Home Bitcoin News Bitcoin Mining CREEK ROAD MINERS, INC. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations (type 10-Q)

CREEK ROAD MINERS, INC. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations (type 10-Q)

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Cautionary Discover Relating to Ahead-Wanting Statements

The next dialogue and evaluation of our monetary situation and outcomes of
operations for the three months ended March 31, 2022 and 2021 needs to be learn in
conjunction with our consolidated monetary statements and associated notes to
these monetary statements which might be included elsewhere on this report. Our
dialogue consists of forward-looking statements primarily based upon present expectations
that contain dangers and uncertainties, similar to our plans, targets,
expectations and intentions. Precise outcomes and the timing of occasions may
differ materially from these anticipated in these forward-looking statements as
a results of a lot of elements, together with these set forth below “Threat Components”
in our Annual Report on Kind 10-Okay for the fiscal 12 months ended December 31, 2021.

We use phrases similar to “anticipate,” “estimate,” “plan,” “undertaking,” “persevering with,”
“ongoing,” “count on,” “consider,” “intend,” “might,” “will,” “ought to,” “may,” and
related expressions to determine forward-looking statements. All forward-looking
statements included on this report are primarily based on data accessible to us on
the date hereof and, besides as required by regulation, we assume no obligation to
replace any such forward-looking statements.


Firm Overview


Creek Street Miners, Inc. (previously generally known as Wizard Manufacturers, Inc., Wizard
Leisure, Inc.
, Wizard World, Inc., and GoEnergy, Inc.) was included in
Delaware on Could 2, 2001. Previous to cryptocurrency mining operations that started in
October 2021, the Firm produced reside and digital popular culture conventions and
occasions, and bought a gelatin machine and associated consumables that have been
discontinued in 2021 As well as, the Firm operated an eCommerce website promoting
popular culture memorabilia that was discontinued on June 30, 2022 (collectively
generally known as “legacy operations”).

On August 6, 2021, we entered into an Asset Buy Settlement (the “Settlement”)
with Informa Pop Tradition Occasions, Inc., a Delaware company (“Informa”).
Pursuant to the Settlement, Creek Street Miners Corp. (fka Kick the Can Corp.)
bought, transferred, and assigned sure property, properties, and rights to
Informa associated to the enterprise of working and producing reside popular culture
occasions. The Firm launched deferred income and different liabilities totaling
$722,429 and acknowledged different earnings of this quantity.

On September 15, 2021, we bought our wholly owned subsidiary which contained our
Jevo property and all rights to our Jevo operations for $1,500,000 and acknowledged
a achieve on the transaction of roughly $1,130,740.


Cryptocurrency Mining


We generate considerably all our income by cryptocurrency we earn by
our mining actions. We have now traditionally mined and held Bitcoin completely,
which we might promote to fund our working and capital expenditures. Whereas we do
not have the intention of mining every other cryptocurrencies within the close to future,
we might develop our mining operations to incorporate extra crypto property if,
after analysis of the monetary deserves of such crypto property primarily based on a quantity
of things, together with the anticipated profitability and value stability of such
crypto property and the flexibility and price of our current miners to mine for such
digital property, we decide that such extra crypto property are fairly
more likely to lead to higher margin than Bitcoin. Our mining operations commenced
on October 24, 2021. We use particular cryptocurrency mining computer systems (generally known as
“miners”) to resolve complicated cryptographic algorithms to help the Bitcoin
blockchain and, in return, obtain Bitcoin as our reward. Miners measure their
processing energy, which is named “hashing” energy, when it comes to the variety of
hashing algorithms solved (or “hashes”) per second, which is the miner’s “hash
price.” We take part in mining swimming pools that pool the assets of teams of
miners and cut up cryptocurrency rewards earned based on the “hashing”
capability every miner contributes to the mining pool.

All the miners we function have been manufactured by Bitmain, and incorporate
application-specific built-in circuit (“ASIC”) chips specialised to resolve
blocks on the Bitcoin blockchains utilizing the 256-bit safe hashing algorithm
(“SHA-256”) in return for Bitcoin cryptocurrency rewards. Cryptocurrency mining
operations started in late 2021 when 240 Bitmain S19J Professional miners with 24 Ph/s of
hashing capability have been positioned in service. As of June 30, 2022, we had 270 Bitmain
S19J Professional miners with 27.0 Ph/s of hashing capability and 270 Bitmain S19 miners
with 24.3 Ph/s of hashing capability that had but to be positioned into service.

