EDGAR 10-K Filing

Company CIK: 1688126
Filing Year: 2023
Filename: 1688126_10-K_2023_0001493152-23-012450.json

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ITEM 1. BUSINESS
Item 1. Business
The Crypto Company (the “Company”, “Crypto”, “we”, “us” or “our”) was incorporated in the State of Utah on December 2, 2013, under the name Croe, Inc. On October 3, 2017, the Company filed Articles of Conversion with the Utah Secretary of State and the Nevada Secretary of State to effectively change its state of incorporation to Nevada and filed Articles of Incorporation with the Nevada Secretary of State to change its name to The Crypto Company.
Crypto Sub, Inc. (formerly known as The Crypto Company) (“Crypto Sub”) was incorporated in the State of Nevada on March 9, 2017. On June 7, 2017, Crypto Sub completed a reverse acquisition of Croe, Inc. On October 3, 2017, we changed our name to The Crypto Company to better reflect our new business. Our company address is currently located at 23823 Malibu Road, # 50477, Malibu, California and our telephone number is (424) 228-9955. Our website can be accessed at www.thecryptocompany.com. The information contained on or that may be obtained from our website is not a part of this report. Currently we operate through one wholly-owned subsidiary Blockchain Training Alliance (“BTA”). We also have one inactive wholly-owned subsidiary CoinTracking, LLC (“CoinTracking”).
During the 2021 and 2022 fiscal years the Company generated revenues and incurred expenses primarily through 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 entered into a Stock Purchase Agreement 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.
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.
Overview of Our Business
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. During 2022 we generated revenues and incurred expenses primarily through these consulting operations. In February 2022 we acquired bitcoin mining equipment and entered into an arrangement with a third party to host and operate the equipment. We generated some minimal revenue from this mining arrangement. However by the end of 2022 we exited that Bitcoin mining business because we determined that it wasn’t profitable.
Strategic Acquisitions
In furtherance of the development of our blockchain consulting services, we may seek from time to time additional strategic acquisitions of assets and / or majority and minority equity interests in entities and technology with characteristics such as (i) established, protectable and scalable revenues; (ii) substantial market share; (iii) established brand equity and customer loyalty; (iv) proprietary technology with competitive advantages; (v) quality personnel, and (vi) strategic access to international markets. Similarly, we may seek to acquire additional assets that complement our business or otherwise enter into strategic relationships as a means to grow our business operations and revenues.
Intellectual Property
We regard our service marks as having significant value and as being important factors in the marketing of our products and services. Our policy is to pursue registration of our marks whenever possible and to oppose vigorously any infringement of our marks.
Market Overview
Blockchain
The blockchain is a decentralized database or digital “ledger” of transactions across a peer-to-peer network of computers or “nodes” that use the underlying infrastructure of the Internet to validate and process valuable transactions. While using the blockchain, participants can transfer information across the Internet without the need of a central third party. In a financial transaction, the buyer and seller interact directly without the need for verification by a trusted third-party intermediary. The actual record of the transaction is pseudonymous, but the identifying information is encrypted, preventing personal information from being shared.
The benefits of blockchain include the following:
● Fraud reduction: Blockchain technology has the potential to positively disrupt most industries since it can work for nearly every type of transaction that involves value, including money, property, and goods. From a business perspective, the technology may be leveraged for process improvement, helping to reduce human error, prevent fraud, and streamline data storage.
● Transparency: Financial organizations may use the blockchain to store records digitally and leverage the technology for any type of transaction that needs to be verified by a trusted third party.
● Security: Transactions may include transferring digital or physical assets, verifying chain of custody, and protecting intellectual property. In an era with increasing cybercrime and strict regulatory requirements, blockchain offers a highly fraud-resistant technology that can protect and authenticate almost any type of transaction.
● Efficiency: Both Permissioned and Public blockchains offer significant improvements in efficiency to retail and business implementations by reducing cost and time in the duplicate databases and ledgers that companies and intermediaries must maintain in the absence of a shared, trusted and immutable system.
