The Crypto Company 10-K Review: All That Glitters Is Not Blockchain 🚫🔗

Investment Score: 1.2 / 10

Warren.AI 💰 1.2 / 10

Net Loss (2024): $6.64 Million

---

1. Business Overview (Item 1)

The Crypto Company ("Crypto" or the "Company"), incorporated in Nevada in 2017, provides consulting services and education for blockchain and distributed ledger technologies. It operates through TechCC (formerly Blockchain Training Alliance) and an inactive CoinTracking LLC. Key points:

• Core Offering: Corporate and individual training, enterprise solution design and implementation of blockchain infrastructure.
• Strategic Acquisitions: Acquired BTA in April 2021 for $1.35 million purchase price; ultimately fully impaired goodwill and intangibles by year-end 2023.
• Industry Position: Direct competition from ConsenSys, CGI, global audit firms and free/low-cost AI platforms.
• Regulatory Environment: Subject to SEC, CFTC, FTC and FinCEN, plus state and foreign blockchain regulations.
• Employees: Just 2 full-time as of June 2025.

2. Financial Performance (Items 7, 7A & 8)

2.1 Revenues & Margins

Year Ended	Revenue	Cost of Services	Gross Margin
2023	$197,459	$313,756	-$116,297
2024	$44,814	$9,394	$35,419

The revenue collapse (–77%) is attributed to free AI training platforms eroding paid course demand.

2.2 Expenses & Losses

• General & Admin: $890 K (2024) vs $1.55 M (2023). Lower outside consulting and legal costs.
• Share-Based Compensation: $5.29 M (2024) vs $1.16 M (2023). Surge driven by CEO equity grant and note conversions.
• Impairment: $0 (2024) vs $1.27 M (2023). BTA write-off completed in 2023.
• Other Expense: $503 K (2024) vs $3.09 M (2023). Interest expense plunge after rolling notes.

Year Ended	Net Loss
2023	$7.23 M
2024	$6.64 M

2.3 Cash Flow & Liquidity

• Operating Cash Flow: –$0.81 M (2024) improved from –$1.64 M (2023).
• Financing Cash Flow: +$0.74 M (2024) vs +$1.60 M (2023) through related-party debt.
• Cash Balance: $1,763 at 12/31/2024.
• Working Capital: –$6.69 M.

The Company is a heavy cash burner with no positive free cash generation.

3. Balance Sheet & Debt (Item 8)

Balance Sheet at 12/31/2024	Amount
Cash and Equivalents	$1,763
Total Current Liabilities	$6.69 M
Notes Payable & Convertible	$2.93 M
Series A Preferred Equity	10 shares
Stockholders’ Deficit	–$6.70 M

Key Debt Features:

• AJB Capital: >$2.8 M in deeply discounted, high-interest (10–24%) notes maturing through 2025; convertible at steep discounts.
• SBA Loans: $12.6 K at 3.75% and $18.3 K at 1% for 5–30 year terms.

4. Risk Factors (Item 1A)

As a smaller reporting company, Crypto omits most Item 1A disclosures. The 2024 report notes broad risks:

• Profitability & Liquidity: Ongoing losses and reliance on new financing.
• Competition: Rapidly advancing tech and free alternatives.
• Regulation: Uncertain blockchain and crypto regulation.
• Capital Availability: No binding credit lines; dependent on related-party loans.

5. Governance & Related-Party Transactions

• CEO Control: September 2024 creation of Series A shares (10 shares, 950 million votes each) all issued to CEO Ron Levy worth $3.03 M.
• Audit Committee: Single independent director, Ms. Holly Ruxin.
• Internal Controls: Management found disclosures and financial controls ineffective as of 12/31/2024.

6. Conclusion & Investment Risk

The Crypto Company is a high-risk venture with:

• Minimal Revenue: <$50 K annual sales.
• High Cash Burn: >$0.8 M yearly operating loss.
• Mounting Debt: $2.8 M+ at onerous terms.
• Negative Equity: Stockholders’ deficit of –$6.7 M.
• No Guarantee of Funding: Dependent on related-party note roll-over.

Investment Score: 1.2 / 10

Crypto has no near-term path to profitability, zero free cash flow, and an untenable capital structure. Unless a turnaround plan emerges underpinned by committed financing or a business pivot, the shares are speculative at best.

---