On December 17, 2021 the Firm entered right into a Non-Fastened Value Gross sales and
Buy settlement (the “Bitmain Settlement”) with Bitmain Applied sciences Restricted
(“Bitmain”) for 600 Bitmain S19XP miners with a reference value of roughly
$11,250 per miner. The miners have a complete of 84 Ph/s of hashing capability and an
preliminary estimated buy dedication of $6,762,000 (the “whole reference
value”), topic to cost changes and associated offsets, together with potential
changes associated to the market value of miners.

As of June 30, 2022, the market value of miners has dropped considerably to
roughly $7,500 per miner, and the Firm has made funds of $3,969,000
(categorised as deposits on mining gear) to Bitmain pursuant to the Bitmain
Settlement. The remaining quantity due below the Bitmain Settlement primarily based on the
preliminary whole reference value is $2,793,000, nevertheless, the Firm is in
negotiation with Bitmain to make no extra funds below the settlement and solely
obtain the online variety of miners primarily based on the funds thus far of $3,969,000,
and the present market value of roughly $7,500 per miner. Supply of the
S19XP miners is predicted late 2022 by January 2023.


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Cell Information Facilities


We make the most of cell knowledge facilities to accommodate our miners. Our cell knowledge facilities are
situated near pure gasoline wellheads. We use pure gasoline to energy a cell
turbine that produces electrical energy that, in flip, is used to energy our miners.


Mining Outcomes


The Firm measures its operations by the quantity and U.S. Greenback (US$) worth of
the cryptocurrency rewards it earns from its cryptocurrency mining actions.
The next desk presents extra data concerning our cryptocurrency
mining operations:



                                                  Amount of Bitcoin       US$ Quantities
Steadiness September 30, 2021                                           -     $            -
Income acknowledged from cryptocurrency mined                       6.7            369,804
Mining pool working charges                                        (0.1 )           (7,398 )
Impairment of cryptocurrencies                                       -            (59,752 )
Steadiness December 31, 2021                                          6.6     $      302,654
Income acknowledged from cryptocurrency mined                       8.3            343,055
Mining pool working charges                                        (0.2 )           (6,868 )
Impairment of cryptocurrencies                                       -           (106,105 )
Steadiness March 31, 2022                                            14.7     $      532,736
Income acknowledged from cryptocurrency mined                       4.6            166,592
Mining pool working charges                                        (0.1 )           (3,428 )
Proceeds from the sale of cryptocurrency                         (18.9 )         (564,205 )
Realized loss on the sale of cryptocurrency                          -           (131,075 )
Impairment of cryptocurrencies                                       -                (34 )
Steadiness June 30, 2022 (1)                                          0.3     $          586




  (1) As of June 30, 2022, no cryptocurrency awards are being obtained and no
      income from cryptocurrency mining is being generated.



Components Affecting Profitability

Our enterprise is closely dependent in the marketplace value of Bitcoin. The costs of
cryptocurrencies, particularly Bitcoin, have skilled substantial volatility.
Additional affecting the business, and significantly for the Bitcoin blockchain, the
cryptocurrency reward for fixing a block is topic to periodic incremental
halving. Halving is a course of designed to manage the general provide and scale back
the danger of inflation in cryptocurrencies utilizing a Proof-of-Work consensus
algorithm. At a predetermined block, the mining reward is lower in half, therefore the
time period “halving”. For Bitcoin the reward was initially set at 50 Bitcoin forex
rewards per block. The Bitcoin blockchain has undergone halving 3 times
since its inception as follows: (1) on November 28, 2012 at block 210,000; (2)
on July 9, 2016 at block 420,000; and (3) on Could 11, 2020 at block 630,000, when
the reward was decreased to its present stage of 6.25 Bitcoin per block. The subsequent
halving for the Bitcoin blockchain is anticipated to happen in March 2024 at
block 840,000, when the reward might be decreased to three.125 Bitcoin per block. This
course of will reoccur till the entire quantity of Bitcoin forex rewards issued
reaches 21 million and the theoretical provide of recent Bitcoin is exhausted. Many
elements affect the value of Bitcoin, and potential will increase or decreases in
costs prematurely of, or following, a future halving is unknown.

We have now traditionally mined and held Bitcoin completely, which we might promote to
fund our working and capital expenditures. As of June 30, 2022, no
cryptocurrency awards are being obtained and no income from cryptocurrency
mining is being generated.

