Nature of Operations and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Description of Business

LevelBlox, Inc., formerly known as AlphaPoint Technology, Inc., principal objective is to partner with innovative Blockchain technology focused companies that are interested in pursuing growth through the public markets. We are developing relationships with a portfolio of high-quality businesses and establishing a sustainable business model, to achieve superior and sustainable financial results.

LevelBlox, is a developer of Software Asset Management (SAM) applications for the Blockchain. LevelBlox has developed a patent-pending software application called AssetCentral (AC). Through AssetCentral use cases we have identified the growing complexity and scope with the current methodology and tracking of Software Asset Management licenses. LevelBlox’s SAM Blockchain application will connect software entitlements to their licenses and components with the software decision makers, to drive automation with transparency to reduce SAM content, effort, and cost. LevelBlox’s Blockchain auditing and compliance tool will assist companies with their compliance audits, internal controls, and best business practices.

LevelBlox has been selected to join the Oracle Scaleup Ecosystem, and the Oracle Cloud Infrastructure platform, utilizing the global resources, cloud technology, infrastructure and expertise Oracle has to offer, as the company moves into its next phase of growth.

LevelBlox is committed to Blockchain deployments for enterprise markets. It seeks to eliminate intermediaries by increasing efficiency and speed and simplifying operations by reducing cost and time related to Software Asset Management (SAM) reconciliations and disputes.

Basis of Presentation

Basis of Presentation

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of (a) the consolidated financial position at December 31, 2018 and December 31, 2017 and (b) the consolidated statements of operations, and cash flows for the year ended December 31, 2018 and 2017 have been made.

Application of Critical Accounting Policies and Use of Estimates

Application of Critical Accounting Policies and Use of Estimates

The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The application of GAAP requires management to make assumptions, judgments and estimates that affect our reported amounts of assets, liabilities, revenue and expenses, and the related disclosures regarding these items. We base the assumptions, judgments and estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results could differ significantly from these estimates under different assumptions or conditions. To the extent that there are material differences between these estimates and actual results, our future financial condition or results of operations will be affected. On a regular basis, we evaluate our assumptions, judgments and estimates.

We believe that the assumptions, judgments and estimates involved in the accounting for stock-based expenses and income taxes have the greatest potential impact on our consolidated financial statements. These areas are key components of our results of operations and are based on complex rules which require us to make judgments and estimates. Historically, our assumptions, judgments and estimates in accordance with our critical accounting policies have not materially differed from actual results.

Fair Value Measurements

Fair Value Measurements

The Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The statement applies whenever other statements require or permit assets or liabilities to be measured at fair value.

At each balance sheet date, the Company performs an analysis of all instruments subject to fair value measurement. The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. As of December 31, 2018 and 2017 the fair values of the Company’s financial instruments approximate their historical carrying amount.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less when purchased which are readily convertible to cash.

Share-based payments

Share-based payments

Share-based payments to employees and non-employees, including grants of employee stock options or shares of stock are recognized as expense in the financial statements based on their fair values. That expense is recognized over the period during which services are provided in exchange for the award.

The Company may issue restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete.

We use the Black-Scholes option pricing model to determine the estimated fair value of warrants issued in connection with stock.

Revenue recognition

Revenue recognition

The Company recognizes revenue under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a 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 (5) recognize revenue when a performance obligation is satisfied.

Software Development Costs

Software Development Costs

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, Research and Development and FASB 985-20, Costs of Computer Software to be Sold, Leased, or Marketed.


•	Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

•	The Company may capitalize costs incurred in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility is determined and prior to our marketing and initial sales.

At December 31, 2018, no software development costs had been capitalized.

Research and Development

Research and Development

The Company expenses research and development costs when incurred. Research and development costs include engineering, programmer costs and testing of product and outputs. Indirect costs related to research and development are allocated based on percentage usage to the research and development. The Company incurred $224,334 and $0 in research and development costs for the years ended December 31, 2018 and 2017, respectively, and are included in the loss from operations.

Income taxes

Income taxes

The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. A valuation allowance may be applied against the net deferred tax due to the uncertainty of its ultimate realization.

Deferred tax assets have been fully offset by a valuation allowance, because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has a history of net operating losses.

Earnings (loss) per share

Earnings (loss) per share

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income by the weighted average number of shares plus any potentially dilutive shares. The Company does not have any potentially dilutive instruments and, thus, anti-dilution issues are not applicable.

Risks and concentrations

Risks and concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk include cash in banks in excess of federally insured amounts. The Company manages this risk by maintaining all deposits in high quality financial institutions.

LevelBlox, Inc. 10-K