8-K/A
Crypto Co (CRCW)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K/A
(AmendmentNo. 1)
CURRENTREPORT
Pursuantto Section 13 OR 15(d) of theSecurities Exchange Act of 1934
Dateof Report (Date of earliest event reported): April 8, 2021
TheCrypto Company
(Exact name of registrant as specified in its charter)
| Nevada | 000-55726 | 46-4212105 |
|---|---|---|
| (State or other jurisdiction<br><br> of incorporation) | (Commission<br><br> File Number) | (IRS Employer<br><br> Identification No.) |
| 23823 Malibu Road Suite 50477<br><br> <br>Malibu, CA | 90265 | |
| --- | --- | |
| (Address of principal<br> executive offices) | (Zip Code) |
(424)228-9955
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting material<br> pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. [ ]
EXPLANATORYNOTE
This Amendment No. 1 to the Current Report on Form 8-K (this “Amendment”) is being filed by The Crypto Company, Inc. (the “Company”) for the purpose of amending and supplementing Item 9.01 of that certain Current Report on Form 8-K originally filed by the Company with the Securities and Exchange Commission (“SEC”) on April 12, 2021 (the “Original Form 8-K”) in connection with the Company’s acquisition of Blockchain Training Alliance, Inc. (“BTA”). As indicated in the Original Form 8-K, this Form 8-K/A is being filed to provide the information required by Item 9.01 of Form 8-K, which was not previously filed with the Original Form 8-K as permitted by the rules of the SEC.****
Item9.01. Financial Statements and Exhibits.
Forward-LookingStatements
Information in this Current Report on Form 8-K/A, together with the exhibits attached hereto, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, any statements regarding the integration of the Company and BTA, the expected benefits and costs of the BTA acquisition; the Company’s plans relating to the acquisition; the future financial and accounting impact of the acquisition; and any statements of expectation or belief or assumptions underlying any of the foregoing. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements, include, but are not limited to, the possibility that the expected costs and benefits of the acquisition may not materialize as expected; the possibility that preliminary financial reporting estimates and assumptions may prove to be incorrect; the failure of the Company to successfully integrate BTA’s business or realize synergies; conditions in the capital and financial markets, general economic conditions and other risks that are described in reports filed by the Company filed with the SEC.
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 hereunto duly authorized.
| THE<br> CRYPTO COMPANY | ||
|---|---|---|
| Date:<br> June 22, 2021 | ||
| By: | /s/ Ron Levy | |
| Name: | Ron Levy | |
| Title: | Chief Executive Officer, Interim Chief Financial<br> Officer, Chief Operating Officer and Secretary |
EXHIBIT99.1
Reportof Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Blockchain Training Alliance, Inc.
Opinionon the Financial Statements
We have audited the accompanying consolidated balance sheets of Blockchain Training Alliance, Inc. as of December 31, 2020 and 2019, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
SubstantialDoubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basisfor Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
| /S/ BF Borgers CPA PC |
|---|
| BF Borgers CPA PC |
We have served as the Company's auditor since 2021
Lakewood, CO
June 22, 2021
BLOCKCHAINTRAINING ALLIANCE, INC.
CONSOLIDATEDBALANCE SHEETS
| December 31, | |||||
|---|---|---|---|---|---|
| 2019 | |||||
| ASSETS | |||||
| Cash | 1,204 | $ | 2,288 | ||
| Total Assets | 1,204 | $ | 2,288 | ||
| LIABILITIES & STOCKHOLDERS’ DEFICIT | |||||
| Current liabilities | |||||
| Loans payable | 83,442 | $ | 74,730 | ||
| Total current liabilities | 83,442 | 74,730 | |||
| Total liabilities | 83,442 | 74,730 | |||
| Stockholders’ Equity | |||||
| Common stock, Par Value .0001, 10,000,000 shares authorized, 6,000,000 and 6,000,000 issued and outstanding of shares as of December 31, 2020 and 2019, respectively. | 600 | 600 | |||
| Additional paid in capital | - | - | |||
| Retained earnings (deficit) | (82,839 | ) | (73,042 | ) | |
| Total Stockholders’ (Deficit) | (82,239 | ) | (72,442 | ) | |
| Total Liabilities and Stockholders’ (Equity) | 1,204 | $ | 2,288 |
All values are in US Dollars.
