Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document And Entity Information | |
Entity Registrant Name | Bitcoin Shop, Inc. |
Entity Central Index Key | 1,436,229 |
Document Type | S1 |
Document Period End Date | Mar. 31, 2015 |
Amendment Flag | false |
Entity Filer Category | Smaller Reporting Company |
Trading Symbol | BTCS |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | |||
Cash | $ 3,697 | $ 5,403 | $ 9,052 |
Digital currencies | 19,944 | 16,040 | $ 22,959 |
Prepaid expense and other current assets | 38,416 | 46,654 | |
Total current assets | 62,057 | 68,097 | $ 32,011 |
Other assets: | |||
Property and equipment, net | 425,207 | 190,190 | $ 3,556 |
Website | 9,941 | 10,700 | |
Deposits | 61,515 | 4,815 | |
Total other assets | 496,663 | 205,705 | $ 3,556 |
Total Assets | 558,720 | 273,802 | 35,567 |
Liabilities and Stockholders' (Deficit)/ Equity | |||
Accounts payable and accrued expense | 191,511 | $ 258,130 | 6,603 |
Customer deposits | $ 4,263 | ||
Short term loan from related parties | 21,990 | $ 7,990 | |
Short term loan | 45,000 | ||
Derivative liability | 1,879,220 | ||
Total current liabilities | 2,137,721 | $ 266,120 | $ 10,866 |
Stockholders' (Deficit)/ Equity | |||
Common stock, 975,000,000 shares authorized at $0.001 par value, 161,277,132, 153,186,804 and 100,773,923 shares issued and outstanding, respectively | 161,277 | 153,187 | $ 100,774 |
Treasury stock, at cost, 13,000,000 and 12,750,000 shares at March 31, 2015 and December 31, 2014, respectively | (4,991) | (2,491) | |
Additional paid in capital | 16,354,150 | 14,594,677 | $ (93,198) |
Accumulated deficit | (18,089,437) | (14,739,891) | 17,125 |
Total Stockholders' (Deficit)/ Equity | (1,579,001) | 7,682 | 24,701 |
Total Liabilities and Stockholders' (Deficit)/ Equity | $ 558,720 | 273,802 | $ 35,567 |
Series C Convertible Preferred Stock [Member] | |||
Stockholders' (Deficit)/ Equity | |||
Preferred stock value | $ 2,200 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock; shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock; shares authorized | 975,000,000 | 975,000,000 | 975,000,000 |
Common stock; par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock; shares issued | 161,277,132 | 153,186,804 | 100,773,923 |
Common stock; shares outstanding | 161,277,132 | 153,186,804 | 100,773,923 |
Treasury stock, shares | 13,000,000 | 12,750,000 | |
Series C Convertible Preferred Stock [Member] | |||
Preferred stock; shares issued | 0 | 2,200,000 | 0 |
Preferred stock; shares outstanding | 0 | 2,200,000 | 0 |
Preferred stock, liquidation preference | $ 0.001 | $ 0.001 | $ 0.001 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations - USD ($) | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Revenues | ||||
E-commerce | $ 1,038 | $ 3,974 | $ 29,328 | $ 20,405 |
Transaction verification services | 36,630 | 17,809 | ||
Total revenues | 37,668 | $ 3,974 | $ 29,328 | 38,214 |
Power and mining expenses | (16,943) | |||
Cost of goods sold | (6,746) | |||
Gross profit | 20,725 | $ 3,974 | $ 29,328 | 31,468 |
Operating expenses: | ||||
Marketing | 578 | 17,897 | 8,206 | 94,820 |
General and Administrative | 1,606,947 | $ 1,546,821 | 2,089 | 14,220,905 |
Change in fair value of digital currencies | $ 1,908 | 132,916 | ||
Impairment loss | 254,433 | 544,800 | ||
Total operating expenses | 1,861,958 | $ 1,564,718 | $ 12,203 | 14,993,441 |
Net loss from operations | (1,841,233) | (1,560,744) | $ 17,125 | (14,961,973) |
Other income (expenses): | ||||
Fair value adjustments for warrant liabilities | (926,620) | $ 109,000 | 204,957 | |
Inducement expense | (58,380) | |||
Interest expenses | (3,499) | |||
Loss on issuance of Units | (519,600) | |||
Other expenses | (214) | |||
Total other (expenses) income | (1,508,313) | $ 109,000 | 204,957 | |
Net loss | $ (3,349,546) | $ (1,451,744) | $ 17,125 | $ (14,757,016) |
Net loss per share, basic and diluted | $ (0.02) | $ (0.01) | $ 0 | $ (0.11) |
Weighted average number of shares outstanding | ||||
Basic and diluted | 158,014,070 | 111,313,557 | 100,773,923 | 136,068,793 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' (Deficit)/Equity (Unaudited) - USD ($) | Series C Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total |
Beginning Balance at Jul. 27, 2013 | |||||||
Beginning Balance, Shares at Jul. 27, 2013 | |||||||
Capital contribution by member | $ 100,774 | $ (93,198) | $ 7,576 | ||||
Capital contribution by member, Shares | 100,773,923 | ||||||
Net loss | $ 17,125 | 17,125 | |||||
Ending Balance at Dec. 31, 2013 | $ 100,774 | $ (93,198) | $ 17,125 | $ 24,701 | |||
Ending Balance, Shares at Dec. 31, 2013 | 100,773,923 | ||||||
Net assets outstanding at time the reverse merger was completed | $ 400 | $ 10,763 | (11,163) | ||||
Net assets outstanding at time the reverse merger was completed, Shares | 400,000 | 10,762,881 | |||||
Issuance of private placement units for cash | $ 3,750 | 1,871,250 | $ 1,875,000 | ||||
Issuance of private placement units for cash, Shares | 3,750,000 | ||||||
Issuance cost - Private Placement Units | (62,000) | (62,000) | |||||
Warrant liability - 1,875,000 warrants issued in connection with Series C | $ (227,239) | (227,239) | |||||
Common stock repurchase | $ (2,491) | (2,491) | |||||
Common stock repurchase, Shares | (12,750,000) | ||||||
Reclassification of derivative liability warrant | $ 22,282 | $ 22,282 | |||||
Conversion of Series C Convertible Preferred to common stock | $ (1,550) | $ 1,550 | |||||
Conversion of Series C Convertible Preferred to common stock, Shares | (1,550,000) | 1,550,000 | 1,550,000 | ||||
Conversion of Series B Convertible Preferred to common stock | $ (400) | $ 40,000 | $ (39,600) | ||||
Conversion of Series B Convertible Preferred to common stock, Shares | (400,000) | 40,000,000 | |||||
Exchange warrants for common stock | $ 100 | (100) | |||||
Exchange warrants for common stock, Shares | 100,000 | ||||||
Stock based compensation | 13,126,445 | $ 13,126,445 | |||||
Capital contribution by member | $ 8,000 | 8,000 | |||||
Capital contribution by member, Shares | |||||||
Net loss | $ (14,757,016) | (14,757,016) | |||||
Ending Balance at Dec. 31, 2014 | $ 2,200 | $ 153,187 | $ (2,491) | $ 14,594,677 | (14,739,891) | $ 7,682 | |
Ending Balance, Shares at Dec. 31, 2014 | 2,200,000 | 153,186,804 | (12,750,000) | ||||
Issuance of private placement units for cash | $ 4,330 | (4,330) | |||||
Issuance of private placement units for cash, Shares | 4,330,000 | ||||||
Common stock repurchase | $ (2,500) | $ (2,500) | |||||
Common stock repurchase, Shares | (250,000) | ||||||
Conversion of Series C Convertible Preferred to common stock | $ (2,200) | $ 2,200 | |||||
Conversion of Series C Convertible Preferred to common stock, Shares | (2,200,000) | 2,200,000 | |||||
Issuance of common stock for asset purchase | $ 305 | 39,175 | $ 39,480 | ||||
Issuance of common stock for asset purchase, Shares | 305,693 | ||||||
Conversion of accounts payable to common stock | $ 553 | 143,141 | 143,694 | ||||
Conversion of accounts payable to common stock, Shares | 552,669 | ||||||
Inducement expenses associated with conversion of accounts payable to common stock | 58,380 | 58,380 | |||||
Issuance of common stock for investment | $ 702 | 153,731 | 154,433 | ||||
Issuance of common stock for investment, Shares | 701,966 | ||||||
Stock based compensation | 1,369,376 | 1,369,376 | |||||
Net loss | (3,349,546) | (3,349,546) | |||||
Ending Balance at Mar. 31, 2015 | $ 161,277 | $ (4,991) | $ 16,354,150 | $ (18,089,437) | $ (1,579,001) | ||
Ending Balance, Shares at Mar. 31, 2015 | 161,277,132 | (13,000,000) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' (Deficit)/Equity (Parenthetical) - 12 months ended Dec. 31, 2014 - Series C Convertible Preferred Stock [Member] - USD ($) | Total |
Private placement units | 3,750,000 |
Warrant liability | $ 1,875,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Net Cash flows used from operating activities: | ||||
Net loss | $ (3,349,546) | $ (1,451,744) | $ 17,125 | $ (14,757,016) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization expenses | 47,359 | 333 | $ 444 | 26,683 |
Stock based compensation | 1,369,376 | 1,343,794 | 13,126,445 | |
Unrealized loss related to digital currencies | 1,408 | $ 7,400 | $ (1,908) | 132,916 |
Gain on sale of fixed assets | (14) | |||
Loss on issuance of Units | 519,600 | |||
Fair value adjustments for warrant liabilities | 926,620 | $ (109,000) | (204,957) | |
Inducement expenses | 58,380 | |||
Impairment loss | 254,433 | 544,800 | ||
Changes in operating assets and liabilities | ||||
Digital currencies | (5,312) | $ 7,470 | $ (21,051) | (125,997) |
Prepaid expense | 8,238 | (106,555) | (46,654) | |
Accounts payable | $ 68,091 | 53,934 | $ 6,603 | 246,740 |
Customer deposits | (4,263) | 4,263 | (4,263) | |
Net cash used in operating activities | $ (101,367) | (258,631) | $ 5,476 | (1,061,303) |
Net cash used in investing activities: | ||||
Purchases of intangible assets | $ (12,290) | (15,468) | ||
Purchase of property and equipment | $ (234,565) | $ (4,000) | (345,355) | |
Sale of property and equipment, net | 1,426 | |||
Deposits | (56,700) | (4,815) | ||
Investment at cost | (100,000) | $ (150,000) | (400,004) | |
Net cash used in investing activities | $ (389,839) | (162,290) | $ (4,000) | (765,642) |
Net cash provided by financing activities: | ||||
Proceeds from the former members of BCSLLC | $ 8,000 | $ 7,576 | 8,000 | |
Common stock repurchase | $ (2,500) | (2,491) | ||
Net proceeds from issuance of Private Placement Units | 423,000 | $ 1,813,000 | 1,813,000 | |
Net proceeds from issuance of Private Placement Units from related party | 10,000 | |||
Proceeds from short term loan from related party | 20,000 | |||
Proceeds from short term loan | 45,000 | |||
Overdraft liability | 4,787 | |||
Payment on short term loan from related party | (6,000) | |||
Net cash provided by financing activities | 489,500 | $ 1,821,000 | $ 7,576 | 1,823,296 |
Net (decrease) increase in cash | (1,706) | 1,400,079 | $ 9,052 | (3,649) |
Cash, beginning of period | 5,403 | 9,052 | 9,052 | |
Cash, end of period | $ 3,697 | 1,409,131 | $ 9,052 | 5,403 |
Supplemental disclosure of non-cash financing and investing activities: | ||||
Conversion of Series B Convertible Preferred to common stock | $ 13,419 | |||
Conversion of Serise C Convertible Preferred to common stock | $ 2,200 | |||
Issuance of common stock for fixed assets purchases | 39,480 | |||
Increase in accounts payable related to fixed assets | 8,984 | |||
Conversion of accounts payable to common stock | 143,694 | |||
Issuance of common stock for investment | $ 154,433 | |||
Reclassification of derivative liability warrant to additional paid in capital | 22,282 | |||
Short term loan from related party for purchase of equipment | $ 7,990 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Business Organization and Nature of Operations | Note 1 Business Organization and Nature of Operations Bitcoin Shop, Inc. (formerly TouchIt Technologies, Inc.), a Nevada Corporation (the Company) in February 2014 entered the business of hosting an online ecommerce marketplace where consumers can purchase merchandise using digital currencies, including bitcoin and is building a diversified company with operations in the digital currency ecosystem. In January 2015, the Company began a rebranding campaign using its BTCS.COM domain (shorthand for Blockchain Technology Consumer Solutions) to better reflect its broadened strategy. The Company released its new website which included broader information on its strategy, access to its ecommerce site, and launching an invite only beta version of its multi-sig secure storage solution (digital wallet). The Company was incorporated in the State of Nevada in 2008 under the name Hotel Management Systems, Inc.. On February 5, 2014, the Company entered into an Exchange Agreement with BitcoinShop.us, LLC, a Maryland limited liability company (BCSLLC), and the holders of the membership interests in BCSLLC (Share Exchange). Upon closing of the Share Exchange, BCSLLC members transferred all the outstanding membership interests of BCSLLC to the Company in exchange for an aggregate of 100,773,923 shares of the Companys common stock (the Common Stock) (the Reverse Merger). As a result, BCSLLC became a wholly-owned subsidiary of the Company. Immediately following the Share Exchange with BCSLLC, the Company discontinued its business as manufacturer of touch screen and touch board products, interactive whiteboard displays and large touch-screens. The Company is an early entrant in the digital currency market and one of the first U.S. publicly traded companies to be involved with digital currencies. The Company aims to enable users to engage in the digital currency ecosystem through one point of access a universal digital currency platform. The Company plans to design and build this platform under the brand Blockchain Technology Consumer Solutions, or BTCS. The Company currently operates a beta ecommerce marketplace which already accepts a variety of digital currencies, has designed a beta secure digital currency storage solution BTCS Wallet, and has been expanding its transaction verification services business, recently adding servers capable of generating bitcoins (i.e. bitcoin mining). In the short term, the Company believes its transaction verification services business will be a growing source of revenue for it. | Note 1 Business Organization and Nature of Operations Bitcoin Shop, Inc. (formerly TouchIt Technologies, Inc.), a Nevada Corporation (the Company) in February 2014 entered the business of hosting an online ecommerce marketplace where consumers can purchase merchandise using digital currencies, including bitcoin and is building a diversified company with operations in the digital currency ecosystem. In January 2015 the Company began a rebranding campaign using its BTCS.COM domain (shorthand for Blockchain Technology Consumer Solutions) to better reflect its broadened strategy. The Company released its new website which included broader information on its strategy, access to its ecommerce site, and launching an invite only beta version of its multi-sig secure storage solution (digital wallet). The Company was incorporated in the State of Nevada in 2008 under the name Hotel Management Systems, Inc.. On February 5, 2014, the Company entered into an Exchange Agreement with BitcoinShop.us, LLC, a Maryland limited liability company (BCSLLC), and the holders of the membership interests in BCSLLC. Upon closing of the Share Exchange, Bitcoinshop Members transferred all the outstanding membership interests of Bitcoinshop to the Company in exchange for an aggregate of 100,773,923 shares of the Companys common stock (the Reverse Merger). As a result, Bitcoinshop became a wholly-owned subsidiary of the Company. Immediately following the Share Exchange with Bitcoinshop, the Company discontinued its business as manufacturer of touch screen and touch board products, interactive whiteboard displays and large touch-screens. The Company is an early entrant in the digital currency market and one of the first U.S. publicly traded companies to be involved with digital currencies. The Company aims to enable users to engage in the digital currency ecosystem through one point of access a universal digital currency platform. The Company plans to design and build this platform under the brand Blockchain Technology Consumer Solutions, or BTCS. The Company currently operates a beta ecommerce marketplace which already accepts a variety of digital currencies, has designed a beta secure digital currency storage solution BTCS Wallet, and has been expanding its transaction verification services business, recently adding servers capable of generating bitcoins (i.e. bitcoin mining). In the short term, the Company believes its transaction verification services business will be a growing source of revenue for it. |
Basis of Presentation
Basis of Presentation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | Note 2 Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, the instructions to Form 10-Q and the rules and regulations of the SEC. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements, but reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. In the opinion of the Companys management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. Interim results are not necessarily indicative of results for a full year. The condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2014. | Note 2 Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, BCSLLC and BTCS Acquisition Corp. Subsequent to year-end, BTCS Acquisition Corp changed its name to BTCS Digital Manufacturing. The Company maintains its books of account and prepares consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (U.S. GAAP). The Companys fiscal year ends on December 31. All significant intercompany balances and transactions have been eliminated in consolidation. |
Liquidity, Financial Condition
Liquidity, Financial Condition and Management's Plans | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Liquidity Financial Condition And Managements Plans | ||
Liquidity, Financial Condition and Management's Plans | Note 3 - Liquidity, Financial Condition and Managements Plans The Company has commenced its planned operations but had limited operating activities to date. The Company has financed its operations from inception using proceeds received from capital contributions made by its members and proceeds in financing transactions. On January 19, 2015, the Company raised $433,000 of capital in a private placement transaction, $20,000 of capital through the issuance of promissory note to Michal Handerhan, the Companys Chief Operating Officer, and $45,000 of capital through the issuance of promissory note to a third party. Notwithstanding, the Company has limited revenues, limited capital resources and is subject to all of the risks and uncertainties that are typical of an early stage enterprise. Significant uncertainties include, among others, whether the Company will be able to raise the capital it needs to finance its longer term operations and whether such operations, if launched, will enable the Company to sustain operations as a profitable enterprise. The Company used approximately $0.1 million of cash in its operating activities for the three months ended March 31, 2015. The Company incurred a $3.3 million net loss for the three months ended March 31, 2015. The Company had cash of $3,697 as of March 31, 2015, and a working capital deficiency of approximately $2.1 million at March 31, 2015. The Company expects to incur losses into the foreseeable future as it undertakes its efforts to execute its business plans. The Company will require significant additional capital to sustain its short-term operations and make the investments it needs to execute its longer term business plan. The Companys existing liquidity is not sufficient to fund its operations and anticipated capital expenditures for the foreseeable future. If the Company attempts to obtain additional debt or equity financing, it cannot provide assurance that such financing will be available to the Company on favorable terms, if at all. Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit, there is substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not made adjustments to the accompanying condensed consolidated financial statements to reflect the potential effects on the recoverability and classification of assets or liabilities should the Company be unable to continue as a going concern. The Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue. While the Company continues to implement its business strategy, it intends to finance its activities through: ● managing current cash and cash equivalents on hand from the Companys past equity offerings, ● seeking additional funds raised through the sale of additional securities in the future, and ● increasing revenue from its bitcoin mining strategy. | Note 3 - Liquidity, Financial Condition and Managements Plans The Company has commenced its planned operations but had limited operating activities to date. The Company has financed its operations from inception using proceeds received from capital contributions made by its members and proceeds in financing transactions. On February 6, 2014, the Company raised $1.875 million of capital in a private placement transaction. Notwithstanding, the Company has limited revenues, limited capital resources and is subject to all of the risks and uncertainties that are typical of an early stage enterprise. Significant uncertainties include, among others, whether the Company will be able to raise the capital it needs to finance its longer term operations and whether such operations, if launched, will enable the Company to sustain operations as a profitable enterprise. The Company used approximately $1 million of cash in its operating activities for the year ended December 31, 2014. The Company incurred a $14.7 million net loss for the year ended December 31, 2014. The Company had cash of $5,403 as of December 31, 2014, and a working capital deficiency of approximately $198,023 at December 31, 2014. The Company expects to incur losses into the foreseeable future as it undertakes its efforts to execute its business plans. The Company will require significant additional capital to sustain its short-term operations and make the investments it needs to execute its longer term business plan. The Companys existing liquidity is not sufficient to fund its operations and anticipated capital expenditures for the foreseeable future. If the Company attempts to obtain additional debt or equity financing, it cannot provide assurance that such financing will be available to the Company on favorable terms, if at all. Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit, there is substantial doubt about the Companys ability to continue as a going concern. The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not made adjustments to the accompanying consolidated financial statements to reflect the potential effects on the recoverability and classification of assets or liabilities should the Company be unable to continue as a going concern. The Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue. While the Company continues to implement its business strategy, it intends to finance its activities through: ● managing current cash and cash equivalents on hand from the Companys past equity offerings, ● seeking additional funds raised through the sale of additional securities in the future, and ● increasing revenue from its bitcoin mining strategy. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Note 4 - Summary of Significant Accounting Policies A summary of the significant accounting policies applied in the preparation of the accompanying condensed consolidated financial statements is as follows: Transaction Verification Services Revenue earned from Bitcoin processing activities (Transaction Verification Services), commonly termed mining activities, is recognized at the fair value of the Bitcoins received as consideration on the date of actual receipt. The Company generates revenue by performing computer processing activities for bitcoin generation. In the crypto-currency industry such activity is generally referred to as Bitcoin mining. The Company receives consideration for performing such Bitcoin mining activities in the form of Bitcoins. Revenue is recorded upon the actual receipt of Bitcoins. Power and mining expenses consist of utilities paid to 3 rd The expenses related to our are affected by the level of activities and not the ultimate generation of Bitcoins. The Company expenses these costs as they are incurred. Earnings per Share Basic earnings per share (EPS) is computed by dividing net loss applicable to common stock by the weighted-average number of common shares outstanding during the period. For purposes of calculating basic and diluted earnings per share, vested restricted stock awards are considered outstanding. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. The following financial instruments were not included in the diluted loss per share calculation for the three months ended March 31, 2015 because their effect was anti-dilutive: As of March 31, 2015 Stock options 12,450,000 Warrants 11,700,000 Excluded potentially dilutive securities 24,150,000 Recent Accounting Pronouncements In April 2015, the FASB issued ASU 2015-03, S implifying the Presentation of Debt Issuance Costs Subsequent events Subsequent events have been evaluated through the date of this filing. | Note 4 - Summary of Significant Accounting Policies A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements is as follows: Digital Currencies Translations and Remeasurements The Company accounts for digital currencies, which it considers to be an operating asset, at their initial cost and subsequently remeasures the carrying amounts of digital currencies it owns at each reporting date based on their current fair value. The changes in the fair value of digital currencies are included as a component of income or loss from operations. The Company currently classifies digital currencies as a current asset. Digital currencies are considered a crypto-currency and the Company receives deposits in various kinds of digital currencies including but not limited to bitcoins, litecoins and dogecoins from customer trade transactions. The Company when necessary, will issue refunds in digital currencies and, at its discretion, make payments to vendors in digital currencies, if and when such vendors accept digital currencies as payment. The Company obtains the equivalency rate of bitcoins to USD from various exchanges including, Bitstamp and Coinbase. The equivalency rate obtained from these sources represents a generally well recognized quoted price in an active market for bitcoins, which market and related database are accessible to the Company on an ongoing basis. In March of 2014, the Company began accepting litecoins and dogecoins. Currently, the Company determines the value of bitcoins, litecoins and dogecoins (for the purpose of e-commerce sales) from GoCoin LLC, the payment processor that enables the Company to accept these digital currencies as payments from its customers for goods. The Bitcoin Price Index was $458.50, $639.36, $386.27 and $319.70 as of March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, respectively. Property and Equipment Internally Developed Software Internally developed software consisting of the core technology that allows the Company to interface with vendors in order to display up-to-date inventory, and present prices in bitcoin, litecoin, or dogecoin according to the GoCoin US Dollars exchange rates. The Company accounts for computer software used in the business in accordance with ASC 350 Intangibles-Goodwill and Other. ASC 350 requires computer software costs associated with internal use software to be charged to operations as incurred until certain capitalization criteria are met. Costs incurred during the preliminary project stage and the post-implementation stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property, equipment and software. These costs generally consist of internal labor during configuration, coding, and testing activities. Capitalization begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used to perform the function intended. The Company redirected its focus from its e-commerce marketplace efforts to its transaction verification services business during the third quarter and fourth quarter in 2014. Revenue generated from the historical e-commerce marketplace business, net of refunds amounted to $2,799 for the year ended December 31, 2014 while net capitalized software costs prior to recording an impairment charge amounted to $144,796. The Company is unable to conclude that undiscounted cash flows on the remaining useful life of this asset will be sufficient to support the carrying amount of this asset or that a market exists to this type of asset to support anything more than a nominal fair value. Accordingly, the Company recorded a $144,796 during the fourth quarter of 2014. Transaction Verification Servers Management has assessed the basis of depreciation of the Companys transaction verification servers used to verify digital currency transactions and generate digital currencies and believes they should be depreciated over a 2 year period. The rate at which the Company generates bitcoins and, therefore, consumes the economic benefits of its transaction verification servers are influenced by a number of factors including the following: ● the complexity of the transaction verification process which is driven by the algorithms contained within the bitcoin open source software; ● the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Petahash units); and ● technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of bitcoins generated as a function of operating costs, primarily power costs i.e. the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase. Because of both the Companys and the industrys relatively short life cycle to date management has only limited data available to it. Furthermore the data available also includes data derived from the use of economic modeling to forecast future bitcoin generation and the assumptions included in such forecasts, including bitcoin price and network difficulty, are derived from management assumptions which are inherently judgmental. Based on current data available to it management has determined that a 2 year diminishing value best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the recent plateau in difficulty level. Management will review this estimate annually and will revise such estimates as and when data comes available. To the extent that any of the assumptions underlying managements estimate of the useful life of its transaction verification servers are subject to revision in a future reporting period either as a result of changes in circumstances or through the availability of better data then in future the rate of depreciation may change impacting both the depreciation expense charged to the profit or loss and the carrying value of transaction verification servers. Intangible Asset The Company has applied the provision of ASC topic 350-50-50 Intangible - Goodwill and Other/Website Development Costs, in accounting for its costs incurred to purchase its website. Capitalized website costs are being amortized by the straight line method over an estimated useful life of 3 years. Amortization cost was $4,768 and $0 for the year ended December 31, 2014 and for the period from July 28, 2013 (inception) through December 31, 2013, respectively. Use of Estimates In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, estimating the provision for income taxes, estimating the fair value of equity instruments recorded as derivative liabilities, useful lives of depreciable assets and whether impairment charges may apply. Revenue Recognition The Company follows the guidance of the Securities and Exchange Commissions Staff Accounting Bulletin (SAB) 104 for revenue recognition and Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Accordingly, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. E-commerce Marketplace Business The Companys e-commerce marketplace revenue is derived from processing fees and the markup of goods purchased by customers through orders originated through the Companys website. The Company recognizes revenues from the origination of the orders upon receiving confirmation that the third party vendors fulfillment process (delivery to customer) is complete. Customer deposits represents orders originated and digital currency payments received for orders that are not yet fulfilled. The Company had no open orders at December 31, 2014. The Company has determined that it is not the primary obligor in any of the sales transactions it originates. The Company does not (i) have general inventory risk with respect to any of the goods that its customers purchase, (ii) take title to, or bear the risk of loss for, any goods that third party vendors ship to its customers, (iii) participate in the fulfillment of the sale, (iv) make representations regarding the suitability of products for its customers purposes, (v) modify any of the products purchased, or (vi) assume credit risk. Accordingly, the Company has determined, based on the weight of available evidence, that it is appropriate to record revenues on a net basis, which is equal to the amount of the processing fees, it earns plus the mark-up. Transaction Verification Services Business Revenue for the Companys transaction verification services business is recognized when the bitcoins are received in our digital wallet and are booked at the prevailing market price on the day of receipt as reported by Coinbase. Income Taxes As a result of the Reverse Merger, beginning on February 5, 2014, the Company is taxed as a C Corporation. Prior to the merger, the Company was a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for periods prior to February 5, 2014. The Company recognizes income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized. Should they occur, the Companys policy is to classify interest and penalties related to tax positions as income tax expense. Since the Companys inception, no such interest or penalties have been incurred, however prior to February 5, 2014, the Company was a limited liability company and the Companys tax losses and credits generally flowed directly to the members. Fair Value Definition and Hierarchy In accordance with U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction in the principal or most advantageous market between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. In accordance with U.S. GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Companys assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The valuation techniques are consistent with the market, cost or income approaches to measuring fair value. If more than one valuation technique is used to measure fair value, the results are evaluated considering the reasonableness of the range of values indicated by those results. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 Level 2 Level 3 The availability of valuation techniques and observable inputs can vary and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for assets and liabilities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Companys own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause assets and liabilities to be reclassified to a lower level within the fair value hierarchy. The Company considers transfers between the levels within the fair value hierarchy when circumstances surrounding the fair value for a particular assets and liabilities conform to a different level of the fair value hierarchy than as previously reported. Whenever circumstances occur, whereby there is a transfer within the fair value hierarchy, the Company considers the date the event or change in circumstances occurred which caused the transfer. Employee Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (ASC 718). ASC 718 addresses all forms of share-based payment (SBP) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations. Advertising Expense Advertisement costs are expensed as incurred and included in marketing expenses. Advertising expenses amounted to $94,820 and $5,052 for the year ended December 31, 2014 and for the period from July 28, 2013 (inception) through December 31, 2013, respectively. Earnings per Share Basic earnings per share (EPS) is computed by dividing net loss applicable to common stock by the weighted-average number of common shares outstanding during the period. For purposes of calculating basic and diluted earnings per share, vested restricted stock awards are considered outstanding. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. The following financial instruments were not included in the diluted loss per share calculation for the year ended December 31, 2014 because their effect was anti-dilutive: As of December 31, 2014 Stock options 12,450,000 Warrants 875,000 Series C Convertible Preferred 2,200,000 Excluded potentially dilutive securities 15,525,000 Investment at Cost On March 20, 2014, the Company invested $150,000 into Series A preferred units of GoCoin, LLC (GoCoin). GoCoin is an international payment processor that enables merchants to accept bitcoin, litecoin and dogecoin payments at the point of checkout in e-commerce transaction. The investment was carried at cost in the accompanying consolidated balance sheet. The Company did not maintain significant influence. On May 9, 2014, the Company invested $50,000 into Series Seed preferred units of Bitvault, Inc (Bitvault). The Company does not maintain significant influence. The investment was carried at cost in the accompanying consolidated balance sheet. On October 2, 2014, the Company entered into a Subscription Agreement (the Agreement) with Coin Outlet Inc. (Coin Outlet) pursuant to which the Company purchased from Coin Outlet 8,334 Units, at $6.00 per Unit, for an aggregate purchase price of $50,004. Each Unit consists of (i) one share of Coin Outlets common stock, and (ii) a warrant to purchase two (2) shares of Coin Outlets common stock at an exercise price of $6.00 per share which expires on December 31, 2015 (the Warrant). As further incentive for the Company to enter into the Agreement, the Company, Coin Outlet and its shareholders (the Holders) entered into an option agreement with the Company (the Option). Pursuant to the Option agreement the Company shall have the option in one or more transactions to obtain up to 75,448 shares in Coin Outlet (or approximately 7.4% of the total shares of Coin Outlet issued and outstanding immediately prior to this transaction) (the CO Shares) in exchange for up to an aggregate of 3,500,000 newly issued shares of common stock of the Company (the BTCS Shares). Both the CO Shares and BTCS Shares shall be adjusted to account for certain reclassifications and adjustments as set forth in the Option agreement. Pursuant to the Option agreement the Option will automatically be exercised, subject to a standard material adverse effect clause, in full on August 15, 2015. The Holders further agreed to enter into a lock-up agreement with the Company with respect to any BTCS Shares received (the Lockup Agreement). Pursuant to the Lockup Agreement the Holders are prohibited from the sale of any BTCS Shares until after February 5, 2017. Immediately prior to the transaction Coin Outlets share structure consisted of 1,000,000 shares of common stock, and no other equity or equity linked securities were issued or outstanding. After giving effect to the Unit purchase the Company will own 0.83% of Coin Outlet and if the Warrant and Option are exercised in full the Company would own 9.8% of Coin Outlet. During the 4th quarter of 2014, the Company assessed impairment for these investments and determined that these investments are not recoverable and as such fully impaired them due to the steady price decline in Bitcoins throughout 2014. The Bitcoin Price Index was $639.36, $386.27 and $319.70 as of June 30, 2014, September 30, 2014 and December 31, 2014, respectively. Total impairment was $150,000 for GoCoin, $50,000 for Bitvault and $50,004 for Coin Outlet. Note Receivable On July 10, 2014, the Company entered into a Convertible Note Purchase Agreement (the Purchase Agreement) with Express Technologies, Inc. (Express Technologies) pursuant to which the Company purchased a note receivable in the principal amount of $150,000 (the Note). The note receivable was carried at cost in the accompanying consolidated balance sheet. The Note accrues interest at 5% per annum and matures on July 10, 2015. Upon the occurrence of Express Technologies next preferred equity financing in which Express Technologies receives gross proceeds of at least $750,000 (the Financing), the entire outstanding principal amount and accrued but unpaid interest (the Conversion Amount) on the Note shall automatically be converted into such number of shares of Express Technologies preferred equity equal to the greater of (A) the Conversion Amount divided by the product of: (i) the per share price of the securities offered in the Financing and (ii) 0.85 and (B) the Conversion Amount divided by an amount equal to $9,000,000 divided by Express Technologies Fully Diluted Capitalization (as defined in the Note). In the event a Financing does not occur prior to the maturity of the Note, the Company may elect to convert the Note into such number of shares of common stock as shall equal: (A) the Conversion Amount as of the Maturity Date divided by (B) an amount equal to $9,000,000 divided by Express Technologies Fully Diluted Capitalization immediately prior to the Maturity Date. The conversion option does not have to be bifurcated as it does not meet the definition of a derivative (not readily convertible into cash). During the 4th quarter of 2014, the Company assessed impairment for this asset and determined that it was impaired due to the steady price decline in Bitcoins throughout 2014. The Bitcoin Price Index was $639.36, $386.27 and $319.70 as of June 30, 2014, September 30, 2014 and December 31, 2014, respectively. Total impairment was $150,000 for this Note. Preferred Stock The Company applies the guidance enumerated in ASC 480 Distinguishing Liabilities from Equity when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. The Company classifies conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control, as temporary equity. At all other times, the Company classifies its preferred shares in stockholders equity. The Companys preferred shares do not feature any redemption rights within the holders control or conditional redemption features not within the Companys control as of December 31, 2014. Accordingly all issuances of preferred stock are presented as a component of consolidated stockholders equity. Convertible Instruments The Company has evaluated the Series C Convertible Preferred Stock (Preferred Stock) conversion component of the Private Placement and determined it should be considered an equity host and not a debt host as defined by ASC 815, Derivatives and Hedging Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which updates the principles for recognizing revenue. ASU 2014-09 also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is evaluating the potential impacts of the adoption of this standard on its consolidated financial statements. The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Companys consolidated financial position and results of operations. The FASB has issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. The guidance, which is effective for annual reporting periods ending after December 15, 2016, extends the responsibility for performing the going-concern assessment to management and contains guidance on how to perform a going-concern assessment and when going-concern disclosures would be required under U.S. GAAP. The Company has elected to early adopt the provisions of ASU 2014-15 in connection with the issuance of these consolidated financial statements. In November 2014, the FASB issued Accounting Standards Update 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (ASU 2014-16), which clarifies how to evaluate the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, ASU 2014-16 requires that an entity consider all relevant terms and features in evaluating the nature of the host contract and clarifies that the nature of the host contract depends upon the economic characteristics and the risks of the entire hybrid financial instrument. An entity should assess the substance of the relevant terms and features, including the relative strength of the debt-like or equity-like terms and features given the facts and circumstances, when considering how to weight those terms and features. ASU 2014-16 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. Subsequent events Subsequent events have been evaluated through the date of this filing. |
