Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
  1. Homepage
  2. Equities
  3. United States
  4. OTC Markets
  5. The Crypto Company
  6. News
  7. Summary
    CRCW   US22906C1027

THE CRYPTO COMPANY

(CRCW)
Delayed OTC Markets  -  12:55 2022-11-25 pm EST
0.2395 USD   +4.13%
11/14CRYPTO CO Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)
AQ
11/14The Crypto Company Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2022
CI
11/11The Crypto Company CEO Releases Statement Regarding Recent Events in Cryptocurrency Industry
AQ
SummaryQuotesChartsNewsCompanyFinancialsFunds 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

CRYPTO CO Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

03/10/2022 | 05:36pm EST

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Annual Report.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes contained elsewhere in this Annual Report. In addition to historical information, the following discussion contains forward-looking statements based upon current expectations that are subject to risks and uncertainties. Actual results may differ substantially from those referred to herein due to a number of factors, including, but not limited to, risks generally described in this report.

We are engaged in the business of providing consulting services and education for blockchain technology and for the building of technological infrastructure and enterprise blockchain technology solutions. We currently generate revenues and incur expenses solely through these consulting and education operations. We have disposed of our entire ownership interest in CoinTracking GmbH and also divested substantially all of our cryptocurrency assets owned by our former cryptocurrency investment segment, which has ceased operations.

7





Recent Events

COVID-19 Pandemic

On March 11, 2020, the World Health Organization ("WHO") declared the COVID-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets, causing global supply chain disruptions and contributing to shortages in the labor market. Most U.S. states and many countries at times have issued policies intended to stop or slow the further spread of the disease.

COVID-19 and the U.S.'s response to the pandemic have contributed to economic volatility. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business or our operations.

Results of Continuing Operations

Comparison of the fiscal years ended December 31, 2021 and December 31, 2020

Revenue and cost of services

For the year ended December 31, 2021, revenues relating to consulting services were $434,552, compared to $14,400 for the year ended December 31, 2020. The increase in revenue is attributable to the acquisition of BTA. The operations of BTA became consolidated with Company operations on April 8, 2021.

Cost of services for the periods ended December 31, 2021 and December 31, 2020 were $273,796 and $-0- respectively. The increase is attributable to the acquisition of BTA and is comprised of payroll expense.

General and administrative expenses and share-based compensation

For the year ended December 31, 2021, our general and administrative expenses were $1,471,226 an increase of 96.1% compared to $749,930 for the year ended December 31, 2020. General and administrative expenses consist primarily of costs relating to professional services, payroll and payroll-related expenses for the Company excluding payroll at BTA, and depreciation and amortization expenses. Professional services included in general and administrative expenses consist primarily of contracting fees, consulting fees, accounting fees, and legal costs. The increase for the year ended December 31, 2021 reflects increased costs associated with being a public company including outside consulting, legal, and accounting costs, and costs incurred to effect the BTA acquisition and other business development efforts.

Share-based compensation was $736,144 for the year ended December 31, 2021, a decrease of 100% compared to $2,321,673 for the year ended December 31, 2020. Share-based compensation decreased due to discretionary option issuances in 2020 as compared to no issuances in 2021.

Other Income

Other income for the year ended December 31, 2021 was 1,293,483 compared to $239,486 during the same period in 2020. The increase is other income is primarily attributable to the recovery of token investments that had been previously written off amounting to to $1,164,662 during the year ended December 31, 2021.

Liquidity and Capital Resources

Our 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 December 31, 2021, we had cash on hand of $75,699. Our loss before provision for income taxes from continuing operations was $785,630 for the year ended December 31, 2021. Our working capital was negative $2,216,422 as of December 31, 2021.

8





Operating Activities

We have incurred, and expect to continue to incur, significant expenses in the areas of professional fees and contracting services.

Net cash used in operating activities for the year ended December 31, 2021 was $152,241 compared to net cash used of $302,812 for the year ended December 31, 2020. The decrease of was primarily due to improved profitability in 2021, net of non- cash share based compensation.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2021 was $786,1515 compared to net cash provided $209,935 for the year ended December 31, 2020. The difference is primarily attributable to the purchase by the Company of BTA in 2021 amounting to $786,1515 in cash used, as well as 208,964 in gain from the sale of cryptocurrency in 2020 compared to -0- in the 2021 period.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $987,765, compared to $117,592 for the year ended December 31, 202019. The increase of $870,173 was primarily the result of an increase of proceeds from common stock issuance of $825,000 in 2021.

