Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jan. 31, 2018 | Mar. 19, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Blockchain Industries, Inc. | |
Entity Central Index Key | 1,084,370 | |
Document Type | 10-Q/A | |
Document Period End Date | Jan. 31, 2018 | |
Amendment Flag | true | |
Amendment Description | Blockchain Industries, Inc. (f/k/a Omni Global Technologies, Inc.) (the “Company”) filed its Quarterly Report on Form 10-Q for the period ended January 31, 2018 (the “Original Form 10-Q”), with the U.S. Securities and Exchange Commission (the “SEC”) on March 19, 2018. The Company is filing this Amendment No. 1 to the Original Form 10-Q (this “Form 10-Q/A”) to amend our disclosure pursuant a comment letter issued by the Securities and Exchange Commission. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Form 10-Q/A also contains new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Accordingly, this Form 10-Q/A includes the currently dated certifications as exhibits. Except as expressly set forth herein, this Amendment No. 1 does not reflect any events that have occurred after the date of the Original Form 10-Q. | |
Current Fiscal Year End Date | --04-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 40,572,246 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Jan. 31, 2018 | Apr. 30, 2017 |
Current assets | ||
Cash & cash equivalents | $ 2,712,799 | $ 0 |
Available-for-sale securities | 2,533,286 | 0 |
Other current assets | 51,519 | 0 |
Total current assets | 5,297,604 | 0 |
Non-current assets | ||
Property, plant & equipment, net of accumulated depreciation | 108,675 | 0 |
Other non-current assets | 11,317 | 0 |
Total non-current assets | 119,992 | 0 |
Total assets | 5,417,596 | 0 |
Current liabilities | ||
Accounts payable and accrued expenses | 110,315 | 493,596 |
Deferred revenue | 1,953,694 | 0 |
Due to related parties | 27,289 | 3,981,423 |
Note payable | 0 | 501,112 |
Convertible note | 0 | 53,000 |
Total liabilities | 2,091,298 | 5,029,131 |
Shareholders' Deficit | ||
Preferred stock, $0.001 par value, 5,000,000 authorized. 328,616.50 shares and zero shares issued and outstanding as of January 31, 2018 and April 30, 2017, respectively | 329 | 0 |
Common stock; $0.001 par value; 400,000,000 shares authorized 36,159,446 and 737,406 shares issued and outstanding as of January 31, 2018 and April 30, 2017, respectively | 17,769 | 20,368 |
Additional paid-in capital | 10,611,198 | 6,179,489 |
Accumulated deficit | (7,302,998) | (11,228,988) |
Total shareholders' equity (deficit) | 3,326,298 | (5,029,131) |
Total liabilities and shareholders' equity | $ 5,417,596 | $ 0 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jan. 31, 2018 | Apr. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 328,616.50 | 0 |
Preferred stock, shares outstanding | 328,616.50 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 36,159,446 | 737,406 |
Common stock, shares outstanding | 36,159,446 | 737,406 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2018 | Jan. 31, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 108,194 | $ 0 | $ 108,194 | $ 0 |
Operating expenses: | ||||
Professional fees | 480,994 | 5,400 | 500,184 | 35,690 |
Advertising and marketing expense | 16,069 | 0 | 16,069 | 0 |
General and administrative expense | 129,459 | 10 | 138,367 | 1,628 |
Total operating expenses | 626,522 | 5,410 | 654,620 | 37,318 |
Income (loss) from operations | (518,328) | (5,410) | (546,426) | (37,318) |
Other income (expense) | ||||
Debt forgiveness | 20,000 | 0 | 5,023,192 | 0 |
Interest expense | (441) | (250) | (1,323) | (543) |
Unrealized gain (loss) of equity securities | (555,957) | 0 | (555,957) | 0 |
Exchange gain (loss) | (12,246) | 0 | (12,246) | 0 |
Total other income (expense) | (548,644) | (250) | 4,453,666 | (543) |
Income (loss) before income taxes | (1,066,972) | (5,660) | 3,907,240 | (37,861) |
Provision for income taxes (benefit) | 0 | 0 | 0 | 0 |
Net income (loss) | $ (1,066,972) | $ (5,660) | $ 3,907,240 | $ (37,861) |
Basic earnings (loss) per common share | $ (.03) | $ (0.01) | $ .10 | $ (0.05) |
Diluted earnings (loss) per common share | $ (.02) | $ (0.01) | $ .09 | $ (0.05) |
Weighted-average number of common shares outstanding: Basic | 32,883,186 | 737,406 | 38,119,333 | 737,406 |
Weighted-average number of common shares outstanding: Diluted | 39,738,384 | 737,406 | 43,770,835 | 737,406 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,907,240 | $ (37,861) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 125 | 0 |
Share-based compensation | 166,603 | 0 |
Unrealized (gain)/loss of equity securities | 555,957 | 0 |
Unrealized currency translation (gains)/losses | 12,246 | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (62,836) | 0 |
Non-cash compensation (marketable securities) | (1,800,000) | 0 |
