Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 17, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Crypto Co | |
Entity Central Index Key | 0001688126 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,659,030 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 845,752 | $ 26,326 |
Accounts receivable, net | 1,400 | 3,900 |
Total current assets | 847,152 | 30,226 |
TOTAL ASSETS | 847,152 | 30,226 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 1,919,163 | 1,933,281 |
Notes Payable | 300,000 | 300,000 |
Total current liabilities | 2,219,163 | 2,233,281 |
Convertible debt | 125,000 | 125,000 |
Notes Payable - Other | 85,857 | 67,592 |
TOTAL LIABILITIES | 2,430,020 | 2,425,873 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 50,000,000 shares authorized, 21,872,091 and 21,417,841 shares issued and outstanding, respectively | 21,872 | 21,418 |
Additional paid-in-capital | 31,631,203 | 30,665,823 |
Accumulated deficit | (33,235,943) | (33,082,888) |
TOTAL STOCKHOLDERS' EQUITY | (1,582,868) | (2,395,647) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 847,152 | $ 30,226 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 21,872,091 | 21,417,841 |
Common stock, shares outstanding | 21,872,091 | 21,417,841 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue: | ||
Total Revenue, net | $ 1,400 | $ 2,500 |
Operating expenses: | ||
Cost of services | ||
General and administrative expenses | 170,607 | 112,092 |
Share-based compensation - non-employee | 140,835 | |
Total Operating Expenses | 311,442 | 112,092 |
Operating loss | (310,042) | (109,592) |
Other income/(expense) | 160,808 | |
Interest expense | (3,822) | (26,752) |
Loss before provision for income taxes | (153,056) | (136,344) |
Provision for income taxes | ||
Net Income (loss) | $ (153,056) | $ (136,344) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) |
Weighted average common shares outstanding - basic and diluted | 21,840,822 | 21,400,591 |
Services [Member] | ||
Revenue: | ||
Total Revenue, net | $ 1,400 | $ 2,500 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2019 | $ 21,401 | $ 28,294,167 | $ (30,265,172) | $ (1,949,603) | ||
Beginning balance, shares at Dec. 31, 2019 | 21,400,591 | |||||
Warrants issued in connection with Convertible Notes | 22,500 | 22,500 | ||||
Stock compensation expense in connection with issuance of options | ||||||
Net loss | (136,344) | (136,344) | ||||
Ending balance at Mar. 31, 2020 | $ 21,401 | 28,316,667 | (30,401,516) | (2,063,447) | ||
Ending balance, shares at Mar. 31, 2020 | 21,400,591 | |||||
Beginning balance at Dec. 31, 2020 | $ 21,418 | 30,665,823 | (33,082,888) | (2,395,647) | ||
Beginning balance, shares at Dec. 31, 2020 | 21,417,841 | |||||
Warrants issued in connection with Convertible Notes | ||||||
Stock issued for cash at $2.00 per share, with warrants | $ 413 | 824,588 | 825,000 | |||
Stock issued for cash at $2.00 per share, with warrants,shares | 412,500 | |||||
Stock compensation expense in connection with issuance of common stock | $ 42 | 140,793 | 140,835 | |||
Stock compensation expense in connection with issuance of common stock, shares | 41,750 | |||||
Net loss | (153,056) | (153,056) | ||||
Ending balance at Mar. 31, 2021 | $ 21,872 | $ 31,631,204 | $ (33,235,944) | $ (1,582,868) | ||
Ending balance, shares at Mar. 31, 2021 | 21,872,091 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Mar. 31, 2020 |
Statement of Stockholders' Equity [Abstract] | ||
Share issued price per share | $ 2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (153,056) | $ (136,344) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Share-based compensation | 140,835 | |
Financing costs associated with convertible debt | 22,500 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 2,500 | (2,500) |
Prepaid expenses | 0 | |
Accounts payable and accrued expenses | (14,119) | 97,961 |
Net cash used in operating activities | (23,839) | (18,383) |
Cash flows from investing activities: | ||
Net cash used in investing activities | ||
Cash flows from financing activities: | ||
Proceeds from loans payable | 18,265 | |
Proceeds from issuance of convertible notes | 22,500 | |
Proceeds from common stock issuance | 825,000 | |
Net cash provided by financing activities | 843,265 | 22,500 |
Net (decrease) increase in cash and cash equivalents | 819,426 | 4,117 |
Cash and cash equivalents at the beginning of the period | 26,326 | 1,611 |
Cash and cash equivalents at the end of the period | 845,752 | 5,728 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest |
Organization and Description of
