UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from __________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of June 13, 2025 the issuer had shares of common stock, par value $ per share, outstanding.
TABLE OF CONTENTS
| Page No. | ||
| PART I FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024 | 4 | |
| Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 | 5 | |
| Unaudited Consolidated Statements of Stockholders’ Deficit for the Three Months Ended March 31, 2025 and 2024 | 6 | |
| Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 | 7 | |
| Notes to Unaudited Consolidated Financial Statements | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 25 |
| Item 4. | Controls and Procedures | 25 |
| PART II OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 26 |
| Item 1A. | Risk Factors | 26 |
| Item 3. | Defaults upon Senior Securities | 26 |
| Item 4. | Mine Safety Disclosures | 26 |
| Item 5. | Other Information | 26 |
| Item 6. | Exhibits | 27 |
| SIGNATURES | 28 | |
| 2 |
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short- term and long-term business operations, and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) as filed with the U.S. Securities and Exchange Commission (“SEC”) and in any subsequent filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Our management cannot predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events, and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless expressly indicated or the context requires otherwise, unless expressly indicated or the context requires otherwise, the terms “Crypto,” the “Company,” “we,” “us,” and “our” in these consolidated financial statements refer to The Crypto Company and, where appropriate, its wholly-owned subsidiary Blockchain Training Alliance, Inc. (“BTA”) and an inactive subsidiary Coin Tracking, LLC (“CoinTracking”).
| 3 |
THE CRYPTO COMPANY
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Total current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Other liabilities | ||||||||
| Notes payable, net | ||||||||
| Convertible debt | ||||||||
| Total current liabilities | ||||||||
| Notes payable - other | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred A voting stock, $ par value; shares authorized, and -- shares issued and outstanding, respectively as of March 31, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value; shares authorized and shares issued and outstanding, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 4 |
THE CRYPTO COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the three months ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Revenue: | ||||||||
| Services | $ | |||||||
| Cost of services | ||||||||
| Gross margin | ||||||||
| Operating expenses: | ||||||||
| General and administrative expenses | ||||||||
| Share-based compensation - non-employee | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income and (expense) | ||||||||
| Gain on the forgiveness of debt | ||||||||
| Loss on the extinguishment of debt | ( | ) | ||||||
| Gain on the sale of property | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other (expense) | ( | ) | ( | ) | ||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Net (loss) per share | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding – basic and diluted | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 5 |
THE CRYPTO COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
| Additional | Total | |||||||||||||||||||
| Common stock | paid-in- | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2023 -Restated | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional paid in capital | ||||||||||||||||||||
| Common stock issued for note conversion | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance, March 31, 2024 -Restated | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional | Total | |||||||||||||||||||
| Common stock | paid-in- | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | capital | Deficit | Deficit | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||
| Issuance of warrants for financing fee | ||||||||||||||||||||
| Common stock issued for note conversion | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 6 |
THE CRYPTO COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Period Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| (Restated) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||
| Loss on the extinguishment of debt | ||||||||
| Share-based compensation | ||||||||
| Warrants issued for financing fee | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payment of notes payable | ( | ) | ( | ) | ||||
| Proceeds from issuance of notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Common stock issued for convertible debt | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 7 |
THE CRYPTO COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – THE COMPANY
The Crypto Company was incorporated in the State of Nevada on March 9, 2017. 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 these consolidated financial statements refer to The Crypto Company and, where appropriate, its wholly-owned subsidiary Technology Convergence Company (“TechCC”) formerly Blockchain Training Alliance, Inc. (“BTA”) and an inactive subsidiary Coin Tracking, LLC (“CoinTracking”).
The Company entered into a Stock Purchase Agreement (the “SPA”) effective as of March 24, 2021 with 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. As a result of this acquisition, the operations of BTA became consolidated with Company operations on April 8, 2021.
TechCC 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.
