XML 22 R8.htm IDEA: XBRL DOCUMENT

General

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Note 1. General

A.

Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp. (the “Company(, was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“Zaxis”). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”).

On March 16, 2015, Zaxis and Emerald Israel executed the Share Exchange Agreement, which closed on July 14, 2015 (the “Share Exchange Agreement”) and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer.

During the fourth quarter of 2015, in connection with the Share Exchange Agreement, the Company changed its name to Emerald Medical Applications Corp.

B.

On January 4, 2018, the Company and Emerald Israel entered into an agreement with Alpha Capital Ansalt and Chi Squared Inc. (collectively, the “Preferred Shareholders”), pursuant to which the Preferred Shareholders agreed to cancel their shares of Series A Preferred Convertible Stock in return for the receipt of up to $250,000 of proceeds from the liquidation of Emerald Israel, to the extent that such liquidation yields net positive proceeds (“Excess Net Assets”).

Management’s best estimate of the potential value of the Excess Net Assets at the date of the cancellation of the shares of Series A Preferred Convertible Stock was $150,000 and therefore, the Company recorded a charge to Additional Paid-in Capital in the Statement of Changes in Stockholders’ Deficit with a corresponding credit to liabilities. Management’s best estimate of the potential value of the Excess Net Assets as of December 31, 2018, was nil. Accordingly, the Company recorded a finance income of $150,000 in its Consolidated Statements of Comprehensive Loss a result of the reversal of the relating liability.

As such, as of December 31, 2018, there were no shares of Series A Preferred Convertible Stock outstanding.

C.

On January 29, 2018, the Company ceased the DermaCompare operations of Emerald Israel and on May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and nominated an Israeli advocate (attorney) as a special executor for Emerald Israel. Following the cessation of the DermaCompare operations, the Company classified to discontinued operations its 2017 results of operation and balances relating to the DermaCompare operation.

Liabilities held for sale:

		December 31, 2018				December 31, 2017
Accounts payable and accrued liabilities			287,070				321,934
Accounts payable - related party			76,004				82,331
Employee payable			75,955				98,476
Short term portion of convertible notes			30,496				33,034
Total			469,525				535,775

D.

On January 17, 2018, the Company formed a new wholly-owned subsidiary in Israel, Virtual Crypto Technologies Ltd. (the “New Subsidiary” or “Virtual Crypto Israel”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers and/or mobile devices.

On January 24, 2018, Virtual Crypto Israel had entered into a binding term sheet (the “Chiron Term Sheet”) with Chiron Refineries Ltd. (“Chiron”), a public company listed on the Tel-Aviv Stock Exchange (TASE: CHR). Pursuant to the Chiron Term Sheet: (i) Virtual Crypto Israel agreed to appoint a wholly-owned subsidiary of Chiron, to be organized under the laws of the Turkish Republic of Northern Cyprus (the “Distributor”), as the exclusive distributor of Virtual Crypto Israel’s Products in Turkey, including the territory of Turkish Republic of Northern Cyprus (collectively, the “Territory”); and (ii) the Distributor shall have the right to appoint sub-distributors within the Territory. The appointment of the Distributor was subject to the payment by the distributor to Virtual Crypto Israel of $250,000 as an appointment fee, of which $150,000 was to be deemed an advance payment by the distributor made on account of future purchases of the Company’s Products.

Virtual Crypto Israel further granted the Distributor an option, exercisable by the Distributor within 12 months from the date on which the ATM Product, including the related software and hardware, was fully tested and ready for installation and operation, to be appointed as an exclusive distributor of the Products for the Federal Republic of Nigeria. If the option was exercised, the Distributor was required to pay Virtual Crypto Israel an appointment fee not more than $250,000. In November 2018, Chiron reported that it had encountered financial difficulties and as such the Company will no longer pursue the transactions contemplated by the Chiron Term Sheet.

To date, $100,000 was paid by the Distributor to Virtual Crypto Israel, which has been recognized as revenues for the year ended December 31, 2018.

E.

Going Concern:

The Company has incurred significant operating losses and negative cash flows from operating activities in relation to its operations, since inception. While the Company raised approximately $1.9 million in the year ended December 31, 2018 to fund the operations of its New Subsidiary, the Company will require additional capital resources in order to support the commercialization of the New Subsidiary’s technology and operations and maintain its research and development activities related to the New Subsidiary’s technology. The Company is addressing its liquidity needs by seeking additional funding from public and/or private sources. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the Company’s short and long-term requirements, or at all these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.