~~OBITX, INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~Note 1. Organization and Basis of Presentation~~

The accompanying audited financial statements of OBITX, Inc., (the “Company”, “we”, “our”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”

Interim Consolidated Financial Statements and Notes to Interim Financial Statements

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and six months ended July 31, 2023, are not necessarily indicative of the results that can be expected for the year ending January 31, 2024 or any other reporting period. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on May 1, 2023 (the “Annual Report”).

~~Basis~~

Table of ~~Presentation~~Contents

Everything Blockchain, Inc.
Consolidated Balance Sheets (Amounts in thousands, except share and per share data)

ASSETS
	As of
	July 31,			January 31,
	2023			2023
	(unaudited)
Current assets
Cash	$	21		$	824
Accounts receivable, net		69			89
Inventory		67			64
Current cryptocurrencies		782			4
Prepaid expenses		454			2,663
Other assets		219			127
Total current assets		1,612			3,771
Property, plant and equipment, net		652			660
Goodwill		16,504			16,504
Intangible assets, net		4,720			4,270
Other assets		222			463
Total assets	$	23,710		$	25,668

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	1,973		$	1,151
Accounts payable related party		700			13
Current portion of long-term debt		544			474
Reserve for legal settlements		154			154
Deferred revenue		250			279
Total current liabilities	$	3,621		$	2,071
Long-term liabilities
Debt		34			47
Total long-term liabilities	$	34		$	47
Total liabilities	$	3,655		$	2,118
Stockholders’ equity
Series A Preferred stock, $0.0001 par value: 1,000,000 shares authorized; 200,000 shares issued and outstanding as of July 31, 2023 and January 31, 2023		-			-
Series B Preferred stock, $0.0001 par value: 1,500,000 shares authorized; 650,000 shares issued and 400,000 shares outstanding as of July 31, 2023 and January 31, 2023		-			-
Series C Preferred stock, $0.0001 par value: 10,000,000 and 2,000,000 shares authorized as of July 31, 2023 and January 31, 2023, respectively; 1,000,000 shares issued and outstanding as of July 31, 2023 and January 31, 2023		-			-
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,949,966 shares issued and 9,923,304 shares outstanding as of July 31, 2023 and January 31, 2023		1			1
Treasury stock		(1,691	)		(1,691	)
Additional paid-in capital		87,190			85,975
Receivable from stockholder		-			(200	)
Accumulated deficit		(65,445	)		(60,535	)
Total stockholders’ equity	$	20,055		$	23,550
Total liabilities and stockholders’ equity	$	23,710		$	25,668

See accompanying notes to consolidated financial statements.

~~The accompanying consolidated financial statements include the accounts~~

Table of the Company and its subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany accounts and transactions have been eliminated.Contents

Everything Blockchain, Inc.
Consolidated Statements of Operations (Amounts in thousands, except share and per share data)

	For the Three Months Ended						For the Six Months Ended
	July 31,						July 31,
	2023			2022			2023			2022
	(unaudited)
Revenue	$	470		$	383		$	732		$	638
Cost of sales		80			56			131			71
Gross profit		390			327			601			567
Selling, general, and administrative		1,438			979			2,668			2,072
Stock based compensation		650			678			1,366			1,481
Depreciation and amortization		59			50			118			100
Total operating expenses		2,147			1,707			4,152			3,653
Loss from operations		(1,757	)		(1,380	)		(3,551	)		(3,086	)
Other expense, net		(1,335	)		(2,070	)		(1,352	)		(2,230	)
Loss before income taxes		(3,092	)		(3,450	)		(4,903	)		(5,316	)
Income tax expense (benefit)		-			(782	)		7			(1,194	)
Net loss	$	(3,092	)	$	(2,668	)	$	(4,910	)	$	(4,122	)

Basic and diluted loss per share:
Basic loss per share	$	(0.31	)	$	(0.28	)	$	(0.49	)	$	(0.46	)
Diluted loss per share	$	(0.31	)	$	(0.28	)	$	(0.49	)	$	(0.46	)
Weighted average shares outstanding - basic		9,923,304			9,412,664			9,923,304			9,045,439
Weighted average shares outstanding - diluted		9,923,304			9,412,664			9,923,304			9,045,439

See accompanying notes to consolidated financial statements.

~~The consolidated financial statements include the accounts~~

Table of ~~the Company and its wholly-owned subsidiaries, Haute Jobs, LLC, (“HAUTE”), Campaign Pigeon, LLC, (“CAMP”), and altCUBE,~~Contents

Everything Blockchain, Inc.~~, (“altCUBE”).~~

Consolidated Statements of Stockholders’ Equity

(Amounts in thousands)

	Preferred Stock					Common Stock				Treasury			Additional Paid-in		Receivable from			Accumulated			Total Stockholders’
	Shares			Amount		Shares		Amount		Stock			Capital		Shareholder			Deficit			Equity
	(unaudited)
Balance – January 31, 2022		600		$	-		8,604	$	1	$	(1,599	)	$	80,134	$	-		$	(51,091	)	$	27,445
Issuance of Series C Preferred		250			-		-		-		-			1,000		-			-			1,000
Conversion of Series C Preferred- into common stock		(250	)		-		561
Warrant exercise		-			-		535		-		-			535		-			-			535
Stock based compensation		-			-		-		-		-			1,274		-			-			1,274
Net loss		-			-		-		-		-			-		-			(4,122	)		(4,122	)
Balance – July 31, 2022		600		$	-		9,700	$	1	$	(1,599	)	$	82,943	$	-		$	(55,213	)	$	26,132

Balance – January 31, 2023		1,600		$	-		9,923	$	1	$	(1,691	)	$	85,975	$	(200	)	$	(60,535	)	$	23,550
Warrant exercise		-			-		-		-		-			-		200			-			200
Stock based compensation		-			-		-		-		-			1,215		-			-			1,215
Net loss		-			-		-		-		-			-		-			(4,910	)		(4,910	)
Balance – July 31, 2023		1,600		$	-		9,923	$	1	$	(1,691	)	$	87,190	$	-		$	(65,445	)	$	20,055

See accompanying notes to consolidated financial statements.

~~Description~~

Table of ~~Business~~

~~The Company was incorporated in the State of Delaware on March 30, 2017 originally under the name GigeTech, Inc.On October 31, 2017 the Company changed its name to OBITX, Inc., and updated its Articles of Incorporation through unanimous consent of its shareholder, MCIG. The Company is headquartered in Jacksonville, Florida.~~Contents

Everything Blockchain, Inc.
Consolidated Statements of Cash Flows (Amounts in thousands)

	For the Six Months Ended July 31
	2023			2022
	(unaudited)
Cash flows from operating activities:
Net Loss	$	(4,910	)	$	(4,122	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock based compensation		1,366			1,481
Deferred income tax benefit		-			(1,197	)
Realized net gain on investment in cryptocurrency		(9	)		(54	)
Fair value adjustment to cryptocurrency		1,302			2,206
Amortization and depreciation		118			100
Changes in operating assets and liabilities:
Accounts receivable, net		20			(51	)
Inventory		(2	)		(43	)
Prepaid expenses		(183	)		(54	)
Other assets		150			(43	)
Accounts payable to related party		686			(30	)
Accounts payable and accrued expenses		887			25
Deferred revenue		(29	)		144
Net cash used in operating activities		(604	)		(1,638	)
Cash flows from investing activities:
Proceeds from cryptocurrencies, net		170			-
Capital expenditures		(560	)		(609	)
Net cash used in investing activities		(390	)		(609	)
Cash flows from financing activities:
Payment of debt		(9	)		(16	)
Proceeds from issuance of Series C Preferred Stock		-			1,000
Proceeds from exercise of warrants		200			500
Net cash provided by financing activities		191			1,484
Net Change in Cash		(803	)		(763	)
Cash, beginning of period		824			1,062
Cash, end of period	$	21		$	299
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest	$	54		$	27
Cash paid for income taxes	$	-		$	3
Non-cash Investing and Financing Activities:
Acquisition of cryptocurrency	$	2,242		$	-
Conversion of accounts payable to related party to common stock		-			35

See accompanying notes to consolidated financial statements.

The Company’s primary NAICS CODE is 519130, Internet publishing and broadcasting and web search portals. We publish and generate textual, audio, and/or video content on the Internet, and operate web sites that use a search engine to generate and maintain extensive databases

Table of ~~internet addresses and content.~~
The Company earns revenue through social media advertising, fees, and services. Under its plan, the Company developed its white label software solution for MCIG under the 420 Cloud brand in support of the cannabis industry. The company has expanded its services and solutions in software development and internet advertising and promotion into the social media industries of entertainment, business administration, blockchain technologies, and social media.¹
~~Subsidiaries of the Company~~
~~The company currently operates, in addition to OBITX, Inc., three wholly owned subsidiaries which are consolidated:~~
~~Haute Jobs, LLC~~
~~We incorporated on May 10, 2018 in the state of Wyoming. Haute Jobs, LLC was created to provide services in the arena of job marketing and matching services, to perform an as an employment center.~~
~~Campaign Pigeon, LLC~~
~~We incorporated on May 10, 2018 in the state of Wyoming. Campaign Pigeon, LLC was created to provide services in the arena of online marketing and generating advertising.~~
~~altCUBE, Inc~~
We incorporated on June 4, 2018 in the state of Wyoming. altCUBE, Inc was created to provide services in the arena of promoting individual advertising solutions and enabling access to the financial crypto global market, providing modern, efficient, clean and intuitive user interface.
~~Note 2. Summary of Significant Accounting Policies~~
~~Principles of Consolidation~~
~~The consolidated financial statements include the accounts of the Company, the wholly owned subsidiaries of HAUTE, CAMP, and altCUBE~~
Contents

~~Use of Estimates~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment;

Everything Blockchain, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements of Everything Blockchain, Inc. (“EBI”) and its consolidated subsidiaries (collectively, the “Company”, “we”, “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (the “SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Description of Business

The Company is primarily engaged in the business of consulting and developing data management, blockchain and cybersecurity related solutions.