During the three months ended March 31, 2025, and years ended December 31, 2024 and 2023, the Company generated revenues and incurred expenses primarily through the business of providing consulting services and education for distributed ledger technologies, for the building of technological infrastructure and enterprise blockchain technology solutions, both of which have ceased operations as of the date of this Annual Report.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The
Company’s consolidated financial statements are prepared using the accrual method of accounting in accordance with United States
(“U.S.”) generally accepted accounting principles (“GAAP”) and have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant
losses and experienced negative cash flows since inception. As of March 31, 2025, the Company had cash of $
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund the Company’s expenses and achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. There can be no assurance that any of these future-funding efforts will be successful. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
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.
| 8 |
Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Blockchain Training Alliance and CoinTracking LLC which is inactive. All significant intercompany accounts and transactions are eliminated in 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 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 March 31, 2025 and 2024 there were $-
Equipment
– Equipment is recorded at cost and depreciated using
the straight-line method over the estimated useful life ranging from
three to
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
| 9 |
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, 2023 the Company determined that its investment in BTA was fully impaired and recorded a loss
of $
Income taxes – Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included in the consolidated 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 consolidated 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 March 31, 2025, we had a net operating loss carryforward for federal income tax purposes of approximately $
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.
| 10 |
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.
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 the consolidated 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.
| 11 |
Reclassifications – Certain amounts in the prior period consolidated 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.
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations except as noted below:
On November 15, 2019, the FASB issued ASU 2019-10, which (1) provides a framework to stagger effective dates for future major accounting standards and (2) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, ASU 2019-10 amends the effective date for ASU 2017-04 to fiscal years beginning after December 15, 2022, and interim periods therein.
Early adoption continues to be permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements for both annual and interim reporting periods.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The amendment will be effective for public companies with fiscal years beginning after December 15, 2020.
In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for us for interim and annual periods in fiscal years beginning after December 15, 2022.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
NOTE 4 – ACQUISITIONS AND AGREEMENTS
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 $
| 12 |
As
a result of the foregoing the Company initially recorded goodwill of $
During
the year ended December 31, 2023, we wrote off all of the goodwill and intangible assets of BTA amounting $
As
a result of the operating results for BTA, the Company determined that its goodwill and intangible assets were fully impaired as of December
31, 2023, and recorded an impairment charge of $
As of March 31, 2025 we had no goodwill or intangible assets on our balance sheet.
NOTE 5 – RELATED PARTY TRANSACTIONS
Effective
September 5, 2024, the Company amended its Articles of Incorporation (the “Articles”), to amend and restate Sections
1 and 2 of Article 4 of the Articles to increase the number of authorized shares of the Company’s common stock (“Common
Stock”) from to and create a new class of stock, par value $ per share, designated as Series
A Preferred Stock consisting of authorized shares, as set forth in Certificate of Amendment to the Articles of Incorporation (the
“Amendment”).
On the same date the Company entered into a stock agreement (the “Stock Agreement”) with, the Company’s CEO Ronald Levy pursuant to which the Company issued a total of ten (10) shares of the Company’s Series A preferred stock (“Preferred Stock”) Mr. Levy also serves Interim Chief Financial Officer, Chief Operating Officer, Chairman of the Board, Secretary, and a member of the Board of Directors of the Company.
Although the shares are not convertible to common stock these Series A Preferred Shares enable Mr. Levy to exercise control over the Company, so the company used the equity methos to value the shares. The 10 Series A Preferred shares convertible shares can be converted into voting shares. As of December 31, 2024 the Company had shares outstanding. The Company estimated that the voting shares could not exceed the number of shares outstanding and used that level of shares to value the common stock which was trading at $ resulted in stock based compensation of $ which was also equivalent to the market capitalization on that date.
