v3.25.2
RESTATEMENT
 12 Months Ended
Dec. 31, 2023
Accounting Changes and Error Corrections [Abstract]  
RESTATEMENT

NOTE 3 – RESTATEMENT

 

ANNUAL IMPACT

 

The following presents a reconciliation of the Balance Sheets, Statements of Operations, and Statements of Cash Flows from the prior period as previously reported to the restated amounts:

 

THE CRYPTO COMPANY

CONSOLIDATED BALANCE SHEETS

 

    As Reported     Restatement Adjustments     As Restated  
    December 31, 2023  
    As Reported     Restatement Adjustments     As Restated  
                   
ASSETS                        
CURRENT ASSETS                        
Cash and cash equivalents   $ 72,970     $ -     $ 72,970  
Prepaid expenses (b)     30,317       (30,317 )     -  
Total current assets     103,287       (30,317 )     72,970  
Fixed assets:                     -  
Goodwill (a)     740,469       (740,469 )     -  
Intangible assets (a)     530,837       (530,837 )     -  
TOTAL ASSETS   $ 1,374,593     $ (1,301,623 )   $ 72,970  
                         
LIABILITIES AND STOCKHOLDERS’ DEFICIT                        
                         
Accounts payable and accrued expenses (b)   $ 2,678,883     $ 343,982     $ 3,022,865  
Other liabilities (c)     -       207,938       207,938  
Notes payable, net (b)     2,506,443       491,828       2,968,271  
Total current liabilities     5,185,326       1,013,748       6,199,074  
Convertible debt     125,000       -       125,000  
Notes payable - other     13,333       -       13,333  
TOTAL LIABILITIES     5,323,659       1,013,748       6,337,407  
                         
STOCKHOLDERS’ DEFICIT                        
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 565,709,873 and 23,950,380 shares issued and outstanding, respectively     565,320       390       565,710  
Additional paid-in-capital     39,932,216       389       39,932,605  
Accumulated deficit     (44,446,602 )     (2,316,150 )     (46,762,752 )
TOTAL STOCKHOLDERS’ DEFICIT     (3,949,066 )     (2,315,371 )     (6,264,437 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 1,374,593     $ (1,301,623 )   $ 72,970  

 

 

THE CRYPTO COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

 

    As Reported     Restatement Adjustments     As Restated  
    For the year ended December 31,2023  
    As Reported     Restatement Adjustments     As Restated  
                   
Revenue:                        
Services (c)   $ 405,397     $ (207,938 )   $ 197,459  
Cost of services     313,756       -       313,756  
Gross margin     91,641       (207,938 )     (116,297 )
                         
Operating expenses:                        
General and administrative expenses (b)     1,238,275       310,002       1,548,277  
Amortization     43,332       -       43,332  
Impairment of goodwill and intangible assets (a)     -       1,271,306       1,271,306  
Share-based compensation - employee     6,761       -       6,761  
Share-based compensation - non-employee     1,148,719       -       1,148,719  
Total Operating Expenses     2,437,087       1,581,308       4,018,395  
Operating loss     (2,345,446 )     (1,789,246 )     (4,134,692 )
                         
Other income     28,375       -       28,375  
Loss on sale of equipment     (31,000 )     -       (31,000 )
Interest expense (b)     (2,567,096 )     (526,903 )     (3,093,999 )
Loss before provision for income taxes     (4,915,167 )     (2,316,150 )     (7,231,317 )
Provision for income taxes     -               -  
Net (loss)     (4,915,167 )     (2,316,150 )     (7,231,317 )
                         
Net (loss) per share   $ (0.04 )   $ (0.02 )   $ (0.05 )
Weighted average common shares outstanding – basic and diluted     134,932,832       134,932,832       134,932,832  

 

 

THE CRYPTO COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    As Reported     Restatement Adjustments     As Restated  
    For the Year Ended  
    December 31, 2023           December 31, 2023  
    As Reported     Restatement Adjustments     As Restated  
                   