Accounts payable and accrued expenses | (383,281) | (5,936) |
Deferred revenue | 1,953,694 | 0 |
Decrease in related party liabilities | (3,954,574) | 0 |
Decrease in notes payable | (501,112) | 0 |
Decrease in convertible notes | (53,000) | 0 |
Net cash provided by (used in) operating activities | (159,477) | (43,797) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (1,289,243) | 0 |
Purchases of fixed assets | (108,800) | 0 |
Net cash provided by (used in) investing activities | (1,398,043) | 0 |
Cash flows from financing activities: | ||
Loans and advances | 441 | 43,843 |
Sale of common and preferred stock | 4,282,125 | 0 |
Net cash provided by financing activities | 4,282,566 | 43,843 |
Net change in cash | 2,725,045 | 46 |
Cash, beginning of the period | 0 | 0 |
Effects of currency translation on cash and cash equivalents | (12,246) | 0 |
Cash, end of the period | $ 2,712,799 | $ 46 |
1. Organization and Description
1. Organization and Description of Business | 9 Months Ended |
Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Blockchain Industries, Inc. (“BCII”, “Blockchain”, the “Company”, “we”, “our” or “us”) was originally formed under the laws of the State of Nevada on September 15, 1995 as Interactive Processing, Inc. to market high-tech consumer electronics through television home-shopping networks, retail stores, catalog companies and their website remotecontrols.com. In March 1999, the Company changed its name to Worldtradeshow.com, Inc. (“WTS”). In April 1999, the Company acquired intellectual property rights to a database from Chaiisai Tora, Inc., an unaffiliated third party, and significantly changed its business plan to develop tradeshow software and market both physical and virtual tradeshow space through the Company's website. The Company’s business involved the operation of Hotels.com.vn, tour companies and restaurants and marketing of the WTS Discount Card in Vietnam in order to serve as an online vehicle for Vietnamese companies to promote themselves, using the largest travel and tourism online website in, as well as being recognized as the official travel/tourism website of, Vietnam. On March 26, 2007, the Company acquired assets from Business.com.vn, a Vietnamese company, which assets consisted of a database of 300,000 Vietnamese companies, marketing software, trademarks and intellectual property, with the intention of developing a directory of companies. The plan included offering such companies opportunities to market themselves through domain registration, website development, and online marketing expertise to help these Vietnamese companies market themselves directly and/or on the Company’s BVNI web portal. In June 2007, the Company changed its name to Business.vn, Inc. However, from October 2008 through early 2016, the Company’s operations were limited as a result of limited capital resources. Nevertheless, the Company continued operations of the Hotel.vn website. On May 15, 2016, the Company was placed under the control of a Receiver in Nevada’s Eighth Judicial District. From May 15, 2016 through March 22, 2017, while under the control of the Receiver, the Company continued to incur expenses to maintain its corporate existence as a public company and maintain its web-related business. On November 18, 2016, the Company changed its name to Omni Global Technologies, Inc. and on May 23, 2017, the Company entered into a Share Purchase Agreement with JOJ Holdings, LLC (“JOJ”), pursuant to which JOJ: (i) purchased 40,000,000 restricted shares of common stock, $0.001 par value (the “Control Shares”) from the Company by the authority of the Receiver; (ii) assumed the liabilities of a judgement creditor in the amount of approximately $25,000; and (iii) paid the Receiver $150,000 which monies were used to cover the Receiver’s and other company expenses. Additionally, and concurrent with the execution of the Share Purchase Agreement, the Receiver resigned, and Olivia Funk was appointed as the sole officer and director of the Company. On November 13, 2017, the Company filed Certificate of Amendment to its Articles of Incorporation with the State of Nevada for the purpose of changing its name from Omni Global Technologies, Inc. to Blockchain Industries, Inc. On November 15, 2017, Mr. Patrick Moynihan was appointed as the Company’s Chief Executive Officer, Chief Financial Officer and Chairman/sole director and, on the same date, Ms. Funk resigned all positions as an executive officer and director of the Company. On December 1, 2017, the Company announced Mr. Zack Pontgrave as President, although a formal agreement was never signed, and Mr. Bryan Larkin as Chief Technology Officer, respectively, joining Mr. Moynihan as part of the Company’s management team. As of April 2018, the Company has