Our enterprise is closely dependent in the marketplace value of Bitcoin, which has
skilled substantial volatility and has not too long ago dropped to its lowest value
since December 2020. The market value of Bitcoin has dropped by as a lot as
roughly 60% because the starting of 2022, and by as a lot as roughly
70% from its all-time excessive. As well as, the price of pure gasoline that we use to
produce electrical energy to energy our miners has elevated considerably. The price of
pure gasoline has elevated by as a lot as roughly 235% because the starting
of 2022. These value actions lead to decreased cryptocurrency mining income
and elevated cryptocurrency mining prices, each of which have a cloth antagonistic
impact on our enterprise and monetary outcomes.


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Competitors


Our enterprise setting is consistently evolving, and cryptocurrency miners can
vary from people to large-scale business mining operations. We compete
with different firms that focus all or a portion of their actions on mining
actions at scale, together with a number of private and non-private firms. We face
vital competitors in each side of our enterprise, together with, however not
restricted to, the acquisition of mining gear, the flexibility to lift capital,
and the flexibility to acquire the bottom value power to energy our mining operations.


Authorities Regulation


Cryptocurrency is more and more changing into topic to governmental regulation, each
within the U.S. and internationally. State and native rules additionally might apply to
our actions and different actions through which we might take part sooner or later.
Quite a few regulatory our bodies have proven an curiosity in regulating blockchain or
cryptocurrency actions. For instance, on March 9, 2022 President Biden signed
an government order on cryptocurrencies. Whereas the manager order doesn’t
mandate any particular rules, it instructs numerous federal businesses to
take into account potential regulatory measures, together with the analysis of the creation
of a U.S. Central Financial institution digital forex. Future modifications to current rules
or totally new rules might have an effect on our enterprise in methods it’s not presently
attainable for us to foretell with any cheap diploma of reliability. Because the
regulatory and authorized setting evolves, we might develop into topic to new legal guidelines and
regulation which can have an effect on our mining and different actions. For added
dialogue concerning our perception concerning the potential dangers current and future
regulation pose to our enterprise, see the Part entitled “Threat Components” in our
Annual Report on Kind 10-Okay for the fiscal 12 months ended December 31, 2021.


COVID-19


We’re topic to dangers and uncertainties because of the COVID-19 pandemic.
The extent of the impression of the COVID-19 pandemic on our enterprise is very
unsure and tough to foretell, because the responses that we, different companies
and governments are taking proceed to evolve. Moreover, capital markets and
economies worldwide have additionally been negatively impacted by the COVID-19 pandemic,
and it’s attainable that it may trigger an area and/or international financial recession.
Policymakers across the globe have responded with fiscal coverage actions to
help the healthcare business and economic system as a complete. The magnitude and
total effectiveness of those actions stay unsure.

The severity of the impression of the COVID-19 pandemic on our enterprise will rely
on a lot of elements, together with, however not restricted to, the period and severity
of the pandemic and the extent and severity of the impression on our clients,
service suppliers and suppliers, all of that are unsure and can’t be
predicted. As of the date of issuance of our monetary statements, the extent to
which the COVID-19 pandemic might sooner or later materially impression our monetary
situation, liquidity or outcomes of operations is unsure.


Russia - Ukraine Battle


The RussiaUkraine battle is a world concern. The Firm doesn’t have any
direct publicity to Russia or Ukraine by its operations, worker base,
investments or sanctions. The Firm doesn’t obtain items or providers sourced
from these international locations, doesn’t anticipate any disruption in its provide chain and
has no enterprise relationships, connections to or property in Russia, Belarus or
Ukraine. No impairments to property have been made as a result of battle. We’re
unable presently to know the complete ramifications of the RussiaUkraine
battle and its results on our enterprise.

Essential Accounting Insurance policies and Estimates

The preparation of our consolidated monetary statements in conformity with
accounting ideas usually accepted in america, or U.S. GAAP,
requires us to make estimates and assumptions that have an effect on the reported quantities
of property, liabilities, income and bills, and associated disclosure of
contingent property and liabilities. When making these estimates and assumptions,
we take into account our historic expertise, our data of financial and market
elements and numerous different elements that we consider to be cheap below the
circumstances. Precise outcomes might differ below completely different estimates and
assumptions. The accounting estimates and assumptions mentioned on this part
are those who we take into account to be essentially the most essential to an understanding of our
monetary statements as a result of they inherently contain vital judgments and
uncertainties.


