On January 3, 2019, Crypto Corp. filed an 8K indicating a significant restatement.
The restatement covered every one of its financial statements produced since it started filing in mid 2017.
The restatement language itself is basically incomprehensible to us. It provides no numbers or context.
A review of their one yearly 10-K (Dec 2017) and its four 10-Qs reveals even more incomprehensible disclosures, with the largest line item in some reports described as “Adjustments to Net Income”.
We cannot decipher how they raised capital and we can’t figure out what their revenue represents. We can’t decipher how their assets (Crypto coins/assets) were valued either.
The company seems to have had no CFO or anyone who can adequately relay the complexities involved in producing reliable financial statements for this kind of a company.
To give the reader some idea of the details of this company’s cacophony of financial reporting issues, check the Watchdog report. All but the most recent disclosures (the restatement) are identified with details. In short, Crypto Corp. is in serious trouble.
Crypto Corp. has also filed five Non-Timely filings, apparently unable to pull together their information under current regulatory requirements. They also have not filed their third quarter 10-Q in 2018 and cancelled their stock-holder meeting scheduled for June 2018. Their website appears not to have been updated in at least six months and director resignations are piling up. In 18 months the company disclosed massive financial chaos, including one major restatement, four ineffective Disclosure Controls, one Section 404 adverse opinion, two class action lawsuits (quickly, but inexplicably settled), one impairment, huge operational losses, one CEO change, many director changes and even an EDGAR profile that still lists the company as a children’s closing company. In addition, it has retained an audit firm (Hall & Company) that mysteriously issued Crypto Corp. a clean opinion for year-end December 2017 and maintains a strange and highly risky portfolio of 12 public clients. Nine of the 12 have, or will likely have, going concern opinions.
Crypto Corp. seems to be heading towards a quick bankruptcy, it is a highly risky idea crashing from technological or managerial failures. Its high market capitalization should be ignored and attributed to almost zero volume and a highly questionable last trade value. While failure is not assured, many red flag indicators are present, with financial disclosure and accounting failures dotting their corporate landscape.