Property and Equipment
Property and Equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | Note 5 Property and Equipment Property and equipment consist of the following at March 31, 2015 and December 31, 2014: March 31, 2015 December 31, 2014 Equipment $ 50,945 $ 14,189 Computer 4,085 3,469 Transaction verification servers 438,431 194,891 493,461 212,549 Accumulated depreciation (68,254 ) (22,359 ) Property and equipment, net $ 425,207 $ 190,190 Depreciation expense is $46,600 and $333 for the three months ended March 31, 2015 and 2014, respectively. | Note 5 Property and Equipment Property and equipment consist of the following at December 31, 2014 and December 31, 2013: December 31, 2014 December 31, 2013 Equipment $ 14,189 $ 4,000 Computer 3,469 - Transaction verification servers 194,891 - 212,549 4,000 Accumulated depreciation (22,359 ) (444 ) Property and equipment, net $ 190,190 $ 3,556 Depreciation expense is approximately $21,915 and $444 for the year ended December 31, 2014 and for the period from July 28, 2013 (inception) through December 31, 2013, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Stockholders' Equity | Note 6 Shareholders Equity Common Stock Issuance On January 19, 2015 (the Closing Date), the Company sold an aggregate of 4,330,000 units (each a January Unit) in a private placement (the January Private Placement) of its securities to certain investors at a purchase price of $0.10 per January Unit pursuant to subscription agreements for an aggregate purchase price of $433,000. Each January Unit in the January Private Placement consists of (i) one share of Common Stock and (ii) a warrant to purchase 2.5 shares of Common Stock at an exercise price of $0.10 per share (January Warrant). The January Units are subject to a Most Favored Nations provision and the January Warrants are subject to price protection in the event of lower priced issuances for a period of twenty four months from the Closing Date in the event the Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversion or exercise price per share which shall be less than $0.10 per share, subject to certain customary exceptions. Additionally, the shares of Common Stock issued as part of the January Unit and issuable upon exercise of the January Warrants are subject to demand and piggy back registration rights. The January Warrant may be exercised on a cashless basis in the event there is no effective registration statement covering the resale of the Common Stock issuable upon exercise of the January Warrants. The January Warrants may be called for cancelation by the Company if: (i) the price per share exceeds $0.20 for 15 consecutive trading days, and (ii) the average daily dollar trading volume for such 15 consecutive trading days exceeds $50,000 per trading day. Because of the Most Favored Nations and call provision discussed above, the net value to shareholders equity is 0. The fair value of all components of the January Units was $952,600 ($649,500 attributed to the unit warrants, and $303,100 attributed to the derivative liability component with Most Favored Nations Provision), and as such the Company recorded a loss on issuance of January Unit of $519,600 for the three month ended March 31, 2015. (see FN 9 for assumptions) On January 23, 2015, the Company purchased 100 Spondoolies S35 digital currency mining servers from Spondoolies Tech Ltd. (Spondoolies) for $223,500 (the Purchase Price) pursuant to a purchase order agreement (the Purchase Agreement). $25,000 of the total Purchase Price was paid in the form of 250,000 shares of the Companys common Stock. On January 26, 2015, the Company entered into a Share Redemption Agreement and Release (the Redemption Agreement) with Charles Kiser, its Executive Vice President pursuant to which Mr. Kiser agreed to return an aggregate of 250,000 shares of the Companys Common Stock, held by him to the Company for cancellation in consideration for an aggregate payment of $2,500. On February 20, 2015, the Company issued 55,693 shares of Common Stock at a price of $0.26 to purchase hardware from a seller for $14,480. On March 26, 2015 the Company acquired 166,756 shares (an additional 2% equity ownership) of Coin Outlet from Eric Grill, Coin Outlets CEO, for 701,966 shares of the Companys Common Stock. The Company now owns approximately 4.2% of Coin Outlets equity and has the ability to own up to 11% upon exercise of the Companys previously issued option and warrant. Mr. Grill entered into a lock-up agreement with the Company with respect to his shares, pursuant to the lockup agreement Mr. Grill is prohibited from the sale of any his shares until after February 5, 2017. The Company assessed impairment for the Coin Outlet investment and determined that this investment is not recoverable and as such fully impaired it due to the steady price decline in Bitcoins throughout 2015. Total impairment was $154,433 for Coin Outlet. During the quarter ended March 31, 2015, a Preferred stockholder converted 2,200,000 shares of Series C Preferred Stock to 2,200,000 shares of Common Stock. This conversion was in accordance with the original terms of the Series C Preferred Stock agreement. During the quarter ended March 31, 2015, the Company converted accounts payable due to certain vendors of $143,694 into 552,669 shares of Common Stock. In addition to common shares issued, the Company also granted Conversion Price Protection to each vendor. For one year after the date of conversion if the Company issues any equity or an equity-linked security at a price less than $0.26 per common share it will result in the issuance of additional Common Stock in an amount equal to an amount such that total number of shares issued to the vendors will be equal to the number of shares that would have been issued had the accounts payable been converted at the subsequent lower offering price. The fair value of the Common Stock on each of the issuance date with Conversion Price Protection was $202,074. The Company recorded $58,380 of inducement expense associated with the issuance of the common shares. (based upon a Monte - Carlo Simulation) A summary of quantitative information with respect to valuation methodology for the three months ended March 31, 2015 is as follows: Date of valuation February 18, 2015 February 18, 2015 March 5, 2015 Fair value of Common Stock $ 0.32 $ 0.32 $ 0.24 Dividend yield (per share) 0 0 0 Strike price $ 0.26 $ 0.26 $ 0.26 Volatility (annual) 123.36 % 123.36 % 124.56 % Risk-free rate 0.23 % 0.23 % 0.25 % Expected life (years) 5 5 5 Stock Purchase Warrants The following is a summary of warrant activity for the three months ended March 31, 2015: Number of Weighted Average Warrants Exercise Price Outstanding as of December 31, 2014 875,000 $ 0.10 Issuance of warrants with Units January 19, 2015* 10,825,000 0.10 Outstanding as of March 31, 2015 ** 11,700,000 $ 0.10 * The warrants contain most favor nation and call provision and the Company classifies these warrant instruments as liabilities measured at fair value and re-measures these instruments at fair value each reporting period. (See FN 9) Demand Registration Rights. The shares of Common Stock issuable upon conversion of Series C Shares or the warrant underlying the January Units are subject to piggy-back and demand registration rights until such shares of Common Stock may be sold under Rule 144 under the Securities Act of 1933, as amended (the Securities Act). The Company shall pay to holders a fee of 0.25% per month of the investors investment, payable in cash, for every thirty (30) day period up to a maximum of 3%, (i) following the filing date that the registration statement has not been filed and (ii) following the effectiveness date that the registration statement has not been declared effective; provided, however, that the Company shall not be obligated to pay any such liquidated damages if the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases issued or actions taken by the Commission pursuant to its authority with respect to Rule 415, and the Company registers at such time the maximum number of shares of Common Stock permissible upon consultation with the staff of the Commission. If during the effectiveness period, the number of registerable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a registration statement, the Company shall file as soon as reasonably practicable an additional registration statement covering the resale of not less than the number of such registerable securities. The Company accounts for obligations under the Registration Rights Agreement in accordance with ASC 450 Contingencies, which requires us to record a liability if the contingent loss is probable and the amount can be estimated. At March 31 2015, the Company has not recorded a liability pertaining to the Companys obligations under the Registration Rights Agreement because the amount is not deemed probable. | Note 6 Stockholders Equity On January 13, 2014, pursuant to the first amendment to BCSLLCs operating agreement, BCSLLC admitted three new members in exchange for aggregate capital contributions amounting to $8,000 representing 51,758,563 of common stock. The Series B Designation provides authorization for the issuance of 400,000 shares of Series B preferred stock, par value $0.001 (the Series B Preferred Stock). Each holder of Series B Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Company and shall be entitled to the number of votes for each share of Series B Preferred Stock owned at the record date for the determination of shareholders entitled to vote on such matter equal to the number of shares of common stock such shares of Series B Preferred Stock are convertible into at such time, but not in excess of the conversion limitations. Each holder of Series B Preferred Stock may, from time to time, convert any or all of such holders shares of Series B Preferred Stock into fully paid and non-assessable shares of common stock in an amount equal to one hundred (100) shares of common stock for each one (1) share of Series B Preferred Stock surrendered. However, at no time may all or a portion of shares of Series B Preferred Stock be converted if the number of shares of common stock to be issued pursuant to such conversion which would exceed, when aggregated with all other shares of common stock owned by such holder at such time, the number of shares of common stock which would result in such holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and the rules thereunder) more than 9.99% of all of the common Stock outstanding at such time (the 9.99% Beneficial Ownership Limitation). By written notice to the Company, any holder of Series B Preferred Stock may increase or decrease the 9.99% Beneficial Ownership Limitation to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to such holder of Series B Preferred Stock sending such notice and not to any other holder of Series B Preferred Stock; provided further, that the Company acknowledges that, notwithstanding the foregoing, certain current holders of Series B Preferred Stock have elected to have the 9.99% Beneficial Ownership Limitation to initially be 4.99%. During the nine months ended September 30, 2014, the Company converted 400,000 shares of Series B Preferred stock into 40,000,000 shares of common stock. There is no outstanding Series B Preferred stock outstanding as of December 31, 2014. On February 6, 2014, following the completion of the merger and recapitalization transaction the Company, sold an aggregate of 3,750,000 units in a private placement (the Private Placement) of its securities to certain investors at a purchase price of $0.50 per unit pursuant to subscription agreements for an aggregate purchase price of $1,875,000. The units in the Private Placement consisted of (i) one share of the Companys Series C Convertible Preferred Stock, par value $0.001 per share, which is convertible into one (1) share of common stock and (ii) a three year warrant to purchase 0.5 share of common stock at an exercise price of $1.00 per share. Additionally, the shares of common stock issuable upon conversion of Series C Preferred Stock and common stock issuable upon exercise of the warrants are subject to piggy-back and demand registration rights until such shares of Common Stock may be sold under Rule 144 under the Securities Act of 1933, as amended (the Securities Act). Each share of the Series C Preferred Stock is convertible into one (1) share of common stock and has a stated value of $0.001. The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The Company is prohibited from effecting the conversion of the Series C Preferred Stock to the extent that, as a result of such conversion, the holder beneficially owns more than 9.99%, in the aggregate, of the issued and outstanding shares of the Companys Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series C Preferred Stock, provided further, that the Company acknowledges that, notwithstanding the foregoing, certain current holders of Series C Preferred Stock have elected to have the 9.99% Beneficial Ownership Limitation to initially be 4.99%. Each share of the Series C Preferred Stock is entitled to the number of votes equal to the number of shares of common stock such share is convertible into at such time, but not in excess of the beneficial ownership limitation. Each warrant is exercisable into a share of common stock at an exercise price of $1.00 per share. The warrant may be exercised on a cashless basis. The Company is prohibited from effecting the exercise of warrant to the extent that, as a result of such exercise, the holder beneficially owns more than 4.99%, in the aggregate, of the issued and outstanding shares of the Companys common stock calculated immediately after giving effect to the issuance of shares of common stock upon the exercise of the warrant. Offering costs of $62,000 associated with the Private Placement Units were recorded as component of stockholders equity. The calculation of the effective conversion amount did not result in a beneficial conversion feature (BCF) because the effective conversion price equaled the Companys stock price on the date of issuance, therefore no BCF was recorded. In June 2014, the Company and the holders of the warrants agreed to waive their Most Favored Nations Provision. As a result of this waiver the Company reclassified $22,282 from derivative liabilities on warrants to additional paid in capital. On July 16, 2014, the Company converted 1,550,000 shares of Series C preferred Stock to 1,550,000 shares of common stock. On August 26, 2014, 1,000,000 warrants were exchanged by multiple warrant holders for 100,000 shares of common stock. On October 21, 2014, the Company entered into a Share Redemption Agreement and Release (the Redemption Agreement) with each of Charles Allen, its Chief Executive Officer, Chief Financial Officer and Chairman, Charles Kiser, its Chief Marketing Officer and Michal Handerhan, its Chief Operating Officer and corporate secretary (collectively, the Company Officers) pursuant to which the Company Officers agreed to return an aggregate of 12,750,000 shares of the Companys common stock, par value $0.001 per share, held by them to the Company for cancellation in consideration for an aggregate payment of $2,491. Demand Registration Rights. The shares of Common Stock issuable upon conversion of Series C Shares or the warrant underlying the units sold in the Private Placement are subject to piggy-back and demand registration rights until such shares of Common Stock may be sold under Rule 144 under the Securities Act of 1933, as amended (the Securities Act). The Company shall pay to holders a fee of 0.25% per month of the Investors investment, payable in cash, for every thirty (30) day period up to a maximum of 3%, (i) following the filing date that the registration statement has not been filed and (ii) following the effectiveness date that the registration statement has not been declared effective; provided, however, that the Company shall not be obligated to pay any such liquidated damages if the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases issued or actions taken by the Commission pursuant to its authority with respect to Rule 415, and the Company registers at such time the maximum number of shares of Common Stock permissible upon consultation with the staff of the Commission. If during the effectiveness period, the number of registerable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a registration statement, the Company shall file as soon as reasonably practicable an additional registration statement covering the resale of not less than the number of such registerable securities. The Company accounts for obligations under the Registration Rights Agreement in accordance with ASC 450 Contingencies, which requires the Company to record a liability if the contingent loss is probable and the amount can be estimated. At December 31, 2014, the Company has not recorded a liability pertaining to the Companys obligations under the Registration Rights Agreement because the amount is not deemed probable (the Companys shares are currently eligible to be sold under Rule 144 the Securities Act. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7 Related Party Transactions On December 18, 2014, Charles Allen, the Companys Chief Executive Officer contributed $7,990 of brand new digital currency mining hardware at cost in exchange for a promissory note (the Allen Note). The Allen Note bears interest at a rate of 2% per year and is due on December 31, 2015. The Allen Note may be prepaid, at our option, without premium or penalty, in whole or in part at any time or from time to time prior to the Allen Note maturity. On February 10, 2015, the Company paid back $3,000 on the Allen Note. On January 19, 2015, Michal Handerhan, the Companys Chief Operating Officer loaned the Company $20,000 pursuant to Promissory Notes (the Handerhan Note). The Handerhan Note bears interest at the rate of 2% per annum and matures on December 31, 2015. The Handerhan Note may be prepaid, at the option of the Company, without premium or penalty, in whole or in part at any time or from time to time prior to the in maturity. On February 17, 2015, the Company paid back $3,000. As of March 31, 2015, the Company recorded $290 of accrued interest related to the Allen Note and the Handerhan Note. On January 19, 2015 (the Closing Date), the Company sold an aggregate of 4,330,000 units (each a January Unit) in a private placement (the January Private Placement) of its securities to certain investors at a purchase price of $0.10 per January Unit pursuant to subscription agreements for an aggregate purchase price of $433,000. Charles Allen, the Companys Chief Executive Officer, and Michal Handerhan, the Companys Chief Operating Officer, each purchased 50,000 January Units in the January Private Placement for $5,000 per executive. |
