Crypto Co (Form: 10-K, Received: 07/26/2019 16:47:54)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________.to _______________.

Commission file number 000-55726

THE CRYPTO COMPANY

(Exact name of Registrant as specified in its charter)

Nevada		46-4212105
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22809 Pacific Coast Highway
Malibu, CA 90265

(Address of principal executive offices - Zip Code)

Registrant’s telephone number, including area code: (424) 228-9955

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None				N/A

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [ ]	Smaller reporting company [X]
	Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes [ ] No [X]

As of June 29, 2018, the Registrant’s common stock was not publicly traded.

Number of shares outstanding of the Registrant’s common stock, as of July 19, 2019: 21,212,860

DOCUMENTS INCORPORATED BY REFERENCE

None.

THE CRYPTO COMPANY

Table of Contents

	Part I
Item 1	Business	3
Item 1A	Risk Factors	6
Item 1B	Unresolved Staff Comments	11
Item 2	Properties	11
Item 3	Legal Proceedings	11
Item 4	Mine Safety Disclosures	11

	Part II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
Item 6	Selected Financial Data	12
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A	Quantitative and Qualitative Disclosure about Market Risk	19
Item 8	Financial Statements and Supplementary Data	19
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	19
Item 9A	Controls and Procedures	19
Item 9B	Other Information	21

	Part III

Item 10	Directors, Executive Officers and Corporate Governance	22
Item 11	Executive Compensation	24
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	25
Item 13	Certain Relationships and Related Transactions, and Director Independence	27
Item 14	Principal Accountant Fees and Services	28

	Part IV

Item 15	Exhibits, Financial Statement Schedules	29
Item 16	Form 10-K Summary	29

Signatures		30

PART I

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this report. In particular, forward-looking statements include statements relating to future actions, prospective products, applications, customers and technologies, and future performance or future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

	●	our ability to execute our business plan and achieve profitability;
	●	our limited operating history;
	●	rapidly advancing technology;
	●	the impact of competitive or alternative services and technologies;
	●	our ability to remediate material weaknesses in our internal control over financial reporting;
	●	our ability to obtain, expand and maintain protection of any intellectual property or propriety software we are currently developing or may develop in the future;
	●	our exposure to and ability to defend third-party claims and challenges to our intellectual property rights;
	●	our ability to obtain adequate financing in the future, as and when we need it;
	●	our ability to continue as a going concern;
	●	our success at managing the risks involved in the foregoing items; and
	●	other factors discussed in this report.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report to conform such statements to actual results or changes in our expectations. You should not place undue reliance on these forward-looking statements.

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 (“Inception”). On June 7, 2017, Crypto Sub completed a reverse acquisition of Croe, Inc. as a result of a Stock Sale, Stock Dividend and Share Exchange, each as described below and collectively referred to as the “Acquisition”. On October 3, 2017, we changed our name to The Crypto Company to better reflect our new business. We are located at 22809 Pacific Coast Highway in 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. Crypto Sub and CoinTracking, LLC, a Nevada limited liability company (“CoinTracking”), are wholly-owned subsidiaries of the Company.

Prior to the Acquisition, the Company was an early stage fitness apparel company with the mission of creating supportive, protective, and innovative sports bras and fitness apparel.

The Acquisition

Stock Sale

On June 7, 2017, the Company entered into (i) a Share Purchase Agreement (the “Restricted Share Purchase Agreement”) with Crypto Sub and John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Company; and (ii) a Share Purchase Agreement (the “Free Trading Share Purchase Agreement”, and together with the Restricted Share Purchase Agreement, the “Share Purchase Agreements”) with Crypto Sub, Uptick Capital, LLC (“Uptick Capital”) and John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Company. Pursuant to the Share Purchase Agreements, the shareholders of the Company sold an aggregate of 11,235,000 shares of common stock of the Company to Crypto Sub and 100,000 shares of common stock of the Company to Uptick Capital, representing an aggregate of 100% of the issued and outstanding common stock of the Company as of such date, for aggregate proceeds of $411,650, including escrow and other transaction related fees to the selling shareholders (the “Stock Sale”). A portion of the acquisition cost equal to $399,300 is expensed as a general and administrative expense in the accompanying consolidated statement of operations.

10,000,000 shares held by Deborah Thomas, the former Chief Executive Officer, principal accounting and financial officer and director of the Company, representing approximately 88.22% of the outstanding common stock of the Company immediately prior to the Stock Sale, were sold at a price of $0.031 per share, and an aggregate of 1,335,000 shares held by the remaining shareholders of the Company were sold at a price of $0.075 per share.

In connection with the Stock Sale, effective as of June 7, 2017, (i) Deborah Thomas resigned as Chief Executive Officer, principal accounting officer and director of the Company and Elliott Polatoff resigned as Secretary and director of the Company; and (ii) Michael Poutre was appointed Chief Executive Officer and sole director of the Company, James Gilbert was appointed President of the Company and Ron Levy was appointed Chief Operating Officer of the Company.

Stock Dividend

On June 7, 2017, Crypto Sub issued to its shareholders a stock dividend (the “Stock Dividend”) of 10,918,007 shares of common stock of the Company acquired through the Stock Sale, distributed on a pro-rata basis, such that the shareholders of Crypto Sub received fifteen shares of common stock of the Company for each share of common stock of Crypto Sub held as of June 6, 2017.

Immediately following the consummation of the Stock Sale and the distribution of the Stock Dividend, Crypto Sub held 316,993 shares, representing 4.26% of the issued and outstanding shares of common stock of the Company, and the shareholders of Crypto Sub, collectively, held 10,918,007 shares, representing 94.40% of the issued and outstanding shares of common stock of the Company. Of the 316,993 shares held by Crypto Sub, 129,238 shares were transferred to certain officers and consultants of Crypto Sub in exchange for their services related to the Transaction, and the remaining shares were retained by Crypto Sub.

Share Exchange

On June 7, 2017, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Michael Poutre, in his sole capacity as representative for the shareholders of Crypto Sub, pursuant to which each issued and outstanding share of common stock of Crypto Sub was exchanged for shares of common stock of the Company (the “Share Exchange”), resulting in the aggregate issuance of 7,026,614 shares of common stock of the Company, on a pro-rata basis, as provided on the Exchange Agreement, to the shareholders of Crypto Sub, in exchange for 727,867 shares of common stock of Crypto Sub.

The Stock Sale, the Stock Dividend and the Share Exchange are collectively referred to as the “Acquisition”. Immediately following the Acquisition, (i) Crypto Sub became a wholly owned subsidiary of the Company; (ii) all of the former shareholders of Crypto Sub became shareholders of the Company, on a pro-rata basis; and (iii) the operations of the Company solely consisted of the operations of Crypto Sub.

Acquisition and Disposition of CoinTracking GmbH

On January 16, 2018, pursuant to an Equity Purchase Agreement (the “CoinTracking Purchase Agreement”) entered into on December 22, 2017 by and among the Company, CoinTracking, Kachel Holding GmbH, an entity formed under the laws of the Republic of Germany (“Kachel Holding”), and Dario Kachel, an individual, CoinTracking purchased from Kachel Holding 12,525 shares of CoinTracking GmbH, an entity formed under the laws of Germany (“CoinTracking GmbH”), representing 50.1% of the equity interests in CoinTracking GmbH, for a purchase price of (i) $4,736,400 in cash, and (ii) 473,640 shares of common stock of the Company, par value $0.001 per share, subject to adjustment as provided in the CoinTracking Purchase Agreement (the “CoinTracking Acquisition”). The CoinTracking Acquisition was consummated on January 26, 2018.

On December 28, 2018, CoinTracking entered into an agreement on the purchase and assignment of shares, agreements on a purchase price of loan agreement and a compensation agreement, with Kachel Holding and CoinTracking GmbH pursuant to which, on January 2, 2019, CoinTracking sold 12,525 shares of equity interest in CoinTracking GmbH, representing 50.1% of the outstanding equity interests in CoinTracking GmbH and CoinTracking’s entire equity ownership stake in CoinTracking GmbH, to Kachel Holding in exchange for $2,200,000, of which (i) $1,000,000 was paid in cash to CoinTracking and (ii) $1,200,000 was applied toward the repayment of an outstanding loan in the amount of $1,500,000 from CoinTracking GmbH to CoinTracking under the CoinTracking Note (the “CoinTracking Disposition”).

Overview of Our Business

We have disposed of our entire ownership interest in CoinTracking GmbH, and also divested substantially all of our cryptocurrency assets.

Strategic Acquisitions

In furtherance of the development of our blockchain consulting services, we may seek from time to time additional strategic acquisitions of majority and minority equity interests in entities and technology that demonstrate (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.

Media Opportunities

We engage in public discourse on an ongoing basis and host roundtable webinars to educate the public about blockchain technology and intend to expand our presence at industry conferences to develop and expand our community and content network. We do not express opinions regarding the advisability of investing in any digital asset or in the digital asset marketplace, and we do not receive compensation in connection with these roundtable webinars.

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 transaction is pseudonymous, but the identifying information is encrypted, preventing personal information from being shared.

The primary 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.

Governmental Regulations

Government regulation of blockchain is being actively considered by the United States federal government via a number of agencies (including 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 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 regulations are in a nascent state 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 certainly 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 June 30, 2019, we had two full-time employees and three part-time employee. 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.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this Annual Report on Form 10-K, before purchasing shares of our common stock. There are numerous and varied risks that may prevent us from achieving our goals. If any of these risks actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.

Risks Related to our Business

We have an evolving business model that will require significant resources, and our business model may not develop as we project.

As blockchain technology becomes more widely available and utilized, we expect the services and products associated with them to evolve and, as a result our contemplated blockchain consulting business will have to continue to evolve. Distributed ledger technology is relatively new and we believe that it will take significant resources to become a competitive provider of consulting services relating to the application of distributed ledger technology. Future additions and modifications to our business will increase the complexity of our business and may place significant strain on our management, personnel, and operations.

If we do not keep pace with technological changes, our blockchain consulting business, if and when developed, may not become competitive and/or our competitors may develop and market similar products that receive greater market acceptance.

The market for blockchain technology and any related consulting services is characterized by rapid technological change, frequent product and service innovation and evolving industry standards. As a result, our contemplated blockchain consulting business must be able to keep pace with this rapidly developing and competitive marketplace. There can be no assurance that we will be able to successfully grow our contemplated blockchain consulting business.

We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or the Nasdaq Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors’ independence, and audit committee oversight. We have not yet adopted any of these corporate governance measures and, since our securities are not yet listed on a national securities exchange, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

The elimination of personal liability against our directors and officers under Nevada law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.

Our Articles of Incorporation and our Bylaws limit the personal liability of our directors and officers for damages for breach of fiduciary duty as a director or officer to the extent permissible under applicable state law. Further, our Articles of Incorporation and our Bylaws provide that we are obligated to indemnify each of our directors or officers to the fullest extent authorized by applicable state law and, subject to certain conditions, advance the expenses incurred by any director or officer in defending any action, suit or proceeding prior to its final disposition. Those indemnification obligations could expose us to substantial expenditures to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to afford. Further, those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders.

If we are unable to retain our staff, our business and results of operations could be harmed.

Our ability to develop our blockchain consulting business is largely dependent on the services of certain executive officers and other employees and contractors which assist such individuals in management and operation of the business (collectively, “Key Personnel”). If we are unable to retain Key Personnel and to attract qualified senior management on terms satisfactory to us, our business will be adversely affected. We do not have key man life insurance covering the life of any executive officers and, even if we are able to afford such a key man policy, our coverage levels may not be sufficient to offset any losses we may suffer as a result of the loss of any Key Personnel.

We may acquire stakes in businesses and enter into joint ventures that will expose us to increased operating risks.

As part of our growth strategy, we intend to enter into joint venture arrangements intended to complement or expand our business and will likely continue to do so in the future. These joint ventures are subject to substantial risks and liabilities associated with their operations, as well as the risk that our relationships with our joint venture partners do not succeed in the manner that we anticipate.

Current and future litigation could adversely affect us.

We, along with certain of the Company’s directors and/or officers, were a party to the legal proceedings described in Item 3 of Part 1 of this Annual Report, which, as of the date of this Annual Report, have been voluntarily dismissed. We, along with certain directors and/or officers of the Company may also become subject to other legal proceedings in our ordinary course of business. Such legal proceedings involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. As a smaller company, the collective costs of litigation proceedings represent a drain on our cash resources, as well as an inordinate amount of our management’s time and attention. Moreover, an adverse ruling in respect of certain litigation could have a material adverse effect on our results of operation and financial condition.

We may face competition and, if we are not able to effectively compete in our markets, our revenues may decrease.

Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of customers or a decrease in prices, either of which could result in decreased revenues and profits. Though the market sectors in which we compete are fairly new, our competitors are numerous, and the recent increase in popularity of such market sectors only creates more competition. New or current competitors may have significantly greater capital resources than us, and our business could be adversely affected because of increased competition from such competitors.

We are in the development stage, are not generating revenue in our continuing operations, and have a limited operating history in providing consulting services.

The Company is in the development stage and faces all of the risks and uncertainties associated with a new and unproven business. Our future is based on an unproven business plan with no historical facts to support projections and assumptions. The Company was founded in March 2017 and has limited history of providing blockchain consulting services. The Company is not currently generating revenues and cannot guarantee when it expects to generate revenue. Investors should understand that an investment in a start-up business is significantly riskier than an investment in a business with any significant operating history. There can be no assurance that the Company will ever achieve revenues or profitability. The Company’s operations are subject to all of the risks inherent in the establishment of a new business enterprise. The likelihood of our success must be considered in light of the challenges, expenses and delays frequently encountered in connection with the operation of a pre-revenue business. Our lack of a significant and relevant operating history makes it difficult to predict future operating results.

We expect to continue to incur losses from operations and negative cash flows, which raise substantial doubt about the Company’s ability to continue as a going concern.

We have accumulated a net deficit through December 31, 2018 . We expect to incur significant losses in the foreseeable future. The time required for us to become profitable is uncertain, and there can be no assurance that we will achieve profitability on a sustained basis, if at all. As a result of our limited operating history, we have neither internal nor industry-based historical financial data for any significant period of time upon which to project revenues or base planned operating expenses. We expect that our results of operations may also fluctuate significantly in the future as a result of a variety of factors, including: the ability to make strategic acquisitions; the ability to develop our consulting business; our ability to attract, retain and motivate qualified personnel; specific economic conditions in the consulting market; general economic conditions; and other factors.

If our remedial measures are insufficient to address material weaknesses and we are unable to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, timely file our periodic reports, maintain our reporting status or prevent fraud.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement new or improved controls, or if we experience difficulties in their implementation, our business and financial results could be harmed and we could fail to meet our financial reporting obligations.