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Rules of Consolidation



The accompanying monetary statements are consolidated and embody the accounts
of the Firm and its wholly-owned subsidiaries. Intercompany balances and
transactions have been eradicated in consolidation.


Use of Estimates


The preparation of monetary statements in conformity with U.S. GAAP requires
administration to make estimates and assumptions that have an effect on the reported quantities of
property and liabilities and disclosures of contingent property and liabilities at
the date of the monetary statements and the reported quantities of income and
bills throughout the reporting durations. Precise outcomes may differ from these
estimates.



Reclassification



Sure prior interval quantities have been reclassified to evolve to present interval
presentation.



Money and money equivalents



For functions of the statements of money flows, the Firm defines money
equivalents as all extremely liquid debt devices bought with an authentic
maturity of three months or much less. In all durations offered, money equivalents
consist primarily of cash market funds.

Honest worth of monetary devices

Beneath Monetary Accounting Requirements Board (“FASB”) Accounting Requirements
Codification (“ASC”) Matter 820, Honest Worth Measurements and Disclosures, truthful
worth is outlined as the value at which an asset might be exchanged or a
legal responsibility transferred in a transaction between educated, prepared events in
the principal or most advantageous marketplace for the asset or legal responsibility. The place
accessible, truthful worth is predicated on observable market costs or parameters or
derived from such costs or parameters. The place observable costs or parameters
should not accessible, valuation fashions are utilized. A good worth hierarchy
prioritizes the inputs utilized in measuring truthful worth into three broad ranges as
follows:


  Degree 1 - Quoted costs in energetic markets for equivalent property or liabilities.
  Degree 2 - Inputs, aside from the quoted costs in energetic markets, are
  observable both straight or not directly.
  Degree 3 - Unobservable inputs primarily based on the Firm's assumptions.



The Firm is required to make use of observable market knowledge if such knowledge is out there
with out undue value and energy. The Firm has no truthful worth gadgets required to
be disclosed as of December 31, 2021 or 2020 below these necessities. The
carrying quantities of monetary property and liabilities, similar to money and money
equivalents, accounts receivable and accounts payable, approximate their truthful
values due to the brief maturity of those devices.

Transactions involving associated events sometimes can’t be presumed to be
carried out on an arm’s-length foundation, because the requisite situations of
aggressive, free market dealings might not exist. Nevertheless, within the case of the
secured convertible debentures as a result of associated events, the Firm obtained a
equity opinion from an unbiased third occasion which helps that the
transaction was carried out at an arm’s size foundation.


Cryptocurrency


Cryptocurrency (Bitcoin) is included in present property within the accompanying
consolidated steadiness sheets. The classification of cryptocurrencies as a present
asset has been made after the Firm’s consideration of the numerous
constant every day buying and selling quantity on available cryptocurrency exchanges
and the absence of limitations or restrictions on Firm’s capability to promote
Bitcoin. Cryptocurrencies awarded to the Firm by its mining actions
are accounted for in reference to the Firm’s income recognition coverage
disclosed under. Cryptocurrencies held are accounted for as intangible property
with indefinite helpful lives. An intangible asset with an indefinite helpful life
just isn’t amortized however assessed for impairment yearly, or extra incessantly, when
occasions or modifications in circumstances happen indicating that it’s extra seemingly than
not that the indefinite-lived asset is impaired. Impairment exists when the
carrying quantity exceeds its truthful worth, which is measured utilizing the quoted value
of the cryptocurrency on the time its truthful worth is being measured. In testing
for impairment, the Firm has the choice to first carry out a qualitative
evaluation to find out whether or not it’s extra seemingly than not that an impairment
exists. Whether it is decided that it’s not extra seemingly than not that an
impairment exists, a quantitative impairment check just isn’t mandatory. If the
Firm concludes in any other case, it’s required to carry out a quantitative impairment
check. To the extent an impairment loss is acknowledged, the loss establishes the
new value foundation of the asset. Subsequent reversal of impairment losses just isn’t
permitted. Cryptocurrencies awarded to the Firm by its mining actions
are included inside working actions on the accompanying consolidated
statements of money flows.