Organization and Description of the Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS The Crypto Company was incorporated in the State of Nevada on March 9, 2017 (“Inception”). The Company is engaged in the business of providing consulting services and education for distributed ledger technologies (“blockchain”), for the building of technological infrastructure and enterprise blockchain technology solutions. The Company currently generates revenues and incurs expenses solely through these consulting operations. Unless expressly indicated or the context requires otherwise, the terms “Crypto,” the “Company,” “we,” “us,” and “our” in this quarterly Report on Form 10-Q for the period ended March 31, 2021 (“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”); and Malibu Blockchain, LLC, a Nevada limited liability company (“Malibu Blockchain”). During the year ended December 31, 2020, the Company generated revenues and incurred expenses primarily through the business of providing consulting services and education for distributed ledger technologies (“blockchain”), for the building of technological infrastructure and enterprise blockchain technology solutions, The Company’s accounting year-end is December 31. COVID-19 On March 11, 2020, the World Health Organization (“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most US states and many countries have issued policies intended to stop or slow the further spread of the disease. Covid-19 and the U.S’s response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the Covid-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2020, and 2019. The Company prepares its consolidated financial statements based upon the accrual method of accounting, recognizing income when earned and expenses when incurred. Basis of Presentation and Principles of Consolidation Use of estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates and assumptions include but are not limited to the valuation allowances of deferred taxes, and share-based compensation expenses. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on the Company’s operating results. Cash and cash equivalents The Company defines its cash and cash equivalents to include only cash on hand and certain highly liquid investments with original maturities of ninety days or less. The Company maintains its cash and cash equivalents at financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to the concentration is minimal. Investments in cryptocurrency Investments were comprised of several cryptocurrencies the Company owned, of which a majority was Bitcoin, that were actively traded on exchanges. During 2018, the Company sold most of its investments and during 2019 wrote-off all those investments because there was no method to obtain liquidity for those investments. During the quarter ended March 31, 2021, one of those investments that had previously been written off became valuable and the Company liquidated the extent of its holdings at that time for cash proceeds of $160,808. The Company recorded this recovery as other income in its financial statements. As previously disclosed, the Company has ceased operations of its former cryptocurrency investment segment, and the Company liquidates newly issued/accessible assets from old investments as promptly as practicable for the sole purpose of winding down the Company’s legacy cryptocurrency investment segment. The Company records its investments as indefinite-lived intangible assets at cost less impairment and are reported as long-term assets in the consolidated balance sheets. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The primary exchanges and principal markets the Company utilized for its trading were Kraken, Bittrex, Poloniex, and Bitstamp. As of March 31, 2021, the Company had written off the value of it’s investments in cryptocurrency. Investments non-cryptocurrency The Company has historically invested in simple agreement for future tokens (“SAFT”) and a simple agreement for future equity (“SAFE”) agreements. The SAFT agreements provide for the issuance of tokens in anticipation of a future token generation event, with the number of tokens predetermined based on the price established in each respective agreement. The SAFE investment included provisions that provide for either equity or tokens or both. As of March 31, 2021, and December 31, 2020 the Company had written off its investments in non-cryptocurrency. Business combination The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values with the residual of the purchase price recorded as goodwill. The results of operations of acquired businesses are included in our operating results from the dates of acquisition. Income taxes Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included in the financial statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. 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 exceed 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. As of March 31, 2021, we are subject to federal taxation in the U.S, as well as state taxes. The Company has not been audited by the U.S. Internal Revenue Service. Fair value measurements The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and the difficulty involved in determining fair value. 