withdrawn the offer to Mr. Pongrave, and the Company is currently negotiating a separation agreement. While we initially purchased a new domain, hotelsinvietnam.net, which the Company used for marketing Vietnamese travel businesses (the “Legacy Business”) to be monetized through our newly established blockchain technology, we are discontinuing that business to focus on our broader business model related to the blockchain technologies market, within the blockchain technology market and intend to target and acquire or build a broad portfolio of virtual currencies, digital coin and tokens, and other blockchain assets (the “Digital Assets”) within four business verticals: ● Digital Asset Bank & Investment Management ● Mining and Trading ● Initial Coin Offerings (“ICOs”) and Ventures ● Media and Education The Company discontinued the Legacy Business as of April 30, 2018. Recent Share Recapitalization On January 16, 2018, the Company executed a 2-for-1 forward stock split. Accordingly, all references to the numbers of common shares and per share data in the accompanying financial statements have been adjusted to reflect these splits, on a retroactive basis, unless indicated otherwise. The Company previously implemented a 1 for 15 reverse stock split effective November 18, 2016. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at April 30, 2017 as presented in the Company’s Annual Report on Form 10-K filed on August 30, 2017 with the SEC, and as amended on May 21, 2018. Revenue Recognition The Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services are rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Amounts collected before these criteria are met are recorded as deferred revenue. Currently, the Company’s revenue is in the form of consulting services provided to customers. Revenue is recognized prorata on a monthly basis over the term of the contractual agreement. At the time of the filing, the Company was unable to determine the percentage of completion for the one project it was contracted to perform and, as such, felt that using a pro rata method of accounting was most appropriate at this time. If and when the services and deliverables have been completed, we will immediately record the remaining portion of the Deferred Revenue. Marketable Securities The Company determines the appropriate classification of its marketable securities, which consist primarily of investments in Digital Assets, such as Bitcoin and Ethereum, at the time of purchase and reevaluates such designation at each balance sheet date. All of the Company’s marketable securities are considered available-for-sale and carried at estimated fair values and reported as available-for-sale securities on the balance sheet. The Company has adopted ASU 2016-01, and now records unrealized gains and losses on available-for-sale securities in net income and reported as “Unrealized gain (loss) of equity securities” on the income statement. Other income includes realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company regularly reviews all of its investments for other-than-temporary declines in fair value. The Company’s review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that it will be required to sell the securities before the recovery of their amortized cost basis. If the Company were to determine that the decline in fair value of an investment is below its accounting basis and the decline is other-than-temporary, the Company would reduce the carrying value of the security and record a loss for the amount of such decline. Going Concern The Company has an accumulated deficit of approximately $26 million from its inception on September 15, 1995 to date. We will need additional working capital for ongoing operations, which raises substantial doubt about our ability to continue as a going concern. Management of the Company is working on a strategy to meet future operational goals which may include equity funding, short term or long-term financing or debt financing, to enable the Company to reach profitable operations, however, there can be no assurances that the plan will succeed, nor that the Company will be able to execute its plans. Stock-based compensation The Company follows the provisions of ASC 718, “Share-Based Payment” and ASC 505-50 “Equity-Based Payments to Non-Employees”. Under this guidance compensation cost generally is recognized at fair value on the date of the grant and amortized over the respective vesting periods. The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of the Company’s shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate approximates the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. Due to limited history of forfeitures, the estimated forfeiture rate included in the option valuation was zero. While ASC 505-50 does