Competition
We have a number of competitors, ranging in size, consisting primarily of other similar consulting firms. We believe our main competitors are ConsenSys, Natsoft Corporation, Quest Global Technologies, and CGI Inc. In addition, global audit and assurance firms typically provide consulting services. Additionally, there are numerous additional other companies that indirectly compete with us in the educational space.
Governmental Regulations
Various uses of blockchain technology are subject to regulation by various governmental entities such as the U.S. Securities and Exchange Commission (the “SEC”), the U.S. Commodities Future Trading Commission (“CFTC”), Federal Trade Commission (“FTC”), and the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury) and governmental bodies in other countries. Other regulatory bodies are governmental or semi- governmental and have shown an interest in regulating or investigating companies engaged in the blockchain business (NASDAQ, NYSE, FINRA, state securities commissions).
Blockchain aimed regulations are evolving with agencies investigating businesses and their practices, gathering information, and generally trying to understand the risks and uncertainties in order to protect investors in these businesses. Regulations will likely increase, in many cases, although it is presently not possible to know how they will increase, how regulations will apply to the Company’s businesses, or when they will be effective. Various bills have also been proposed in congress for adoption-related to the Company’s business which may be adopted and have an impact on it. As the regulatory and legal environment evolves, the Company may become subject to new laws and further regulation by the SEC and other agencies, although the Company is not currently trading in digital assets and has no intention to trade in digital assets.
Employees
As of April 1,2023 we had 8 full-time employees. We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel. None of our employees is represented by a labor union, and we believe that our employee relations are good.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
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.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
Not applicable. As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item 1B.

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ITEM 2. PROPERTIES
Item 2. Properties
The Company rents space on a month-to-month basis located at 23823 Malibu Road, # 50477, Malibu, California 90265.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
None

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The trading symbol for our common stock is “CRCW”. On January 10, 2022 the Company’s common stock began being quoted on the OTCQB.
The following table sets forth the high and low bid prices for our common stock for the periods indicated as reported by the OTCQB starting from January 10, 2022, and for periods prior to January 10, 2022 the OTC Grey market. The bid quotations reported by each of the OTCQB and OTC Grey market reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not represent actual transactions.
Period High Low
First Quarter $ 3.59 $ 1.71
Second Quarter $ 1.90 $ 0.85
Third Quarter $ 0.92 $ 0.34
Fourth Quarter $ 0.46 $ 0.16
Period High Low
First Quarter $ 8.45 $ 2.25
Second Quarter $ 4.80 $ 1.91
Third Quarter $ 2.54 $ 1.90
Fourth Quarter $ 5.09 $ 1.92
Holders
As of February 23, 2023 there were 129 holders of record of our common stock.
Securities Authorized for Issuance Under Equity Compensation Plan
The Company has issued equity awards in the form of stock options pursuant to The Crypto Company 2017 Equity Incentive Plan (the “2017 Plan”), which was approved by stockholders on August 24, 2017. Under the terms of the 2017 Plan, a total of 5,000,000 shares of stock were reserved for issuance and / or as stock options.
The following table sets forth information about the 2017 Plan as of December 31, 2022:
Number
of Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(years)
Aggregate
Intrinsic
Value
Options outstanding, at December 31, 2021 2,281,429 $ 2.26 5.25 5,155,003
Options granted - -
Options cancelled - -
Options exercised - -
Options outstanding, at December 31, 2022 2,281,429 $ 2.26 3.25 $ 5,155,003
Vested and exercisable at December 31, 2022 2,281,429 $ 2.26 3.25 $ 5,155,003
As of December 31, 2022, there remain 2,718,571 shares available for issuance under the 2017 Plan or that are not otherwise reserved under outstanding stock options.
Unregistered Sales of Equity Securities.
On February 9, 2023 we sold 125,000 shares of our common stock to our CEO in a private transaction for $25,000 in cash consideration. The shares were offered and sold pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
On April 3, 2023 we sold 7,692 shares of our common stock to our CEO in a private transaction for $2,000 in cash consideration. The shares were offered and sold pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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.