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 recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company adopted ASC 606 as of January 1, 2018, using the modified retrospective transition method for contracts as of the date of initial application. There was no cumulative impact on the Company’s retained earnings. During 2021, the Company’s main source of revenue was consulting and development services for one customer. The Company has determined that revenue should be recognized over time, as the service is provided. The Company considered the criteria in ASC 606 in reaching this determination, specifically: ● The customer receives and consumes the benefit provided by the Company’s performance as the Company performs. ● The Company’s performance enhances an asset controlled by the customer. ● The Company’s performance does not create an asset with alternative use, and the Company has an enforceable right to payment for performance completed to date. The consulting arrangement meet more than one of the criteria above. Share-based compensation In accordance with ASC No. 718, Compensation-Stock Compensation (“ASC 718”), the Company measures the compensation costs of share-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options. On January 1, 2019, the Company adopted ASC No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , The Company accounts for its share-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 time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate. Net loss per common share The Company reports earnings per share (“EPS”) with a dual presentation of basic EPS and diluted EPS. Basic EPS is computed as net income divided by the weighted average of common shares for the period. Diluted EPS reflects the potential dilution that could occur from common shares issued through stock options, or warrants. For the three month period ended March 31, 2021, and 2020, the Company had no potentially dilutive common stock equivalents. Therefore, the basic EPS and diluted EPS are the same. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2020, and 2019. The Company prepares its consolidated financial statements based upon the accrual method of accounting, recognizing income when earned and expenses when incurred. Basis of Presentation and Principles of Consolidation Use of estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates and assumptions include but are not limited to the valuation allowances of deferred taxes, and share-based compensation expenses. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on the Company’s operating results. Management’s Representation of Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto at December 31, 2020, as presented in the Company’s Annual Report on Form 10-K filed on March 31, 2021 with the SEC. Cash and cash equivalents The Company defines its cash and cash equivalents to include only cash on hand and certain highly liquid investments with original maturities of ninety days or less. The Company maintains its cash and cash equivalents at financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to the concentration is minimal. Investments in cryptocurrency Investments were comprised of several cryptocurrencies the Company owned, of which a majority was Bitcoin, that were actively traded on exchanges. During 2018, the Company sold most of its investments and during 2019 wrote-off the remainder of all those investments because there was no method to obtain liquidity for those investments. During the quarter ended March 31, 2021, one of those investments that had previously been written off became valuable and the Company liquidated the extent of its holdings at that time for cash proceeds of $160,808. The Company recorded this recovery as other income in its financial statements. As previously disclosed, the Company has ceased operations of its former cryptocurrency investment segment, and the Company liquidates newly issued/accessible assets from old investments as promptly as practicable for the sole purpose of winding down the Company’s legacy cryptocurrency investment segment. The Company records its investments as indefinite-lived intangible assets at cost less impairment and are reported as long-term assets in the consolidated balance sheets. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The primary exchanges and principal markets the Company utilized for its trading were Kraken, Bittrex, Poloniex, and Bitstamp. As of March 31, 2021, the Company had written off the value of its investments in cryptocurrency. Investments non-cryptocurrency The Company has historically invested in simple agreement for future tokens (“SAFT”) and a simple agreement for future equity (“SAFE”) agreements. The SAFT agreements provide for the issuance of tokens in anticipation of a future token generation event, with the number of tokens predetermined based on the price established in each respective agreement. The SAFE investment included provisions that provide for either equity or tokens or both. As of March 31, 2021, and December 31, 2020 the Company had written off its investments in non-cryptocurrency. Business combination The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values with the residual of the purchase price recorded as goodwill. The results of operations of acquired businesses are included in our operating results from the dates of acquisition. Income taxes Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included in the financial statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. 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 exceed 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. As of March 31, 2021, we are subject to federal taxation in the U.S, as well as state taxes. The Company has not been audited by the U.S. Internal Revenue Service. Fair value measurements The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and the difficulty involved in determining fair value. 