Subsequent to December 31, 2021, we raised approximately $1,307,000 in cash proceeds from various transactions described in Notes to the Financial Statements- Note 8 Subsequent Events

Critical Accounting Policies and Estimates

Stock-Based Compensation

In accordance with ASC No. 718, Compensation-Stock Compensation ("ASC 718"), the Company measures the compensation costs of stock-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in financial statements over the period during which employees are required to provide services. Stock-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 stock-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.

9





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 that 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 liabilities approximate fair value because of the short maturity of these instruments.

Goodwill and Indefinite-lived intangible Assets

We test for the impairment of our goodwill and indefinite-lived assets at least annually and whenever events or circumstances occur indicating that a possible impairment has been incurred.

We perform our annual goodwill impairment test on the first day of our fourth quarter based on the income approach, also known as the discounted cash flow ("DCF") method, which utilizes the present value of future cash flows to estimate fair value. We also use the market approach, which utilizes market price data of companies engaged in the same or a similar line of business as that of our company, to estimate fair value. A reconciliation of the two methods is performed to assess the reasonableness of fair value of each of the reporting units.

The future cash flows used under the DCF method are derived from estimates of future revenues, operating income, working capital requirements and capital expenditures, which in turn reflect specific global, industry and market conditions. The discount rate developed is based on data and factors relevant to the economies in which the business operates and other risks associated with those cash flows, including the potential variability in the amount and timing of the cash flows. A terminal growth rate is applied to the final year of the projected period and reflects our estimate of stable growth to perpetuity. We then calculate the present value of the respective cash flows for each reporting unit to arrive at the fair value using the income approach and then determine the appropriate weighting between the fair value estimated using the income approach and the fair value estimated using the market approach. Finally, we compare the estimated fair value of our goodwill and indefinite-lived assets to its respective carrying value in order to determine if the goodwill assigned to each reporting unit is potentially impaired. In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which eliminated Step 2 from the goodwill impairment test. If the fair value of the asset exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the asset is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the asset's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that asset.

10




Significant assumptions used include management's estimates of future growth rates, the amount and timing of future operating cash flows, capital expenditures, discount rates, as well as market and industry conditions and relevant comparable company multiples for the market approach. Assumptions utilized are highly judgmental, especially given the role technology plays in driving the demand for consulting services in the blockchain technology space. Based on the analysis that we performed at December 31, 2021, we determined that there was no impairment of our goodwill or intangible assets.

Revenue Recognition

The Company recognizes consulting revenue when the service is rendered, the fee for arrangement is fixed or determinable, and collectability is reasonably assured.

Income Taxes

Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included in the financial statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Off-Balance Sheet Transactions

We do not have any off-balance sheet transactions.

Trends, Events and Uncertainties

COVID-19 Pandemic

The COVID-19 pandemic and the U.S.'s response to the pandemic are having an adverse effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business or our operations.

11




The blockchain technology market is dynamic and unpredictable. Although we 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.

We cannot assure you that our consulting business will develop as planned, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, since we have no committed source of financing, we cannot assure you that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.

Other than as discussed above and elsewhere in this Annual Report on Form 10-K, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

© Edgar Online, source Glimpses

All news about THE CRYPTO COMPANY
11/14CRYPTO CO Management's Discussion and Analysis of Financial Condition and Results of O..
AQ
11/14The Crypto Company Reports Earnings Results for the Third Quarter and Nine Months Ended..
CI
11/11The Crypto Company CEO Releases Statement Regarding Recent Events in Cryptocurrency Ind..
AQ
11/02Crypto Co : Termination of a Material Definitive Agreement (form 8-K)
AQ
10/05Crypto Co : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obl..
AQ
09/30The Crypto Company announced that it has received funding from 1800 Diagonal Lending, L..
CI
09/27Cryptocurrency Market Maker Suffers $160M DeFi Hack
AQ
09/21The Crypto Company Education, Consulting Subsidiary Launches New Class Offering Focused..
AQ
09/07The Crypto Company Education, Consulting Subsidiary Launches New Service Offering; Inks..
AQ
08/19CRYPTO CO Management's Discussion and Analysis of Financial Condition and Results of O..
AQ
More news
Financials (USD)
Sales 2021 0,43 M - -
Net income 2021 -0,79 M - -
Net Debt 2021 0,53 M - -
P/E ratio 2021 -102x
Yield 2021 -
Capitalization 5,88 M 5,88 M -
EV / Sales 2020 8 622x
EV / Sales 2021 186x
Nbr of Employees 10
Free-Float 37,7%
Chart THE CRYPTO COMPANY
Duration : Period :
The Crypto Company Technical Analysis Chart | MarketScreener
Full-screen chart
Income Statement Evolution
Managers and Directors
Ronald Levy Chairman, CEO, Secretary, CFO & COO
Holly Ziegel Ruxin Director
Anthony Strickland Director
Sector and Competitors