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Impairment of Lengthy-Lived Belongings

Lengthy-lived property are comprised of intangible property and property and gear.
Lengthy-lived property are reviewed for impairment at any time when occasions or modifications in
circumstances point out that the carrying quantity of the asset might not be
recoverable. An estimate of undiscounted future money flows produced by the
asset, or the suitable grouping of property, is in comparison with the carrying worth
to find out whether or not an impairment exists, pursuant to the provisions of FASB
ASC 360-10 “Accounting for the Impairment of Lengthy-Lived Belongings and for
Lengthy-Lived Belongings to Be Disposed Of”. If an asset is decided to be impaired,
the loss is measured primarily based on quoted market costs in energetic markets, if
accessible. If quoted market costs should not accessible, the estimate of truthful worth
is predicated on numerous valuation strategies, together with a reduced worth of
estimated future money flows and basic evaluation. The Firm stories an
asset to be disposed of on the decrease of its carrying worth or its estimated web
realizable worth.



Property and gear



Property and gear are said at value and are depreciated utilizing the
straight-line technique over their estimated helpful lives of three to 9 years. No
depreciation is recorded till the property or gear is positioned into service.
Leasehold enhancements are amortized over the shorter of the helpful lives of the
associated property, or the lease time period. Expenditures for upkeep and repairs are
charged to operations as incurred whereas renewals and betterments are
capitalized. Good points and losses on disposals are included within the consolidated
statements of operations.

Administration assesses the carrying worth of property and gear at any time when occasions
or modifications in circumstances point out that the carrying worth might not be
recoverable. If there’s indication of impairment, administration prepares an
estimate of future money flows anticipated to end result from using the asset and
its eventual disposition. If these money flows are lower than the carrying quantity
of the asset, an impairment loss is acknowledged to write down down the asset to its
estimated truthful worth.


Income Recognition


We account for income in accordance with ASU 2014-09, Income from Contracts
with Clients (Matter 606), (“ASC 606”). The underlying precept of ASC 606 is
to acknowledge income to depict the switch of products or providers to clients at
the quantity anticipated to be collected.

Revenues are acknowledged when management of the promised items or providers are
transferred to a buyer, in an quantity that displays the consideration that we
count on to obtain in change for these items or providers. We apply the
following 5 steps with the intention to decide the suitable quantity of income to
be acknowledged as we fulfill our obligations below every of our agreements:


  ? determine the contract with a buyer;
  ? determine the efficiency obligations within the contract;
  ? decide the transaction value;
  ? allocate the transaction value to efficiency obligations within the contract; and
  ? acknowledge income because the efficiency obligation is happy.



The Firm has entered into digital asset mining swimming pools by executing contracts
with the mining pool operators to offer computing energy to the mining pool.
The contracts are terminable at any time by both occasion and the Firm’s
enforceable proper to compensation solely begins when the Firm offers
computing energy to the mining pool operator. In change for offering computing
energy, the Firm is entitled to a fractional share of the fastened cryptocurrency
award the mining pool operator receives (much less digital asset transaction charges to
the mining pool operator that are recorded as a part of value of revenues),
for efficiently including a block to the blockchain. The Firm’s fractional
share is predicated on the proportion of computing energy the Firm contributed to
the mining pool operator to the entire computing energy contributed by all mining
pool contributors in fixing the present algorithm.

Offering computing energy in digital asset transaction verification providers is
an output of the Firm’s extraordinary actions. The availability of offering such
computing energy is the one efficiency obligation within the Firm’s contracts
with mining pool operators. The transaction consideration the Firm receives,
if any, is noncash consideration, which the Firm measures at truthful worth on
the date obtained, which isn’t materially completely different than the truthful worth at
contract inception or the time the Firm has earned the award from the swimming pools.
The consideration is all variable. As a result of it’s not possible {that a} vital
reversal of cumulative income won’t happen, the consideration is constrained
till the mining pool operator efficiently locations a block (by being the primary
to resolve an algorithm) and the Firm receives affirmation of the
consideration it’ll obtain, at which era income is acknowledged. There is no such thing as a
vital financing part in these transactions.


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Honest worth of the cryptocurrency award obtained is decided utilizing the market
price of the associated cryptocurrency on the time of receipt. There may be presently no
particular definitive steerage below GAAP or various accounting framework for
the accounting for cryptocurrencies acknowledged as income or held, and
administration has exercised vital judgment in figuring out the suitable
accounting therapy. Within the occasion authoritative steerage is enacted by the
FASB, the Firm could also be required to vary its insurance policies, which may have an
impact on the Firm’s consolidated monetary place and outcomes from
operations.



Cryptocurrency Mining Prices



The Firm’s cryptocurrency mining prices consist primarily of direct prices of
incomes Bitcoin associated to mining operations, together with mining pool charges,
pure gasoline prices, turbine rental prices, and cell knowledge middle rental prices,
however exclude depreciation and amortization, that are individually said within the
Firm’s consolidated statements of operations.