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 recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company adopted ASC 606 as of January 1, 2018, using the modified retrospective transition method for contracts as of the date of initial application. There was no cumulative impact on the Company’s retained earnings. During the quarter ended March 31, 2021, the Company’s main source of revenue was consulting and development services for one customer. The Company has determined that revenue should be recognized over time, as the service is provided. The Company considered the criteria in ASC 606 in reaching this determination, specifically: ● The customer receives and consumes the benefit provided by the Company’s performance as the Company performs. ● The Company’s performance enhances an asset controlled by the customer. ● The Company’s performance does not create an asset with alternative use, and the Company has an enforceable right to payment for performance completed to date. The consulting arrangement meet more than one of the criteria above. Share-based compensation In accordance with ASC No. 718, Compensation-Stock Compensation, the Company measures the compensation costs of share-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options. On January 1, 2019, the Company adopted ASC No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , The Company accounts for its share-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 time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate. Net loss per common share The Company reports earnings per share (“EPS”) with a dual presentation of basic EPS and diluted EPS. Basic EPS is computed as net income divided by the weighted average of common shares for the period. Diluted EPS reflects the potential dilution that could occur from common shares issued through stock options, or warrants. For the three month period ended March 31, 2021, and 2020, the Company had no potentially dilutive common stock equivalents. Therefore, the basic EPS and diluted EPS are the same. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 4 – NOTE PAYABLE On April 3, 2018, CoinTracking entered into a Loan Agreement (the “Loan Agreement”) with CoinTracking GmbH, which provided for total borrowings of up to $3,000,000. During 2018, CoinTracking borrowed $1,500,000 in exchange for three promissory notes (the “CoinTracking Note”) in the amounts of $300,000, $700,000, and $500,000, respectively. On December 31, 2018, the CoinTracking Note was still outstanding. On January 2, 2019, the Company sold its equity ownership stake in CoinTracking GmbH, and $1,200,000 of the sales proceeds were applied toward repayment of the $1,500,000 outstanding loan amount under the CoinTracking Note. The remaining balance of $300,000 is outstanding as of March 31, 2021, with a due date of March 31, 2022 which due date was extended from the prior due date of March 31, 2021 pursuant to an amendment dated December 28, 2018. The Note bears interest at 3%, which is payable monthly, in arrears. All payments shall be applied first to all accrued and unpaid interest and second to the outstanding principal balance, as applicable. Interest expense was $2,250 for the three month period ended March 31, 2021, and March 31, 2020, respectively. ● On May 8, 2020, the Company entered into a promissory note (the “Promissory Note”) with First Bank, a Missouri banking corporation, which provides for a loan of $53,492 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan has a two-year term and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains events of default and other provisions customary for a loan of this type. The Company anticipates this loan will be forgiven. ● On June 10, 2020, the Company received a loan from the Small Business Administration of $12,100 (the 2020 “SBA Loan”). The 2020 SBA Loan bears interest at 3.75% per annum and is payable over 30 years with all payments of principal and interest deferred for the first 12 months. ● On February 2, 2021, the Registrant received a loan from the Small Business Administration of $18,265 (the “2021 SBA Loan”). The 2021 SBA Loan bears interest at 1% per annum and is payable over 5 years with all payments of principal and interest deferred for the first 10 months. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Notes | |
Convertible Notes | NOTE 5 – CONVERTIBLE NOTES The balance of Convertible Notes was $125,000 as of March 31, 2021 and December 31, 2020. In June 2020, the Company issued Convertible Notes (“June 2020 Notes”) to an accredited investors for an aggregate amount of $5,000. The June 2020 Notes mature in June 2025, unless earlier converted. The June 2020 Notes bear interest at a rate of 5% per year. The June 2020 Notes will automatically convert into shares of common stock on the earlier to occur of a) a qualified equity financing, with the conversion price equal to 50% of the common stock price paid by the purchasers of the equity, or b) on the maturity date, at a price per share equal to the fair market value of the Company’s common stock on that date. If a change in control occurs before either of the automatic conversion events, the holders of the June 2020 Notes will have the option to convert the June 2020 Notes at a price per share equal to the fair market value of the common stock at the time of