| Note 3 - Summary of Significant Accounting Policies | Note 3 - Summary of Significant Accounting Policies Basis of Presentation In the opinion of management, the accompanying unaudited interim
Condensed Consolidated Financial Statements of BCoT and its subsidiary, reflect all adjustments, including normal recurring accruals,
necessary for a fair presentation. All significant intercompany balances and transactions have been eliminated in consolidation. Certain
information and footnote disclosure normally included in annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or omitted pursuant to instructions, rules and regulations prescribed
by the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate
to make the information presented not misleading when these unaudited Condensed Consolidated Financial Statements are read in conjunction
with the audited Consolidated Financial Statements contained in the Company’s Form 10-K for the year ended December 31, 2021. The
results of operations for the period ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.
The Consolidated Financial Statements as of December 31, 2021 are derived from audited financial statements included in the Company’s
Form 10-K for the year ended December 31, 2021. Use of Estimates The preparation of the condensed consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue
and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting
estimates inherent in the preparation of the Company's condensed consolidated financial statements includes the fair values of the Digital
Assets, including the impairment assessments, as well as estimates related to stock-based compensation. BCOT Security Tokens Revenue Recognition The Company issued BCOT Security Tokens
for use by customers in Catenis. From December 2017 through early July 2018, the Company obtained Ether, Bitcoin, Bitcoin Cash and Tether
from customers totaling approximately $11,863,530 $609,670 The BCOT Security Tokens are issued on
the Bitcoin blockchain and are used as independent programmable units of power that directly convert to Catenis credits which power the
virtual devices and ultimately the entire Catenis system. These security tokens can be independently purchased, held, traded, and used
on Catenis. Using the administrative interface, the customer can send BCOT Security Tokens to their account and they will be converted
on a one-to-one basis into Catenis credits for their account. Each BCOT Security Token value is taken into account when calculating the
amount of Catenis Credits required to pay for a given Catenis service when that service is consumed. The Company evaluated the terms of sale
of the BCOT Security Tokens and determined that, when sold, a BCOT Security Token represents an obligation of the Company with counterparties
that were determined to be customers. Therefore, the Company determined that BCOT Security Tokens, when sold by the Company, are akin
to prepayments of future services and are treated as deferred revenue in accordance with ASC 606, Revenue from Contracts with Customers
(“ASC 606”). Pursuant to the terms of the BCOT Security
Tokens, there is no form of partnership, joint venture, agency or any similar relationship between a holder of a BCOT Security Token and
the Company. Except as noted below, BCOT Security Tokens are non-refundable and do not pay interest and have no maturity date. BCOT Security
Tokens confer only the right to be used to power the Catenis platform, BCoT’s product, and confer no other rights of any form with
respect to the Company, including, but not limited to, any voting, distribution, redemption, liquidation, proprietary (including all forms
of intellectual property), or other financial or legal rights. Subsequent to the distribution of BCOT Security Tokens to customers, the
associated liability to deliver the BCOT Security Tokens was satisfied. No additional BCOT Security Tokens were sold by the Company since
this distribution. Subsequent to the distribution noted above,
and pursuant to the Settlement Agreement (as defined and described further in Note 9), the Company was obligated to refund amounts raised
from the sale of BCOT Security Tokens for valid claims submitted and may incur other fines and penalties. The Rescission Offer (as defined
and described further in Note 9) deadline was February 21, 2021. Accordingly, as of March 31, 2022, all valid claims have been submitted
and the Company issued refunds to claimants of $226,258 $10,553 $537,300 In the first quarter of 2021, subsequent
to the receipt of all valid Rescission Offer claims, the Company recognized the remaining amount of $12,218,612 Deferred Revenue Deferred revenue represents BCOT Security
Tokens that have been purchased by customers but not yet redeemed and utilized as Catenis credits for Catenis services. Concentrations of Credit Risk and
Off-Balance Sheet Risk The Company is subject to concentration
of risk with respect to the Digital Assets which are held in digital wallets. Private keys, which provide access to the Digital Assets,
are held in secured vaults at banking institutions and a limited number of digital wallets. The Digital Assets are exchanged for United
States Dollars (USD) in the normal course of business so that the Company may meet its operational needs. The Digital Assets are not insured
and the exchange rate of the digital assets to USD experiences significant volatility. Software Development Costs The Company capitalizes costs related to
software developed or obtained for internal use in accordance with the ASC 350-40, Internal-Use Software (“ASC 350-40”). The
following illustrates the various stages and related processes of computer software development in accordance with ASC 350-40: Preliminary project stage: (a) conceptual
formulation of alternatives; (b) evaluation of alternatives; (c) determination of existence of needed technology; and (d) final selection
of alternatives. Internal and external costs incurred during the preliminary project stage are expensed as incurred. Application development
stage: (a) design of chosen path, including software configuration and software interfaces; (b) coding; installation to hardware; and
(c) testing, including parallel processing phase. Internal and external costs incurred to develop internal-use computer software during
the application development stage are capitalized. Post-implementation-operation stage: (a) training; and (b) application maintenance.
