What changed in this filing

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Item 1. Financial Statements

2024-08-09 compared with 2024-05-21 · 131 added, 103 removed, 423 unchanged (36% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2024

June 30, 2024

December 31, 2023

8 unchanged sentences

Equipment notes payable

Convertible notes payable

Notes payable

Notes payable – related parties

Convertible notes payable

Derivative liabilities

3 unchanged sentences

Stockholders’ deficit:

Preferred shares, $ 0.001 par value, 4,999,000 shares authorized March 31, 2024 and December 31, 2023;

none issued and outstanding

Common shares, $ 0.001 par value, 950,000,000 shares authorized March 31, 2024 and December 31, 2023;

390,687,459 shares issued and outstanding, March 31, 2024 and December 31, 2023

Preferred shares, $ 0.001 par value, 4,999,000 shares authorized June 30, 2024 and December 31, 2023;

no ne issued and outstanding

Common shares, $ 0.001 par value, 950,000,000 shares authorized June 30, 2024 and December 31, 2023;

390,687,459 shares issued and outstanding, June 30, 2024 and December 31, 2023

Additional paid-in capital

11 unchanged sentences

For the three months ended

March 31, 2024

March 31, 2023

For the six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Operating expenses:

4 unchanged sentences

( 2,130,370 )

Other expense:

Other income (expense):

Interest expense

1 unchanged sentence

Other expense

Refund of equipment deposit

Change in fair value of derivatives

Loss on settlement

Total other expense, net

Loss before provision for income taxes

Total other income (expense), net

Income (loss) before provision for income taxes

( 1,715,371 )

Provision for income taxes

$ ( 451,204 )

Net income (loss)

( 1,715,371 )

8 unchanged sentences

Equity (Deficit)

For the three months ended March 31, 2024 and

For the three and six months ended June 30,

2024 and 2023

Stockholders'

5 unchanged sentences

( 3,584,160 )

Balance June 30, 2024

$ ( 39,432,556 )

$ ( 3,899,638 )

Balance December 31, 2022

8 unchanged sentences

( 2,125,221 )

Balance June 30, 2023

$ ( 37,595,499 )

$ ( 2,062,581 )

See accompanying notes to the unaudited consolidated

2 unchanged sentences

Consolidated Statements of Cash Flows

For the three months ended

March 31, 2024

March 31, 2023

For the six months ended

June 30, 2024

June 30, 2023

Operating Activities:

6 unchanged sentences

Stock-based compensation

Loss on cryptocurrency transactions

Change in fair value of derivative liabilities

6 unchanged sentences

Proceeds from sale of cryptocurrencies

Net cash provided by investing activities

Purchase of cryptocurrencies

Net cash provided by (used in) investing activities

Financing Activities:

Payments on preferred B shares

Net cash used in financing activities

Proceeds from convertible notes payable

Proceeds from related party advances

Payments on convertible notes

Net cash provided by (used in) financing activities

Net change in cash

4 unchanged sentences

Income taxes paid

Supplemental Disclosures of Noncash Financing Information:

Convertible notes issued in exchange for cryptocurrency

Note payable issued in exchange for cryptocurrency

Cryptocurrency used to pay accounts payable

See accompanying notes to the unaudited consolidated

2 unchanged sentences

Notes to the Consolidated Financial Statements

1 – Basis of Presentation

NOTE 1 – Basis of Presentation

The accompanying unaudited interim financial statements

37 unchanged sentences

Schedule of liabilities measured at fair value

Fair Value Measurements at March 31, 2024

Fair Value Measurements at June 30, 2024

Derivative liabilities

2 unchanged sentences

The Company had no assets valued using level 1,

level 2, or level 3 inputs as of March 31, 2024 or December 31, 2023.

level 2, or level 3 inputs as of June 30, 2024 or December 31, 2023.

Derivative Financial Instruments

114 unchanged sentences

of assets and liabilities should the Company be unable to continue as a going concern.

At March 31, 2024, the Company had not yet achieved

At June 30, 2024, the Company had not yet achieved

profitable operations and expects to incur further losses as it has suspended its operations until such time, if any, that the Company

12 unchanged sentences

NOTE 4 – Related Party Transactions

As of March 31, 2024 the Company owed the executive

As of June 30, 2024 the Company owed the executive

officers of the Company $ 1,193,338 in accrued payroll for services performed.