For example, management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2017 and December 31, 2018 and concluded that there are material weaknesses in our internal controls related to control over financial reporting, and therefore, that we did not maintain effective internal control over financial reporting as of December 31, 2018. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, detected or corrected on a timely basis. If the enhanced controls implemented to remediate and address the material weaknesses are not designed or do not operate effectively, if we are unsuccessful in implementing or following these processes, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, or we are otherwise unable to remediate the material weaknesses, this may result in untimely or inaccurate reporting of our financial results.

We may be forced to cease operations or take actions that result in the dissolution of the Company.

It is possible that, due to any number of reasons, including, but not limited to, regulations that decrease interests in or inhibit the growth of Blockchain technology, the inability by the Company to maintain its competitiveness among companies operating in similar market sectors, the failure of commercial relationships, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve or take actions that result in a dissolution event.

Risks Related to the Ownership of our Common Stock

The OTC Markets have assigned the “Caveat Emptor” designation to the Company.

On December 7, 2017, the Company was assigned a “Caveat Emptor” designation by the OTC Markets Group, Inc. (the ‘OTC Markets”). The OTC Markets assigns a Caveat Emptor designation to a company’s stock symbol to inform current and potential investors that there may be reasons to exercise additional care when deciding whether they should continue or begin their investment in such company. Such reasons include: (i) a suspension or halt in the trading of a company’s stock, (ii) unsolicited quotes, (iii) the OTC Markets’ belief of the existence of undisclosed corporate actions, (iv) investigation of fraud or other criminal activities and (v) the OTC Markets’ belief of other public interest concern. Typically, the OTC Markets will continue to display such designation until adequate current information is made available by a company pursuant to certain reporting standards, such adequacy being in the sole discretion of the OTC Markets, and until the OTC Markets believes there is no longer a public interest concern. The designation of the Caveat Emptor symbol does not suspend or halt the company’s trading on the OTC Markets.

As of the date of this report, the Caveat Emptor designation assigned to the Company has not been removed. While the Company believes it has disclosed all material facts in accordance with its SEC reporting obligations, and continues to work with the OTC Markets to resolve any issues in an effort to remove the Caveat Emptor designation, we cannot guarantee that the designation will be removed in the future, or at all.

Our shares were previously suspended by the SEC, and are currently listed on the OTC Grey Market.

On December 19, 2017, the SEC, pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), temporarily suspended trading of the Company’s stock on the OTC Pink market until January 3, 2018 (the “Trade Halt”). The SEC cited concerns on the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the Company, statements in SEC filings about the plans of the Company’s insiders to sell their shares of the Company’s common stock and potential manipulative transactions in the Company’s stock in November of 2017. The Trade Halt was lifted by the SEC as of January 4, 2018, and the SEC did not provide comments on whether it is still investigating the Company. Although the Company has had ongoing communications with the SEC and we believe that we have addressed all of the issues raised by the SEC, we cannot guarantee that the SEC will not suspend the trading of the Company’s stock on the OTC Markets, should we resume our quotation thereon, or on any national securities exchange in the future.

Upon the expiration of the Trade Halt, the OTC Markets, automatically, as a matter of course, discontinued the display of quotes for our common stock and moved our common stock to the OTC Grey Market (the “Grey Market Listing”) as of January 4, 2018. Securities listed on the OTC Grey Market are tradable, but broker-dealers of such securities are unable to publicly quote such securities. While the Company continues to work with the OTC Markets, there can be no guarantee that our stock will resume trading on the OTC Pink market.

There is not now, and there may never be, an active, liquid and orderly trading market for our common stock, which may make it difficult for investors to sell shares of our common stock.

Since the Grey Market Listing, there has not been any trading activity in our common stock on a national securities exchange, the OTC Pink market or any other OTC Market, and an active trading status on such OTC Markets or exchange for our shares may never develop or be sustained. Even if the Company’s stock resumes trading on the OTC Pink Market, the Company can neither guarantee that the OTC Market will remove the Caveat Emptor designation assigned to the Company nor the SEC will not suspend or halt trading of the Company’s stock in the future. As a result, investors in our common stock must bear the economic risk of holding those shares for an indefinite period of time. We do not now, and may not in the future, meet the listing standards of any national securities exchange. As a result, our stockholders may find it difficult to obtain an accurate determination as to the market value of their shares of our common stock, and may find few buyers to purchase their stock. As a result of these and other factors, it may not be possible to resell shares of our common stock at or above the price for which they were purchased, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future, and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our common stock as consideration.

Investors may have difficulty in reselling their shares due to state Blue Sky laws.

The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there might be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTCQB marketplace or on the OTC Bulletin Board, investors should consider any secondary market for our common shares to be a limited one. We intend to seek coverage and publication of information regarding the company in an accepted publication, which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin. Accordingly, our common shares should be considered totally illiquid, which inhibits investors’ ability to resell their shares.

We have no plans to pay dividends.

To date, we have paid no cash dividends on our common stock. For the foreseeable future, earnings generated from our operations will be retained for use in our business and not to pay dividends. As a result, capital appreciation, if any, of our common stock will be the sole resource of gain for stockholders for the foreseeable future. Investors seeking cash dividends should not purchase our common stock.

We may issue more shares in a future financing or strategic acquisition, which could result in substantial dilution.

Any future financing, merger or acquisition effected by us would result in the issuance of additional securities and the substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock are issued in connection with and following a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock initially was a “penny stock,” and we became subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule.” This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the investor and have received the investor’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our common shares and may affect the ability of investor s to sell any of our common shares in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

We do not anticipate that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

Unless the requirements of an exemption, such as Rule 144, is met, Investors may be restricted from selling their shares.

Rule 144 promulgated under the Securities Act (“Rule 144”), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, for resales of securities acquired in a non-public offering without having to satisfy such registration requirements, a six-month holding period following acquisition of and payment in full for such securities. There can be no assurance that the Company will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning the Company, as is required by Rule 144 as part of the conditions of its availability.

Accordingly, an investor should be prepared to hold the securities acquired in such offerings indefinitely and cannot expect to be able to liquidate any or all of their investment even in case of an emergency. In addition, any proposed transfer must comply with restrictions on transfer imposed by the Company and by federal and state securities laws. The Company may permit the transfer of such securities out of a subscriber’s name only when his or her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Securities Act or any applicable state securities or “blue sky” laws.

Sales of our common stock under Rule 144 could reduce the price of our stock.

Some, but not all, of our outstanding common shares may currently be eligible for resale under Rule 144 assuming we satisfy the requirements therein, including the requirements relating to the disclosure of current public information. If substantial amounts of our common stock become available for resale under Rule 144, prevailing market prices for our common stock will be reduced.

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.

Item 2. Properties

We currently rent an office, on a month to month basis, located at 22809 Pacific Coast Highway, Malibu, CA 90265, for $344 per month.

Item 3. Legal Proceedings

See discussion of legal proceedings in Note 14 (Commitments and Contingencies) to the Consolidated Financial Statements included in Item 8 of Part II of this Report, which is incorporated by reference into this Item 3 of Part I.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The trading symbol for our common stock is “CRCW”.

The following table sets forth the high and low bid prices for our common stock for the periods indicated as reported by the OTC Grey market. The bid quotations reported by the OTC Grey market reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Period	High		Low
2018
First Quarter	$	575.00	$	11.00
Second Quarter	$	52.00	$	20.10
Third Quarter	$	44.00	$	44.00
Fourth Quarter	$	44.00	$	3.60

2017
September 27 through September 30, 2017	$	10.00	$	3.30
October 1, 2017 through December 31, 2017	$	642.00	$	9.00

On December 19, 2017, the SEC implemented the Trade Halt, pursuant to Section 12(k) of the Exchange Act, which temporarily suspended trading of the Company’s stock on the OTC Pink market until January 3, 2018. The Trade Halt was lifted by the SEC as of January 4, 2018, at which time the OTC Markets Group Inc. (the “OTC Markets”), automatically, as a matter of course, discontinued the display of quotes for our common stock and moved our common stock to the OTC Grey market. Securities listed on the OTC Grey market are tradable, but broker-dealers of such securities are unable to publicly quote such securities. While the Company continues to work with the OTC Markets, there can be no guarantee that our stock will resume trading on the OTC Pink market.

Holders

As of June 30, 2019, there were 148 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 from The Crypto Company 2017 Equity Incentive Plan (the “2017 Plan”), which was approved by stockholders on August 24, 2017.

The following table sets forth information about the 2017 Plan as of December 31, 2018:

Plan Category

Number of
securities to be
issued upon
exercise of
outstanding
options,

warrants and
rights

Weighted

average exercise
price of
outstanding
options,

warrants and
rights

Number of
securities
remaining
available for
future issuance
under equity
compensation
plans

Equity compensation plans approved by security holders (2017 Plan)

1,401,612

5.83

3,544,459

Total

1,401,612

3,544,459

Item 6. Selected Financial Data

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.

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 described in the section titled “ Risk Factors ”.

We are engaged in the business of providing consulting services and education for distributed ledger technologies (“blockchain”), for the building of technological infrastructure and enterprise blockchain technology solutions. We currently generate revenues and incur expenses solely through these consulting and education operations. As described below, as of the date of this report 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.

Recent Events

On January 2, 2019, CoinTracking sold 12,525 shares of equity interest in CoinTracking GmbH, representing 50.1% of the outstanding equity interests in CoinTracking GmbH and CoinTracking’s entire equity ownership stake in CoinTracking GmbH, to Kachel Holding in exchange for $2,200,000, of which (i) $1,000,000 was paid in cash to CoinTracking and (ii) $1,200,000 was applied toward the repayment of an outstanding loan in the amount of $1,500,000 from CoinTracking GmbH to CoinTracking.

Business Segments

During the year ended December 31, 2018, the Company had two principal business segments that generated revenues and incurred expenses, both of which have ceased operations as of the date of this report:

The cryptocurrency investment segment generated revenues that primarily consisted of amounts earned through trading activities of cryptocurrencies. The Company recorded its investments in cryptocurrency as indefinite lived intangible assets, at cost less impairment, and are reported as long-term assets in the consolidated balance sheets. Realized gains and losses on sales of investments in cryptocurrency, and impairment losses, are included in other income/(expense) in the consolidated statement of operations and comprehensive income.

The Company also generated software subscription revenues through CoinTracking GmbH and generates minimal amounts of consulting revenue. The software subscription segment consisted primarily of amounts earned through subscriptions to the CoinTracking GmbH website. Operating expenses related to this segment consisted primarily of technology infrastructure and general administrative costs primarily incurred in Germany.

Discontinued Operations

As a result of the pending sale as of December 31, 2018, of CoinTracking’s entire equity ownership stake in CoinTracking GmbH, and a strategic shift in our business in the fourth quarter of 2018 away from cryptocurrency investing to blockchain consulting and education, the assets and liabilities to be sold or disposed of other than by sale are reported in assets and liabilities held for sale in the Consolidated Balance Sheets as of December 31, 2018. Additionally, the current operating results associated with these assets and liabilities have been reclassified to give effect to these changes and are reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. Loss from discontinued operations was $16,376,131 for the year ended December 31, 2018. The loss includes an impairment of goodwill of $9,356,105, and impairment of other intangible assets of $3,743,480 related to CoinTracking GmbH. The loss from discontinued operations attributable to the Crypto Company was $9,859,271 for the year ended December 31, 2018, which includes our 50.1% ownership of CoinTracking GmbH. CoinTracking GmbH was acquired in 2018, and therefore, there was no impact on the Company’s prior year results. Income from discontinued operations of $541,254 for the period from Inception through December 31, 2017 relates to our discontinued cryptocurrency investment segment.

See Note 15- Discontinued Operations to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for further details of the results of CoinTracking GmbH.

R esults of Continuing Operations

Comparison of the fiscal year ended December 31, 2018 and the period from Inception through December 31, 2017

Revenue

For the year ended December 31, 2018, revenues relating to consulting services were $5,000, compared to $6,000 for the period from Inception through December 31, 2017.

General and administrative expenses and share based compensation

For the year ended December 31, 2018, our general and administrative expenses were $5,730,063, an increase of 65.1% compared to $3,471,010 for the period from Inception through December 31, 2017. General and administrative expenses consist primarily of costs relating to professional services, payroll and payroll-related expenses 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, 2018 reflects increased costs associated with being a public company, in particular, outside legal and accounting costs. In addition, the prior year comparative period was not a full fiscal year.

Share-based compensation was $3,302,471 for the year ended December 31, 2018, a decline of 49.1% compared to $6,493,514 for the period from Inception through December 31, 2017. Share-based compensation decreased due to a decline in the value of the Company’s common stock, resulting in an adjustment to offset a portion of the previously recorded share-based compensation for non-employees, which are remeasured quarterly. This decline was offset, in part, by a grant of 2,804,062 stock options, net of cancellations, including 2,407,062 options granted to employees and directors for the year ended December 31, 2018. A significant portion of the stock options granted were cancelled in the fourth quarter ended December 31, 2018. In addition, share-based compensation includes $1,417,584 for the year ended December 31, 2018 for common stock issued to our former CEO, James Gilbert, in connection with services rendered, compared to $746,717 for the period from Inception through December 31, 2017, for common stock issued to certain officers and consultants for services rendered, including services in connection with a stock dividend, stock sale and share exchange.

Liquidity, Going Concern 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, 2018, we had cash of $2,448, a decline of $8,947,796 from the December 31, 2017 balance of $8,950,244. This decline is due, in part, to the acquisition of CoinTracking GmbH in January 2018, which included $3,189,303 of cash consideration, net of acquired cash. In addition, our loss before provision for income taxes from continuing operations was $18,903,249 for the year ended December 31, 2018. Our working capital was ($955,303) as of December 31, 2018. During the year ended December 31, 2018, we liquidated a majority of our investments in cryptocurrency, which had a cost basis of $964,067 at December 31, 2017. In addition, on January 2, 2019, we sold our equity interest in CoinTracking GmbH for $2,200,000, of which (i) $1,000,000 was received in cash and (ii) $1,200,000 was applied toward the repayment of an outstanding loan in the amount of $1,500,000 from CoinTracking GmbH. The cash received from the liquidation of our investment in cryptocurrency helped fund our operations during the year ended December 31, 2018, and the funds received from the sale of CoinTracking GmbH is projected to fund a portion of operations in 2019. As of December 31, 2018, our accumulated deficit amounted to $28,456,550. As a result of our history of losses and financial condition, there is substantial doubt about our ability to continue as a going concern.