Cash flows from operating activities:                        
Net income (loss)   $ (4,915,167 )   $ (2,316,150 )   $ (7,231,317 )
Adjustments to reconcile net loss to net cash used in operations:                        
Depreciation and amortization     43,332       -       43,332  
Share-based compensation     1,155,480       -       1,155,480  
Debt discount for warrants     2,041,490       -       2,041,490  
Impairment of goodwill     -       1,271,306       1,271,306  
Loss on disposal of equipment     31,000       -       31,000  
Prepaid expenses     51,000       30,317       81,317  
Other liabilities     -       207,938       207,938  
Accounts payable and accrued expenses     413,335       343,982       757,317  
Net cash provided by/used in operating activities     (1,179,530 )     (462,606 )     (1,642,136 )
                         
Cash flows from financing activities:                        
Payment of notes payable     (227,251 )     -       (227,251 )
Proceeds from issuance of notes payable     1,344,145       462,606       1,806,751  
Proceeds from common stock issuance     25,000       -       25,000  
Net cash provided by financing activities     1,141,894       462,606       1,604,500  
                         
Net (decrease) increase in cash and cash equivalents     (37,636 )     -       (37,636 )
Cash and cash equivalents at the beginning of the period     110,606       -       110,606  
Cash and cash equivalents at the end of the period   $ 72,970       -     $ 72,970  

 

 

Notes:

 

With the exception of item (c) described below all of the line items in the annual restatement above, were determined to only impact the Company’s fourth quarter ended December 31, 2023 and had no impact on the financial statements for Company’s first three quarters.

 

(a)Based on an annual review performed on December 31, 2023, the Company determined that its goodwill and intangible assets had been fully impaired and recorded an impairment charge amounting to $1,271,306.
(b)

At year end December 31, 2023, the Company recorded the following charges and adjustments to the financial statement above. These entries only impacted the Company’s fourth quarter and had no impact on prior quarters:

-$526,903 was recorded as default interest due to a notification by lender to the Company in Q4 of 2023

-$310,000 in accrued salary, board fees and accrued expenses which should have been recorded relating the Company’s Q4 activity, was not recorded

-$30,317 in prepaid expenses was reclassified against accrued expenses in Q4

-$30,317 in prepaid expenses was reclassified against accrued expenses in Q4

(c)Represents quarterly reduction of revenue which has been reclassified as an accrued liability due to the lack of documentation to support revenue recognition under the guidelines of ASC 606. The reduction in quarterly revenue amounted to $127,784 for the period ended March 31, 2023, $77,965 for the quarter ended June 30, 2023, and $2,189 for the quarter ended September 30, 2023. These adjustments amounted to $207,938. The quarterly restatement on the Company’s balance sheet and statements of operations of these revenue adjustments, which had no impact on cash flows, are reflected below.

 

QUARTERLY RESTATEMENT IMPACT

 

BALANCE SHEETS

 

   March 31,       March 31,   June 30,       June 30,   September       September 
   2023       2023   2023       2023   2023       2023 
   As Filed   Adjustments   Restated   As Filed   Adjustments   Restated   As Filed   Adjustments   Restated 
ASSETS                                             
Current assets:                                             
Cash and cash equivalents  $16,677        $16,677   $17,682        $17,682   $20,435        $20,435 
Prepaid expenses   57,717         57,717    19,117         19,117    3,750         3,750 
Total current assets   74,394         74,394    36,799         36,799    24,185         24,185 
Goodwill   740,469         740,469    740,469         740,469    740,469         740,469 
Intangible assets   563,336         563,336    552,503         552,503    541,670         541,670 
Total assets  $1,378,199    -   $1,378,199   $1,329,771    -   $1,329,771   $1,306,324    -   $1,306,324 
                                              