such conversion. The Company can prepay the principal and interest, in cash, at any time without any premium or penalty. The June 2020 Notes have no voting rights, do not participate in dividends, and are unsecured. The Company believes it is more likely than not that the June 2020 Notes will not be automatically converted in connection with a qualified equity financing prior to either prepayment or automatic conversion on maturity. In April 2020, the Company issued three Convertible Notes (“April 2020 Notes”) to three accredited investors for an aggregate amount of $22,500. The April 2020 Notes mature in April 2025, unless earlier converted. The April 2020 Notes bear interest at a rate of 5% per year. The April 2020 Notes will automatically convert into shares of common stock on the earlier to occur of a) a qualified equity financing, with the conversion price equal to 50% of the common stock price paid by the purchasers of the equity, or b) on the maturity date, at a price per share equal to the fair market value of the Company’s common stock on that date. If a change in control occurs before either of the automatic conversion events, the holders of the April 2020 Notes will have the option to convert the April 2020 Notes at a price per share equal to the fair market value of the common stock at the time of such conversion. The Company can prepay the principal and interest, in cash, at any time without any premium or penalty. The April 2020 Notes have no voting rights, do not participate in dividends, and are unsecured. The Company believes it is more likely than not that the April 2020 Notes will not be automatically converted in connection with a qualified equity financing prior to either prepayment or automatic conversion on maturity. In February 2020, the Company issued three Convertible Notes (“February 2020 Notes”) to three accredited investors for an aggregate amount of $22,500. The February 2020 Notes mature in February 2025, unless earlier converted. The February 2020 Notes bear interest at a rate of 5% per year. The February 2020 Notes will automatically convert into shares of common stock on the earlier to occur of a) a qualified equity financing, with the conversion price equal to 50% of the common stock price paid by the purchasers of the equity, or b) on the maturity date, at a price per share equal to the fair market value of the Company’s common stock on that date. If a change in control occurs before either of the automatic conversion events, the holders of the February 2020 Notes will have the option to convert the February 2020 Notes at a price per share equal to the fair market value of the common stock at the time of such conversion. The Company can prepay the principal and interest, in cash, at any time without any premium or penalty. The February 2020 Notes have no voting rights, do not participate in dividends, and are unsecured. The Company believes it is more likely than not that the February 2020 Notes will not be automatically converted in connection with a qualified equity financing prior to either prepayment or automatic conversion on maturity. Interest expense for Convertible Notes was $1,541 for the three months ended March 31, 2021, compared to $1,088 for three month period ended March 31, 2020, respectively. |
Warrants for Common Stock
Warrants for Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Warrants For Common Stock | |
Warrants for Common Stock | NOTE 6 – WARRANTS FOR COMMON STOCK As of March 31, 2021, outstanding warrants to purchase shares of the Company’s common stock were as follows: Issuance Date Exercisable for Expiration Date Exercise Price Number of Shares Outstanding Under Warrants September 2019 Common Shares September 24, 2022 $ 0.01 75,000 February 2020 Common Shares February 6, 2030 $ 0.01 10,000 February 2020 Common Shares February 12, 2030 $ 0.01 2,500 February 2020 Common Shares February 19, 2030 $ 0.01 10,000 April 2020 Common Shares April 20, 2030 $ 0.01 22,500 June 2020 Common Shares June 9, 2030 $ 0.01 5,000 March 2020 Common Shares February 28, 2026 $ 0.50 412,500 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 | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options | NOTE 7 - 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 three month period ended March 31, 2021, the Company did not issue any stock options. 5,000,000 shares of the Company’s common stock are reserved for issuance under the Plan. As of March 31, 2021, there are outstanding stock option awards issued from the Plan covering a total of 2,281,429 shares of the Company’s common stock and there remain reserved for future awards 2,718,571 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, 2020 2,281,429 $ 2.26 5.25 5,155,003 Options granted - - - - Options canceled - - - - Options exercised - - - - Options outstanding, at March 31, 2021 2,281,429 $ 2.26 5.00 $ 5,155,003 Exercisable 2,281,429 $ 2.26 5.00 $ 5,155,003 Vested and exercisable and expected to vest, end of the period 2,281,429 $ 2.26 5.00 $ 5,155,003 The Company recognized $-0- for share-based compensation related to stock options for the three month period ended March 31, 2021. There were no options exercised for the three months ended March 31, 2021. The Company did not grant any restricted stock awards during the three month period ended March 31, 2021 . As of March 31, 2021, there was $-0- of unrecognized compensation costs related to stock options issued to employees and nonemployees. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 - COMMITMENTS AND CONTINGENCIES Facility rent expense was $-0- for the three months ended March 31, 2021, and $837 for the three months ended March 31, 2020, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS As previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020, the Company entered into a Stock Purchase Agreement (the “SPA”) effective as of March 24, 2021 with Blockchain Training Alliance, Inc (“BTA”) and its stockholders. On April 8, 2021, the Company completed the acquisition of all of the issued and outstanding stock of BTA and BTA became a wholly owned subsidiary of the Company. At the closing the Company delivered to the sellers a total of $600,000 in cash, promissory notes in the total principal amount of $150,000 bearing 1% interest per annum, and an aggregate of 201,439 shares of Company common stock in accordance with the terms of the SPA. BTA is a blockchain training company and service provider that provides training and educational courses focused on blockchain technology and education as to the general understanding of blockchain to corporate and individual clients. Subsequent to March 31, 2021 the Company generated $630,000 in proceed from sale of tokens that were previously written off as described throughout this Report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation |
Use of Estimates | Use of estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates and assumptions include but are not limited to the valuation allowances of deferred taxes, and share-based compensation expenses. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on the Company’s operating results. |
Management's Representation of Interim Financial Statements | Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2020, and 2019. The Company prepares its consolidated financial statements based upon the accrual method of accounting, recognizing income when earned and expenses when incurred. |
Cash and Cash Equivalents | Cash and cash equivalents The Company defines its cash and cash equivalents to include only cash on hand and certain highly liquid investments with original maturities of ninety days or less. The Company maintains its cash and cash equivalents at financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to the concentration is minimal. |
Investments in Cryptocurrency | Investments in cryptocurrency Investments were comprised of several cryptocurrencies the Company owned, of which a majority was Bitcoin, that were actively traded on exchanges. During 2018, the Company sold most of its investments and during 2019 wrote-off the remainder of all those investments because there was no method to obtain liquidity for those investments. During the quarter ended March 31, 2021, one of those investments that had previously been written off became valuable and the Company liquidated the extent of its holdings at that time for cash proceeds of $160,808. The Company recorded this recovery as other income in its financial statements. As previously disclosed, the Company has ceased operations of its former cryptocurrency investment segment, and the Company liquidates newly issued/accessible assets from old investments as promptly as practicable for the sole purpose of winding down the Company’s legacy cryptocurrency investment segment. The Company records its investments as indefinite-lived intangible assets at cost less impairment and are reported as long-term assets in the consolidated balance sheets. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The primary exchanges and principal markets the Company utilized for its trading were Kraken, Bittrex, Poloniex, and Bitstamp. As of March 31, 2021, the Company had written off the value of its investments in cryptocurrency. |
Investments Non-cryptocurrency | Investments non-cryptocurrency The Company has historically invested in simple agreement for future tokens (“SAFT”) and a simple agreement for future equity (“SAFE”) agreements. The SAFT agreements provide for the issuance of tokens in anticipation of a future token generation event, with the number of tokens predetermined based on the price established in each respective agreement. The SAFE investment included provisions that provide for either equity or tokens or both. As of March 31, 2021, and December 31, 2020 the Company had written off its investments in non-cryptocurrency. |
Business Combination | Business combination The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values with the residual of the purchase price recorded as goodwill. The results of operations of acquired businesses are included in our operating results from the dates of acquisition. |
Income Taxes | Income taxes Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included in the financial statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. 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 exceed 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. As of March 31, 2021, we are subject to federal taxation in the U.S, as well as state taxes. The Company has not been audited by the U.S. Internal Revenue Service. |
