| BASIS OF PRESENTATION & GOING CONCERN | 1.
BASIS OF PRESENTATION & GOING CONCERN Basis
of Presentation The
accompanying unaudited consolidated financial statements of Hash Labs Inc., a Nevada corporation (the “Company”),
have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These
unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s Form 10-K
for the fiscal year ended December 31, 2017. In the opinion of management, these unaudited consolidated financial statements reflect
all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the
Company as of September 30, 2018, and the results of operations and cash flows for the nine months ended September 30, 2018 and
2017. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results that
may be expected for the entire fiscal year. Nature
of Business Operations Hash Labs Inc. is a Nevada
corporation that was originally formed on November 1, 2005 when Bio-Solutions International, Inc. (“Bio-Solutions”)
entered into an Agreement and Plan of Merger with OmniMed Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary
of Bio-Solutions, OmniMed International, Inc. (“OmniMed”) and the shareholders of OmniMed. On January 17, 2006, OmniMed
changed its name to MedeFile International, Inc. The Company’s business following the closing of this agreement was the
sale of an Internet-enabled Personal Health Record (iPHR) system for gathering, digitizing, maintaining, accessing and sharing
an individual’s medical records, and in connection therewith, providing a professional service specializing in HIPAA compliant
retrieval, reproduction and release of information. Under this service, Company personnel went onsite to physicians’ offices
weekly to reproduce the records requested by third parties. In October 2017, the name
of the Company was changed to Tech Town Holdings, Inc. to reflect a new business strategy centered on identifying and fostering
new or early stage business opportunities being aggressively fueled by digital reinvention and innovation. To that end, our business-building
platform was segmented into six focused categories, for which we planned to advance numerous technology development projects: Following close scrutiny of emerging
business opportunities, coupled with evaluation of market trends, the Company determined that a more prudent strategy was to narrow
its focus. The Company has now concentrated its focus on dynamic global growth opportunities in the financial technology, or Fintech
industry, with an emphasis on emerging Blockchain or distributed ledger technology (“DLT”). The Company intends to
develope financial technology solutions to operate on DLT, known as Hashgraph. Effective March 2, 2018, the Company changed its
name to Hash Labs Inc. The Company intends to develop its first Fintech solution using Hashgraph digital ledge technology, or
DLT, which the Company intends to be a mobile application that intends to convert gold into a price-stable, scalable and 100%
backed by physical gold cryptocurrency asset. Going
Concern The accompanying unaudited consolidated
financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company incurred
a net loss of $3,523,145 for the nine months ended September 30, 2018 and has working capital of $24,222 as of September 30, 2018. The
accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The operating losses raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s
ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which
is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond the Company’s control.
The unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot
continue in existence. We
will need to raise additional capital in order to continue operations. Financing transactions may include the issuance of equity
or debt securities, obtaining credit facilities, or other financing mechanisms. Additional financing may not be available on terms
acceptable to the Company, or at all. Further,
if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities
may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is
not available or is not available on acceptable terms, we will have to curtail or cease our operations. Financial
Accounting Pronouncements In
May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 is a comprehensive
revenue recognition standard that has superseded nearly all existing revenue recognition guidance under current U.S. GAAP and
replaced it with a principle based approach for determining revenue recognition. ASU 2014-09 requires that companies recognize
revenue based on the value of transferred goods or services as they occur in the contract. The ASU also requires additional disclosure
about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective
for interim and annual periods beginning after December 15, 2017. The
Company’s primary source of revenue has been from providing a professional service that specializes in HIPAA compliant retrieval,
reproduction and release of information. Orders are fulfilled as requested, then invoiced. Once payment is received, revenue is
recognized when records are delivered. (The Company no longer performs this service and has not yet begun generating revenues
under its new business focus.) During
the fourth quarter of 2017, the Company finalized its assessment related to the new standard and determined that the timing of
revenue recognition related to the Company’s revenues will remain consistent between the new standard and the previous standard. The
Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective method, and there was no cumulative adjustment
to retained earnings. Fair
Value of Financial Instruments Cash
and Equivalents, Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages
and Other Current Liabilities The
carrying amounts of these items approximated fair value. Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting
Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Level 1 Level 2 Level 3 The
application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of September
30, 2018 and December 31, 2017 are described below:
Fair
Value Measurements
Level
1 Level
2 Level
3 Total
September 30, 2018:
Liabilities
Derivative
Liabilities $ - $ - $ - $ -
Total $ - $ - $ - $ -
December 31, 2017:
Liabilities
Derivative
Liabilities $ - $ - $ 19,406 $ 19,406
Total $ - $ - $ 19,406 $ 19,406 Derivative
liability as of September 30, 2018 was $0, compared to $19,406 as of December 31, 2017. | NOTE 1 — BUSINESS, GOING CONCERN AND SIGNIFICANT ACCOUNTING
POLICIES Basis
of Presentation The
consolidated financial statements present the balance sheets, statements of operations, changes in stockholder’s deficit
and cash flows of the Company. The consolidated financial statements of the Company have been prepared in accordance with generally
accepted accounting principles in the United States of America. Principle
of Consolidation The accompanying financial statements present
on a consolidated basis the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and
transactions have been eliminated in consolidation. Nature
of Business Operations Our Company was originally formed on November
1, 2005 when Bio-Solutions International, Inc. entered into an Agreement and Plan of Merger (with OmniMed Acquisition Corp., a
Nevada corporation and a wholly-owned subsidiary of Bio-Solutions, OmniMed International, Inc. (“OmniMed”) and the
shareholders of OmniMed. Pursuant to the Agreement, Bio-Solutions acquired all of the outstanding equity stock from the OmniMed
shareholders. As a result, the OmniMed shareholders assumed control of Bio-Solutions and changed the name of the Company to OmniMed
International, Inc., effective November 21, 2006. On January 17, 2006, OmniMed changed its name to MedeFile International, Inc.