The ability to continue as a going concern is dependent upon us generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund our expenses and achieve a level of revenue adequate to support our current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. There can be no assurance that any of these future-funding efforts will be successful, that we will be able to replace the revenues lost as a result of the sale of CoinTracking GmbH, or that we will achieve our projected level of revenues in 2019 and beyond. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The following table summarizes the primary sources and uses of cash for the periods presented below:

	Year ended December 31, 2018			For the period from inception through December 31, 2017
Net cash used in operating activities	$	(6,274,104	)	$	(3,133,188	)
Net cash used in investing activities		(1,630,966	)		(198,495	)
Net cash provided by financing activities		250,057			12,281,927
Effects of exchange rate on cash		(188,581	)		-
Net increase (decrease) in cash and cash equivalents	$	(7,843,594	)	$	8,950,244

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, 2018 was $6,274,104 compared to $3,133,188 for the period from Inception through December 31, 2017. The increase of $3,140,916 was primarily due to an increase in our net loss to $25,420,109 for the year ended December 31, 2018 compared to $9,553,301 for the period from inception through December 31, 2017. In addition, our net realized gain on investments in cryptocurrency increased to $1,303,130 for the year ended December 31, 2018 from $781,373 for the period from inception through December 31, 2017, and our contract liabilities, part of our software subscription segment acquired in 2018, decreased $1,977,768 for the year ended December 31, 2018 compared to the period from Inception to December 31, 2017, due to a decrease in subscription sales beginning in the second quarter of 2018. In addition, our non-cash share-based compensation decreased to $4,213,475 for the year ended December 31, 2018, compared to $6,533,696 for the period from inception through December 31, 2017. These decreases were offset, in part, by non-cash charges relating to a write-off of goodwill and intangible assets of $13,099,584 for the year ended December 31, 2018, and non-cash impairment of investments in cryptocurrency of $2,066,803. There was no impairment of goodwill, intangible assets and investments in cryptocurrency in the prior year. Finally, depreciation and amortization increased to $1,214,827 for the year ended December 31, 2018 compared to $4,675 for the period from inception through December 31, 2017.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2018 was $1,630,966 compared to $198,495 for the period from inception through December 31, 2017, due to the acquisition of CoinTracking GmbH for $3,189,303, net of acquired cash of $1,547,097, offset by sales of investments in cryptocurrency, net of purchases of $2,228,949, for the year ended December 31, 2018, and the purchase of additional SAFT and SAFE investments included in investments, non-cryptocurrency of $500,000. There was no cash used to purchase investments in cryptocurrency in the period from Inception to December 31, 2017.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2018 was $250,057, compared to $12,281,927 in the period from Inception to December 31, 2017. The decrease of $12,031,870 was primarily the result of a decrease to $200,000 in aggregate proceeds from sales of common stock for the year ended December 31, 2018, compared to aggregate proceeds of $12,358,000 from issuance of common stock of the Company for the period from Inception through December 31, 2017.

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. This update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

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.

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.

CoinTracking GmbH accounts for a contract when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services is transferred to the Company’s customers over time, and in an amount that reflects the consideration the Company was contractually due in exchange for those services. Most of the Company’s contracts with customers were single, or had few distinct performance obligations, and the transaction price was allocated to each performance obligation using the stand-alone selling price.

CoinTracking GmbH’s revenue is primarily derived directly from users in the form of subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by PayPal or cryptocurrencies, subject to certain conditions identified in our terms and conditions. Revenue is initially deferred and recognized using the straight-line method over the term of the applicable subscription period, which primarily range from annual to perpetual.

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. The Income tax payable of $800 reflects the minimum franchise tax for the State of California.

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.

O ff-Balance Sheet Transactions

We do not have any off-balance sheet transactions.

T rends, Events and Uncertainties

The blockchain technology market is dynamic and unpredictable. Although we will undertake compliance efforts, including efforts with commercially reasonable diligence, there can be no assurance that there will not be a new or unforeseen law, regulation or risk factor which will materially impact our ability to continue our business as currently operated or raise additional capital to foster our continued growth.

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.

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 information required by this Item.

Item 8. Financial Statements and Supplementary Data

See pages beginning with page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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, 2018. Based upon (1) that evaluation, (2) the fact that the Company’s previously issued financial statements for the period from inception through December 31, 2017 and each fiscal quarter therein, and for the quarterly periods ended March 31, 2018, June 30, 2018, and September 30, 2018 (collectively, the “Relevant Periods”), should no longer be relied upon because of errors in those financial statements and (3) the fact that the Company is restating those financial statements in this Annual Report to correct such errors, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2018, due to the material weaknesses in our internal control over financial reporting in connection with the Company’s previous accounting treatment for its investments in cryptocurrency, as well as the material weaknesses in our internal control over financial reporting described in our Annual Report on Form 10-K for the period from Inception through December 31, 2017, as filed on April 2, 2018 with the SEC, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on September 14, 2018, as further amended by Amendment No. 2 on Form 10-K/A filed with the SEC on April 4, 2019 (the “2017 Annual Report”), which have not yet been remediated.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”) 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 our assets;

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

All systems of internal control, no matter how well designed, have inherent limitations. Therefore, even those systems deemed to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Furthermore, 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.

A material weakness is a deficiency, or a combination of deficiencies, in disclosure controls and procedures, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018. The framework used in carrying out this evaluation was set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in “Internal Control—Integrated Framework (2013)”.

Based on this evaluation, our management concluded that as of December 31, 2018, our internal control over financial reporting was not effective due to the material weakness relating to the Company’s previous accounting treatment for its investments in cryptocurrency. The errors that necessitated restatement of the Company’s previously issued financial statements for the Relevant Periods resulted from (1) the misclassification of accounting for investments in cryptocurrency at fair value, as opposed to intangible assets with indefinite lives and recording such investments in cryptocurrency at cost less impairment, if any, and (2) the misclassification of accounting for certain investments in token pre-sale and simple agreements for future tokens that were incorrectly described as investments in Initial Coin Offerings and included as investments in cryptocurrency in the Company’s consolidated balance sheets when such investments should be included as investments, non-cryptocurrency in the Company’s consolidated balance sheets.

As we previously disclosed in our 2017 Annual Report, the other matters involving internal controls and procedures that our management considered to be material weaknesses were as follows:

	●	we have not performed a risk assessment and mapped our processes to control objectives;

	●	we have not implemented comprehensive entity-level internal controls;

	●	we have not implemented adequate system and manual controls; and

	●	we do not have sufficient segregation of duties.

Management’s Actions and Plans to Remediate Material Weaknesses

Management is responsible for implementing changes and improvements to internal control over financial reporting and for remediating the control deficiencies that gave rise to the material weaknesses. Management believes that progress has been made to remediate the underlying causes of the material weaknesses in internal control over financial reporting and has taken the following steps to remediate such material weaknesses:

	●	Implemented a formal quarterly review of financial information with our Chief Executive Officer and each managing director that oversees a portion of the business. These individuals provide a certification that the operating results are accurate to the best of their knowledge.

	●	Account reconciliations are now prepared for all material accounts and independently reviewed.

	●	Expenditures are approved by our Chief Executive Officer.

	●	We have hired a Controller.

Management plans to take the following steps to further remediate the material weaknesses as follows:

	●	Perform a risk assessment and map processes to control objectives and, where necessary, implement and document internal controls in accordance with the 2013 Committee of Sponsoring Organizations of the Treadway Commission.

	●	Our entity-level controls are, generally, informal and we intend to evaluate current processes, supplement where necessary, and document requirements.

	●	Evaluate system and manual controls, identify specific weaknesses, and implement a comprehensive system of internal controls.

	●	Asses and remediate personnel weaknesses.

	●	Appoint a Chief Financial Officer with public company experience.

Management understands that in order to remediate the Company’s material weaknesses, additional segregation of duties, changes in personnel and technologies are necessary. We will not consider these material weaknesses fully remediated until management has tested those internal controls and found them to be operating effectively.

Changes in Internal Control over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting during the three-month period ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

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	59	Director, Chief Executive Officer, Chief Operating Officer and Secretary
Anthony Strickland	49	Director
Holly Ruxin	49	Director
Ivan Ivankovich	52	Chief Financial Officer

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, 59, has served as our Chief Executive Officer and a Director since May 2018. 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 Partner 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, 49, 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 Republican 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, 49, 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.

Ivan Ivankovich . Mr. Ivankovich, 52, has served as our Chief Financial Officer since August 2017. He is the Co-Founder and Managing Partner of Full Stack Finance, an accounting and part-time CFO services company, since March 2015. He also served as Chief Financial Officer of Springowl Asset Management, a registered hedge fund, from March 2016 until July 2017, President of iFinance Consulting Group from July 2005 until March 2015 and a member of the Board of Directors of OriginClear, Inc. (OTCQB:OCLN) from June 2007 until January 2014. Mr. Ivankovich earned his Bachelor of Science in Economics from the University of California, Santa Barbara.

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 of the Company does not have an audit committee. The board of directors oversees the accounting and financial reporting processes of the Company and the audits of the Company’s consolidated financial statements and does not have an “audit committee financial expert.” We are actively seeking independent members of our board of directors to serve on an audit committee, including an “audit committee financial expert.”

Item 11. Executive Compensation

2018 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 2018.

Name and Principal Position	Year		Salary		Bonus ($)		Stock Awards ($)			Option Awards ($) ⁽⁶⁾		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)			Total ($)
Ron Levy,		2018		245,000		-		-			-		-		-			245,000
Chief Executive and Chief Operating Officer ⁽¹⁾		2017		170,000		-		-			-		-		-			170,000

Michael Poutre,		2018		137,769		-		-			-		-		90,000	⁽⁵⁾		227,769
Chief Executive Officer ⁽²⁾		2017		180,000		60,000		-			-		-		-			240,000

James Gilbert,		2018		135,000		-		1,417,584	⁽⁴⁾		-		-		-			1,554,602
Chief Executive Officer and President ⁽³⁾		2017		170,000		-		280,000			-		-		-			450,000

Ivan Ivankovich, Chief Financial Officer		2018		106,000														106,000

Mark Schwartz,		2018		162,500		-		-			1,190,082		-		-			1,354,600
Chief Technology Officer						-		-					-		-

	(1)	Appointed as Chief Executive Officer on May 21, 2018 and Chief Operating Officer as of June 7, 2017.
	(2)	Resigned as Chief Executive Officer on May 14, 2018.
	(3)	Resigned as Chief Executive Officer and President on May 22, 2018.
	(4)	Mr. Gilbert is a founder of the Company and, as of March 9, 2017, was entitled to receive a total of 502,512 shares of common stock with a value of $42.86 per share as of such date, of which, due to administrative error discovered on April 18, 2018, Mr. Gilbert only received 300,000 shares. As such, on April 18, 2018, the Company issued to Mr. Gilbert an additional 202,512 shares of common stock, effective as of March 9, 2017.
	(5)	Mr. Poutre received a severance payment of $90,000 in connection with a Separation and Consulting Agreement entered into on May 9, 2018.
	(6)	These amounts represent the grant date fair value under ASC 718 for stock option awards granted. The ASC 718 value as of the grant date for stock option awards is spread over the vesting period. All of these options expired upon the termination of Mr. Schwartz. Assumptions used in the calculation of these amounts for stock options granted are included in Note 11 – Summary of Stock Options to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

Outstanding Equity Awards at Fiscal Year-End

We did not grant any equity awards to our named executive officers during the year ended December 31, 2018.

Employment Agreements, Severance and Change-in Control Arrangements

Michael Poutre

On June 22, 2017, the Company entered into a Consulting Agreement (“Consulting Agreement”) with MP2 Ventures, LLC (“MP2”), pursuant to which MP2 shall cause Michael Poutre, principal of MP2 and Chief Executive Officer of the Company, to serve as Chief Executive Officer of the Company for an initial term of one year, in exchange for a consulting fee in the amount of $240,000 per annum.

Effective May 14, 2018, Michael Poutre, former Chief Executive Officer and director of the Company resigned from all of his current roles with the Company. Mr. Poutre remained a consultant to the Company until November 2018. In connection with Mr. Poutre’s resignation, the Company entered into a Separation and Consulting Agreement and General Mutual Release (the “Separation and Consulting Agreement”), which was executed on May 9, 2018 and approved by the Board of Directors on May 14, 2018. The Separation and Consulting Agreement was not effective until May 17, 2018, following the end of the revocation period. The Separation and Consulting Agreement provides that the Company pays Mr. Poutre a lump-sum cash payment of (i) his earned but unpaid base salary, (ii) his accrued but unpaid vacation time, and (iii) any outstanding requests for expense reimbursements that are approved pursuant to Company policy. Mr. Poutre served as a consultant of the Company for six months at a rate of $30,000 per month, payable in two separate tranches, though the Company may terminate his services for any reason.

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, 218 for each of Jeffrey Berman and 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. 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, 2018:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) ⁽¹⁾		Total ($)
Holly Ruxin		60,001		262,563		808,502
Anthony Strickland		60,001		748,501		319,231
Jeffrey Berman ⁽²⁾		40,000		262,563		299,230

	(1)	Represents the grant date fair value of stock options in accordance with ASC 718.
	(2)	Mr. Berman resigned as director effective September 24, 2018.

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 July 19, 2019 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 21,212,836 shares of our common stock outstanding as of July 19, 2019.

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, 22809 Pacific Coast Highway, Malibu, California 90265. Shares of common stock subject to options, warrants or other rights currently exercisable or exercisable within 60 days of July 19, 2019, 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 (2)		6,020,156		28.4	%

Anthony Strickland (3)		250,000		1.1	%

Holly Ruxin (4)		100,000		0.5	%

Ivan Ivankovich		-		-	%

All Directors and Executive Officers as a Group		6,370,156		28.7	%

Mark Schwartz		-		-

James Gilbert		7,434,821		35.0	%

Michael Poutre (1)		6,020,156		28.4	%

Rafael Furst		3,032,309		14.3	%

Redwood Fund LP (1) (2)		3,031,810		14.3	%

Imperial Strategies, LLC (1) (2)		2,988,346		14.1	%

(1)

Redwood Fund LP is the direct beneficial owner of 3,031,810 shares of Common Stock of the Company. Ladyface Capital, LLC is the General Partner of Redwood Fund LP. Michael Poutre was the Chief Executive Officer and Director of the Company from June 7, 2017 until he resigned on May 14, 2018. Mr. Poutre is the Chief Executive Officer of Ladyface Capital, LLC. Accordingly, Mr. Poutre may be deemed to have voting and investment power over the shares beneficially owned by Redwood Fund LP. Imperial Strategies, LLC is the direct beneficial owner of 2,988,346 shares of Common Stock of the Company. Michael Poutre is the Chief Executive Officer of Imperial Strategies, LLC, and is the sole member of MP2 Ventures, LLC, a member of Imperial Strategies, LLC, and may be deemed to have voting and investment power over the shares beneficially owned by Imperial Strategies, LLC.