Fair Value Measurements | Fair value measurements The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and the difficulty involved in determining fair value. 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 recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company adopted ASC 606 as of January 1, 2018, using the modified retrospective transition method for contracts as of the date of initial application. There was no cumulative impact on the Company’s retained earnings. During the quarter ended March 31, 2021, the Company’s main source of revenue was consulting and development services for one customer. The Company has determined that revenue should be recognized over time, as the service is provided. The Company considered the criteria in ASC 606 in reaching this determination, specifically: ● The customer receives and consumes the benefit provided by the Company’s performance as the Company performs. ● The Company’s performance enhances an asset controlled by the customer. ● The Company’s performance does not create an asset with alternative use, and the Company has an enforceable right to payment for performance completed to date. The consulting arrangement meet more than one of the criteria above. |
Share-Based Compensation | Share-based compensation In accordance with ASC No. 718, Compensation-Stock Compensation, the Company measures the compensation costs of share-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options. On January 1, 2019, the Company adopted ASC No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , The Company accounts for its share-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 time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate. |
Net Loss Per Common Share | Net loss per common share The Company reports earnings per share (“EPS”) with a dual presentation of basic EPS and diluted EPS. Basic EPS is computed as net income divided by the weighted average of common shares for the period. Diluted EPS reflects the potential dilution that could occur from common shares issued through stock options, or warrants. For the three month period ended March 31, 2021, and 2020, the Company had no potentially dilutive common stock equivalents. Therefore, the basic EPS and diluted EPS are the same. |
Warrants for Common Stock (Tabl
Warrants for Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Warrants For Common Stock | |
Schedule of Outstanding Warrants to Purchase Shares of Common Stock | As of March 31, 2021, outstanding warrants to purchase shares of the Company’s common stock were as follows: Issuance Date Exercisable for Expiration Date Exercise Price Number of Shares Outstanding Under Warrants September 2019 Common Shares September 24, 2022 $ 0.01 75,000 February 2020 Common Shares February 6, 2030 $ 0.01 10,000 February 2020 Common Shares February 12, 2030 $ 0.01 2,500 February 2020 Common Shares February 19, 2030 $ 0.01 10,000 April 2020 Common Shares April 20, 2030 $ 0.01 22,500 June 2020 Common Shares June 9, 2030 $ 0.01 5,000 March 2020 Common Shares February 28, 2026 $ 0.50 412,500 |
Summary of Stock Options (Table
Summary of Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [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, 2020 2,281,429 $ 2.26 5.25 5,155,003 Options granted - - - - Options canceled - - - - Options exercised - - - - Options outstanding, at March 31, 2021 2,281,429 $ 2.26 5.00 $ 5,155,003 Exercisable 2,281,429 $ 2.26 5.00 $ 5,155,003 Vested and exercisable and expected to vest, end of the period 2,281,429 $ 2.26 5.00 $ 5,155,003 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | Mar. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
Investment in cryptocurrency | $ 160,808 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Jun. 10, 2021 | Feb. 02, 2021 | Jan. 02, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 10, 2020 | May 08, 2020 | Dec. 31, 2018 | Apr. 03, 2018 |
CoinTracking [Member] | |||||||||
Borrowings amount outstanding | $ 1,500,000 | ||||||||
CoinTracking GmbH [Member] | CoinTracking [Member] | |||||||||
Repayment of outstanding loan | $ 1,200,000 | ||||||||
Loan Agreement [Member] | CoinTracking GmbH [Member] | |||||||||
Borrowings amount outstanding | $ 1,500,000 | ||||||||
Remaining balance of outstanding | $ 300,000 | ||||||||
Maturity date | Mar. 31, 2022 | ||||||||
Interest expense | $ 2,250 | $ 2,250 | |||||||
Loan Agreement [Member] | CoinTracking GmbH [Member] | Promissory Note One [Member] | |||||||||
Borrowings amount outstanding | 300,000 | ||||||||
Loan Agreement [Member] | CoinTracking GmbH [Member] | Promissory Note Two [Member] | |||||||||
Borrowings amount outstanding | 700,000 | ||||||||
Loan Agreement [Member] | CoinTracking GmbH [Member] | Promissory Note Three [Member] | |||||||||
Borrowings amount outstanding | $ 500,000 | ||||||||
Loan Agreement [Member] | CoinTracking GmbH [Member] | Maximum [Member] | |||||||||
Borrowings amount | $ 3,000,000 | ||||||||
Loan interest rate | 3.00% | ||||||||
Paycheck Protection Program [Member] | |||||||||
Loan interest rate | 1.00% | ||||||||
Loans payable | $ 53,492 | ||||||||
Debt instrument, term | 30 years | ||||||||
Small Business Administration [Member] | |||||||||
Loan interest rate | 1.00% | 3.75% | |||||||