On January
27, 2025 (the “Advance Date”), the Company entered into a Promissory Note with Ronald Levy, the Company’s, Chief Executive
Officer, Chief Operating Officer and Secretary, to obtain an advance in the amount of $
NOTE 6 – NOTE PAYABLE
●
On June 10, 2020, the Company received a loan from the Small Business Administration of $
●
On February 2, 2021, the Company received a loan from the Small Business Administration of $
As
of March 31, 2025 the total due on the SBA loans amounted to $
●
On May 3, 2022, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “May AJB SPA”) entered
into with AJB, and issued a Promissory Note in the principal amount of $
| 13 |
At
the closing the Company repaid all obligations owed to AJB pursuant to a
The
maturity date of the May ABJ Note is
Following
an event of default, and subject to certain limitations, the outstanding amount of the Note may be converted into shares of Company common
stock. Amounts due under the Note would be converted into shares of the Company’s common stock at a conversion price equal to
●
On February 2, 2023, the Company borrowed funds pursuant to a SPA entered into with Fast Capital, LLC (“Fast Capital”), and
Fast Capital purchased a
The
maturity date of the Fast Capital Note is
Fast
Capital has the right at any time after the six-month anniversary of the date of issuance of the Fast Capital Note to convert all or
any part of the outstanding and unpaid principal amount of the Fast Capital Note into Company common stock, subject to a beneficial ownership
limitation. The conversion price of the Fast Capital Note equals
| 14 |
The
Fast Capital Note contains various covenants standard and customary events of default such as failing to timely make payments under the
Fast Capital Note when due, the failure to maintain a listing on the OTC Markets or the Company defaulting on any other note or similar
debt obligation into which the Company has entered and failed to cure within the applicable grace period. The occurrence of any of the
events of default, entitle First Capital, among other things, to accelerate the due date of the unpaid principal amount of, and all accrued
and unpaid interest on, the Fast Capital Note. Upon an “Event of Default”, interest shall accrue at a default interest rate
of
As
of March 31, 2025, the balancing remaining under the Fast Capital Note is $
●
On June 23, 2023, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “AJB SPA”) entered
into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the AJB June Note is
As
of March 31, 2025, the balancing remaining under the AJB June Note is $
●
On November 13, 2023, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “Nov. SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the Nov. Note is
As
of March 31, 2025, the balancing remaining under the AJB June Note is $
●
On January 30, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “January 30, 2024
SPA”) entered into with AJB, and issued a Promissory Note in the principal amount of $
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The
maturity date of the January 30, 2024 Note is
As
of March 31, 2025, the balancing remaining under the AJB June Note is $
All remaining principal balance remain unpaid as of March 31, 2025.
●
On February 20, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “February 20, 2024
SPA”) entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the February 20, 2024 Note is
●
On February 29, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “February 29, 2024
SPA”) entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the February 29, 2024 Note is
●
On April 12, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “April 12, 2024 SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the April 12, 2024 Note is
●
On May 31, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “May 31, 2024 SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
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The
maturity date of the May 31, 2024 Note is
●
On June 18, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “June 18, 2024 SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the June 18, 2024 Note is
●
On July 15, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “July 15, 2024 SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
The
maturity date of the July 15, 2024 Note is
●
On August 28, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “August 28, 2024 SPA”)
entered into with AJB, and issued a Promissory Note in the principal amount of $
On
January 27, 2025, the Company and AJB Capital Investments LLC entered into a Second Amendment dated as of October 10, 2024 (“Second
Amendment”), to that certain Promissory Note dated as of August 28, 2024 (“Promissory Note”). The First Amendment to
the Promissory Note dated as of October 1, 2024 (“First Amendment”), amends the Promissory Note, to increase the principal
amount of the Promissory Note from $
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On
February 11, 2025, the Company and AJB Capital Investments LLC entered into a Third Amendment dated as of February 6, 2025 (“Third
Amendment”) to that certain Promissory Note dated as of August 28, 2024 (“Promissory Note”). The First Amendment to
the Promissory Note dated as of October 1, 2024 (“First Amendment”), amends the Promissory Note, to increase the principal
amount of the Promissory Note from $
The
Company and AJB Capital Investments LLC entered into a Fourth Amendment dated as of March 10, 2025 (“Fourth Amendment”) to
that certain Promissory Note dated as of August 28, 2024 (“Promissory Note”). The First Amendment to the Promissory Note
dated as of October 1, 2024 (“First Amendment”), amends the Promissory Note, to increase the principal amount of the
Promissory Note from $
The
maturity date of the August 28, 2024 Note is
●
On November 1, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “November 1, 2024
SPA”) entered into with AJB, and issued a Promissory Note in the principal amount of $
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On
January 10, 2025, the Company and AJB Capital Investments LLC entered into a Second Amendment dated as of January 8, 2025 (“Second
Amendment”), to that certain Promissory Note dated as of November 1, 2024 (“Promissory Note”). The First Amendment
to the Promissory Note dated as of November 18, 2024 (“First Amendment”), amended the Promissory Note to increase the
principal amount of the Promissory Note from $
The
maturity date of the November 1, 2024 Note is
●
On December 4, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “December 4, 2024
SPA”) entered into with AJB, and issued a Promissory Note in the principal amount of $
●
The maturity date of the December 4, 2024 Note is
As
of March 31, 2025 the balance of all convertible notes outstanding was $
NOTE 7 – OTHER LIABILITIES
During
the year ended December 31, 2023 the Company initially recorded $
NOTE 8 – EQUITY
Common stock
As of March 31, 2025, the Company had shares of $ common stock authorized. As of March 31, 2025 there were and and shares of common stock outstanding, respectively.