Investment at Cost
Investment at Cost | 3 Months Ended |
Mar. 31, 2015 | |
Schedule of Investments [Abstract] | |
Investment at Cost | Note 8 Investment at Cost On January 19, 2015, the Company entered into a Convertible Note Purchase Agreement (the Purchase Agreement) with Coin Outlet, Inc. (Coin Outlet) pursuant to which the Company purchased a convertible promissory note in the principal amount of $100,000 (the Coin Outlet Note). The Coin Outlet Note accrues interest at 4% per annum and matures on January 31, 2016. The Coin Outlet Note will convert, on or before the maturity date, upon the occurrence of Coin Outlets next equity financing (or series of financings) in which Coin Outlet receives gross proceeds of at least $1 million (the Trigger Financing). Upon the occurrence of a Trigger Financing, all outstanding principal on the Coin Outlet Note (and, at the Coin Outlets option, accrued but unpaid interest thereon), will convert into such Coin Outlet securities sold in the Trigger Financing at a price per share equal to 80% of the per share price of the securities sold in the Trigger Financing (the Note Conversion Price). In the event the Note Conversion Price exceeds the quotient of (x) $6 million divided by (y) Coin Outlets fully diluted capitalization (as calculated in the Coin Outlet Note) (such quotient, the Fully Diluted Value), then the Note Conversion Price shall equal the per share price of the securities sold in the Trigger Financing and Coin Outlet shall issue such additional number of shares of Coin Outlet to the Company such that the average purchase price per share of Coin Outlet common stock (including shares of Coin Outlet common stock issuable upon conversion of the Coin Outlet Note into the Trigger Financing) is equal to the Fully Diluted Value. On March 26, 2015 the Company acquired 166,756 shares (an additional 2% equity ownership) of Coin Outlet Inc. (Coin Outlet) from Eric Grill, Coin Outlets CEO, for 701,966 shares of the Companys Common Stock (Coin Outlet Investment). The Company now owns approximately 4.2% of Coin Outlets equity and has the ability to own up to 11% upon exercise of its previously issued option and warrant. Mr. Grill entered into a lock-up agreement with the Company with respect to his shares, pursuant to the lockup agreement Mr. Grill is prohibited from the sale of any his shares until after February 5, 2017. (see Note 6) As of March 31, 2015, the Company assessed the carrying amount of this investment for potential impairment and determined that this investment is not recoverable due to uncertainties regarding the stability of digital currency markets and steady price decline in the US dollar equivalent of Bitcoins throughout 2015. Total impairment was $254,433 for the Coin Outlet Note and Coin Outlet Investment. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | Note 9 Fair Value Measurements The Companys assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Companys liabilities measured at fair value on a recurring basis and the Companys estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2015 and December 31, 2014: Fair value measured at March 31, 2015 Total carrying value at March 31, 2015 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Digital Currencies $ 19,944 $ 19,944 $ - $ - Liabilities: Derivative Liabilities $ 1,879,220 $ - $ - $ 1,879,220 Fair value measured at December 31, 2014 Total carrying value at December 31, 2014 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 16,040 $ 16,040 $ - $ - Derivative liabilities as of March 31, 2015 consists of Unit warrants with call provision and most favored nation that was issued on January 19, 2015 in connection with the Companys financing. There were no transfers between Level 1, 2 or 3 during the three months ended March 31, 2015. The following table presents additional information about Level 3 assets and liabilities measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. Changes in Level 3 liabilities measured at fair value for the three months ended March 31, 2015: Balance - January 1, 2015 $ - Fair value of derivative liability on date of issuance (January 19, 2015) 952,600 Change in fair value of derivative liability 926,620 Balance - March 31, 2015 $ 1,879,220 A summary of quantitative information with respect to valuation methodology, estimated using a probability-weighted Black-Scholes option pricing model, which is comparable to a Binomial option pricing model, and significant unobservable inputs used for the Companys warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2015 is as follows: January 19, 2015 March 31, 2015 Date of valuation Fair value of Common Stock $ 0.08 $ 0.23 Dividend yield (per share) 0.00 % 0.00 % Strike price $ 0.10 $ 0.10 Volatility (annual) 108.44 % 107.90 % Risk-free rate 1.29 % 1.37 % Expected life (years) 5.0 4.8 The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Companys management. | Note 7 Fair Value Measurements The Companys assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Companys liabilities measured at fair value on a recurring basis and the Companys estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2014: Fair value measured at December 31, 2014 Total carrying value at December 31, 2014 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 16,040 $ 16,040 $ - $ - Fair value measured at December 31, 2013 Total carrying value at December 31, 2013 Quoted prices in active markets 5 (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 22,959 $ 22,959 $ - $ - There were no transfers between Level 1, 2 or 3 during the year ended December 31, 2014 and for the period ended July 28, 2013 (inception) through December 31, 2013, respectively. The following table presents additional information about Level 3 assets and liabilities measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. Changes in Level 3 liabilities measured at fair value for the twelve months ended December 31, 2014: Balance - January 1, 2014 $ - Fair value of warrant liability on date of issuance (February 6, 2014) 227,239 Change in fair value of warrant liability immediately before reclassification (204,957 ) Reclassification of derivative liability warrant (22,282 ) Balance - December 31, 2014 $ - A summary of quantitative information with respect to valuation methodology, estimated using a probability-weighted Black-Scholes option pricing model, which is comparable to a Binomial option pricing model, and significant unobservable inputs used for the Companys warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2014 is as follows: Date of valuation February 6, 2014 March 31, 2014 June 30, 2014 Fair value of common stock $ 0.44 $ 0.32 0.17 Dividend yield (per share) 0.00 % 0.00 % 0.00 % Strike price $ 1.00 $ 1.00 1.00 Volatility (annual) 74 % 74 % 71 % Risk-free rate 0.66 % 0.93 % 0.88 % Expected life (years) 3.0 2.9 2.7 The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Companys Management. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock Based Compensation | Note 10 Stock Based Compensation Compensation expense for all stock-based awards is measured on the grant date based on the fair value of the award and is recognized as an expense, on a straight-line basis, over the employees requisite service period (generally the vesting period of the equity award). The fair value of each option award is estimated on the grant date using a Black-Scholes option valuation model. Stock-based compensation expense is recognized only for those awards that are expected to vest using an estimated forfeiture rate. The Company estimates pre-vesting option forfeitures at the time of grant and reflects the impact of estimated pre-vesting option forfeitures in compensation expense recognized. For options and warrants issued to non-employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Stock-based compensation expense was $1,369,376 and $1,343,794 for the three months ended March 31, 2015 and 2014, respectively. Stock Option Activity There is no stock option activities during the three months ended March 31, 2015. The Companys policy, in the event of exercise, is to issue new shares to fulfill the requirements for options that are exercised. There are 12,450,000 options outstanding as of March 31, 2015, and none of those are exercisable. The outstanding options had weighted average exercise price of $0.10 and intrinsic value of $0.23. There is $4,142,896 of unrecognized compensation cost as of March 31, 2015, and will be amortized in 0.85 2 years. | Note 8 Stock Based Compensation 2014 Equity Incentive Plan On January 30, 2014, the Board of Directors of the Company approved and authorized the adoption of the 2014 Equity Incentive Plan (the 2014 Plan). The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. The 2014 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Companys employees, officers, directors and consultants. Pursuant to the terms of the 2014 Plan, either the Board or a board committee is authorized to administer the plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Unless earlier terminated by the Board, the Plan shall terminate at the close of business on January 30, 2024. Up to 15,503,680 shares of common stock are issuable pursuant to awards under the 2014 Plan. On February 5, 2014, the Company granted Charles Allen, the Companys Chief Executive Officer and Chief Financial Officer, a five year stock option to purchase up to 1,550,368 shares of the Companys common stock at an exercise price of $0.50 per share in connection with his employment with the Company. The options vest in twelve equal monthly installments, beginning on the one year anniversary of the date of issuance and every one month anniversary thereafter. On February 5, 2014, the Company granted Michal Handerhan, the Companys Chief Operating Officer and Chairman, a five year stock option to purchase up to 1,550,368 shares of the Companys common stock at an exercise price of $0.50 per share in connection with his employment with the Company. The options vest in twelve equal monthly installments, beginning on the one year anniversary of the date of issuance and every one month anniversary thereafter. On February 5, 2014, the Company granted Timothy Sidie, the Companys Chief Technology Officer, a five year stock option to purchase up to 1,550,368 shares of the Companys common stock at an exercise price of $0.50 per share in connection with his employment with the Company. The options vest in twelve equal monthly installments, beginning on the one year anniversary of the date of issuance and every one month anniversary thereafter. On February 5, 2014, the Company granted Charles A. Kiser, the Companys Chief Executive Officer and Chief Financial Officer, a five year stock option to purchase up to 1,550,368 shares of the Companys common stock at an exercise price of $0.50 per share in connection with his employment with the Company. The options vest in twelve equal monthly installments, beginning on the one year anniversary of the date of issuance and every one month anniversary thereafter. On November 7, 2014, the Company entered into an Option Cancellation and Release Agreement (each, a Cancellation Agreement) with each of Charles Allen, its Chief Executive Officer, Chief Financial Officer and Chairman, Charles Kiser, its Chief Marketing Officer, Michal Handerhan, its Chief Operating Officer and corporate secretary and Timothy Sidie, its former Chief Technology Officer (collectively, the Company Option Holders) pursuant to which each of the Company Option Holders agreed to return to the Company for cancellation, options to purchase up to 1,550,368 shares (or 6,201,472 shares in the aggregate) of the Companys common stock, par value $0.001 per share, with an exercise price of $0.50, held by them. Mr. Kisers and Mr. Sidies 3,100,736 shares of options were canceled without replacement, and the amortization of the unrecognized stock compensation expenses were accelerated on November 7, 2014 for total $5,570,636. On November 7, 2014, the Board of Directors of the Company granted Mr. Allen and Mr. Handerhan each an eight year non-qualified stock option under the Companys 2014 Plan to purchase up to an aggregate of 9,500,000 shares of the Companys common stock with a per share exercise price of $0.10 as replacement of the options canceled per Cancellation Agreement. The cancellation and reissuance of these stock options was treated as a modification and, accordingly, incremental fair value resulting from the modification of these awards amounted to $6,349,113, which is being recognized over the new vesting period of 1.2 years. Compensation expense for all stock-based awards is measured on the grant date based on the fair value of the award and is recognized as an expense, on a straight-line basis, over the employees requisite service period (generally the vesting period of the equity award). The fair value of each option award is estimated on the grant date using a Black-Scholes option valuation model. Stock-based compensation expense is recognized only for those awards that are expected to vest using an estimated forfeiture rate. The Company estimates pre-vesting option forfeitures at the time of grant and reflects the impact of estimated pre-vesting option forfeitures in compensation expense recognized. For options and warrants issued to non-employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. The cancellation and reissuance of these stock options was treated as a modification and, accordingly, total stock-based compensation expense related to these awards increased $6,349,113, which will be recognized over the new vesting period. The grant date fair value including modified instrumental value of stock options granted for the year ended December 31, 2014 was $18,638,717. The fair value of the Companys common stock was based upon the publicly quoted price on the date that the final approval of the awards was obtained. The Company does not expect to pay dividends in the foreseeable future so therefore the dividend yield is 0%. The expected term for stock options granted with service conditions represents the average period the stock options are expected to remain outstanding and is based on the expected term calculated using the approach prescribed by the Securities and Exchange Commissions Staff Accounting Bulletin No. 110 for plain vanilla options. The expected term for stock options granted with performance and/or market conditions represents the period estimated by management by which the performance conditions and market conditions will be met. The Company obtained the risk free interest rate from publicly available data published by the Federal Reserve. The volatility rate was computed based on a comparison of average volatility rates of similar companies. The fair value of options granted in 2014 was estimated using the following assumptions exercise price $0.10-$0.50, expected stock price volatility 73.8%-105%, effective life 2.75-5.03 years, risk free rate 0.69%-1.67%. Total stock-based compensation expense was $13,126,445 for the year ended December 31, 2014. Stock Option Activity A summary of stock option activity to employees for the year ended December 31, 2014 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value per Share Avergae Remaining Contractual Life Average Intrinsic Value Outstanding at December 31, 2013 - $ - $ - - $ - Granted 18,651,472 0.23 1.00 8.0 - Expired - - - - - Canceled (6,201,472 ) (0.50 ) (2.88 ) - - Outstanding at December 31, 2014 12,450,000 $ 0.10 $ 0.01 8.0 $ - Exercisable as of December 31, 2014 - - The Companys policy, in the event of exercise, is to issue new shares to fulfill the requirements for options that are exercised. There is $5,512,272 of unrecognized compensation cost as of December 31, 2014. |
Employment Agreements
Employment Agreements | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employment Agreements | Note 9 Employment Agreements Charles W. Allen. On February 5, 2014, the Company entered into an employment agreement with Charles W. Allen (the Allen Employment Agreement), whereby Mr. Allen agreed to serve as the Companys Chief Executive Officer and Chief Financial Officer for a period of two (2) years, subject to renewal, in consideration for an annual salary of $150,000. Additionally, under the terms of the Allen Employment Agreement, Mr. Allen shall be eligible for an annual bonus if the Company meets certain criteria, as established by the Board of Directors. Mr. Allen shall be entitled to participate in all benefits plans the Company provides to its senior executives. Michal Handerhan On February 5, 2014, the Company entered into an employment agreement with Michal Handerhan (the Handerhan Employment Agreement), whereby Mr. Handerhan agreed to serve as the Companys Chief Operating Officer and Chairman for a period of two (2) years, subject to renewal, in consideration for an annual salary of $160,000. Additionally, under the terms of the Handerhan Employment Agreement, Mr. Handerhan shall be eligible for an annual bonus if the Company meets certain criteria, as established by the Board of Directors. Mr. Handerhan shall be entitled to participate in all benefits plans the Company provides to its senior executives. Tim Sidie On February 5, 2014, the Company entered into an employment agreement with Timothy Sidie (the Sidie Employment Agreement), whereby Mr. Sidie agreed to serve as the Companys Chief Technology Officer for a period of two (2) years, subject to renewal, in consideration for an annual salary of $140,000. Additionally, under the terms of the Sidie Employment Agreement, Mr. Sidie shall be eligible for an annual bonus if the Company meets certain criteria, as established by the Board of Directors. Mr. Sidie shall be entitled to participate in all benefits plans the Company provides to its senior executives. Charles Kiser On February 5, 2014, the Company entered into an employment agreement with Charles A. Kiser (the Kiser Employment Agreement), whereby Mr. Kiser agreed to serve as the Companys Chief Marketing Officer for a period of one (1) year, subject to renewal, in consideration for an annual salary of $135,000. Additionally, under the terms of the Kiser Employment Agreement, Mr. Kiser shall be eligible for an annual bonus if the Company meets certain criteria, as established by the Board of Directors. Mr. Kiser shall be entitled to participate in all benefits plans the Company provides to its senior executives. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies | ||