not specifically indicate which period expenses should be recognized, the guidance does indicate that the expenses should be recognized in the same period as when the services were performed. The stock-based compensation, that are expensed at fair value, accrue over the service period (vesting period) and are re-measured every period until they are settled if the services are to be performed over a period of time. On the vesting date, a final adjustment is made to reconcile the prior expenses. Note that if the performance requirements have been met but grant has expired, the expenses are not reversed. However, if the performance requirements have not been met then the expenses are reversed. Many of the assumptions require significant judgment and any changes could have a material impact in the determination of stock-based compensation expense. Fair Value Measurements The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of January 31, 2018 and April 30, 2017. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, marketable securities, related party payables, accounts payable and accrued liabilities. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. Stock Purchase Warrants The Company accounts for warrants issued to purchase shares of its Common Stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds, the fair value of which approximates cost. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. The Company classifies certain accounts holding Bitcoin and Ethereum to be cash equivalents and records them at their initial cost, and subsequently re-measures the carrying amounts it owns at each reporting date based on their current fair value. The changes in the fair value are included as a component of income or loss from operations. The Company considers certain accounts holding Bitcoin and Ethereum as cash because they are readily convertible to U.S. Dollars and the Company has used these currencies to receive and make payments for services. The Company obtains the equivalency rate of Bitcoins and Ethereum to U.S. Dollars by using the historical values from Coin Market Cap (https://coinmarketcap.com). The equivalency rate obtained represents a generally well recognized quoted price in an active market for Bitcoin and Ethereum, which website is accessible to the Company on an ongoing basis. The Company may maintain its Bitcoin and Ethereum in wallets of an online exchange or in a cold storage wallet. Property and equipment Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The Company currently is in the process of building a mining facility for Digital Assets. All cost associated with that project, including the architectural, designs, and planning cost are being capitalized until the completion of the project. The estimated useful lives of property and equipment are as follows: Computer software and office equipment 1-5 years Furniture and fixtures 5-10 years Mining Facility No depreciation is taken until the project is completed and placed into service Basic and Diluted Net Loss Per Share Net earnings or loss per share is calculated in accordance with SFAS No. 128, Earnings Per Share Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Actual results could differ from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation. Management reviews its estimates on a quarterly basis and, where necessary, makes adjustments prospectively. Recent Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017 but early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification flows of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of the adoption of ASU 2016-09 on its consolidated financial statements. The adoption of ASU No. 2016-09 is not expected to have a material impact on the Company's consolidated financial statements or related disclosures. All other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
3. Provision for Income Taxes
3. Provision for Income Taxes | 9 Months Ended |
Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | As of January 31, 2018, the Company has a federal net operating loss carry forwards of $ $6,264,744 that can be utilized to reduce future taxable income. The net operating loss carry forward will expire through 2023 if not utilized. Utilization of the net operating loss and tax credit carry forward may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating loss and tax credit carry forwards before utilization. The Company has provided a full valuation allowance on the deferred tax asset because of uncertainty regarding realizability. Management expects to perform an analysis of the net operating loss carry forwards and the impact of the recent changes in equity, which will provide certainty over the limitations of the net operating loss. |
4. Available-for-Sale Securitie