On
January 23, 2025 (the “Effective Date”), the Company entered into a consulting agreement (the “Consulting Agreement”)
with YWRC Holdings, Inc. (the “Consultant”). The Consulting Agreement has an initial term of six months, commencing on the
Effective Date. The Consultant received a one-time engagement fee on the Effective Date and is eligible to receive a monthly fee for
its services during the term of the Consulting Agreement in accordance with the terms and conditions of the Consulting Agreement, totaling
up to a cumulative $
Preferred A Stock
Effective
September 5, 2024, the Company amended its Articles of Incorporation (the “Articles”), to amend and restate Sections
1 and 2 of Article 4 of the Articles to increase the number of authorized shares of the Company’s common stock (“Common
Stock”) from to and create a new class of stock, par value $ per share, designated as Series
A Preferred Stock consisting of 10 authorized shares, as set forth in Certificate of Amendment to the Articles of Incorporation (the
“Amendment”). Pursuant to the Amendment, Common Stock and Preferred Stock are identical in all respects, except that
each share of Common Stock is entitled to one vote and each share of
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On the same date the Company entered into a stock agreement (the “Stock Agreement”) with, the Company’s CEO Ronald Levy pursuant to which the Company issued a total of ten (10) shares of the Company’s Series A preferred stock (“Preferred Stock”) Mr. Levy also serves Interim Chief Financial Officer, Chief Operating Officer, Chairman of the Board, Secretary, and a member of the Board of Directors of the Company.
Although
the shares are not convertible to common stock these Series A Preferred Shares enable Mr. Levy to exercise control over the Company,
so the company used the equity methos to value the shares.
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 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 year ended December 31, 2020, the Company issued stock options to members of its board of directors, stock options to employees, and stock options to non-employees. No stock options were issued in 2024.
shares of the Company’s common stock are reserved for issuance under the Plan. As of March 31, 2025, there are outstanding stock option awards issued from the Plan covering a total of shares of the Company’s common stock and there remain reserved for future awards shares of the Company’s common stock.
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Number | Exercise | Term | ||||||||||
| of Shares | Price | (years) | ||||||||||
| Options outstanding, at December 31, 2023 | $ | |||||||||||
| Options granted | ||||||||||||
| Options cancelled | ||||||||||||
| Options exercised | ||||||||||||
| Options outstanding, at December 31, 2024 | $ | |||||||||||
| Options granted | ||||||||||||
| Options cancelled | ||||||||||||
| Options exercised | ||||||||||||
| Options vested and outstanding, at March 31, 2025 | $ | |||||||||||
The Company recognized $-- and $-- of compensation expense related to stock options for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 these options had no intrinsic value since they were all out of the money as of March 31, 2025.
The determination of the fair value of share-based compensation awards utilizing the Black-Scholes model is affected by the Company’s stock price and a number of complex and subjective assumptions, including stock price, volatility, expected life of the equity award, forfeitures rates if any, risk-free interest rates and expected dividends. Volatility is based on the historical volatility of comparable companies measured over the most recent period, generally commensurate with the expected life of the Company’s stock options, adjusted for future expectations given the Company’s limited historical share price data.