The accompanying notes are an integral part of these financial statements.
BLOCKCHAINTRAINING ALLIANCE, INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
| YEARS ENDED | ||||||
|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||
| 2020 | 2019 | |||||
| Revenue: | ||||||
| Sales net of discounts | $ | 570,070 | $ | 1,005,293 | ||
| COGS | 101,092 | 331,293 | ||||
| Gross profit | 468,978 | 674,000 | ||||
| Operating Expenses: | ||||||
| Administrative expenses | $ | 174,190 | $ | 305,036 | ||
| Payroll expenses | 194,885 | 372,500 | ||||
| Related party compensation expense | 117,700 | 87,057 | ||||
| Legal and professional expenses | - | 6,384 | ||||
| Total operating expenses | $ | 486,775 | $ | 770,977 | ||
| (Loss) from operations | ||||||
| Other expense | ||||||
| Other (expense) net | 8,000 | - | ||||
| Income (loss) before provision for income taxes | (9,797 | ) | (96,977 | ) | ||
| Provision for income taxes | - | - | ||||
| Net (Loss) | $ | (9,797 | ) | $ | (96,977 | ) |
| Basic and diluted earnings(loss) per common share | $ | (0.00 | ) | $ | (0.02 | ) |
| Weighted average number of shares outstanding | 6,000,000 | 6,000,000 |
The accompanying notes are an integral part of these financial statements.
BLOCKCHAINTRAINING ALLIANCE, INC.
CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Additional | Total | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||
| Shares | Value | Capital | Deficit | Equity | ||||||||
| Balance, December 31, 2018 | 6,000,000 | $ | 600 | - | $ | 23,935 | 24,535 | |||||
| Net income (loss) | (96,977 | ) | (96,977 | ) | ||||||||
| Balance, December 31, 2019 | 6,000,000 | $ | 600 | $ | - | $ | (73,042 | ) | $ | (72,442 | ) | |
| Net income (loss) | (9,797 | ) | (9,797 | ) | ||||||||
| Balance, December 31, 2020 | 6,000,000 | $ | 600 | $ | - | $ | (82,839 | ) | $ | (82,239 | ) |
The accompanying notes are an integral part of these financial statements.
BLOCKCHAINTRAINING ALLIANCE, INC.
CONSOLIDATEDSTATEMENTS OF CASH FLOWS
| December 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||
| Cash Flows From Operating Activities: | ||||||
| Net income (loss) | $ | (9,797 | ) | $ | (96,977 | ) |
| Adjustments to reconcile net income to net cash provided by (used for) operating activities | ||||||
| Other receivable | - | 5,013 | ||||
| Net cash provided by (used for) operating activities | (9,797 | ) | (91,964 | ) | ||
| Cash Flows From Investing Activities: | ||||||
| Net cash provided by (used for) investing activities | - | - | ||||
| - | - | |||||
| Cash Flows From Financing Activities: | ||||||
| Loans payable | (24,288 | ) | 29,539 | |||
| Proceeds from PPP Loan | 33,000 | - | ||||
| Net cash provided by (used for) financing activities | 8,712 | 29,539 | ||||
| Net Increase (Decrease) In Cash | (1,084 | ) | (62,425 | ) | ||
| Cash At The Beginning Of The Period | 2,288 | 64,714 | ||||
| Cash At The End Of The Period | $ | 1,204 | $ | 2,288 |
The accompanying notes are an integral part of these financial statements.
BLOCKCHAINTRAINING ALLIANCE, INC.
NOTESTO FINANCIAL STATEMENTS
FORTHE YEAR ENDED DECEMBER 31, 2020
NOTE1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Blockchain Training Alliance, Inc., (“BTA”, or the Company) was organized in Delaware on February 26, 2018 with the mission of building Blockchain technology education strategically for corporate solutions. Training is delivered self-paced online, at clients location, and has globally recognized Certifications have been proctored online and in person. The Company is focused on helping current and future professionals through education and certification build the skills they need to implement Blockchain solutions.
NOTE2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basisof Presentation
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Useof Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
Cashand cash equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On December 31, 2020, totaled $1,204.