	(2)	Ron Levy, Chief Executive Officer, Chief Operating Officer and a Director of the Company, is Chief Operating Officer 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. Imperial Strategies, LLC is the direct beneficial owner of 2,988,346 shares of Common Stock of the Company. Mr. Levy is also the Chief Operating Officer of Imperial Strategies, LLC, and is a member of KOL Partners, LLC, a member of Imperial Strategies, LLC, and may be deemed to have voting and investment power over the shares beneficially owned by Imperial Strategies, LLC.

	(3)	Includes options to purchase 246,429 shares of Common Stock that may be exercised within 60 days of July 19, 2019.

	(4)	Includes options to purchase 100,000 shares of Common Stock that may be exercised within 60 days of July 19, 2019.

Section 16(a) Beneficial Ownership Reporting Compliance

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 2018 were filed in a timely manner, except that, as a result of administrative errors, one Form 4 reporting one transaction was not timely filed on behalf of Mr. Strickland.

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.

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.

From January 1 2018, through the date of this Annual Report on Form 10-K, described below are certain transactions or series of transactions between us and certain related persons. Information relating to employment agreements entered into by the Company and its executive officers and executive officer compensation can be found at Item 11 - Executive Compensation.

We have a services agreement with Full Stack Finance for chief financial officer and accounting outsource services. Ivan Ivankovich, the Company’s CFO, is the Co-Managing Director of Full Stack Finance. We incurred $476,287 in fees to Full Stack Finance during the year ended December 31, 2018.

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.

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, 2018 and 2017 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,
	2018		2017
Audit fees	$	180,134	$	144,500
Audit-related fees		128,023		3,495
Tax fees		12,419		12,000
All other fees		-		-
Total fees	$	320,576	$	159,995

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.

Audit-Related Fees: Represents the fees for audits of CoinTracking GmbH’s historical financial statements and review of correspondence with regulatory bodies.

The board of directors of the Company does not have an audit committee. The board of directors 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.

Tax Fees: Represents professional services rendered for tax compliance, tax advice and tax planning.

All Other Fees: Our independent registered public accounting firm was not paid any other fees for professional services during the fiscal years ended December 31, 2018 and 2017.

PART IV

Item 15. Exhibits, Financial Statement Schedules

Financial Statements

See pages beginning with page F-1.

Exhibit Index

		Incorporated by Reference
Exhibit 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
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
3.5	Amended and Restated Bylaws	8-K	3.1	2/28/18	000-55726
4.1	Description of Securities					*
10.1	Consulting Agreement by and between the Company and MP2 Ventures, LLC, dated as of June 22, 2017.	8-K	10.1	6/28/17	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	**
21.1	List of Subsidiaries of The Crypto Company					*
31.1	Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002					*
31.2	Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002					*
32.1	Certification of the Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002					*
32.2	Certification of the Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002					*

* Filed herewith

** Management contract or compensatory plan

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized, on July 26, 2019.

	THE CRYPTO COMPANY (Registrant)

	By:	/s/ Ron Levy
		Ron Levy
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities indicated on the 26th day of July, 2019.

Signature		Title

/s/ Ron Levy		Chief Executive Officer and Chairman of the Board
Ron Levy		(Principal Executive Officer)

/s/ Ivan Ivankovich		Chief Financial Officer
Ivan Ivankovich		(Principal Financial and Accounting Officer)

/s/ Anthony Strickland
Anthony Strickland		Director

/s/ Holly Ruxin
Holly Ruxin		Director

THE CRYPTO COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheet December 31, 2018	F-3

Consolidated Statement of Operations For the Period from Inception, March 9, 2017 through December 31, 2017 and the fiscal year ended December 31, 2018	F-4

Consolidated Statement of Stockholders’ Equity For the Period from Inception, March 9, 2017 through December 31, 2017 and the fiscal year ended December 31, 2018	F-5

Consolidated Statement of Cash Flows For the Period from Inception, March 9, 2017 through December 31, 2017 and the fiscal year ended December 31, 2018	F-6

Notes to Consolidated Financial Statements	F-7 – F-30

F- 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the board of directors of The Crypto Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Crypto Company as of December 31, 2018 and 2017, 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, 2018 and 2017, 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.

Basis for 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 audit 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 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.

Substantial Doubt 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.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s auditor since 2019.

Lakewood, CO

July 26, 2019

F- 2

THE CRYPTO COMPANY

Consolidated Balance Sheets

December 31,

	As of December 31, 2018			As of December 31, 2017
					(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,448		$	8,950,244
Accounts receivable, net		-			500
Prepaid expenses and other current assets		79,283			33,294
Assets held for sale		5,190,063			-
Total current assets		5,271,794			8,984,038

Equipment, net of accumulated depreciation		89,332			68,320
Other assets		20,968			1,500
Noncurrent assets held for sale		-			1,131,885

TOTAL ASSETS	$	5,382,094		$	10,185,743

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,035,434		$	697,609
Income taxes payable		1,600			800
Liabilities held for sale		3,127,921			-
Total current liabilities		4,164,955			698,409

TOTAL LIABILITIES		4,164,955			698,409

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 50,000,000 shares authorized, 21,212,860 and 20,458,945 shares issued and outstanding, respectively		21,213			20,459
Additional paid-in-capital		28,219,355			19,020,176
Accumulated deficit		(28,456,550	)		(9,553,301	)
Accumulated other comprehensive income		(743,987	)		-
TOTAL CRYPTO COMPANY EQUITY		(959,969	)		9,487,334
Noncontrolling interests		2,177,108			-
TOTAL STOCKHOLDERS’ EQUITY		1,217,740			9,487,334

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,382,094		$	10,185,743

The accompanying notes are an integral part of these condensed consolidated financial statements.

F- 3

THE CRYPTO COMPANY

Consolidated Statement of Operations

For the year ended December 31, 2018 and For the Period from Inception, March 9, 2017 through December 31, 2017

	FOR THE YEAR ENDED DECEMBER 31, 2018			For the Period from Inception, March 9, 2017 through December 31, 2017
					(Restated)
Revenue:
Other	$	5,000		$	6,000

Total Revenue, net	$	5,000			6,000

Operating expenses:
General and administrative expenses		5,730,063			3,471,010
Share-based compensation		3,302,471			6,493,514

Total Operating Expenses		9,032,534			9,964,524

Operating loss		(9,027,534	)		(9,958,524	)

Impairment other assets		-			(134,100	)
Other income(expense)		(14,844	)		(1,130	)

Loss before provision for income taxes		(9,042,378	)		(10,093,754	)

Provision for income taxes		1,600			800

Loss from continuing operations		(9,043,978	)		(10,094,554	)

Income/(loss) from discontinued operations attributable to the Crypto Company		(9,859,271	)		541,253

Net loss attributable to the Crypto Company		(18,903,249	)		(9,553,301	)

Loss from discontinued operations attributable to noncontrolling interest		(6,516,860	)		-

Net loss	$	(25,420,109	)	$	(9,553,301	)

Other comprehensive loss
Foreign currency translation adjustment		(743,987	)		-
Foreign currency translation adjustment attributable to noncontrolling interest		(741,017	)		-

Comprehensive loss	$	(26,905,113	)	$	(9,553,301	)

Continuing operations:
Net loss attributable to the Crypto Company per common share – basic and diluted	$	(0.43	)	$	(0.60	)
Discontinued operations:					-
Income/(loss) attributable to the Crypto Company per common share – basic and diluted	$	(0.47	)	$	0.03
Net loss attributable to the Crypto Company per common share – basic and diluted	$	(0.90	)	$	(0.57	)
Weighted average common shares outstanding – basic and diluted		21,096,881			16,746,792

The accompanying notes are an integral part of these consolidated financial statements.

F- 4

THE CRYPTO COMPANY

Consolidated Statement of Stockholders’ Equity

For the Year Ended December 31, 2018 and for the Period from Inception, March 9, 2017 through December 31, 2017

					Additional						Accumulated Other						Total
	Common stock				paid-in-			Accumulated			Comprehensive			Noncontrolling			Stockholders’
	Shares		Amount		capital			Deficit			Income			Interest			Equity
Balance, March 9, 2017		-	$	-	$	-		$	-		$	-		$	-		$	-
Stock issued for cash to:		-		-		-			-			-			-			-
Founders at prices ranging from $0.67 to $0.80 per share		425,000		425		399,575			-			-			-			400,000
Private placement investors at $42.86 per share		52,867		53		2,265,833												2,265,886
Stock issued in exchange for services rendered at $1.60 per share		125,000		125		199,875			-			-			-			200,000
Stock issued in exchange for investment in cryptocurrency at $0.80 per share		125,000		125		99,875			-			-			-			100,000
Stock based compensation for founders issued stock at beneficial prices at or near inception		-		-		380,000			-			-			-			380,000
Reverse acquisition with Croe, Inc.
Stock dividend issued to Crypto shareholders
Founders		10,125,000		10,125		(10,125	)		-			-			-			-
Private placement investors		793,007		793		(793	)		-			-			-			-
Crypto’s common stock exchanged for Croe’s common stock		6,298,747		6,299		(6,299	)		-			-			-			-
Shares previously outstanding for Croe not included in the stock exchange		100,000		100		(100	)		-			-			-			-
Stock issued in exchange for services rendered at $1.29 per share		129,238		129		166,588			-			-			-			166,717
Stock issued for cash at $2.00 per share		47,500		47		94,953			-			-			-			95,000
Stock issued for cash at $2.00 per share		437,488		437		874,538			-			-			-			874,975
Stock issued in exchange for investment in cryptocurrency at $2.00 per share		62,500		63		124,949			-			-			-			125,012
Stock issued for cash at $2.00 per share, with warrants		672,500		673		1,344,327			-			-			-			1,345,000
Stock issued for cash at $7.00 per share, net of financing costs of $76,073		1,053,848		1,054		7,300,012			-			-			-			7,301,066
Stock issued in connection with cashless exercise of stock options		11,250		11		(11	)		-			-			-			-
Stock compensation expense in connection with issuance of options		-		-		5,786,979			-			-			-			5,786,979
Net loss		-		-		-			(9,553,301	)		-			-			(9,553,301	)
Balance, December 31, 2017		20,458,945	$	20,459	$	19,020,176		$	(9,553,301	)	$	-		$	-		$	9,487,334
Stock issued for acquisition of CoinTracking GmbH		473,640		473		4,735,927			-									4,736,400
Fair value of noncontrolling interest acquired in connection with acquisition of CoinTracking GmbH		-		-		-			-			-			9,434,985			9,434,985
Stock issued for services at $2.00 per share		202,512		203		1,417,381			-			-			-			1,417,584
Exercise of stock options		23,096		23		50,035			-			-			-			50,058
Stock issued for cash at $5.00 per share		40,000		40		199,960			-			-			-			200,000
Cashless exercise of stock options		14,667		15		(15	)		-			-			-			-
Stock compensation expense in connection with issuance of options		-		-		2,795,891			-			-			-			2,795,891
Other comprehensive loss		-		-		-			-			(743,987	)		(741,017	)		(1,485,004	)
Net loss		-		-		-			(18,903,249	)		-			(6,516,860	)		(25,420,109	)
Balance, December 31, 2018		21,212,860	$	21,213	$	28,219,355		$	(28,456,550	)	$	(743,987	)	$	2,177,108		$	1,217,740

The accompanying notes are an integral part of these condensed consolidated financial statements.

F- 5

THE CRYPTO COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended December 31, 2018			For the Period from Inception March 9, 2017 Through December 31, 2017
				(Restated)
Cash flows from operating activities:
Net loss	$	(25,420,109	)	$	(9,553,301	)
Adjustments to reconcile net loss to net cash used in operations:
Net realized gain on investment in cryptocurrency		(1,303,130	)		(781,373	)
Impairment of investments in cryptocurrency		2,066,803			-
Impairment of intangible assets		3,743,479			-
Impairment of goodwill		9,356,105			-
Impairment of investments, non-cryptocurrency		410,050			-
Impairment of assets held for sale		743,987			-
Expenses paid in cryptocurrency		105,684			-
Depreciation and amortization		1,214,827			4,675
Share-based compensation		4,213,475			6,533,696
Change in operating assets and liabilities:
Accounts receivable		500			(500	)
Loan receivable, related party		23,696			-
Prepaid expenses		77,078			(33,294	)
Accounts payable and accrued expenses		493,138			698,409
Contract liabilities		(1,977,768	)		-
Other assets		(21,919	)		(1,500	)
Net cash used in operating activities		(6,274,104	)		(3,133,188	)

Cash flows from investing activities:
Payments for purchase of equipment		(42,675	)		(72,995	)
Cash paid for acquisition, net of cash acquired		(3,189,303	)		-
Proceeds from sales of cryptocurrency		7,498,837			-
Purchase of investments, non-cryptocurrency		(500,000	)		-
Purchase of investments in cryptocurrency		(5,269,888	)		(125,500	)
Capitalized software development		(127,937	)		-
Net cash used in investing activities		(1,630,966	)		(198,495	)

Cash flows from financing activities:
Proceeds from common stock issuance		200,000			12,358,000
Financing costs relating to common stock issuance		50,057			(76,073	)
Net cash provided by financing activities		250,057			12,281,927

Effect of exchange rate changes on cash		(188,581	)		-
Net (decrease) increase in cash and cash equivalents		(7,843,594	)		8,950,244
Cash and cash equivalents at the beginning of the period		8,950,244			-
Cash and cash equivalents at the end of the period	$	1,106,650		$	8,950,244

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	1,130
Cash paid for income taxes	$	800			-

Noncash investing activities:
Shares of common stock issued in exchange of investment in cryptocurrency	$	-		$	225,012
Transfer of non-cryptocurrency to investments in cryptocurrency	$	255,763			-
Customer payments received in cryptocurrency	$	1,211,250		$	-
Cryptocurrency acquired in trade of cryptocurrency investments	$	5,065,384		$	2,748,715
Issue of common stock for acquisition of CoinTracking GmbH	$	4,736,400		$	-
Purchase of contract asset for commissions and incentives with investments in cryptocurrency	$	186,377		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F- 6

THE CRYPTO COMPANY

Notes to Consolidated Financial Statements

NOTE 1 – THE COMPANY

The Crypto Company was incorporated in the State of Nevada on March 9, 2017 (“Inception”). The Company is engaged in the business of providing consulting services and education for distributed ledger technologies (“blockchain”), for the building of technological infrastructure and enterprise blockchain technology solutions. The Company currently generates revenues and incurs expenses solely through these consulting operations.