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As of March 31, 2025 the following warrants were outstanding:
| Issuance Date | Exercisable for | Expiration Date | Exercise Price | Number of Shares Outstanding Under Warrants | ||||||||
| February 2020 | $ | |||||||||||
| February 2020 | $ | |||||||||||
| February 2020 | $ | |||||||||||
| April 2020 | $ | |||||||||||
| June 2020 | $ | |||||||||||
| March 2021 | $ | |||||||||||
| January 2022 | $ | |||||||||||
| February 2022 | $ | |||||||||||
| April 2022 | $ | |||||||||||
| May 2022 | $ | |||||||||||
| March 2023 | $ | |||||||||||
| March 2023 | $ | |||||||||||
| April 2023 | $ | |||||||||||
| May 2023 | $ | |||||||||||
| June 2023 | $ | |||||||||||
| November 2023 | $ | |||||||||||
| April 2024 | $ | |||||||||||
| May 2024 | $ | |||||||||||
| February 2025 | $ | |||||||||||
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Legal Contingencies
The Company may from time to time become subject to legal proceedings, claims, and litigation arising in the ordinary course of business.
Indemnities and guarantees - During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company’s officers and directors, under which the Company may be required to indemnify such persons for liabilities arising out of their respective relationships. In connection with its facility lease, the Company has indemnified the lessor for certain claims arising from the use of the facility. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheet.
NOTE 10 - SUBSEQUENT EVENTS
The
Company and AJB Capital Investments LLC entered into a Fifth Amendment executed on May 13, 2025 (“Fifth Amendment”) to that
certain Promissory Note dated as of August 28, 2024 (“Promissory Note”). The First Amendment to the Promissory Note dated
as of October 1, 2024 (“First Amendment”), amends the Promissory Note, to increase the principal amount of the Promissory
Note from $
The offer and sale of the Promissory Note and Pre-Funded Warrant was made in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in reliance on exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.
On May 23, 2025, the Company issued a total of shares of common stock, in lieu of cash to seven different consultants proving services to the Company.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and with our audited consolidated financial statements, including the notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report”), as filed with the U.S. Securities and Exchange Commission (“SEC”). In addition to historical consolidated financial information, the following discussion and analysis contain forward-looking statements that reflect our plans, estimates, and beliefs and involve risks and uncertainties. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” and similar expressions are intended to identify forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, as well as risks referenced in our other filings with the SEC.
Overview of Our Business
We are primarily engaged in the business of providing consulting, training, and educational services for distributed ledger technologies (“blockchain”), for individual and corporate clients, enterprises for general blockchain education, as well as for the building of technological infrastructure and enterprise blockchain technology solutions. We currently generate revenues and incur expenses through these consulting and educational operations. We have disposed of our entire ownership interest in CoinTracking GmbH and also divested all of our cryptocurrency assets owned by our former cryptocurrency investment segment, which has ceased operations.
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.
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.
Recent Developments
Effective September 5, 2024, the Company amended its Articles of Incorporation (the “Articles”), to amend and restate Sections 1 and 2 of Article 4 of the Articles to increase the number of authorized shares of the Company’s common stock (“Common Stock”) from 2,000,000,000 to 19,000,000,000 and create a new class of stock, par value $0.001 per share, designated as Series A Preferred Stock consisting of 10 authorized shares, as set forth in Certificate of Amendment to the Articles of Incorporation (the “Amendment”). Pursuant to the Amendment, Common Stock and Preferred Stock are identical in all respects, except that each share of Common Stock is entitled to one vote and each share of Preferred Stock is entitled to 950,000,000 votes.
Effective September 5, 2024, the Company entered into a stock agreement (the “Stock Agreement”) with Ronald Levy (the “Recipient”), pursuant to which the Company issued a total of ten (10) shares of the Company’s Series A preferred stock (“Preferred Stock”) as a bonus to the Recipient. The shares of Preferred Stock were offered and sold in reliance upon exemption from the registration requirements under Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
On August 28, 2024, the Company borrowed funds pursuant to the terms of a Securities Purchase Agreement (the “AJB SPA”) entered into with AJB Capital Investments, LLC (“AJB”), and issued a Promissory Note in the principal amount of $120,000 (the “AJB Note”) to AJB in a private transaction for a purchase price of $108,000, each dated as of August 28, 2024. In connection with the sale of the AJB Note, the Company also paid certain fees and expenses of AJB. After payment of the fees and expenses, the net proceeds to the Company were $98,000, which will be used for working capital, to fund potential acquisitions or other forms of strategic relationships, and other general corporate purposes.