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, 2022 and December 31, 2021
Revenue and cost of services
For the year ended December 31, 2022, revenues relating to consulting services were $619,538, compared to $434,552 for the year ended December 31, 2021. 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, 2022 and December 31, 2021 were $369,313 and $273,796 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, 2022, our general and administrative expenses were $1,864,543 an increase of 26.7% compared to $1,471,226 for the year ended December 31, 2021. 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, 2022 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 $2,104,126 for the year ended December 31, 2022, an increase of 186% compared to $736,144 for the year ended December 31, 2021. Share-based compensation increased due to warrant issuances in 2022 to various lenders as compared to less issuances in 2021.
Other Income
Other income for the year ended December 31, 2022 was 85,865 compared to $1,293,483 during the same period in 2021. The decrease in other income is primarily attributable to the recovery of token investments that had been previously written off amounting 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, 2022, we had cash on hand of $110,606. Our loss before provision for income taxes from continuing operations was $5,662,918 for the year ended December 31, 2022. Our working capital was negative $4,234,978 as of December 31, 2022.
During 2022 we funded our operations with various loans as described in the Report. We intend to continue funding our operations through debt instruments and, if possible, through equity issuances. There can be no assurances that we will be successful in obtaining additional funding, and if funding can be obtained on favorable terms.
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, 2022 was $1,930,308 compared to net cash used of $152,241 for the year ended December 31, 2021. The increase was primarily due to a decrease in profitability in 2022, net of non- cash share based compensation.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2022 was $50,000 compared to net cash used of$786,151 for the year ended December 31, 2021. The difference is primarily attributable to the purchase by the Company of BTA in 2021 amounting to $786,1515 in cash used, compared to purchase of equipment of $50,000 in 2022 compared to -0- in the 2021 period.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2022 was $2,015,215, compared to $987,765 for the year ended December 31, 2021. The increase of $1,027,450 was primarily the result of an increase of proceeds from issuance of notes payable of $2,606,146 in 2022.
Subsequent to December 31, 2022, we raised approximately $248,500 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.
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.
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, 2022, 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
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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. 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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
See pages beginning with page.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Internal Control over Financial Reporting and Evaluation of Disclosure Controls and Procedures.
Conclusions Regarding the Effectiveness 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 Exchange Act, as of December 31, 2022. Based upon management’s hiring of two independent SEC accounting consultants with extensive public company experience and the Company’s adoption of new policies relating to disclosure controls management concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2022.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and
● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013).
Based on its assessment, management has concluded that as of December 31, 2022, our disclosure controls and procedures and internal control over financial reporting were effective.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations of Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. Controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Not applicable

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate
Set forth below is certain information regarding our current executive officers and directors. Each of the directors was elected to serve until our next annual meeting of stockholders or until his or her successor is elected and qualified. Our officers are appointed by, and serve at the pleasure of, the board of directors.
Name
Age
Position
Ronald Levy
Director, Chief Executive Officer, Interim Chief Financial Officer, Chief Operating Officer and Secretary
Anthony Strickland
Director
Holly Ruxin
Director
Biographical information with respect to our executive officers, directors and key employees is provided below. There are no family relationships between any of our executive officers, directors or key employees.
Ron Levy. Mr. Levy, 63, has served as our Chief Executive Officer and a Director since May 2018 and Interim Chief Financial Officer since December 2019. Mr. Levy has also served as our Chief Operating Officer since June 2017. Mr. Levy’s experience includes consulting for various emerging growth companies through various growth cycles. He also serves as Chief Operating Officer and beneficial owner at Redwood Fund, LP, a private investment fund and major stockholder of the Company, since February 2014, and Ladyface Capital, LLC, the General Partner of Redwood Fund, LP, since July 2013.