Unless expressly indicated or the context requires otherwise, the terms “Crypto,” the “Company,” “we,” “us,” and “our” in this Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (this “Annual Report”) refer to The Crypto Company and, where appropriate, its wholly owned subsidiaries, Crypto Sub, Inc., a Nevada corporation (“Crypto Sub”); CoinTracking, LLC, a Nevada limited liability company (“CoinTracking”); Malibu Blockchain, LLC, a Nevada limited liability company (“Malibu Blockchain”); and, where applicable, CoinTracking’s majority-owned subsidiary, CoinTracking GmbH, which was sold subsequent to December 31, 2018. See “Note 17 - Subsequent Events” for additional details.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation – The company prepares its consolidated financial statements based upon the accrual method of accounting, recognizing income when earned and expenses when incurred.

Consolidation – The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Crypto Sub, CoinTracking, and Malibu Blockchain, as well as its 50.1% ownership of CoinTracking GmbH. All significant intercompany accounts and transactions are eliminated in consolidation. Subsequent to December 31, 2018, the Company sold its entire equity ownership stake in CoinTracking GmbH. See Recent Developments in this Note 2 and “Note 17 - Subsequent Events” for additional details.

Recent Developments – On December 28, 2018, CoinTracking entered into an agreement on the purchase and assignment of shares, agreements on a purchase price of loan agreement, and a compensation agreement (collectively, the “Agreement”), pursuant to the laws of the Republic of Germany, with Kachel Holding GmbH, an entity formed under the laws of the Republic of Germany (“Kachel Holding”), and CoinTracking GmbH. Subsequent to December 31, 2018, pursuant to the Agreement, CoinTracking sold 12,525 shares of equity interest in CoinTracking GmbH, representing 50.1% of the equity interests in CoinTracking GmbH and 100% of CoinTracking’s holdings in CoinTracking GmbH, to Kachel Holding in exchange for USD $2,200,000, of which (i) USD $1,000,000 was paid in cash to CoinTracking and (ii) USD $1,200,000 was applied toward the repayment of an outstanding loan in the amount of USD $1,500,000 from CoinTracking GmbH to CoinTracking.

F- 7

As a result of the pending sale as of December 31, 2018, of CoinTracking’s entire equity ownership stake in CoinTracking GmbH, and a strategic shift in the Company’s business in the fourth quarter of 2018 away from cryptocurrency investing to blockchain consulting and education, the assets and liabilities to be sold or disposed of other than by sale are reported in assets and liabilities held for sale in the Consolidated Balance Sheets as of December 31, 2018. Additionally, the current operating results associated with these assets and liabilities have been reclassified to give effect to these changes and are reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. See “Note 15 - Discontinued Operations” and “Note 17 - Subsequent Events” for additional details.

Liquidity and Going Concern – The Company’s consolidated financial statements are prepared using the accrual method of accounting in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant losses and experienced negative cash flows since Inception. As of December 31, 2018, the Company had cash of $2,448, a decline of $8,947,796 from the December 31, 2017 balance of $8,950,244. This decline is due, in part, to the acquisition of CoinTracking GmbH in January 2018, which included $3,189,303 of cash consideration, net of acquired cash. In addition, the Company’s net loss before provision for income taxes was $18,903,249 for the year ended December 31, 2018. The Company’s working capital was negative ($955,303) as of December 31, 2018. During 2018, the Company liquidated a majority of its investments in cryptocurrency, which had a cost basis of $964,067 at December 31, 2017. In addition, subsequent to December 31, 2018, the Company sold its equity interest in CoinTracking GmbH for $2,200,000, of which (i) $1,000,000 was received in cash and (ii) $1,200,000 was applied toward the repayment of an outstanding loan in the amount of $1,500,000 from CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details. The cash received from the liquidation of the Company’s investment in cryptocurrency helped fund the Company’s operations during 2018, and the funds received from the sale of CoinTracking GmbH will be used to help fund operations in 2019. As of December 31, 2018, the accumulated deficit amounted to $28,456,550. As a result of the Company’s history of losses and financial condition, there is substantial doubt about the ability of the Company to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund the Company’s expenses and achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. There can be no assurance that any of these future-funding efforts will be successful or that the Company will be able to replace the revenues lost as a result of the sale of CoinTracking GmbH, in 2019 and beyond. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Use of estimates – The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant estimates and assumptions include but are not limited to the recoverability and useful lives of long-lived assets, allocation of revenue on software subscriptions, valuation of goodwill from business acquisitions, valuation and recoverability of investments, valuation allowances of deferred taxes, and share-based compensation expenses. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on the Company’s operating results.

Cash and cash equivalents – The Company defines its cash and cash equivalents to include only cash on hand and certain highly liquid investments with original maturities of ninety days or less. The Company maintains its cash and cash equivalents at financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to the concentration is minimal.

F- 8

Investments in cryptocurrency – Investments are comprised of several cryptocurrencies the Company owns, of which a majority is Bitcoin, that are actively traded on exchanges. The Company records its investments as indefinite lived intangible assets at cost less impairment and are reported as long-term assets in the consolidated balance sheets. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The primary exchanges and principal markets the Company utilizes for its trading are Kraken, Bittrex, Poloniex and Bitstamp.

Realized gains and losses on sales of investments in cryptocurrency, and impairment losses, are included in other income/(expense) in the Consolidated Statements of Operations.

The following table presents additional information about investments in cryptocurrency, as of December 31, 2018:

	December 31, 2018
Balance at January 1, 2018	$	964,067
Acquisition of CoinTracking GmbH		1,115,345
Purchases of cryptocurrency		5,269,888
Net realized gains on investments in cryptocurrency		1,303,130
Transfer from investments, non-cryptocurrency		255,763
Customer payments in cryptocurrency		1,211,250
Expenditures of cryptocurrency		(292,060	)
Sales of cryptocurrency		(7,498,837	)
Impairment of cryptocurrency		(2,066,803	)
Foreign currency impact		(32,463	)
Balance at December 31, 2018	$	229,280

The following table summarizes the historical cost of cryptocurrencies, held as of December 31, 2018:

Bitcoin	$	200,849
Ethereum		19,383
Litecoin		5,153
Bitcoin Cash		2,018
Ripple		1,290
Other Cryptocurrencies		587
Balance at December 31, 2018	$	229,280

The investments in cryptocurrency are included in assets held for sale at December 31, 2018.

Investments – non-cryptocurrency – As of December 31, 2018, the Company has invested $667,818 as part of nine financings, including $500,000 during the year ended December 31, 2018. The investments include $417,818 invested in accordance with eight token pre-sale and simple agreement for future tokens (“SAFT”) agreements. The agreements provide for the issuance of tokens in anticipation of a future token generation event, with the number of tokens predetermined based on the price established in each respective agreement. In addition, the Company invested $250,000 as part of a financing in accordance with a simple agreement for future equity (“SAFE”) agreement, representing 4% interest, at the time of the investment, in a private enterprise. The Company’s SAFE investment may take the form of equity in the future, relating to a potential equity financing or initial public offering and a token grant in the event of a successful Initial Coin Offering (“ICO”) by the enterprise.

The Company received tokens for $255,763 of its investments, at cost, during 2018 which have been transferred to an active exchange and included in Investments in Cryptocurrency in the consolidated balance sheets.

F- 9

The Company has evaluated the guidance in Accounting Standards Codification (“ASC”) No. 325-20 Investments – Other, in determining to account for its investments, non-cryptocurrency using the cost method since the investments are not marketable and do not give the Company significant influence. The Company has determined that $160,050 of its remaining token pre-sale or SAFT investments as of December 31, 2018 were impaired as the Company determined that a token generation event and trading on an active change were remote.

During the year ended December 31, 2018, the Company determined that its SAFE investment is impaired as the enterprise changed its primary business model and requires additional financing to bring its products to market. Therefore, the Company has recorded an impairment loss of $250,000, representing the full value of its investment.

Equipment – Equipment is recorded at cost and depreciated using the straight-line method over the estimated useful life ranging from three to five years. Normal repairs and maintenance are expensed as incurred. Expenditures that materially adapt, improve, or alter the nature of the underlying assets are capitalized. When equipment is retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and the resulting gain or loss is credited or charged to income.

Impairment of long-lived assets – The Company analyzes its long-lived assets, including intangible assets with finite useful lives (subject to amortization) acquired in connection with the acquisition of CoinTracking GmbH, for potential impairment. Impairment losses are recorded on long-lived assets when indicators of impairment are present, and for intangible assets acquired in connection with acquisitions, the undiscounted cash flows estimated to be generated by those assets are less than the net carrying amount of the assets. In such cases, the carrying values of assets to be held and used are adjusted to their estimated fair value, less estimated selling expenses. For the year ended December 31, 2018, the Company recognized an impairment loss of $2,749,646 on its definite lived intangible assets related to CoinTracking GmbH, classified as Held for Sale. There was no impairment in the period from Inception to December 31, 2017. Subsequent to December 31, 2018, the Company sold its entire equity ownership stake in CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details.

Business combination – The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values with the residual of the purchase price recorded as goodwill. The results of operations of acquired businesses are included in our operating results from the dates of acquisition.

Goodwill and indefinite lived intangible assets – The Company records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill. Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trade names, and developed technologies. Intangible assets subject to amortization are amortized over the period of estimated economic benefit of five years. In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), goodwill and other intangible assets with indefinite lives are not amortized but tested annually, on December 31, or more frequently if the Company believes indicators of impairment exist. Indefinite lived intangible assets also include investments in cryptocurrency (see Investments in Cryptocurrency).

The Company assesses whether goodwill impairment and indefinite lived intangible assets exists using both qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed to determine whether a goodwill impairment exists at the reporting unit. The Company performed the annual impairment test for goodwill and intangible assets with indefinite lives as of December 31, 2018 using a quantitative assessment, and recorded an intangible asset impairment of $993,833, and $9,356,105 for goodwill, related to the intangible assets and goodwill acquired in connection with the purchase of CoinTracking GmbH (See Note 9 – Goodwill and Intangible Assets for further information). There was no impairment for the period from inception through December 31, 2017.

In addition, we capitalized certain costs incurred with developing our CoinTracking SaaS platform in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased, or Marketed once technological feasibility has been established. Capitalized software costs primarily include i) external direct costs of services utilized in software development and ii) compensation and related benefits for employees who are directly associated with software development. We amortized our capitalized software costs over a five-year period, reflecting the estimated useful lives of the assets.

F- 10

Foreign Currency Translation – Results of foreign operations are translated into USD using average rates prevailing throughout the period, while assets and liabilities are translated in USD at period end foreign exchange rates. Transactions gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency of the applicable subsidiary are included in the consolidated statements of operations, within other income, in the year in which the change occurs. The Company’s functional currency is USD while the functional currency for CoinTracking GmbH is in euros.

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. For the year ended December 31, 2018, the income tax payable of $1,600 reflects the minimum franchise tax for the State of California.

As of December 31, 2018, we are subject to taxation in the U.S., as well as state and German taxes. The Company has not been audited by the U.S. Internal Revenue Service, nor has the Company been audited by any states or in Germany. Subsequent to September 30, 2018, we sold our entire equity ownership stake in CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details.

Fair value measurements – The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

	Level 1	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date.

	Level 2	Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date.

	Level 3	Unobservable inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the measurement date.

The carrying amounts of the Company’s financial assets and liabilities, including cash, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments.

F- 11

Revenue recognition – The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

	●	Step 1: Identify the contract with the customer
	●	Step 2: Identify the performance obligations in the contract
	●	Step 3: Determine the transaction price
	●	Step 4: Allocate the transaction price to the performance obligations in the contract
	●	Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method for contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. See “Note 6 – Subscription Revenue Recognition” for additional information on the impact to the Company.

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

The Company accounts for its share-based compensation using the Black-Scholes model to estimate the fair value of stock option awards. Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company’s common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non-employees are expected to hold their options prior to exercise, and (iii) risk-free interest rate.

F- 12

Net loss per common share – The Company reports earnings per share (“EPS”) with a dual presentation of basic EPS and diluted EPS. Basic EPS is computed as net income divided by the weighted average of common shares for the period. Diluted EPS reflects the potential dilution that could occur from common shares issued through stock options, or warrants. For the year ended December 31, 2018 and the period from Inception to December 31, 2017, the Company had no potentially dilutive common stock equivalents. Therefore, the basic EPS and the diluted EPS are the same.

Marketing expense – Marketing expenses are charged to operations, under general and administrative expenses. The Company incurred $342,645 of marketing expenses for the year ended December 31, 2018, compared to $20,054 for the period from Inception through December 31, 2017.

Reclassifications – Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. Such reclassifications had no effect on the Company’s financial position, results of operations or cashflows.

NOTE 3 – Restatement of the Consolidated Financial Statements

The purpose of restatement is to correct errors in the Company’s previously issued financial statements, as disclosed in the Company’s Current Report on Form 8-K filed subsequent to December 31, 2018, on January 3, 2019. The restatement is in connection with the accounting for investments in cryptocurrency at fair value as opposed to intangible assets with indefinite lives and record such investments in cryptocurrency at historical cost less impairment, if any. Management previously reported its investments in cryptocurrency at fair value, with changes in fair value reported as unrealized gains and losses in its consolidated statements of operations. The Company has corrected the error in this Annual Report for the period from January 1, 2018 to June 30, 2018, and for the period from inception to December 31, 2017. The Company’s investment in cryptocurrency at December 31, 2017 were accounted for in error and were overstated from their historical cost by $1,785,742. In addition, the Company corrected the classification of its net realized gain/loss on investments in cryptocurrency by reclassifying them from revenue to other income(expense).

The Company has also determined that its classification and disclosures of $367,639 in investments, as of June 30, 2018, were incorrectly described as investments in Initial Coin Offerings and included as investments in cryptocurrency in its consolidated balance sheets. The investments were made in accordance with token pre-sale and simple agreement for tokens agreements (“SAFT”), and should be included as investments, non-cryptocurrency in the Company’s consolidated balance sheets. The Company reclassified the balance and changed the related disclosures in this current filing. Management believes the reclassification is material to the Company’s condensed consolidated financial statements in the period from January 1, 2018 to June 30, 2018, and for the period from inception to December 31, 2017.

Finally, in connection with the acquisition of CoinTracking GmbH, the Company completed its preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on the information available and preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed. The result is the recording of intangible assets of $7,726,356, noncontrolling interest of $9,434,984, and a reduction of $43,348 to net assets acquired, resulting in an adjustment to increase goodwill of $1,665,279. The Company recorded amortization expense of $993,023 relating to certain intangible assets acquired for the year ended December 31, 2018, of which $211,153 and $486,176 have been restated for the three and six months ended March 31 and June 30, 2018, respectively. As a result of these changes, the Company restated its consolidated balance sheet and consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and June 30, 2018, as noted below. Subsequent to December 31, 2018, the Company sold its entire equity ownership stake in CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details.