Subsidiaries of the Company

The subsidiaries of the Company are Render Payment Corp., 832 Energy Technology Consultants, LLC, Mercury, Inc. (“Mercury”), Vengar Technologies LLC, Everything Blockchain Technology Corporation, and EBI International, Inc.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of EBI and its wholly owned subsidiaries.

Unaudited Interim Financial Information

The Company’s unaudited consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended January 31, 2023, and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on May 1, 2023 (the “2023 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period.

The unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the three and six months ended July 31, 2023, are not necessarily indicative of the results for the year ending January 31, 2024, or for any future period.

As of July 31, 2023, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Annual Report.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates and judgments relate to revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation of long-lived assets and finite-lived intangible assets; recoverability of goodwill; acquisition method of accounting; contingencies; and income taxes.

On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

~~Revenue Recognition Policies~~

~~We intend to earn revenue from the subscription, non-software related hosted services, term-based and perpetual licensing~~

Table of ~~software products, associated software maintenance and support plans, consulting services, training, and technical support.~~Contents

Revenue Recognition Policies

Services revenue. We generate services revenue via consulting services and software development. The Company is engaged in developing, engineering, and designing blockchain projects, to include platforms and cryptocurrencies for customers.

Subscription revenue. We generate revenue from subscriptions through staking of our current crypto assets. Our primary token being staked is a hybrid Proof of Work (“POW”) and Proof of Stake (“POS”) system. Stakers, in this particular token, are paid inflation based both on the duration of the stake (contract length), as well as based on the volume / quantity of tokens staked. Rewards / interest / inflation are paid in the native token. We also participate in networks with POW consensus algorithms, through creating or validating blocks on the network. In exchange for participating in the consensus mechanism of these networks, the Company earns rewards in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete, and the rewards are available for transfer. Revenue is measured based on the number of tokens received and the fair value of the token at the date of recognition.

Product revenue. We generate product revenue through customized product development and merchandise sales.

We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

On February 1, 2018, we adopted Topic 606, using the modified retrospective transition method applied to those contracts which were not completed as of February 1, 2018. Results for reporting periods beginning after February 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on February 1, 2018.

	Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.·	~~We determine revenue recognition through the following steps:~~ ~~We determine revenue recognition through the following steps:~~ ·identification of the contract, or contracts, with a customer;

	·	identification of the performance obligations in the contract;

	·	determination of the transaction price;

	·	allocation of the transaction price to the performance obligations in the contract; and

	·	recognition of revenue when, or as, we satisfy a performance obligation. ~~Research and Development~~ Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized only if the product or process is technically and commercially feasible, if development costs can be measured reliably, if future economic benefits are probable, if the Company intends to use or sell the asset and the Company intends and has sufficient resources to complete development. The Company has recognized $2,160 as a capital asset for the nine months ended October 31, 2018 and $82,800 for the six months ended July 31, 2017. ~~Concentration of Credit Risk and Significant Customers~~ Financial instruments which potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable. The Company places its temporary cash investments with financial institutions insured by the FDIC. Concentrations of credit risk with respect to trade receivables and commodities are limited due to the diverse group of customers to whom the Company provides services to. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables or the selling of its commodities warrant based upon factors such as the credit risk of specific customers, historical trends, other information and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high-quality financial institutions.

8Concentration of Credit Risk and Significant Customers

~~The Company had $0 in excess of federally insured limits on October 31, 2018, and October 31, 2017.~~

Financial instruments which potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable.

Concentrations of credit risk with respect to trade receivables and commodities are limited due to the Company’s diverse group of customers. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables or the selling of its commodities warrant based upon factors such as the credit risk of specific customers, historical trends, other information, and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts.

Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high-quality financial institutions. The Company had $0 and $0.4 million in excess of federally insured limits on July 31, 2023 and January 31, 2023, respectively.

Our cryptocurrency balances are maintained in accounts held by institutions located in and outside the United States. The Company maintains amounts on deposit that often exceed coverage from third party insured limit of up to $1,000,000. The risk is managed by maintaining multiple accounts with various accounts held in a cold storage wallet. The Company had $0.8 million in excess of amounts protected by insurance.

~~For the nine month period ended October 31, 2018, sales to the Company’s primary customer, Render Payment, LLC accounted for approximately 0%~~

Table of ~~revenues and 99.6% of accounts receivable, there were $1,254,530 accounts receivable for the nine month period ended October 31, 2018 and $1,469,986 for the nine month period ended October 31, 2017.~~
~~Cost of Goods Sold~~
~~The Company recognizes the direct cost of purchasing product for sale, including freight-in and packaging, as cost of goods sold in the accompanying statement of operations.~~
~~Cost of Revenue~~
Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by OEMs, to drive traffic to our websites and products, and to acquire online advertising space; costs incurred to support and maintain Internet-based products and services, including data center costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products.
~~Cash and Cash Equivalents~~
The Company includes in cash and cash equivalents all short-term, highly liquid investments that mature within three months of the date of purchase. Cash equivalents consist principally of investments in interest-bearing demand deposit accounts and liquidity funds with financial institutions and are stated at cost, which approximates fair value. For cash management purposes, the company concentrates its cash holdings in an account at Bank of America. The Company had no cash equivalents as of October 31, 2018, or October 31, 2017.
P~~roperty, Plant, and Equipment~~
Property, plant, and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized.
~~Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five periods.~~
~~The Company classifies its software under the~~Financial Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, and the Governmental Accounting Standards Board (GASB) Statement No. 42,~~Accounting of Costs of Computer Software Developed or Obtained for Internal Use. When software is used in providing goods and services it is classified as PPE.~~ ~~The Company considers its proprietary software as a major part of the Company’s operations that are intended to provide profits.~~
~~Accounts Receivable~~
~~The Company’s accounts receivable are trade accounts receivable. The Company recognized $0 as an uncollectable reserve for the nine month periods ending October 31, 2018 and 2017.~~
~~Advertising Costs and Expense~~
~~The advertising costs are expensed as incurred. Advertising costs were $9,795 for the nine month period ending October 31, 2018 and $4,725 for the nine month period ending October 31, 2017.~~
~~Foreign Currency Translation~~
~~The Company’s functional currency and its reporting currency is the United States Dollar.~~
~~Income Taxes~~
~~In accordance with~~~~SAB Topic 1: Financial Statements, Subsidiary’s or Division’s Separate Financial Statements and Segments~~, income taxes are consolidated with MCIG, the controlling entity of the Company. There are currently no tax implications should the Company not consolidate with MCIG. With only losses showing for the periods shown there would be no taxes payable for any periods presented. If there were tax expenses they would be based on the IRS published corporate tax rate of 34% for 2017 and 21% for 2018.
Contents

9Cash and Cash Equivalents

~~Basic and Diluted Net Earnings (Loss) Per Share~~

~~The Company follows~~~~ASC Topic 260 – Earnings Per Share~~~~, and~~~~FASB 2015-06, Earnings Per Share~~ to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

~~Commitments and Contingencies~~

~~The Company reports and accounts for its commitments and contingencies in accordance with~~~~ASC 440 – Commitments~~ ~~and~~~~ASC 450 – Contingencies~~. We recognize a loss on a contingency when it is probable a loss will incur and that the amount of the loss can be reasonably estimated. The Company recognized $0 as a loss on contingencies in the six month periods ending October 31, 2018 and October 31, 2017.

~~Note 3. Going Concern~~

The Company includes in cash and cash equivalents all short-term, highly liquid investments that mature within three months of the date of purchase. Cash equivalents consist principally of investments in interest-bearing demand deposit accounts and liquidity funds with financial institutions and are stated at cost, which approximates fair value. The Company had no cash equivalents as of July 31, 2023 and January 31, 2023.

Basic and Diluted Net Earnings (Loss) Per Share

The Company follows ASC Topic 260 – Earnings Per Share, and FASB 2015-06, Earnings Per Share to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS calculations are determined by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect, calculated using (i) the “treasury stock” method for warrants and (ii) the “if converted” method for the preferred stock if their inclusion would not have been anti-dilutive.

Fair Value Measurements

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

~~The Company's financial statements are prepared using generally accepted accounting principles, which contemplate~~- Level 1:

Quoted prices in active markets for identical instruments;

- Level 2:

Other significant observable inputs (including quoted prices in active markets for similar instruments);

- Level 3:

Significant unobservable inputs (including assumptions in determining the ~~realization~~fair value of assets and liquidation of liabilities in the normal course of business. Because the business is new and has a limited history, no certainty of continuation can be stated. The accompanying financial statements for the periods ended October 31, 2018, has been prepared to assume that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.certain investments).

The Company has negative cash flow but has recognized a substantial gain in October 2017, due in large part to the services provided to a single customer, Render Payment, LLC. There are no assurances the Company will generate a profit or obtain positive cash flow. The Company has sustained its solvency through the support of its single shareholder, MCIG,

The carrying values for cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, and deferred revenue approximate their fair value due to their short maturities.

Note 3. Going Concern

The Company’s consolidated financial statements are prepared in accordance with GAAP, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has a limited history, no certainty of continuation can be stated. The accompanying financial statements for the three and six months ended July 31, 2023 and 2022 have been prepared to assume that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has had historically negative cash flow and net losses. Though the year ended January 31, 2022 resulted in positive cash flow and net income, there are no assurances the Company will generate a profit or obtain positive cash flow in the future. The Company has sustained its solvency through the support of its shareholder and chairman, Michael Hawkins, or companies controlled by Michael Hawkins, which raise substantial doubt about its ability to continue as a going concern.

Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time to the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the ~~necessary~~ funding or generate the revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty.