Commitments and Contingencies | Note 11 Commitments and Contingencies The Company has an operating sub-lease agreement ending on May 31, 2015 for its headquarters in Arlington, Virginia. Prepaid expenses include $24,073 of fixed minimum lease payment that is prepaid through May 31, 2015. On January 28, 2015, BTCS Digital Manufacturing a wholly owned subsidiary of the Company entered into a commercial lease agreement (the Lease). The term of the Lease commenced on January 28, 2015 and ends on January 25, 2017. The annual rental fee for the first and second year will be $58,271 and $66,750, respectively. The Company also has the option to purchase the property during the second year of the Lease term for a purchase price of $775,000 less the $10,000 security deposit and all lease payments. | Note 10 Commitments and Contingencies On April 4, 2014, the Company entered into an operating sub-lease agreement beginning on April 14, 2014 and ending on May 31, 2015 (the Term) for its headquarters in Arlington, Virginia. Prepaid expenses include $24,073 of fixed minimum lease payment that is prepaid through May 31, 2015. Additionally, the Company paid a security deposit of one months rent of $4,815. On January 28, 2015, the Company entered into a commercial lease agreement (the Lease). The term of the Lease commenced on January 26, 2015 and ends on January 25, 2017. The annual rental fee for the first and second year will be $58,271 and $66,750, respectively. The Company also has the option to purchase the property during the second year of the Lease term for a purchase price of $775,000. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 Income Taxes The Company had no income tax expense due to operating loss incurred for the year ended December 31, 2014. The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at December 31, 2014 are comprised of the following: As of December 31, 2014 Deferred tax assets: Net-operating loss carryforward $ 455,491 Stock-based compensation 5,177,726 Total Deferred Tax Assets 5,633,217 Valuation allowance (5,633,217 ) Deferred Tax Asset, Net of Allowance $ - At December 31, 2014, the Company had net operating loss carry forwards for federal and state tax purposes of approximately $1,155,000 which begin to expire in 2034. Prior to the merger, the Company (Bitcoin Shop Inc.) had generated approximately $1,100,000 of net operating loss carryforwards, which the Companys preliminary analysis indicates would be subject to significant limitations pursuant to Internal Revenue Code Section 382. Therefore, the Company recorded no deferred tax asset related to Bitcoin Shop Incs previous net operating loss carryforwards. The Company has not performed a detailed analysis to determine whether an ownership change under Section 382 of the IRC has occurred. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. In case the deferred tax assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount of the deferred tax assets at December 31, 2014. The valuation allowance increased by approximately $5,633,000 as of December 31, 2014. The expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows: For the year ended December 31, 2014 Statutory Federal Income Tax Rate (34.0 ) % State Taxes, Net of Federal Tax Benefit (5.3 ) % Others 1.1 % Change in Valuation Allowance 38.2 % Income Taxes Provision (Benefit) 0.0 % The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2014. |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 12 Subsequent Events On April 20, 2015, the Company sold an aggregate of 7,708,342 Units (each a April Unit) of its securities in a private placement (the April Private Placement) to certain investors (the Investors) at a purchase price of $0.30 per April Unit pursuant to subscription agreements for an aggregate purchase price of $2,312,500. Each April Unit in the April Private Placement consists of (i) one share of Common Stock and (ii) a warrant to purchase 1.4 shares of Common Stock at an exercise price of $0.375 per share (April Warrant). The April Units are subject to a Most Favored Nations provision issuances for a period of twenty four months from the Closing Date in the event the Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversion or exercise price per share which shall be less than $0.30 per share (such, issuance, a Lower Price Issuance), subject to certain customary exceptions. Furthermore, the exercise price of the April Warrants is subject to certain price protection provisions for a period of twenty four months in the event the Company issues a Lower Price Issuance such that the Company shall lower the April Warrant exercise price to the price that is the product of: (i) one hundred and twenty five percent (125%), and (ii) the issuance price of the Lower Price Issuance. The April Warrant may be exercised on a cashless basis in the event there is no effective registration statement covering the resale of the Common Stock issuable upon exercise of the April Warrants. The April Warrants may be called for cancelation by the Company if: (i) the volume weighted average price per share exceeds $0.938 for 15 consecutive trading days, and (ii) the average daily dollar trading volume for such 15 consecutive trading days exceeds $200,000 per trading day. The Company has undertaken, pursuant to the registration rights agreement (the Registration Rights Agreement) between the Company and each of the Investors to file a registration statement to register the shares of Common Stock issued as part of the April Units and issuable upon exercise of the April Warrants issued in the April Private Placement, within forty five days following the Closing Date, to have such registration statement declared effective by the Securities and Exchange Commission within one hundred and twenty days from such filing date and to maintain the effectiveness of the registration statement until all of the Common Stock and Conversion Shares, have been sold or are otherwise able to be sold pursuant to Rule 144. In the event the Company fails to file within the forty five day period or have such registration statement declared effective within the one hundred and twenty day period, the Company is obligated to pay liquidated damages to the Investors for every thirty days during which such filing is not made and/or effectiveness obtained, such fee being subject to certain exceptions. Charles Allen, the Companys Chief Executive Officer and Michal Handerhan, the Companys Chief Operating Officer each purchased 66,667 April Units for $20,000 per executive in the April Private Placement. On April 20, 2015, the Company issued an aggregate of 418,716 shares of Common Stock to its advisory board members. Each of the nine members of the advisory board members received 46,524 shares of common stock. The shares were issued pursuant to independent contractor agreements between the advisory board members and the Company dated October 1, 2014. On April 22, 2015, the Company issued 83,000 shares of Common Stock at a per share price of $0.31 to Chord Advisors, LLC (Chord). The shares were issued pursuant to a conversion agreement (the Conversion Agreement) for an aggregate conversion amount of $25,730. The conversion amount was in consideration for financial advisory services. On April 24, 2015, the Company issued of 32,258 shares of Common Stock at a per share price of $0.31 to Chord. The shares were issued pursuant to a conversion agreement (the Conversion Agreement) for an aggregate conversion amount of $10,000. The conversion amount was in consideration for financial advisory services in connection with derivative liability accounting. On May 4, 2015, the Company issued of 16,129 shares of Common Stock at a per share price of $0.31 to Chord. The shares were issued pursuant to a conversion agreement (the Conversion Agreement) for an aggregate conversion amount of $5,000. The conversion amount was in consideration for financial advisory services in connection with derivative liability accounting. On May 4, 2015, the Company repaid $10,000 in principal of the promissory note issued to Michal Handerhan, the Companys Chief Operating Officer, on January 19, 2015. The remaining balance of the promissory note, including principal and accrued interest is $7,108. On May 8, 2015, the Company paid in full the remaining balance of the promissory note issued to Charles Allen, the Companys Chief Executive Officer on December 18, 2014, including $4,990 in principal and $48 in accrued interest. On May 12, 2015, the Company agreed to convert accrued and unpaid salaries owed to Charles Allen, the Companys Chief Executive Officer, and Michal Handerhan, the Companys Chief Operating Officer (collectively the Employees) into shares of Common Stock pursuant to conversion agreements (collectively, the Salary Conversion Agreements). The Company recorded $27,000 accrued salaries as of March 31, 2015. Charles Allen converted $25,000 of accrued and unpaid salary for the months of March 2015 and April 2015 into 50,000 share of Common Stock at a per share price of $0.50. Michal Handerhan converted $25,000 of accrued and unpaid salary for the months of March 2015 and April 2015 into 50,000 share of Common Stock at a per share price of $0.50. On May 12, 2015, Bitcoin Shop, Inc. (the Company) entered into a Series B Preferred Share Purchase Agreement (the Share Purchase Agreement) and the Management Rights Letter (the Rights Letter) with Spondoolies Tech Ltd. (Spondoolies) a Bitcoin equipment manufacturer, by way of a joinder agreement (the Joinder Agreement) pursuant to which the Company purchased 29,092 Series B Preferred Shares of Spondoolies (the Series B Shares) for an aggregate purchase price of $1,500,000 (the Investment). After giving effect to the Investment, the Company owns approximately 6.6% of Spondoolies equity on a fully diluted basis. The Series B Preferred Shares are convertible into Spondoolies ordinary shares by dividing the original issuance price of the Series B Preferred Shares ($51.56) by the initial conversion price ($51.56) (the Conversion Price). Until Spondoolies consummates a Qualified IPO (as defined substantially as an initial firm commitment underwritten public offering of Spondoolies ordinary shares with net proceeds to Spondoolies of not less than $40 million), the Series B Preferred shares are subject to anti-dilution protection in the event Spondoolies issues ordinary shares or securities convertible into or exercisable for ordinary shares at a price per share or conversion or exercise price per share which shall be less than Conversion Price then in effect, subject to certain customary exceptions. The Conversion Price is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The Series B Shares are also entitled to certain preemptive rights, and a liquidation preference in the event of dissolution of Spondoolies. The Series B Preferred Shares are automatically convertible into ordinary shares of Spondoolies upon the occurrence of a Qualified IPO. In connection with the Companys purchase of the Series B Preferred Shares, the Company and Spondoolies executed the Rights Letter which provided the Company with certain rights, including inspection rights, and information rights with respect to Spondoolies financial statements, appurtenant to the Investment. On May 12, 2015, the Company and Spondoolies entered into a letter agreement (the Letter Agreement) to clarify and expand upon certain terms related to a proposed merger (Proposed Merger) contained in the LOI. Under the terms of the Letter Agreement, Spondoolies agreed to provide to the Company: (i) certain exclusivity rights for a period of nine months (the Term) with respect to any proposals or offers from, or enter into any agreements with, any third party relating to (a) any investment in, or acquisition of, equity interests of Spondoolies or (b) any possible sale or other disposition of all or any material portion of assets of Spondoolies; (ii) a breakup fee of $50,000 payable by Spondoolies, if the Proposed Merger is not consummated during the Term as a result of certain circumstances; (iii) a breakup fee of $1,000,000 if the Proposed Merger is not consummated because the approval of Spondoolies board of directors or shareholders for the Proposed Merger is not obtained and a competing deal is consummated, during the Term; and (iv) Spondoolies agreed to continue to sell its products to the Company for a period of 3 years, if the Proposed Merger is not consummated and Spondoolies continues to design and manufacture ASIC digital currency mining hardware. On May 13, 2015, the Company paid in full the remaining balance of the promissory note issued to Michal Handerhan, the Companys Chief Operating Officer, on January 19, 2015, including $7,000 in principal and $108 in accrued interest. | Note 12 - Subsequent Events On January 14, 2015, the Company and Coin Outlet executed an amendment (the Warrant Amendment) to the warrant previously issued by Coin Outlet to the Company on October 2, 2014 to change the expiration date of such warrant from January 15, 2015 to December 31, 2015. On January 19, 2015, Michal Handerhan, the Companys Chief Operating Officer and Timothy Sidie, the Companys co-founder and lead developer loaned the Company $20,000 and $45,000 respectively pursuant to Promissory Notes (the Notes). The Notes bears interest at the rate of 2% per annum and mature on December 31, 2015. The Notes may be prepaid, at the option of the Company, without premium or penalty, in whole or in part at any time or from time to time prior to the in maturity. On January 19, 2015, the Company entered into a Convertible Note Purchase Agreement (the Purchase Agreement) with Coin Outlet, Inc. (Coin Outlet) pursuant to which the Company purchased a convertible promissory note in the principal amount of $100,000 (the Coin Outlet Note). The Coin Outlet Note accrues interest at 4% per annum and matures on January 31, 2016. The Coin Outlet Note will convert, on or before the maturity date, upon the occurrence of Coin Outlets next equity financing (or series of financings) in which Coin Outlet receives gross proceeds of at least $1 million (the Trigger Financing). Upon the occurrence of a Trigger Financing, all outstanding principal on the Coin Outlet Note (and, at the Coin Outlets option, accrued but unpaid interest thereon), will convert into such Coin Outlet securities sold in the Trigger Financing at a price per share equal to 80% of the per share price of the securities sold in the Trigger Financing (the Note Conversion Price). In the event the Note Conversion Price exceeds the quotient of (x) $6 million divided by (y) Coin Outlets fully diluted capitalization (as calculated in the Coin Outlet Note) (such quotient, the Fully Diluted Value), then the Note Conversion Price shall equal the per share price of the securities sold in the Trigger Financing and Coin Outlet shall issue such additional number of shares of Coin Outlet to the Company such that the average purchase price per share of Coin Outlet common stock (including shares of Coin Outlet common stock issuable upon conversion of the Coin Outlet Note into the Trigger Financing) is equal to the Fully Diluted Value. On January 19, 2015 (the Closing Date), Bitcoin Shop, Inc. (the Company) sold an aggregate of 4,330,000 Units (each a Unit) in a private placement (the Private Placement) of its securities to certain investors (the Investors) at a purchase price of $0.10 per Unit pursuant to subscription agreement (the Subscription Agreements) for an aggregate purchase price of $433,000. Each Unit in the Private Placement consists of (i) one share of common stock, par value $0.001 per share (the Common Stock) and (ii) a warrant to purchase 2.5 shares of Common Stock at an exercise price of $0.10 per share. The Units are subject to a Most Favored Nations provision and the Warrants are subject to price protection in the event of lower priced issuances for a period of twenty four months from the Closing Date in the event the Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversion or exercise price per share which shall be less than $0.10 per share, subject to certain customary exceptions. Additionally, the shares of Common Stock issued as part of the Unit and issuable upon exercise of the Warrants are subject to demand and piggy back registration rights. The Warrant may be exercised on a cashless basis in the event there is no effective registration statement covering the resale of the Common Stock issuable upon exercise of the Warrants. The Warrants may be called for cancelation by the Company if: (i) the price per share exceeds $0.20 for 15 consecutive trading days, and (ii) the average daily dollar trading volume for such 15 consecutive trading days exceeds $50,000 per trading day. Charles Allen, the Companys Chief Executive Officer, and Michal Handerhan, the Companys Chief Operating Officer each purchased 50,000 Units in the Private Placement. On January 23, 2015, BTCS Digital Manufacturing, a wholly owned subsidiary of the Company, purchased one hundred Spondoolies S35 digital currency mining servers from Spondoolies Tech Ltd. (Spondoolies) for $218,500 (the Purchase Price) pursuant to a purchase order agreement (the Purchase Agreement). $25,000 of the total Purchase Price was paid in the form of 250,000 shares of the Companys common Stock. On January 26, 2015, the Company entered into a Share Redemption Agreement and Release (the Redemption Agreement) with Charles Kiser, its Executive Vice President pursuant to which Mr. Kiser agreed to return an aggregate of 250,000 shares of the Companys Common Stock, held by him to the Company for cancellation in consideration for an aggregate payment of $2,500. On January 28, 2015, the Company entered into a commercial lease agreement (the Lease). The term of the Lease commenced on January 26, 2015 and ends on January 25, 2017. The annual rental fee for the first and second year will be $58,271 and $66,750, respectively. The Company also has the option to purchase the property during the second year of the Lease term for a purchase price of $775,000. On February 18, 2015, the Company issued 326,923 and 71,900 shares of Common Stock at a per share price of $0.26, to Sichenzia Ross Friedman Ference LLP (SRFF) and Alliance Funds LLC (AF), respectively. The shares were issued pursuant to conversion agreements (the Conversion Agreements) for an aggregate conversion amount of $103,694 (the Conversion Amount). The Conversion Amount was in consideration for settling outstanding legal and investor relation fee balances of $85,000 and $18,694 owed to SRFF and Capital Markets Group an affiliate of AF, respectively. The Common Stock is subject to price protection in the event of lower priced issuances for a period of one year from the Conversion Date in the event the Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversion or exercise price per share which shall be less than $0.26 per share, subject to certain customary exceptions. Additionally, the shares of Common Stock issued are subject to demand and piggy back registration rights. On February 20, 2015, BTCS Digital Manufacturing, a wholly owned subsidiary of the Company, purchased from a seller (the Seller) used digital currency mining servers comprised primarily of Spondoolies hardware for $14,480 (the Purchase Price) pursuant to a purchase agreement (the Purchase Agreement). The Purchase Price was paid in the form of 55,693 shares of the Companys restricted Common Stock at a per share price of $0.26. Additionally, the shares of Common Stock issued are subject to demand and piggy back registration rights. On March 5, 2015, the Company issued of 153,846 shares of Common Stock at a per share price of $0.26, to Chord Advisors, LLC (Chord). The shares were issued pursuant to a conversion agreement (the Conversion Agreement) for an aggregate conversion amount of $40,000 (the Conversion Amount). The Conversion Amount was in consideration for settling a balance of $30,000 and for the prepayment of $10,000 for advisory services for March 2015 and April 2015. The Common Stock is subject to price protection in the event of lower priced issuances for a period of one year from the Conversion Date in the event the Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversion or exercise price per share which shall be less than $0.26 per share, subject to certain customary exceptions. Additionally, the shares of Common Stock issued are subject to demand and piggy back registration rights. On March 26, 2015 the Company acquired 166,756 shares (an additional 2% equity ownership) of Coin Outlet from Eric Grill, Coin Outlets CEO, for 701,966 shares of the Companys common stock. The Company now owns approximately 4.2% of Coin Outlets equity and has the ability to own up to 11% upon exercise of its previously issued option and warrant. Mr. Grill entered into a lock-up agreement with the Company with respect to his shares, pursuant to the lockup agreement Mr. Grill is prohibited from the sale of any his shares until after February 5, 2017. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Digital Currencies Translations and Remeasurements | Digital Currencies Translations and Remeasurements The Company accounts for digital currencies, which it considers to be an operating asset, at their initial cost and subsequently remeasures the carrying amounts of digital currencies it owns at each reporting date based on their current fair value. The changes in the fair value of digital currencies are included as a component of income or loss from operations. The Company currently classifies digital currencies as a current asset. Digital currencies are considered a crypto-currency and the Company receives deposits in various kinds of digital currencies including but not limited to bitcoins, litecoins and dogecoins from customer trade transactions. The Company when necessary, will issue refunds in digital currencies and, at its discretion, make payments to vendors in digital currencies, if and when such vendors accept digital currencies as payment. The Company obtains the equivalency rate of bitcoins to USD from various exchanges including, Bitstamp and Coinbase. The equivalency rate obtained from these sources represents a generally well recognized quoted price in an active market for bitcoins, which market and related database are accessible to the Company on an ongoing basis. In March of 2014, the Company began accepting litecoins and dogecoins. Currently, the Company determines the value of bitcoins, litecoins and dogecoins (for the purpose of e-commerce sales) from GoCoin LLC, the payment processor that enables the Company to accept these digital currencies as payments from its customers for goods. The Bitcoin Price Index was $458.50, $639.36, $386.27 and $319.70 as of March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, respectively. | |