4. Available-for-Sale Securities | 9 Months Ended |
Jan. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | The following table sets forth the components of the Company’s marketable securities at January 31, 2018 and April 30, 2017: January 31, 2018 Description Cost Gross Unrealized gain (loss) Aggregate fair value Chimes - Equity Token $ 200,000 $ – $ 200,000 Chimes - Utility Token 50,000 – 50,000 Video Coin - Utility Token 50,000 – 50,000 Lottery.com - Utility Token 250,000 – 250,000 Academy - Utility Token 250,000 – 250,000 Coral Health - Utility Token 250,000 – 250,000 Kinerjay Pay Common Stock 1,800,000 (550,000 ) 1,250,000 BTC Wallet 26,928 (2,179 ) 24,749 EOS Wallet 20,323 (2,651 ) 17,672 NEO Wallet 101,523 (1,698 ) 99,825 OMG Wallet 20,870 (429 ) 20,441 QTUM Wallet 14,480 1,858 16,338 REP Wallet 55,119 (858 ) 54,261 Total available-for-sale securities $ 3,089,243 $ (555,957 ) $ 2,533,286 There were no marketable securities as of April 30, 2017. The KinerjaPay Common Stock was received as compensation and, as such, the Company did not use cash to acquire the securities. We have an agreement with Chimes to purchase 500,000 tokens of their Series T Preferred Equity Token “ ”. Chimes will sell a total of 100,000,000 Chimes Equity Tokens. Chimes Equity Tokens share the same economic value as commons shares of Chimes expect the Chimes Equity Tokens are non-voting shares. For the utility tokens, they will be similar to other tokens that trade on alternative trading systems, and do not represent an equity interest in the underlying issuer, but an investment in the blockchain platform. |
5. Property and Equipment
5. Property and Equipment | 9 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | The following table sets forth the components of the Company’s property, plant and equipment at January 31, 2018 and April 30, 2017: January 31, 2018 Cost Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment 7,527 (125 ) 7,402 Mining Facility (in progress) 101,273 – 101,273 Total fixed assets 108,800 (125 ) 108,675 There was no property and equipment as of April 30, 2017. |
6. Liabilities Discharged in Re
6. Liabilities Discharged in Receivership | 9 Months Ended |
Jan. 31, 2018 | |
Liabilities Discharged In Receivership | |
Liabilities Discharged in Receivership | The Company was dormant from October 2008 through May 15, 2016 until it was placed under the control of a Receiver in Nevada’s Eighth Judicial District pursuant to Case #A14-715484-P (“the Case”). On June 13, 2017, pursuant to an order by the judge presiding over the Case, the Company emerged from receivership and liabilities including accounts payable, accrued expenses, amounts due to related parties, notes payable, and convertible notes amounting to $5,023,192 that had been outstanding since 2009, were officially discharged. As a result, the Company recorded other income, “debt forgiveness” on its income statement for the period ended July 31, 2017. The amount of debt discharged represented substantially all of the Company’s liabilities outstanding as of April 30, 2017. |
7. Deferred Revenue
7. Deferred Revenue | 9 Months Ended |
Jan. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue | As of January 31, 2018, deferred revenue amounted to $1,953,694 compared to zero as of April 30, 2017. The deferred revenue was concentrated in one customer with whom the Company had signed a one-year consulting agreement with on January 11, 2018 (the “Consulting Agreement”). Under the terms of the Consulting Agreement with the customer, the value of the contract was comprised of $250,000 in cash and 1,000,000 shares of stock valued at $1.80 per share, or $1,800,000, and was paid in full to the Company prior to the commencement of services. The total value of the contract was $2,050,000. The Company or customer may cancel the Consulting Agreement at any time for any reason whatsoever without an obligation to return any of the consideration received. In the event of such termination, the Company would immediately record the entire deferred liability balance as service revenue. There were no deferred revenue balances as of April 30, 2017. |
8. Due to Related Parties
8. Due to Related Parties | 9 Months Ended |
Jan. 31, 2018 | |
Related Party Transactions [Abstract] | |
Due to Related Parties | As of January 31, 2018, the balance due to related parties was $27,289. As April 30, 2017, the balance due to related parties was $3,981,423. This amount was written off as part of the discharge of receivership described in Note 6. Liabilities Discharged in Receivership. The amount of $27,289 relates to a liability assumed by the Company related to the Share Purchase Agreement with JOJ Holdings described in Note 1. Organization and Description of Business. |
9. Stockholders' Equity