Anthony Strickland. Mr. Strickland, 52, has served as a member of the Board since June 2017 and currently serves as President and Chief Executive Officer of Strong America, an advocacy group and political action committee, since June 2017. Mr. Strickland is a former member of the California State Senate, representing District 19 from 2008 to 2012, and a former California Assemblyman, representing the 37th District from 1998 to 2004. He served as Vice President of GreenWave Energy Solutions LLC, a company that seeks to harness the power of ocean waves to provide energy to Californians, from January 2007 to November 2008. Mr. Strickland earned his B.A. in political science from Whittier College. Because of his experience in legislation and ability to offer guidance on regulatory matters, we concluded that Mr. Strickland should serve as a member of the Board.
Holly Ruxin. Ms. Holly Ruxin, 52, has served as a member of the Board since April 2018 and currently serves as Chief Executive Officer of Montcalm TCR, a San Francisco-based wealth management and capital markets trading firm. Ms. Ruxin began her investment career at Goldman Sachs in the fixed income derivatives arena, and she has managed client assets and led private client teams at Morgan Stanley, Montgomery Securities and Bank of America for over twenty years. Ms. Ruxin is also the founder of Trevor TCR, a non-profit organization designed to invest in what matters and achieve transformation through giving. Ms. Ruxin received a Master of Business Administration in Finance from Columbia University and a Bachelor of Arts in Economics from the University of Michigan. We determined that Ms. Ruxin should serve as a director because of her extensive asset management and capital markets experience.
Code of Ethics
The Company has adopted a Code of Conduct and Ethics that applies to every director, officer and employee of the Company. Such Code of Conduct and Ethics includes written standards that are reasonably designed to deter wrongdoing and to promote:
● Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
● Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company;
● Compliance with applicable governmental laws, rules and regulations;
● The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
● Accountability for adherence to the code.
A copy of the Code of Conduct and Ethics is available on the Company’s website at www.thecryptocompany.com.
Director Nominations
The Company does not have any defined procedures by which stockholders may submit nominations for directors and there has been no change to that policy.
Audit Committee and Audit Committee Financial Expert
The board of directors has an Audit Committee comprised of its two independent board members, Holly Ruxin and Anthony Strickland. Ms. Ruxin serves as the Chair of that committee. The Audit Committee oversees the accounting and financial reporting processes of the Company and the audits of the Company’s consolidated financial statements.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation 2022 Summary Compensation Table
The following table provides information regarding the total compensation for services rendered in all capacities that was earned during the fiscal year indicated by our named executive officers for 2022.
Name and
Principal Position
Year Salary Bonus ($)
Stock Awards ($)
Option Awards ($)(4)
Non-Equity Incentive Plan Compensation ($)
All Other Compensation
($)
Total ($)
Ron Levy, (Chief Executive, Interim Chief $ 360,000 (2) - - - - - $ 360,000
Financial Officer, and Chief Operating Officer(1) $ 360,000 (2) - - - - - $ 360,000
(1) Appointed as Chief Executive Officer on May 21, 2018.
(2) The total CEO’s salary for the years ended December 31, 2022 and December 31, 2021 was $360,000 per year. The total salary for the two years amounted to $720,000 of which $711,316 of this amount has been deferred and is recorded in accrued expenses on the Company’s balance sheet as of December 31, 2022.
Outstanding Equity Awards at Fiscal Year-End
During the year ended December 31, 2020, the Company issued a total of 500,000 stock options to non-employee members of its board of directors, 1,250,000 stock options to its chief executive officer, and 170,000 stock options to others. The Company did not grant any options to its officers or directors during the 2022 fiscal year.
Employee Benefits
We currently do not offer any employee benefit plans, including any 401(k) plan.
Director Compensation Policy
The board of directors of the Company does not have a compensation committee. The board of directors determines the amount and form of executive and director compensation.