~~Note 4. Property, Plant and Equipment~~

In a major transaction, the Company acquired the 420 Cloud software environment which includes, 420 Cloud mobile, 420 Cloud browser, 420 Cloud API, WhoDab, BangPunch, 420 single sign-on mobile wallet, 420 job search, Weedistry, Ehesive, 420 cue, 420 wise guy, and Palm weed. While some

Table of the software applications are currently in use, others are still under development. The Company launched its 420 cloud software service on April 20, 2017. The company has transferred all digital currency ATMs to assets held for sale as they are no longer going to be used by the company has and will be sold.
~~The following is a detail of equipment:~~

Property, Plant, and Equipment
For the 9 months ended October 31,

2018

2017
Software
$
3,129,411
$
3,127,244
Intangibles

7,753

-
Machinery & Equipment

-

-
Total acquisition cost

3,137,164

3,127,244
Accumulated depreciation

564,461

83,960
Total property, plant, and equipment
$
2,572,704
$
3,043,284

~~Depreciation expense on property, plant and equipment was $363,475 for the 9 months ended October 31, 2018 and $83,960 for the 9 months ending October 31, 2017.~~

~~Note 5. Related Party Transactions~~

~~Related Party Transactions~~

On March 31, 2017, MCIG entered into a purchase agreement with APO Holdings, LLC to acquire the 420 Cloud Software Network (see Note 7 – Acquisitions). MCIG acquired the assets and assigned them to OBITX. The cost of the asset was recorded as an intercompany transfer. OBITX has utilized the acquired assets of the 420 Cloud Network for its base of operations.

On November 1, 2017, the company assigned all rights and obligations to the 420 Cloud Software Network to OBITX in exchange for 100,000 shares of Series A Preferred Stock and 500,000 shares of OBITX common stock. The cost basis of the Assets at the time of transfer was $3,043,285. MCIG conducted an independent review of the Assets in August 2017. The independent review stated that no impairment was needed and that the assets had a fair market value in excess of the current cost basis.

~~On March 13, 2017 MCIG acquired 10,000 shares of OBITX common shares representing 100% ownership at the time.~~

On August 1, 2017, the Company entered into a contract with MCIG for hosting and email services. In addition, the Company will provide additional marketing services for MCIG and other internet based activities as mutually agreed upon. Under terms of the agreement, MCIG is to $2,000 per month for a period of 12 months. All additional services not identified are billed at an hourly rate of $150 per hour.

On September 13, 2017, the company entered into an agreement to provide social media and other advertising services to Render Payment, LLC. The contract calls for the payment of $1,250,000 for services rendered with a 90 day payment term. We provided services for marketing the ICO for Render Payment, LLC which have been completed and are finished. The fee for our service is $1,250,000 per the contract. WE can easily accept payment today in RPM tokens; however we are electing to not do so as we believe we will make more by holding it. Michael Hawkins, the former Chief Financial Officer, is a non-controlling member with greater than 10% ownership in Render Payment, LLC.

On November 1, 2017, the Company entered into a consulting agreement with Alex Mardikian, the Chief Executive Officer. The agreements call for $7,000 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less.

On November 1, 2017, the Company entered into a consulting agreement with Brandy Craig, the Chief Financial Officer. The agreements call for $3,500 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less.

On November 1, 2017, the Company entered into a consulting agreement with Paul Rosenberg, the Director. The agreements call for $3,500 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. . The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less.

The Company entered a Line of Credit with MCIG, for up to $500,000 in funding on November 1, 2016. The Line of Credit will terminate on April 30, 2019. It was given at a 0% interest rate and is payable upon termination date with the option to convert the agreement into equity at a 15% discount to the then current market rate. Since inception, the Company had various transactions in which MCIG paid expenses on behalf of the Company.

Contents

11Note 4. Intangible Assets

As of April 30, 2018, the Company borrowed $3,635,253.42 from MCIG. $3,043,285 of which represents the 420 Cloud Software Network that was exchanged for 100,000 shares of Series A Preferred Stock and 500,000 shares of OBITX common stock on November 1, 2017. As of October 31, 2018, the amount outstanding on the Line of Credit with MCIG is $596,526. The Line of Credit was increased to $1,000,000 on January 1, 2018.

Intangible assets consist of the following:

	As of July 31, 2023
	Gross Amount		Accumulated Amortization		Net Carrying Amount
	(in thousands)
IP/Technology	$	4,780	$	60	$	4,720
Non-compete agreements		82		82		-
Total Intangibles	$	4,862	$	142	$	4,720

	As of January 31, 2023
	Gross Amount		Accumulated Amortization		Net Carrying Amount
	(in thousands)
IP/Technology	$	4,251	$	-	$	4,251
Non-compete agreements		82		63		19
Total Intangibles	$	4,333	$	63	$	4,270

The Company’s IP/Technology is amortized over five years and the non-compete agreements are amortized over two years.

Note 5. Cryptocurrency Assets

The Company transacts business with cryptocurrency assets. The Company records cryptocurrency assets as an intangible asset with infinite life. We classify cryptocurrency assets that have a market value and substantial liquidity as current intangible assets. The following chart shows our cryptocurrency assets (in thousands):

Current Assets
	As of
Coin Symbol	July 31, 2023		January 31, 2023
BTC	$	9	$	4
PLS		484		-
PLSX		289		-
	$	782	$	4

In May 2023, PulseChain (“Pulse”) and PulseX were launched. Pulse is a layer 1 blockchain that is a fork of Ethereum. PulseX is a fork of the Uniswap digital exchange platform (“DEX”) and is the native DEX of the Pulse ecosystem. During the year ended January 31, 2022, we invested $0.1 million in each of Pulse and PulseX. In May 2023, we received 2.3 billion Pulse tokens and 3.0 billion PulseX tokens.

Also in May 2023, Overwatch Partners, Inc. (“Overwatch”), an entity controlled by Michael Hawkins, distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic Industry Corp (“Epic”), a wholly owned company of Michael Hawkins, 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million.

For the quarter ended July 31, 2023, the Company recorded in other income (expense), net fair market value expense adjustments of $1.3 million related to PulseX.

During the three and six months ended July 31, 2022, the Company recorded in other income (expense), net fair market value expense adjustments of $2.1 million and $2.2 million, respectively.

~~On November 1, 2017, the company issued five-year warrants for the purchase of a combined total of 3,000,000 common shares to seven individuals/entities at the purchase price of $1.00 per share.~~

On November 1, 2017, the Company entered into a consulting agreement with the Law Offices of Carl G. Hawkins to serve as corporate counsel. The agreement calls for a one-time payment of $5,000 plus $150 per hour for legal services. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and counsel may elect to convert a portion of this into equity of the company. In addition, counsel was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and counsel was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less.

~~On November 1, 2017 Alex Mardikian, the company’s Chief Executive Officer, purchased 50,000 shares of common stock for $5.00.~~

~~On November 1, 2017 Brandy Craig, the company’s Chief Financial Officer, purchased 50,000 shares of common stock for $5.00.~~

~~On November 1, 2017 Carl G. Hawkins, the company’s Corporate Counsel, purchased 50,000 shares of common stock for $5.00.~~

~~On November 1, 2017 Paul Rosenberg, the company’s Director, purchased 500,000 shares of common stock for $50.00.~~

~~On November 1, 2017 Epic Industry Corp, a wholly owned company of MCIG’s Chief Financial Officer, Michael Hawkins, purchased 250,000 shares of common stock for $25.~~

On November 1, 2017 Paul Rosenberg entered into an agreement with the company to purchase up to 5,000,000 shares of common stock at the price of $0.10 per share. As of the time of this filing Mr. Rosenberg has purchased 2,500,000 for $250,000.

~~On November 1, 2017 APO Holdings, LLC purchased 1,500,000 shares of common stock with certain registration rights for $150,000.~~

On June 30, 2018 OBITX provided services to their subsidiary altCUBE in the amount of $25,167. This amount was made up of General Administrative expenses of $1,250, Website Design of $16,009, Marketing Expense $7,168, and Website Maintenance of $740.

OnJune 14, 2018 the Company entered a Line of Credit with APOHoldings, LLC for up to $100,000 at any one time. The Line of Credit may be cancelled at any time by either party providing 30 days written notice of cancellation. It was given at a 0.6% interest rate and may be paid at any time with no definitive payoff date. As of October 31, 2018 the current outstanding on the line of credit is $77,400.

~~Note 6. Commitments and Contingencies~~

The Company entered into a commitment for its corporate offices on October 30, 2017. The commitment is for a period of twelve (12) months at the rate of $69 per month. The Company may utilize additional space on an as needed basis at an hourly or daily rate.

~~Note 7. Acquisitions~~

On March 31, 2017, MCIG acquired software code for a cloud-based social media platform to be known as 420Cloud, which was assigned to OBITX. The Company considers the acquisition of 420Cloud as a purchase of an asset, not a business. In this particular acquisition, the Company acquired software code and supporting functions for five different software packages that had not been finalized, marketed, and launched at the time of acquisition. The Company expects to continue to expend a significant amount of time and capital to further develop the software.

At the time of acquisition, the assets have no operational income and could not generate revenue without major consideration and effort by the Company. The following table summarizes the estimated fair values of the assets acquired and their accounting classifications, at the date of acquisition. We assumed the liability and responsibility to complete the software as it was designed for with the intent to market.

~~420Cloud Accounting Classifications~~

~~Software - 420 Cloud - Mobile~~Table of Contents

Note 6. Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

	As of
	July 31, 2023			January 31, 2023
Land	$	36		$	36
Buildings and building improvements		339			339
Machinery and equipment		210			211
Furniture, fixtures and office equipment		77			75
Computer equipment and computer software		126			114
Vehicles		97			60
		885			835
Less: Accumulated depreciation		(233	)		(175	)
Total property, plant and equipment, net	$	652		$	660

Note 7. Debt

As of July 31, 2023, Mercury's outstanding debt of $0.5 million had a weighted average interest rate of 6.3%. The debt consists primarily of term loans and a line of credit with various financial institutions, and such debt is collateralized by the assets of Mercury. The debt has maturity dates ranging from 2023 through 2026.

On July 14, 2023, a board director of the Company loaned it $55,000, representing half of the Company’s employee retention credit refund, which the Company expects to receive this year. The note calls for the payment of the principal sum of $55,000 plus interest of $12,500 for a total of $67,500. The maturity date of the note is December 31, 2023.