The maturity date of the AJB Note is February 28, 2025. The AJB Note bears interest at a rate of twelve percent (12%) per calendar year from the date of issuance. The interest shall accrue on a monthly basis and is payable on the maturity date or upon acceleration or by prepayment or otherwise. The Company may prepay the AJB Note at any time without penalty. Under the terms of the AJB Note, the Company may not issue additional debt that is not subordinate to AJB, must comply with the Company’s reporting requirements under the Securities Exchange Act of 1934, and must maintain the listing of the Company’s common stock on the OTC Market or other exchange, among other restrictions and requirements. The Company’s failure to make required payments under the AJB Note or to comply with any of these covenants, among other matters, would constitute an event of default. Upon an event of default under the AJB SPA or AJB Note, the AJB Note will bear interest at the lesser of 18% per annum or the maximum amount permitted under law, AJB may immediately accelerate the AJB Note due date, AJB may convert the amount outstanding under the AJB Note into shares of Company common stock at a discount to the market price of the stock, and AJB will be entitled to its costs of collection, among other penalties and remedies.
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Effective June 28, 2024, the Company entered into stock agreements (each, a “Stock Agreement”) with five separate recipients (each, a “Recipient”). Pursuant to the terms of the Stock Agreements, the Company issued a total of 910,770,639 shares of Company common stock as a bonus granted to certain Recipients who are employees and as a consideration for certain contractors’ services for the Recipients who are contractors. Ronald Levy, Chief Executive Officer, Interim Chief Financial Officer, Chief Operating Officer, Chairman of the Board and Secretary of the Company, was one the Recipients. The shares of Company common stock were issued in a private transaction. The shares of Company common stock described in this Current Report on Form 8-K were offered and sold in reliance upon exemption from the registration requirements under Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. Each of the Recipients had access to information about the Company or is a person to whom the Company believes the offer was exempt from registration.
On October 3, 2023, the Company entered into an Intellectual Property Assignment Agreement (the “IP Agreement”) with AllFi Technologies, Inc., a Delaware corporation, and wholly owned subsidiary of the Company (“AllFi Technologies”), pursuant to which the Company assigns to AllFi Technologies: (i) a sublicense of code instance managed by TelBill, LLC under the Code Licensing Commerical Agreement dated as of August 29, 2023, by and between the Company and TelBill, LLC (“Code Licensing Commerical Agreement”), (ii) one runtime SaaS license for use by AllFi Technologies in the conduct of its coupon business for a term of 12 months in accordance with the Company’s sublicense right under Section 2.1 of the Code Licensing Commerical Agreement in exchange for a fee to be mutually agreed to by the Company and AllFi Technologies through the use of such SaaS license, and (iii) one runtime SaaS license for use by AllFi Technologies in the conduct of its banking and marketplace business for a term of 12 months in accordance with the Company’s sublicense right under Section 2.1 of the Code Licensing Commerical Agreement in exchange for a fee to be mutually agreed to by the Company and AllFi Technologies through the use of such SaaS license.
Also on October 3, 2023, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with AllFi Technologies, pursuant to which the Company agreed to purchase from AllFi Technologies an aggregate of 501 shares of AllFi Technologies’ common stock, which represents 50.1% of the current issued and outstanding shares of AllFi Technologies, for a purchase price of $100,000. Upon the execution of the Subscription Agreement, the Company became a shareholder of AllFi Technologies.
In connection with the Company’s investment in AllFi Technologies as described above, on October 7, 2023, the Company sold an aggregate of 22,104,583 shares of the Company’s restricted common stock to AllFi Holdings LLC (the “Investor”), for a total purchase price of $1.00, pursuant to a Subscription Agreement by and between the Company and the Investor (the “Subscription Agreement”).
