via web-based or mobile application. Prior to December 2017, CoinTracking GmbH operated as a sole proprietorship starting in 2013. Technology The Company is developing proprietary technology and source code to create products and services that will assist third-parties by providing them with the tools, computer programming and training to independently invest in, trade and manage their own digital assets, including trading management and auditing software, tools and processes to assist in the trading and management of our own proprietary portfolio of digital assets and the operations and traditional companies, from start-up businesses to well-established companies. We may consider using our technology to build additional units around our existing platform, or selling or licensing our technology to third-party institutions for a fee. Media and Ongoing Education The Company also engages in public discourse on an ongoing basis and regularly hosts roundtable webinars to educate the public about the cryptocurrency market. The Company does not express opinions regarding the advisability of investing in a particular digital asset or in the digital asset marketplace, and it does not receive compensation in connection with these roundtable webinars. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the period from Inception through December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018. Consolidation Liquidity and Going Concern The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund the Company’s expenses and achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. There can be no assurance that any of these future-funding efforts will be successful or that the Company will achieve its projected level of revenue in 2018 and beyond. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Use of estimates Cash and cash equivalents Investments in cryptocurrency - Management In addition, the Company’s cryptocurrency investments include Initial Coin Offerings (“ICOs”), which primarily consist of tokens that are not currently traded on an exchange. The Company records these investments at cost, as there is no active market. As of June 30, 2018, ICOs represent $367,639 of the Company’s investments in cryptocurrencies. For the six-month period ended June 30, 2018, the Company recognized no impairment losses on investments in ICOs. Investments – non-cryptocurrency Equipment Impairment of long lived assets - Business combination - Goodwill and Intangible Assets The Company assesses whether goodwill impairment exists using both qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed to determine whether a goodwill impairment exists at the reporting unit. Based on its analysis, the Company’s management believes that no impairment of the carrying value of its goodwill existed at June 30, 2018. There can be no assurance however, that market conditions will not change or demand for the Company’s products and services will continue which could result in impairment of goodwill in the future. In addition, we capitalize certain costs incurred with developing our CoinTracking SaaS platform in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased, or Marketed once technological feasibility has been established. Capitalized software costs primarily include i) external direct costs of services utilized in software development and ii) compensation and related benefits for employees who are directly associated with software development. We amortize our capitalized software costs over a three-year period, reflecting the estimated useful lives of the assets. Foreign Currency Translation Income taxes - When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. We are subject to taxation in the U.S., as well as state and German taxes. The Company has not been audited by the U.S. Internal Revenue Service, nor has the Company been audited by any states or in Germany. Fair value measurements Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date. Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, including cash, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. Revenue recognition The Company also has subscription revenues through its majority-owned subsidiary CoinTracking GmbH and minimal amounts of consulting revenue. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 supersedes nearly all existing revenue recognition guidance under US GAAP. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective transition method for contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. See “Note 5 - Revenue Recognition” for additional information on the impact to the Company. Currently, in the US GAAP accounting framework, there is no authoritative guidance specifically related to the accounting treatment of cryptocurrencies, and management has exercised significant judgement in determining appropriate accounting treatment. Management Stock-based compensation Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The compensation cost is remeasured at fair value at each reporting period when the award vests. As a result, stock option-based payments to non-employees can result in significant volatility in compensation expense. The Company accounts for its stock-based compensation using the Black-Scholes model to estimate the fair value of stock option awards. Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company’s common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate. Risks and uncertainties - The prices of cryptocurrency could materially and adversely affect an investment in the shares of the Company. The prices of the cryptocurrencies have a limited history. During such history, the cryptocurrencies’ prices have been volatile and subject to influence by many factors including the levels of liquidity. If the cryptocurrency’s markets continue to experience significant price fluctuations, the Company may experience losses. Several factors may affect the prices of the cryptocurrencies, including, but not limited to, global cryptocurrency supply and demand, and competition from other forms of digital currency or payments services. There is currently no clearing house for cryptocurrency, nor is there a central or major depository for the custody of cryptocurrency. There is a risk that some or all of the Company’s cryptocurrencies could be lost or stolen. The Company does not have insurance protection on its cryptocurrency which exposes the Company and its shareholders to the risk of loss of the Company’s cryptocurrency. Further, cryptocurrency transactions are irrevocable. Stolen or incorrectly transferred of cryptocurrency may be irretrievable. As a result, any incorrectly executed cryptocurrency transactions could adversely affect an investment in the Company. To the extent private keys for the cryptocurrency’s addresses are lost, destroyed or otherwise compromised and no backup of the private keys are accessible, the Company may be unable to access the cryptocurrency held in the associated address and the private key will not be capable of being restored by the cryptocurrency network. The processes by which cryptocurrency transactions are settled are dependent on the cryptocurrency peer-to-peer network, and as such, the Company is subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which may adversely affect the value of the cryptocurrencies. Net loss per common share Marketing expense - |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS In June 2018, FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company is evaluating the effect that ASU No. 2018-07 will have on its consolidated financial statements and related disclosures. In July 2017, the FASB issued No. ASU 2017-11 , In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Essentially, an entity will not have to account for the effects of a modification if: (1) The fair value of the modified award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The new standard became effective for us on January 1, 2018. Adoption of the ASU No. 2017-11 did not have a significant impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (Topic 805). The new guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. The ASU is effective for annual reporting periods beginning after December 15, 2017, and for interim periods within those years. Adoption of ASU No. 2017-01 did not have a significant impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issues, ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) which removes “Step Two” of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The ASU is effective for annual reporting periods beginning after December 15, 2019, and for interim periods within those years, with early adoption permitted. The adoption of ASU No. 2017-04 is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which, among other things, requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard becomes effective for us on January 1, 2019. Early adoption is permitted. The amendments in this update should be applied under a modified retrospective approach. Adoption of ASU No. 2016-02 will not have a significant impact on our consolidated financial statements and related disclosures. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 4 - ACQUISITION On January 26, 2018, CoinTracking, a wholly-owned subsidiary of the Company, acquired 50.1% of the equity interest in CoinTracking GmbH, for (i) $4,736,400 in cash and (ii) 473,640 shares of common stock of the Company at $10 per share for total purchase price valued at $9,472,800. On the acquisition date, the fair market value of $10 per share for the Company’s common stock was determined using a trading range from November 2017, discounted further due to lack of marketability. The Company used this approach due to the lack of trading volume since (i) the stock trading was suspended by the SEC in December 2017 and was moved to OTC Grey market by the OTC Markets Group, Inc. on January 3, 2018, (ii) stock sales to accredited investors on December 12, 2017, at $7 per share, and (iii) a valuation performed as of March 31, 2018. The equity purchase agreement between the Company and CoinTracking GmbH included a purchase price adjustment pursuant to which the consideration would increase if the share price of the Company’s common stock closed below $10 per share on July 2, 2018. No adjustment was required. CoinTracking GmbH provides its customers with the ability to view and monitor their own cryptocurrency portfolios as well as tax calculation and reporting services. Customers may not make trades through the CoinTracking GmbH platform. The purpose of the acquisition was to increase our presence in the digital asset industry and build strategic alliances. The consolidated financial statements were prepared using the acquisition method of accounting in accordance with FASB ASC805, Business Combinations Accordingly, consideration paid by the Company to complete the acquisition was allocated to the identifiable assets and liabilities of CoinTracking GmbH based on estimated fair values as of the closing date. We made a preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on the information available and preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed. Acquisition-related costs were expensed as incurred and were not considered to be significant. We expect to complete the final purchase price allocation related to this acquisition prior to year-end. Therefore, the valuation of certain assets and liabilities in the CoinTracking GmbH acquisition is preliminary and subject to change. The table below summarizes the fair values of the assets acquired and liabilities assumed, translated from euros to U.S. dollars, at the date of acquisition: CoinTracking GmbH Cash and cash equivalents $ 1,547,097 Investment in cryptocurrency 1,115,345 Loan receivable – related party 194,380 Other current assets 284,677 Goodwill 10,014,881 Other assets 144,566 Total assets $ 13,300,946 Current liabilities $ 211,422 Contract liabilities, short term 2,686,858 Contract liabilities, long term 929,866 Total liabilities 3,828,146 Net assets acquired $ 9,472,800 During the six months ended June 30, 2018, the Company recorded an adjustment to current liabilities assumed of $250,000, resulting in a reduction of goodwill. The purchase price was based on the expected financial performance of CoinTracking GmbH and not on the value of the net identifiable assets at the time of acquisition. This resulted in a significant portion of the purchase price being attributed to goodwill. As a result, the Company recognized $10,014,881 of goodwill on the date of acquisition. Once the purchase price allocation is completed, the Company expects a portion of goodwill to be allocated to non-controlling interests and intangible assets, primarily software and technology and a non-compete agreement with the former majority shareholder of CoinTracking GmbH, included as finite-lived intangible assets, which will increase amortization expense by a significant amount. Unaudited pro forma financial information The unaudited pro forma financial information in the table below presents the combined results of the Company and CoinTracking GmbH as if these acquisitions had occurred on January 1, 2018. The unaudited pro forma financial information includes adjustments required under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the acquisitions actually occurred on January 1, 2018. For the three and six months ended June 30, 2018: Three-months Six Months Revenue $ 586,747 $ 2,232,007 Net loss $ (7,145,543 ) (10,374,966 ) Basic and diluted loss per share: Basic and diluted $ (0.34 ) $ (0.49 ) |
Subscription Revenue Recognitio
Subscription Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Subscription Revenue Recognition | |
Subscription Revenue Recognition | NOTE 5 – SUBSCRIPTION REVENUE RECOGNITION CoinTracking GmbH accounts for a contract when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services. Most of the Company’s contracts with customers are single, or have few distinct performance obligations, the transaction price is allocated to each performance obligation using the stand-alone selling price. CoinTracking GmbH’s revenue is primarily derived directly from users in the form of subscriptions. Subscription revenue, is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by PayPal or cryptocurrencies, and, subject to certain conditions identified in our terms and conditions. Revenue is initially deferred and is recognized using the straight-line method over the terms of the applicable subscription period, which primarily range from annual to perpetual. Transaction Price The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for services, including amounts that are variable. CoinTracking GmbH has a standalone sales price for its subscription service, which varies based on length of subscription. Further, the Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. Estimates of certain revenue Revenue collected in advance for subscriptions ranging from annual to perpetual packages are deferred and recognized as revenue on a straight-line basis over the terms of the applicable subscription period or performance obligation period. For “lifetime” revenue packages, where the customer has access to the website for unlimited length of time, the Company has elected to recognize revenue on a straight-line basis over three years. We believe that based on the short history of customer data, customer relationship period, and number of available alternative providers, and anticipation of future changes to the blockchain industry, a measure of three years of performance obligation to our customers appears to be appropriate. The Company intends to re-evaluate the length of the performance obligation period for lifetime revenue packages periodically based on historical and industry data and adjust it as deemed necessary. Net Revenue and Charge-back Reserves CoinTracking GmbH does not maintain an allowance for doubtful accounts because the customer prepays for subscription in advance before access is provided to CoinTracking GmbH’s website. The Company maintains a reserve for potential credits issued to consumers or other revenue adjustments. In addition, as of June 30, 2018, PayPal withheld $49,856 for potential credits issued to customers, which is included in prepaid expenses and other current assets on our condensed Balance Sheet. Contract Liabilities Contract liabilities are recorded when payments are received or due in advance of performing CoinTracking GmbH’s service obligations and is recognized over the service period, which primarily relates to prepayments of subscription revenue. At the acquisition date of January 26, 2018, CoinTracking GmbH’s total contract liabilities were $3,616,724, and we recognized revenue of $1,341,284 for the six months ended June 30, 2018. As of June 30, 2018, $2,800,248 of current contract liabilities were recorded and $1,408,208 of long-term contract liabilities were recorded. As of December 31, 2017, we did not have consolidated contract liabilities. Assets Recognized from the Costs to Obtain a Contract with a Customer CoinTracking GmbH has determined that certain costs associated with affiliate payments paid to customers pursuant to certain sales incentive programs, meet the requirements to be capitalized as a cost of obtaining a contract. Affiliates are paid in Bitcoins and expense is amortized over the applicable subscription period. During the three and six months ended June 30, 2018, the Company recognized expense of $32,100 and $62,754, respectively, related to the amortization of affiliate payments. The aggregate contract asset balance at June 30, 2018 is $158,360. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 6 - SEGMENT INFORMATION The Company has organized its operations into two segments: a software subscription segment and a cryptocurrency investment segment. The software subscription segment primarily consists of amounts earned through subscriptions to the CoinTracking GmbH website. Among other features, the CoinTracking GmbH website offers subscriptions, currently ranging from annual to perpetual, that allow individuals and entities to record exactly when and where they acquired virtual currencies of any variety, as well as their acquisition prices. Operating expense related to this segment is technology infrastructure and general administrative costs primarily incurred in Germany. The cryptocurrency investment segment primarily consists of amounts earned, if any, through proprietary trading activities of cryptocurrencies and costs are operating expenses that consists of general and administrative costs in North America. The Company does not trade or manage other individuals’ or entities’ funds and has no current plans to do so. There are no intercompany internal revenue transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business performance and manages its operations. The following table summarizes the Company’s operating income by segment for the three months ended June 30: 2018 Cryptocurrency Investment Software Subscription Total Revenue, net $ (299,086 ) $ 885,833 $ 586,747 Costs and expenses (7,397,216 ) (654,662 ) (8,051,878 ) Operating income/(loss) $ (7,696,302 ) $ 231,171 $ (7,465,131 ) 2017 Cryptocurrency Investment Software Subscription Total Revenue, net $ 82,640 $ - $ 82,640 Costs and expenses (1,391,465 ) - (1,391,465 ) Operating loss $ (1,308,825 ) $ - $ (1,308,825 ) The following table summarizes the Company’s operating income by segment for the six months ended June 30: 2018 Cryptocurrency Investment Software Subscription Total Revenue, net $ 773,512 $ 1,342,825 $ 2,116,337 Costs and expenses (8,836,235 ) (1,271,374 ) (10,107,592 ) Operating income/(loss) $ (8,062,723 ) 71,468 (7,991,255 ) The following table summarizes the Company’s operating income by segment for the period from Inception to June 30, 2017: 2017 Cryptocurrency Investment Software Subscription Total Revenue, net $ 82,640 $ - $ 82,640 Costs and expenses (1,672,565 ) - (1,672,565 ) Operating loss $ (1,589,925 ) $ - $ (1,589,925 ) |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Investments | NOTE 7 - INVESTMENTS Investments include cryptocurrency classified as a Level 2 asset because inputs are from cryptocurrency exchanges with price variability. The Company also invests in a SAFE and ICOs which are included as Level 3 investments as there was no active market as of June 30, 2018. The following table summarizes the Company’s investments at fair value as of June 30, 2018: Level 1 Level 2 Level 3 Investment in cryptocurrency $ - $ 1,832,810 $ 617,639 The Company establishes processes and procedures to ensure that the valuation methodologies that are categorized within Level 3 are fair, consistent and verifiable. ICOs are carried at cost which approximates fair value at June 30, 2018. The Company considers the length of its investments, of which a majority were made during the current year, as well as its comprehensive investment process which includes reviews of white papers, preparation of either short or long forms analysis that is reviewed by the Company’s internal investment committee, among other factors in determining fair value. At the time that the ICOs have an available market exchange, the investments will be reclassified to Level 2. The following table sets forth a summary of changes in the fair value of the Company’s Level 3 investments for the six months ended June 30, 2018: Level 3 Cryptocurrency Balance at December 31, 2017 $ 167,818 Transfers to Level 2 investments (50,179 ) Purchases, sales, issuances, and settlement, net 500,000 Balance, June 30, 2018 $ 367,639 The following table summarizes the fair value of cryptocurrencies, other than ICOs, held as of June 30, 2018: Bitcoin $ 1,223,488 Ethereum 105,432 Bitcoin Cash 70,028 Litecoin 42,316 Cardano 25,822 EOS 24,525 Stellar Lumens 24,369 BlockVee 23,445 Ether Classis 23,037 Binance Coin 21,108 NEO 20,882 Dash 20,271 Monero 17,619 Polymath 16,281 OmiseGO 15,143 Enigma 14,096 Ontology 13,761 Vechain 13,457 Qtum 13,122 Steem 10,473 Zcash 9,893 Siacoin 9,466 Basic Attention Token 8,665 0x 8,429 ICON 8,387 Nano 8,298 Lisk 8,272 Aeternity 7,946 Zilliqa 7,827 Metal 6,342 Aragon 4,757 Bitcoin Private 1,948 Ripple 1,384 DigiByte 752 Decred 435 NavCoin 234 Startis 215 Dogecoin 188 Gas 170 NEM 157 Horizen 122 Waves 100 CloakCoin 45 Decentraland 37 PIVX 32 Bytom 20 Nebulas 14 $ 1,832,810 |
Equipment
Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Equipment | NOTE 8 - EQUIPMENT Equipment consists of the following: June 30, 2018 December 31, 2017 Computer equipment $ 107,850 $ 69,241 Furniture equipment 15,322 3,754 123,172 72,995 Less accumulated depreciation (15,013 ) (4,675 ) $ 108,159 $ 68,320 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 9 – GOODWILL AND INTANGBILE ASSETS Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company’s goodwill balance is the result of the acquisition of CoinTracking GmbH in the current year (see footnote 4). Intangible assets include software development costs, related to our CoinTracking GMBH SaaS platform. The carrying amount of goodwill and intangible assets for the six months ended June 30, 2018 were as follows: Balance as of December 31, 2017(net of amortization) Additions Amortization Balance as of June 30, 2018 Goodwill $ - $ 9,392,685 - $ 9,392,685 (1) Capitalized Software $ - $ 217,632 $ (40,644 ) $ 176,988 $ - $ 9,610,317 $ (40,644 ) $ 9,569,673 (1) Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. The Company evaluates the recoverability of goodwill annually as of December 31, and whenever events or changes in circumstances indicate to us that the carrying amount may not be recoverable. There were no conditions that indicated any impairment of goodwill as of June 30, 2018. Intangible assets with finite useful lives are amortized over their respective estimated useful lives. Amortization expense related to intangible assets was $9,060 for the three and six months ended June 30, 2018, respectively, and $0 for the prior year periods. Amortization expense for intangible assets is included in general and administrative expenses. The following table provides estimated future amortization expense related to intangible assets as of June 30, 2018: Year ending December 31, Future Amortization 2018 (remaining) $ 37,564 2019 75,129 2020 51,611 2021 12,684 2022 - $ 176,988 |
Summary of Common Stock Transac
Summary of Common Stock Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of Common Stock Transactions | NOTE 10 - SUMMARY OF COMMON STOCK TRANSACTIONS On April 18, 2018, the Company issued to James Gilbert 202,512 shares of common stock of the Company, valued at $7 per share at the time of issuance, or $1,417,584, for certain services performed on behalf of the Company. On March 20, 2018, upon exercise of a stock option by a consultant of the Company, the Company issued 7,031 shares of common stock at an exercise price of $0.01 per share. On January 31, 2018, upon partial exercise of a stock option by an employee of the Company, the Company issued 14,667 shares of common stock as a cashless exercise. On January 22, 2018, a consultant of the Company exercised 12,494 stock options at an exercise price of $2.00 per share. The Company did not issue the shares upon exercise, recording a common stock payable on its condensed consolidated balance sheet at March 31, 2018. On May 16, 2018, the Company issued the shares and recorded the issuance to common stock and additional paid-in-capital. On January 16, 2018, pursuant to an Equity Purchase Agreement (the “Agreement”) entered into on December 22, 2017 by and among the Company, CoinTracking, Kachel Holding, and Dario Kachel, CoinTracking purchased from Kachel Holding 12,525 shares of CoinTracking GmbH, representing 50.1% of the equity interests in CoinTracking GmbH, for a purchase price which consisted, in part, of 473,640 shares of common stock of the Company (the “CoinTracking Acquisition”). The transaction closed on January 26, 2018 (see Note 4). |