The Company’s business following the closing of this acquisition was the sale of an Internet-enabled Personal Health Record
(iPHR) system for gathering, digitizing, maintaining, accessing and sharing an individual’s medical records, and in connection
therewith, providing a professional service specializing in HIPAA compliant retrieval, reproduction and release of information.
Under this service, Company personnel go onsite to physicians’ office weekly to reproduce the records requested by third
parties. In
October 2017, the name of the Company was changed to Tech Town Holdings, Inc. to reflect a new business strategy centered on identifying
and fostering new or early stage business opportunities being aggressively fueled by digital reinvention and innovation. To that
end, our business-building platform was segmented into six focused categories, for which we planned to advanc e
numerous technology development projects:
● Digital
News Aggregation
● Digital
Entertainment and Gaming
● Digital
Health and Wellness
● Cryptocurrencies
and Blockchain Technologies
● CannaTech
● Mo However, following closer scrutiny of the new business opportunities we were exploring in late 2017, coupled
with our evaluation of market trends and growth dynamics in their respective categories, we determined that a more prudent strategy
was to narrow our focus, working instead on capitalizing on global growth opportunities in a single industry category. At this
time, we continue to evaluate prevailing opportunities for our Company and anticipate determining a focused course of action in
mid-2018. In March 2018, the Company’s name was changed to Hash Labs Inc. We also continue to provide a professional service
specializing in HIPAA compliant retrieval, reproduction and release of information Going
Concern The
accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However,
the Company has reported a net loss of for the year ended December 31, 2017 and has negative working capital as of December 31,
2017. The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. The operating losses
and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s
ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which
is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond the Company’s control. We
will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee
that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities,
obtaining credit facilities, or other financing mechanisms. Further, if we issue additional equity
or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences
or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available
on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that
might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments
that might arise from this uncertainty. Cash
and Cash Equivalents For
purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less
than three months. Concentrations
of Credit Risk Financial
instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash
and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times,
such investments may be in excess of the FDIC insurance limit. Currently our operating account is not above the FDIC limit. Advertising The Company follows the policy of charging
the costs of advertising to expense as incurred. The Company incurred no advertising costs for the years ended December 31, 2017
and 2016. Income
Taxes The
Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under
this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and
tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes
the enactment date. The
Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized.
In making such determination, the Company considers all available positive and negative evidence, including future reversals of
existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.
A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the
Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded
amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The
Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when
it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals
or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold
at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. Property
and Equipment Property
and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation
are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings.
Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over
their estimated useful lives being 3 years up to 10 years. Revenue
Recognition The
Company generates revenue from licensing the right to utilize its proprietary software for the storage and distribution of healthcare
information to individuals and affinity groups. For revenue from product sales, the Company recognizes revenue on four basic criteria
which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred;
(3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and
(4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the
collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded. Fair
Value of Financial Instruments Cash
and Equivalents, Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages
and Other Current Liabilities The
carrying amounts of these items approximated fair value. Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting
Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Level 1 Level 2 Level 3 The
application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of December
31, 2017 and December 31, 2016 are described below:
Fair Value Measurements
Level 1 Level 2 Level 3 Total
December 31, 2017:
Liabilities
Derivative Liabilities $ - $ - $ 19,406 $ 19,406
Total $ - $ - $ 19,406 $ 19,406
December 31, 2016:
Liabilities
Derivative Liabilities $ - $ - $ 12,567 $ 12,567
Total $ - $ - $ 12,567 $ 12,567 Derivative
liability as of December 31, 20178 was $19,406, compared to $12,567 as of December 31, 2016. Impairment
of Long Lived Assets In accordance with Accounting Standards Codification
(“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used
are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property
and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the asset’s carrying
amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical
performance and management’s estimate of future performance, giving consideration to existing and anticipated competitive
and economic conditions. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the assets or their
fair values, whichever is more determinable. At December 31, 2017, the Company determined there was an impairment on the Domain
Name assets. As a result an impairment was recorded in the amount of $12,231. Additionally, an impairment was recognized for the
Dino Might program in the amount of $818,422. The impairment on both assets was due to limited to no cash flow expected to be generated. Net
Loss per Share Basic
and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding.
Management
Estimates The
presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results
could differ from those estimates. Stock
Based Compensation The Company accounts for employee compensation
related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the grant date based
on the value of the award and is recognized over the service period, which is usually the vesting period. The Company accounts
for nonemployee compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is
measured at the earlier of a commitment date or completion of services based on the value of the award and is recognized over the
service period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to
both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the measurement
date. Recent
Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue
from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09
establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that
reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective
date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods).
The amendments may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative
effect recognized as of the date of initial application (full retrospective). The Company will adopt ASU 2014-09 in the first quarter
of 2018 and apply the full retrospective approach. Because the Company’s primary source of revenues is from providing a professional
service specializing in HIPAA compliant retrieval, reproduction and release of information, the Company does not expect the impact
on its consolidated financial statements to be material. |
