| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of presentation – The company prepares its
consolidated financial statements based upon the accrual method of accounting, recognizing income when earned and expenses when incurred. Consolidation
– The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries, Blockchain Training Alliance and LLC which is inactive.
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 recoverability and useful lives
of long-lived assets, allocation of revenue on software subscriptions, valuation of goodwill from business acquisitions, valuation and
recoverability of investments, 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 are comprised
of several cryptocurrencies the Company owns, of which a majority is Bitcoin, that are actively traded on exchanges. 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. Realized
gains and losses on sales of investments in cryptocurrency, and impairment losses, are included in other income/(expense) in the Consolidated
Statements of Operations. As
of the December 31, 2021 and 2020 there were $- 0 during
the Company cryptocurrency 0 -
value. These tokens were immediately liquidated, and the total proceeds received from them was $ 1,164,662
and classified as “Other Income from
the Recovery of Tokens” in the Company’s Statement of Operations. Equipment
– Equipment is recorded at cost and depreciated
using the straight-line method over the estimated useful life ranging from three to five years Impairment
of long-lived assets – The
Company analyzes its long-lived assets, including intangible assets with finite useful lives (subject to amortization) acquired in connection
with the acquisition of CoinTracking GmbH, for potential impairment. Impairment losses are recorded on long-lived assets when indicators
of impairment are present, and for intangible assets acquired in connection with acquisitions, the undiscounted cash flows estimated
to be generated by those assets are less than the net carrying amount of the assets. In such cases, the carrying values of assets to
be held and used are adjusted to their estimated fair value, less estimated selling expenses. For the year ended December 31, 2018, the
Company recognized an impairment loss of $ 2,749,646
on its definite lived intangible assets related
to CoinTracking GmbH, classified as Held for Sale. On January 2, 2019, the Company sold its entire equity ownership stake in CoinTracking
GmbH. 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. Goodwill
and intangible assets – The
Company records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill.
Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are recorded at the
estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trade
names, and developed technologies. Intangible assets subject to amortization are amortized over the period of estimated economic benefit
of five years. In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), goodwill and other intangible
assets with indefinite lives are not amortized but tested annually, on December 31, or more frequently if the Company believes indicators
of impairment exist. Indefinite lived intangible assets also include investments in cryptocurrency (see Investments in Cryptocurrency). The
Company assesses whether goodwill impairment and indefinite lived intangible assets 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. As of December 31, 2021 the Company determined that no 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 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. As of December 31,
2021, we had a net operating loss carryforward for federal income tax purposes of approximately $ 10,613,000
portions of which will begin to expire
in 2037 . Utilization of some of the federal and state net operating loss and credit
carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code
of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before
utilization. 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 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 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. 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 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 period of 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 year ended
December 31, 2021 and the year ended December 31, 2020, the Company had no potentially
dilutive common stock equivalents. Therefore, the basic EPS and the diluted EPS are the same . Marketing
expense – Marketing
expenses are charged to operations, under general and administrative expenses. The Company incurred $ 33,965
of marketing expenses for the year ended December
31, 2021, compared to $- 0 -
for year ended December 31, 2020. Reclassifications
– Certain
amounts in the prior period financial statements have been reclassified to conform to the current period presentation. Such reclassifications
had no effect on the Company’s financial position, results of operations or cashflows. |
