v3.20.1

DISCONTINUED OPERATIONS | 6 Months Ended
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Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | NOTE 3: DISCONTINUED OPERATIONS As of June 30, 2019, the Company was under ongoing negotiation to transfer Northway Mining, LLC to a related party, who at the time of filing this 10Q was no longer a related party. Due to the foregoing, on July 1, 2019, the Company entered into certain Membership Interest Transfer Agreement and announced a change in the strategic focus by not continuing the cryptocurrency business unit. As a result of this shift, the Company has disclosed in the financials as Assets held-for-sale the amount of $1,455,047 and Liabilities held-for-sale in the amount of $ 2,345,861 reorganizing a cessation of its business operations for Northway Mining, LLC, in accordance with Accounting Standards Codification (ASC) 205-20, Discontinued Operations. As such, the historical results of Northway Mining, LLC, have been classified as discontinued operations. As of December 31, 2018, assets of discontinued operations consisted of property and equipment, cash and other assets, totals $1,590,992. As of December 31, 2018, liabilities of discontinued operations consisted of accounts payable and loans total $1,534,235. Assets and liabilities held-for-sale as of June 30, 2019 and December 31,2018 consisted of the following:
|  | June 30, |  | December 31,
|  | 2019 |  | 2018
Assets held-for-sale |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 176,313 |
Cryptocurrency |  |  | — |  |  |  | 6,189 |
Property and equipment, net |  |  | 1,455,047 |  |  |  | 1,408,490 |
Total |  | $ | 1,455,047 |  |  | $ | 1,590,992 |
Liabilities held-for-sale |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 301,548 |  |  | $ | 58,628 |
Checks drawn in excess of bank balance |  |  | 9,139 |  |  |  | 27,793 |
Accrued expenses |  |  | 5,080 |  |  |  | 5,080 |
Payroll liabilities |  |  | 7,519 |  |  |  | 7,707 |
Related party loans |  |  | 359,114 |  |  |  | 20,001 |
Auto loans |  |  | 44,256 |  |  |  | 45,950 |
Loans payable - net of discounts $0 and $180,085 |  |  | 1,363,843 |  |  |  | 1,010,714 |
Deferred revenue |  |  | 255,362 |  |  |  | 275,362 |
Contingent liability |  |  | — |  |  |  | 83,000 |
Total |  | $ | 2,345,861 |  |  | $ | 1,534,235 |
Results of the discontinued operations for the three months and six months ended June 30, 2019 and 2018 are:
|  | Three months ended |  | Six months ended
|  | June 30, |  | June 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
REVENUES |  | $ | — |  |  | $ | — |  |  | $ | 10,392 |  |  | $ | — |
COST OF SALES |  |  | — |  |  |  | — |  |  |  | 436,403 |  |  |  | — |
GROSS PROFIT |  |  | — |  |  |  | — |  |  |  | (426,011 | ) |  |  | — |
General and administrative expenses |  |  | 40,416 |  |  |  | — |  |  |  | 124,068 |  |  |  | — |
Depreciation expense |  |  | 28,783 |  |  |  | — |  |  |  | 57,248 |  |  |  | — |
Total operating expense |  |  | 69,199 |  |  |  | — |  |  |  | 181,316 |  |  |  | — |
Loss from operations |  |  | (69,199 | ) |  |  | — |  |  |  | (607,327 | ) |  |  | — |
OTHER INCOME (EXPENSES) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense and amortization of debt discount |  |  | (83,667 | ) |  |  | — |  |  |  | (477,960 | ) |  |  | — |
Impairment loss on cryptocurrency |  |  | — |  |  |  | — |  |  |  | (6,189 | ) |  |  | — |
Gain on extinguishment of debt |  |  | 143,904 |  |  |  | — |  |  |  | 143,904 |  |  |  | — |
Total other income (expense) |  |  | 60,237 |  |  |  | — |  |  |  | (340,245 | ) |  |  | — |
Loss from discontinued operations |  | $ | (8,962 | ) |  | $ | — |  |  | $ | (947,572 | ) |  | $ | — |
The following table provides supplemental cash flow information related to discontinued operations:
|  | Six Month Ended
|  | June 30,
|  | 2019
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
Loss from discontinued operation |  | $ | (947,572 | )
Adjustments to reconcile loss from discontinued operation to net cash used in operating activities - discontinued operation: |  |  |  |
Gain on extinguishment of debt |  |  | (143,904 | )
Amortization of debt discount |  |  | 207,040 |
Depreciation expense |  |  | 57,248 |
Impairment loss on cryptocurrency |  |  | 6,189 |
Default penalty interest |  |  | 270,920 |
Change in operating assets and liabilities: |  |  |  |
Accounts payable and accrued expenses |  |  | 247,365 |
Payroll liability |  |  | (188 | )
Deferred revenue |  |  | (20,000 | )
Net cash used in operating activities - discontinued operations |  |  | (322,902 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |
Cash paid for fixed assets acquisition |  |  | (103,805 | )
Net cash used in investing activities - discontinued operations |  |  | (103,805 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |
Bank overdraft |  |  | (18,654 | )
Proceeds from notes payable |  |  | 112,400 |
Repayment of notes payable |  |  | (65,506 | )
Proceeds from related party loans |  |  | 307,134 |
Repayment of related party loans |  |  | (83,286 | )
Repayment of auto loan |  |  | (1,694 | )
Net cash provided by financing activities - discontinued operations |  |  | 250,394 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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