Internal and external costs incurred during the post-implementation-operation stage are expensed as incurred. Certain costs incurred are considered enhancements,
modifications to existing internal-use software that result in additional functionality. Enhancements normally require new software specifications
and may also require a change to all or part of the existing software specifications. When this additional functionality is determinable,
the related costs are capitalized. Otherwise, costs are expensed as incurred. Capitalization of internal-use software costs ceases when
a computer software project is substantially complete and ready for its intended use. The Company has developed and continues
to enhance Catenis, a platform, or web services layer, designed to improve upon existing blockchain technology, including its security
and ease of use. The technology primarily assists with four blockchain-based services: 1) message transmission, 2) message logging, 3)
digital asset generation, and 4) digital asset transfer. Due to the significant hurdles during development and launch of Catenis, market
adoption and recovery of the development costs is uncertain. Accordingly, the Company expensed $78,437 $66,194 Income Taxes Income taxes are recorded in accordance
with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company
recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement
and tax basis of assets and liabilities and net operating and capital loss carryforwards using enacted tax rates in effect for the year
in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it
is more likely than not that some or all of the deferred tax assets will not be realized. The valuation allowance is reduced when it is
determined that it is more likely than not that the deferred tax asset will be realized. The Company accounts for uncertain tax
positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of
tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The
determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position
as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to
unrecognized tax benefits as income tax expense. The Company files a consolidated tax return,
which incorporates the limited liability company subsidiary. Stock-based Compensation The Company accounts for stock-based compensation
to employees and non-employees in conformity with the provisions of ASC 718, Stock Based Compensation. The Company expenses stock-based
compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value of the awards.
The Company accounts for forfeitures as they occur. Stock-based awards are recognized on a straight-line basis over the requisite service
period. Common shares issued to third parties for
services provided are valued based on the estimated fair value of the Company’s common shares. All stock-based compensation costs
are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. To date, stock-based compensation is immaterial
to the condensed consolidated financial statements. Fair Value Measurement The valuation hierarchy is composed of
three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair
value measurement. The levels within the valuation hierarchy under ASC 820 are described below: Level 1 — Assets and liabilities
with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as
quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value
measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or
indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value
measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for
the assets or liabilities. The Company’s financial instruments
include cash, accounts payable, sponsorship agreements, and note payable. The fair values of cash, accounts payable, and sponsorship agreements
approximate their stated amounts because of the short maturity of these financial instruments from the balance sheet date. The fair value
of note payable approximates its stated amount based on the interest rates currently available to the Company. Our sponsorship agreements
are carried at fair value and based on Level 2 inputs. Intangible Assets Digital Assets held by the Company consist
of Ethers, Bitcoins and Bitcoin Cash and are included in current assets in the Condensed Consolidated Balance Sheets. Digital assets such
as Bitcoins, Ethers, and Bitcoin Cash are digital currencies considered cryptocurrencies that are not fiat currencies (i.e., a currency
that is backed by a central bank or a national, supra- national or quasi-national organization) and are not backed by hard assets or other
credits. Digital currencies are not financial assets because they are not an ownership interest in a company, or a contract establishing
a right or obligation to deliver or receive cash or another financial instrument. Since they lack physical substance and have no limit
on the useful life, digital currencies are considered to be indefinite-lived intangible assets under ASC 350, Intangibles–Goodwill
and Other (“ASC 350”). Indefinite-lived intangible assets are
not subject to amortization. Instead, they are tested for impairment on an annual basis and more frequently if events or circumstances
change that indicate that it’s more likely than not that the asset is impaired. As a result, the Company will only recognize decreases
in the value of its Digital Assets, and any increase in value will be recognized upon disposition. Ether, Bitcoin, Bitcoin Cash are traded
on exchanges in which there are observable prices in an active market, the Company views a decline in the quoted price below the cost
to be an impairment indicator. The quoted price and observable prices for Ether, Bitcoin, and Bitcoin Cash are determined by the Company
using a principal market analysis in accordance with ASC 820, Fair Value Measurement. When the Company evaluates Ethers, Bitcoins,
and Bitcoin Cash for impairment under ASC 350, each acquisition of Ether, Bitcoin, and Bitcoin Cash is considered a separate unit of
account. The Company tracks the cost of each unit of Ether, Bitcoin, and Bitcoin Cash when received or purchased, when performing impairment
testing and upon disposition either through sale or exchanged for goods or services. The realized gain or loss on sale of Digital Assets
is included in a separate financial statement line item in the Condensed Consolidated Statements of Operations, while impairment of Digital
Assets is included in operating expenses because of the nature of the assets. The Company obtains the equivalency rate
of the digital currencies to USD based on a global exchange rate from public exchange Gemini. As of March 31, 2022 and December 31, 2021,
the Company’s adjusted cost basis was $1,271,596 $1,284,953 Income (loss) per common share Basic income (loss) per share (“Basic
EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting
period. Diluted income (loss) per share (“Diluted EPS”) is computed by dividing the net income (loss) by the weighted average
number of common shares outstanding during the reporting period while also giving effect to all potentially dilutive common shares that
were outstanding during the reporting period. For the three months ended March 31, 2022
and 2021, the Company reported net income. Therefore, for purposes of calculating Diluted EPS, the weighted average number of common stock
includes all potentially dilutive common shares. Adoption of Recent Accounting Pronouncements The Company's accounting policies are the
same as those described in Note 3 to the Company's Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended
December 31, 2021. The Company has reviewed recent accounting
pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated
financial statements as a result of future adoption. |