Warrants for Common Stock
Warrants for Common Stock | 6 Months Ended |
Jun. 30, 2018 | |
Warrants For Common Stock | |
Warrants for Common Stock | NOTE 11 – WARRANTS FOR COMMON STOCK During the six-month period ended June 30, 2018, no stock purchase warrants were issued. As of June 30, 2018, outstanding warrants to purchase shares of the Company’s common stock were as follows: Number of Shares Issuance Date Exercisable for Expiration Date Exercise Price Outstanding Under Warrants September 2017 Common Shares September 25, 2020 $ 2.00 168,125 The warrants expire on the third anniversary of their issuance dates. The exercise price of the warrants is subject to adjustment from time to time, as provided therein, to prevent dilution of purchase rights granted thereunder. The warrants are considered indexed to the Company’s own stock and therefore no subsequent remeasurement is required. |
Summary of Stock Options
Summary of Stock Options | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options | NOTE 12 - SUMMARY OF STOCK OPTIONS On July 21, 2017, the Company’s board of directors adopted The Crypto Company 2017 Equity Incentive Plan (the “Plan), which was approved by its stockholders on August 24, 2017. The Plan is administered by the board of directors (the “Administrator”). Under the Plan, the Company may grant equity awards to eligible participants which may take the form of stock options (both incentive stock options and non-qualified stock options) and restricted stock awards. Awards may be granted to officers, employees, non-employee directors (as defined in the Plan) and other key persons (including consultants and prospective employees). The term of any stock option award may not exceed 10 years and may be subject to vesting conditions, as determined by the Administrator. Options granted generally vest over eighteen to thirty-six months. Incentive stock options may be granted only to employees of the Company or any subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Internal Revenue Code. During the six months ended June 30, 2018, the Company issued an additional 450,000 stock options to members of our board of directors, 1,957,062 stock options to employees, and 400,000 stock options to non-employees. 5,000,000 shares of the Company’s common stock are reserved for issuance under the Plan. As of the six-month period ended June 30, 2018, there are outstanding stock option awards issued from the Plan covering a total of 3,163,735 shares of the Company’s common stock and there remain reserved for future awards 1,836,265 shares of the Company’s common stock. Weighted Average Weighted Remaining Average Contractual Aggregate Number Exercise Term Intrinsic of Shares Price (years) Value Options outstanding, at December 31, 2017 644,531 $ 2.32 Options granted 2,807,062 $ 7.37 Options cancelled (250,000 ) $ 7.00 Options exercised (37,858 ) $ 1.63 Options outstanding, at June 30, 2018 3,163,735 $ 6.44 9.44 $ 128,764,882 Exercisable 637,117 $ 5.73 9.66 $ 25,762,945 Vested and exercisable and expected to vest, end of period 3,163,735 $ 6.44 9.44 $ 128,764,882 The Company recognized $3,339,996, and $2,631,857 of compensation expense related to stock options for the three and six months ended June 30, 2018, respectively. The total intrinsic value for options exercised, determined using the market price of our common stock on the date of exercise, was $0 and $2,978,095 during the three and six months ended June 30, 2018, respectively. During the six-month period ended June 30, 2018 and the period from Inception through June 30, 2017 the Company had not granted any restricted stock awards. As of June 30, 2018, approximately $5,522,520 of total unrecognized compensation costs related to stock options issued to employees is expected to be recognized over a weighted average period of approximately 1.23 years. The determination of the fair value of stock-based compensation awards utilizing the Black-Scholes model is affected by the Company’s stock price and a number of complex and subjective assumptions, including stock price, volatility, expected life of the equity award, forfeitures rates if any, risk-free interest rates and expected dividends. Volatility is based on the historical volatility of comparable companies measured over the most recent period, generally commensurate with the expected life of the Company’s stock options, adjusted for future expectations given the Company’s limited historical share price data. The risk-free rate is based on implied yields in effect at the time of the grant on U.S. Treasury zero-coupon bonds with remaining terms equal to the expected term of the stock options. The expected dividend is based on the Company’s history and expectation of dividend payouts. Forfeitures are recognized when they occur. The range of assumptions used for the six-month period ended June 30, 2018 are as follows: June 30, 2018 Ranges Weighted-average volatility 36 - 75 % Expected dividends 0 % Expected term (in years) 5.00 - 10 years Risk-free rate 1.91 - 2.95 % Stock options issued to nonemployees are revalued at each vesting tranche and/or reporting date in accordance with ASC 505. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 - RELATED PARTY TRANSACTIONS The Company has a services agreement with Full Stack Finance for chief financial officer and accounting outsource services. Ivan Ivankovich, the Company’s CFO, is the Co- Managing Director of Full Stack Finance. Emad Boulos, an employee of Full Stack Finance, serves as the Company’s Controller. The Company paid a total of $255,833 and $394,092 in fees to Full Stack Finance during the three-month and six-month period ended June 30, 2018, respectively, and as of June 30, 2018, there was a balance of $138,791 due to Full Stack Finance, which is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. The Company has a loan receivable from an officer of CoinTracking GmbH as of June 30, 2018 totaling $168,423. The loan is due upon demand and it bears interest at 2%. During the quarter ended June 30, 2018 and the period from Inception to June 30, 2017 interest income accrued for this loan was $1,246 and $0, respectively, which is included in other income on the accompanying condensed consolidated statements of operations. On April 3, 2018, CoinTracking entered into a Loan Agreement (the “Loan Agreement”) with CoinTracking GmbH, pursuant to which CoinTracking GmbH may provide a loan (the “CoinTracking Loan”) of up to $3,000,000 to CoinTracking, to be advanced to CoinTracking in one or more tranches, at such times and in such amounts as may be requested by CoinTracking from time to time, on or before the tenth anniversary of the Loan Agreement. The Company is deemed obligor of CoinTracking’s obligations under the Loan Agreement for United States Federal income tax purposes. Interest on the CoinTracking Loan will accrue at a rate per annum of the greater of (i) three percent (3%), or (ii) the interest rates published monthly by the United States Internal Revenue Service and in effect under section 1274(d) of the Internal Revenue Code in effect as of the date of issuance of any promissory note under the CoinTracking Loan, and will be payable quarterly. During the three months ended June 30, 2018, pursuant to the Loan Agreement, CoinTracking GmbH advanced $1,500,000 to CoinTracking in exchange for three promissory notes (the “CoinTracking Note”) in the amounts of $300,000, $700,000 and $500,000, respectively, which is still outstanding as of June 30, 2018. The CoinTracking Note will mature on the second anniversary thereof. CoinTracking and CoinTracking GmbH are consolidated entities, as such, the loan and advances are considered to be intercompany transactions and are eliminated in consolidation. Effective May 14, 2018, Michael Poutre, former Chief Executive Officer and director of the Company, resigned from all of his current roles with the Company. Mr. Poutre will remain a consultant to the Company until November 2018. In connection with Mr. Poutre’s resignation, the Company entered into a Separation and Consulting Agreement and General Mutual Release (the “Separation and Consulting Agreement”), which was executed on May 9, 2018 and approved by the Board of Directors on May 14, 2018. The Separation and Consulting Agreement was not effective until May 17, 2018, following