v3.26.1
DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2026
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

NOTE 13 – DISCONTINUED OPERATIONS

 

On July 8, 2026, the Company discontinued operations of its subsidiary SAFETek, LLC.

 

In accordance with the provisions of ASC 205-20, the assets and liabilities have been reflected as discontinued operations in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, and consist of the following:

 

SCHEDULE OF ASSETS AND LIABILITIES REFLECTED IN DISCONTINUED OPERATIONS 

   June 30, 2026   December 31, 2025 
Current assets of discontinued operations:          
Prepaid assets  $408   $- 
Deposits, current   691,139    936,434 
Receivables   23,313    13,194 
Total current assets of discontinued operations  $714,860   $949,628 
           
Total fixed assets, net of discontinued operations [1]  $7,726   $118,257 
           
Other assets of discontinued operations:          
Deposits  $37,320   $37,320 
Total other assets of discontinued operations  $37,320   $37,320 
           
Current liabilities of discontinued operations:          
Accounts payable and accrued liabilities  $22,821   $14,029 
Payroll liabilities   9,345    1,825 
Total current liabilities of discontinued operations  $32,166   $15,854 

 

[1]Fixed assets of discontinued operations were made up of the following at each balance sheet date:
   Estimated        
   Useful        
   Life  June 30,   December 31, 
   (years)  2026   2025 
Computer equipment  3  $4,826   $4,826 
Data processing equipment  3   6,875,580    7,381,111 
Gross book value      6,880,406    7,385,937 
Accumulated depreciation      (6,872,680)   (7,267,680)
Net book value     $7,726   $118,257 

 

 

Total depreciation expense for the six months ended June 30, 2026 and 2025, was $110,531 and $350,876, respectively. During the six months ended June 30, 2026, we sold assets with a total net book value of $0 for cash of $9,858 and digital assets worth $2,916, therefore recognized a gain on disposal of assets of $12,774. During the six months ended June 30, 2025, we sold assets with a total net book value of $31,227 for digital assets worth $123,064, therefore recognized a gain on disposal of assets of $91,837.

 

In accordance with the provisions of ASC 205-20, the results of operations of the discontinued operations for the three and six months ended June 30, 2026 and 2025 have been reflected as discontinued operations in the condensed consolidated statements of operations, and consist of the following:

 

   2026   2025   2026   2025 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2026   2025   2026   2025 
                 
Revenue of discontinued operations:                    
Mining revenue [2]  $557,949   $829,231   $1,112,071   $1,692,175 
Total revenue, net of discontinued operations   557,949    829,231    1,112,071    1,692,175 
                     
Operating costs and expenses of discontinued operations:                    
Cost of sales and service [3]   757,434    1,053,300    1,690,321    2,090,899 
Advertising, selling, and marketing   -    -    51    - 
Salary and related   49,595    81,918    97,884    216,021 
Loss (gain) on disposal of assets [1]   (12,774)   (91,837)   (12,774)   (91,837)
General and administrative   70,068    236,524    192,699    555,890 
Total operating costs and expenses of discontinued operations   864,323    1,279,905    1,968,181    2,770,973 
                     
Operating net income (loss) of discontinued operations   (306,374)   (450,674)   (856,110)   (1,078,798)
                     
Other income (expense) of discontinued operations:                    
                     
Other income (expense)   63,245    63,245    130,489    126,489 
Total other income (expense) of discontinued operations   63,245    63,245    130,489    126,489 
                     
Income (loss) before income taxes of discontinued operations   (243,129)   (387,429)   (725,621)   (952,309)
Income tax expense   -    -    -    - 
Net income (loss) of discontinued operations  $(243,129)  $(387,429)  $(725,621)  $(952,309)

 

[1]Fixed assets of discontinued operations were made up of the following at each balance sheet date:

[2]Revenue Recognition

[3]Cost of Sales and Service

 

Mining Revenue

 

Through the first week of July 2026, we generated revenue from mining bitcoin. Subsequently, we discontinued our bitcoin mining business. The Company entered into a digital asset mining pool by executing a contract, as amended from time to time, with the mining pool operator to provide computing power to the mining pool. The contract was terminable at any time by either party without penalty. Further, since the contract was continuously renewing, second by second, the mining contract was considered to have a duration of less than 24 hours for accounting purposes. The Company’s enforceable right to compensation only began when the Company provided computing power to the mining pool operator. In exchange for providing computing power, we were entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which calculated our share of block rewards, transaction fees, and mining pool operator fees. We were entitled to consideration even if a block was not successfully placed by the mining pool operator.

 

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) was an output of the Company’s ordinary activities. The provision of providing such computing power was the only performance obligation in the Company’s contract with the mining pool operator. The transaction consideration the Company received was net of a contractually agreed-upon mining pool operator fee charged and kept by the mining pool operator and was noncash, in the form of Bitcoin. Given that the contract was continuously renewing, and the duration is considered to be less than 24 hours, the Company measured the transaction consideration at fair value on the date Bitcoin was received. The consideration was variable. The amount of consideration recognized was constrained to the amount of consideration received, which was when it was probable a significant reversal would not occur. There was no significant financing component or risk of a significant revenue reversal in these transactions due to the performance obligations and settlement of the transactions being on a daily basis.

 

[3]Cost of Sales and Service

 

Included in our costs of sales and services is amounts paid to hosting and electricity fees that we pay to vendors to set up our mining equipment at third-party sites in order to generate mining revenue.

 

In accordance with the provisions of ASC 205-20, the cash flow activity from discontinued operations for the six months ended June 30, 2026 and 2025 have been reflected as discontinued operations in the condensed consolidated statements of cash flows, and consists of the following:

 

   2026   2025 
   Six Months Ended June 30, 
   2026   2025 
CASH FLOWS FROM DISCONTINUED OPERATING ACTIVITIES:          
Net income (loss)  $(725,621)  $(952,309)
Depreciation   110,531    350,876 
(Gain) loss on disposal of assets   (12,774)   (91,837)
Revenue recognized from bitcoin mined   (1,112,071)   (1,692,175)
Operating expenses paid with digital assets   27,246    30,756 
Receivables   (10,119)   - 
Prepaid assets   (408)   5,421 
Deposits   245,295    - 
Accounts payable and accrued liabilities   16,312    (26,493)
Net cash provided by (used in) operating activities - discontinuing  $(1,461,609)  $(2,375,761)
           
CASH FLOWS FROM DISCONTINUED INVESTING ACTIVITIES:          
Proceeds from sale of fixed assets  $9,858   $- 
Net cash provided by (used in) investing activities - discontinuing  $9,858   $-