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Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2015
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 3rd parties in relation to Bitcoin mining activities. The expenses related to our Bitcoin mining activities 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, Simplifying the Presentation of Debt Issuance Costs, which require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU 2015-03 is effective for the interim and annual periods ending after December 15, 2015. The Company does not expect any material impact from adoption of this guidance on the Company’s condensed consolidated financial statements.

 

Subsequent events

 

Subsequent events have been evaluated through the date of this filing.