the end of the revocation period. The Separation and Consulting Agreement provides that the Company will pay Mr. Poutre a lump-sum cash payment of (i) his earned but unpaid base salary, (ii) his accrued but unpaid vacation time, and (iii) any outstanding requests for expense reimbursements that are approved pursuant to Company policy. Mr. Poutre will serve as a consultant of the Company for six months at a rate of $30,000 per month, payable in two separate tranches, though the Company may terminate his services for any reason. The Separation and Consulting Agreement contains other standard provisions contained in agreements of this nature including non-disparagement and a general release of any and all claims . |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Share | NOTE 14 - BASIC AND DILUTED LOSS PER SHARE The following is a reconciliation of the basic and diluted loss per share computations: For the three months ended June 30, 2018 For the six months ended June 30, 2018 Numerator for basic and diluted income per share: Net loss attributable to the Company $ (7,272,309 ) $ (10,431,256 ) Denominator for basic and diluted income per share: Weighted average shares (basic) 21,131,457 21,003,328 Common stock equivalents - - Weighted average shares (diluted) 21,131,457 21,003,328 Basic and diluted income (loss) per share: Basic and diluted $ (0.34 ) $ (0.50 ) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15 - COMMITMENTS AND CONTINGENCIES Operating leases On January 18, 2018, the Company entered into a short-term lease agreement with Miramar Property Investment Co., for an office space on a month-to-month basis, requiring monthly rents of $3,024 expiring through September 30, 2018. Facility rent expense was $10,478 and $9,000 for the three months ended June 30, 2018 and 2017, respectively, and $35,501 and $9,000, for the six months ended June 30, 2018 and the three-month period from Inception to June 30, 2017 respectively. Legal Indemnities and guarantees |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16: SUBSEQUENT EVENTS On July 3, 2018, upon exercise of a stock option by a member of the Company’s board of directors, the Company issued 3,571 shares of common stock at an exercise price of $7.00 per share. As of August 31, 2018, the Company liquidated, into cash, all its investment in cryptocurrency held by the cryptocurrency investment segment, which had a balance of $1,022,099 as of June 30, 2018, included in investment in cryptocurrency, of The Crypto Company in the condensed consolidated balance sheet. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the period from Inception through December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018. |
Consolidation | Consolidation |
Liquidity and Going Concern | Liquidity and Going Concern The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund the Company’s expenses and achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. There can be no assurance that any of these future-funding efforts will be successful or that the Company will achieve its projected level of revenue in 2018 and beyond. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Use of Estimates | Use of estimates |
Cash and Cash Equivalents | Cash and cash equivalents |
Investments | Investments in cryptocurrency - Management In addition, the Company’s cryptocurrency investments include Initial Coin Offerings (“ICOs”), which primarily consist of tokens that are not currently traded on an exchange. The Company records these investments at cost, as there is no active market. As of June 30, 2018, ICOs represent $367,639 of the Company’s investments in cryptocurrencies. For the six-month period ended June 30, 2018, the Company recognized no impairment losses on investments in ICOs. Investments – non-cryptocurrency |
Equipment | Equipment |
Impairment of Long Lived Assets | Impairment of long lived assets - |
Business Combination | Business combination - |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company assesses whether goodwill impairment exists using both qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed to determine whether a goodwill impairment exists at the reporting unit. Based on its analysis, the Company’s management believes that no impairment of the carrying value of its goodwill existed at June 30, 2018. There can be no assurance however, that market conditions will not change or demand for the Company’s products and services will continue which could result in impairment of goodwill in the future. In addition, we capitalize certain costs incurred with developing our CoinTracking SaaS platform in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased, or Marketed once technological feasibility has been established. Capitalized software costs primarily include i) external direct costs of services utilized in software development and ii) compensation and related benefits for employees who are directly associated with software development. We amortize our capitalized software costs over a three-year period, reflecting the estimated useful lives of the assets. |
Foreign Currency Translation | Foreign Currency Translation |
Income Taxes | Income taxes - When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. We are subject to taxation in the U.S., as well as state and German taxes. The Company has not been audited by the U.S. Internal Revenue Service, nor has the Company been audited by any states or in Germany. |
Fair Value Measurements | Fair value measurements Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date. Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, including cash, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. |
Revenue Recognition | Revenue recognition The Company also has subscription revenues through its majority-owned subsidiary CoinTracking GmbH and minimal amounts of consulting revenue. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 supersedes nearly all existing revenue recognition guidance under US GAAP. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective transition method for contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. See “Note 5 - Revenue Recognition” for additional information on the impact to the Company. Currently, in the US GAAP accounting framework, there is no authoritative guidance specifically related to the accounting treatment of cryptocurrencies, and management has exercised significant judgement in determining appropriate accounting treatment. Management |
Stock-based Compensation | Stock-based compensation Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The compensation cost is remeasured at fair value at each reporting period when the award vests. As a result, stock option-based payments to non-employees can result in significant volatility in compensation expense. The Company accounts for its stock-based compensation using the Black-Scholes model to estimate the fair value of stock option awards. Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company’s common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate. |
Risks and Uncertainties | Risks and uncertainties - The prices of cryptocurrency could materially and adversely affect an investment in the shares of the Company. The prices of the cryptocurrencies have a limited history. During such history, the cryptocurrencies’ prices have been volatile and subject to influence by many factors including the levels of liquidity. If the cryptocurrency’s markets continue to experience significant price fluctuations, the Company may experience losses. Several factors may affect the prices of the cryptocurrencies, including, but not limited to, global cryptocurrency supply and demand, and competition from other forms of digital currency or payments services. There is currently no clearing house for cryptocurrency, nor is there a central or major depository for the custody of cryptocurrency. There is a risk that some or all of the Company’s cryptocurrencies could be lost or stolen. The Company does not have insurance protection on its cryptocurrency which exposes the Company and its shareholders to the risk of loss of the Company’s cryptocurrency. Further, cryptocurrency transactions are irrevocable. Stolen or incorrectly transferred of cryptocurrency may be irretrievable. As a result, any incorrectly executed cryptocurrency transactions could adversely affect an investment in the Company. To the extent private keys for the cryptocurrency’s addresses are lost, destroyed or otherwise compromised and no backup of the private keys are accessible, the Company may be unable to access the cryptocurrency held in the associated address and the private key will not be capable of being restored by the cryptocurrency network. The processes by which cryptocurrency transactions are settled are dependent on the cryptocurrency peer-to-peer network, and as such, the Company is subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which may adversely affect the value of the cryptocurrencies. |