On February 23, 2024, the Company entered into a License Agreement (“License Agreement”) with AllFi Holdings LLC, a Wyoming limited liability company (“AllFi Holdings”), pursuant to which the Company grants to AllFi Holdings an exclusive license to utilize the Assigned IP (as defined in the License Agreement) associated with the utilization of the AllFi Brand. In consideration of the license granted under the License Agreement, AllFi Holdings will remit royalty payments to the Company for the utilization of the Assigned IP in accordance with the terms of the License Agreement.
On June 7, 2024, the Company completed the sale of AllFi Technologies, a majority owned subsidiary of the Company, to AllFi Holdings. AllFi Holdings purchased all of the issued and outstanding shares of common stock of the Company’s subsidiary, AllFi Technologies. This sale was designed to optimize both companies’ focus on their respective areas of expertise. As a result of this transaction, The Crypto Company received back from AllFi Holdings, its previously issued and committed shares, which totaled approximately 10% of The Crypto Company. In return, AllFi Holdings obtained full ownership of AllFi Technologies, including the trademarks and IP associated therewith.
Voluntary Mutual Termination and Release Agreement
On August 31, 2023, the Company entered into a Code Licensing Commercial Agreement (the “Code Licensing Agreement”) with TelBill, LLC (“TelBill”), pursuant to which TelBill granted the Company a non-exclusive, worldwide, revocable, non-transferable, sublicensable, license to use and market its software and fin-tech products and services to the Company’s customers. In exchange, the Company paid TelBill a sum of $300,000, paid in accordance with the fee schedule set forth in the Code Licensing Agreement. The Company also paid TelBill for all security system infrastructure costs and to manage the code instance, which were both be billed at actual cost with no markup. In addition, TelBill is entitled to share in the revenue generated by the Company through the use of TelBill’s software, at a rate of 15% of net program profits. As additional consideration for the license, the Company provided TelBill with 19.98% equity in the Company in the form of warrants with a 30-year expiration, and which vest in accordance with the vesting schedule set forth in the Code Licensing Agreement.
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The Agreement has a one hundred year term or will continue until it is terminated in accordance with the provisions set forth in the Code Licensing Agreement. Each party may terminate the Agreement, upon written notice to the other party. Neither party may assign the Agreement, including through a change of control. The Agreement also contains customary representations, warranties and covenants, and the parties have also agreed to indemnify and hold each other harmless from claims and losses arising directly or indirectly from the Agreement under certain circumstances.
On February 23, 2024, the Company entered into a Voluntary Mutual Termination and Release Agreement (“Termination Agreement”) with TelBill, pursuant to which the Company and TelBill agreed to terminate the Code Licensing Commercial Agreement. The Company and TelBill have made customary representations, warranties, and covenants in the Termination Agreement.
Comparison of the three months ended March 31, 2025 and March 31, 2024
Revenue
Revenues for the three months ended March 31, 2025 and March 31, 2024, were $2,856 and $14,281 respectively. The decrease in revenue was due to less demand for blockchain training services due to advent of free artificial intelligence programs. Revenue for the 2025 period consisted of fees received for blockchain training and consulting generated by the Company’s BTA subsidiary.
General and Administrative Expenses
For the three months ended March 31, 2025, our general and administrative expenses were $319,943, a decrease of $122,887 compared to $442,380 for the period ended March 31, 2024. The decrease is primarily due to decreased activity at BTA. General and administrative expenses consist primarily of costs relating to professional services, payroll, and payroll-related expenses. Professional services included in general and administrative expenses consist primarily of contracting fees, consulting fees, and accounting fees.
Share-based compensation was $158,800 and $463,198 for the three months ended March 31, 2025 and March 31, 2024, respectively.
Other Income (Expense)
During the three months ended March 31, 2025 other expense was $135,695 compared to other expense of $200,157 for the three months ended March 31, 2024. The decrease is primarily attributable to a decrease in interest expense to $117,251 during the 2025 period compared to $200,157 in 2024.
Net Loss
As a result of the foregoing we recorded a loss of $611,582 or $(0.00) per share for the three months ended March 31, 2025 compared to a loss of $1,091,905, or $(0.00) per share for the three month ended March 31, 2024.
Liquidity
Operating Activities
Net cash used in operating activities was $152,825 for the three months ended March 31, 2025, compared to net cash used by operating activities of $344,505 for the three months ended March 31, 2024. The decrease in net cash used in operating activities during the 2025 period was primarily due to a reduction in net loss.