As previously disclosed, the Company entered into Director Services Agreements with each of its non-employee directors, effective April 7, 2018 for Holly Ruxin, and June 7, 2018 for Anthony Strickland. Pursuant to the Director Service Agreements, each director is be entitled to receive (i) a fee of $80,000 per annum, payable quarterly, and (ii) a ten-year option to purchase 100,000 shares of common stock of the Company at an exercise price of $10.00 per share, which option shall be fully vested on the six-month anniversary of the date of grants. In addition, Mr. Strickland received an additional option grant to purchase 150,000 shares of common stock of the Company at an exercise price of $7.00 per share, which option was fully vested on the grant date. In 2020 each director was granted an option exercisable to purchase 250,000 shares of Company common stock. Additionally, subject to certain exceptions, each director is entitled to receive reimbursement for reasonable expenses incurred for the benefit of the Company.
The table below summarizes the compensation earned or paid to our non-employee directors for the fiscal year ended December 31, 2022:
Name Fees Earned or Paid in Cash ($) Stock
Awards ($) Total ($)
Holly Ruxin 80,004 - 80,004 (1)
Anthony Strickland 80,004 - 80,004 (2)
(1) As of December 31, 2022, a total of $320,349 of Director’s fees from prior and current periods was accrued and remains unpaid as of the date of this Report.
(2) As of December 31, 2022, a total of $292,016 of Director’s fees from prior and current periods was accrued and remains unpaid as of the date of this Report.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The disclosure in Item 5 under the heading “Securities Authorized for Issuance Under Equity Compensation Plans” is hereby incorporated by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of April 1, 2023 regarding the beneficial ownership of our common stock by the following persons:
● each stockholder or group of stockholders who, to our knowledge, owns more than 5% of our common stock;
● each of our named executive officers;
● each director; and
● all of our executive officers and directors as a group.
Percentage ownership of our common stock is based on 25,615,537 shares of our common stock outstanding as of April 12, 2023.
Beneficial ownership is determined in accordance with the rules of the SEC, and thus represents voting or investment power with respect to our securities. Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power. The address for each of our named executive officers and directors is c/o The Crypto Company, 23823 Malibu Road #50477, Malibu, California 90265. Shares of common stock subject to options, warrants or other rights currently exercisable or exercisable within 60 days of April 1, 2023, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.
Name of Beneficial Owner Amount and
Nature of Beneficial
Ownership
Percentage
of Common
Stock
Outstanding
Ron Levy (1) 6,932,427 27.1 %
Anthony Strickland (2) 515,000 2.0 %
Holly Ruxin (3) 365,000 1.4 %
All Directors and Executive Officers as a Group 7,812,427 30.5 %
5% Shareholders
James Gilbert 7,434,821 29.0 %
Rafael Furst 2,137,309 8.3 %
(1) Mr. Ron Levy is a beneficial owner of KOL Partners, LLC, which is a managing member of Ladyface Capital, LLC. Accordingly, Mr. Levy may be deemed to have voting and investment power over the shares beneficially owned by Redwood Fund LP. Redwood Fund LP is the direct beneficial owner of 3,031,810 shares of Common Stock of the Company. Ron Levy is the beneficial owner of KOL Partners, LLC, which is a member of Imperial Strategies, LLC with a majority ownership interest and may be deemed may be deemed to have voting and investment power over the 2,085,617 shares beneficially owned by Imperial Strategies, LLC. Includes vested options to purchase 1,250,000 shares of Common Stock that may be exercised at any time.
(2) Includes vested options to purchase 496,429 shares of Common Stock that may be exercised at any time.
(3) Includes vested options to purchase 350,000 shares of Common Stock that may be exercised at any time.
Compliance with Section 16(a) of the Exchange Act.
Our directors and executive officers and any beneficial owner of more than 10% of our common stock, as well as certain affiliates of those persons, must file reports with the SEC showing the number of shares of common stock they beneficially own and any changes in their beneficial ownership. Based on our review of these reports and written representations of our directors and executive officers, we believe that all required reports in 2022 were filed in a timely manner, except that, as a result of administrative errors, each of our outside directors, Anthony Strickland and Holly Ruxin, filed a Form 4 in March 2022 reporting the receipt of a restricted stock grant in January 2022.