Net Loss Per Common Share | Net loss per common share |
Marketing Expense | Marketing expense - |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The table below summarizes the fair values of the assets acquired and liabilities assumed, translated from euros to U.S. dollars, at the date of acquisition: CoinTracking GmbH Cash and cash equivalents $ 1,547,097 Investment in cryptocurrency 1,115,345 Loan receivable – related party 194,380 Other current assets 284,677 Goodwill 10,014,881 Other assets 144,566 Total assets $ 13,300,946 Current liabilities $ 211,422 Contract liabilities, short term 2,686,858 Contract liabilities, long term 929,866 Total liabilities 3,828,146 Net assets acquired $ 9,472,800 |
Schedule of Unaudited Pro Forma Financial Information | For the three and six months ended June 30, 2018: Three-months Six Months Revenue $ 586,747 $ 2,232,007 Net loss $ (7,145,543 ) (10,374,966 ) Basic and diluted loss per share: Basic and diluted $ (0.34 ) $ (0.49 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Operating Income (Loss) by Segment | The following table summarizes the Company’s operating income by segment for the three months ended June 30: 2018 Cryptocurrency Investment Software Subscription Total Revenue, net $ (299,086 ) $ 885,833 $ 586,747 Costs and expenses (7,397,216 ) (654,662 ) (8,051,878 ) Operating income/(loss) $ (7,696,302 ) $ 231,171 $ (7,465,131 ) 2017 Cryptocurrency Investment Software Subscription Total Revenue, net $ 82,640 $ - $ 82,640 Costs and expenses (1,391,465 ) - (1,391,465 ) Operating loss $ (1,308,825 ) $ - $ (1,308,825 ) The following table summarizes the Company’s operating income by segment for the six months ended June 30: 2018 Cryptocurrency Investment Software Subscription Total Revenue, net $ 773,512 $ 1,342,825 $ 2,116,337 Costs and expenses (8,836,235 ) (1,271,374 ) (10,107,592 ) Operating income/(loss) $ (8,062,723 ) 71,468 (7,991,255 ) The following table summarizes the Company’s operating income by segment for the period from Inception to June 30, 2017: 2017 Cryptocurrency Investment Software Subscription Total Revenue, net $ 82,640 $ - $ 82,640 Costs and expenses (1,672,565 ) - (1,672,565 ) Operating loss $ (1,589,925 ) $ - $ (1,589,925 ) |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Schedule of Fair Value of Investments in Cryptocurrency | The following table summarizes the Company’s investments at fair value as of June 30, 2018: Level 1 Level 2 Level 3 Investment in cryptocurrency $ - $ 1,832,810 $ 617,639 The following table sets forth a summary of changes in the fair value of the Company’s Level 3 investments for the six months ended June 30, 2018: Level 3 Cryptocurrency Balance at December 31, 2017 $ 167,818 Transfers to Level 2 investments (50,179 ) Purchases, sales, issuances, and settlement, net 500,000 Balance, June 30, 2018 $ 367,639 |
Summary of Cryptocurrencies Held | The following table summarizes the fair value of cryptocurrencies, other than ICOs, held as of June 30, 2018: Bitcoin $ 1,223,488 Ethereum 105,432 Bitcoin Cash 70,028 Litecoin 42,316 Cardano 25,822 EOS 24,525 Stellar Lumens 24,369 BlockVee 23,445 Ether Classis 23,037 Binance Coin 21,108 NEO 20,882 Dash 20,271 Monero 17,619 Polymath 16,281 OmiseGO 15,143 Enigma 14,096 Ontology 13,761 Vechain 13,457 Qtum 13,122 Steem 10,473 Zcash 9,893 Siacoin 9,466 Basic Attention Token 8,665 0x 8,429 ICON 8,387 Nano 8,298 Lisk 8,272 Aeternity 7,946 Zilliqa 7,827 Metal 6,342 Aragon 4,757 Bitcoin Private 1,948 Ripple 1,384 DigiByte 752 Decred 435 NavCoin 234 Startis 215 Dogecoin 188 Gas 170 NEM 157 Horizen 122 Waves 100 CloakCoin 45 Decentraland 37 PIVX 32 Bytom 20 Nebulas 14 $ 1,832,810 |
Equipment (Tables)
Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Equipment | Equipment consists of the following: June 30, 2018 December 31, 2017 Computer equipment $ 107,850 $ 69,241 Furniture equipment 15,322 3,754 123,172 72,995 Less accumulated depreciation (15,013 ) (4,675 ) $ 108,159 $ 68,320 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | The carrying amount of goodwill and intangible assets for the six months ended June 30, 2018 were as follows: Balance as of December 31, 2017(net of amortization) Additions Amortization Balance as of June 30, 2018 Goodwill $ - $ 9,392,685 - $ 9,392,685 (1) Capitalized Software $ - $ 217,632 $ (40,644 ) $ 176,988 $ - $ 9,610,317 $ (40,644 ) $ 9,569,673 (1) Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. |
Schedule of Estimated Future Amortization Expense Related to Intangible Assets | The following table provides estimated future amortization expense related to intangible assets as of June 30, 2018: Year ending December 31, Future Amortization 2018 (remaining) $ 37,564 2019 75,129 2020 51,611 2021 12,684 2022 - $ 176,988 |
Warrants for Common Stock (Tabl
Warrants for Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Warrants For Common Stock | |
Schedule of Outstanding Warrants to Purchase Shares of Common Stock | As of June 30, 2018, outstanding warrants to purchase shares of the Company’s common stock were as follows: Number of Shares Issuance Date Exercisable for Expiration Date Exercise Price Outstanding Under Warrants September 2017 Common Shares September 25, 2020 $ 2.00 168,125 |
Summary of Stock Options (Table
Summary of Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Activity | Weighted Average Weighted Remaining Average Contractual Aggregate Number Exercise Term Intrinsic of Shares Price (years) Value Options outstanding, at December 31, 2017 644,531 $ 2.32 Options granted 2,807,062 $ 7.37 Options cancelled (250,000 ) $ 7.00 Options exercised (37,858 ) $ 1.63 Options outstanding, at June 30, 2018 3,163,735 $ 6.44 9.44 $ 128,764,882 Exercisable 637,117 $ 5.73 9.66 $ 25,762,945 Vested and exercisable and expected to vest, end of period 3,163,735 $ 6.44 9.44 $ 128,764,882 |
Schedule of Stock Option Assumptions Used | The range of assumptions used for the six-month period ended June 30, 2018 are as follows: June 30, 2018 Ranges Weighted-average volatility 36 - 75 % Expected dividends 0 % Expected term (in years) 5.00 - 10 years Risk-free rate 1.91 - 2.95 % |
Basic and Diluted Loss Per Sh30
Basic and Diluted Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following is a reconciliation of the basic and diluted loss per share computations: For the three months ended June 30, 2018 For the six months ended June 30, 2018 Numerator for basic and diluted income per share: Net loss attributable to the Company $ (7,272,309 ) $ (10,431,256 ) Denominator for basic and diluted income per share: Weighted average shares (basic) 21,131,457 21,003,328 Common stock equivalents - - Weighted average shares (diluted) 21,131,457 21,003,328 Basic and diluted income (loss) per share: Basic and diluted $ (0.34 ) $ (0.50 ) |
The Company (Details Narrative)
The Company (Details Narrative) | Jun. 30, 2018 | Jan. 26, 2018 |
Equity interests, percentage | 4.00% | |
CoinTracking GmbH [Member] | ||
Equity interests, percentage | 50.10% | 50.10% |
Kachel Holding GmbH [Member] | ||
Equity interests, percentage | 49.90% |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jan. 26, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Mar. 08, 2017 |
Common stock ownership percentage | 4.00% | 4.00% | |||||
Cash balance | $ 1,154,996 | $ 1,389,531 | $ 1,389,531 | $ 1,154,996 | $ 8,950,244 | ||
Cash declined | 7,795,248 | 7,795,248 | |||||
Cash paid for acquisition, net of cash acquired | 3,189,303 | ||||||
Working capital | 264,484 | 264,484 | |||||
Contract liability | 2,800,248 | 2,800,248 | |||||
Investment in cryptocurrency at fair value | 1,022,099 | 1,022,099 | 2,917,627 | ||||
Accumulated deficit | 18,198,814 | 18,198,814 | 7,767,559 | ||||
Consolidated investments | $ 2,200,449 | $ 2,200,449 | |||||
Percentage of volume of trades on exchanges | 13.00% | 13.00% | |||||
Investment in trading exchange on Bitcoin/USD per day | $ 168,000,000 | ||||||
Investment in a private enterprise | $ 250,000 | $ 250,000 | |||||
Equity interests, percentage | 4.00% | 4.00% | |||||
Income tax payable | $ 800 | $ 800 | $ 800 | ||||
Marketing expenses | $ 85,570 | $ 13,500 | $ 13,500 | $ 134,269 | |||
Minimum [Member] | |||||||