F- 13

The Company’s originally disclosed accounting policy, from the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2018 regarding investments in cryptocurrency stated that:

“ Investments in cryptocurrency – Investments are comprised primarily of two types of cryptocurrency investments. The Company owns several cryptocurrencies, of which a majority is Bitcoin, which are actively traded on exchanges and are reported at fair value as determined by digital asset markets with realized gains and losses calculated on a trade date basis as the difference between the fair value and cost of cryptocurrencies transferred. Management believes that measuring cryptocurrencies at fair value, consistent with the accounting for trading investments in commodities and securities with changes in fair value recognized on both the balance sheet and profit and loss statements, best reflects the Company’s financial position and the economics and characteristics of its cryptocurrency investments. The Company recognizes the fair value changes in unrealized gains and losses on investment through the accompanying Statement of Operations. For the six-month period ended June 30, 2018, the Company had a consolidated balance of $2,200,449 in investments in cryptocurrencies. The Company believes that it would be able to liquidate a majority of its portfolio into cash within one to seven days, if needed. As of June 30, 2018, the Company’s holdings represent on average 1.3% of the daily volume of total trades on the specific exchanges where it would be able to convert its holdings to cash. The primary exchanges and principal markets the Company utilizes for its trading are Kraken, Bittrex, Poloniex and Bitstamp. These exchanges, in the aggregate, account for approximately $168,000,000 in Bitcoin/U.S. dollars (“USD”) trades per day globally.

In addition, the Company’s cryptocurrency investments include Initial Coin Offerings (“ICOs”), which primarily consist of tokens that are not currently traded on an exchange. The Company records these investments at cost, as there is no active market. As of June 30, 2018, ICOs represent $367,639 of the Company’s investments in cryptocurrencies. For the six-month period ended June 30, 2018, the Company recognized no impairment losses on investments in ICOs.

Investments – non-cryptocurrency – During the six months ended June 30, 2018, the Company invested $250,000 as part of a financing in accordance with a simple agreement for future equity (“SAFE”), representing 4% interest, at the time of the investment, in a private enterprise. The Company’s investment may take the form of equity in the future, relating to a potential equity financing or initial public offering and a token grant in the event of a successful ICO by the enterprise. The Company has evaluated the guidance in Accounting Standards Codification (“ASC”) No. 325-20 Investments – Other, in determining to account for the investment using the cost method since the equity securities are not marketable and do not give the Company significant influence. The Company has determined that there is no impairment to date due to the recent nature of the investment and the early stage development of the platform and has included such asset as a level 3 investment.”

The Company’s updated accounting policy regarding investments in cryptocurrency transactions and remeasurement states that:

“ Investments in cryptocurrency – Investments are comprised of several cryptocurrencies the Company owns, of which a majority is Bitcoin, that are actively traded on exchanges. The Company records its investments as indefinite lived intangible assets at cost less impairment and are reported as long-term assets in the consolidated balance sheets. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The primary exchanges and principal markets the Company utilizes for its trading are Kraken, Bittrex, Poloniex and Bitstamp.

Realized gains and losses on sales of investments in cryptocurrency, and impairment losses, are included in other income/(expense) in the consolidated statement of operations and comprehensive income.

F- 14

The Company has evaluated the guidance in Accounting Standards Codification (“ASC”) No. 325-20 Investments – Other, in determining to account for its investments, non-cryptocurrency using the cost method since the investments are not marketable and do not give the Company significant influence. The Company has determined that there is no impairment of its remaining token pre-sale or SAFT investments as of December 31, 2018 as they were entered into in the last twelve months and progress has been demonstrated toward tokenization.

The Company has determined that its previously issued financial statements should be restated on a prospective basis. Accordingly the Company is not amending and re-filing the financial statements included in its prior quarterly reports on Form 10-Q for each of the quarterly periods from Inception through June 30, 2018, nor in its Annual Report for the period from Inception through December 31, 2017. Management believes the errors are material when considering quantitative materiality. Management does not believe it is probable that the judgment of a reasonable person relying upon its prior filings would have been changed or influenced by the inclusion or correction of the item, nor is there a substantial likelihood that a reasonable person would consider it important.”

The effect of the restatement on the Company’s net loss, net loss attributable to The Crypto Company, comprehensive income and per-share amounts for the prior interim periods of 2018 ended June 30, 2018 are as follows:

	For the three months ended March 31, 2018
	As Previously Reported			Restatement Adjustment ⁽¹⁾		Restatement Adjustment ⁽²⁾			As Restated
Net loss	$	(3,521,747	)	$	1,587,709	$	(211,153	)	$	(2,145,191	)
Net loss attributable to The Crypto Company		(3,158,118	)		1,587,709		(105,788	)		(1,676,197	)
Net loss per common share – basic and diluted		(0.15	)							(0.08	)
Weighted average common shares outstanding – basic and diluted		20,864,198			-					20,864,198

	For the three months ended June 30, 2018
	As Previously Reported			Restatement Adjustment ⁽¹⁾		Restatement Adjustment ⁽²⁾			As Restated
Net loss	$	(7,145,543	)	$	182,168	$	(275,024	)	$	(7,238,399	)
Net loss attributable to The Crypto Company		(7,272,309	)		182,925		(137,237	)		(7,226,621	)
Net loss per common share – basic and diluted		(0.34	)							(0.34	)
Weighted average common shares outstanding – basic and diluted		21,131,457			-					21,131,457

	For the six months ended June 30, 2018
	As Previously Reported			Restatement Adjustment ⁽¹⁾		Restatement Adjustment ⁽²⁾			As Restated
Net loss	$	(10,667,291	)	$	1,769,877	$	(486,176	)	$	(9,383,590	)
Net loss attributable to The Crypto Company		(10,431,256	)		1,770,634		(243,359	)		(8,903,981	)
Net loss per common share – basic and diluted		(0.50	)							(0.42	)
Weighted average common shares outstanding – basic and diluted		21,003,328			-					21,003,328

	⁽¹⁾	Reflects the restatement in connection with the accounting for investments in cryptocurrency as intangible assets with indefinite lives and record such investments in cryptocurrency at cost less impairment.
	⁽²⁾	Reflects the restatement of the intangible asset amortization due to the completion of the preliminary valuation of the fair value of tangible and intangible assets acquired and related liabilities in connection with the acquisition of CoinTracking GmbH on January 26, 2018.

F- 15

The effect of the restatement on the Company’s condensed consolidated balance sheet as of December 31, 2017 is as follows:

	December 31, 2017
	As Previously Reported			Restatement Adjustment			Audited and Restated
Investment in cryptocurrency, net	$	2,917,627		$	(2,917,627	)	$	-
Total current assets		11,901,665			(2,917,627	) ⁽¹⁾		8,984,038
Investment in cryptocurrency, net		2,917,627			(1,785,742	) ⁽¹⁾		1,131,885
Total assets		11,971,485			(1,785,742	)		10,185,743
Accumulated deficit		(7,767,559	)		(1,785,742	)		(9,553,301	)
Total stockholders’ equity		11,273,076			(1,785,742	)		9,487,334
Total liabilities and stockholders’ equity		11,971,485			(1,785,742	)		10,185,743

⁽¹⁾

Includes reclassification of investments in cryptocurrency from current assets to long-term assets.

The effect of the restatement on the Company’s condensed consolidated statement of operations for the period from Inception through December 31, 2017, are as follows:

	Inception through December 31, 2017
	As Previously Reported			Restatement Adjustment			As Restated
Net realized gain on investment in cryptocurrency	$	781,373		$	(781,373	)	$	-
Operating loss		(9,551,371	)		(781,373	)		(10,332,744	)
Net change in unrealized appreciation (depreciation) on investment in cryptocurrency		1,785,742			(1,785,742	)		-
Other income(expense):
Net realized gain on investment in cryptocurrency		-			781,373			781,373
Loss before provision for income taxes		(7,766,759	)		(1,785,742	)		(9,552,231	)
Net loss		(7,767,559	)		(1,785,742	)		(9,553,301	)
Net loss per common share - basic and diluted		(0.46	)					(0.57	)
Weighted average common shares outstanding - basic and diluted		16,746,792						16,746,792

⁽¹⁾

Restatement adjustment includes reclassification of net realized gain/(loss) on investment in cryptocurrency from revenue to other income(expense).

The effect of the restatement on the Company’s consolidated statement of cash flows for the period from Inception through December 31, 2017, are as follows:

	Inception through December 31, 2017
	As Previously Reported			Restatement Adjustment			As Restated
Net loss	$	(7,767,559	)	$	(1,785,742	)	$	(9,553,301	)
Net change in unrealized appreciation (depreciation) on investment in cryptocurrency		(1,785,742	)		1,785,742			-
Noncash investing activities:
Cryptocurrency acquired in trade of cryptocurrency investments	$	-		$	2,748,715		$	2,748,715

F- 16

NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS

In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. The amendments in this ASU clarify certain aspects of the guidance related to: reporting comprehensive income, debt modification and extinguishment, income taxes related to stock compensation, income taxes related to business combinations, derivatives and hedging, fair value measurements, brokers and dealers liabilities, and plan accounting. This new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. The adoption of ASU No. 2018-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU remove, add, and modify certain disclosures. The ASU removes the following disclosure requirements from Topic 820: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; (3) the valuation process for Level 3 fair value measurements; and (4) certain other requirements for nonpublic entities. The ASU adds the following disclosure requirements: (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, disclosure of other quantitative information may be more appropriate if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The ASU modifies disclosure requirements in Topic 820 relating to timing of liquidation of an investee’s assets, the disclosure of the date when restrictions from redemption might lapse, the intention of the measurement uncertainty disclosure, and certain other requirements for nonpublic entities. This new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2019. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software). The amendments in this ASU require an entity (customer) in a hosting arrangement that is a service to (1) determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense; (2) expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement; (3) apply the existing impairment guidance to the capitalized implementation costs as if the costs were long-lived assets; (4) present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting arrangements; and (5) present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. This new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2019. The adoption of ASU No. 2018-15 is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

F- 17

In June 2018, FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. Management currently does not plan to early adopt this guidance. The new standard is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company is evaluating the effect that ASU No. 2018-07 will have on its consolidated financial statements and related disclosures.

In July 2017, the FASB issued No. ASU 2017-11 , Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Rounds and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This ASU changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments also require entities to recognize the effect of the down round feature on EPS when it is triggered. ASU 2017-11 should be adopted retrospectively or as a cumulative-effect adjustment as of the date of adoption, only to financial instruments outstanding as of the initial application date. ASU 2017-11 will be effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The adoption of ASU No. 2017-11 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Essentially, an entity will not have to account for the effects of a modification if: (1) The fair value of the modified award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The new standard became effective for us on January 1, 2018. Adoption of the ASU No. 2017-11 did not have a significant impact on our consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (Topic 805). The new guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. The ASU is effective for annual reporting periods beginning after December 15, 2017, and for interim periods within those years. Adoption of ASU No. 2017-01 did not have a significant impact on our consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) which removes “Step Two” of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The ASU is effective for annual reporting periods beginning after December 15, 2019, and for interim periods within those years, with early adoption permitted. The adoption of ASU No. 2017-04 is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which, among other things, requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard becomes effective for us on January 1, 2019. Early adoption is permitted. The amendments in this update should be applied under a modified retrospective approach. Adoption of ASU No. 2016-02 is not expected to have a significant impact on our consolidated financial statements and related disclosures.

F- 18

NOTE 5 – ACQUISITION

On January 26, 2018, the Company, through its wholly owned subsidiary, CoinTracking, acquired 50.1% of the equity interest in CoinTracking GmbH, for (i) $4,736,400 in cash and (ii) 473,640 shares of common stock of the Company at $10 per share for a total purchase price valued at $9,472,800. On the acquisition date, the fair market value of $10 per share for the Company’s common stock was determined using a trading range from November 2017, discounted further due to lack of marketability. The Company used this approach due to the lack of trading volume since (i) the stock trading was suspended by the SEC in December 2017 and was moved to OTC Grey market by the OTC Markets Group, Inc. on January 3, 2018, (ii) stock sales to accredited investors on December 12, 2017, at $7 per share, and (iii) a valuation performed as of March 31, 2018. The equity purchase agreement between the Company and CoinTracking GmbH included a purchase price adjustment pursuant to which the consideration would increase if the share price of the Company’s common stock closed below $10 per share on July 2, 2018. No adjustment was required.

CoinTracking GmbH provides its customers with the ability to view and monitor their own cryptocurrency portfolios as well as tax calculation and reporting services. Customers may not make trades through the CoinTracking GmbH platform. The purpose of the acquisition was to increase the Company’s presence in the digital asset industry and build strategic alliances.

The consolidated financial statements were prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and have been included in the Company’s consolidated results as of the acquisition date with the Company considered as the accounting acquirer and CoinTracking GmbH as the accounting acquiree.

Accordingly, consideration paid by the Company to complete the acquisition was allocated to the identifiable assets and liabilities of CoinTracking GmbH based on estimated fair values as of the closing date. The Company made a preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on the information available and preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed. Acquisition-related costs were expensed as incurred and were not considered to be significant.

In the fourth quarter of the year ended December 31, 2018, the Company completed its allocation of the consideration transferred to the assets acquired and liabilities assumed based on the fair value of tangible and intangible assets acquired and liabilities assumed. The result was the recording of intangible assets of $7,726,356, noncontrolling interest of $9,434,984, and an additional adjustment of $267,401 to net assets acquired, resulting in an adjustment to increase goodwill of $1,976,029, from $10,014,881 to $11,990,910.Subsequent to December 31, 2018 and the 2018 fiscal year end, we sold our entire equity ownership stake in CoinTracking GmbH. See “Note 17 Subsequent Events” for additional details.

The table below summarizes the fair values of the assets acquired and liabilities assumed, translated from euros to USD, at the date of acquisition:

	CoinTracking GmbH
Cash and cash equivalents	$	1,547,097
Investment in cryptocurrency		1,115,345
Loan receivable – related party		194,380
Other current assets		296,273
Goodwill		11,990,910
Intangible assets		7,726,356
Other assets		14,633
Total assets	$	22,884,994

Current liabilities	$	360,486
Contract liabilities, short term		2,686,858
Contract liabilities, long term		929,866
Noncontrolling interest		9,434,984
Total liabilities		13,412,194
Net assets acquired	$	9,472,800

F- 19

The purchase price was based on the expected financial performance of CoinTracking GmbH and not on the value of the net identifiable assets at the time of acquisition. This resulted in a significant portion of the purchase price being attributed to goodwill. As a result, the Company recognized $11,990,910 of goodwill on the date of acquisition.

Unaudited pro forma financial information

The unaudited pro forma financial information in the table below presents the combined results of the Company and CoinTracking GmbH as if the acquisition had occurred on January 1, 2018. The unaudited pro forma financial information includes adjustments required under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the acquisition actually occurred on January 1, 2018.