Property and Equipment | Property and Equipment Internally Developed Software Internally developed software consisting of the core technology that allows the Company to interface with vendors in order to display up-to-date inventory, and present prices in bitcoin, litecoin, or dogecoin according to the GoCoin US Dollars exchange rates. The Company accounts for computer software used in the business in accordance with ASC 350 Intangibles-Goodwill and Other. ASC 350 requires computer software costs associated with internal use software to be charged to operations as incurred until certain capitalization criteria are met. Costs incurred during the preliminary project stage and the post-implementation stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property, equipment and software. These costs generally consist of internal labor during configuration, coding, and testing activities. Capitalization begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used to perform the function intended. The Company redirected its focus from its e-commerce marketplace efforts to its transaction verification services business during the third quarter and fourth quarter in 2014. Revenue generated from the historical e-commerce marketplace business, net of refunds amounted to $2,799 for the year ended December 31, 2014 while net capitalized software costs prior to recording an impairment charge amounted to $144,796. The Company is unable to conclude that undiscounted cash flows on the remaining useful life of this asset will be sufficient to support the carrying amount of this asset or that a market exists to this type of asset to support anything more than a nominal fair value. Accordingly, the Company recorded a $144,796 during the fourth quarter of 2014. Transaction Verification Servers Management has assessed the basis of depreciation of the Companys transaction verification servers used to verify digital currency transactions and generate digital currencies and believes they should be depreciated over a 2 year period. The rate at which the Company generates bitcoins and, therefore, consumes the economic benefits of its transaction verification servers are influenced by a number of factors including the following: ● the complexity of the transaction verification process which is driven by the algorithms contained within the bitcoin open source software; ● the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Petahash units); and ● technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of bitcoins generated as a function of operating costs, primarily power costs i.e. the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase. Because of both the Companys and the industrys relatively short life cycle to date management has only limited data available to it. Furthermore the data available also includes data derived from the use of economic modeling to forecast future bitcoin generation and the assumptions included in such forecasts, including bitcoin price and network difficulty, are derived from management assumptions which are inherently judgmental. Based on current data available to it management has determined that a 2 year diminishing value best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the recent plateau in difficulty level. Management will review this estimate annually and will revise such estimates as and when data comes available. To the extent that any of the assumptions underlying managements estimate of the useful life of its transaction verification servers are subject to revision in a future reporting period either as a result of changes in circumstances or through the availability of better data then in future the rate of depreciation may change impacting both the depreciation expense charged to the profit or loss and the carrying value of transaction verification servers. | |
Intangible Asset | Intangible Asset The Company has applied the provision of ASC topic 350-50-50 Intangible - Goodwill and Other/Website Development Costs, in accounting for its costs incurred to purchase its website. Capitalized website costs are being amortized by the straight line method over an estimated useful life of 3 years. Amortization cost was $4,768 and $0 for the year ended December 31, 2014 and for the period from July 28, 2013 (inception) through December 31, 2013, respectively. | |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, estimating the provision for income taxes, estimating the fair value of equity instruments recorded as derivative liabilities, useful lives of depreciable assets and whether impairment charges may apply. | |
Revenue recognition | Revenue Recognition The Company follows the guidance of the Securities and Exchange Commissions Staff Accounting Bulletin (SAB) 104 for revenue recognition and Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Accordingly, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. E-commerce Marketplace Business The Companys e-commerce marketplace revenue is derived from processing fees and the markup of goods purchased by customers through orders originated through the Companys website. The Company recognizes revenues from the origination of the orders upon receiving confirmation that the third party vendors fulfillment process (delivery to customer) is complete. Customer deposits represents orders originated and digital currency payments received for orders that are not yet fulfilled. The Company had no open orders at December 31, 2014. The Company has determined that it is not the primary obligor in any of the sales transactions it originates. The Company does not (i) have general inventory risk with respect to any of the goods that its customers purchase, (ii) take title to, or bear the risk of loss for, any goods that third party vendors ship to its customers, (iii) participate in the fulfillment of the sale, (iv) make representations regarding the suitability of products for its customers purposes, (v) modify any of the products purchased, or (vi) assume credit risk. Accordingly, the Company has determined, based on the weight of available evidence, that it is appropriate to record revenues on a net basis, which is equal to the amount of the processing fees, it earns plus the mark-up. Transaction Verification Services Business Revenue for the Companys transaction verification services business is recognized when the bitcoins are received in our digital wallet and are booked at the prevailing market price on the day of receipt as reported by Coinbase. | |
Income Taxes | Income Taxes As a result of the Reverse Merger, beginning on February 5, 2014, the Company is taxed as a C Corporation. Prior to the merger, the Company was a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for periods prior to February 5, 2014. The Company recognizes income taxes on an accrual basis based on tax positions taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized. Should they occur, the Companys policy is to classify interest and penalties related to tax positions as income tax expense. Since the Companys inception, no such interest or penalties have been incurred, however prior to February 5, 2014, the Company was a limited liability company and the Companys tax losses and credits generally flowed directly to the members. | |
Fair Value - Definition and Hierarchy | Fair Value Definition and Hierarchy In accordance with U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction in the principal or most advantageous market between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. In accordance with U.S. GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Companys assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The valuation techniques are consistent with the market, cost or income approaches to measuring fair value. If more than one valuation technique is used to measure fair value, the results are evaluated considering the reasonableness of the range of values indicated by those results. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 Level 2 Level 3 The availability of valuation techniques and observable inputs can vary and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for assets and liabilities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Companys own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause assets and liabilities to be reclassified to a lower level within the fair value hierarchy. The Company considers transfers between the levels within the fair value hierarchy when circumstances surrounding the fair value for a particular assets and liabilities conform to a different level of the fair value hierarchy than as previously reported. Whenever circumstances occur, whereby there is a transfer within the fair value hierarchy, the Company considers the date the event or change in circumstances occurred which caused the transfer. | |
Employee Stock-Based Compensation | Employee Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (ASC 718). ASC 718 addresses all forms of share-based payment (SBP) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations. | |
Advertising Expense | Advertising Expense Advertisement costs are expensed as incurred and included in marketing expenses. Advertising expenses amounted to $94,820 and $5,052 for the year ended December 31, 2014 and for the period from July 28, 2013 (inception) through December 31, 2013, respectively. | |
Investment at Cost | Investment at Cost On March 20, 2014, the Company invested $150,000 into Series A preferred units of GoCoin, LLC (GoCoin). GoCoin is an international payment processor that enables merchants to accept bitcoin, litecoin and dogecoin payments at the point of checkout in e-commerce transaction. The investment was carried at cost in the accompanying consolidated balance sheet. The Company did not maintain significant influence. On May 9, 2014, the Company invested $50,000 into Series Seed preferred units of Bitvault, Inc (Bitvault). The Company does not maintain significant influence. The investment was carried at cost in the accompanying consolidated balance sheet. On October 2, 2014, the Company entered into a Subscription Agreement (the Agreement) with Coin Outlet Inc. (Coin Outlet) pursuant to which the Company purchased from Coin Outlet 8,334 Units, at $6.00 per Unit, for an aggregate purchase price of $50,004. Each Unit consists of (i) one share of Coin Outlets common stock, and (ii) a warrant to purchase two (2) shares of Coin Outlets common stock at an exercise price of $6.00 per share which expires on December 31, 2015 (the Warrant). As further incentive for the Company to enter into the Agreement, the Company, Coin Outlet and its shareholders (the Holders) entered into an option agreement with the Company (the Option). Pursuant to the Option agreement the Company shall have the option in one or more transactions to obtain up to 75,448 shares in Coin Outlet (or approximately 7.4% of the total shares of Coin Outlet issued and outstanding immediately prior to this transaction) (the CO Shares) in exchange for up to an aggregate of 3,500,000 newly issued shares of common stock of the Company (the BTCS Shares). Both the CO Shares and BTCS Shares shall be adjusted to account for certain reclassifications and adjustments as set forth in the Option agreement. Pursuant to the Option agreement the Option will automatically be exercised, subject to a standard material adverse effect clause, in full on August 15, 2015. The Holders further agreed to enter into a lock-up agreement with the Company with respect to any BTCS Shares received (the Lockup Agreement). Pursuant to the Lockup Agreement the Holders are prohibited from the sale of any BTCS Shares until after February 5, 2017. Immediately prior to the transaction Coin Outlets share structure consisted of 1,000,000 shares of common stock, and no other equity or equity linked securities were issued or outstanding. After giving effect to the Unit purchase the Company will own 0.83% of Coin Outlet and if the Warrant and Option are exercised in full the Company would own 9.8% of Coin Outlet. During the 4th quarter of 2014, the Company assessed impairment for these investments and determined that these investments are not recoverable and as such fully impaired them due to the steady price decline in Bitcoins throughout 2014. The Bitcoin Price Index was $639.36, $386.27 and $319.70 as of June 30, 2014, September 30, 2014 and December 31, 2014, respectively. Total impairment was $150,000 for GoCoin, $50,000 for Bitvault and $50,004 for Coin Outlet. | |
Note Receivable | Note Receivable On July 10, 2014, the Company entered into a Convertible Note Purchase Agreement (the Purchase Agreement) with Express Technologies, Inc. (Express Technologies) pursuant to which the Company purchased a note receivable in the principal amount of $150,000 (the Note). The note receivable was carried at cost in the accompanying consolidated balance sheet. The Note accrues interest at 5% per annum and matures on July 10, 2015. Upon the occurrence of Express Technologies next preferred equity financing in which Express Technologies receives gross proceeds of at least $750,000 (the Financing), the entire outstanding principal amount and accrued but unpaid interest (the Conversion Amount) on the Note shall automatically be converted into such number of shares of Express Technologies preferred equity equal to the greater of (A) the Conversion Amount divided by the product of: (i) the per share price of the securities offered in the Financing and (ii) 0.85 and (B) the Conversion Amount divided by an amount equal to $9,000,000 divided by Express Technologies Fully Diluted Capitalization (as defined in the Note). In the event a Financing does not occur prior to the maturity of the Note, the Company may elect to convert the Note into such number of shares of common stock as shall equal: (A) the Conversion Amount as of the Maturity Date divided by (B) an amount equal to $9,000,000 divided by Express Technologies Fully Diluted Capitalization immediately prior to the Maturity Date. The conversion option does not have to be bifurcated as it does not meet the definition of a derivative (not readily convertible into cash). During the 4th quarter of 2014, the Company assessed impairment for this asset and determined that it was impaired due to the steady price decline in Bitcoins throughout 2014. The Bitcoin Price Index was $639.36, $386.27 and $319.70 as of June 30, 2014, September 30, 2014 and December 31, 2014, respectively. Total impairment was $150,000 for this Note. | |
Preferred Stock | Preferred Stock The Company applies the guidance enumerated in ASC 480 Distinguishing Liabilities from Equity when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. The Company classifies conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control, as temporary equity. At all other times, the Company classifies its preferred shares in stockholders equity. The Companys preferred shares do not feature any redemption rights within the holders control or conditional redemption features not within the Companys control as of December 31, 2014. Accordingly all issuances of preferred stock are presented as a component of consolidated stockholders equity. | |
Convertible Instruments | Convertible Instruments The Company has evaluated the Series C Convertible Preferred Stock (Preferred Stock) conversion component of the Private Placement and determined it should be considered an equity host and not a debt host as defined by ASC 815, Derivatives and Hedging | |
Transaction Verification Services | Transaction Verification Services Revenue earned from Bitcoin processing activities (Transaction Verification Services), commonly termed mining activities, is recognized at the fair value of the Bitcoins received as consideration on the date of actual receipt. The Company generates revenue by performing computer processing activities for bitcoin generation. In the crypto-currency industry such activity is generally referred to as Bitcoin mining. The Company receives consideration for performing such Bitcoin mining activities in the form of Bitcoins. Revenue is recorded upon the actual receipt of Bitcoins. Power and mining expenses consist of utilities paid to 3 rd The expenses related to our are affected by the level of activities and not the ultimate generation of Bitcoins. The Company expenses these costs as they are incurred. | |
Earnings per Share | Earnings per Share Basic earnings per share (EPS) is computed by dividing net loss applicable to common stock by the weighted-average number of common shares outstanding during the period. For purposes of calculating basic and diluted earnings per share, vested restricted stock awards are considered outstanding. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. The following financial instruments were not included in the diluted loss per share calculation for the three months ended March 31, 2015 because their effect was anti-dilutive: As of March 31, 2015 Stock options 12,450,000 Warrants 11,700,000 Excluded potentially dilutive securities 24,150,000 | Earnings per Share Basic earnings per share (EPS) is computed by dividing net loss applicable to common stock by the weighted-average number of common shares outstanding during the period. For purposes of calculating basic and diluted earnings per share, vested restricted stock awards are considered outstanding. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. The following financial instruments were not included in the diluted loss per share calculation for the year ended December 31, 2014 because their effect was anti-dilutive: As of December 31, 2014 Stock options 12,450,000 Warrants 875,000 Series C Convertible Preferred 2,200,000 Excluded potentially dilutive securities 15,525,000 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, the FASB issued ASU 2015-03, S implifying the Presentation of Debt Issuance Costs | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which updates the principles for recognizing revenue. ASU 2014-09 also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is evaluating the potential impacts of the adoption of this standard on its consolidated financial statements. The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Companys consolidated financial position and results of operations. The FASB has issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. The guidance, which is effective for annual reporting periods ending after December 15, 2016, extends the responsibility for performing the going-concern assessment to management and contains guidance on how to perform a going-concern assessment and when going-concern disclosures would be required under U.S. GAAP. The Company has elected to early adopt the provisions of ASU 2014-15 in connection with the issuance of these consolidated financial statements. In November 2014, the FASB issued Accounting Standards Update 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (ASU 2014-16), which clarifies how to evaluate the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, ASU 2014-16 requires that an entity consider all relevant terms and features in evaluating the nature of the host contract and clarifies that the nature of the host contract depends upon the economic characteristics and the risks of the entire hybrid financial instrument. An entity should assess the substance of the relevant terms and features, including the relative strength of the debt-like or equity-like terms and features given the facts and circumstances, when considering how to weight those terms and features. ASU 2014-16 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements |
Subsequent Events | Subsequent events Subsequent events have been evaluated through the date of this filing. | Subsequent events Subsequent events have been evaluated through the date of this filing. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Schedule of Earnings Per Share Anti-Diluted | The following financial instruments were not included in the diluted loss per share calculation for the three months ended March 31, 2015 because their effect was anti-dilutive: As of March 31, 2015 Stock options 12,450,000 Warrants 11,700,000 Excluded potentially dilutive securities 24,150,000 | The following financial instruments were not included in the diluted loss per share calculation for the year ended December 31, 2014 because their effect was anti-dilutive: As of December 31, 2014 Stock options 12,450,000 Warrants 875,000 Series C Convertible Preferred 2,200,000 Excluded potentially dilutive securities 15,525,000 |