Investing Activities
Net cash used in investing activities was $0 and $0 for the three months ended March 31, 2025 and March 31, 2024.
Financing Activities
Net cash from financing activities for the three months ended March 31, 2025, was $157,995, compared to $293,423 for the three months ended March 31, 2024. The decrease in net cash from financing activities was mainly due to the resulting issuance of promissory notes during the three months ended March 31, 2025 to $158,113 compared to $293,600 in the March 31, 2024 period.
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Trends, Events, and Uncertainties
Blockchain
The blockchain technology market is dynamic and unpredictable. Although we will undertake compliance efforts, including efforts with commercially reasonable diligence, there can be no assurance that there will not be a new or unforeseen law, regulation or risk factor which will materially impact our ability to continue our business as currently operated or raise additional capital to foster our continued growth.
Other than as discussed in this Quarterly Report and our 2023 Annual Report, we are not aware of any other trends, events, or uncertainties that are likely to have a material effect on our financial condition.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have no material changes to our Critical Accounting Policies and Estimates disclosure as filed in our 2023 Annual Report.
Recent Accounting Pronouncements
See Note 3 to the consolidated financial statements for a discussion of recent accounting pronouncements.
Off-Balance Sheet Transactions
We do not have any off-balance sheet transactions.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
ITEM 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, including our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2025. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2025, to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the period ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. Other Information
ITEM 1. Legal Proceedings.
The Company is subject, from time to time, to various legal proceedings that are incidental to the conduct of its business. The Company is not involved in any pending legal proceeding that it believes would reasonably be expected to have a material adverse effect on its financial condition or results of operations.
ITEM 1A. Risk Factors.
In evaluating us and our common stock, we urge you to carefully consider the risks and other information in this Quarterly Report on Form 10-Q, the Risk Factors disclosed in Item 1A. of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, that could materially and adversely affect our results of operations or financial condition.
ITEM 3. Defaults upon Senior Securities.
On April 24, 2023, the Company defaulted on the July 27, 2022 Coventry Note. The Company was in violation of covenants in the Coventry Note that require the Company to make the payment of any principal amount, guaranteed interest, or any other interest due under the Coventry Note, when due, subject to a five day cure period. Upon an event of default, consistent with the terms of the Coventry Note, the Coventry Note becomes convertible, in whole or in part, into shares of the Company’s Common Stock at Coventry’s option. On April 24, 2023, the Company received a notice of default in the amount of $17,916.94 of principal and $2,083.06 of interest. As per the terms of the Coventry Note, upon the occurrence and during the continuation of an event of default, the Coventry Note will become immediately due and payable. As of the filing date of this quarterly report on Form 10-Q, the total arrearage is $-0- since the Coventry Note has been paid in full.
ITEM 4. Mine Safety Disclosures.
Not applicable.
ITEM 5. Other Information.
During
the three months ended March 31, 2025, no director or officer of the Company
On May 3, 2024, the Securities and Exchange Commission entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC (“Borgers”) and its sole audit partner, Benjamin F. Borgers CPA, permanently, barring Mr. Borgers and Borgers (collectively, “BF Borgers”) from appearing or practicing before the Commission as an accountant (the “Order”). As a result of the Order, BF Borgers may no longer serve as the Company’s independent registered public accounting firm, nor can BF Borgers issue any audit reports included in Securities and Exchange Commission filings or provide consents with respect to audit reports. In light of the Order, the Audit Committee of the Board of Directors of the Company (the “Audit Committee”) on May 8, 2024, unanimously approved to dismiss and dismissed BF Borgers as the Company’s independent registered public accounting firm.
On May 8, 2024, the Audit Committee engaged Bush & Associates CPA LLC to serve as the Company’s new independent registered public accounting firm.
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ITEM 6. Exhibits.
* Filed herewith.
** Furnished, not filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: June 20, 2025 | THE CRYPTO COMPANY | |
| (Registrant) | ||
| By: | /s/ Ron Levy | |
| Ron Levy | ||
Chief Executive Officer, Interim Chief Financial Officer, Chief Operating Officer and Secretary (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||
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