During the year ended December 31, 2023, the executive

officers of the Company advanced $ 16,000 to the Company for working capital needs.

The advances are non-interest bearing and are due on

During the six months ended June 30, 2024, the

executive officers of the Company advanced $ 16,725 to the Company for working capital needs.

During the year ended December 31, 2023,

the executive officers of the Company advanced $ 16,000 to the Company for working capital needs.

The advances are non-interest bearing

and are due on demand.

As of June 30, 2024 the total amount owed was $ 32,725 .

NOTE 5 – Equity

11 unchanged sentences

On July 19, 2022, the Company designated 1,000,000

shares of its original 5,000,000 authorized shares of Preferred Stock as Series B Preferred Stock with a $ 0.001 par value and a stated

value of $1.00 per share.

The Series B Convertible Preferred Stock ranks senior to the common stock with respect to dividends and right

of liquidation and has no voting rights.

The Series B Convertible Preferred Stock has an 8 % cumulative annual dividend.

of default, the dividend rate increases to 22%.

The Company may not, with consent of a majority of the holders of Series B Convertible

Preferred Stock, alter or changes the rights of the Series B Convertible Preferred Stock, amend the articles of incorporation, create

any other class of stock ranking senior to the Series B Convertible Preferred Stock, increase the authorized shares of Series B Convertible

Preferred Stock, or liquidate or dissolve the Company.

Beginning 180 days from issuance, the Series B Convertible Preferred Stock may

be converted into common stock at a price based on 65% of the average of the two lowest trading prices during the 15 days prior to conversion.

The Company may redeem the Series B Convertible Preferred Stock during the first 180 days from issuance, subject to early redemption penalties

of up to 25%.

The Series B Convertible Preferred Stock must be redeemed by the Company 12 months following issuance if not previously

redeemed or converted.

Based on the terms of the Series B Convertible Preferred Stock, the Company determined that the preferred stock

is mandatorily redeemable and will be accounted for as a liability under ASC 480.

As of March 31, 2024, there are no shares of the Series

B preferred shares outstanding.

shares of its original 5,000,000

authorized shares of Preferred Stock as Series B Preferred Stock with a $ 0.001

par value and a stated value of $1.00 per share.

The Series B Convertible Preferred Stock ranks senior to the common stock with

respect to dividends and right of liquidation and has no voting rights.

The Series B Convertible Preferred Stock has an 8 %

cumulative annual dividend.

In the event of default, the dividend rate increases to 22%.

The Company may not, with consent of a

majority of the holders of Series B Convertible Preferred Stock, alter or changes the rights of the Series B Convertible Preferred

Stock, amend the articles of incorporation, create any other class of stock ranking senior to the Series B Convertible Preferred

Stock, increase the authorized shares of Series B Convertible Preferred Stock, or liquidate or dissolve the Company.

Beginning 180

days from issuance, the Series B Convertible Preferred Stock may be converted into common stock at a price based on 65% of the

average of the two lowest trading prices during the 15 days prior to conversion.

The Company may redeem the Series B Convertible

Preferred Stock during the first 180 days from issuance, subject to early redemption penalties of up to 25%.

Convertible Preferred Stock must be redeemed by the Company 12 months following issuance if not previously redeemed or converted.

Based on the terms of the Series B Convertible Preferred Stock, the Company determined that the preferred stock is mandatorily

redeemable and will be accounted for as a liability under ASC 480.

As of June 30, 2024, there are no

shares of the Series B preferred shares outstanding.

Common shares

The Company has authorized 950,000,000 shares

of common stock, par value of $ 0.001 , and as of March 31, 2024 has issued 390,687,459 shares of common stock.

of common stock, par value of $ 0.001 , and as of June 30, 2024 has issued 390,687,459 shares of common stock.