Change in Control
As of the date of this report, we are not aware of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
SEC regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.
Policies and Procedures for Related Person Transactions
While our board of directors has not adopted a formal written related person transaction policy that sets forth the policies and procedures for the review and approval or ratification of related person transactions, it the Company’s practice and procedure to present all transactions arrangements, relationships or any series of similar transactions, arrangements or relationships, in which the Company was or is to be a participant and a related person had or will have a direct or indirect material interest, to the board of directors for approval.
Director Independence
Our determination of the independence of our directors is made using the definition of “independent” contained in the listing standards of the Nasdaq Stock Market. On the basis of information solicited from each director, the board has determined that each of Anthony Strickland and Holly Ruxin is independent within the meaning of such rules.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
The following table sets forth fees billed and to be billed to us by our independent registered public accounting firm for the years ended December 31, 2022 and 2021 for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.
Year Ended
December 31,
Audit fees $ 99,000
$ 111,000
Total fees $ 99,000 $ 111,000
Audit Fees: Represents fees for professional services provided for the audit of our annual consolidated financial statements, review of our consolidated financial statements included in our quarterly reports and services in connection with statutory and regulatory filings.
The board of directors has an Audit Committee comprised of its two independent board members, Holly Ruxin and Anthony Strickland. Ms. Ruxin serves as the Chair of that committee. The Audit Committee oversees the accounting and financial reporting processes of the Company and the audits of the Company’s consolidated financial statements.
The Audit Committee of the Company oversees the accounting and financial reporting processes of the Company and approves all auditing services and the terms thereof and non-audit services (other than non-audit services published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board) to be provided to us by the independent auditor; provided, however, the pre-approval requirement is waived with respect to the provisions of non-audit services for us if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules
Financial Statements
See pages beginning with page.
Exhibit Index
Exhibit
Incorporated by Reference
No.
Description of Exhibit
Form
Exhibit
Filing Date
File No.
2.1
Share Purchase Agreement, dated as of June 7, 2017, by and among Croe, Inc., The Crypto Company and John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Croe, Inc. listed on Schedule I thereto
8-K
2.1
6/9/17
000-55726
2.2
Share Purchase Agreement, dated as of June 7, 2017, by and among Croe, Inc., The Crypto Company, Uptick Capital, LLC and John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Croe, Inc. listed on Schedule I thereto
8-K
2.2
6/9/17
000-55726
2.3
Share Exchange Agreement, dated as of June 7, 2017, by and between Croe, Inc. and Michael Poutre, in his sole capacity as representative for the shareholders of Crypto
8-K
2.3
6/9/17
000-55726
2.4
Equity Purchase Agreement, dated as of December 22, 2017, by and among The Crypto Company, CoinTracking, LLC, Kachel Holding GmbH and Dario Kachel
8-K
2.1
1/16/18
000-55726
2.5
Purchase and assignment of shares, agreements on a purchase price of loan agreement and compensation agreement, dated as of December 28, 2018, by and among CoinTracking, LLC, Kachel Holding GmbH and CoinTracking GmbH
8-K
2.1
1/4/19
000-55726
2.6
Stock Purchase Agreement by and among The Crypto Company, Blockchain Training Alliance, Inc. and certain stockholders dated March 15, 2021
10-K
2.6
3/30/2021
000-55726
3.1
Articles of Conversion (Utah)
8-K
3.1
10/11/17
000-55726
3.2
Articles of Conversion (Nevada)
8-K
3.2
10/11/17
000-55726
3.3
Articles of Incorporation of The Crypto Company
8-K
3.3
10/11/17
000-55726
3.4
Certificate of Amendment to Articles of Incorporation of Crypto Sub, Inc.
8-K
3.4
10/11/17
000-55726
3.4
Certificate of Amendment to Articles of Incorporation of Crypto Sub, Inc.