9. Stockholders' Equity | 9 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Common and Preferred Stock The Company has 400,000,000 shares of Common Stock authorized with a par value of $0.001 per share and 5,000,000 shares of Preferred Stock authorized, with a par value of $0.001 per share. As of January 31, 2018, and April 30, 2017 there were 36,159,446 and 737,406 shares of Common Stock outstanding, respectively. As of January 31, 2018, and April 30, 2017 there were 328,616.50 and zero preferred shares outstanding, respectively. Each preferred share is convertible to 40 shares of Common Stock, which is adjusted for the 2-for-1 forward stock split effective January 16, 2018. Per ASC 230-10-50-3, we executed a non-cash financing activity by entering into an agreement with certain shareholders to convert their 13,144,660 shares of Common Stock into 328,616.50 shares of the Company’s Series A Preferred Stock. As of January 31, 2018, the following dilutive securities calculated using the treasury method were considered equivalents for the purposes of calculating earnings per share: Preferred shares convertible to Common Stock 13,144,660 Warrants 7,637,500 Stock options 234,247 Share count reconciliation Beginning share balance April 30, 2017 737,406 Control Shares issued 40,000,000 Shares issued in private placements 12,946,700 RSU’s vested 620,000 Shares retired (5,000,000 ) Shares converted to preferred stock. (13,144,660 ) Ending share balance January 31, 2018 36,159,446 Common Stock and Warrants Issued in Private Placements During the nine-month period ended January 31, 2018, the Company accepted subscription agreements, issuing 12,946,700 shares of Common Stock for $4,282,125. The Company issued the shares of Common Stock as outlined in the table below: Issue Price Shares Issued Funds Received $ 0.05 4,000,000 $ 200,000 $ 0.10 6,175,000 $ 617,500 $ 1.25 2,771,700 $ 3,464,625 12,946,700 $ 4,282,125 As part of the $0.05 and $0.10 rounds of investment, investors received warrants equal to 50% of the shares received at an exercise price of $0.25. Through the nine-months ended January 31, 2018, the Company had issued 5,137,500 as part of the issuance for the $0.05 and $0.10 rounds. Common Stock Issued in Exchange for Consulting, Professional and Other Services The Company has issued non-statutory stock options, restricted stock purchase awards and stock compensation to directors and consultants. The terms of stock options granted under these plans generally may not exceed 10 years. The Company currently does not have a defined equity incentive plan. Stock issued to directors and consultants have been granted via individual agreements. Share-based payment arrangements were made to compensate independent contractors to perform services as a way to conserve cash as we develop our business. Share-based payments were made in negotiations with each independent contractor and may be in the form of an option to purchase shares of our common stock or restricted shares of our common stock. We grant share-based payment over the term of our agreements with vesting schedule to incentive personnel over time. After the reporting period, we conducted a 409A valuation with the firm SingerLewak, The date of the 409A valuation was May 22, 2018. SingerLewak took certain available information about the Company and assess the following values at specific dates: Value Date Value ($ per share) December 1, 2017 0.063 January 1, 2018 0.117 February 1, 2018 1.25 March 1, 2018 1.25 The Company believes these values represent an accurate representation of our fair market value at the specific dates. According to these results above, the Company determined that it did not issue any options below the fair value market price. The Company will keep this valuation in the event the IRS investigates our claims that our OTC-traded price is not a fair representation of our market value on those dates. If the IRS concludes that the OTC-traded price should be used to determine our valuation, there may be penalties to the grantees or to the Company under Section 409A of the Internal Revenue Code. The Company will continue to assess material changes to its business that would affect our market values, and we may decide that certain conditions would allow us to use the OTC-traded price as an accurate representation of a fair market value of our common stock. During the nine-month period ended January 31, 2018, the Company issued 2,620,000 restricted shares of Common Stock (“RSA”) to independent contractors for professional services. The fair value of the restricted shares was calculated to be $508,140 using the price per share on the grant date of each restricted stock award. The Company issued the shares of restricted Common Stock for services as outlined in the table below: RSAs Number of Shares Remeasured Weighted