All of the common shares

1 unchanged sentence

Stock Options

As of March 31, 2024, the Company has $ 22,529,707

As of June 30, 2024, the Company has $ 22,529,707

of value remaining to be expensed based upon completions of milestones, of which $ 21,679,711 is contingently subject to expense recognition

2 unchanged sentences

The following table summarizes the stock option

activity for the three months ended March 31, 2024:

Schedule of stock option

activity for the six months ended June 30, 2024:

Schedule of stock option activity

Weighted-Average Exercise Price Per Share

Outstanding, December 31, 2023

Outstanding, March 31, 2024

As of March 31, 2024, the Company had 85,907,990

Outstanding, June 30, 2024

As of June 30, 2024, the Company had 85,907,990

stock options that were exercisable and 137,473 that are in dispute.

The weighted average remaining life of all outstanding stock options

was 3.5 years as of March 31, 2024.

was 3.25 years as of June 30, 2024.

Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying

3 unchanged sentences

The following table summarizes the stock warrant

activity for the three months ended March 31, 2024:

activity for the six months ended June 30, 2024:

Schedule of stock warrant

1 unchanged sentence

Outstanding, December 31, 2023

Outstanding, March 31, 2024

Outstanding, June 30, 2024

NOTE 6 – Notes Payable and Convertible

1 unchanged sentence

Notes Payable

Pursuant to the merger agreement, the Company

acquired outstanding note payables in the amount of $ 35,000 .

These loans were advanced as due on demand and no communication has been

received from the original lenders.

Pursuant to the Company’s Agreement and

Plan of Merger and Reorganization effective January 31, 2022, the Company acquired outstanding note payables in the amount of $ 35,000 .

These loans were advanced as due on demand and no communication has been received from the original lenders.

Equipment Notes Payable

12 unchanged sentences

balances in equipment notes payable on the Company's balance sheet.

The balance of the loans as of March 31, 2024 is $ 1,179,972 , which

The balance of the loans as of June 30, 2024 is $ 1,179,972 , which

is due on demand as a result of the default.

12 unchanged sentences

upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined.

As of March 31, 2024, the balance on the note is $ 42,262 , with a remaining unamortized discount of $ 0 .

During the six months ended June 30, 2024, the Company repaid $ 10,000 of principal on the note.

As of June 30, 2024, the note is in default

and the balance on the note is $ 32,262 , with a remaining unamortized discount of $ 0 .

In addition, on April 11, 2023, the Company entered

into an additional Securities Purchase Agreement effective April 20, 2023 with the above investor, pursuant to which the Company sold

the investor an unsecured promissory note in the principal amount of $ 56,962 (the “Convertible Note”), bears interest at a

rate of 8 %, or 22% in the event of default, and matures on April 11, 2024 .

into an additional Securities Purchase Agreement effective April 20, 2023 with 1800 Diagonal Lending LLC, pursuant to which the Company

sold the investor an unsecured promissory note in the principal amount of $ 56,962 (the “Convertible Note”), bears interest

at a rate of 8 %, or 22% in the event of default, and matures on April 11, 2024 .

The Company received net proceeds of $ 50,000 in consideration

7 unchanged sentences

accrued interest combined.

As of March 31, 2024, the balance on the note is $ 94,439 , with a remaining unamortized discount of $ 0 .

As of June 30, 2024, the note is in default and the balance on the note is $ 94,439 , with a remaining unamortized

discount of $ 0 .

On August 4, 2023, the Company entered into a

12 unchanged sentences

to 150% of the then outstanding amount of principal and accrued interest combined.

As of March 31, 2024, the balance on the note is $ 99,529 ,

with a remaining unamortized discount of $ 0 .

On October 20, 2023 the Company received notice

from 1800 Diagonal Lending LLC, the holder of the April Promissory Note, Convertible Note and August Promissory Note (collectively, the

“1800 Notes”) that such notes were in default.

The holder has made demand for the immediate payment of the 1800 Notes of a

sum representing 150% of the remaining outstanding principal balances of the 1800 Notes in the aggregate of $250,008.99, together with

accrued interest and default interest as provided for in the 1800 Notes.

As a result of the default, the 1800 Notes became convertible

into common stock and an additional $ 88,618 of principal was added to the note balance.

In addition, as a result of the default the notes

became convertible at a variable rate resulting in derivative liability accounting under ASC 815.