Note 8. Commitments and Contingencies

The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments and ASC 450 – Contingencies. We recognize a loss on a contingency when it is probable a loss will be incurred and that the amount of the loss can be reasonably estimated. No loss contingencies have been recorded for the three and six months ended July 31, 2023 and 2022.

Note 9. Legal Proceedings

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on the Company’s financial position, results of operations or liquidity.


12
$	~~677,389~~
~~Software - 420 Cloud – Browser~~Table of Contents

Note 10. Related Parties and Related Party Transactions

Related party balance sheet items (in thousands)

	As of July 31, 2023		As of January 31, 2023

Prepaid expenses	$	-	$	2,000
Accounts payable and accrued expenses		93		28
Loans payable		700		13

Related party income statement items (in thousands)

	For the Three Months Ended				For the Six Months Ended
	July 31,				July 31,
	2023		2022		2023		2022

Consulting expenses	$	66	$	30	$	132	$	60
Stock based compensation		650		575		1,300		1,150
Payroll expenses		120		144		239		339

During the quarter ended July 31, 2021, the Company issued 50,000 shares of Series A Preferred Stock to Epic. The issuance was done as a prepayment for services to generate sales for the Company. The shares are earned as sales generated by Epic achieve certain sales targets.

In May 2023, Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million. Our board decided that the value received from Pulse and PulseX, in lieu of sales, satisfied the requirements for the Series A Preferred Stock to be earned by Epic.

Note 11. Stockholders’ Equity

Common Stock

As of July 31, 2023 and January 31, 2023, the Company had 200 million common shares authorized, with 9,949,966 common shares at a par value of $0.0001 issued. As of July 31, 2023 and January 31, 2023, the Company had 9,923,304 common shares outstanding.

During the three and six months ended July 31, 2023, stock-based compensation expense related to stock grants was $75,000 and $150,000, respectively, from a grant to an employee. During the three months ended July 31, 2022, stock-based compensation expense related to stock grants was $89,000, which consisted of grants to employee of $75,000 and consultants of $14,000. During the six months ended July 31, 2022, stock-based compensation expense related to stock grants was $206,000, which consisted of grants to employee of $150,000 and consultants of $56,000.

Preferred Stock

Series A Preferred Stock

As of July 31, 2023 and January 31, 2023, the Company had one million Series A Preferred shares, par value $0.0001, authorized, with 200,000 Series A Preferred shares issued and outstanding. The Series A Preferred stock converts into common stock at the option of the holder of the Series A Preferred, after twenty-four months of ownership. The conversion rate for every one share of Series A Preferred stock is 50 shares of common stock. Each share of Series A Preferred stock entitles the holder to 1,000 votes. Holders of Series A Preferred are entitled to share ratably in dividends, if any are declared. There are no redemption rights. In the event of dissolution, the holders of Series A Preferred are entitled to share pro rata all assets remaining after payment in full of all liabilities.

The 200,000 shares of Series A Preferred Stock are eligible to be converted into common stock at the option of the holder of the Series A Preferred Stock.

~~315,709~~

~~Software – 420 Cloud API~~Table of Contents

Series B Preferred Stock

As of July 31, 2023 and January 31, 2023, the Company had 1.5 million Series B Preferred shares, par value $0.0001, authorized, with 650,000 Series B Preferred shares issued and 400,000 Series B Preferred shares outstanding. The Series B Preferred stock converts into common stock at the option of the holder of the Series B Preferred, after twenty-four months of ownership. The conversion rate for every one share of Series B Preferred stock is ten shares of common stock. Each share of Series B Preferred stock entitles the holder to 100 votes. Holders of Series B Preferred are entitled to share ratably in dividends if any are declared. There are no redemption rights. In the event of dissolution, the holders of Series B Preferred are entitled to share pro rata all assets remaining after payment in full of all liabilities.

All shares of Series B Preferred Stock are eligible to be converted into common stock at the option of the holder of the Series B Preferred Stock.

Series C Preferred Stock

As of July 31, 2023 and January 31, 2023, the Company had 10 million and 2 million Series C Preferred shares, par value $0.0001, authorized, respectively, with one million Series C Preferred shares issued and outstanding. The Series C Preferred Stock shall rank senior to the Company’s common stock, Series A Preferred Stock, and Series B Preferred Stock. Each holder of Series C Preferred Stock is entitled to one (1) vote for each share of Series C Preferred Stock held on all matters submitted to a vote of stockholders. Each share of Series C Preferred Stock shall be convertible, at the discretion of the holders, after six months of ownership, into shares of common stock. The number of common shares issued shall be at the rate of 30% less than the volume-weighted average price or $5.00 per share whichever is less.

The one million shares of Series C Preferred Stock are eligible to be converted into common stock at the option of the holder of the Series C Preferred Stock.

Note 12. Warrants

A summary of warrant activity for six months ended July 31, 2023 is as follows:

				Weighted
				Average
				Conversion
	Shares			Price

Warrants outstanding at January 31, 2023		3,356,000		$	3.60
Cancelled/Expired		(1,200,000	)		1.90
Warrants outstanding at July 31, 2023		2,156,000		$	4.55

During the three months ended July 31, 2023, stock-based compensation expense related to warrant grants was $575,000, which consisted of grants to employees of $338,000 and directors of $237,000. During the six months ended July 31, 2023, stock-based compensation expense related to warrant grants was $1,215,000, which consisted of grants to employees of $675,000, directors of $474,000, and consultants of $66,000. During the three months ended July 31, 2022, stock-based compensation expense related to warrant grants was $589,000, which consisted of grants to employees of $317,000, directors of $209,000, and consultants of $63,000. During the six months ended July 31, 2022, stock-based compensation expense related to warrant grants was $1,274,000, which consisted of grants to employees of $724,000, directors of $418,000, and consultants of $132,000.


14
	~~90,116~~
~~Software - Whodab~~Table of Contents

Note 13. Treasury Stock

Treasury stock consists of 250,000 shares of Series B Preferred stock and 26,662 shares of common stock. The shares are considered issued but not outstanding. Therefore, the shares are not used in the EPS calculations.

Note 14. Income Taxes

Our consolidated effective income tax rate for the three and six months ended July 31, 2023 was 0%. Our consolidated effective income tax rate for the three and six months ended July 31, 2022 was 23%.

Note 15. Net Loss Per Common Share

	For the Three Months Ended						For the Six Months Ended
	July 31,						July 31,
	2023			2022			2023			2022
	(in thousands, except per share data)
Numerator:
Net loss	$	(3,092	)	$	(2,668	)	$	(4,910	)	$	(4,122	)
Denominator:
Weighted average common shares outstanding		9,923			9,413			9,923			9,045
Effect of dilutive securities:
Warrants		-			-			-			-
Preferred stock		-			-			-			-
Diluted shares outstanding		9,923			9,413			9,923			9,045
Basic: Net loss per common share	$	(0.31	)	$	(0.28	)	$	(0.49	)	$	(0.46	)
Diluted: Net loss per common share	$	(0.31	)	$	(0.28	)	$	(0.49	)	$	(0.46	)

Note 16. Subsequent Events

On August 2, 2023, Paul Rosenberg elected to convert 275,000 shares of Series B Preferred Stock into 2,750,000 shares of common stock. On August 2, 2023, Epic elected to convert 125,000 shares of Series B Preferred Stock into 1,250,000 shares of common stock. On August 2, 2023, the Company officially retired the following class of stock: Series B Preferred.

On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $480,000. Mercury used $461,000 of the proceeds from the sale to payoff both Mercury's line of credit and term loan, which were in default. After paying off the notes and closing costs, Mercury was left with $11,000 for general corporate purposes.

On September 3, 2023, the Company changed the name of 832 Energy Technology Consultants, LLC to DataStone, Inc., by incorporating as a Florida corporation. On September 3, 2023, the Company also changed the name of Vengar Technologies LLC to Vengar Technologies, Inc., by incorporating as a Florida corporation.

On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $0.7 million. Subsequent to July 31, 2023, Epic has provided funding and plans to provide additional funding to equal a total note principal of $1.0 million. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025.

~~67,587~~

~~Software - Ehesive~~Table of Contents

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

You should read the following discussion and analysis of our financial condition, results of operations and cash flows in conjunction with our consolidated financial statements and the related notes presented in this report and in our Annual Report.

FORWARD-LOOKING STATEMENTS

Certain statements in this section contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this report and not clearly historical in nature are forward-looking, and the words “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “potential,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) generally are intended to identify forward-looking statements. Any statements in this report that are not historical facts are forward-looking statements. Actual results may differ materially from those discussed from time to time in the Company’s SEC filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made except as required by law.

OVERVIEW

The overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Quarterly Report on Form 10-Q.

The Company is primarily engaged in the business of consulting and developing data management, blockchain and cybersecurity related solutions. We are a technology company that is blending blockchain, zero-trust, and database management technology to create a platform to solve real world, practical business problems. Our business model is based on building recurring revenue through software subscriptions, licensing agreements, and transaction fees. Our patent-pending advances in blockchain engineering deliver the essential elements needed for real-world business use: speed, security, and energy efficiency. Currently, our lines of business are EB Advise, BuildDB and EB Control.

Our website can be found at www.everythingblockchain.io, which is not incorporated as part of this Form 10-Q.

EMPLOYEES

As of July 31, 2023, the Company has 24 employees.

Available Information

All reports of the Company filed with the SEC are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.


16
	~~450,882~~
~~Software – 420 Cloud – Single Sign~~Table of Contents

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation, and contingencies.

We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition, and results of operations for future periods could be materially affected.

Results of Operations

Our operating results for the three and six months ended July 31, 2023 and 2022 are summarized as follows:

	For the Three Months Ended July 31,						For the Six Months Ended July 31,
	2023			2022			2023			2022
	(in thousands)
Revenue	$	470		$	383		$	732		$	638
Cost of sales		80			56			131			71
Gross profit		390			327			601			567
Selling, general, administrative		1,438			979			2,668			2,072
Stock based compensation		650			678			1,366			1,481
Depreciation and amortization		59			50			118			100
Total operating expenses		2,147			1,707			4,152			3,653
Loss from operations		(1,757	)		(1,380	)		(3,551	)		(3,086	)
Other expense, net		(1,335	)		(2,070	)		(1,352	)		(2,230	)
Loss before income taxes		(3,092	)		(3,450	)		(4,903	)		(5,316	)
Income tax expense (benefit)		-			(782	)		7			(1,194	)
Net loss	$	(3,092	)	$	(2,668	)	$	(4,910	)	$	(4,122	)

Revenue

Revenue for the three months ended July 31, 2023 was $0.5 million as compared to $0.4 million for the three months ended July 31, 2022. Revenue for the three months ended July 31, 2023 primarily consisted of $288,000 from product revenue and $177,000 from consulting services. Revenue for the three months ended July 31, 2022 primarily consisted of $196,000 from consulting services, $158,000 from product revenue, and $24,000 from staking of cryptocurrency.

Revenue for the six months ended July 31, 2023 was $0.7 million as compared to $0.6 million for the six months ended July 31, 2022. Revenue for the six months ended July 31, 2023 primarily consisted of $380,000 from product revenue and $347,000 from consulting services. Revenue for the six months ended July 31, 2022 primarily consisted of $411,000 from consulting services, $171,000 from product revenue, and $51,000 from staking of cryptocurrency.

Cost of Sales

Cost of sales for the three months ended July 31, 2023 and 2022 was $0.1 million. Cost of sales for the six months ended July 31, 2023 and 2022 was $0.1 million. Cost of sales for all periods primarily consisted of product costs.

Gross Profit

Gross profit for the three months ended July 31, 2023 was $0.4 million as compared to $0.3 million for the three months ended July 31, 2022. Gross profit for the six months ended July 31, 2023 and 2022 was $0.6 million.


17
	~~450,882~~
~~Software – 420 Job Search~~Table of Contents

Operating Expenses

Operating expenses primarily consist of selling, general and administrative expenses, stock-based compensation expense, and amortization and depreciation expense. Selling, general and administrative expenses primarily consist of personnel costs, consultant fees, professional fees, computer and internet expenses, marketing expenses, utilities expenses, meals and entertainment, office supplies, and reporting fees.

Operating expenses for the three months ended July 31, 2023 were $2.1 million compared to $1.7 million for the three months ended July 31, 2022. The primary reason for the increase was due to an increase in payroll expenses of $0.3 million and professional fees of $0.1 million.

Operating expenses for the six months ended July 31, 2023 were $4.2 million compared to $3.7 million for the six months ended July 31, 2022. The primary reason for the increase was due to an increase in payroll expenses of $0.5 million and professional fees of $0.1 million, partially offset by a decrease in stock-based compensation of $0.1 million.

Loss from Operations

Loss from operations for the three months ended July 31, 2023 was $1.8 million compared to $1.4 million for the three months ended July 31, 2022. Loss from operations for the six months ended July 31, 2023 was $3.6 million compared to $3.1 million for the six months ended July 31, 2022. The primary reasons for the increase in loss from operations were due to the increase in operating expenses as discussed above.

Other Expense

Other income (expense) consists primarily of sales of cryptocurrency and the associated costs, fair market value adjustments to cryptocurrency, and interest income and expense.

Other expense, net for the three months ended July 31, 2023 was $1.3 million compared to $2.1 million for the three months ended July 31, 2022. Other expense, net for the three months ended July 31, 2023 consists primarily of fair market value expense adjustments related to PulseX of $1.3 million. Other expense, net for the three months ended July 31, 2022 consists primarily of fair market value expense adjustments to cryptocurrency of $2.1 million.

Other expense, net for the six months ended July 31, 2023 was $1.4 million compared to $2.2 million for the six months ended July 31, 2022. Other expense, net for the six months ended July 31, 2023 consists primarily of fair market value expense adjustments related to PulseX of $1.3 million. Other expense, net for the six months ended July 31, 2022 consists primarily of fair market value expense adjustments to cryptocurrency of $2.2 million.

Adjusted EBITDA

The Company reports all financial information required in accordance with GAAP. The Company believes, however, that evaluating its ongoing operating results will be enhanced if it also discloses certain non-GAAP information.

Adjusted EBITDA, which is a non-GAAP financial measure, is defined by the Company as net income (loss) plus net interest income, income tax (benefit) expense, depreciation and amortization, and stock-based compensation.

Adjusted EBITDA should not be considered an alternative to net income, operating income, net cash provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP. In addition, Adjusted EBITDA presented by other companies may not be comparable to our presentation since each company may define these terms differently.

The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net loss.

	For the Three Months Ended July 31,						For the Six Months Ended July 31,
	2023			2022			2023			2022
	(in thousands)
Net loss	$	(3,092	)	$	(2,668	)	$	(4,910	)	$	(4,122	)
Add:
Income tax expense (benefit)		-			(782	)		7			(1,194	)
Stock based compensation		650			678			1,366			1,481
Depreciation and amortization		59			50			118			100
Net interest expense		37			13			54			26
Adjusted EBITDA	$	(2,346	)	$	(2,709	)	$	(3,365	)	$	(3,709	)

Analysis of Cash Flows

Operating Activities

Net cash used in operating activities was $0.6 million for the six months ended July 31, 2023. We had net loss of $4.9 million, which included fair value adjustments to cryptocurrency of $1.3 million and stock-based compensation of $1.4 million.

Net cash used in operating activities was $1.6 million for the six months ended July 31, 2022. We had net loss of $4.1 million, which included fair value adjustments to cryptocurrency of $2.2 million, due to decreases in the values of cryptocurrencies, and stock-based compensation of $1.5 million.


18
	~~135,173~~
~~Software – Weedistry~~			~~45,058~~ Table of Contents
~~Software – Marketaro~~			~~112,644~~
~~Software – 420 Cue~~			~~450,882~~
~~Software – 420 Wise Guy~~			~~225,593~~
~~Software – Palm Weed~~			~~22,529~~
~~Total assets acquired~~		$	~~3,044,444~~
~~Due to Shareholder – MCIG, Inc.~~		$	~~3,044,444~~

~~Note 8. Stockholders’ Equity~~

~~Common Stock~~

~~As of October 31, 2018 and January 31, 2018, the Company had 200,000,000 common shares authorized, with 5,460,000 common shares at a par value of $0.0001 issued and outstanding.~~

~~As of October 31, 2018 and January 31, 2018, the company had 1,000,000 Series A Preferred shares authorized, with 100,000 Series A Preferred shares at a par value of $10 issued and outstanding.~~

~~Note 9. Basic Income per Share before Non-Controlling Interest~~

~~Basic Income Per Share~~ ~~- The computation of basic and diluted loss per common share is based on the weighted average number of shares outstanding during each period.~~

Basic Income Per share
For the 9 months Ended October 31,

2018

2017
Net income

             (690,006)

       832,045
Basic income per share

                    (0.09)

            83.20
Basic weighted average number of shares outstanding

            5,560,000

            10,000

~~The computation of basic loss per common share is based on the weighted average number of shares outstanding during the period.~~

~~Note 11. Warrants~~

On November 1, 2017 the Company issued 7 warrants to officers, directors, and investors for the purchase of up to 3,000,000 shares of common stock at $1.00 per share. The warrants expire on November 1, 2022 at 5:00 PM Eastern Standard Time. The warrants contain participation rights to any registration statement filed by the Company.~~The Holder shall not be entitled to exercise their Warrant when the number of shares exercised by the Warrant Holder would cause the Holder to exceed 4.99% of the total outstanding common stock.~~

~~A summary of warrant activity for six months ended October 31, 2018 is as follows:~~

Weighted

Average

Conversion

Shares

Price

Warrants outstanding at April 30, 2017

-

$
-

Exercised

-

$
-

Granted

3,000,000

$
1.00

Warrants outstanding at April 30, 2018

3,000,000

$
1.00

~~Note 10. Subsequent Events~~

~~As of December 10, 2018 OBITX, Inc became a public company.~~

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

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and related notes thereto in our S-1 and annual audit for the year ended January 31, 2018.

Certain statements in this section contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this report and not clearly historical in nature are forward-looking, and the words “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “potential,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) generally are intended to identify forward-looking statements. Any statements in this report that are not historical facts are forward-looking statements. Actual results may differ materially from those discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made except as required by law.

~~HISTORY AND BACKGROUND~~

We were incorporated in the State of Delaware on March 30, 2017, originally under the name GigeTech, Inc. On October 31, 2017, the Company changed its name to OBITX, Inc., and updated its Articles of Incorporation through unanimous consent of its shareholder, MCIG. The Company is headquartered in Jacksonville, Florida.

The Company’s Primary Standard Industrial Classification Code (referred to as “SIC Codes”) is 7379, Computer Related Services, not elsewhere classified. The Company’s primary NAICS CODE is 519130, Internet publishing and broadcasting and web search portals. We publish and generate textual, audio, and/or video content on the Internet, and operate websites that use a search engine to generate and maintain extensive databases of internet addresses and content.

~~GENERAL~~

OBITX is engaged in the business of marketing and advertising through its proprietary software. We believe that our products will provide our consumers in the tech, internet, blockchain, and cannabis markets with an advertising and marketing approach uniquely designed for them. We provide consulting services in various approaches to marketing and advertising for each customer with an execution plan for the promotion and growth of their business.

We compete in a highly competitive market that includes other marketing companies, as well as traditional internet promotion companies. In this highly fragmented market, we have focused on building brand awareness early through viral adoption and word of mouth. In the future, we expect to employ additional marketing strategies.

Viral Marketing is a technique that uses pre-existing social networking services and other technologies to try to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes.

Thus far, we have been successful in driving traffic to our websites and building a client base by utilizing viral marketing strategies. Specifically, we have built a presence on leading social-media sites such as Facebook and Twitter. Through these sites, we post information about our services and make daily attempts to engage our target audience. This process is designed to drive traffic to our websites and eventually leads to sales. The viral marketing strategy is cost-effective, and we do not anticipate any significant costs arising from this strategy.

~~We currently operate the following websites, which are not incorporated as part of this Form 10-Q:~~

·~~www.ObitX.com~~

·~~www.ehesive.com~~

·~~www.latestPR.com~~

·~~www.Marketaro.com~~

·~~www.BlogCertified.com~~

~~Corporate Information~~

~~Our principal executive office is located at 4720 Salisbury Road, Jacksonville, Florida 32256 and our telephone number is (904) 748-9750. Our fiscal year end is January 31 of each calendar year.~~

~~Implications of Being an Emerging Growth Company~~

We currently qualify as an “emerging growth company” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced reporting requirements that are otherwise applicable to public companies. These reduced reporting requirements include:

·~~not being required to comply with the auditor attestation requirements of Section 404(b) of the SarbanesOxley Act of 2002, as amended (the “~~~~SarbanesOxley Act~~~~”);~~

·~~reduced disclosure obligations regarding executive compensation in this prospectus and in our future periodic reports, proxy statements and registration statements; and~~

·~~not being required to hold a non-binding advisory vote on executive compensation or to seek stockholder approval of any golden parachute payments not previously approved.~~

We may continue to take advantage of these reduced reporting obligations until March 30, 2022. However, if certain events occur prior to such date, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.07 billion or we issue more than $1.0 billion of non-convertible debt in any three year period, we would cease to be an emerging growth company.

We have elected to take advantage of certain of the reduced disclosure obligations regarding executive compensation and other matters in this prospectus and other filings we make with the SEC. As a result, the information that we provide to our stockholders is different than the information you might receive from other public fully reporting companies in which you hold equity interests.

The JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption and, therefore, we are not subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

~~BUSINESS STRATEGY~~

OBITX Inc. is an advertising company marketing products and services using digital technologies across the internet, mobile devices, display advertisements, and other digital mediums. As a technology driven company, we do Software as a Service (SaaS) development, deployment, and day-to-day operations. In addition, we provide website designs, copywriting, copyediting, social networking, influencing and campaign management. OBITX has developed proprietary software and web presence for the promotion and development of its business strategy.

15Investing Activities

We have developed a proprietary cloud based social media platform. This software can be a white label social media cross-platform service utilized in various industry to promote internal and external services and products. Clients may customize the parameters in which the software operates in the promotion and advertisement of their respective business. The software was initially launched under MCIG as its 420 Cloud software solution model. This software helps with managing social media by utilizing the following:

·Cloud - API / BackEnd: The HTTP and HTTPS API integration allow users greater cloud versatility. This cross-platform APIs allows cloud tenants the ability to access resources from primary cloud providers and others. This system saves time and development since organizations will be able to access the resources and workloads of different cloud providers and platforms.

·Content delivery network (CDN): this service stores a cached version of its content in multiple geographical locations (a.k.a., points of presence, or PoPs). The PoPs contain a number of caching servers responsible for content delivery to visitors within its proximity. This places your content in many places at once providing superior coverage to users.

·Single Sign-on / Wallet: single sign-on portal allowing users to enter one set of credentials to access to their web apps in the cloud only once – via desktops, smartphones, and tablets. The password security and multi-factor authentication ensure that only authorized users to get access to sensitive data. This service also allows users to make secure electronic transactions.

·Cloud Cue: A prioritize matching system based on ratings and credentials bringing products and people together. This system uses impression recognition and matching capabilities combined with the ability of mobile image capture to bring people to products they need and even people they want.

·Cloud Wise Buy: This takes cataloged data accompanying a product on an e-commerce portal and presents it in order to help a buyer find the best deal based on the time and geolocation from where the information is sourced.

·Lead Generation Software: Captures information at a point of contacts such as landing pages, white paper downloads, and email openings. These leads are then scored and defined providing information on how customers interact with brands allowing the creation of customer journeys to be used by sales teams to generate more sales.

·Cloud Tienda eCommerce: A centralized e-commerce repository system using a multichannel product content management platform making it easy to centrally manage product information and publish listings in a growing selection of channels and websites.

·Media Processing: This system unifies the media processing chain offering a comprehensive software solution that transforms traditional video preparation and delivery architectures into a cloud operation, accelerating the time it takes you to process photos and videos.

·Cardosaur allows for the use of gift cards to buy and sell items on the internet. Cardosaur will utilize a licensed, third party processor. Its role with be as a referral agent. This gives users the ability to purchase from online vendors, auction sites, and other commercial users while making sure all private user data is encrypted and secure

In addition to the software, the digital advertising based model utilizes marketing methods such as search engine optimization, search engine marketing, content marketing, campaign marketing, social media optimization, influencer marketing, content automation, and email direct marketing. These services are offered through a series of software platforms. These platforms include:

·Ehesive: is a self-serve cost per thousand (CPM) platform that rents digital ad space to publishers to be filled with content from a pool of advertisers. This platform uses content marketing, campaign marketing, and content automation to help users reach the most potential viewers.

·Marketaro: is our email service for developers and marketers with pre-built marketing automations to help send newsletters, shipping notices, password resets, and promotional emails to clients personal email lists.

·Latest PR: is a press release circulation service using SEO to place a press release high in google listing. When a user publishes a press release through the website, they are given the following automation tools: Social Media Distribution, Search Engine Distribution, Extended Marketaro Distribution, National Media Distribution, Premium International Distribution, Bulk Blast Industry Generic, Blog Certified Sponsor Post, Published on 3rd party sites related to network, Images and Video Included within Post.

·Blog Certified: is our digital ad service that uses influencers as publishers renting out ad space on their blogs to sell to advertisers. This platform offers world-class advertising management, professional advertising implementation, custom reporting dashboard, mobile optimization, access to all ad-types and tech, site and setup audits, dedicated ad-ops team, priority testing and a data team.

We intend on utilizing these software platform in multiple industries; however, our management team is primarily focused on the blockchain technology business as a key level of interest and future development.

~~We have created three subsidiaries: i) altCUBE, Inc., ii)~~ Haute Jobs, Inc., and iii) Campaign Pigeon, LLC to provide legal protections for various elements of the business plan. Currently, Haute Jobs, Inc., and Campaign Pigeon, LLC have no direct business. altCUBE is a marketing company, which is paid royalties for referrals to ePaymints (www.epaymints.com, which is not incorporated in this prospectus), a credit card processing company. ePaymints also facilitates crypto currency denominated transactions through a third party which may expose the Company to additional risks and losses. altCUBE is paid a recurring referral fee for clients that are introduced and accepted by ePaymints for credit card processing. altCUBE is not a payment processor or a money transmitter, maintains no licenses, and is not required to register under FinTech.

Net cash used in investing activities was $0.4 million for the six months ended July 31, 2023, compared to $0.6 million for the six months ended July 31, 2022. During the six months ended July 31, 2023, we had capital expenditures of $0.6 million, partially offset by proceeds from cryptocurrencies of $0.2 million. During the six months ended July 31, 2022, we had capital expenditures of $0.6 million.

~~INDUSTRY~~

A Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. The blockchain system has been designed to use nodes agreement to order transactions and prevent fraud so that records cannot be altered retroactively. The network orders transaction by putting them together into groups called blocks, each block contains a definite amount of transactions and a link to the previous block. Bitcoin, which is the name of the best-known cryptocurrency, is the one for which blockchain technology was invented. Blockchain is, quite simply, a digital, decentralized ledger that keeps a record of all transactions that take place across a peer-to-peer network.

Bitcoins are not the only type of Digital Assets founded on math-based algorithms and cryptographic security, although it is considered the most prominent as of the date of the filing of this Registration Statement. Over 1,000 other Digital Assets, (commonly referred to as “altcoins”, “tokens”, “protocol tokens”, or “digital assets”), have been developed since the Bitcoin Network’s inception, including Ethereum, Ripple, Litecoin, Dash, and Monero.

~~Blockchain Technologies~~

~~Cryptocurrencies~~

Cryptocurrency is an encrypted decentralized digital currency transferred between peers and confirmed in a public ledger via a process known as mining. As of September 2017, there are over 1,000 digital currencies in existence.

~~Blockchain Value~~

Cryptocurrencies are Digital Asset that is not a fiat currency (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization) and is not backed by hard assets or other credit. As a result, the value of cryptocurrencies is determined by the value that various market participants place on them through their transactions.

~~Exchange Valuation~~

Due to the peer-to-peer framework of cryptocurrencies, transferors and recipients of cryptocurrencies are able to determine the value of the cryptocurrency transferred by mutual agreement or barter with respect to their transactions. As a result, the most common means of determining the value of a cryptocurrency is by surveying one or more Exchanges where the cryptocurrency is publicly bought, sold and traded.

~~Uses of Cryptocurrencies~~

~~Global Cryptocurrency Market~~

Global trade in cryptocurrencies consists of individual end-user-to-end-user transactions, together with facilitated exchange-based trading. There is currently no reliable data on the total number or demographic composition of users on the global exchanges.

~~Goods and Services~~

Cryptocurrencies can be used to purchase goods and services, either online or at physical locations, although reliable data is not readily available about the retail and commercial market penetration of the various cryptocurrencies. To date, the rate of consumer adoption and use of cryptocurrencies for paying merchants has trailed the broad expansion of retail and commercial acceptance of cryptocurrency. Other markets, such as credit card companies and certain financial institutions are not accepting such digital assets. It is likely that there will be a strong correlation between the continued expansion of the Cryptocurrency Network and its retail and commercial market penetration.

~~Anonymity and Illicit Use~~

Financing Activities

The Blockchain Network was not designed to ensure the anonymity of users, despite a common misperception to the contrary. All transactions are logged on the Blockchain and any individual or government can trace the flow of cryptocurrencies from one address to another. Off-Blockchain transactions occurring off the Network are not recorded and do not represent actual transactions or the transfer of cryptocurrencies from one digital wallet address to another, though information regarding participants in an Off-Blockchain transaction may be recorded by the parties facilitating such Off-Blockchain transactions. Digital wallet addresses are randomized sequences of 27-34 alphanumeric characters that, standing alone, do not provide sufficient information to identify users; however, various methods may be used to connect an address to a particular user’s identity, including, among other things, simple Internet searching, electronic surveillance and statistical network analysis and data mining. Anonymity is also reduced to the extent that certain Exchanges and other service providers collect users’ personal information, because such Exchanges and service providers may be required to produce users’ information in order to comply with legal requirements. In many cases, a user’s own activity on the Blockchain Network or on Internet forums may reveal information about the user’s identity.