Reverse Inventory Cut up


We carried out a 1-for-20 reverse inventory cut up of our excellent shares of
widespread inventory that was efficient on January 23, 2020. Except in any other case famous, all
share and associated possibility, warrant, and convertible safety data
offered has been retroactively adjusted to mirror the decreased variety of
shares, and the rise within the share value which resulted from this motion.


Inventory-Primarily based Compensation


We periodically concern inventory choices, warrants and restricted inventory to workers
and non-employees for providers, in capital elevating transactions, and for
financing prices. We account for share-based funds below the steerage as set
forth within the Share-Primarily based Fee Matter 718 of the FASB Accounting Requirements
Codification, which requires the measurement and recognition of compensation
expense for all share-based cost awards made to workers, officers,
administrators, and consultants, together with worker inventory choices, primarily based on estimated
truthful values. We estimate the truthful worth of inventory possibility and warrant awards to
workers and administrators on the date of grant utilizing an option-pricing mannequin, and
the worth of the portion of the award that’s in the end anticipated to vest is
acknowledged as expense over the required service interval in our Statements of
Operations. We estimate the truthful worth of restricted inventory awards to workers
and administrators utilizing the market value of our widespread inventory on the date of grant,
and the worth of the portion of the award that’s in the end anticipated to vest is
acknowledged as expense over the required service interval in our Statements of
Operations.



Revenue taxes



We account for earnings taxes utilizing the asset and legal responsibility technique whereby
deferred tax property are acknowledged for deductible short-term variations, and
deferred tax liabilities are acknowledged for taxable short-term variations.
Short-term variations are the variations between the reported quantities of property
and liabilities and their tax bases. Deferred tax property are decreased by a
valuation allowance when, within the opinion of administration, it’s extra seemingly than
not that some portion or the entire deferred tax property might be realized.
Deferred tax property and liabilities are adjusted for the results of modifications in
tax legal guidelines and charges on the date of enactment.


Discontinued Operations


Previous to cryptocurrency mining operations that started in October 2021, the
Firm produced reside and digital popular culture conventions and occasions and bought a
gelatin machine and associated consumables that have been discontinued in 2021. In
addition, the Firm operated an eCommerce website promoting popular culture memorabilia
that was discontinued on June 30, 2022 (recognized collectively as “legacy
operations”).

On August 6, 2021, we entered into an Asset Buy Settlement (the “Settlement”)
with Informa. Pursuant to the Settlement, Creek Street Miners Corp (fka Kick the
Can Corp.) bought, transferred, and assigned sure property, properties, and
rights to Informa associated to the enterprise of working and producing reside pop
tradition occasions. The Firm launched deferred income and different liabilities
totaling $722,429 and acknowledged different earnings of this quantity.


38






On September 15, 2021, we bought our wholly owned subsidiary which contained our
Jevo property and all rights to our Jevo operations for $1,500,000 and acknowledged
a achieve on the transaction of roughly $1,130,740.

The associated property and liabilities related to the discontinued operations
in our consolidated steadiness sheets for the durations ending June 30, 2022, and
December 31, 2021, are categorised as discontinued operations. Moreover, the
monetary outcomes related to discontinued operations in our consolidated
assertion of operations for the three and 6 months ending June 30, 2022 and
2021, are categorised as discontinued operations.


Outcomes of Operations


Comparability of the Three and Six Months Ended June 30, 2022 and 2021


                                                   Three Months Ended June 30,
                                       2022             2021          $ Change       % Change

Income:
Cryptocurrency mining              $    165,592     $          -     $  165,592               - %

Working prices and bills:
Cryptocurrency mining prices
(unique of depreciation and
amortization proven under)               400,416                -        400,416               - %
Depreciation and amortization           164,520            7,394        157,126           2,125 %
Inventory primarily based compensation                466,136          189,919        276,217             145 %
Normal and administrative              764,908        1,143,386       (378,478 )           (33 )%
Impairment of mined
cryptocurrency                               34                -             34               - %
Whole working bills              1,796,014        1,340,699        455,315              34 %

Loss from operations                 (1,629,422 )     (1,340,699 )     (288,723 )           (22 )%