The fair value of the derivative on

the date of default was charged directly to interest expense, as the notes are passed due.

As of June 30, 2024, the note is in default and the

balance on the note is $ 99,529 , with a remaining unamortized discount of $ 0 .

On October 20, 2023 and May 21, 2024 the Company

received notices from 1800 Diagonal Lending LLC, the holder of the April Promissory Note, Convertible Note and August Promissory Note

(collectively, the “1800 Notes”) that such notes were in default.

The holder has made demand for the immediate payment of

the 1800 Notes of a sum representing 150% of the remaining outstanding principal balances of the 1800 Notes in the aggregate of $226,230,

together with accrued interest and default interest as provided for in the 1800 Notes.

As a result of the default, the 1800 Notes became

convertible into common stock and an additional $ 88,618 of principal was added to the note balance.

In addition, as a result of the default

the notes became convertible at a variable rate resulting in derivative liability accounting under ASC 815.

The fair value of the derivative

on the date of default was charged directly to interest expense, as the notes are passed due.

See further discussion under Note 7.

7 unchanged sentences

of 130% for the period beginning on the issuance date and ending on the maturity date.

As of March 31, 2024, the balance on the note is

As of June 30, 2024, the balance on the note is

The note is past due.

6 unchanged sentences

Promissory Note has a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date.

of March 31, 2024, the balance on the note is $ 57,502 .

of June 30, 2024, the balance on the note is $ 57,502 .

The note is past due.

10 unchanged sentences

The fair values of the conversion option of outstanding

convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on convertible

notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable.

The fair value

of the derivative liabilities was estimated using a binomial model with the following assumptions:

convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on

convertible notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable.

The fair value of the derivative liabilities was estimated using a binomial model with the following assumptions:

Schedule of assumptions for derivative liabilities

As of March 31, 2024

As of June 30, 2024

Conversion Option

3 unchanged sentences

Exercise price

$0.00013-0.01

Derivative liability fair value

Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of March 31, 2024

Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of June 30, 2024

All fair value measurements related to the derivative

2 unchanged sentences

value of the derivative liability during the year ended December 31, 2023:

Schedule of fair

value of derivative liability

Schedule of fair value of derivative liability

Fair value as of December 31, 2023

Fair value on the date of issuance related to principal default

Fair value on the date of issuance related to warrants issued

Fair value on the date of cash repayments

Change in fair value of derivatives

Fair value as of March 31, 2024

Fair value as of June 30, 2024

The total impact of derivative liabilities recognized

in the Company’s consolidated statements of operations includes the change in fair value of derivatives, with the Company recognizing

a total gain of $ 90,185 during the three months ended March 31, 2024.

In addition, as a result of the default, all other potentially dilutive

instruments must also be recorded at fair value pursuant to ASC 815.

in the Company’s consolidated statements of operations includes the change in fair value of derivatives and derivative liabilities

settled upon cash repayments, with the Company recognizing a total loss of $ 152,052 during the six months ended June 30, 2024.

as a result of the default, all other potentially dilutive instruments must also be recorded at fair value pursuant to ASC 815.

NOTE 8 – Cryptocurrency Assets

The Company began cryptocurrency mining activities

during the year ended December 31, 2021.

In addition to mining activities, the Company conducts other business activities using its cryptocurrency

assets as compensation.

The below table represents the cryptocurrency activities during the three months ended March 31, 2024:

The Company conducts various business activities

using its cryptocurrency assets.

The below table represents the cryptocurrency activities during the six months ended June 30, 2024:

Schedule of cryptocurrency

Cryptocurrency at December 31, 2023

Purchases of cryptocurrency

Loss on cryptocurrency

Cryptocurrency at March 31, 2024

Cryptocurrency at June 30, 2024

NOTE 9 – Commitments and Contingencies

6 unchanged sentences

The total number of stock options being contested is 137,473 .

No additional communication has been received related to the claims from Taylor.

No additional communication

has been received related to the claims from Taylor.

NOTE 10 – Subsequent events

On July 5, 2024, the Company received an additional

refund of $275,000 related to prior advances made for the purchase of equipment.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements