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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

 

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________________ to ______________________

 

Commission file number: 000-54995

 

I-ON DIGITAL CORP.

(Exact name of registrant as specified in its charter)

(formerly known as I-ON Communications Corp.)

 

Delaware   46-3031328

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

1244 N. Stone Street, Unit 3, Chicago, IL 60610

(Address of principal executive offices, including zip code)

 

(866) 440-2278

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act: None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding as of August 13, 2024
Common Stock, $0.0001 par value per share   27,410,234 shares

 

 

 

 

 

 

PART 1 – FINANCIAL INFORMATION

 

Item 1. Interim Financial Statements

 

The unaudited interim financial statements of I-ON Digital Corp. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to US dollars unless otherwise noted.

 

2

 

 

I-ON Digital Corp.

 

Table of Contents

 

Condensed Consolidated Financial Statements (UNAUDITED)  
   
Condensed Consolidated Balance Sheets (UNAUDITED) 4
   
Condensed Consolidated Statements of Operations (UNAUDITED) 5
   
Condensed Consolidated Statements of Stockholders’ Equity (UNAUDITED) 6
   
Condensed Consolidated Statements of Cash Flows (UNAUDITED) 7
   
Notes to Condensed Consolidated Financial Statements (UNAUDITED) 8

 

3

 

 

I-ON Digital Corp.

 

Condensed Consolidated Balance Sheets

 

 

 

  

June 30,

2024

  

December 31,

2023

 
   (Unaudited)     
ASSETS          
           
Current assets:          
Cash and cash equivalents  $156,356   $36,075 
Prepayments   104,325    109,764 
Total current assets   260,681    145,839 
           
Non-current assets:          
Intangible assets, net   18,379,927    18,400,927 
           
Total non-current assets   18,379,927    18,400,927 
           
Total Assets  $18,640,608   $18,546,766 
           
Liabilities and Stockholders’ Equity          
           
Current liabilities:          
Accrued expenses  $116,188   $100,659 
Accrued interest   353,836    79,589 
Deferred revenue – related party   -    32,625 
Due to related parties   694,141    167,909 
Loans payable   517,012    473,026 
Total current liabilities   1,681,177    853,808 
           
Total liabilities   1,681,177    853,808 
           
Commitments and contingencies   -     -  
           
Stockholders’ Equity          
Preferred stock Series A - $0.0001 par value; 6,000 shares authorized; 4,600 shares issued and outstanding at June 30, 2024 and December 31, 2023   -    - 
Preferred stock Series A to be issued (803 shares as of June 30, 2024
And December 31, 2023)
   176,342    176,342 
Preferred stock Series C - $0.0001 par value; 910,000 shares authorized; 910,000 shares issued and outstanding at June 30, 2024 and December 31, 2023   91    91 
Common stock - $0.0001 par value; 100,000,000 shares authorized; 27,410,234 shares issued and outstanding at June 30, 2024 and December 31, 2023   2,741    2,741 
Additional paid-in-capital   21,010,285    21,010,285 
Accumulated retained earnings   (4,230,028)   (3,496,501)
Total stockholders’ equity   16,959,431    17,692,958 
           
Total Liabilities and Stockholders’ Equity  $18,640,608   $18,546,766 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4

 

 

I-ON Digital Corp.

 

Condensed Consolidated Statements of Operations (Unaudited)

 

 

 

  

Three Months

Ended

June 30,

2024

  

Three Months

Ended
June 30,

2023

  

Six Months

Ended
June 30,

2024

  

Six Months
Ended
June 30,

2023

 
                 
Net sales – related party  $-   $32,625   $32,625   $32,625 
Cost of sales   -    21,000    21,000    21,000 
Gross profit   -    11,625    11,625    11,625 
                     
Operating expenses                    
Professional fees   138,580    67,760    191,580    183,760 
General and administrative expenses   141,911    92,190    235,339    155,670 
Total expenses from operations   280,491    159,950    426,919    339,430 
Income (loss) from operations   (280,491)   (148,325)   (415,294)   (327,805)
                     
Other income (expenses)                    
Interest expenses   (159,117)   -    (318,233)   - 
Income (loss) before income taxes   (439,608)   (148,325)   (733,527)   (327,805)
                     
Provision for income taxes   -    -    -    - 
                     
Net income (loss)  $(439,608)  $(148,325)  $(733,527)  $(327,805)
                     
Net income (loss) per share, basic and diluted  $(0.02)  $(0.00)  $(0.03)  $(0.01)
                     
Weighted average number of shares outstanding, basic and diluted   27,410,234    26,668,975    27,410,234    24,674,224 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5

 

 

I-ON Digital Corp.

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

 

For the three and six months ended June 30, 2024 and 2023

 

 

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Earnings   Equity 
          

 

Preferred Stock

   Additional      

Total

Company

 
   Common Stock   Series A   Series B   Series C   Paid-in   Retained   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Earnings   Equity 
                                             
Balance at December 31, 2022   19,724,220   $1,972    -   $        - -   -   $      -          -   $       -   $2,689,391   $(2,691,363)  $                      - 
Issuance of preferred stock - series A   -    -    3,600    -    -    -    -    -    214,286    -    214,286 
Distribution   -    -    -    -    -    -    -    -    (250,000)   -    (250,000)
Issuance of preferred stock - series B   -    -    -    -    6,000    1    -    -    35,713    -    35,714 
Preferred stock series B conversion to Common Stock   6,000,000    600    -    -    (6,000)   (1)   -    -    (599)   -    - 
Common stock cancellation   (350)   -    -    -    -    -    -    -    -    -    - 
Net income (loss)   -    -    -    -  -  -    -    -    -    -    (179,480)   (179,480)
                                                        
Balance at March 31, 2023   25,723,870    2,572    3,600    -  -  -    -    -    -    2,688,791    (2,870,843)   (179,480)
                                                        
Common stock issued for services   550,000    55    -    -    -    -    -    -    120,945    -    121,000 
Common stock issued for intangible asset   1,136,364    114    -    -    -    -    -    -    249,886    -    250,000 
Issuance of preferred stock A   -    -    1,000    -    -    -    -    -    219,500    -    219,500 
Net income (loss)   -    -    -    -  -  -    -    -    -    -    (148,325)   (148,325)
                                                        
Balance at June 30, 2023   27,410,234   $2,741    4,600   $-  -  -   $-    -   $-   $3,279,122   $(3,019,168)  $262,695 

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Earnings   Equity 
           Preferred Stock         

Total

 
   Common Stock   Series A  

Series A

to be issued

   Series B   Series C  

Additional

Paid-in

   Retained  

Company

Stockholders’

 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Earnings   Equity 
Balance at December 31, 2023   27,410,234   $2,741    4,600   $      -    803   $176,342          -   $       -    910,000   $      91   $21,010,285   $(3,496,501)  $   17,692,958 
Net loss   -    -    -    -    -    -    -    -    -    -    -    (293,919)   (293,919)
                                                                  
Balance at March 31, 2024   27,410,234    2,741    4,600    -    803    176,342    -    -    910,000    91    21,010,285    (3,790,420)   17,399,039 
Net loss   -    -    -    -    -    -    -    -    -    -    -    (439,608)   (439,608)
                                                                  
Balance at June 30, 2024   27,410,234   $2,741    4,600   $-    803   $176,342    -   $-    910,000   $91   $21,010,285   $(4,230,028)  $16,959,431 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

6

 

 

I-ON Digital Corp.

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

 

  

Six Months

Ended June 30,

2024

  

Six Months

Ended June 30,

2023

 
         
Cash flows from operating activities:          
Net income (loss)  $(733,527)  $(327,805)
Adjustments:          
Stock compensation   -    121,000 
Amortization   21,000    21,000 
Accretion of debt discount   43,986    - 
Changes in assets and liabilities:          
Prepaid expenses and other current assets   5,439    (70,583)
Accrued expenses   15,529    102,473 
Accrued interest   274,247    - 
Deferred revenue – related party   (32,625)   97,875 
Other current liabilities – related party   -    171,342 
Net cash provided by (used in) operating activities   (405,951)   115,302 
           
Cash flows from investing activities:          
Purchase of intangible assets   -    (353,690)
Total net cash provided by (used in) investing activities   -    (353,690)
           
Cash flows from financing activities:          
Proceeds from issuance of preferred stock Series A   -    433,786 
Proceeds from issuance of preferred stock Series B   -    35,714 
Distribution per stock purchase agreement   -    (250,000)
Advances from related parties   526,232    119,690 
Total net cash provided by (used in) financing activities   526,232    339,190 
           
Net increase (decrease) in cash and cash equivalents   120,281    100,802 
           
Cash and cash equivalents, beginning of period   36,075    - 
           
Cash and cash equivalents, end of period  $156,356   $100,802 
           
Supplemental disclosure of cash flow information:          
Interest paid  $-   $- 
Taxes paid  $-   $- 
           
Supplemental disclosure of non-cash flow information:          
Continuing operations:          
Issuance of common stock for intangible assets  $-   $250,000 
Issuance of common stock for services  $-   $121,000 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

7

 

 

I-ON Digital Corp.

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

 

 

NOTE 1: Organization and Operations

 

I-ON Digital Corp. (the “Company”) is engaged in providing digital-based enterprise solutions, including the digitization and distribution of digital tokens, primarily proven gold reserves, and other asset-based digital securities on the block chain.

 

In January 2023, the Company entered into a Series A Preferred Stock Purchase Agreement (the “Purchase Agreement”) with I-ON Acquisition Corp. (“IAC”), a related party, pursuant to which IAC received 3,600 shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) for consideration of $214,286. Each share of Series A Preferred Stock is convertible into 10,000 shares of the Company’s common stock (“Common Stock”). The 3,600 shares of Series A Preferred Stock were subsequently distributed to IAC’s sole stockholder Carlos Montoya, the Company’s Chief Executive Officer. The Company’s total authorized Series A Preferred Stock is 6,000 of which a total of 4,600 shares are issued and outstanding.

 

On December 15, 2023, the Company consummated its previously announced transaction contemplated by that certain Contribution and Exchange Agreement, dated as of October 30, 2023 (the “Contribution and Exchange Agreement”), by and between the Company and Orebits Acquisition Group (“OAG”), a Wyoming limited liability company and an entity owned and controlled by Carlos Montoya, the CEO and controlling shareholder, pursuant to which the Company acquired 910,000 shares of outstanding common stock of Orebits Corp. (“Orebits”), representing the 100% controlling interest in Orebits,in exchange for 910,000 shares of Series C Convertible Preferred Stock of the Company (“Series C Preferred Stock” and such transaction, the “Transaction”). As part of the Contribution and Exchange Agreement, upon and by virtue of the consummation of the Transaction, OAG transferred all its right, title and interest in and to approximately 9,700 Orebits.AU gold-backed digital assets to the Company, which at the time of consummation of the Transaction, had an estimated value of $17.6 million. The Transaction was accounted for as an acquisition of assets.

 

The acquisition of Orebits has had a significant impact on the Company’s consolidated balance sheets. Prior to consummation of the Transaction, Orebits carried only one asset – 9,700 Orebits AU gold-backed digital assets having a post-transaction value of $17.6 million. After the acquisition, the value of the assets on the consolidated balance sheets increased by $17,643,284 and there was no increase in liabilities.

 

8

 

 

NOTE 2. Summary of Significant Accounting Policies

 

The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the balance sheet as of December 31, 2023, which has been derived from audited financial statements, and these unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2024 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023.

 

Basis of Consolidation

 

The consolidated financial statements include the accounts of I-On Digital Corp. and its wholly owned subsidiary Orebits (collectively, the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Subsidiaries are entities over which the Company has control, typically through a majority voting interest. The Company consolidates entities in which it holds a controlling financial interest, as defined by Accounting Standards Codification (ASC) 810, Consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since the Company, under the prior ownership group, sold-off of its subsidiaries in September 2022. In addition, the Company has limited cash and has reported recurring losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

As of June 30, 2024, the Company has completed two digital platforms that we believe will establish a stabilized source of revenues which will be sufficient to cover operating costs for the next twelve months. Those platforms are still in the testing stage as of the date these consolidated financial statements were ready to be issued. The implementation of these platforms will take time to cover the full operation costs.

 

The Company’s business prospects have changed since the new management took control of operations in January 2023. Since the new ownership took over the Company, management commenced new initiatives in technology development and acquisitions. In connection with these initiatives, management plans to prepare the Company for capital formation and new business development through capital raising vehicles. There can be no assurances that the Company will be successful in this or any of its endeavors. In addition, the Company is also funded by its related parties for its operations. It is expected that the related parties will continue funding the Company’s operations until we are able to raise capital or increase revenue to cover operating costs.

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.

 

Revenue Recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1: Identify the contract with the customer; 2: Identify the performance obligations in the contract; 3: Determine the transaction price; 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when the Company satisfies a performance obligation.

 

9

 

 

Cash and Cash Equivalents

 

The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when acquired to be cash equivalents. As of June 30, 2024 and December 31, 2023 there were no cash equivalents.

 

Intangible Assets

 

Intangible assets represent non-physical assets that lack a physical substance but have value. These assets are typically long-term in nature and can include items such as patents, trademarks, copyrights, digital assets, and software. When the Company acquires an intangible asset, it is recorded either at fair value or at historical cost. The fair value is used if the asset is acquired from an entity not under common control in a business combination, and the historical cost is used if the asset is acquired from an entity under common control. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.

 

The estimated useful lives of the respective asset categories are as follows:

  

Development costs   3 years
Intangible assets excluding development costs   10 years
Other Intangible assets – Core technology platforms   3 to 5 years

 

The Company follows ASC 350-30-35 and recognizes costs incurred to renew or extend the term of a recognized intangible asset as an expense in the period in which they are incurred. These costs are not capitalized but are instead treated as operating expenses, ensuring that the financial statements accurately reflect the current period’s operational activities.

 

Impairment Analysis for Long-lived Assets and Intangible Assets

 

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.

 

10

 

 

Digital Assets

 

Digital assets are accounted for as indefinite-lived intangible assets, and are initially measured at cost, in accordance with ASC 350 – “Intangibles-Goodwill and Other” (“ASC 350”). The Company does not intend to sell the digital assets in the near future so they are classified as non-current assets.

 

These digital assets are not amortized, but are assessed for impairment annually, or upon a triggering event that indicates it is more likely than not that the indefinite-lived intangible asset is impaired. Whenever the exchange-traded price of digital assets declines below its carrying value, the Company has determined that impairment exists and records impairment equal to the amount by which the carrying value exceeds the fair value. Once the intangible asset is impaired, the loss is not reversed if the fair value subsequently increases.

 

Earnings Per Share

 

FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

 

Fair Value Measurements

 

The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

 

ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available.

 

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

 

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis.

 

The three levels of inputs are as follows:

 

  Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date.
     
  Level 2 Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities.
     
  Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

11

 

 

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us.

 

Income Taxes

 

Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.

 

The Company follows FASB ASC 740, Income Taxes, which require the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 as of June 30, 2024.

 

Contingencies

 

Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are cash arising from its normal business activities. The Company has its cash in high credit quality institutions. The Company currently does not provide for or issue extensions of credit to its clients, vendors or employees. If the Company’s board of directors elected to make a change in current policy, management, pursuant to policy and procedure implementation of the same, would establish methodologies for monitoring and assessing corresponding risks, inclusive of the potential for concentrations and the related adequacy of loss reserves going forward.

 

Advertising

 

Costs associated with advertising and promotions are expensed as incurred.

 

Employee Stock Based Compensation

 

The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value of the number of shares vesting specified periods over three years.

 

Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.

 

For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements.

 

12

 

 

Recently Issued Accounting Pronouncements

 

On December 13, 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for all entities for the fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. Where applicable the Company will adopt ASU 2023-08 when it is effective from its fiscal year beginning January 1, 2025. The adoption of ASU 2023-08 will have a material impact on the Consolidated Financial Statements.

 

Other recently issued accounting updates are not expected to have a material impact on the Company’s Financial Statements.

 

NOTE 3. Earnings Per Share

 

The Company calculates earnings per share in accordance with FASB ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the period. Due to the net loss recorded for the three and six months ended June 30, 2024 and 2023, the consolidated financial statements excluded potentially dilutive securities from the computation of diluted earnings per share because the inclusion would have been anti-dilutive. Potentially dilutive securities as of June 30, 2024 and 2023 include the following securities that are convertible into shares of Common Stock: 5,403 shares of Series A Convertible Preferred Stock convertible into 54,030,000 shares of Common Stock; 910,000 shares of Series C Convertible Preferred Stock convertible into 18,200,000 shares of Common Stock; and outstanding warrants to purchase 550,000 shares of Common Stock.

 

The following table sets forth the computation of basic and diluted net income per common share:

  

   2024   2023   2024   2023 
   Six Months Ended
June 30,
   Three Months Ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income (loss)  $(733,527)  $(327,805)  $(439,608)  $(148,325)
                     
Weighted average shares of common stock outstanding – Basic and diluted   27,410,234    24,674,224    27,410,234    26,668,975 
                     
Net loss per share:                    
Earnings per share – Basic and diluted   (0.03)   (0.01)   (0.02)   (0.00)

 

13

 

 

NOTE 4. Prepaid Expenses

 

In August 2023, the Company signed an agreement with M2 Compliance LLC (M2) for M2 to provide EDGAR filing services for the Company. The term of the services is from August 19, 2023 to August 18, 2024. The annual fee is $6,495. The Company amortized $3,248 and $1,624 of the expenses for the services for the six and three months ended June 30, 2024, respectively. As of June 30, 2024, the total expense amortized was $5,684 and the balance was $811.

 

Also in August 2023, the Company paid the annual fees to OCT Markets for two categories of services. The fee is $9,780. The Company amortized $4,890 and $2,445 of expenses for the six and three months ended June 30, 2024, respectively. As of June 30, 2024, the total amortized was $8,965 and the balance was $815.

 

In December 2023, the Company hired a consultant to work on the patents related to the token business operations and paid a $100,000 retainer for the services to be performed. As of June 30, 2024, the services have not been completed, therefore the full $100,000 remains as a prepaid expense as of June 30, 2024. Management expects the completion of the work by the third quarter of 2024.

 

In May 2024, the Company overpaid one of the vendors $2,699 and this amount will be applied to the future expenses.

 

As of June 30, 2024, the balance of prepaid expenses was $104,325.

 

NOTE 5. Intangible Assets

 

In January 2023, the Company entered into a service agreement with Nodalium, Inc. through which Nodalium, Inc. (“Nodalium”) will provide continuing services for the Architectural Plan Project, Core IT Platform & Digital Asset Ecosystem and Workflow management. The consideration for this project is $80,000. As of June 30, 2024, the project was not yet complete, therefore no amortization was recognized for the six months ended June 30, 2024 and the value of the assets was $80,000 as of June 30, 2024. Having participated in the planning and development of the Company’s Core Architectural Platform and Digital Asset Ecosystem, Nodalium, based on its platform knowledge and expertise, will further deliver its exclusive “Workflow” technology allowing the Company to independently monitor and report on all transactions involving the ION.au Digital Asset and/or the ION Digital Hybrid Blockchain platform. Nodalium’s continuous reporting will allow the Company to systematically balance its internal ledger systems, inclusive of client account balances reflecting buy, sell, trade or collateral pledge transactions, on a daily basis, against balances provided by Nodalium. All such accounting, will be made available in statement format to clients, institutional partners, auditors and/or public agencies, as appropriate.

 

In February 2023, ION Acquisition Corp., a company owned 100% by Carlos Montoya, the Company’s Chief Executive Officer and controlling stockholder, signed a purchase agreement with Nahla Jacobs and Nahla Saleh Jacobs Trust and Orebits Acquisition Group LLC, to purchase 180 Orebits AU Certificates, valued at $335,700. ION Acquisition Corp. paid $85,700 in cash and issued 1,136,364 shares of its common stock for the transaction. ION Acquisition Corp then contributed the 180 Orebits AU Certificates to the Company. In October 2023, the Company assessed the value of the Orebits AU Certificates and determined there was an impairment of $8,199, reducing the asset value to $327,501 as of December 31, 2023. This asset has been determined to have an indefinite life, therefore no amortization has been recognized, instead the asset is evaluated for impairment in accordance with Company policy for such. During the six months ended June 30, 2024 no impairment was recognized, therefore as of June 30, 2024, the value of this asset was $327,501.

 

In March 2023 the Company paid, through OAG (a related party), $84,000 to Oktane Media for Nodalium Channel Partnership Agreement & Transaction Costs, through which the Company obtained a certain license that allows the Company to resell the license. The license fee covers one year. The asset was amortized over the twelve months starting in April 2023. The Company amortized $21,000 during the six months ended June 30, 2024, and it was fully amortized and the net value of this asset was $0 as of June 30, 2024.

 

In March 2023, the Company signed an agreement with Instruxi Limited, through which Instruxi Limited will build a technology stack for the tokenization of precious metal, mineral, and/or commodity asset rights for unextracted deposits. The technology stack will allow the Company to provide specialist consultation, through its ION’s Digital Architecture & Hybrid Blockchain Platform. The Company paid $329,142 and as of June 30, 2024 the project was not yet complete, therefore no amortization was recognized for the six months ended June 30, 2024 and the value of the assets was $329,142 as of June 30, 2024.

 

In December 2023, the Company obtained 9,699.7082 Orebits AU Certificates through the acquisition of Orebits. Pursuant to the purchase agreement, I-ON Digital Corp. issued 910,000 shares of Series C Preferred Stock in exchange for Orebits’ 100% ownership of 910,000 Orebits’ shares. The Company, having independently built the underlying ION Digital Hybrid Blockchain & Workflow Platform in anticipation of onboarding the Orebits.AU Gold Backed Digital Asset, recorded the 9,699.7082 Orebits AU Certificates at $17,643,284 ($1,818.95 per Orebits AU Certificate). This asset has been determined to have an indefinite life, therefore no amortization has been recognized, instead the asset is evaluated for impairment in accordance with Company policy for such. During the six months ended June 30, 2024 no impairment was recognized, therefore as of June 30, 2024, the value of this asset was $17,643,284.

 

As of June 30, 2024, the net value of the intangible assets was $18,379,927. Because the intangible assets subject to amortization had not yet been placed into service as of June 30, 2024, the Company has not yet determined the expected aggregate amortization expense for future periods.

 

14

 

 

NOTE 6. Related-Party Transactions

 

As described in NOTE 1 and NOTE 7, in January 2023, the Company sold 3,600 shares of its Series A Preferred Stock to related parties for proceeds of $214,286.

 

As described in NOTE 5 the Company purchased certain intangible assets from related parties.

 

Through an entity controlled by Carlos Montoya, the Company’s CEO and controlling stockholder, Mr. Montoya currently pays substantially all the expenses for the Company’s operations and certain capital expenditures. For the six months ended June 30, 2024 and 2023, the related party paid expenses of $526,232 and $119,690, respectively. These advances from the related party are repayable by the Company, unsecured, non-interest bearing and payable on demand. There are no written agreements for these advances. As of June 30, 2024 and December 31, 2023, the balance of due to the related party was $694,141 and $167,909, respectively.

 

On March 30, 2023, the Company sub-leased its Enterprise Workflow/Intelligent Automation Platform, as allowed under the relicensing provisions within that certain master software license agreement, to I-ON Acquisition Corp., an entity owned by Carlos Montoya, the Company’s Chief Executive Officer, for annual fees of $130,500. The Company received the full amount and recorded it as deferred revenue, to be recognized into revenue over the twelve-month licensing period starting in April 2023. The Company recognized revenue of $32,625 for the six months ended June 30, 2024 and the deferred revenue related to this contract was $0 as of June 30, 2024.

 

NOTE 7. Convertible Notes

 

In November 2023, the Company issued Convertible Notes (the “Convertible Notes”) payable in the amount of $550,000, with the following terms and conditions. The term is one year or 30 days from the closing date of the registered security token offerings (the “Payment Date”) which is a planned offering yet to be approved by the Securities and Exchange Commission (“SEC”). The effective (bonus) interest rate is 100% payable at the closing date. In addition, the Company issued 550,000 warrants to purchase shares of Common Stock to the holders of Convertible Notes as additional consideration (see NOTE 8). The value of the warrants was $87,970, which was recorded as a debt discount and increase to additional paid in capital at note inception. The Convertible Notes can be converted to SEC registered tokens if and when they are approved and made available. The principal will be paid at the Payment Date by tokens at two and half times the principal, of which the value of the tokens would be $1,375,000.

 

For the six months ended June 30, 2024, the Company amortized debt discount of $43,986 into interest expense and the total amortization was $54,981 as of June 30, 2024. As of June 30, 2024, the balance of the debt discount remaining was $32,988 and the net loan balance was $517,012.

 

For the six months ended June 30, 2024, the Company recorded interest expense of $274,247. As of June 30, 2024, the interest accrued was $353,836.

 

NOTE 8. Stockholders’ Equity

 

On September 29, 2022, the Company effectuated an Equity Transfer Agreement (the “Sell-Off Agreement”) by and among the Company, Communications and JFJ Digital Corp., a Delaware corporation (“JFJ”), whereby all of the outstanding equity of Communications was transferred to JFJ in exchange for the return of 15,306,119 shares of Common Stock held by Jae Cheol Oh, the Company’s-then Chief Executive Officer and Chief Financial Officer, and Hong Rae Kim, a founder and then-director of the Company (the “Sell-Off”). After the “Sell-off”, the Company had 19,724,220 common shares outstanding.

 

15

 

 

In September 2022, the Company established the Series A Preferred Stock. The authorized number of shares of Series A Preferred Stock is six thousand (6,000). Each share has a par value of $0.0001. In January 2023, pursuant to a certain purchase agreement with a related party, the Company issued 3,600 shares of Series A Preferred Stock for $214,286 cash consideration. Also, pursuant to the Purchase Agreement (defined in Note 1), $214,286 was distributed to the former major shareholder. Each share of Series A Preferred Stock is convertible into Ten Thousand (10,000) shares of Common Stock and is entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of Ten Thousand (10,000) votes per share of Series A Preferred Stock.

 

In September 2022, the Company established a series of preferred stock known as Series B Convertible Preferred Stock (“Series B Preferred Stock”). The authorized number of shares of Series B Preferred Stock is six thousand (6,000) with a par value of $0.0001. In January 2023, the Company issued 6,000 shares of Series B Preferred Stock pursuant to a Contribution Agreement (the “Contribution Agreement”) with certain Purchasers (the “Purchasers”) pursuant to which the Purchasers agreed to purchase 6,000 shares of Series B Preferred Stock for the consideration of cash $35,714. Each share of Series B Preferred Stock is convertible into one thousand (1,000) shares of Common Stock.

 

Also in January 2023, all 6,000 issued and outstanding shares of Series B Preferred Stock were converted into 6,000,000 shares of Common Stock.

 

In January 2023, the Company cancelled 350 shares of Common Stock issued to a stockholder.

 

In May 2023, the Company issued 1,000 shares of Series A Preferred Stock for the value of $219,500. As of December 31, 2023, the total number of outstanding shares of Series A Preferred Stock was 4,600.

 

In May 2023, the Company issued 1,136,364 shares of Common Stock to Nahla Jacobs pursuant to the service agreement signed with Nahla Jacobs and Nahla Saleh Jacobs Trust and Orbits Acquisition Group LLC. The share price was $0.22 per share and the total value was $250,000.

 

Also in May 2023, the Company issued 550,000 shares of Common Stock pursuant to the service agreement the Company signed with Dutchess Group LLC at $0.22 per share for a total of $121,000.

 

In May and June 2023, the Company received $100,000 and $71,342, respectively, for stock to be issued. In August 2023, the Company received additional $5,000 for the stock to be issued. As of June 30, 2024, the total amount of stock to be issued was $176,342.

 

In November 2023, the Company issued 550,000 warrants to purchase shares of Common Stock to the Holders of the Convertible Notes as additional consideration for the loans underlying the Convertible Notes (see NOTE 7). Pursuant to the underlying loan agreements, the warrant holders can purchase shares of Common Stock at the price of $0.07 per share. The total value of the warrants was $87,970 and the warrants will expire on November 6, 2024.

 

In December 2023, the Company issued 910,000 shares of Series C Preferred Stock in exchange for 910,000 shares of Orebits. The authorized number of shares of Series C Preferred Stock is 910,000 with a par value of $0.0001 per share. Each share of Series C Preferred C Stock is convertible into twenty (20) shares Common Stock and is entitled to twenty (20) votes per share.

 

As of June 30, 2024, the Company had 27,410,234 shares of Common Stock issued and outstanding.

 

NOTE 9. Subsequent Events

 

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were available to be issued and determined the Company did not have any reportable subsequent events.

 

16

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward Looking Statements

 

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our unaudited interim financial statements for the three and six months ended June 30, 2024 and 2023 and as of June 30, 2024 and December 31, 2023 are expressed in US dollars and are prepared in accordance with GAAP. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter. Our unaudited financial statements and notes included therein have been prepared on a basis consistent with and should be read in conjunction with our audited financial statements and notes for the year ended December 31, 2023, as filed in our annual report on Form 10-K.

 

The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this quarterly report.

 

Business Overview

 

Organization and Corporate History

 

I-ON is a leading-edge provider of asset-digitization and securitization solutions engineered to provide a secure, fast, transparent, and institutional-grade ecosystem. We specialize in digitizing documentary evidence of ownership into secure, asset-backed digital certificates, thus bringing liquidity and recognized value to a diverse array of asset classes. Our cutting-edge technology includes a zero-trust, hybrid blockchain architecture that incorporates state-of-the-art smart contracts and sophisticated workflow management AI technologies. This system enables the digitization of ownership records for recoverable gold, precious metals, and mineral reserves, transforming them into digital certificates that facilitate wealth transfer through innovative asset-backed financial instruments.

 

In 2023, I-ON continued to expand its market presence and product offerings. We notably acquired Orebits’ gold digitization patent portfolio, trademarks, brand marks, and core intellectual property (see Note 1 of the Notes to Financial Statements). This acquisition has allowed us to enhance our capabilities and broaden our service offerings, particularly through a new SaaS platform designed for banks, broker-dealers, and other financial intermediaries. This platform supports the receipt, management, and reporting of digital assets, reinforcing our commitment to innovation in the banking, financial technology, and mineral asset industries.

 

Results of Operations

 

Net Sales – Related Party

 

The related party sales for the six months ended June 30, 2024 and 2023 were $32,625 and the sales for the three months ended June 30, 2024 and 2023 were $0 and $32,625, respectively. The Company subleased its license to a related party for one year from April 2023 through March 2024 for an annual fee of $130,500. The Company received the full amount and recorded it as deferred revenue which was recognized ratably into revenue over the twelve-month licensing period beginning in April 2023.

 

Cost of Sales

 

The cost of sales for the six months ended June 30, 2024 and 2023 were $21,000 and the cost of sales for the three months ended June 30, 2024 and 2023 were $0 and $21,000, respectively. The costs were recognized over the same period revenue was generated, from April 2023 through March 2024.

 

17

 

 

Gross Profit

 

The gross profit for the six months ended June 30, 2024 and 2023 was $11,625 and the gross profit for the three months ended June 30, 2024 and 2023 was $0 and $11,625, respectively. This is aligned to the sales in the same periods.

 

Operating Expenses

 

Operating expenses consist of professional fees and general and administrative expenses.

 

Operating expenses for the six months ended June 30, 2024 was $426,919, containing $191,580 of professional fees and $235,339 of general and administrative expenses. Comparing with the six months ended June 30, 2023, the operating expenses were $339,430, containing $183,760 of professional fees, and $155,670 of general and administrative expenses.

 

Operating expenses for the three months ended June 30, 2024 was $280,491, containing $138,580 of professional fees and $141,911 of general and administrative expenses. Comparing with the three months ended June 30, 2023, the operating expenses were $159,950, containing $67,760 of professional fees, and $92,190 of general and administrative expenses.

 

The increase in operating expenses was due to more activities incurred such as computer and internet expenses, payroll expenses, etc. during the three and six months ended June 30, 2024.

 

Other Income (Expense)

 

For the three and six months ended June 30, 2024, the Company had interest expenses of $159,117 and $318,233. There were no such expenses for the three and six months ended June 30, 2023, as the Company obtained loans of $550,000, recorded with debt discount at inception, in November 2023, and did not recognize any interest or amortization of debt discount before that date.

 

Liquidity and Capital Resources

 

As of June 30, 2024 the Company had its cash of $156,356 in its bank account.

 

Operating Activities

 

Cash of $405,951 was used in operating activities for the six months ended June 30, 2024, compared to the cash provided by operating activities of $115,302 for the six months ended June 30, 2023. The change was mainly due to the net loss that more than doubled for the six months ended June 30, 2024 compared to the net loss for the six months ended June 30, 2023.

 

Investing Activities

 

Cash used in investing activities for the six months ended June 30, 2023 was $0, compared to cash used in investing activities $353,690 for the six months ended June 30, 2023. The change was due to the Company investing in intangible assets during the prior period.

 

18

 

 

Financing Activities

 

Cash provided by financing activities for the six months ended June 30, 2024 was $526,232, compared to cash provided in financing activities of $339,190 for the six months ended June 30, 2023. The increase was due to more funds being needed for the Company’s operations in the current period.

 

Critical Accounting Estimates

 

Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management. Management has carefully considered the recently issued accounting pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

As required by Rule 15d-15(b) under the Exchange Act, our management, including our principal executive and financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) as of June 30, 2024, the last day of the period covered by this Quarterly Report. Based on this evaluation, our management, including our principal executive and financial officer, concluded that, as of June 30, 2024, our disclosure controls and procedures were not fully effective at the reasonable assurance level.

 

Limitations on Effectiveness of Controls

 

Our management, including our principal executive and financial officer, does not expect that our disclosure controls and procedures, or our system of internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act), will prevent or detect all errors and all fraud. A control system, no matter how well designed or operated, can provide only reasonable, but not absolute, assurance that the objectives of the system are met. The design of our control system reflects the fact that there are resource constraints, and that the benefits of such control system must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control failures and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the intentional acts of individuals, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part on certain assumptions about the likelihood of future events, and there can be no assurance that the design of any particular control will always succeed in achieving its objective under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

There has not been any change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three-month period ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

19

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.

 

Item 2. Unregistered Sales of Equity Securities

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Rule 10b-5(1) Trading Plans. During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 

Item 6. Exhibits

 

Exhibit

Number

 

Exhibit

Description

3.1   Certificate of Designations of Rights and Preferences for Series A Convertible Preferred Stock
     
3.2   Certificate of Designations of Rights and Preferences for Series B Convertible Preferred Stock.
     
3.3   Certificate of Designations of Rights and Preferences for Series C Convertible Preferred Stock.
     
31.1   Certification of Chief Executive and Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
     
31.2   Certification of Chief Executive and Financial Officer Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
     
**   The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

 

20

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: August 13, 2024  

I-ON DIGITAL CORP.
   
  By: /s/ Carlos X. Montoya
    Carlos X. Montoya
   

Chairman, President

(Principal Executive, Financial and Accounting Officer)

 

21

 

 

 

Exhibit 3.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 31.1

 

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Carlos X. Montoya, certify that:

 

1.have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 of I-ON Digital Corp.;
  
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
  
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
  
4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e Ind 15d-1I)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal over financial reporting;

 

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 13, 2024    
     
    /s/ Carlos X. Montoya
  Name: Carlos X. Montoya
  Title:

Chairman, President

(Principal Executive, Financial and Accounting Officer)

 

 

 

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with Quarterly Report on Form 10-Q (the “Report”) of I-ON Digital Corp. (the “Company”) for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Carlos X. Montoya, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of the undersigned’s knowledge and belief:

 

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
  
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 13, 2024   /s/ Carlos X. Montoya
  Name: Carlos X. Montoya
  Title: Chairman, President
    (Principal Executive, Financial and Accounting Officer)

 

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-Q or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.2 is expressly and specifically incorporated by reference in any such filing.

 

A signed original of this written statement required by Section 906 has been provided to I-ON Digital Corp. and will be retained by I-ON Digital Corp. and furnished to the Securities and Exchange Commission upon request.

 

 

 

 

v3.24.2.u1
Cover - $ / shares
6 Months Ended
Jun. 30, 2024
Aug. 13, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 000-54995  
Entity Registrant Name I-ON DIGITAL CORP.  
Entity Central Index Key 0001580490  
Entity Tax Identification Number 46-3031328  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 1244 N. Stone Street  
Entity Address, Address Line Two Unit 3  
Entity Address, City or Town Chicago  
Entity Address, State or Province IL  
Entity Address, Postal Zip Code 60610  
City Area Code (866)  
Local Phone Number 440-2278  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   27,410,234
Entity Listing, Par Value Per Share $ 0.0001  
v3.24.2.u1
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 156,356 $ 36,075
Prepayments 104,325 109,764
Total current assets 260,681 145,839
Non-current assets:    
Intangible assets, net 18,379,927 18,400,927
Total non-current assets 18,379,927 18,400,927
Total Assets 18,640,608 18,546,766
Current liabilities:    
Accrued expenses 116,188 100,659
Accrued interest 353,836 79,589
Loans payable 517,012 473,026
Total current liabilities 1,681,177 853,808
Total liabilities 1,681,177 853,808
Commitments and contingencies
Stockholders’ Equity    
Common stock - $0.0001 par value; 100,000,000 shares authorized; 27,410,234 shares issued and outstanding at June 30, 2024 and December 31, 2023 2,741 2,741
Additional paid-in-capital 21,010,285 21,010,285
Accumulated retained earnings (4,230,028) (3,496,501)
Total stockholders’ equity 16,959,431 17,692,958
Total Liabilities and Stockholders’ Equity 18,640,608 18,546,766
Series A Preferred Stock [Member]    
Stockholders’ Equity    
Preferred stock Series C - $0.0001 par value; 910,000 shares authorized; 910,000 shares issued and outstanding at June 30, 2024 and December 31, 2023
Series A Issued [Member]    
Stockholders’ Equity    
Preferred stock Series C - $0.0001 par value; 910,000 shares authorized; 910,000 shares issued and outstanding at June 30, 2024 and December 31, 2023 176,342 176,342
Series C Preferred Stock [Member]    
Stockholders’ Equity    
Preferred stock Series C - $0.0001 par value; 910,000 shares authorized; 910,000 shares issued and outstanding at June 30, 2024 and December 31, 2023 91 91
Related Party [Member]    
Current liabilities:    
Deferred revenue – related party 32,625
Due to related parties $ 694,141 $ 167,909
v3.24.2.u1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Common stock, par value   $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 27,410,234 27,410,234
Common stock, shares outstanding 27,410,234 27,410,234
Series A Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 6,000 6,000
Preferred stock shares issued 4,600 4,600
Preferred stock shares outstanding 4,600 4,600
Preferred stock, shares to be issued 803 803
Series C Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 910,000 910,000
Preferred stock shares issued 910,000 910,000
Preferred stock shares outstanding 910,000 910,000
v3.24.2.u1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Net sales – related party $ 32,625 $ 32,625 $ 32,625
Cost of sales 21,000 21,000 21,000
Gross profit 11,625 11,625 11,625
Operating expenses        
Professional fees 138,580 67,760 191,580 183,760
General and administrative expenses 141,911 92,190 235,339 155,670
Total expenses from operations 280,491 159,950 426,919 339,430
Income (loss) from operations (280,491) (148,325) (415,294) (327,805)
Other income (expenses)        
Interest expenses (159,117) (318,233)
Income (loss) before income taxes (439,608) (148,325) (733,527) (327,805)
Provision for income taxes
Net income (loss) $ (439,608) $ (148,325) $ (733,527) $ (327,805)
Net loss per share: Basic $ (0.02) $ (0.00) $ (0.03) $ (0.01)
Net loss per share: Diluted $ (0.02) $ (0.00) $ (0.03) $ (0.01)
Weighted average number of shares outstanding: Basic 27,410,234 26,668,975 27,410,234 24,674,224
Weighted average number of shares outstanding: Diluted 27,410,234 26,668,975 27,410,234 24,674,224
v3.24.2.u1
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Preferred Stock [Member]
Series A Preferred Stock [Member]
Preferred Stock [Member]
Series A Issued [Member]
Preferred Stock [Member]
Series B Preferred Stock [Member]
Preferred Stock [Member]
Series C Preferred Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2022 $ 1,972 $ 2,689,391 $ (2,691,363)
Balance shares at Dec. 31, 2022 19,724,220        
Issuance of preferred stock A   214,286 214,286
Issuance of preferred stock - series A, shares   3,600            
Distribution   (250,000) (250,000)
Issuance of preferred stock - series B   $ 1 35,713 35,714
Issuance of preferred stock - series B, shares       6,000        
Preferred stock series B conversion to Common Stock $ 600   $ (1) (599)
Preferred stock series B converion to common stock, shares 6,000,000     (6,000)        
Common stock cancellation  
Common stock cancellation, shares (350)              
Net income (loss) (179,480) (179,480)
Balance at Mar. 31, 2023 $ 2,572 2,688,791 (2,870,843) (179,480)
Balance shares at Mar. 31, 2023 25,723,870 3,600        
Balance at Dec. 31, 2022 $ 1,972 2,689,391 (2,691,363)
Balance shares at Dec. 31, 2022 19,724,220        
Net income (loss)               (327,805)
Balance at Jun. 30, 2023 $ 2,741 3,279,122 (3,019,168) 262,695
Balance shares at Jun. 30, 2023 27,410,234 4,600        
Balance at Mar. 31, 2023 $ 2,572 2,688,791 (2,870,843) (179,480)
Balance shares at Mar. 31, 2023 25,723,870 3,600        
Issuance of preferred stock A   219,500 219,500
Net income (loss) (148,325) (148,325)
Common stock issued for services 55   120,945 121,000
Common stock issued for intangible asset 114   249,886 250,000
Balance at Jun. 30, 2023 $ 2,741 3,279,122 (3,019,168) 262,695
Balance shares at Jun. 30, 2023 27,410,234 4,600        
Balance at Mar. 31, 2023 $ 2,572 2,688,791 (2,870,843) (179,480)
Balance shares at Mar. 31, 2023 25,723,870 3,600        
Issuance of preferred stock - series A, shares   1,000            
Common stock issued for services, shares 550,000              
Common stock issued for intangible assets, shares 1,136,364              
Balance at Jun. 30, 2024 $ 2,741 $ 176,342 $ 91 21,010,285 (4,230,028) 16,959,431
Balance shares at Jun. 30, 2024 27,410,234 4,600 803 910,000      
Balance at Dec. 31, 2023 $ 2,741 $ 176,342 $ 91 21,010,285 (3,496,501) 17,692,958
Balance shares at Dec. 31, 2023 27,410,234 4,600 803 910,000      
Net income (loss) (293,919) (293,919)
Balance at Mar. 31, 2024 $ 2,741 $ 176,342 91 21,010,285 (3,790,420) 17,399,039
Balance shares at Mar. 31, 2024 27,410,234 4,600 803        
Balance at Dec. 31, 2023 $ 2,741 $ 176,342 $ 91 21,010,285 (3,496,501) 17,692,958
Balance shares at Dec. 31, 2023 27,410,234 4,600 803 910,000      
Issuance of preferred stock A               176,342
Net income (loss)               (733,527)
Balance at Jun. 30, 2024 $ 2,741 $ 176,342 $ 91 21,010,285 (4,230,028) 16,959,431
Balance shares at Jun. 30, 2024 27,410,234 4,600 803 910,000      
Balance at Mar. 31, 2024 $ 2,741 $ 176,342 $ 91 21,010,285 (3,790,420) 17,399,039
Balance shares at Mar. 31, 2024 27,410,234 4,600 803        
Net income (loss) (439,608) (439,608)
Balance at Jun. 30, 2024 $ 2,741 $ 176,342 $ 91 $ 21,010,285 $ (4,230,028) $ 16,959,431
Balance shares at Jun. 30, 2024 27,410,234 4,600 803 910,000      
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net income (loss) $ (733,527) $ (327,805)
Adjustments:    
Stock compensation 121,000
Amortization 21,000 21,000
Accretion of debt discount 43,986
Changes in assets and liabilities:    
Prepaid expenses and other current assets 5,439 (70,583)
Accrued expenses 15,529 102,473
Accrued interest 274,247
Deferred revenue – related party (32,625) 97,875
Other current liabilities – related party 171,342
Net cash provided by (used in) operating activities (405,951) 115,302
Cash flows from investing activities:    
Purchase of intangible assets (353,690)
Total net cash provided by (used in) investing activities (353,690)
Cash flows from financing activities:    
Proceeds from issuance of preferred stock Series A 433,786
Proceeds from issuance of preferred stock Series B 35,714
Distribution per stock purchase agreement (250,000)
Advances from related parties 526,232 119,690
Total net cash provided by (used in) financing activities 526,232 339,190
Net increase (decrease) in cash and cash equivalents 120,281 100,802
Cash and cash equivalents, beginning of period 36,075
Cash and cash equivalents, end of period 156,356 100,802
Supplemental disclosure of cash flow information:    
Interest paid
Taxes paid
Supplemental disclosure of non-cash flow information:    
Issuance of common stock for intangible assets 250,000
Issuance of common stock for services $ 121,000
v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure [Table]            
Net Income (Loss) $ (439,608) $ (293,919) $ (148,325) $ (179,480) $ (733,527) $ (327,805)
v3.24.2.u1
Insider Trading Arrangements
3 Months Ended
Jun. 30, 2024
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Organization and Operations
6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Operations

NOTE 1: Organization and Operations

 

I-ON Digital Corp. (the “Company”) is engaged in providing digital-based enterprise solutions, including the digitization and distribution of digital tokens, primarily proven gold reserves, and other asset-based digital securities on the block chain.

 

In January 2023, the Company entered into a Series A Preferred Stock Purchase Agreement (the “Purchase Agreement”) with I-ON Acquisition Corp. (“IAC”), a related party, pursuant to which IAC received 3,600 shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) for consideration of $214,286. Each share of Series A Preferred Stock is convertible into 10,000 shares of the Company’s common stock (“Common Stock”). The 3,600 shares of Series A Preferred Stock were subsequently distributed to IAC’s sole stockholder Carlos Montoya, the Company’s Chief Executive Officer. The Company’s total authorized Series A Preferred Stock is 6,000 of which a total of 4,600 shares are issued and outstanding.

 

On December 15, 2023, the Company consummated its previously announced transaction contemplated by that certain Contribution and Exchange Agreement, dated as of October 30, 2023 (the “Contribution and Exchange Agreement”), by and between the Company and Orebits Acquisition Group (“OAG”), a Wyoming limited liability company and an entity owned and controlled by Carlos Montoya, the CEO and controlling shareholder, pursuant to which the Company acquired 910,000 shares of outstanding common stock of Orebits Corp. (“Orebits”), representing the 100% controlling interest in Orebits,in exchange for 910,000 shares of Series C Convertible Preferred Stock of the Company (“Series C Preferred Stock” and such transaction, the “Transaction”). As part of the Contribution and Exchange Agreement, upon and by virtue of the consummation of the Transaction, OAG transferred all its right, title and interest in and to approximately 9,700 Orebits.AU gold-backed digital assets to the Company, which at the time of consummation of the Transaction, had an estimated value of $17.6 million. The Transaction was accounted for as an acquisition of assets.

 

The acquisition of Orebits has had a significant impact on the Company’s consolidated balance sheets. Prior to consummation of the Transaction, Orebits carried only one asset – 9,700 Orebits AU gold-backed digital assets having a post-transaction value of $17.6 million. After the acquisition, the value of the assets on the consolidated balance sheets increased by $17,643,284 and there was no increase in liabilities.

 

 

v3.24.2.u1
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2. Summary of Significant Accounting Policies

 

The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the balance sheet as of December 31, 2023, which has been derived from audited financial statements, and these unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2024 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023.

 

Basis of Consolidation

 

The consolidated financial statements include the accounts of I-On Digital Corp. and its wholly owned subsidiary Orebits (collectively, the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Subsidiaries are entities over which the Company has control, typically through a majority voting interest. The Company consolidates entities in which it holds a controlling financial interest, as defined by Accounting Standards Codification (ASC) 810, Consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since the Company, under the prior ownership group, sold-off of its subsidiaries in September 2022. In addition, the Company has limited cash and has reported recurring losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

As of June 30, 2024, the Company has completed two digital platforms that we believe will establish a stabilized source of revenues which will be sufficient to cover operating costs for the next twelve months. Those platforms are still in the testing stage as of the date these consolidated financial statements were ready to be issued. The implementation of these platforms will take time to cover the full operation costs.

 

The Company’s business prospects have changed since the new management took control of operations in January 2023. Since the new ownership took over the Company, management commenced new initiatives in technology development and acquisitions. In connection with these initiatives, management plans to prepare the Company for capital formation and new business development through capital raising vehicles. There can be no assurances that the Company will be successful in this or any of its endeavors. In addition, the Company is also funded by its related parties for its operations. It is expected that the related parties will continue funding the Company’s operations until we are able to raise capital or increase revenue to cover operating costs.

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.

 

Revenue Recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1: Identify the contract with the customer; 2: Identify the performance obligations in the contract; 3: Determine the transaction price; 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when the Company satisfies a performance obligation.

 

 

Cash and Cash Equivalents

 

The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when acquired to be cash equivalents. As of June 30, 2024 and December 31, 2023 there were no cash equivalents.

 

Intangible Assets

 

Intangible assets represent non-physical assets that lack a physical substance but have value. These assets are typically long-term in nature and can include items such as patents, trademarks, copyrights, digital assets, and software. When the Company acquires an intangible asset, it is recorded either at fair value or at historical cost. The fair value is used if the asset is acquired from an entity not under common control in a business combination, and the historical cost is used if the asset is acquired from an entity under common control. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.

 

The estimated useful lives of the respective asset categories are as follows:

  

Development costs   3 years
Intangible assets excluding development costs   10 years
Other Intangible assets – Core technology platforms   3 to 5 years

 

The Company follows ASC 350-30-35 and recognizes costs incurred to renew or extend the term of a recognized intangible asset as an expense in the period in which they are incurred. These costs are not capitalized but are instead treated as operating expenses, ensuring that the financial statements accurately reflect the current period’s operational activities.

 

Impairment Analysis for Long-lived Assets and Intangible Assets

 

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.

 

 

Digital Assets

 

Digital assets are accounted for as indefinite-lived intangible assets, and are initially measured at cost, in accordance with ASC 350 – “Intangibles-Goodwill and Other” (“ASC 350”). The Company does not intend to sell the digital assets in the near future so they are classified as non-current assets.

 

These digital assets are not amortized, but are assessed for impairment annually, or upon a triggering event that indicates it is more likely than not that the indefinite-lived intangible asset is impaired. Whenever the exchange-traded price of digital assets declines below its carrying value, the Company has determined that impairment exists and records impairment equal to the amount by which the carrying value exceeds the fair value. Once the intangible asset is impaired, the loss is not reversed if the fair value subsequently increases.

 

Earnings Per Share

 

FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

 

Fair Value Measurements

 

The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

 

ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available.

 

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

 

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis.

 

The three levels of inputs are as follows:

 

  Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date.
     
  Level 2 Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities.
     
  Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us.

 

Income Taxes

 

Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.

 

The Company follows FASB ASC 740, Income Taxes, which require the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 as of June 30, 2024.

 

Contingencies

 

Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are cash arising from its normal business activities. The Company has its cash in high credit quality institutions. The Company currently does not provide for or issue extensions of credit to its clients, vendors or employees. If the Company’s board of directors elected to make a change in current policy, management, pursuant to policy and procedure implementation of the same, would establish methodologies for monitoring and assessing corresponding risks, inclusive of the potential for concentrations and the related adequacy of loss reserves going forward.

 

Advertising

 

Costs associated with advertising and promotions are expensed as incurred.

 

Employee Stock Based Compensation

 

The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value of the number of shares vesting specified periods over three years.

 

Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.

 

For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements.

 

 

Recently Issued Accounting Pronouncements

 

On December 13, 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for all entities for the fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. Where applicable the Company will adopt ASU 2023-08 when it is effective from its fiscal year beginning January 1, 2025. The adoption of ASU 2023-08 will have a material impact on the Consolidated Financial Statements.

 

Other recently issued accounting updates are not expected to have a material impact on the Company’s Financial Statements.

 

v3.24.2.u1
Earnings Per Share
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Earnings Per Share

NOTE 3. Earnings Per Share

 

The Company calculates earnings per share in accordance with FASB ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the period. Due to the net loss recorded for the three and six months ended June 30, 2024 and 2023, the consolidated financial statements excluded potentially dilutive securities from the computation of diluted earnings per share because the inclusion would have been anti-dilutive. Potentially dilutive securities as of June 30, 2024 and 2023 include the following securities that are convertible into shares of Common Stock: 5,403 shares of Series A Convertible Preferred Stock convertible into 54,030,000 shares of Common Stock; 910,000 shares of Series C Convertible Preferred Stock convertible into 18,200,000 shares of Common Stock; and outstanding warrants to purchase 550,000 shares of Common Stock.

 

The following table sets forth the computation of basic and diluted net income per common share:

  

   2024   2023   2024   2023 
   Six Months Ended
June 30,
   Three Months Ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income (loss)  $(733,527)  $(327,805)  $(439,608)  $(148,325)
                     
Weighted average shares of common stock outstanding – Basic and diluted   27,410,234    24,674,224    27,410,234    26,668,975 
                     
Net loss per share:                    
Earnings per share – Basic and diluted   (0.03)   (0.01)   (0.02)   (0.00)

 

 

v3.24.2.u1
Prepaid Expenses
6 Months Ended
Jun. 30, 2024
Prepaid Expenses  
Prepaid Expenses

NOTE 4. Prepaid Expenses

 

In August 2023, the Company signed an agreement with M2 Compliance LLC (M2) for M2 to provide EDGAR filing services for the Company. The term of the services is from August 19, 2023 to August 18, 2024. The annual fee is $6,495. The Company amortized $3,248 and $1,624 of the expenses for the services for the six and three months ended June 30, 2024, respectively. As of June 30, 2024, the total expense amortized was $5,684 and the balance was $811.

 

Also in August 2023, the Company paid the annual fees to OCT Markets for two categories of services. The fee is $9,780. The Company amortized $4,890 and $2,445 of expenses for the six and three months ended June 30, 2024, respectively. As of June 30, 2024, the total amortized was $8,965 and the balance was $815.

 

In December 2023, the Company hired a consultant to work on the patents related to the token business operations and paid a $100,000 retainer for the services to be performed. As of June 30, 2024, the services have not been completed, therefore the full $100,000 remains as a prepaid expense as of June 30, 2024. Management expects the completion of the work by the third quarter of 2024.

 

In May 2024, the Company overpaid one of the vendors $2,699 and this amount will be applied to the future expenses.

 

As of June 30, 2024, the balance of prepaid expenses was $104,325.

 

v3.24.2.u1
Intangible Assets
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

NOTE 5. Intangible Assets

 

In January 2023, the Company entered into a service agreement with Nodalium, Inc. through which Nodalium, Inc. (“Nodalium”) will provide continuing services for the Architectural Plan Project, Core IT Platform & Digital Asset Ecosystem and Workflow management. The consideration for this project is $80,000. As of June 30, 2024, the project was not yet complete, therefore no amortization was recognized for the six months ended June 30, 2024 and the value of the assets was $80,000 as of June 30, 2024. Having participated in the planning and development of the Company’s Core Architectural Platform and Digital Asset Ecosystem, Nodalium, based on its platform knowledge and expertise, will further deliver its exclusive “Workflow” technology allowing the Company to independently monitor and report on all transactions involving the ION.au Digital Asset and/or the ION Digital Hybrid Blockchain platform. Nodalium’s continuous reporting will allow the Company to systematically balance its internal ledger systems, inclusive of client account balances reflecting buy, sell, trade or collateral pledge transactions, on a daily basis, against balances provided by Nodalium. All such accounting, will be made available in statement format to clients, institutional partners, auditors and/or public agencies, as appropriate.

 

In February 2023, ION Acquisition Corp., a company owned 100% by Carlos Montoya, the Company’s Chief Executive Officer and controlling stockholder, signed a purchase agreement with Nahla Jacobs and Nahla Saleh Jacobs Trust and Orebits Acquisition Group LLC, to purchase 180 Orebits AU Certificates, valued at $335,700. ION Acquisition Corp. paid $85,700 in cash and issued 1,136,364 shares of its common stock for the transaction. ION Acquisition Corp then contributed the 180 Orebits AU Certificates to the Company. In October 2023, the Company assessed the value of the Orebits AU Certificates and determined there was an impairment of $8,199, reducing the asset value to $327,501 as of December 31, 2023. This asset has been determined to have an indefinite life, therefore no amortization has been recognized, instead the asset is evaluated for impairment in accordance with Company policy for such. During the six months ended June 30, 2024 no impairment was recognized, therefore as of June 30, 2024, the value of this asset was $327,501.

 

In March 2023 the Company paid, through OAG (a related party), $84,000 to Oktane Media for Nodalium Channel Partnership Agreement & Transaction Costs, through which the Company obtained a certain license that allows the Company to resell the license. The license fee covers one year. The asset was amortized over the twelve months starting in April 2023. The Company amortized $21,000 during the six months ended June 30, 2024, and it was fully amortized and the net value of this asset was $0 as of June 30, 2024.

 

In March 2023, the Company signed an agreement with Instruxi Limited, through which Instruxi Limited will build a technology stack for the tokenization of precious metal, mineral, and/or commodity asset rights for unextracted deposits. The technology stack will allow the Company to provide specialist consultation, through its ION’s Digital Architecture & Hybrid Blockchain Platform. The Company paid $329,142 and as of June 30, 2024 the project was not yet complete, therefore no amortization was recognized for the six months ended June 30, 2024 and the value of the assets was $329,142 as of June 30, 2024.

 

In December 2023, the Company obtained 9,699.7082 Orebits AU Certificates through the acquisition of Orebits. Pursuant to the purchase agreement, I-ON Digital Corp. issued 910,000 shares of Series C Preferred Stock in exchange for Orebits’ 100% ownership of 910,000 Orebits’ shares. The Company, having independently built the underlying ION Digital Hybrid Blockchain & Workflow Platform in anticipation of onboarding the Orebits.AU Gold Backed Digital Asset, recorded the 9,699.7082 Orebits AU Certificates at $17,643,284 ($1,818.95 per Orebits AU Certificate). This asset has been determined to have an indefinite life, therefore no amortization has been recognized, instead the asset is evaluated for impairment in accordance with Company policy for such. During the six months ended June 30, 2024 no impairment was recognized, therefore as of June 30, 2024, the value of this asset was $17,643,284.

 

As of June 30, 2024, the net value of the intangible assets was $18,379,927. Because the intangible assets subject to amortization had not yet been placed into service as of June 30, 2024, the Company has not yet determined the expected aggregate amortization expense for future periods.

 

 

v3.24.2.u1
Related-Party Transactions
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related-Party Transactions

NOTE 6. Related-Party Transactions

 

As described in NOTE 1 and NOTE 7, in January 2023, the Company sold 3,600 shares of its Series A Preferred Stock to related parties for proceeds of $214,286.

 

As described in NOTE 5 the Company purchased certain intangible assets from related parties.

 

Through an entity controlled by Carlos Montoya, the Company’s CEO and controlling stockholder, Mr. Montoya currently pays substantially all the expenses for the Company’s operations and certain capital expenditures. For the six months ended June 30, 2024 and 2023, the related party paid expenses of $526,232 and $119,690, respectively. These advances from the related party are repayable by the Company, unsecured, non-interest bearing and payable on demand. There are no written agreements for these advances. As of June 30, 2024 and December 31, 2023, the balance of due to the related party was $694,141 and $167,909, respectively.

 

On March 30, 2023, the Company sub-leased its Enterprise Workflow/Intelligent Automation Platform, as allowed under the relicensing provisions within that certain master software license agreement, to I-ON Acquisition Corp., an entity owned by Carlos Montoya, the Company’s Chief Executive Officer, for annual fees of $130,500. The Company received the full amount and recorded it as deferred revenue, to be recognized into revenue over the twelve-month licensing period starting in April 2023. The Company recognized revenue of $32,625 for the six months ended June 30, 2024 and the deferred revenue related to this contract was $0 as of June 30, 2024.

 

v3.24.2.u1
Convertible Notes
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Convertible Notes

NOTE 7. Convertible Notes

 

In November 2023, the Company issued Convertible Notes (the “Convertible Notes”) payable in the amount of $550,000, with the following terms and conditions. The term is one year or 30 days from the closing date of the registered security token offerings (the “Payment Date”) which is a planned offering yet to be approved by the Securities and Exchange Commission (“SEC”). The effective (bonus) interest rate is 100% payable at the closing date. In addition, the Company issued 550,000 warrants to purchase shares of Common Stock to the holders of Convertible Notes as additional consideration (see NOTE 8). The value of the warrants was $87,970, which was recorded as a debt discount and increase to additional paid in capital at note inception. The Convertible Notes can be converted to SEC registered tokens if and when they are approved and made available. The principal will be paid at the Payment Date by tokens at two and half times the principal, of which the value of the tokens would be $1,375,000.

 

For the six months ended June 30, 2024, the Company amortized debt discount of $43,986 into interest expense and the total amortization was $54,981 as of June 30, 2024. As of June 30, 2024, the balance of the debt discount remaining was $32,988 and the net loan balance was $517,012.

 

For the six months ended June 30, 2024, the Company recorded interest expense of $274,247. As of June 30, 2024, the interest accrued was $353,836.

 

v3.24.2.u1
Stockholders’ Equity
6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Stockholders’ Equity

NOTE 8. Stockholders’ Equity

 

On September 29, 2022, the Company effectuated an Equity Transfer Agreement (the “Sell-Off Agreement”) by and among the Company, Communications and JFJ Digital Corp., a Delaware corporation (“JFJ”), whereby all of the outstanding equity of Communications was transferred to JFJ in exchange for the return of 15,306,119 shares of Common Stock held by Jae Cheol Oh, the Company’s-then Chief Executive Officer and Chief Financial Officer, and Hong Rae Kim, a founder and then-director of the Company (the “Sell-Off”). After the “Sell-off”, the Company had 19,724,220 common shares outstanding.

 

 

In September 2022, the Company established the Series A Preferred Stock. The authorized number of shares of Series A Preferred Stock is six thousand (6,000). Each share has a par value of $0.0001. In January 2023, pursuant to a certain purchase agreement with a related party, the Company issued 3,600 shares of Series A Preferred Stock for $214,286 cash consideration. Also, pursuant to the Purchase Agreement (defined in Note 1), $214,286 was distributed to the former major shareholder. Each share of Series A Preferred Stock is convertible into Ten Thousand (10,000) shares of Common Stock and is entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of Ten Thousand (10,000) votes per share of Series A Preferred Stock.

 

In September 2022, the Company established a series of preferred stock known as Series B Convertible Preferred Stock (“Series B Preferred Stock”). The authorized number of shares of Series B Preferred Stock is six thousand (6,000) with a par value of $0.0001. In January 2023, the Company issued 6,000 shares of Series B Preferred Stock pursuant to a Contribution Agreement (the “Contribution Agreement”) with certain Purchasers (the “Purchasers”) pursuant to which the Purchasers agreed to purchase 6,000 shares of Series B Preferred Stock for the consideration of cash $35,714. Each share of Series B Preferred Stock is convertible into one thousand (1,000) shares of Common Stock.

 

Also in January 2023, all 6,000 issued and outstanding shares of Series B Preferred Stock were converted into 6,000,000 shares of Common Stock.

 

In January 2023, the Company cancelled 350 shares of Common Stock issued to a stockholder.

 

In May 2023, the Company issued 1,000 shares of Series A Preferred Stock for the value of $219,500. As of December 31, 2023, the total number of outstanding shares of Series A Preferred Stock was 4,600.

 

In May 2023, the Company issued 1,136,364 shares of Common Stock to Nahla Jacobs pursuant to the service agreement signed with Nahla Jacobs and Nahla Saleh Jacobs Trust and Orbits Acquisition Group LLC. The share price was $0.22 per share and the total value was $250,000.

 

Also in May 2023, the Company issued 550,000 shares of Common Stock pursuant to the service agreement the Company signed with Dutchess Group LLC at $0.22 per share for a total of $121,000.

 

In May and June 2023, the Company received $100,000 and $71,342, respectively, for stock to be issued. In August 2023, the Company received additional $5,000 for the stock to be issued. As of June 30, 2024, the total amount of stock to be issued was $176,342.

 

In November 2023, the Company issued 550,000 warrants to purchase shares of Common Stock to the Holders of the Convertible Notes as additional consideration for the loans underlying the Convertible Notes (see NOTE 7). Pursuant to the underlying loan agreements, the warrant holders can purchase shares of Common Stock at the price of $0.07 per share. The total value of the warrants was $87,970 and the warrants will expire on November 6, 2024.

 

In December 2023, the Company issued 910,000 shares of Series C Preferred Stock in exchange for 910,000 shares of Orebits. The authorized number of shares of Series C Preferred Stock is 910,000 with a par value of $0.0001 per share. Each share of Series C Preferred C Stock is convertible into twenty (20) shares Common Stock and is entitled to twenty (20) votes per share.

 

As of June 30, 2024, the Company had 27,410,234 shares of Common Stock issued and outstanding.

 

v3.24.2.u1
Subsequent Events
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events

NOTE 9. Subsequent Events

 

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were available to be issued and determined the Company did not have any reportable subsequent events.

v3.24.2.u1
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the balance sheet as of December 31, 2023, which has been derived from audited financial statements, and these unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2024 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023.

 

Basis of Consolidation

Basis of Consolidation

 

The consolidated financial statements include the accounts of I-On Digital Corp. and its wholly owned subsidiary Orebits (collectively, the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Subsidiaries are entities over which the Company has control, typically through a majority voting interest. The Company consolidates entities in which it holds a controlling financial interest, as defined by Accounting Standards Codification (ASC) 810, Consolidation.

 

Going Concern

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since the Company, under the prior ownership group, sold-off of its subsidiaries in September 2022. In addition, the Company has limited cash and has reported recurring losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

As of June 30, 2024, the Company has completed two digital platforms that we believe will establish a stabilized source of revenues which will be sufficient to cover operating costs for the next twelve months. Those platforms are still in the testing stage as of the date these consolidated financial statements were ready to be issued. The implementation of these platforms will take time to cover the full operation costs.

 

The Company’s business prospects have changed since the new management took control of operations in January 2023. Since the new ownership took over the Company, management commenced new initiatives in technology development and acquisitions. In connection with these initiatives, management plans to prepare the Company for capital formation and new business development through capital raising vehicles. There can be no assurances that the Company will be successful in this or any of its endeavors. In addition, the Company is also funded by its related parties for its operations. It is expected that the related parties will continue funding the Company’s operations until we are able to raise capital or increase revenue to cover operating costs.

 

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.

 

Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1: Identify the contract with the customer; 2: Identify the performance obligations in the contract; 3: Determine the transaction price; 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when the Company satisfies a performance obligation.

 

 

Cash and Cash Equivalents

Cash and Cash Equivalents

 

The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when acquired to be cash equivalents. As of June 30, 2024 and December 31, 2023 there were no cash equivalents.

 

Intangible Assets

Intangible Assets

 

Intangible assets represent non-physical assets that lack a physical substance but have value. These assets are typically long-term in nature and can include items such as patents, trademarks, copyrights, digital assets, and software. When the Company acquires an intangible asset, it is recorded either at fair value or at historical cost. The fair value is used if the asset is acquired from an entity not under common control in a business combination, and the historical cost is used if the asset is acquired from an entity under common control. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.

 

The estimated useful lives of the respective asset categories are as follows:

  

Development costs   3 years
Intangible assets excluding development costs   10 years
Other Intangible assets – Core technology platforms   3 to 5 years

 

The Company follows ASC 350-30-35 and recognizes costs incurred to renew or extend the term of a recognized intangible asset as an expense in the period in which they are incurred. These costs are not capitalized but are instead treated as operating expenses, ensuring that the financial statements accurately reflect the current period’s operational activities.

 

Impairment Analysis for Long-lived Assets and Intangible Assets

Impairment Analysis for Long-lived Assets and Intangible Assets

 

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.

 

 

Digital Assets

Digital Assets

 

Digital assets are accounted for as indefinite-lived intangible assets, and are initially measured at cost, in accordance with ASC 350 – “Intangibles-Goodwill and Other” (“ASC 350”). The Company does not intend to sell the digital assets in the near future so they are classified as non-current assets.

 

These digital assets are not amortized, but are assessed for impairment annually, or upon a triggering event that indicates it is more likely than not that the indefinite-lived intangible asset is impaired. Whenever the exchange-traded price of digital assets declines below its carrying value, the Company has determined that impairment exists and records impairment equal to the amount by which the carrying value exceeds the fair value. Once the intangible asset is impaired, the loss is not reversed if the fair value subsequently increases.

 

Earnings Per Share

Earnings Per Share

 

FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

 

Fair Value Measurements

Fair Value Measurements

 

The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

 

ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available.

 

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

 

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis.

 

The three levels of inputs are as follows:

 

  Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date.
     
  Level 2 Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities.
     
  Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us.

 

Income Taxes

Income Taxes

 

Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.

 

The Company follows FASB ASC 740, Income Taxes, which require the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 as of June 30, 2024.

 

Contingencies

Contingencies

 

Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.

 

Concentration of Credit Risk

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are cash arising from its normal business activities. The Company has its cash in high credit quality institutions. The Company currently does not provide for or issue extensions of credit to its clients, vendors or employees. If the Company’s board of directors elected to make a change in current policy, management, pursuant to policy and procedure implementation of the same, would establish methodologies for monitoring and assessing corresponding risks, inclusive of the potential for concentrations and the related adequacy of loss reserves going forward.

 

Advertising

Advertising

 

Costs associated with advertising and promotions are expensed as incurred.

 

Employee Stock Based Compensation

Employee Stock Based Compensation

 

The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value of the number of shares vesting specified periods over three years.

 

Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.

 

For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements.

 

 

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

On December 13, 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for all entities for the fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. Where applicable the Company will adopt ASU 2023-08 when it is effective from its fiscal year beginning January 1, 2025. The adoption of ASU 2023-08 will have a material impact on the Consolidated Financial Statements.