Different earnings (expense):
Realized loss on sale of
cryptocurrency                         (131,075 )              -       (131,075 )             - %
PPP mortgage forgiveness                          -                -              -               - %
Curiosity expense                       (242,630 )       (245,419 )        2,789               1 %
Whole different earnings (expense)           (373,705 )       (245,419 )     (128,286 )           (52 )%
Web loss from persevering with
operations                           (2,003,127 )     (1,586,118 )     (417,008 )           (26 )%

Discontinued operations:
Revenue (loss) from discontinued
operations                              (48,917 )       (267,087 )      218,169              82 %
Acquire from sale of discontinued
operations                                    -                -              -               - %
Web earnings from discontinued
operations                              (48,917 )       (267,087 )      218,169              82 %
Web loss                           $ (2,052,044 )   $ (1,853,205 )   $ (198,839 )           (11 )%




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                                                     Six Months Ended June 30,
                                       2022             2021          $ Change        % Change

Income:
Cryptocurrency mining              $    509,647     $          -     $   509,647               - %

Working prices and bills:
Cryptocurrency mining prices
(unique of
depreciation and amortization
proven under)                            786,758                -         786,758               - %
Depreciation and amortization           329,040           12,349         316,691           2,565 %
Inventory primarily based compensation              2,389,241        2,037,475         351,766              17 %
Normal and administrative            1,697,769        2,211,277        (513,508 )           (23 )%
Impairment of mined
cryptocurrency                          106,139                -         106,139               - %
Whole working bills              5,308,947        4,261,101       1,047,846              25 %

Loss from operations                 (4,799,300 )     (4,261,101 )      (538,199 )           (13 )%

Different earnings (expense):
Realized loss on sale of
cryptocurrency                         (131,075 )              -        (131,075 )             - %
PPP mortgage forgiveness                    197,662                -         197,662               - %
Curiosity expense                       (390,694 )       (469,511 )        78,817              17 %
Whole different earnings (expense)           (324,107 )       (469,511 )      145,4047              31 %
Web loss from persevering with
operations                           (5,123,407 )     (4,730,612 )      (392,795 )            (8 )%

Discontinued operations:
Revenue (loss) from discontinued
operations                              (17,732 )        408,532        (426,264 )          (104 )%
Acquire from sale of discontinued
operations                                    -                -               -               - %
Web earnings from discontinued
operations                              (17,732 )        408,532        (426,264 )          (104 )%
 Web loss                          $ (5,141,139 )   $ (4,322,080 )   $  (819,059 )           (19 )%




Income



                                  Three Months Ended June 30,
                           2022        2021      $ Change      % Change
Income:
Cryptocurrency mining   $  165,592     $   -     $ 165,592             - %




                                   Six Months Ended June 30,
                          2022        2021      $ Change      % Change
Income:
Cryptocurrency mining   $ 509,647     $   -     $ 509,647             - %



Income from cryptocurrency mining started in late 2021. All income related
with discontinued operations is classed accordingly on our consolidated
assertion of operations for the three and 6 months ending June 30, 2022 and
2021.

On Could 28, 2022, the Firm entered right into a Binding Memorandum of Understanding
for a Proposed Transaction with Highwire Power Companions, Inc. (“Highwire”) to
purchase sure power property together with pure gasoline manufacturing alternatives in
South Dakota, North Dakota, and Wyoming in addition to a possibility for
fixed-price electrical energy era in Wyoming. In mid-June 2022 the Firm
relocated 240 Bitmain S19J Professional miners with 24 Ph/s of hashing capability from
Louisiana to a facility operated by Highwire in Colorado. As of June 30, 2022,
the power has been unable to provide enough pure gasoline to supply the
stage of energy required to function the miners. In consequence, the Firm is
neither receiving cryptocurrency awards nor producing income from
cryptocurrency mining is being generated.


40






Working Prices and Bills



                                                  Three Months Ended June 30,
                                      2022            2021          $ Change       % Change
Working Prices and Bills:
Cryptocurrency mining prices
(unique of depreciation and
amortization proven under)          $   400,416     $         -     $  400,416               - %
Depreciation and amortization          164,520           7,394        157,126           2,125 %
Inventory primarily based compensation               466,136         189,919        276,217             145 %
Normal and administrative             764,908       1,143,386       (378,478 )           (33 )%
Impairment of mined
cryptocurrency                              34               -             34               - %
Whole working bills           $ 1,796,014     $ 1,340,699     $  455,315              34 %



Working prices and bills elevated $455,315 or 34%, for the three months
ended June 30, 2022 in comparison with the three months ended June 30, 2021, primarily
as a result of cryptocurrency mining operations and depreciation of $400,416 and
157,126, respectively, that weren’t current within the prior 12 months interval, higher
inventory primarily based compensation of $276,217, and partially offset by decrease common and
administrative bills of $378,478.