NetLoss per Share
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
SubstantialDoubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
FairValue of Financial Instruments
The Company determines the fair value of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value:
| ● | Level<br> 1 — Quoted prices in active markets for identical assets or liabilities. |
|---|---|
| ● | Level<br> 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar<br> assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated<br> by observable market data for substantially the full term of the assets or liabilities. |
| ● | Level<br> 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value<br> of the assets or liabilities. |
The carrying amounts of financial instruments such as cash, and accounts payable and accrued liabilities, approximate the related fair values due to the short-term maturities of these instruments. The carrying values of our notes payable approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.
RecentAccounting Pronouncements
There are no recent accounting pronouncements that impact the Company’s operations.
NOTE3 – EQUITY
The Company was formed as an Corporation on February 26, 2018 with 10,000,000 common stock authorized. As of December 31, 2020 there were 6,000,000 common stocks outstanding. Since inception there have been no capital contributions or distributions.
NOTE4 – COMMITMENTS AND CONTINGENCIES
The Company had contractual commitments in the amount of $83,442 as of December 31, 2020.
NOTE5 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
The Company entered into a Stock Purchase Agreement (the “SPA”) effective as of March 24, 2021 with The Crypto Company (“Crypto Co.”) based in Malibu California. On April 8, 2021, the Company completed the sale of all of its issued and outstanding stock and became a wholly owned subsidiary of Crypto Co. At the closing the Company’s shareholder’s received a total of $600,000 in cash, promissory notes in the total principal amount of $150,000 bearing 1% interest per annum, and an aggregate of 201,439 restricted common shares of Crypto Co. in accordance with the terms of the SPA.
EXHIBIT99.2
TheCrypto Company and Blockchain Training Alliance, Inc.
UnauditedProforma Consolidated Balance Sheets
Forthe Year Ended December 31, 2020
| Blockchain | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| The<br> Crypto | Training | ||||||||||||||||
| Company | Alliance,<br> Inc. | ||||||||||||||||
| December<br> 31, | December<br> 31, | ||||||||||||||||
| 2020(a) | 2020(a) | Adjustment<br> (b) | Adjustment<br> (c) | Adjustment<br> (a) | Consolidated | ||||||||||||
| Assets | |||||||||||||||||
| Current<br> Assets: | |||||||||||||||||
| Cash | $ | 26,326 | $ | 1,204 | $ | 825,000 | $ | (600,000 | ) | $ | 252,530 | ||||||
| Accounts<br> Receivable - Net | 3,900 | - | - | - | 3,900 | ||||||||||||
| Total<br> Current Assets | 30,226 | 1,204 | 825,000 | - | (600,000 | ) | 256,430 | ||||||||||
| Goodwill | - | - | 1,082,010 | 1,082,010 | |||||||||||||
| Intangible<br> Assets | - | - | 270,503 | 270,503 | |||||||||||||
| Total<br> Assets | $ | 30,226 | $ | 1,204 | $ | 825,000 | $ | - | $ | 752,513 | 1,608,943 | ||||||
| Liabilities<br> and Stockholders’ Equity: | |||||||||||||||||
| Current<br> Liabilities: | |||||||||||||||||
| Accounts<br> Payable and Accrued Liabilities | $ | 1,933,281 | 1,933,281 | ||||||||||||||
| Loans<br> payable | 83,443 | (83,443 | ) | ||||||||||||||
| Notes<br> payable | 300,000 | - | 150,000 | 450,000 | |||||||||||||
| Total<br> Current Liabilities | 2,233,281 | $ | 83,443 | - | (83,443 | ) | 150,000 | 2,383,281 | |||||||||
| Long<br> Term Liabilities: | |||||||||||||||||
| Convertible<br> Debt | 125,000 | - | - | - | - | 125,000 | |||||||||||
| Notes<br> payable other | 67,592 | - | - | - | 67,592 | ||||||||||||
| Total<br> Long Term Liabilities | 192,592 | - | - | - | - | 192,592 | |||||||||||
| Total<br> liabilities | 2,425,873 | 83,443 | - | (83,443 | ) | 150,000 | 2,575,873 | ||||||||||
| Commitments<br> and Contingencies | - | - | - | - | - | - | |||||||||||
| Stockholders’<br> Equity | |||||||||||||||||
| Common stock - Par<br> value (0.001) | 21,418 | 600 | 550 | (600 | ) | 201 | 22,169 | ||||||||||
| Additional<br> Paid-In Capital | 30,665,823 | 824,450 | 604,116 | 32,094,389 | |||||||||||||
| Accumulated<br> Deficit | (33,082,888 | ) | (82,239 | ) | 84,043 | (1,804 | ) | (33,082,888 | ) | ||||||||
| Total<br> Stockholders’ Equity | (2,395,647 | ) | (82,239 | ) | 825,000 | 83,443 | 602,513 | (966,930 | ) | ||||||||
| Total<br> Liabilities and Stockholders’ Equity | $ | 30,226 | $ | 1,204 | $ | 825,000 | $ | - | $ | 752,513 | $ | 1,608,943 |
TheCrypto Company and Blockchain Training Alliance, Inc.