For the year ended December 31, 2018:

	2018
Revenue	$	3,553,979
Net loss		(18,579,800	)
Basic and diluted loss per share:
Basic and diluted	$	(0.88	)

Subsequent to December 31, 2018, we sold our entire equity ownership stake in CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details.

NOTE 6 – SUBSCRIPTION REVENUE RECOGNITION

CoinTracking GmbH accounts for a contract when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue was recognized when control of the promised services was transferred to the Company’s customers over time, and in an amount that reflects the consideration the Company was contractually due in exchange for those services. Most of the Company’s contracts with customers were single, or had few distinct performance obligations, and the transaction price was allocated to each performance obligation using the stand-alone selling price.

Transaction Price

The objective of determining the transaction price was to estimate the amount of consideration the Company was due in exchange for services, including amounts that are variable. CoinTracking GmbH has a standalone sales price for its subscription service, which varies based on length of subscription. Further, the Company excluded from the measurement of transaction price all taxes assessed by governmental authorities that were both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts were not included as a component of revenue or cost of revenue.

F- 20

Estimates of certain revenue

Revenue collected in advance for subscriptions ranging from annual to perpetual packages were deferred and recognized as revenue on a straight-line basis over the terms of the applicable subscription period or performance obligation period. For “lifetime” revenue packages, where the customer had access to the website for an unlimited length of time, the Company elected to recognize revenue on a straight-line basis over three years. We believe that based on the short history of customer data, customer relationship period, and number of available alternative providers, and anticipation of future changes to the blockchain industry, a measure of three years of performance obligation to customers was appropriate.

Net Revenue and Charge-back Reserves

CoinTracking GmbH does not maintain an allowance for doubtful accounts because the customer prepays for subscription in advance before access is provided to CoinTracking GmbH’s website. The Company maintained a reserve for potential credits issued to consumers or other revenue adjustments when necessary. In addition, as of December 31, 2018, PayPal withheld $47,872 for potential credits issued to customers, which is included in assets held for sale on the Company’s consolidated balance sheets. As of December 31, 2017, the Company did not have consolidated contract liabilities.

Contract Liabilities

Contract liabilities were recorded when payments were received or due in advance of performing CoinTracking GmbH’s service obligations and was recognized over the service period, which primarily related to prepayments of subscription revenue. At the acquisition date of January 26, 2018, CoinTracking GmbH’s total contract liabilities were $3,616,724, and we recognized revenue of $3,553,979 for the year ended December 31, 2018. As of December 31, 2018, $1,750,465 of current contract liabilities and $847,461 of long-term contract liabilities are included in liabilities held for sale. As of December 31, 2017, we did not have consolidated contract liabilities.

Assets Recognized from the Costs to Obtain a Contract with a Customer

CoinTracking GmbH has determined that certain costs associated with affiliate payments paid to customers pursuant to certain sales incentive programs, meet the requirements to be capitalized as a cost of obtaining a contract. Affiliates are paid in Bitcoins and expense is amortized over the applicable subscription period.

During the year ended December 31, 2018, the Company recognized expense of $208,104 related to the amortization of affiliate payments. The aggregate contract asset balance at December 31, 2018 was $106,026, included in assets held for sale. Subsequent to December 31, 2018, we sold our entire equity ownership stake in CoinTracking GmbH. See “Note 17 - Subsequent Events” for additional details.

NOTE 7 – INVESTMENTS, NON-CRYPTOCURRENCY

The Company has invested $417,818 in non-tradeable token pre-sale and SAFT agreements, including $250,000 during the year ended December 31, 2018. In addition, the Company invested $250,000 during the year ended December 31, 2018 as part of a financing in accordance with a SAFE investment in a private enterprise. These investments are included as Level 3 investments as there was no active market as of December 31, 2018.

The Company establishes processes and procedures to ensure that the valuation methodologies that are categorized within Level 3 are fair, consistent and verifiable. Non-cryptocurrency investments are carried at cost which approximates fair value at December 31, 2018. The Company considers the length of its investments, of which a majority were made during the current year, as well as its comprehensive investment process which includes reviews of white papers, preparation of either short or long forms analysis that is reviewed by the Company’s internal investment committee, among other factors in determining fair value. At the time that the investments are tokenized and available on active market exchanges, the investments will be reclassified to investments in cryptocurrency

F- 21

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 investments for the year ended December 31, 2018:

	Level 3
	Non-Cryptocurrency

Balance at December 31, 2017	$	167,818
Transfers to investments in cryptocurrency		(255,763	)
Purchases, sales, issuances, and settlement, net		500,000
Impairment		(410,050	)
Balance at December 31, 2018	$	2,005

These investments are included in assets held for sale at December 31, 2018.

NOTE 8 – EQUIPMENT

Equipment consists of the following at December 31:

	2018			2017
Computer equipment	$	114,244		$	69,241
Furniture equipment		20,980			3,754
		135,224			72,995
Less accumulated depreciation		(35,522	)		(4,675	)
	$	99,701		$	68,320

Depreciation expense for equipment was $30,847 and $4,675 for the year ended December 31, 2018 and the period from Inception through December 31, 2017, respectively. Depreciation expense is included in selling, general and administrative expenses.

Equipment of $10,369 are included in assets held for sale at December 31, 2018.

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company’s goodwill balance is the result of the acquisition of CoinTracking GmbH in the current year (see Note 5 - Acquisition). Intangible assets include software development costs, related to the CoinTracking GMBH SaaS platform, customer base and trade name.

The carrying amount of goodwill for the year ended December 31, 2018 was as follows:

	December 31, 2018
Balance at December 31, 2017	$	-
Acquisitions		11,990,910
Impairment		(9,356,105	)
Foreign translation impact		(940,100	)
	$	1,694,705

F- 22

The carrying amounts of intangible assets for the year ended December 31, 2018 was as follows:

	Estimated Useful Life	Gross Carry Amount		Accumulated Amortization			Impairment			Balance as of December 31, 2018
Trade name	-	$	1,797,768		-		$	(993,833	)	$	803,935

Software	5 Years		4,264,412		(795,888	)		(2,366,546	)		1,101,978
Customer base	5 Years		1,058,422		(197,458	)		(270,267	)		590,697
Capitalized software	5 Years		127,937		(15,104	)		(112,833	)		-
		$	7,248,539	$	(1,008,450	)	$	(3,743,479	)	$	2,496,610

Intangible assets with finite useful lives are amortized over their respective estimated useful lives. Amortization expense related to intangible assets was $1,008,450 year ended December 31, 2018. There was no amortization expense related to intangible assets in the prior year from Inception through December 31, 2017.

Amortization expense for intangible assets is included in general and administrative expenses.

The Company’s goodwill and intangible assets relate to CoinTracking GmbH and are therefore included as held for sale on the consolidated balance sheets, and amortization expense and impairment losses are included in loss from discontinued operations in the consolidated statements of operations for the year ended December 31, 2018.

Impairment of goodwill and indefinite lived intangible assets

The Company performed its annual impairment test at December 31, 2018. Based on the guidance in ASC 350 – Intangibles – Goodwill and Other, management of the Company elected to bypass the qualitative assessment of goodwill and proceeded directly to performing the first step of the goodwill impairment test. The first step of the goodwill impairment test indicated that the fair value of goodwill was below its carrying value, indicating impairment. The Company then performed the second step of the goodwill impairment test, comparing the implied fair value of goodwill to its carrying value, resulting in an impairment charge of $9,356,105. In addition, the Company recognized an impairment charge of $998,833 related to the Trade Name indefinite lived intangible asset.

CoinTracking GmbH was acquired in the first quarter of 2018, shortly after bitcoin and other cryptocurrencies reached their highest market values, resulting in significant customer signups for CoinTracking GmbH’s software subscription service. Beginning in early 2018, the market value of cryptocurrencies declined sharply, resulting in a steady decline in new customer signups. While software subscription revenues for 2018 were in line with the Company’s projections, the Company reduced its projected revenue expectations for future years in line with the decline in new customer signups. Subsequent to December 31, 2018, the Company agreed to sell the software subscription business back to the noncontrolling shareholder at sales price of $2,200,000, significantly below the $9,472,800 purchase price paid by the Company in January 2018. See “Note 17 - Subsequent Events” for additional details.

The Company estimates the fair value of its reporting units using a weighting of fair values derived from both the income approach and the market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. The weighting of the fair value derived from the market approach ranges from 0% to 50% depending on the level of comparability of these publicly traded companies to the reporting unit. The Company used a 50% weighting of these two approaches in determining the fair value of CoinTracking GmbH, which fair value approximated the Company’s sales price.

F- 23

NOTE 10 – WARRANTS FOR COMMON STOCK

As of December 31, 2018, outstanding warrants to purchase shares of the Company’s common stock were as follows:

Number of Shares

Issuance Date

Exercisable
for

Expiration
Date

Exercise
Price

Outstanding
Under Warrants

September 2017

Common Shares

September 25, 2020

2.00

168,125

The warrants expire on the third anniversary of their issuance dates. The exercise price of the warrants is subject to adjustment from time to time, as provided therein, to prevent dilution of purchase rights granted thereunder. The warrants are considered indexed to the Company’s own stock and therefore no subsequent remeasurement is required.

NOTE 11 – SUMMARY OF STOCK OPTIONS

On July 21, 2017, the Company’s board of directors adopted The Crypto Company 2017 Equity Incentive Plan (the “Plan”), which was approved by its stockholders on August 24, 2017. The Plan is administered by the board of directors (the “Administrator”). Under the Plan, the Company may grant equity awards to eligible participants which may take the form of stock options (both incentive stock options and non-qualified stock options) and restricted stock awards. Awards may be granted to officers, employees, non-employee directors (as defined in the Plan) and other key persons (including consultants and prospective employees). The term of any stock option award may not exceed 10 years and may be subject to vesting conditions, as determined by the Administrator. Options granted generally vest over eighteen to thirty-six months. Incentive stock options may be granted only to employees of the Company or any subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Internal Revenue Code.

During the year ended December 31, 2018, the Company issued an additional 450,000 stock options to members of its board of directors, 1,957,062 stock options to employees, and 400,000 stock options to non-employees.

5,000,000 shares of the Company’s common stock are reserved for issuance under the Plan. As of December 31, 2018, there are outstanding stock option awards issued from the Plan covering a total of 1,401,612 shares of the Company’s common stock and there remain reserved for future awards 3,544,459 shares of the Company’s common stock.

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number			Exercise		Term		Intrinsic
	of Shares			Price		(years)		Value
Options outstanding at December 31, 2016		-
Options granted		657,031		$	2.28
Options cancelled		-			-
Options exercised		(12,500	)	$	1.00
Options outstanding, at December 31, 2017		644,531		$	2.32
Options granted		2,807,062		$	7.37
Options cancelled		(2,008,552	)	$	6.93
Options exercised		(41,429	)	$	2.09
Options outstanding, at December 31, 2018		1,401,612		$	5.83		9.08	$	-
Exercisable		1,013,635		$	6.16		9.10	$	-
Vested and exercisable and expected to vest, end of period		1,401,612		$	5.83		9.08	$	-

F- 24

The Company recognized $2,795,891 and $5,786,979, of compensation expense related to stock options for the year ended December 31, 2018 and the period from Inception to December 31, 2017, respectively.

The total intrinsic value for options exercised, determined using the market price of our common stock on the date of exercise, was $295,763 and $7,175,000 during the year ended December 31, 2018 and the period from Inception to December 31, 2017, respectively.

During the year ended December 31, 2018 and the period from Inception through December 31, 2017 the Company did not grant any restricted stock awards.

As of December 31, 2018, approximately $357,058 of total unrecognized compensation costs related to stock options issued to employees is expected to be recognized over a weighted average period of approximately 1.18 years.

The determination of the fair value of share-based compensation awards utilizing the Black-Scholes model is affected by the Company’s stock price and a number of complex and subjective assumptions, including stock price, volatility, expected life of the equity award, forfeitures rates if any, risk-free interest rates and expected dividends. Volatility is based on the historical volatility of comparable companies measured over the most recent period, generally commensurate with the expected life of the Company’s stock options, adjusted for future expectations given the Company’s limited historical share price data.

The risk-free rate is based on implied yields in effect at the time of the grant on U.S. Treasury zero-coupon bonds with remaining terms equal to the expected term of the stock options. The expected dividend is based on the Company’s history and expectation of dividend payouts. Forfeitures are recognized when they occur.

The range of assumptions used for the year ended December 31, 2018 and the period from Inception through December 31, 2017 are as follows:

	Year ended December 31, 2018			Period from Inception through December 31, 2017
		Ranges			Ranges
Volatility		48 – 55	%		36 – 48	%
Expected dividends		0	%		0	%
Expected term (in years)		5 – 10 years			5 – 10 years
Risk-free rate		1.81 – 3.12	%		1.81 – 2.36	%

Stock options issued to nonemployees are revalued at each vesting tranche and/or reporting date in accordance with ASC 505.

NOTE 12 – RELATED PARTY TRANSACTIONS

The Company has a services agreement with Full Stack Finance for chief financial officer and accounting outsource services. Ivan Ivankovich, the Company’s CFO, is the Co-Managing Director of Full Stack Finance. The Company paid a total of $476,287 and $111,075 in fees to Full Stack Finance during the year ended December 31, 2018 and the period from Inception to December 31, 2017, respectively. There was a balance of $133,834 due to Full Stack Finance, at December 31, 2018. There was no balance due to Full Stack at December 31, 2017.

The Company has a loan receivable from an officer of CoinTracking GmbH as of December 31, 2018 totaling $170,684. The loan is due upon demand and it bears interest at 2%. During the year ended December 31, 2018 and the period from Inception to December 31, 2017 interest income accrued for this loan was $3,300 and $0, respectively, which is included in other income/(expense) on the accompanying consolidated statements of operations. During the year ended December 31, 2018, the company sold $939,155 in cryptocurrency held by CoinTracking GmbH to an officer of CoinTracking GmbH, in accordance with a shareholder resolution entered into on September 21, 2018.