Property And Equipment (Tables)
Property And Equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property And Equipment, Net | Property and equipment consist of the following at March 31, 2015 and December 31, 2014: March 31, 2015 December 31, 2014 Equipment $ 50,945 $ 14,189 Computer 4,085 3,469 Transaction verification servers 438,431 194,891 493,461 212,549 Accumulated depreciation (68,254 ) (22,359 ) Property and equipment, net $ 425,207 $ 190,190 | Property and equipment consist of the following at December 31, 2014 and December 31, 2013: December 31, 2014 December 31, 2013 Equipment $ 14,189 $ 4,000 Computer 3,469 - Transaction verification servers 194,891 - 212,549 4,000 Accumulated depreciation (22,359 ) (444 ) Property and equipment, net $ 190,190 $ 3,556 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Summary of Fair Value of Valuation Assumptions | A summary of quantitative information with respect to valuation methodology for the three months ended March 31, 2015 is as follows: Date of valuation February 18, 2015 February 18, 2015 March 5, 2015 Fair value of Common Stock $ 0.32 $ 0.32 $ 0.24 Dividend yield (per share) 0 0 0 Strike price $ 0.26 $ 0.26 $ 0.26 Volatility (annual) 123.36 % 123.36 % 124.56 % Risk-free rate 0.23 % 0.23 % 0.25 % Expected life (years) 5 5 5 |
Summary of Warrant Activity | The following is a summary of warrant activity for the three months ended March 31, 2015: Number of Weighted Average Warrants Exercise Price Outstanding as of December 31, 2014 875,000 $ 0.10 Issuance of warrants with Units January 19, 2015* 10,825,000 0.10 Outstanding as of March 31, 2015 ** 11,700,000 $ 0.10 * The warrants contain most favor nation and call provision and the Company classifies these warrant instruments as liabilities measured at fair value and re-measures these instruments at fair value each reporting period. (See FN 9) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Summary of Fair Value liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Companys liabilities measured at fair value on a recurring basis and the Companys estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2015 and December 31, 2014: Fair value measured at March 31, 2015 Total carrying value at March 31, 2015 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Digital Currencies $ 19,944 $ 19,944 $ - $ - Liabilities: Derivative Liabilities $ 1,879,220 $ - $ - $ 1,879,220 Fair value measured at December 31, 2014 Total carrying value at December 31, 2014 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 16,040 $ 16,040 $ - $ - | The following table presents information about the Companys liabilities measured at fair value on a recurring basis and the Companys estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2014: Fair value measured at December 31, 2014 Total carrying value at December 31, 2014 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 16,040 $ 16,040 $ - $ - Fair value measured at December 31, 2013 Total carrying value at December 31, 2013 Quoted prices in active markets 5 (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Digital Currencies $ 22,959 $ 22,959 $ - $ - |
Schedule of Changes in Level 3 Liabilities Measured at Fair Value | Changes in Level 3 liabilities measured at fair value for the three months ended March 31, 2015: Balance - January 1, 2015 $ - Fair value of derivative liability on date of issuance (January 19, 2015) 952,600 Change in fair value of derivative liability 926,620 Balance - March 31, 2015 $ 1,879,220 | Changes in Level 3 liabilities measured at fair value for the twelve months ended December 31, 2014: Balance - January 1, 2014 $ - Fair value of warrant liability on date of issuance (February 6, 2014) 227,239 Change in fair value of warrant liability immediately before reclassification (204,957 ) Reclassification of derivative liability warrant (22,282 ) Balance - December 31, 2014 $ - |
Summary of Quantitative Information to Valuation Methodology | A summary of quantitative information with respect to valuation methodology, estimated using a probability-weighted Black-Scholes option pricing model, which is comparable to a Binomial option pricing model, and significant unobservable inputs used for the Companys warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2015 is as follows: January 19, 2015 March 31, 2015 Date of valuation Fair value of Common Stock $ 0.08 $ 0.23 Dividend yield (per share) 0.00 % 0.00 % Strike price $ 0.10 $ 0.10 Volatility (annual) 108.44 % 107.90 % Risk-free rate 1.29 % 1.37 % Expected life (years) 5.0 4.8 | A summary of quantitative information with respect to valuation methodology, estimated using a probability-weighted Black-Scholes option pricing model, which is comparable to a Binomial option pricing model, and significant unobservable inputs used for the Companys warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2014 is as follows: Date of valuation February 6, 2014 March 31, 2014 June 30, 2014 Fair value of common stock $ 0.44 $ 0.32 0.17 Dividend yield (per share) 0.00 % 0.00 % 0.00 % Strike price $ 1.00 $ 1.00 1.00 Volatility (annual) 74 % 74 % 71 % Risk-free rate 0.66 % 0.93 % 0.88 % Expected life (years) 3.0 2.9 2.7 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity to employees for the year ended December 31, 2014 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value per Share Avergae Remaining Contractual Life Average Intrinsic Value Outstanding at December 31, 2013 - $ - $ - - $ - Granted 18,651,472 0.23 1.00 8.0 - Expired - - - - - Canceled (6,201,472 ) (0.50 ) (2.88 ) - - Outstanding at December 31, 2014 12,450,000 $ 0.10 $ 0.01 8.0 $ - Exercisable as of December 31, 2014 - - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred tax Assets | The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at December 31, 2014 are comprised of the following: As of December 31, 2014 Deferred tax assets: Net-operating loss carryforward $ 455,491 Stock-based compensation 5,177,726 Total Deferred Tax Assets 5,633,217 Valuation allowance (5,633,217 ) Deferred Tax Asset, Net of Allowance $ - |
Schedule of Tax Expense (Benefit) | The expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows: For the year ended December 31, 2014 Statutory Federal Income Tax Rate (34.0 ) % State Taxes, Net of Federal Tax Benefit (5.3 ) % Others 1.1 % Change in Valuation Allowance 38.2 % Income Taxes Provision (Benefit) 0.0 % |
Business Organization and Nat29
Business Organization and Nature of Operations (10Q) (Details Narrative) | Feb. 05, 2014shares |
Bitcoin Shop Us LLC [Member] | |
Shares issued for membership interests | 100,773,923 |
Business Organization and Nat30
Business Organization and Nature of Operations (10K) (Details Narrative) | Feb. 05, 2014shares |
Bitcoin Shop Us LLC [Member] | |
Shares issued for membership interests | 100,773,923 |
Liquidity, Financial Conditio31
Liquidity, Financial Condition and Management's Plans (10Q) (Details Narrative) - USD ($) | Jan. 19, 2015 | Feb. 06, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jul. 27, 2013 |
Proceeds from private placement | $ 433,000 | $ 1,875,000 | |||||
Proceeds from notes payable | 20,000 | ||||||
Net cash used in operating activities | $ (101,367) | $ (258,631) | $ 5,476 | $ (1,061,303) | |||
Net loss | (3,349,546) | (1,451,744) | 17,125 | (14,757,016) | |||
Cash | 3,697 | $ 1,409,131 | $ 9,052 | 5,403 | |||
Working capital deficiency | $ 2,100,000 | $ 198,023 | |||||
Handerhan (COO) [Member] | |||||||
Proceeds from notes payable | $ 45,000 |
Liquidity, Financial Conditio32
Liquidity, Financial Condition and Management's Plans (10K) (Details Narrative) - USD ($) | Jan. 19, 2015 | Feb. 06, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jul. 27, 2013 |
Liquidity Financial Condition And Managements Plans | |||||||
Proceeds from private placement | $ 433,000 | $ 1,875,000 | |||||
Net cash used in operating activities | $ 101,367 | $ 258,631 | $ (5,476) | $ 1,061,303 | |||
Net loss | 3,349,546 | 1,451,744 | (17,125) | 14,757,016 | |||
Cash | 3,697 | $ 1,409,131 | $ 9,052 | 5,403 | |||
Working capital deficiency | $ 2,100,000 | $ 198,023 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (10K) (Detail Narrative) | Oct. 02, 2014USD ($)Units$ / sharesshares | Aug. 26, 2014shares | Jul. 10, 2014USD ($)$ / shares | May. 09, 2014USD ($) | Mar. 20, 2014USD ($) | Feb. 05, 2014 | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($) | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014$ / shares | Jun. 30, 2014$ / shares |
Bitcoin price index | $ / shares | $ 319.70 | $ 458.50 | $ 319.70 | $ 386.27 | $ 639.36 | ||||||||
E-commerce marketplace revenue | $ 2,799 | ||||||||||||
Net capitalized software costs | 144,796 | ||||||||||||
Amortization costs | $ 0 | 4,768 | |||||||||||
Percentage of tax benefits maximum | 50.00% | ||||||||||||
Advertisement costs | $ 5,052 | 94,820 | |||||||||||
Investments at cost | $ 100,000 | $ 150,000 | $ 400,004 | ||||||||||
Issuance of warrants to purchase of common stock | shares | 100,000 | ||||||||||||
Convertible Note [Member] | |||||||||||||
Impairment of investments | $ 150,000 | ||||||||||||
Coin Outlet [Member] | |||||||||||||
Number of unit purchased | Units | 8,334 | ||||||||||||
Number of unit purchase price | $ / shares | $ 6 | ||||||||||||
Payments to acquire share price | $ 50,004 | ||||||||||||
Issuance of warrants to purchase of common stock | shares | 2 | ||||||||||||
Common stock exercise price | $ / shares | $ 6 | ||||||||||||
Warrants expiration date | Dec. 31, 2015 | ||||||||||||
Number of stock transaction during period | shares | 75,448 | ||||||||||||
Percentage of shares issued and outstanding | $ / shares | $ 0.074 | ||||||||||||
Number of shares exchange for newly issued common shares | shares | 3,500,000 | ||||||||||||
Number of common stock and no other equity or equity linked securities were issued or outstanding | shares | 1,000,000 | ||||||||||||
Percentage of purchase unit own | 0.83% | ||||||||||||
Percenatge of warrants option excercised own | 9.80% | ||||||||||||
GoCoin, LLC [Member] | |||||||||||||
Investments at cost | $ 150,000 | ||||||||||||
Impairment of investments | 150,000 | ||||||||||||
Bitvault Inc [Member] | |||||||||||||
Investments at cost | $ 50,000 | ||||||||||||
Impairment of investments | 50,000 | ||||||||||||
Coin Outlet [Member] | |||||||||||||
Impairment of investments | $ 50,004 | ||||||||||||
Express Technologies [Member] | |||||||||||||
Investments at cost | $ 150,000 | ||||||||||||
Note interest rate | 5.00% | ||||||||||||
Debt instruments maturity date | Jul. 10, 2015 | ||||||||||||
Proceeds from convertible debt | $ 750,000 | ||||||||||||
Debt instruments conversion price per share | $ / shares | $ 0.85 | ||||||||||||
Original conversion amount | $ 9,000,000 | ||||||||||||
Transaction Verification Servers [Member] | |||||||||||||
Useful life | 2 years | ||||||||||||
Website [Member] | |||||||||||||
Useful life | 3 years |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Earnings Per Share Anti-Diluted (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Anti dilutive shares excluded | 24,150,000 | 15,525,000 |
Stock Options [Member] | ||
Anti dilutive shares excluded | 12,450,000 | 12,450,000 |
Warrant [Member] | ||
Anti dilutive shares excluded | 11,700,000 | 875,000 |
Series C Convertible Preferred Stock [Member] | ||
Anti dilutive shares excluded | 2,200,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 333 | $ 46,600 | $ 444 | $ 21,915 |
Property And Equipment - Schedu
Property And Equipment - Schedule of Property And Equipment, Net (Details) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Abstract] | |||
Equipment | $ 50,945 | $ 14,189 | $ 4,000 |
Computer | 4,085 | 3,469 | |
Transaction verification servers | 438,431 | 194,891 | |
Property plant and equipment, gross | 493,461 | 212,549 | $ 4,000 |
Less: accumulated depreciation | (68,254) | (22,359) | (444) |
Property and equipment, net | $ 425,207 | $ 190,190 | $ 3,556 |
Stockholders' Equity (10Q) (Det
Stockholders' Equity (10Q) (Details Narrative) | Mar. 26, 2015shares | Feb. 20, 2015USD ($)$ / sharesshares | Jan. 26, 2015USD ($)shares | Jan. 23, 2015USD ($)Integershares | Jan. 19, 2015USD ($)$ / sharesshares | Aug. 26, 2014shares | Mar. 31, 2015USD ($)$ / sharesshares | Mar. 31, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares |
Issuance of warrants to purchase of common stock | shares | 100,000 | ||||||||
Fair value of January Units | $ 952,600 | ||||||||
Derivative liability warrants | 649,500 | ||||||||
Derivative liability | 303,100 | ||||||||
Loss on issuance of units | 519,600 | ||||||||
Issuance of common stock for asset purchase | |||||||||
Number of common stock return | $ (2,500) | $ (2,491) | |||||||
Bitcoin index price | $ / shares | $ 243.39 | $ 319.70 | |||||||
Impairment charges | $ 154,433 | ||||||||
Conversion of Series C Convertible Preferred to common stock, Shares | shares | 1,550,000 | ||||||||
Inducement expense | $ 58,380 | ||||||||
Percentage of fees per month | 0.25% | ||||||||
Percentage of investment payable in cash | $ / shares | $ 0.03 | ||||||||
Percentage of registerable securities | $ / shares | $ 1 | ||||||||
Redemption Agreement [Member] | Charles Kiser [Member] | |||||||||
Number of common stock shares return | shares | 250,000 | ||||||||
Number of common stock return | $ 2,500 | ||||||||
Series C Preferred Stock Agreement [Member] | |||||||||
Conversion of Series C Convertible Preferred to common stock, Shares | shares | 2,200,000 | ||||||||
Conversion of accounts payable to common stock, Shares | shares | 143,694 | ||||||||
Conversion of accounts payable to common stock | $ 552,669 | ||||||||
Equity price per share | $ / shares | $ 0.26 | ||||||||
Fair value of common stock grants | $ 202,074 | ||||||||
Spondoolies Tech Ltd. [Member] | Purchase Agreement [Member] | |||||||||
Number of Spondoolies purchased | Integer | 100 | ||||||||
Number of digital currency mining servers purchased | Integer | 35 | ||||||||
Purchase price of assets | $ 223,500 | ||||||||
Issuance of common stock for asset purchase, Shares | shares | 250,000 | ||||||||
Issuance of common stock for asset purchase | $ 25,000 | ||||||||
Seller [Member] | |||||||||
Number of common stock unit sold | shares | 55,693 | ||||||||
Common stock purchase price per share | $ / shares | $ 0.26 | ||||||||
Number of common stock sold | $ 14,480 | ||||||||
Coin Outlet [Member] | |||||||||
Issuance of common stock for acquisition, share | shares | 166,756 | ||||||||
Percentage of additional equity ownership | 2.00% | ||||||||
Issuance of common stock shares for stock compensation | shares | 701,966 | ||||||||
Percentage of equity ownership | 4.20% | ||||||||
Percentage of equity ownership ability increase upto exercise of previously issued option and warrant | 11.00% | ||||||||
January Private Placement [Member] | |||||||||
Number of common stock unit sold | shares | 4,330,000 | ||||||||
Common stock purchase price per share | $ / shares | $ 0.10 | ||||||||
Number of common stock sold | $ 433,000 | ||||||||
Issuance of warrants to purchase of common stock | shares | 2.5 | ||||||||
Common stock exercise price per share | $ / shares | $ 0.10 | ||||||||
Stock conversation price per share | $ / shares | 0.10 | ||||||||
Warrant price per share exceeds | $ / shares | $ 0.20 | ||||||||
Average daily dollar trading volume exceeds per trading day | $ 50,000 | ||||||||
Net value to shareholders' equity | $ 0 |
Stockholders_ Equity (10K) (Det
Stockholders’ Equity (10K) (Details Narrative) - USD ($) | Jan. 19, 2015 | Oct. 21, 2014 | Aug. 26, 2014 | Jul. 16, 2014 | Feb. 06, 2014 | Jan. 13, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Jun. 30, 2014 |
Aggregate capital contributions | $ 8,000 | |||||||||||
Common stock, capital contributions | 51,758,563 | |||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Number of preferred stock converted into common stock | 40,000,000 | |||||||||||
Number of stock sold for private placements | 3,750,000 | |||||||||||
Proceeds from private placements | $ 433,000 | $ 1,875,000 | ||||||||||
Issuance of warrants to purchase of common stock | 100,000 | |||||||||||
Deferred offering costs | $ 62,000 | |||||||||||
Derivative liabilities | $ 1,879,220 | $ 22,282 | ||||||||||
Warrants exchanged for stock | 1,000,000 | |||||||||||
Payment for returned shares | $ 2,500 | $ 2,491 | ||||||||||
Percentage of holder fees per month | 0.25% | |||||||||||
Maximum holder fee per month | 30.00% | |||||||||||
Investors [Member] | ||||||||||||
Percentage of common stock outstanding | 9.99% | |||||||||||
Percentage of beneficial ownership percentage | 4.99% | |||||||||||
Percentage of beneficial ownership limitation to initially | 4.99% | |||||||||||
Common stock purchase price | $ 0.50 | |||||||||||
Company Officers [Member] | ||||||||||||
Cancellation of shares | 12,750,000 | |||||||||||
Payment for returned shares | $ 2,491 | |||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Designated preferred stock authorization for issuance | 400,000 | |||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||
Convesrtion of non-assessable shares of common stock | 100 | |||||||||||
Number of preferred stock surrendered | 1 | |||||||||||
Percentage of common stock outstanding | 9.99% | |||||||||||
Percentage of beneficial ownership percentage | 9.99% | |||||||||||
Percentage of beneficial ownership limitation to any other percentage not in excess | 9.99% | |||||||||||
Percentage of beneficial ownership limitation to initially | 4.99% | |||||||||||
Converstion of stock shares | 40,000 | |||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||
Series C Preferred Stock [Member] | ||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||
Warrants term | 3 years | |||||||||||
Issuance of warrants to purchase of common stock | 0.5 | |||||||||||
Common stock exercise price per share | $ 1 | |||||||||||
Debt instruments conversion price per share | $ 0.001 | |||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||
Converstion of stock shares | 1,550,000 | |||||||||||
Number of preferred stock converted into common stock | 1,550,000 | |||||||||||
Preferred stock, shares outstanding | 0 | 0 | 2,200,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Fair Value of Valuation Assumptions (Details) - USD ($) | Mar. 05, 2015 | Feb. 18, 2015 | Mar. 31, 2015 | Jan. 19, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Feb. 06, 2014 |
Equity [Abstract] | |||||||
Fair value of common stock | $ 0.24 | $ 0.32 | |||||
Dividend yield (per share) | $ 0 | $ 0 | |||||
Strike price | $ 0.26 | $ 0.26 | $ 0.10 | $ 0.10 | $ 1 | $ 1 | $ 1 |
Volatility (annual) | 124.56% | 123.36% | |||||
Risk-free rate | 0.25% | 0.23% | |||||
Expected life (years) | 5 years | 5 years |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Warrant Activity (Details) - 3 months ended Mar. 31, 2015 - Warrant [Member] - $ / shares | Total | |
Number of Warrants Outstanding Beginning Balance | 875,000 | |
Number of Warrants Outstanding Issuance of warrants with Units - January 19, 2015* | [1] | 10,825,000 |
Number of Warrants Outstanding Ending Balance | 11,700,000 | |
Weighted Average Exercise Price Outstanding Beginning Balance | $ 0.10 | |
Weighted Average Exercise Price Outstanding Issuance of warrants with Units - January 19, 2015* | [1] | 0.10 |
Weighted Average Exercise Price Outstanding Ending Balance | $ 0.10 | |
[1] | The warrants contain most favor nation and call provision and the Company classifies these warrant instruments as liabilities measured at fair value and re-measures these instruments at fair value each reporting period. (See FN 9) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Feb. 16, 2015 | Feb. 10, 2015 | Jan. 19, 2015 | Dec. 18, 2014 | Mar. 31, 2015 |
Repayment of note payable | $ 3,000 | ||||
January Private Placement [Member] | |||||
Number of common stock unit sold | 4,330,000 | ||||
Common stock purchase price per share | $ 0.10 | ||||
Number of common stock sold | $ 433,000 | ||||
Allen Note [Member] | |||||
Accrued interest relate to note | $ 290 | ||||
HanderhanNote[Member] | |||||
Accrued interest relate to note | $ 1,100 | ||||
Charles Allen [Member] | |||||
Number of common stock shares purchased | 50,000 | ||||
Number of common stock purchased | $ 5,000 | ||||
Charles Allen [Member] | Allen Note [Member] | |||||
Loan from related party | $ 7,990 | ||||
Note bear interest rate | 2.00% | ||||
Note due date | Dec. 31, 2015 | ||||
Repayment of note payable | $ 3,000 | ||||
Michal Handerhan [Member] | |||||
Accrued interest relate to note | $ 108 | ||||
Number of common stock shares purchased | 50,000 | ||||
Number of common stock purchased | $ 5,000 | ||||
Michal Handerhan [Member] | HanderhanNote[Member] | |||||
Loan from related party | $ 20,000 | ||||
Note bear interest rate | 2.00% | ||||
Note due date | Dec. 31, 2015 |