Users may take certain precautions to enhance the likelihood that they and their transactions will remain anonymous. For instance, a user may send its cryptocurrencies to different addresses multiple times to make tracking the cryptocurrencies through the Blockchain more difficult or, more simply, engage a so-called “mixing” or “tumbling” service to switch its cryptocurrencies with those of other users. However, these precautions do not guarantee anonymity and are illegal to the extent that they constitute money laundering or otherwise violate the law.

As with any other asset or medium of exchange, cryptocurrencies can be used to purchase illegal goods or fund illicit activities. The use of cryptocurrencies for illicit purposes, however, is not promoted by the Blockchain Network or the user community as a whole. Furthermore, we do not believe our advertising, marketing, and consulting services has exposure to such uses because the services we provide are curated by our management and team.

~~DESCRIPTION OF SUBSIDIARIES~~

~~altCUBE, Inc.~~

We incorporated on June 4, 2018 in the state of Wyoming. altCUBE, Inc. was created to provide services in the arena of promoting individual advertising solutions and enabling access to the financial crypto global market, providing modern, efficient, clean and intuitive user interface.

~~Campaign Pigeon, LLC~~

~~We incorporated on May 10, 2018 in the state of Wyoming. Campaign Pigeon, LLC was created to provide services in the arena of online marketing and generating advertising.~~

~~Haute Jobs, LLC~~

~~We incorporated on May 10, 2018 in the state of Wyoming. Haute Jobs, LLC was created to provide services in the arena of job marketing and matching services, to perform an as an employment center.~~

~~Critical Accounting Policies and Estimates~~

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies.

We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and they require critical management judgments and estimates about matters that may be uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.

~~Our operating results for the three and nine months ended October 31, 2018 and 2017 are summarized as follows:~~

For the three months ended

For the nine months ended

October 31,

October 31,

2018

2017

2018

2017

Sales

$          46,320

$        1,266,150

$          84,610

$       1,266,150
Total Cost of Sales

           180,518

              262,538

           520,164

             330,433
Gross profit (loss)

          (134,198)

      1,003,611.92

          (435,554)

             935,717
Total operating expenses

             81,986

                35,002

           255,149

             103,672
Net income (loss) from operations

          (216,184)

              968,610

          (690,702)

             832,045

Net cash provided by financing activities was $0.2 million for the six months ended July 31, 2023, compared to $1.5 million for the six months ended July 31, 2022. During the six months ended July 31, 2023, we received the $0.2 million receivable from stockholder. During the six months ended July 31, 2022, we sold 250,000 shares of Series C Preferred Stock for $1.0 million and two warrants were exercised for a total of 500,000 shares of common stock resulting in the Company receiving $0.5 million.

~~Results of Operations for the three months ended October 31, 2018 and 2017~~

~~Revenue~~

Our revenue from operations for the three months ended October 31, 2018 was $46,320 compared to $1,266,150, a decrease of $1,219,830 from the three months ended October 31, 2017. This decrease is primarily a result in the decrease is revenue earned through cryptocurrency advertisers.

~~Cost of Goods Sold~~

Our cost of goods sold for the three months ended October 31, 2018 was $180,518 compared to $262,538 for the three months ended October 31, 2017. The decrease of $82,020 is primarily due to the decrease in labor cost and direct expenses associated with cryptocurrency advertisers.

~~Gross Profit/Loss~~

Our gross loss for the three months ended October 31, 2018 was $134,198 compared to a gross income of $1,003,612 for the three months ended October 31, 2017. The gross loss of $134,198 for the three months ended October 31, 2018 represents approximately 290% as a percentage of total revenue. The gross profit of $1,003,612 for the three months ended October 31, 2017 represents approximately 79% as a percentage of total revenue. This decrease in the gross profit is primarily attributed to the inclusion of amortization of assets directly associated with sales and the lack of advertising revenue generated in cryptocurrency field.

~~Operating Expenses~~

~~Our operating expenses increased by $46,984 to $81,986 for the three months ended October 31, 2018, from $35,002 for the three months ended October 31, 2017.~~

The increase was primarily due to the increase in selling, general and administrative of $2,304, professional fees of $2,925, payroll of $5,153, consulting fees of $36,477, and amortization and depreciation of $646 with a decrease inmarketing expense of $521.

Liquidity and Capital Resources

Our total operating expenses for the three months ended October 31, 2018 of $81,986 consisted of $11,156 of selling, general and administrative expenses, $2,925 of professional fees, consulting expense of $57,477, marketing expense of $804, payroll of $8,978, and $646 of amortization and depreciation expenses. Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, office supplies and other expenses.

~~Net Income/Loss~~

Our net loss from operations of $216,184 for the three months ended October 31, 2018 from a net income of $968,610 for the three months ending October 31, 2017 represents a deficit of $1,184,794. The increase in net loss compared to the prior period net income is primarily a result of the gross profit decrease of $1,137,810, and an increase in operating expenses of $46,984.

~~Results of Operations for the nine months ended October 31, 2018 and 2017~~

~~Revenue~~

Our revenue from operations for the nine months ended October 31, 2018 was $84,610 compared to $1,266,150, a decrease of $1,181,540 from the nine months ended October 31, 2017. This increase is primarily a result in the decrease is revenue earned through cryptocurrency advertisers.

~~Cost of Goods Sold~~

Our cost of goods sold for the nine months ended October 31, 2018 was $520,164 compared to $330,433 for the nine months ended October 31, 2017. The increase of $189,731 is due to the decreases in cost of services of $139,55, and shipping of $202, with increases in computer leases of $4,131, software maintenance of $45,770, and depreciation expenses of $279,515.

~~Gross Profit/Loss~~

Our gross loss for the nine months ended October 31, 2018 was $435,554 compared to a gross income of $935,717 for the nine months ended October 31, 2017. The gross loss of $435,554 for the nine months ended October 31, 2018 represents approximately 515% as a percentage of total revenue. The gross profit of $935,717 for the nine months ended October 31, 2017 represents approximately 74% as a percentage of total revenue. This decrease in the gross profit is primarily attributed to decrease of revenue of $1,181,540 and an increase in cost of sales of $189,731.

~~Operating Expenses~~

~~Our operating expenses increased by $151,477 to $255,149 for the nine months ended October 31, 2018, from $103,672 for the nine months ended October 31, 2017.~~

The increase was primarily due to the increase in selling, general and administrative of $2,304, professional fees of $24,033, marketing fees of $5,070, consulting fees of $126,977, and amortization and depreciation of $1,531 with a decrease in payroll of $10,537.

Our total operating expenses for the nine months ended October 31, 2018 of $255,149 consisted of $20,051 of selling, general and administrative expenses, $24,033 of professional fees, consulting expense of $168,977, marketing expense of $9,795, payroll of $30,761, and $1,531 of amortization and depreciation expenses. Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, office supplies and other expenses.

~~Net Income/Loss~~

Our net loss from operations of $690,702 for the nine months ended October 31, 2018 from a net income of $832,045 for the nine months ending October 31, 2017 represents a deficit of $1,522,747. The increase in net loss compared to the prior period net income is primarily a result of the decrease in gross profit of $1,371,271, and operating expenses of $151,477.

~~Liquidity and Capital Resources~~

We fund operations primarily through cash on hand, cash from sales of Series C Preferred Stock, cryptocurrencies, and exercises of warrants, and the support of Michael Hawkins.

~~Introduction~~

~~During the nine months ended October 31, 2018 we utilized $17,211 in cash. Our cash on hand as of October 31, 2018 was $39.~~

~~Cash Requirements~~

~~We had cash available of 39 as of October 31, 2018. Based on our revenues, cash on hand and current monthly burn rate, we must rely on financing to fund current operations on a daily basis.~~

~~Sources and Uses of Cash~~

~~Operations~~

~~We used $56,140 in cash by operating activities for the nine months ended October 31, 2018, as compared to $333,995 for the nine months ended October 31, 2017.~~

Net cash used by operations consisted primarily of the net loss of $690,702 offset by non-cash expenses of $225,849 consisting of $365,006 in depreciation and amortization of assets. Additionally, changes in assets and liabilities consisted of decreases of $215,456 in accounts receivable and prepaid expenses of $224 with increases in accounts payable of $54,324.

~~Investments~~

We utilized $122,319 in investing activities for the nine months ended October 31, 2018 compared to using $3,127,245 for the nine months ended October 31, 2017. Our investing activities consisted primarily of $108,196 in assets held for sale, along with $5,822 utilized in the acquisition of property, plant, and equipment and $8,301 in intangible assets.

~~Financing~~

We had net cash provided in financing activities of $162,148 and $3,463,737 for the nine months ended October 31, 2018 and 2017 respectively. Our financing activities consisted of an increase in net proceeds from the issuance of stock of $3,463,737 for October 31, 2017 and an increase of $162,148 of advances made by a related party for October 31, 2018.

~~Off-Balance Sheet Arrangements~~

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we consider material.

~~Going Concern~~

Our financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying financial statements for the three and nine months ended October 31, 2018 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The working capital for the 9 months ended October 31, 2018 is $860,410.

While the company has working capital The Company has suffered losses from operations in the amount of $690,702 for the nine month period ended October 31, 2018 and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern

Item 3. Quantitative and Qualitative Disclosures about Market Risk

~~We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-Q.~~

Item 4. Controls and Procedures

~~Evaluation of Disclosure Controls and Procedures~~

During the six months ended July 31, 2023, we received the $0.2 million receivable from stockholder.