                                                    Six Months Ended June 30,
                                      2022            2021          $ Change        % Change
Working Prices and Bills:
Cryptocurrency mining prices
(unique of depreciation and
amortization proven under)          $   786,758     $         -     $   786,758               - %
Depreciation and amortization          329,040          12,349         316,691           2,565 %
Inventory primarily based compensation             2,389,241       2,037,475         351,766              17 %
Normal and administrative           1,697,769       2,211,277        (513,508 )           (23 )%
Impairment of mined
cryptocurrency                         106,139               -         106,139               - %
Whole working bills           $ 5,308,947       4,261,101       1,047,846              25 %



Working prices and bills elevated $1,047,846 or 25%, for the six months
ended June 30, 2022 in comparison with the six months ended June 30, 2021, primarily
as a result of cryptocurrency mining operations and depreciation of $786,758 and
316,691, respectively, that weren’t current within the prior 12 months interval, higher
inventory primarily based compensation of $351,766, and partially offset by decrease common and
administrative bills of $513,508.


Web Revenue (Loss)



                                                   Three Months Ended June 30,
                                       2022             2021          $ Change       % Change
Web Revenue (Loss):
Web loss from persevering with
operations                         $ (2,003,127 )   $ (1,586,118 )   $ (417,008 )           (26 )%
Web earnings from discontinued
operations                              (48,917 )       (267,087 )      218,169              82 %
Whole web loss                     $ (2,052,044 )   $ (1,853,205 )   $ (198,839 )           (11 )%



Web loss from persevering with operations elevated $417,008 or 26%, for the three
months ended June 30, 2022 in comparison with the three months ended June 30, 2021,
primarily as a result of elevated working prices and bills as described above.


                                                    Six Months Ended June 30,
                                       2022             2021          $ Change       % Change
Web Revenue (Loss):
Web loss from persevering with
operations                         $ (5,123,407 )   $ (4,730,612 )   $ (392,795 )            (8 )%
Web earnings from discontinued
operations                              (17,732 )        408,532       (426,264 )          (104 )%
Whole web loss                     $ (5,141,139 )   $ (4,322,080 )   $ (819,059 )           (19 )%



Web loss from persevering with operations elevated $392,795 or 8%, for the six months
ended June 30, 2022 in comparison with the six months ended June 30, 2021, primarily
as a result of elevated working prices and bills as described above.


Going Concern Evaluation


Traditionally, we have now relied upon money from financing actions to fund
considerably the entire money necessities of our actions and have incurred
vital losses and skilled detrimental money movement. The Firm had web
losses from persevering with operations of $5,123,407, and $4,730,612, for the six
months ended June 30, 2022 and 2021, respectively. We can not predict if we’ll
be worthwhile. We might proceed to incur losses for an indeterminate interval of
time and could also be unable to attain profitability. An prolonged interval of losses
and detrimental money movement might forestall us from efficiently working and increasing
our enterprise. We could also be unable to attain or maintain profitability on a
quarterly or annual foundation. On June 30, 2022, we had money and money equivalents of
$816,146 and dealing capital deficit of roughly $2.5 million.


41






We have now evaluated the importance of those situations in relation to our
capability to fulfill our obligations, which has raised substantial doubts concerning the
Firm’s capability to proceed as a going concern. The Firm believes that if
it’s unable to acquire debt and/or fairness financing, the sale of fastened property,
particularly cryptocurrency miners, might be required. There will be no
assurances that debt and/or fairness financing will be obtained, or that the sale
of fastened property, particularly cryptocurrency miners, will be achieved. The
accompanying consolidated monetary statements have been ready assuming that
the Firm will proceed as a going concern.

The consolidated monetary statements don’t embody any changes to mirror
the attainable future results on the recoverability and classification of property,
or the quantities and classification of liabilities that will end result from the
issues mentioned herein. Whereas the Firm believes within the viability of
administration’s technique to acquire debt and/or fairness financing, and/or to promote
fastened property, particularly cryptocurrency miners, there will be no assurances to
that impact. The Firm’s capability to proceed as a going concern relies
upon the Firm’s capability to acquire debt and/or fairness financing, and/or promote
of fastened property, particularly cryptocurrency miners.

© Edgar On-line, supply Glimpses


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