8-K
3.1
2/7/2023
000-55726
3.5
Amended and Restated Bylaws
8-K
3.1
2/28/18
000-55726
4.1
Description of Securities
10-K
4.1
7/26/19
000-55726
10.2
Form of Securities Purchase Agreement by and between the Company and each purchaser thereunder (September 8, 2017)
8-K
10.1
9/29/17
000-55726
10.3
Form of Securities Purchase Agreement by and between the Company and each purchaser thereunder (September 20, 2017)
8-K
10.2
9/29/17
000-55726
10.4
Form of Securities Purchase Agreement by and between the Company and each purchaser thereunder (September 25, 2017)
8-K
10.3
9/29/17
000-55726
10.5
Form of Common Stock Purchase Warrant (September 25, 2017)
8-K
10.4
9/29/17
000-55726
10.6
Form of Securities Purchase Agreement by and between the Company and each purchaser thereunder (December 12, 2017)
8-K
10.1
12/13/17
000-55726
10.7
Form of Non-Qualified Stock Option Agreement
8-K
10.1
4/17/18
000-55726 **
10.8
Separation Agreement and General Mutual Release
8-K
10.1
5/25/18
000-55726
10.9
Form of Director Services Agreement
8-K
10.2
5/25/18
000-55726 **
10.14
Securities Purchase Agreement, dated February 24, 2022, between The Crypto Company and AJB Capital Investments, LLC
10-K
10.14
03-10-2022
000-55726
10.15
Promissory Note in favor of Sixth Street Lending LLC, dated February 24, 2022
10-K
10.15
03-10-2022
000-55726
10.16
Common Stock Purchase Warrant, dated February 24, 2022, for 200,000 shares issued by Crypto Company to AJB Capital Investments.
10-K
10.16
03-10-2022
000-55726
10.17
Promissory Note in favor of Innovative Digital Investors, LLC, dated February 23, 2022
10-K
10.17
03-10-2022
000-55726
10.18
Promissory Note in favor of Bitmine Immersion Technologies, LLC, dated February 23, 2022
10-K
10.18
03-10-2022
000-55726
10.19
Purchase Agreement and Bill of Sale, dated February 23, 2022, between The Crypto Company and Innovative Digital Investors, LLC
10-K
10.19
03-10-2022
000-55726
10.20
Purchase Agreement and Bill of Sale, dated February 23, 2022, between The Crypto Company and Bitmine Immersion Technologies, LLC
10-K
10.20
03-10-2022
000-55726
10.21
AJB Security Agreement dated 2-24-2022
*
10.22
Efrat Note dated 4-7-2022
*
10.23
Efrat Secruity Agreement dated 4-7-2022
*
10.24
Efrat SPA dated 4-7-2022
*
10.25
AJB Note dated 5-3-2022
*
10.26
AJB SPA dated 5-3-2022
*
10.27
AJB Security Agreement dated 5-3-2022
*
10.28
1800 Diagonal Note dated 7-5-2022
*
10.29
1800 Diagonal SPA dated 7-5-2022
*
10.30
Coventry Note dated 7-15-2022
*
10.31
Coventry SPA dated 7-15-2022
*
10.32
1800 Diagonal Note dated 9-26-2022
*
10.33
1800 Diagonal SPA dated 9-26-2022
*
10.34
1800 Diagonal Note 12-9-2022
*
10.35
1800 Diagonal SPA dated 12-9-2022
*
10.36
1800 Diagonal Note dated 1-3-2023
*
10.37
1800 Diagonal SPA dated 1-3-2023
*
10.38
Fast Capital Note dated 1-30-2023
*
10.39
Fast Capital SPA dated 1-30-2023
*
10.40
1800 Diagonal Note dated 3-2-2023
*
10.41
1800 Diagonal SPA dated 3-2-2023
*
21.1
List of Subsidiaries of The Crypto Company
10-K
21.1
03-10-2022
000-55726
Certification of the Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board pursuant to section 302 of the Sarbanes-Oxley Act of 2002
*
Certification of the Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board pursuant to section 906 of the Sarbanes-Oxley Act of 2002
*
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith
** Management contract or compensatory plan