We were recently notified by the bank that when we acquired Mercury it triggered defaults under both Mercury's line of credit and term loan due to the change in ownership. Both the line of credit and term loan are classified as current liabilities. On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $480,000. Mercury used $461,000 of the proceeds from the sale to payoff both Mercury's line of credit and term loan. After paying off the notes and closing costs, Mercury was left with $11,000 for general corporate purposes.

Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements as of July 31, 2023.

Going Concern

Our financial statements are prepared in accordance with GAAP, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the three and six months ended July 31, 2023 and 2022 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company and therefore, we are not required to provide the information required by this Item of Form 10-Q.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

~~We carried out an evaluation, under the supervision and with the participation~~

Table of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2018.Contents

We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2023. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.

As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.

Changes in internal controls over financial reporting

There have been no changes in our internal control over financial reporting during the quarter ended July 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its principal executive officer and its principal financial officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues 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. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

~~Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance~~

Table of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.
~~As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.~~
~~Changes in internal controls over financial reporting~~
~~There have been no changes in our internal control over financial reporting during the quarter ended October31, 2018that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.~~
~~Limitations on the Effectiveness of Controls~~
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues 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. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
~~PART II – OTHER INFORMATION~~
~~Item 1. Legal Proceedings~~
The Company is not involved in any legal proceedings which management believes will have a material effect upon the financialcondition of the Company, nor are any such material legal proceedings anticipated.
~~Item 1A. Risk Factors~~
~~As a smaller reporting company, we are not required to provide the information required by this Item.~~
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~
~~None.~~Contents

~~Item 3. Defaults Upon Senior Securities~~

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not involved in any legal proceedings which management believes will have a material effect upon the financial condition of the Company, nor are any such material legal proceedings anticipated.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There have been no events that are required to be reported under this Item.

Item 3. Defaults Upon Senior Securities

There have been no events that are required to be reported under this Item.

Item 4. Mine Safety Disclosures

There have been no events that are required to be reported under this Item.

Item 5. Other Information

There have been no events that are required to be reported under this Item.

~~Item 4. Mine Safety Disclosures~~

~~There have been no events that are required to be reported under this Item.~~

~~Item 5. Other Information~~

~~There have been no events that are required to be reported under this Item.~~

21
~~Item 6. Exhibits~~
Table of Contents

Item 6. Exhibits

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Everything Blockchain, Inc.

~~31.2~~Dated: September 14, 2023	By:	~~Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~/s/ Toney Jennings
		Toney Jennings
32.1 *		~~Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

32.2 *		~~Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~101.INS~~			~~XBRL Instance Document~~

~~101.SCH~~			~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~			~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~			~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~			~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~			~~XBRL Taxonomy Extension Presentation Linkbase Document~~

			* Furnished herewith.

~~SIGNATURES~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~

	~~OBITX, INC.~~


~~Dated: January 10, 2019~~		~~/s/ Alex Mardikian~~
	~~By:~~	~~Alex Mardikian~~
	Its:	Chief Executive Officer (Principal Executive Officer)

Dated: September 14, 2023	By:	/s/ William Regan

William Regan
~~Dated: January 10, 2019~~		~~/s/ Brandy Craig~~
	~~By:~~	~~Brandy Craig~~
	Its:	Chief Financial Officer (Principal Financial Officer)

~~Nevada~~Florida		~~27-4439285~~82-1091922
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~4720 Salisbury Road~~12574 Flagler Center Blvd, Suite 101 Jacksonville, FL		~~32256~~32258
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
~~Registrant’s telephone number, including area code~~Non-accelerated Filer	~~(570) 778-6459~~☐	Smaller reporting company	☒
		Emerging growth company	☐

PART I. FINANCIAL INFORMATION
Item 1.
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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
~~Large accelerated filer [ ]~~Financial Statements (unaudited)	~~Accelerated filer [ ]~~
~~Non-accelerated filer [ ]~~	~~Smaller reporting company [√]~~
~~(Do not check if smaller reporting company)~~3
	Consolidated Balance Sheets
~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [√]~~
~~As of September 15, 2018, the Company had 5,460,000 shares of common stock, $0.0001 par value outstanding.~~
~~Transitional Small Business Disclosure Format Yes [ ] No[√]~~

*OBITX, INC.*
*and SUBSIDIARIES*
*Consolidated Balance Sheets*
ASSETS
			October 31,	January 31,
			2018	2018
Current Assets
	Cash and cash equivalents		$ 39	$ 16,350
	Accounts receivable, net		1,254,530	1,469,986
	Assets held for sale		408,166	-
	Prepaid expenses		224	-
		Total current assets	1,662,959	1,486,336
Property, plant and equipment, net			2,566,481	3,227,767
Intangible assets, net			14,523	4,091
Total assets			$ 4,243,963	$ 4,718,194

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued expenses		$ 116,524	$ 62,200
	Due to related party		686,026	523,878
		Total current liabilities	802,549	586,078
		Total liabilities	802,549	586,078
Stockholders' equity
Series A Preferred stock, $0.0001 par value; 1,000,000 shares			10	10
authorized; 100,000 shares issued and outstanding, as of
October 31, 2018 and January 31, 2018, respectively.
Common stock, $0.0001 par value, voting; 200,000,000 shares			546	546
authorized; 5,460,000 shares issued and outstanding, as of
October 31, 2018 and January 31, 2018, respectively.
	Additional paid in capital		3,442,825	3,442,825
	Accumulated deficit		(1,967)	688,735
Total stockholders' equity			3,441,414	4,132,116
Total liabilities and stockholders' equity			$ 4,243,963	$ 4,718,194

See accompanying notes to unaudited consolidated financial statements.

*OBITX, INC.*
*and SUBSIDIARIES*
*Statements of Cash Flows*
*For the nine months ended October 31,*
				2018	2017
Cash flows from operating activities:
Net (Loss)				(690,702)	$ 832,045
Adjustments to reconcile net loss to net
	Cash provided by (used in) operating activities:
		Depreciation and amortization		365,006	83,960
	Decrease (Increase) in:
		Accounts receivable, net		215,456	(1,250,000)
		Prepaid expenses and other current assets		(224)	-
		Accounts payable, accrued expenses and taxes payable		54,324	-
	Total adjustment to reconcile net income to net cash			634,562	(1,166,040)
			Net cash provided in operating activities	(56,140)	(333,995)
Cash flows from investing activities:
	Increase (Decrease) in:
		Assets held for Sale		(108,196)	-
		Acquisition of property, plant and equipment		(5,822)	(3,127,245)
		Acquisition of intangible assets		(8,301)	-
			Net cash received in investing activities	(122,319)	(3,127,245)
Cash Flows From Financing Activities:
		Borrowing from related party		162,148	-
		Proceeds from issuance of common stock		-	1
		Intercompany transfers		-	3,463,737
			Net Cash Provided By Financing Activities	162,148	3,463,738
Net Change in Cash				(16,311)	2,498
Cash at Beginning of Year				16,350	-
Cash at End of Period				$ 39	$ 2,498
See accompanying notes to unaudited consolidated financial statements.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

Item 1. Legal Proceedings

The Company is not involved in any legal proceedings which management believes will have a material effect upon the financialcondition of the Company, nor are any such material legal proceedings anticipated.

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~OBITX, INC.~~ ~~TABLE OF CONTENTS~~ 4
~~PART I. FINANCIAL INFORMATION~~	Consolidated Statements of Operations		5
~~Item 1. Financial Statements~~	Consolidated Statements of Stockholders’ Equity 3		6
~~Condensed Consolidated Balance Sheets as of October 31, 2018 (unaudited) and January 31, 2018~~	4
~~Condensed Consolidated Statements of Operations for the three months and nine months ended October 31, 2018 and 2017 (unaudited)~~	5
~~Condensed~~ Consolidated Statements of Cash Flows ~~for the nine months ended October 31, 2018 and 2017 (unaudited)~~	6	7
	Notes to ~~Condensed~~ Consolidated Financial Statements ~~(unaudited)~~	7	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
~~Item 4. Controls and Procedures~~	19
~~PART II. OTHER INFORMATION~~
Item ~~1. Legal Proceedings~~4.	Controls and Procedures	20	19
~~Item 1A. Risk Factors~~	20
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		21
Item 1A.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20	21
Item 3.	Defaults Upon Senior Securities	20
~~Item 4. Mine Safety Disclosures~~	20
~~Item 5. Other Information~~	20
~~Item 6. Exhibits~~	21
~~SIGNATURES~~	22

Item 4.	Mine Safety Disclosures		21
Item 5.	Other Information		21
Item 6.	Exhibits		22

SIGNATURES			23

*OBITX, INC.*
*and SUBSIDIARIES*
*Consolidated Statements of Operations*
*(unaudited)*

		For the three months ended		For the nine months ended
		October 31,		October 31,
		2018	2017	2018	2017

Sales		$ 46,320	$ 1,266,150	$ 84,610	$ 1,266,150
	Computer lease	3,382	3,698	11,418	7,287
	Cost of services	29,057	205,034	65,479	205,034
	Depreciation expense	121,159	41,980	363,475	83,960
	Software maintenance	26,920	11,625	79,791	33,951
	Freight and shipping costs	-	202	-	202
Total cost of sales		180,518	262,538	520,164	330,433
Gross Income (Loss)		(134,198)	1,003,611	(435,554)	935,717
Selling, general, and administrative		11,156	8,852	20,051	15,649
Professional fees		2,925	-	24,033	-
Marketing & advertising		804	1,325	9,795	4,725
Payroll		8,978	3,825	30,761	41,298
Consultant fees		57,477	21,000	168,977	42,000
Amortization & depreciation expense		646	-	1,531	-
Total operating expenses		81,986	35,002	255,149	103,672
Net income (loss) from operations		(216,184)	968,610	(690,702)	832,045
Basic and diluted (Loss) per share:
Income(Loss) per share from continuing operations		(0.0389)	96.8610	(0.1242)	83.2045
Income(Loss) per share		(0.0389)	96.8610	(0.1242)	83.2045
Weighted average shares outstanding		5,560,000	10,000	5,560,000	10,000
See accompanying notes to unaudited consolidated financial statements.