Estimated useful life of equipment | 3 years | ||||||
Maximum [Member] | |||||||
Estimated useful life of equipment | 5 years | ||||||
CoinTracking GmbH [Member] | |||||||
Common stock ownership percentage | 50.10% | 50.10% | 50.10% | ||||
Cash paid for acquisition, net of cash acquired | $ 9,472,800 | ||||||
Equity interests, percentage | 50.10% | 50.10% | 50.10% | ||||
Initial Coin Offerings [Member] | |||||||
Investment in cryptocurrency at fair value | $ 367,639 | $ 367,639 | |||||
Impairment losses |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | Jan. 26, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 12, 2017 | |
Equity interests, percentage | 4.00% | |||||
Purchase price | $ 3,189,303 | |||||
Goodwill on acquisition | $ 9,392,685 | [1] | ||||
CoinTracking GmbH [Member] | ||||||
Equity interests, percentage | 50.10% | 50.10% | ||||
Payments to acquire businesses in cash | $ 4,736,400 | |||||
Number of common stock shares purchased | 473,640 | |||||
Business combination, purchase price per share | $ 10 | |||||
Purchase price | $ 9,472,800 | |||||
Adjustment to current liabilities assumed | 211,422 | $ 250,000 | ||||
Goodwill on acquisition | $ 10,014,881 | |||||
CoinTracking GmbH [Member] | Accredited Investors [Member] | ||||||
Business combination, purchase price per share | $ 7 | |||||
[1] | Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. |
Acquisition - Schedule of Fair
Acquisition - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Jun. 30, 2018 | Jan. 26, 2018 | Dec. 31, 2017 | |
Goodwill | $ 9,392,685 | [1] | ||
CoinTracking GmbH [Member] | ||||
Cash and cash equivalents | $ 1,547,097 | |||
Investment in cryptocurrency | 1,115,345 | |||
Loan receivable - related party | 194,380 | |||
Other current assets | 284,677 | |||
Goodwill | 10,014,881 | |||
Other assets | 144,566 | |||
Total assets | 13,300,946 | |||
Current liabilities | $ 250,000 | 211,422 | ||
Contract liabilities, short term | 2,686,858 | |||
Contract liabilities, long term | 929,866 | |||
Total liabilities | 3,828,146 | |||
Net assets acquired | $ 9,472,800 | |||
[1] | Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. |
Acquisition - Schedule of Unaud
Acquisition - Schedule of Unaudited Pro Forma Financial Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||
Revenue | $ 586,747 | $ 2,232,007 |
Net loss | $ (7,145,543) | $ (10,374,966) |
Basic and diluted loss per share: Basic and diluted | $ (0.34) | $ (0.49) |
Subscription Revenue Recognit36
Subscription Revenue Recognition (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2018 | Jan. 26, 2018 | Dec. 31, 2017 | |
Subscriptions of revenue, description | Revenue collected in advance for subscriptions ranging from annual to perpetual packages are deferred and recognized as revenue on a straight-line basis over the terms of the applicable subscription period or performance obligation period. For "lifetime" revenue packages, where the customer has access to the website for unlimited length of time, the Company has elected to recognize revenue on a straight-line basis over three years. | |||
Potential credit withheld by paypal | $ 49,856 | |||
Subscription revenue | $ 884,587 | 1,341,284 | ||
Contract liabilities, current | 2,800,248 | 2,800,248 | ||
Contract liabilities, noncurrent | 1,408,208 | 1,408,208 | ||
Amortization of sales incentive programs cost | 32,100 | 62,754 | ||
Aggregate contract asset | $ 158,360 | $ 158,360 | ||
CoinTracking LLC [Member] | ||||
Contract liabilities | $ 3,616,724 |
Segment Information (Details Na
Segment Information (Details Narrative) | 6 Months Ended |
Jun. 30, 2018Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Operating Income (Loss) by Segment (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | |
Revenue, net | $ 586,747 | $ 82,640 | $ 82,640 | $ 2,116,337 |
Cost and expenses | (8,051,878) | (1,391,465) | (1,672,565) | (10,107,592) |
Operating income/(loss) | (7,465,131) | (1,308,825) | (1,589,925) | (7,991,255) |
Cryptocurrency Investment [Member] | ||||
Revenue, net | (299,086) | 82,640 | 82,640 | 773,512 |
Cost and expenses | (7,397,216) | (1,391,465) | (1,672,565) | (8,836,235) |
Operating income/(loss) | (7,696,302) | (1,308,825) | (1,589,925) | (8,062,723) |
Software Subscription [Member] | ||||
Revenue, net | 885,833 | 1,342,825 | ||
Cost and expenses | (654,662) | (1,271,374) | ||
Operating income/(loss) | $ 231,171 | $ 71,468 |
Investments - Schedule of Fair
Investments - Schedule of Fair Value of Investments in Cryptocurrency (Details) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Investment in cryptocurrency, ending balance | $ 1,832,810 |
Level 1 [Member] | |
Investment in cryptocurrency, ending balance | |
Level 2 [Member] | |
Investment in cryptocurrency, ending balance | 1,832,810 |
Level 3 [Member] | |
Investment in cryptocurrency, beginning balance | 167,818 |
Transfers to Level 2 investments | (50,179) |
Purchases, sales, issuances, and settlement, net | 500,000 |
Investment in cryptocurrency, ending balance | $ 617,639 |
Investments - Summary of Crypto
Investments - Summary of Cryptocurrencies Held (Details) | Jun. 30, 2018USD ($) |
Investments | $ 1,832,810 |
Bitcoin [Member] | |
Investments | 1,223,488 |
Ethereum [Member] | |
Investments | 105,432 |
Bitcoin Cash [Member] | |
Investments | 70,028 |
Litecoin [Member] | |
Investments | 42,316 |
Cardano [Member] | |
Investments | 25,822 |
EOS [Member] | |
Investments | 24,525 |
Stellar Lumens [Member] | |
Investments | 24,369 |
BlockVee [Member] | |
Investments | 23,445 |
Ether Classis [Member] | |
Investments | 23,037 |
Binance Coin [Member] | |
Investments | 21,108 |
NEO [Member] | |
Investments | 20,882 |
Dash [Member] | |
Investments | 20,271 |
Monero [Member] | |
Investments | 17,619 |
Polymath [Member] | |
Investments | 16,281 |
OmiseGO [Member] | |
Investments | 15,143 |
Enigma [Member] | |
Investments | 14,096 |
Ontology [Member] | |
Investments | 13,761 |
Vechain [Member] | |
Investments | 13,457 |
Qtum [Member] | |
Investments | 13,122 |
Steem [Member] | |
Investments | 10,473 |
Zcash [Member] | |
Investments | 9,893 |
Siacoin [Member] | |
Investments | 9,466 |
Basic Attention Token [Member] | |
Investments | 8,665 |
0x [Member] | |
Investments | 8,429 |
ICON [Member] | |
Investments | 8,387 |
Nano [Member] | |
Investments | 8,298 |
Lisk [Member] | |
Investments | 8,272 |
Aeternity [Member] | |
Investments | 7,946 |
Zilliqa [Member] | |
Investments | 7,827 |
Metal [Member] | |
Investments | 6,342 |
Aragon [Member] | |
Investments | 4,757 |
Bitcoin Private [Member] | |
Investments | 1,948 |
Ripple [Member] | |
Investments | 1,384 |
DigiByte [Member] | |
Investments | 752 |
Decred [Member] | |
Investments | 435 |
NavCoin [Member] | |
Investments | 234 |
Startis [Member] | |
Investments | 215 |
Dogecoin [Member] | |
Investments | 188 |
Gas [Member] | |
Investments | 170 |
NEM [Member] | |
Investments | 157 |
Horizen [Member] | |
Investments | 122 |
Waves [Member] | |
Investments | 100 |
CloakCoin [Member] | |
Investments | 45 |
Decentraland [Member] | |
Investments | 37 |
PIVX [Member] | |
Investments | 32 |
Bytom [Member] | |
Investments | 20 |
Nebulas [Member] | |
Investments | $ 14 |
Equipment - Schedule of Equipme
Equipment - Schedule of Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Equipment, gross | $ 123,172 | $ 72,995 |
Less accumulated depreciation | (15,013) | (4,675) |
Equipment, net | 108,159 | 68,320 |
Computer Equipment [Member] | ||
Equipment, gross | 107,850 | 69,241 |
Furniture Equipment [Member] | ||
Equipment, gross | $ 15,322 | $ 3,754 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of goodwill | ||||
Amortization expense related to intangible assets | $ 9,060 | $ 0 | $ 9,060 | $ 0 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) | 6 Months Ended | |
Jun. 30, 2018USD ($) | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning balance | ||
Additions | 9,392,685 | |
Amortization | ||
Goodwill, ending balance | 9,392,685 | [1] |
Capitalized Software, beginning balance | ||
Additions | 217,632 | |
Amortization | (40,644) | |
Capitalized Software, ending balance | 176,988 | |
Goodwill and intangible assets beginning balance | ||
Additions | 9,610,317 | |
Amortization | (40,644) | |
Goodwill and intangible assets ending balance | $ 9,569,673 | |
[1] | Goodwill is recorded in euros and translated to U.S. dollars, in accordance with ASC 830, Foreign Currency Matters, and therefore, is subject to fluctuations. |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense Related to Intangible Assets (Details) | Jun. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 (remaining) | $ 37,564 |