F- 25

On April 3, 2018, CoinTracking entered into a Loan Agreement (the “Loan Agreement”) with CoinTracking GmbH, pursuant to which CoinTracking GmbH may provide a loan (the “CoinTracking Loan”) of up to $3,000,000 to CoinTracking, to be advanced to CoinTracking in one or more tranches, at such times and in such amounts as may be requested by CoinTracking from time to time, on or before the tenth anniversary of the Loan Agreement. The Company is deemed obligor of CoinTracking’s obligations under the Loan Agreement for United States Federal income tax purposes. Interest on the CoinTracking Loan will accrue at a rate per annum of the greater of (i) three percent (3%), or (ii) the interest rates published monthly by the United States Internal Revenue Service and in effect under section 1274(d) of the Internal Revenue Code in effect as of the date of issuance of any promissory note under the CoinTracking Loan, and will be payable quarterly. During the year ended December 31, 2018, pursuant to the Loan Agreement, CoinTracking GmbH advanced $1,500,000 to CoinTracking in exchange for three promissory notes (the “CoinTracking Note”) in the amounts of $300,000, $700,000 and $500,000, respectively, which is still outstanding as of December 31, 2018. The CoinTracking Note will mature on the second anniversary thereof. CoinTracking and CoinTracking GmbH are consolidated entities, as such, the loan and advances are intercompany transactions and are eliminated in consolidation. Subsequent to December 31, 2018, the Company sold its equity ownership stake in CoinTracking GmbH, and $1,200,000 of the sale proceeds were applied toward repayment of the $1,500,000 outstanding loan amount under the CoinTracking Note. See “Note 17 - Subsequent Events” for additional details.

Effective May 14, 2018, Michael Poutre, former Chief Executive Officer and director of the Company resigned from all of his then-current roles with the Company. Mr. Poutre remained a consultant until November 2018. In connection with Mr. Poutre’s resignation, the Company entered into a Separation and Consulting Agreement and General Mutual Release (the “Separation and Consulting Agreement”), which was executed on May 9, 2018 and approved by the Board of Directors on May 14, 2018. The Separation and Consulting Agreement was not effective until May 17, 2018, following the end of the revocation period. The Separation and Consulting Agreement provides that the Company pays Mr. Poutre a lump-sum cash payment of (i) his earned but unpaid base salary, (ii) his accrued but unpaid vacation time, and (iii) any outstanding requests for expense reimbursements that are approved pursuant to Company policy. Mr. Poutre served as a consultant of the Company for six months at a rate of $30,000 per month, payable in two separate tranches. The Separation and Consulting Agreement contains other standard provisions contained in agreements of this nature including non-disparagement and a general release of any and all claims. During 2018, the Company paid Mr. Poutre $90,000 of the $180,000 due in connection with his Separation and Consulting Agreement. Subsequent to December 31, 2018, the Company reached a settlement with Mr. Poutre, reducing the final amount due to $40,000 (see Note 17 – Subsequent Events).

NOTE 13 – BASIC AND DILUTED LOSS PER SHARE

The following is a reconciliation of the basic and diluted loss per share computations for the year ended December 31, 2018 and the period from Inception through December 31, 2017:

	Year ended December 31, 2018			Period from Inception through December 31, 2017
					(Restated)
Numerator for basic and diluted income per share:
Net loss from continuing operations attributable to the Company	$	(9,043,978	)	$	(10,094,554	)

Discontinued operations:
Income/(loss) attributable to the Company		(9,859,271	)		541,253
Net loss per share attributable to the Company	$	(18,903,249	)	$	(9,553,301	)

Denominator for basic and diluted income per share:
Weighted average shares (basic)		21,096,881			16,746,792
Common stock equivalents		-			-
Weighted average shares (diluted)		21,096,881			16,746,792

Basic and diluted income (loss) per share:
Net loss from continuing operations attributable to the Company	$	(0.43	)	$	(0.60	)
Net loss from discontinued operations attributable to the Company		(0.47	)		0.03
Net loss attributable to the Company	$	(0.90	)	$	(0.57	)

F- 26

NOTE 14 - COMMITMENTS AND CONTINGENCIES

On November 1, 2018, the Company relocated its corporate office and entered into a month-to-month office agreement with Regus Management Group, LLC for $344 per month. Facility rent expense was $107,053 and $45,000 for the year ended December 31, 2018 and for the period from inception through December 31, 2017, respectively.

Legal Contingencies – As previously disclosed, we received a subpoena on May 15, 2018, from the SEC’s Division of Enforcement in connection with a formal investigation it is conducting involving us as well as other unrelated public issuers who are holders of or provide services related to digital assets. The subpoena requested that we produce certain documents to the SEC’s Division of Enforcement by May 30, 2018. We are unable to predict how long the SEC’s investigation will continue or whether, at the conclusion of its investigation, the SEC will seek to impose fines or file an enforcement action against us. Additionally, the Company may from time to time become subject to legal proceedings, claims, and litigation arising in the ordinary course of business.

Indemnities and guarantees - During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company’s officers and directors, under which the Company may be required to indemnify such persons for liabilities arising out of their respective relationships. In connection with its facility lease, the Company has indemnified the lessor for certain claims arising from the use of the facility. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheet.

NOTE 15 - Discontinued Operations

On December 28, 2018, the Company entered into an agreement to sell its controlling interest in CoinTracking GmbH, which sale was completed subsequent to December 31, 2018. See “Note 17 - Subsequent Events” for additional details. CoinTracking GmbH was acquired by the Company on January 26, 2018. In addition, during the fourth quarter of 2018, there was a strategic shift in the Company’s business away from cryptocurrency investing to blockchain consulting and education. As a result of the sale of CoinTracking GmbH and the shift in the Company’s operations, the Company reclassified the assets and liabilities divested as held for sale as of December 31, 2018. The Company’s financial results for the prior period from Inception through December 31, 2017 does not included the results of CoinTracking GmbH, which was acquired in 2018. The Company retained no ownership in CoinTracking GmbH and has no continuing involvement with CoinTracking GmbH as of the date of the sale of the controlling interest. In addition, the Company discontinued its cryptocurrency investment segment. The statement of operations and balance sheet impact below for the period from Inception through December 31, 2017 and as of December 31, 2017 reflect the operations of the cryptocurrency investment segment.

F- 27

A reconciliation of the operations of the cryptocurrency investment segment and CoinTracking GmbH to the Consolidated Statement of Operations is shown below:

	Year Ended December 31, 2018			For the period from Inception March 9, 2017 through December 31, 2017

Revenue:
Subscription revenue, net	$	3,553,979		$	-

Operating expenses:
Cost of subscription revenues		350,348			-
General and administrative expenses		3,623,234			199,937
Share-based compensation		911,003			40,182

Total Operating Expenses		4,884,585			(240,119	)

Operating loss		(1,330,606	)		(240,119	)

Net realized gains on investment in cryptocurrency		1,303,130			781,373
Impairment of investments, cryptocurrency		(2,066,803	)		-
Impairment of investments, non-cryptocurrency		(410,050	)		-
Impairment of assets held for sale		(743,987	)		-
Impairment of goodwill		(9,356,105	)		-
Impairment of intangibles		(3,743,480	)
Other income(expense)		144,608			-

Income/(loss) before provision for income taxes		(16,203,293	)		541,254

Provision for income taxes		172,838			-
Net income/(loss)	$	(16,376,131	)	$	541,254
Loss attributable to noncontrolling interest		(6,516,860	)		-
Income/(loss) attributable to Crypto Company	$	(9,859,271	)	$	541,254

The loss attributable to the Crypto Company of $9,859,271 for the year ended December 31, 2018 is comprised of a loss of $1,844,896 from the cryptocurrency investment segment, $6,542,979 representing 50.1% of CoinTracking GmbH’s operations loss from their stand-alone financial statements, $743,987 impairment of assets held for sale and $727,409 of costs incurred by the Company in support of CoinTracking GmbH’s operations, which costs were not allocated to the noncontrolling interest.

A reconciliation of the assets and liabilities held for sale of the cryptocurrency investment segment and CoinTracking GmbH to the consolidated balance sheets is shown below:

	December 31, 2018			December 31, 2017

Cash and cash equivalents	$	1,104,202		$	-
Loan receivable, related party		170,684			-
Prepaid expenses and other current assets		103,086			-
Impairment in assets held for sale		(743,987	)
Contract asset for commissions and incentives, current portion		73,733			-
Total current assets held for sale		707,718			-
Equipment, net of accumulated depreciation		10,369			-
Contract asset for commissions and incentives, net of current portion		32,293			-
Investment in cryptocurrency		229,280			964,067
Investments, non-cryptocurrency		2,005			167,818
Goodwill		1,694,705			-
Intangible assets, net		2,496,610			-
Other assets		17,083			-
Total noncurrent assets held for sale		4,482,345			1,131,885
Total assets held for sale	$	5,190,063		$	1,131,885

Accounts payable and accrued expenses		362,149			-
Income taxes payable		167,846			-
Contract liabilities, net of current portion		1,750,465			-
Total current liabilities held for sale		2,280,460
Contract liabilities, net of current portion		847,461			-
Total noncurrent liabilities held for sale		847,861			-
Total liabilities held for sale	$	3,127,921		$	-

Cash flows from discontinued operations:
Depreciation and amortization	$	1,047,526		$	-
Impairment of goodwill	$	9,356,105		$	-
Impairment of intangible assets	$	3,743,479		$	-
Capital expenditures	$	19,943		$	-

F- 28

The balance sheet at December 31, 2017 includes the cryptocurrency investment segment. CoinTracking GmbH was not acquired until 2018.

Note 16 – PROVISION FOR Income taxes

Income Tax – The components of the provision for income taxes are as follows:

	For the Year Ended December 31, 2018		For the Period from Inception through December 31, 2017

Current:
Federal	$	-	$	-
State		1,600		800
Total current	$	1,600	$	800

Deferred:
Federal	$	-	$	-
State		-		-
Total deferred	$	-	$	-
Provision for income taxes

Significant Components of the Company’s net deferred tax assets are as follows:

	For the Year Ended December 31, 2018			For the Period from Inception through December 31, 2017

Federal and state carryforwards	$	2,760,996		$	815,300
Stock base compensation		4,157,006			1,764,100
Reserves and accruals		82,576
Other		(9,026	)
		6,991,552			2,579,400
Valuation allowance		(6,991,552	)		(2,579,400	)
	$	-		$	-

F- 29

Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of our lack of U.S. earnings history, the net U.S. deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $4,894,551 during the year ended December 31, 2018.

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income rates of 21% to pre-tax loss as follows for the following periods:

	For the Year Ended December 31, 2018			For the Period from Inception through December 31, 2017

Tax benefit at federal statutory rate	$	(2,569,899	)	$	(2,006,852	)
State income tax, net of federal benefit		(2,138,781	)		(571,548	)
Increase in valuation allowance		6,323,644			2,579,200
Previously unrecognized deferred tax assets		(1,613,364	)		-

Income tax expense	$	1,600		$	800

As of December 31, 2018, we had a net operating loss carryforward for federal income tax purposes of approximately $9,276,216, portions of which will begin to expire in 2037. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization.

Note 17 - SUBSEQUENT EVENTS

On December 28, 2018, CoinTracking entered into an agreement on the purchase and assignment of shares, agreements on a purchase price of loan agreement and a compensation agreement, pursuant to the laws of the Republic of Germany, with Kachel Holding and CoinTracking GmbH pursuant to which, on January 2, 2019, CoinTracking sold 12,525 shares of equity interest in CoinTracking GmbH, representing 50.1% of the outstanding equity interests in CoinTracking GmbH and CoinTracking’s entire equity ownership stake in CoinTracking GmbH, to Kachel Holding in exchange for $2,200,000, of which (i) $1,000,000 was paid in cash to CoinTracking and (ii) $1,200,000 was applied toward the repayment of an outstanding loan in the amount of $1,500,000 from CoinTracking GmbH to CoinTracking under the CoinTracking Note.

On January 15, 2019, the Company entered into a settlement agreement with Mr. Poutre, whereby the Company agreed to pay Mr. Poutre $40,000 as settlement of all amounts outstanding in connection with his Separation and Consulting Agreement. In connection with the settlement the Company reduced its accounts payable and accrued expenses to $40,000 as of December 31, 2018.

F- 30

EXHIBIT 4.1

DESCRIPTION OF CAPITAL STOCK

The following describes the common stock and certain provisions of the Articles of Incorporation, as amended (the “Articles of Incorporation”), and Amended and Restated By-laws (the “By-laws”) of The Crypto Company (the “Company”), and certain related rights. This description is only a summary and is qualified in its entirety by reference to the Articles of Incorporation and the By-laws as amended, each of which have been filed with the Securities and Exchange Commission.

General

The authorized capital stock of the Company consists of 50,000,000 shares of common stock, par value $.001 per share (“common stock”). The common stock is listed on the OTC Grey market under the symbol “CRCW”.

Voting Rights

Each outstanding share of common stock entitles the holder thereof to one vote on all matters submitted to a vote of stockholders. There is no cumulative voting in the election of directors; consequently, the holders of a majority of the outstanding shares of common stock can elect all of the directors then standing for election.

Dividend Rights

Subject to applicable law and the Articles of Incorporation, dividends upon the shares of capital stock of the Company may be declared by the Company’s board of directors (the “Board of Directors”) at any regular or special meeting of the Board of Directors. Dividends may be paid in cash, in property or in shares of the Company’s capital stock, unless otherwise provided by applicable law or the Articles of Incorporation.

No Preemptive or Similar Rights

Holders of common stock have no conversion, redemption or preemptive rights to subscribe to any securities of the Company. All outstanding shares of common stock are fully paid and nonassessable.

Liquidation Rights

In the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up of the Company, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Company, tangible and intangible, of whatever kind available for distribution to stockholders, ratably in proportion to the number of shares of the Common Stock held by each.

Certain Articles of Incorporation and By-laws Provisions

Term of Board of Directors. The Articles of Incorporation and By-laws provide that each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal.

Number of Directors. The By-laws provide that the Board of Directors shall consist of not less than one and not more than seven members.

Special Meetings. The Articles of Incorporation and By-laws provide that special meetings of stockholders may be called pursuant to a resolution approved by the Board of Directors or by any two directors and may not be called by any other person or persons. The only business which may be conducted at a special meeting shall be the matter or matters set forth in the notice of such meeting.

EXHIBIT 21

SUBSIDIARIES

NAME	JURISDICTION OF INCORPORATION		PERCENTAGE OWNERSHIP

Crypto Sub, Inc.		Nevada		100	%

CoinTracking, LLC		Nevada		100	%

Malibu Blockchain, LLC		Nevada		100	%

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Ron Levy, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Crypto Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2019

/s/ Ron Levy
Ron Levy
Chief Executive Officer, Chief Operating Officer and Secretary
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Ivan Ivankovich, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Crypto Company;

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2019

/s/ Ivan Ivankovich
Ivan Ivankovich
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Crypto Company. (the “Company”) for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ron Levy, Chief Executive Officer, Chief Operating Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of July 26, 2019.

/s/ Ron Levy
Ron Levy
Chief Executive Officer, Chief Operating Officer and Secretary
(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Crypto Company (the “Company”) for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ivan Ivankovich, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of July 26, 2019.

/s/ Ivan Ivankovich
Ivan Ivankovich
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)