LIABILITIES AND STOCKHOLDERS’ DEFICIT                                             
Current liabilities:                                             
Accounts payable and accrued expenses  $2,457,771        $2,457,771   $2,589,752        $2,589,752   $2,632,066        $2,632,066 
Other liabilities        127,784    127,784         205,749    205,749         207,938    207,938 
Deferred revenue   60,000         60,000    -              -         - 
Notes, payable, net   2,361,218         2,361,218    2,408,045         2,408,045    2,440,845         2,440,845 
Total current liabilities   4,878,989    127,784    5,006,773    4,997,797    205,749    5,203,546    5,072,911    207,938    5,280,849 
Convertible debt   125,000         125,000    125,000              125,000         125,000 
Notes payable other   13,864         13,864    13,687         13,687    13,510         13,510 
Total liabilities   5,017,853    127,784    5,145,637    5,136,484    205,749    5,342,233    5,211,421    207,938    5,419,359 
                             -              - 
Stockholders’ Deficit:                                             
Common stock   25,741         25,741    53,821         53,821    208,688         208,688 
Additional paid in capital   38,637,372         38,637,372    39,238,579         39,238,579    39,340,646         39,340,646 
Accumulated deficit   (42,302,767)   (127,784)   (42,430,551)   (43,099,113)   (205,749)   (43,304,862)   (43,454,431)   (207,938)   (43,662,369)
Total stockholders’ deficit   (3,639,654)   (127,784)   (3,767,438)   (3,806,713)   (205,749)   (4,012,462)   (3,905,097)   (207,938)   (4,113,035)
Total liabilities and deficit  $1,378,199    -   $1,378,199   $1,329,771    -   $1,329,771   $1,306,324    -   $1,306,324 

 

 

STATEMENTS OF OPERATIONS

 

   Three months       Three months   Three months       Three months   Three months       Three months 
   ended       ended   ended       ended   ended       ended 
   March 31,       March 31,   June 30,       June 30,   September 30,       September 30, 
   2023       2023   2023       2023   2023       2023 
   As filed   Adjustments   As restated   As filed   Adjustments   As restated   As filed   Adjustments   As restated 
                                     
Services  $           156,893    (127,784)  $             29,109   $           106,610    (77,965)  $         28,645   $           124,195    (2,189)  $           122,006 
Cost of services   97,868         97,868    117,314         117,314    14,900         14,900 
Gross profit   59,025    (127,784)   (68,759)   (10,705)   (77,965)   (88,670)   109,295    (2,189)   107,106 
Operating expenses:                                             
General and administrative expenses   431,049         431,049    320,500         320,500    244,183         244,183 
Amortization   10,833         10,833    10,833    -    10,833    10,833         10,833 
Stock based compensation   386,560    -    386,560    119,919    -    119,919    113,818         113,818 
Total operating expenses   828,442    -    828,442    451,252    -    451,252    368,834    -    368,834 
Loss from operations   (769,417)   (127,784)   (897,201)   (461,957)   (77,965)   (539,922)   (259,539)   (2,189)   (261,728)
Other income (expense)             -              -              - 
Other income                  25,775         25,775                
Loss on the sale of equipment   (31,000)        (31,000)                              
Interest (expense)   (1,970,913)        (1,970,913)   (346,402)        (346,402)   (99,306)        (99,306)
Loss before provision of income taxes   (2,771,331)   (127,784)   (2,899,115)   (782,584)   (77,965)   (860,549)   (358,845)   (2,189)   (361,034)
Provision for income taxes (benefit)   -              -              -           
Net loss  $(2,771,331)   (127,784)  $(2,899,115)  $(782,584)   (77,965)  $(860,549)  $(358,845)   (2,189)  $(361,034)
                                              
Net loss per share  $(0.11)       $(0.12)  $(0.02)       $(0.02)  $(0.00)       $(0.00)
Weighted average shares basic and diluted   25,097,908         25,097,908    35,731,866         35,731,866    110,774,232         110,774,232