 

Other recently issued accounting updates are not expected to have a material impact on the Company’s Financial Statements.

v3.24.2.u1
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Schedule of Estimated Useful Lives of Asset Categories

The estimated useful lives of the respective asset categories are as follows:

  

Development costs   3 years
Intangible assets excluding development costs   10 years
Other Intangible assets – Core technology platforms   3 to 5 years
v3.24.2.u1
Earnings Per Share (Tables)
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Computation of Basic and Diluted Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

  

   2024   2023   2024   2023 
   Six Months Ended
June 30,
   Three Months Ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income (loss)  $(733,527)  $(327,805)  $(439,608)  $(148,325)
                     
Weighted average shares of common stock outstanding – Basic and diluted   27,410,234    24,674,224    27,410,234    26,668,975 
                     
Net loss per share:                    
Earnings per share – Basic and diluted   (0.03)   (0.01)   (0.02)   (0.00)
v3.24.2.u1
Organization and Operations (Details Narrative) - USD ($)
1 Months Ended
Dec. 15, 2023
Jan. 31, 2023
Jun. 30, 2024
Dec. 31, 2023
Sep. 30, 2022
Orebits Corp [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Transferred right title and interest 9,700        
Estimated value $ 17,600,000        
Increase in assets 17,643,284        
Increase in liabilities $ 0        
Orebits Corp [Member] | Common Stock [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Exchange shares of series c preferred stock 910,000        
Controlling interests 100.00%        
Series A Preferred Stock [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Number of shares issued   3,600      
Sale of stock consideration   $ 214,286      
Preferred stock, shares authorized     6,000 6,000 6,000
Preferred stock, shares issued     4,600 4,600  
Preferred stock, shares outstanding     4,600 4,600  
Series C Preferred Stock [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Preferred stock, shares authorized     910,000 910,000  
Preferred stock, shares issued     910,000 910,000  
Preferred stock, shares outstanding     910,000 910,000  
Series C Preferred Stock [Member] | Orebits Corp [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Exchange shares of series c preferred stock 910,000        
Share Purchase Agreement [Member] | Series A Preferred Stock [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Number of shares issued   3,600      
Sale of stock consideration   $ 214,286      
Purchase Agreement [Member] | Series A Preferred Stock [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Share issuable upon preferred stock conversion   10,000      
Preferred stock, shares authorized   6,000      
Preferred stock, shares issued   4,600      
Preferred stock, shares outstanding   4,600      
v3.24.2.u1
Schedule of Estimated Useful Lives of Asset Categories (Details)
Jun. 30, 2024
In Process Research and Development [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives of asset 3 years
Intangible Assets Excluding Development Costs [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives of asset 10 years
Other Intangible Assets [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives of asset 3 years
Other Intangible Assets [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives of asset 5 years
v3.24.2.u1
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Accounting Policies [Abstract]    
Cash equivalents $ 0 $ 0
Vesting period 3 years  
v3.24.2.u1
Schedule of Computation of Basic and Diluted Net Income Per Common Share (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Earnings Per Share [Abstract]            
Net income (loss) $ (439,608) $ (293,919) $ (148,325) $ (179,480) $ (733,527) $ (327,805)
Basic 27,410,234   26,668,975   27,410,234 24,674,224
Diluted 27,410,234   26,668,975   27,410,234 24,674,224
Earnings per share - Basic $ (0.02)   $ (0.00)   $ (0.03) $ (0.01)
Earnings per share - Diluted $ (0.02)   $ (0.00)   $ (0.03) $ (0.01)
v3.24.2.u1
Earnings Per Share (Details Narrative)
6 Months Ended
Jun. 30, 2024
shares
Share-Based Payment Arrangement, Option [Member]  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Warrants outstanding 550,000
Series A Preferred Stock [Member]  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Stock options outstanding 5,403
Series A Preferred Stock [Member] | Share-Based Payment Arrangement, Option [Member]  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Stock options outstanding 54,030,000
Series C Convertible Preferred Stock [Member] | Share-Based Payment Arrangement, Option [Member]  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Warrants outstanding 910,000
Series C Preferred Stock [Member] | Share-Based Payment Arrangement, Option [Member]  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Stock options outstanding 18,200,000
v3.24.2.u1
Prepaid Expenses (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
May 31, 2024
Dec. 31, 2023
Aug. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Annual fee     $ 9,780 $ 138,580 $ 67,760 $ 191,580 $ 183,760
Amortized expenses       2,445   4,890  
Prepaid expense balance       815   815  
Payments to employees   $ 100,000          
Prepaid expenses   $ 109,764   104,325   104,325  
Payments to vendors $ 2,699            
Consultant [Member]              
Prepaid expenses       100,000   100,000  
M2 Compliance LLC [Member] | Service Agreement [Member]              
Annual fee     6,495        
Amortized expenses       1,624   3,248  
Prepaid expense amortization     $ 8,965     5,684  
Prepaid expense balance       $ 811   $ 811  
v3.24.2.u1
Intangible Assets (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 31, 2023
May 31, 2023
Mar. 31, 2023
Feb. 28, 2023
Jan. 31, 2023
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Payments to obtain assets             $ 353,690  
Net value of intangible assets           $ 18,379,927 18,379,927   $ 18,400,927
Impairment loss $ 8,199                
Asset value                 $ 327,501
Amortized           2,445 4,890    
Amortization of intangible assets             21,000 $ 21,000  
Orebits Acquisition Corp [Member]                  
Ownership percentage                 100.00%
Orebits Acquisition Corp [Member]                  
Shares, issued                 9,699.7082
Orebits Acquisition Group [Member                  
Number of shares issued                 910,000
Orebits Acquisition Group [Member | Series C Preferred Stock [Member]                  
Number of shares issued                 910,000
Orebits Acquistion Corp [Member]                  
Estimated value             17,643,284   $ 17,643,284
Share price                 $ 1,818.95
Service Agreement [Member] | Nodalium Inc [Member]                  
Payments to obtain assets         $ 80,000        
Net value of intangible assets           80,000 80,000    
Purchase Agreement [Member]                  
Payments to obtain assets       $ 335,700          
Net value of intangible assets           327,501 327,501    
Cash paid as per agreement   $ 85,700              
Number of shares issued   1,136,364              
Amortized       $ 0          
Impairment loss             0    
Partnership Agreement [Member] | Orebits Acquisition Group [Member                  
Payments to obtain assets     $ 84,000            
Net value of intangible assets           0 0    
Amortization of intangible assets             21,000    
Agreement [Member] | Instruxi Limited [Member]                  
Payments to obtain assets             329,142    
Net value of intangible assets           $ 329,142 $ 329,142    
v3.24.2.u1
Related-Party Transactions (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jan. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Mar. 30, 2023
Related Party Transaction [Line Items]              
Deferred revenue             $ 130,500
Revenue recognized   $ 32,625 $ 32,625 $ 32,625    
Related Party [Member]              
Related Party Transaction [Line Items]              
Related party paid expense       526,232 $ 119,690    
Due to related parties   694,141   694,141   $ 167,909  
Deferred revenue       $ 32,625  
Series A Preferred Stock [Member]              
Related Party Transaction [Line Items]              
Sale of stock, shares issued 3,600            
Proceeds from sale of stock $ 214,286            
v3.24.2.u1
Convertible Notes (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Nov. 30, 2023
Aug. 31, 2023
Jun. 30, 2023
May 31, 2023
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Dec. 31, 2023
Convertible notes payable $ 550,000              
Bonus rate 100.00%              
Issuance of warrants, value   $ 5,000 $ 71,342 $ 100,000 $ 219,500 $ 214,286 $ 176,342  
Amortization of debt discount             43,986  
Interest expense             54,981  
Debt discount             32,988  
Loans payable             517,012 $ 473,026
Interest expense             274,247  
Interest accrued             $ 353,836  
Warrant [Member]                
Issuance of warrants, shares 550,000              
Issuance of warrants, value $ 87,970              
Convertible principal amount $ 1,375,000              
v3.24.2.u1
Stockholders’ Equity (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Nov. 30, 2023
Sep. 29, 2022
Aug. 31, 2023
Jun. 30, 2023
May 31, 2023
Jan. 31, 2023
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Sep. 30, 2022
Class of Stock [Line Items]                        
Common stock shares outstanding   19,724,220             27,410,234   27,410,234  
Cash consideration for preferred stock shares issued                 $ 433,786    
Stock issued value     $ 5,000 $ 71,342 $ 100,000   $ 219,500 $ 214,286 $ 176,342      
Stock of conversion description                     share of Series C Preferred C Stock is convertible into twenty (20) shares Common Stock and is entitled to twenty (20) votes per share.  
Common stock shares issued                 27,410,234   27,410,234  
Common Stock [Member]                        
Class of Stock [Line Items]                        
Stock issued value                    
Stock cancelled during period, shares           350   (350)        
Warrant [Member]                        
Class of Stock [Line Items]                        
Number of shares issued 550,000                      
Stock issued value $ 87,970                      
Issuance of warrants, shares 550,000                      
Warrant common stock par value $ 0.07                      
Issuance of warrants, value $ 87,970                      
Warrants expire date Nov. 06, 2024                      
Nahla Jacobs [Member]                        
Class of Stock [Line Items]                        
Number of shares issued         1,136,364              
Stock issued value         $ 250,000              
Share price         $ 0.22              
Dutchess Group LLC [Member] | Common Stock [Member]                        
Class of Stock [Line Items]                        
Number of shares issued         550,000              
Stock issued value         $ 121,000              
Share price         $ 0.22              
Series A Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Number of shares issued         1,000              
Shares of preferred stock, authorized                 6,000   6,000 6,000
Shares of preferred stock, par value                 $ 0.0001   $ 0.0001 $ 0.0001
Number of shares convertible                 10,000      
Preferred stock voting rights                 vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of Ten Thousand (10,000) votes per share of Series A Preferred Stock      
Stock issued value         $ 219,500              
Shares of preferred stock issued                 4,600   4,600  
Preferred stock, shares outstanding                 4,600   4,600  
Series A Preferred Stock [Member] | Former Major Shareholder [Member]                        
Class of Stock [Line Items]                        
Cash consideration for preferred stock shares issued           $ 214,286            
Series A Convertible Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Number of shares issued           3,600            
Cash consideration           $ 214,286            
Series B Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Shares of preferred stock, authorized                       6,000
Shares of preferred stock, par value                       $ 0.0001
Number of shares convertible                 1,000      
Shares of preferred stock issued           6,000            
Preferred stock, shares outstanding           6,000            
Preferred stock shares, converted to common stock           6,000,000            
Series C Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Shares of preferred stock, authorized                 910,000   910,000  
Shares of preferred stock, par value                 $ 0.0001   $ 0.0001  
Shares of preferred stock issued                 910,000   910,000  
Preferred stock, shares outstanding                 910,000   910,000  
Series C Preferred Stock [Member] | Orebits Acquisition Group [Member                        
Class of Stock [Line Items]                        
Shares of preferred stock issued                     910,000  
Sell-Off Agreemer [Member]                        
Class of Stock [Line Items]                        
Number of shares issued   15,306,119                    
Contribution Agreement [Member] | Series B Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Number of shares issued           6,000            
Shares of preferred stock, authorized           6,000            
Stock issued value           $ 35,714            

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