UnauditedProforma Consolidated Statements of Operations
Forthe Year Ended December 31, 2020
| Blockchain | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| The Crypto | Training | |||||||||||
| Company | Alliance, Inc. | |||||||||||
| December 31, | December 31, | |||||||||||
| 2020 | 2020 | Adjustment (d) | Consolidated | |||||||||
| Revenue | ||||||||||||
| Services | $ | 14,400 | $ | 570,070 | 584,470 | |||||||
| Cost of goods sold | - | 101,092 | 101,092 | |||||||||
| Gross Profit | 14,400 | 468,978 | 483,378 | |||||||||
| - | ||||||||||||
| Operating expense: | - | |||||||||||
| General and administrative expenses | 749,930 | 486,775 | 1,236,705 | |||||||||
| Share based compensation -employee | 175,018 | 175,018 | ||||||||||
| Share based compensation - non-employee | 2,146,655 | 2,146,655 | ||||||||||
| Total operating expenses | 3,071,603 | 486,775 | 3,558,378 | |||||||||
| Loss from operations | (3,057,203 | ) | (17,797 | ) | (3,075,000 | ) | ||||||
| Other Income (Expense) | - | |||||||||||
| Other Income | 307,522 | 8,000 | 315,522 | |||||||||
| Interest expense | (68,036 | ) | - | (68,036 | ) | |||||||
| Total other income | 239,486 | 8,000 | 247,486 | |||||||||
| Loss from operations before income taxes | (2,817,717 | ) | (9,797 | ) | (2,827,514 | ) | ||||||
| Provision for Income Taxes | - | - | - | |||||||||
| Net Loss | $ | (2,817,717 | ) | $ | (9,797 | ) | $ | (2,827,514 | ) | |||
| - | ||||||||||||
| Basic and fully diluted loss per share | $ | (0.13 | ) | $ | (0.00 | ) | $ | (0.13 | ) | |||
| Weighted average number of shares outstanding | 21,401,204 | 6,000,000 | (5,248,561 | ) | 22,152,643 |
Notes
| (a) | The<br> Company entered into a Stock Purchase Agreement (“the SPA”) effective as of March<br> 24, 2021 with Blockchain Training Alliance (“BTA”) and its stockholders On April<br> 8, 2021 the Company completed the acquisition of all of the issued and outstanding stock<br> of BTA and BTA became a wholly-owned subsidiary of the Company. At closing the Company delivered<br> to the Sellers, $600,000 in cash, a 1%, one year promissory note and 201,439 shares of common<br> stock. |
|---|
The closing price of the Company’s common stock on April 8, 2021 was $3.00 per share. For the purposes of this proforma analysis, 20% of the goodwill is assumed to be the value of intangible assets.
| (b) | Subsequent<br> to December 31, 2020 the Company raised $825,000 from five accredited investors through the<br> private placement of 412,500 common shares at $2.00 per share along with a<br> matching number of five year warrants exercisable at $0.50 per share. These proceeds were<br> used to consummate the acquisition. |
|---|---|
| (c) | Under<br> the terms of the SPA the Sellers were required to pay off all liabilities prior to closing. |
| (d) | To<br> adjust shares outstanding as if the transaction had occurred at the beginning of the 2020<br> year. |