Loans payable | $ 18,265 | $ 12,100 | |||||||
Debt instrument, term | 5 years |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jun. 30, 2020 | Apr. 30, 2020 | Feb. 29, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Convertible Notes | $ 125,000 | $ 125,000 | ||||
Convertible Notes [Member] | ||||||
Interest expense | $ 1,541 | $ 1,088 | ||||
Convertible Notes [Member] | Accredited Investors [Member] | ||||||
Debt aggregate amount | $ 5,000 | |||||
Debt maturity date | Jun. 30, 2025 | |||||
Debt instrument interest rate | 5.00% | |||||
Debt instrument conversion percentage | 50.00% | |||||
Convertible Notes [Member] | Three Accredited Investors [Member] | Three Convertible Notes [Member] | ||||||
Debt aggregate amount | $ 22,500 | $ 22,500 | ||||
Debt maturity date | Apr. 30, 2025 | Feb. 28, 2025 | ||||
Debt instrument interest rate | 5.00% | 5.00% | ||||
Debt instrument conversion percentage | 50.00% | 50.00% |
Warrants for Common Stock - Sch
Warrants for Common Stock - Schedule of Outstanding Warrants to Purchase Shares of Common Stock (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Warrant One [Member] | |
Issuance Date | September 2019 |
Exercisable for | Common Shares |
Expiration Date | Sep. 24, 2022 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 75,000 |
Warrant Two [Member] | |
Issuance Date | February 2020 |
Exercisable for | Common Shares |
Expiration Date | Feb. 6, 2030 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 10,000 |
Warrant Three [Member] | |
Issuance Date | February 2020 |
Exercisable for | Common Shares |
Expiration Date | Feb. 12, 2030 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 2,500 |
Warrant Four [Member] | |
Issuance Date | February 2020 |
Exercisable for | Common Shares |
Expiration Date | Feb. 19, 2030 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 10,000 |
Warrant Five [Member] | |
Issuance Date | April 2020 |
Exercisable for | Common Shares |
Expiration Date | Apr. 20, 2030 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 22,500 |
Warrant Six [Member] | |
Issuance Date | June 2020 |
Exercisable for | Common Shares |
Expiration Date | Jun. 9, 2030 |
Exercise Price | $ / shares | $ 0.01 |
Number of Shares Outstanding Under Warrants | shares | 5,000 |
Summary of Stock Options (Detai
Summary of Stock Options (Details Narrative) - USD ($) | Jul. 21, 2017 | Mar. 31, 2021 | Dec. 31, 2020 |
Stock options granted | |||
Number of stock option remain reserved for future issuance | 2,281,429 | ||
Stock option exercised | |||
Restricted stock awards granted | |||
Unrecognized compensation costs | $ 0 | ||
Stock Option [Member] | |||
Share based compensation | $ 0 | $ 1,976,673 | |
2017 Equity Incentive Plan [Member] | |||
Stock option award vesting, description | Options granted generally vest over eighteen to thirty-six months | ||
Number of stock option remain reserved for future issuance | 5,000,000 | 2,718,571 | |
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) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options Outstanding, Beginning Balance | shares | 2,281,349 |
Number of Options granted | shares | |
Number of Options canceled | shares | |
Number of Options exercised | shares | |
Number of Options Outstanding, Ending Balance | shares | 2,281,429 |
Number of Options Outstanding, Exercisable | shares | 2,281,429 |
Number of Options Vested and Exercisable and Expected to Vest | shares | 2,281,429 |
Weighted Average Exercise Price, Options Outstanding, Beginning Balance | $ / shares | $ 2.26 |
Weighted Average Exercise Price, Options granted | $ / shares | |
Weighted Average Exercise Price, Options canceled | $ / shares | |
Weighted Average Exercise Price, Options exercised | $ / shares | |
Weighted Average Exercise Price, Options Outstanding, Ending Balance | $ / shares | 2.26 |
Weighted Average Exercise Price, Options Exercisable | $ / shares | 2.26 |
Weighted Average Exercise Price, Vested and Exercisable and Expected to Vest | $ / shares | $ 2.26 |
Weighted Average Remaining Contractual Term (Years), Options Outstanding, Beginning | 5 years 2 months 30 days |
Weighted Average Remaining Contractual Term (Years), Options Outstanding, Ending | 5 years |
Weighted Average Remaining Contractual Term (Years), Options Exercisable | 5 years |
Weighted Average Remaining Contractual Term (Years), Vested and Exercisable and Expected to Vest | 5 years |
Aggregate Intrinsic Value, Options Outstanding, Beginning balance | $ | $ 5,155,003 |
Aggregate Intrinsic Value, Options Outstanding, Ending balance | $ | 5,155,003 |
Aggregate Intrinsic Value, Options Exercisable | $ | 5,155,003 |
Aggregate Intrinsic Value, Vested and Exercisable and Expected to Vest | $ | $ 5,155,003 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Facility rent expense | $ 0 | $ 837 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 08, 2021 | May 17, 2021 |
Proceed from sale of tokens written off | $ 630,000 | |
Stock Purchase Agreement [Member] | Blockchain Training Alliance, Inc [Member] | ||
Payment to acquire business | $ 600,000 | |
Shares issued for acquisition | 201,439 | |
Stock Purchase Agreement [Member] | Blockchain Training Alliance, Inc [Member] | Notes Payable [Member] | ||
Principal amount | $ 150,000 | |
Debt instrument interest rate | 1.00% |