Investment at Cost (Details Nar
Investment at Cost (Details Narrative) - USD ($) | Mar. 26, 2015 | Jan. 19, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 |
Bitcoin index price | $ 243.39 | $ 319.70 | ||||
Investment impairment | $ 254,433 | $ 544,800 | ||||
Coin Outlet [Member] | ||||||
Issuance of common stock for acquisition, share | 166,756 | |||||
Percentage of additional equity ownership | 2.00% | |||||
Issuance of common stock shares for stock compensation | 701,966 | |||||
Percentage of equity ownership | 4.20% | |||||
Percentage of equity ownership ability increase upto exercise of previously issued option and warrant | 11.00% | |||||
Purchase Agreement [Member] | Coin Outlet [Member] | ||||||
Convertible promissory note principal amount | $ 100,000 | |||||
Note accrues interest rate | 4.00% | |||||
Note maturity date | Jan. 31, 2016 | |||||
Proceeds from convertible promissory note | $ 1,000,000 | |||||
Percentage of sale of price per shares | 80.00% | |||||
Note conversion price exceeds | $ 600,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Digital Currencies | $ 19,944 | $ 16,040 | $ 22,959 | |
Derivative Liabilities | 1,879,220 | $ 22,282 | ||
Quoted Prices in Active Markets (Level 1) [Member] | ||||
Digital Currencies | $ 19,944 | $ 16,040 | $ 22,959 | |
Derivative Liabilities | ||||
Significant Other Observable Inputs (Level 2) [Member] | ||||
Digital Currencies | ||||
Derivative Liabilities | ||||
Significant Unobservable Inputs (Level 3) [Member] | ||||
Digital Currencies | ||||
Derivative Liabilities | $ 1,879,220 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Changes in Level 3 Liabilities Measured at Fair Value (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |||
Beginning balance | |||
Fair value of warrant liability on date of issuance (February 6, 2014) | $ 952,600 | $ 227,239 | |
Change in fair value of warrant liability | 926,620 | $ (109,000) | (204,957) |
Reclassification of derivative liability warrant | $ (22,282) | ||
Ending balance | $ 1,879,220 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Quantitative Information to Valuation Methodology (Details) - $ / shares | Jan. 19, 2015 | Feb. 06, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 05, 2015 | Feb. 18, 2015 |
Fair Value Disclosures [Abstract] | |||||||
Fair value of common stock | $ 0.08 | $ 0.44 | $ 0.23 | $ 0.17 | $ 0.32 | ||
Dividend yield (per share) | 0 | 0 | 0 | 0 | 0 | ||
Strike price | $ 0.10 | $ 1 | $ 0.10 | $ 1 | $ 1 | $ 0.26 | $ 0.26 |
Volatility (annual) | 108.44% | 74.00% | 107.90% | 71.00% | 74.00% | ||
Risk-free rate | 1.29% | 0.66% | 1.37% | 0.88% | 0.93% | ||
Expected life (years) | 5 years | 3 years | 4 years 9 months 18 days | 2 years 8 months 12 days | 2 years 10 months 24 days |
Stock Based Compensation (10Q)
Stock Based Compensation (10Q) (Details Narrative) - Title Of Individual With Relationship To Entity Domain - USD ($) | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Stock-based compensation expense | $ 1,369,376 | $ 1,343,794 | $ 13,126,445 | |
Stock option outstanding shares | 12,450,000 | 12,450,000 | ||
Stock option outstanding weighted average exercise price | $ .10 | $ 0.10 | ||
Stock option outstanding instrinsic value | $ 0.23 | |||
Unrecognized compensation cost | $ 4,142,896 | $ 5,512,272 | ||
Minimum [Member] | ||||
Stock option amortized year | 10 months 6 days | |||
Maximum [Member] | ||||
Stock option amortized year | 2 years |
Stock Based Compensation (10 K)
Stock Based Compensation (10 K) (Details Narrative) - USD ($) | Mar. 05, 2015 | Feb. 18, 2015 | Jan. 19, 2015 | Nov. 07, 2014 | Feb. 06, 2014 | Feb. 05, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 |
Number of common stock are issuable | 15,503,680 | ||||||||||
Stock options granted, exercise price | $ 0.23 | ||||||||||
Number of options cancelled, exercise price | 0.50 | ||||||||||
Aggregate of stock option shares cancelled during period | 6,201,472 | ||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Stock-based compensation expense | $ 6,349,113 | ||||||||||
New vesting period term | 1 year 2 months 12 days | ||||||||||
Fair value of stock option grants | $ 18,638,717 | ||||||||||
Fair value exercise price | $ 0.08 | $ 0.44 | $ 0.23 | $ 0.17 | $ 0.32 | ||||||
Fair value expected volatility | 108.44% | 74.00% | 107.90% | 71.00% | 74.00% | ||||||
Expected life | 5 years | 5 years | |||||||||
Fair value risk-free interest rate | 1.29% | 0.66% | 1.37% | 0.88% | 0.93% | ||||||
Stock-based compensation expense | $ 1,369,376 | $ 1,343,794 | 13,126,445 | ||||||||
Unrecognized compensation cost | $ 4,142,896 | $ 5,512,272 | |||||||||
Minimum [Member] | |||||||||||
Stock option term | 10 months 6 days | ||||||||||
Fair value exercise price | $ 0.10 | ||||||||||
Fair value expected volatility | 73.80% | ||||||||||
Expected life | 2 years 9 months | ||||||||||
Fair value risk-free interest rate | 0.69% | ||||||||||
Maximum [Member] | |||||||||||
Stock option term | 2 years | ||||||||||
Fair value exercise price | $ 0.50 | ||||||||||
Fair value expected volatility | 105.00% | ||||||||||
Expected life | 5 years 11 days | ||||||||||
Fair value risk-free interest rate | 1.67% | ||||||||||
Charles Allen [Member] | |||||||||||
Stock option term | 5 years | ||||||||||
Number of options granted | 1,550,368 | ||||||||||
Stock options granted, exercise price | $ 0.50 | ||||||||||
Number of options cancelled during period | 1,550,368 | ||||||||||
Number of options cancelled, exercise price | $ 0.50 | ||||||||||
Non-qualified stock option granted during period | 9,500,000 | ||||||||||
Non-qualified stock option granted, exercise price | $ 0.10 | ||||||||||
Michal Handerhan [Member] | |||||||||||
Stock option term | 5 years | ||||||||||
Number of options granted | 1,550,368 | ||||||||||
Stock options granted, exercise price | $ 0.50 | ||||||||||
Number of options cancelled during period | 1,550,368 | ||||||||||
Number of options cancelled, exercise price | $ 0.50 | ||||||||||
Non-qualified stock option granted during period | 9,500,000 | ||||||||||
Non-qualified stock option granted, exercise price | $ 0.10 | ||||||||||
Timothy Sidie [Member] | |||||||||||
Stock option term | 5 years | ||||||||||
Number of options granted | 1,550,368 | ||||||||||
Stock options granted, exercise price | $ 0.50 | ||||||||||
Number of options cancelled during period | 1,550,368 | ||||||||||
Number of options cancelled, exercise price | $ 0.50 | ||||||||||
Charles A Kiser [Member] | |||||||||||
Stock option term | 5 years | ||||||||||
Number of options granted | 1,550,368 | ||||||||||
Stock options granted, exercise price | $ 0.50 | ||||||||||
Number of options cancelled during period | 1,550,368 | ||||||||||
Number of options cancelled, exercise price | $ 0.50 | ||||||||||
Kiser And Sidie [Member] | |||||||||||
Number of options cancelled during period | 3,100,736 | ||||||||||
Amortization of unrecognized stock compensation expense | $ 5,570,636 |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Stock Option Activity (10 K) (Details) - 12 months ended Dec. 31, 2014 - USD ($) None in scaling factor is -9223372036854775296 | Total |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of options, outstanding at beginning of period | |
Number of options, granted | 18,651,472 |
Number of options, expired | |
Number of options, cancelled | (6,201,472) |
Number of options, outstanding at end of period | 12,450,000 |
Number of options, exercisable at end of period | |
Weighted Average Exercise Price, outstanding at beginning of period | |
Weighted Average Exercise Price, granted | $ 0.23 |
Weighted Average Exercise Price, expired | |
Weighted Average Exercise Price, Cancelled | $ (0.50) |
Weighted Average Exercise Price, outstanding at end of period | $ 0.10 |
Weighted Average Grant Date Fair Value per Share, Outstanding at beginning of period | |
Weighted Average Grant Date Fair Value per Share, Granted | $ 1 |
Weighted Average Grant Date Fair Value per Share, Expired | |
Weighted Average Grant Date Fair Value per Share, Cancelled | $ (2.88) |
Weighted Average Grant Date Fair Value per Share, Outstanding at end of period | $ 0.01 |
Avergae Remaining Contractual Life, Granted | 8 years |
Avergae Remaining Contractual Life, Outstanding at end of period | 8 years |
Average Intrinsic Value beginning of period | |
Average Intrinsic Value end of period |
Employment Agreements (10 K) (D
Employment Agreements (10 K) (Details Narrative) - Feb. 05, 2014 - USD ($) | Total |
Charles W. Allen [Member] | |
Employment agreement term | 2 years |
Annual salary | $ 150,000 |
Michal Handerhan [Member] | |
Employment agreement term | 2 years |
Annual salary | $ 160,000 |
Tim Sidie [Member] | |
Employment agreement term | 2 years |
Annual salary | $ 140,000 |
Charles Kiser [Member] | |
Employment agreement term | 1 year |
Annual salary | $ 135,000 |
Commitments and Contingencies (
Commitments and Contingencies (10Q) (Details Narrative) - USD ($) | Mar. 31, 2015 | Jan. 28, 2015 | Apr. 04, 2014 |
Commitments And Contingencies | |||
Prepaid expenses of fixed minimum lease payment | $ 24,073 | $ 24,073 | |
Annual rental fee first year | $ 58,271 | ||
Annual rental fee second year | 66,750 | ||
Security deposit | 10,000 | $ 4,815 | |
Option, purchase price | $ 775,000 |
Commitments and Contigencies (1
Commitments and Contigencies (10 K) (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2014 | Mar. 31, 2015 | Jan. 28, 2015 | Apr. 04, 2014 | |
Prepaid expenses, lease payments | $ 24,073 | $ 24,073 | ||
Security deposit | $ 10,000 | $ 4,815 | ||
Lease Agreements [Member] | ||||
Lease agreement term | January 26, 2015 and ends on January 25, 2017. | |||
Lease Agreements [Member] | First Year Annual Rentel Fee [Member] | ||||
Annual rental fee | $ 58,271 | |||
Lease Agreements [Member] | Second Year Annual Rentel Fee [Member] | ||||
Annual rental fee | 66,750 | |||
Lease term for a purchase price | $ 775,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - Dec. 31, 2014 - USD ($) | Total |
Net operating loss carry forwards for federal and state tax | $ 1,155,000 |
Operating loss carry forwards expiration years | 2,034 |
Valuation allowance increased approximately | $ 5,633,000 |
Prior Merger [Member] | |
Net operating loss carry forwards for federal and state tax | $ 1,100,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred tax Assets (Details) | Dec. 31, 2014USD ($) |
Income Tax Disclosure [Abstract] | |
Net-operating loss carryforward | $ 455,491 |
Stock-based compensation | 5,177,726 |
Total Deferred Tax Assets | 5,633,217 |
Valuation allowance | $ (5,633,217) |
Deferred Tax Asset, Net of Allowance |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Expense (Benefit) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Statutory Federal Income Tax Rate | (34.00%) |
State Taxes, Net of Federal Tax Benefit | (5.30%) |
Others | 1.10% |
Change in Valuation Allowance | 38.20% |
Income Taxes Provision (Benefit) | 0.00% |
Subsequent Events (10Q) (Detail
Subsequent Events (10Q) (Details Narrative) - USD ($) | May. 12, 2015 | May. 04, 2015 | Apr. 24, 2015 | Apr. 22, 2015 | Apr. 20, 2015 | Apr. 20, 2015 | Feb. 16, 2015 | Jan. 19, 2015 | Aug. 26, 2014 | Feb. 06, 2014 | May. 08, 2015 | Mar. 31, 2015 |
Issuance of warrants to purchase of common stock | 100,000 | |||||||||||
Proceeds from private placements | $ 433,000 | $ 1,875,000 | ||||||||||
Repayment of promissory note | $ 3,000 | |||||||||||
Charles Allen [Member] | ||||||||||||
Number of common stock shares purchased | 50,000 | |||||||||||
Michal Handerhan [Member] | ||||||||||||
Number of common stock shares purchased | 50,000 | |||||||||||
Promissory note principal amount | $ 7,000 | |||||||||||
Accrued interest | $ 108 | |||||||||||
Subsequent Event [Member] | Charles Allen [Member] | ||||||||||||
Number of common stock shares purchased | 66,667 | |||||||||||
Proceeds from private placements | $ 20,000 | |||||||||||
Promissory note principal amount | $ 4,990 | |||||||||||
Accrued interest | $ 48 | |||||||||||
Accrued salaries current | $ 27,000 | |||||||||||
Subsequent Event [Member] | Michal Handerhan [Member] | ||||||||||||
Number of common stock shares purchased | 66,667 | |||||||||||
Proceeds from private placements | $ 20,000 | |||||||||||
Repayment of promissory note | $ 10,000 | |||||||||||
Remaining balance of promissory note including principal and accrued interest | $ 7,108 | |||||||||||
Accrued salaries current | $ 27,000 | |||||||||||
Subsequent Event [Member] | Advisory Board Members [Member] | ||||||||||||
Number of stock shares issued during period | $ 418,716 | |||||||||||
Subsequent Event [Member] | Nine Advisory Board [Member] | ||||||||||||
Number of stock shares issued during period | $ 46,524 | |||||||||||
Conversion Agreement [Member] | Subsequent Event [Member] | ||||||||||||
Issuance of common stock shares for services | 16,129 | 32,258 | 83,000 | |||||||||
Common stock price per share | $ 0.31 | $ 0.31 | $ 0.31 | |||||||||
Issuance of common stock for services | $ 5,000 | $ 10,000 | $ 25,730 | |||||||||
Conversion Agreement [Member] | Subsequent Event [Member] | Charles Allen [Member] | ||||||||||||
Common stock price per share | $ 0.50 | |||||||||||
Value of accrued and unpaid salary that converted into common stock | $ 25,000 | |||||||||||
Issuance of common stock for accrued and unpaid salary | 50,000 | |||||||||||
Conversion Agreement [Member] | Subsequent Event [Member] | Michal Handerhan [Member] | ||||||||||||
Common stock price per share | $ 0.50 | |||||||||||
Value of accrued and unpaid salary that converted into common stock | $ 25,000 | |||||||||||
Issuance of common stock for accrued and unpaid salary | 50,000 | |||||||||||
Share Purchase Agreement [Member] | Subsequent Event [Member] | Spondoolies Tech Ltd. [Member] | Series B Preferred Stock [Member] | ||||||||||||
Number of preferred stock shares purchased | 29,092 | |||||||||||
Number of preferred stock purchased | $ 1,500,000 | |||||||||||
Percentage of equity owned on fully dilute basis | 6.60% | |||||||||||
Preferred stock original issuance price per share | $ 51.56 | |||||||||||
Preferred stock initial conversation price per share | $ 51.56 | |||||||||||
Proceeds from issuance of public offering | $ 40,000,000 | |||||||||||
Letter Agreement [Member] | Subsequent Event [Member] | Spondoolies Tech Ltd. [Member] | ||||||||||||
Breakup fee payable | 50,000 | |||||||||||
Letter Agreement [Member] | Subsequent Event [Member] | Board Of Directors Or Shareholders [Member] | Spondoolies Tech Ltd. [Member] | ||||||||||||
Breakup fee payable | $ 1,000,000 | |||||||||||
Letter agreement period | 3 years | |||||||||||
April Private Placement [Member] | Subscription Agreements [Member] | Subsequent Event [Member] | ||||||||||||
Number of common stock unit sold | 7,708,342 | |||||||||||
Common stock purchase price per share | $ 0.30 | $ 0.30 | ||||||||||
Issuance of warrants to purchase of common stock | 1.4 | |||||||||||
Common stock exercise price per share | 0.375 | $ 0.375 | ||||||||||
Stock conversation price per share | 0.30 | $ 0.30 | ||||||||||
Percentage of lower exercise price of product | 125.00% | |||||||||||
Warrant weighted average price per share exceeds | $ 0.938 | $ 0.938 | ||||||||||
Average daily dollar trading exceeds volume, per day | $ 200,000 | $ 200,000 | ||||||||||
Number of stock shares issued during period | $ 2,312,500 |
Subsequent Events (10 K) (Detai
Subsequent Events (10 K) (Details Narrative) - USD ($) | Mar. 26, 2015 | Mar. 05, 2015 | Feb. 20, 2015 | Feb. 18, 2015 | Jan. 28, 2015 | Jan. 26, 2015 | Jan. 23, 2015 | Jan. 19, 2015 | Feb. 06, 2014 | Apr. 30, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Nov. 07, 2014 | Dec. 31, 2013 |
Proceeds from issuance of note | $ 20,000 | ||||||||||||||
Units sold in private placement | $ 1,875,000 | ||||||||||||||
Proceeds from units sold in private placement | 433,000 | $ 1,875,000 | |||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Number of common stock shares outstanding | 161,277,132 | 161,277,132 | 153,186,804 | 100,773,923 | |||||||||||
Common stock issued | 161,277,132 | 161,277,132 | 153,186,804 | 100,773,923 | |||||||||||
Handerhan (COO) [Member] | |||||||||||||||
Proceeds from issuance of note | $ 45,000 | ||||||||||||||
Subsequent Event [Member] | Conversion Agreement [Member] | |||||||||||||||
Aggregate conversion amount | $ 103,694 | ||||||||||||||
Subsequent Event [Member] | Lease Agreements [Member] | |||||||||||||||
Lease term description | The term of the Lease commenced on January 26, 2015 and ends on January 25, 2017. | ||||||||||||||
Subsequent Event [Member] | Lease Agreements [Member] | First Year [Member] | |||||||||||||||
Annual lease rental fee | $ 58,271 | ||||||||||||||
Subsequent Event [Member] | Lease Agreements [Member] | Second Year [Member] | |||||||||||||||
Annual lease rental fee | $ 66,750 | ||||||||||||||
Subsequent Event [Member] | Subscription Agreements [Member] | |||||||||||||||
Note interest rate | 20.00% | ||||||||||||||
Units sold in private placement | $ 4,330,000 | ||||||||||||||
Uints sold in private placement price per share | $ 0.10 | ||||||||||||||
Proceeds from units sold in private placement | $ 433,000 | ||||||||||||||
Common stock par value | $ 0.001 | ||||||||||||||
Number of consecutive trading days | 15 days | ||||||||||||||
Maximum wighted average trading volume per day | $ 50,000 | ||||||||||||||
Subsequent Event [Member] | Purchase Price [Member] | |||||||||||||||
Value of digital currency mining servers purchased | $ 14,480 | $ 218,500 | |||||||||||||
Subsequent Event [Member] | Purchase Agreement [Member] | |||||||||||||||
Common stock par value | $ 0.26 | ||||||||||||||
Value of digital currency mining servers purchased | $ 25,000 | ||||||||||||||
Number of common stock shares outstanding | 55,693 | 250,000 | |||||||||||||
Subsequent Event [Member] | Redemption Agreement [Member] | |||||||||||||||
Value of digital currency mining servers purchased | $ 2,500 | ||||||||||||||
Number of common stock shares outstanding | 250,000 | ||||||||||||||
Subsequent Event [Member] | Sichenzia Ross Friedman Ference LLP [Member] | |||||||||||||||
Common stock par value | $ 0.26 | ||||||||||||||
Common stock issued | 326,923 | ||||||||||||||
Legal and investor relation and fee | $ 85,000 | ||||||||||||||
Subsequent Event [Member] | Alliance Funds LLC [Member] | |||||||||||||||
Common stock par value | $ 0.26 | ||||||||||||||
Common stock issued | 71,900 | ||||||||||||||
Legal and investor relation and fee | $ 18,694 | ||||||||||||||
Subsequent Event [Member] | Chord Advisors, LLC [Member] | |||||||||||||||
Common stock par value | $ 0.26 | ||||||||||||||
Common stock issued | 153,846 | ||||||||||||||
Subsequent Event [Member] | Conversion Agreement [Member] | |||||||||||||||
Units sold in private placement | $ 40,000 | ||||||||||||||
Common stock par value | $ 0.26 | ||||||||||||||
Advisory services fee baalnce amount | $ 30,000 | ||||||||||||||
Prepaid advisory services fee | $ 10,000 | ||||||||||||||
Subsequent Event [Member] | Coin Outlet Note [Member] | |||||||||||||||
Debt principal amount | 100,000 | ||||||||||||||
Subsequent Event [Member] | Coin Outlet [Member] | |||||||||||||||
Proceeds from issuance of note | $ 1,000,000 | ||||||||||||||
Note interest rate | 0.40% | ||||||||||||||
Note maturity date | Jan. 31, 2016 | ||||||||||||||
Subsequent Event [Member] | Coin Outlet [Member] | Note Conversion Price [Member] | |||||||||||||||
Note conversion price percentage | 80.00% | ||||||||||||||
Note conversion price exceeds the triger | $ 6,000,000 | ||||||||||||||
Subsequent Event [Member] | Handerhan (COO) [Member] | |||||||||||||||
Proceeds from issuance of note | $ 20,000 | ||||||||||||||
Note interest rate | 0.20% | ||||||||||||||
Note maturity date | Dec. 31, 2015 | ||||||||||||||
Units sold in private placement | $ 50,000 | ||||||||||||||
Subsequent Event [Member] | Timothy Sidie, (CF&LD) [Member] | |||||||||||||||
Proceeds from issuance of note | $ 45,000 | ||||||||||||||
Note interest rate | 0.20% | ||||||||||||||
Note maturity date | Dec. 31, 2015 | ||||||||||||||
Units sold in private placement | $ 50,000 | ||||||||||||||
Subsequent Event [Member] | Eric Grill [Member] | |||||||||||||||
Number of shares acquired | 166,756 | ||||||||||||||
Percentage of additional equity ownership acquired | 0.20% | ||||||||||||||
Number of shares issued under agreements | 701,966 | ||||||||||||||
Subsequent Event [Member] | Eric Grill [Member] | Coin Outlet [Member] | |||||||||||||||
Percentage of additional equity ownership acquired | 4.20% | ||||||||||||||
Percentage of maximum equity ownership | 11.00% | ||||||||||||||
Subsequent Event [Member] | Minimum [Member] | |||||||||||||||
Warrant expiration date | Jan. 15, 2015 | ||||||||||||||
Subsequent Event [Member] | Maximum [Member] | |||||||||||||||
Warrant expiration date | Dec. 31, 2015 |