2,019 | 75,129 |
2,020 | 51,611 |
2,021 | 12,684 |
2,022 | |
Total amortization expense | $ 176,988 |
Summary of Common Stock Trans45
Summary of Common Stock Transactions (Details Narrative) - USD ($) | Apr. 18, 2018 | Mar. 20, 2018 | Jan. 31, 2018 | Jan. 26, 2018 | Jan. 22, 2018 | Jan. 16, 2018 | Jun. 30, 2018 |
Number of common stock shares exercise of stock options | 37,858 | ||||||
Stock option exercise price per share | $ 1.63 | ||||||
Equity interests, percentage | 4.00% | ||||||
Kachel Holding GmbH [Member] | |||||||
Equity interests, percentage | 49.90% | ||||||
CoinTracking GmbH [Member] | |||||||
Number shares purchased | 473,640 | ||||||
Equity interests, percentage | 50.10% | 50.10% | |||||
Equity Purchase Agreement [Member] | Kachel Holding GmbH [Member] | |||||||
Number shares purchased | 12,525 | ||||||
Equity Purchase Agreement [Member] | CoinTracking GmbH [Member] | |||||||
Number shares purchased | 473,640 | ||||||
Equity interests, percentage | 50.10% | ||||||
Employee [Member] | |||||||
Number of common stock shares exercise of stock options | 14,667 | ||||||
Consultant [Member] | |||||||
Number of common stock shares exercise of stock options | 12,494 | ||||||
Stock option exercise price per share | $ 2 | ||||||
James Gilbert [Member] | |||||||
Common stock issued for services | 202,512 | ||||||
Common stock issued for services, price per share | $ 7 | ||||||
Common stock issued for services, value | $ 1,417,584 | ||||||
Consultant [Member] | |||||||
Number of common stock shares exercise of stock options | 7,031 | ||||||
Stock option exercise price per share | $ 0.01 |
Warrants for Common Stock (Deta
Warrants for Common Stock (Details Narrative) | Jun. 30, 2018shares |
Warrant [Member] | |
Number of stock purchase warrants issued |
Warrants for Common Stock - Sch
Warrants for Common Stock - Schedule of Outstanding Warrants to Purchase Shares of Common Stock (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Issuance Date | September 2,017 |
Exercisable for | Common Shares |
Expiration Date | Sep. 25, 2020 |
Exercise Price | $ / shares | $ 2 |
Number of Shares Outstanding Under Warrants | shares | 168,125 |
Summary of Stock Options (Detai
Summary of Stock Options (Details Narrative) - USD ($) | Jul. 21, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Stock options granted | 2,807,062 | |||
Number of outstanding stock option awards | 3,163,735 | 3,163,735 | 644,531 | |
Share based compensation | $ 3,339,996 | $ 2,631,857 | ||
Total intrinsic value of options exercised | 0 | $ 2,978,095 | ||
Restricted stock awards granted | ||||
Stock option [Member] | ||||
Unrecognized compensation costs | $ 5,522,520 | $ 5,522,520 | ||
Unrecognized compensation weighted average period | 1 year 2 months 23 days | |||
Board of Directors [Member] | ||||
Stock options granted | 450,000 | |||
Employees [Member] | ||||
Stock options granted | 1,957,062 | |||
Non Employees [Member] | ||||
Stock options granted | 400,000 | |||
2017 Equity Incentive Plan [Member] | ||||
Number of stock option remain reserved for future issuance | 1,836,265 | 1,836,265 | ||
Number of outstanding stock option awards | 3,163,735 | 3,163,735 | ||
2017 Equity Incentive Plan [Member] | ||||
Number of stock option remain reserved for future issuance | 5,000,000 | |||
2017 Equity Incentive Plan [Member] | Maximum [Member] | ||||
Stock option award vesting period | 10 years |
Summary of Stock Options - Sche
Summary of Stock Options - Schedule of Stock Options Activity (Details) | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Options Outstanding, Beginning Balance | shares | 644,531 |
Number of Options Granted | shares | 2,807,062 |
Number of Options Cancelled | shares | (250,000) |
Number of Options Exercised | shares | (37,858) |
Number of Options Outstanding, Ending Balance | shares | 3,163,735 |
Number of Options Outstanding, Exercisable | shares | 637,117 |
Number of Options Vested and Exercisable and Expected to Vest | shares | 3,163,735 |
Weighted Average Exercise Price, Options Outstanding, Beginning Balance | $ / shares | $ 2.32 |
Weighted Average Exercise Price, Options Granted | $ / shares | 7.37 |
Weighted Average Exercise Price, Options Cancelled | $ / shares | 7 |
Weighted Average Exercise Price, Options Exercised | $ / shares | 1.63 |
Weighted Average Exercise Price, Options Outstanding, Ending Balance | $ / shares | 6.44 |
Weighted Average Exercise Price, Options Exercisable | $ / shares | 5.73 |
Weighted Average Exercise Price, Vested and Exercisable and Expected to Vest | $ / shares | $ 6.44 |
Weighted Average Remaining Contractual Term, Options Outstanding | 9 years 5 months 9 days |
Weighted Average Remaining Contractual Term, Options Exercisable | 9 years 7 months 28 days |
Weighted Average Remaining Contractual Term, Vested and Exercisable and Expected to Vest | 9 years 5 months 9 days |
Aggregate Intrinsic Value, Options Outstanding | $ | $ 128,764,882 |
Aggregate Intrinsic Value, Options Exercisable | $ | 25,762,945 |
Aggregate Intrinsic Value, Vested and Exercisable and Expected to Vest | $ | $ 128,764,882 |
Summary of Stock Options - Sc50
Summary of Stock Options - Schedule of Stock Option Assumptions Used (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Expected dividends | 0.00% |
Minimum [Member] | |
Weighted-average volatility | 36.00% |
Expected term (in years) | 5 years |
Risk-free rate | 1.91% |
Maximum [Member] | |
Weighted-average volatility | 75.00% |
Expected term (in years) | 10 years |
Risk-free rate | 2.95% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 17, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Apr. 03, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Related Party Transaction [Line Items] | ||||||
Loans receivable | $ 168,423 | $ 168,423 | ||||
Separation and Consulting Agreement [Member] | Michael Poutre [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Consultant fee payable to CFO, per month | $ 30,000 | |||||
Full Stack Finance [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Legal fees | 255,833 | 394,092 | ||||
Legal fees payable | 138,791 | 138,791 | ||||
CoinTracking GmbH [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loans receivable | $ 168,423 | $ 168,423 | ||||
Loan interest rate | 2.00% | 2.00% | ||||
Accrued interest income | $ 1,246 | $ 1,246 | $ 0 | |||
CoinTracking GmbH [Member] | Loan Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loan interest rate | 3.00% | |||||
Loan amount ot be advanced | $ 3,000,000 | |||||
Loan amount outstanding | 1,500,000 | 1,500,000 | ||||
CoinTracking GmbH [Member] | Loan Agreement [Member] | Promissory Note One [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory note, face amount | 300,000 | 300,000 | ||||
CoinTracking GmbH [Member] | Loan Agreement [Member] | Promissory Note Two [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory note, face amount | 700,000 | 700,000 | ||||
CoinTracking GmbH [Member] | Loan Agreement [Member] | Promissory Note Three [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory note, face amount | $ 500,000 | $ 500,000 |
Basic and Diluted Loss Per Sh52
Basic and Diluted Loss Per Share - Schedule of Earnings Per Share Basic and Diluted (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Numerator for basic and diluted income per share: Net loss attributable to the Company | $ (7,272,309) | $ (920,554) | $ (1,201,654) | $ (10,431,256) |
Denominator for basic and diluted income per share: Weighted average shares (basic) | 21,131,457 | 21,003,328 | ||
Denominator for basic and diluted income per share: Common stock equivalents | ||||
Denominator for basic and diluted income per share: Weighted average shares (diluted) | 21,131,457 | 21,003,328 | ||
Basic and diluted income (loss) per share: Basic and diluted | $ (0.34) | $ (0.07) | $ (0.09) | $ (0.50) |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jan. 18, 2018 | May 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 |
Facility rent expense | $ 10,478 | $ 9,000 | $ 9,000 | $ 35,501 | ||
Lease Agreement [Member] | Soba Living, LLC [Member] | ||||||
Monthly rent | $ 6,000 | |||||
Lease expiration date | Sep. 30, 2018 | |||||
Short-Term Lease Agreement [Member] | Miramar Property Investment Co. [Member] | ||||||
Monthly rent | $ 3,024 | |||||
Lease expiration date | Sep. 30, 2018 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jul. 03, 2018 | Aug. 31, 2018 | Jun. 30, 2018 |
Liquidated investments | $ 2,200,449 | ||
Subsequent Event [Member] | |||
Number of common stock shares issued | 3,571 | ||
Shares issued price per share | $ 7 | ||
Liquidated investments | $ 1,022,099 |