Average Fair Value RSA Unvested at the beginning of the Period $ - RSA Granted During the Period 2,620,000 $ 0.11 RSA Canceled During the Period $ - RSA Vested During the Period 620,000 $ 0.07 RSA Unvested at the End of the Period 2,000,000 $ 0.12 Number of Shares Weighted Average Exercise Price Intrinsic Value Weighted Average Remaining Life Remeasured Weighted Average Fair Value Outstanding at Beginning of Period $ - $ - - $ - Exercisable at the End of the Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Granted During the Period 1,422,000 $ 1.92 $ - 7.92 $ 0.107 Exercised During the Period $ - $ - - $ - Canceled during the Period(Forfeited) $ - $ - - $ - Canceled during the Period(Expired) $ - $ - - $ - Outstanding at the End of the Period 1,422,000 $ 1.92 $ - 7.92 $ 0.107 Options Vested During the Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Vested at end of Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Shares Expected to vest 1,145,668 $ 2.19 $ - 8.40 $ 0.116 Vested and Expected to vest 1,422,000 $ 1.92 $ - 7.92 $ 0.107 Preferred Notes Convertible to Common Stock During the nine-month period ended January 31, 2018, the Company converted 13,144,660 shares of Common Stock into Series A Convertible Preferred Stock (the “Preferred Shares”). The Company designated 500,000 shares as Preferred Shares. The Company had agreed to convert certain investor shares of Common Stock into the Preferred Shares, which are convertible into shares of Common Stock at a rate of one Preferred Share into forty shares of Common Stock. At January 31, 2018, the Company had 328,616.50 Preferred Shares issued and outstanding. Key terms of the Preferred Shares include: ● Holders shall have no voting rights unless and until such shares are converted into shares of common stock. ● Holders must provide written notice to the authorized representative of the Company in order to convert their shares. ● In no event may the holder convert any shares of Preferred Shares into Common Stock if, as a result of such conversion, the Holder will own of record and/or beneficially in excess of 4.99% of the outstanding shares of Common Stock. On February 12, 2018, the Company filed a Certificate of Designation with the State of Nevada effective as of November 11, 2017 for a newly authorized Series A Convertible Preferred Stock. A total of 500,000 shares of Series A Convertible Preferred Stock have been authorized of which 328,616.50 shares were issued and outstanding, as follows: Issuee Name Series A Convertible Preferred Shares JOJ Holdings, LLC (1) 141,116.50 JFS Investments, Inc. (2) 187,500.00 (1) Mr. Justin Schreiber is the control person of JOJ Holdings, LLC. (2) Mr. Joe Salvani is the control person of JFS Investments, Inc. The Company is obligated is issue shares of Common Stock to the holders of the Preferred Shares once the holder submits a notice of conversion to the Company. The Company shall issue the required number of shares of Common Stock at a rate of 40 shares of Common Stock to 1 share of the Preferred Shares. Stock Purchase Warrants The stock purchase warrants have been accounted for as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments indexed to, and potentially settled in, a company’s own stock, distinguishing liabilities from equity. The Company had a total of 9,637,500 warrants outstanding as of January 31, 2018 as outlined in the table below: Quantity Issued Strike Price Average Remaining Contractual Life (years) Amount Exercised Founders 2,500,000 $ 2.50 4.79 $ – Founders 2,000,000 $ 0.25 2.79 – Private Placement 5,137,500 $ 0.25 2.85 – 9,637,500 $ – Weighted-average exercise price $ 0.83 The $0.83 per share is the weighted-average exercise price of all warrants that have been issued, which are convertible into one share of our Common Stock. 2,000,000 warrants are not yet vested and will vest on January 1, 2019. As such the 2,000,000 are not considered when calculating dilutive shares for the period. |
10. Subsequent Events
10. Subsequent Events | 9 Months Ended |
Jan. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | During the period from February 1, 2018 through the date of this amended Report, the Company has raised a total $1,445,000 through the private placements of its common stock at $1.25 per share, issuing 1,248,000 shares of Common Stock. No warrants were issued as part of these private placements. Blockex: On February 16, 2018, we entered into a Private Token Purchase Commitment Form (“BlockEx Agreement”) with BlockEx Limited (“BlockEx”) a privately held limited liability company incorporated under the laws of Gibraltar. Under the terms of the BlockEx Agreement, the Company agreed to purchase up to 5,714,285.71 digital tokens from the Company for 2,000,000 Euros, or at the time of the purchase, approximately $2,481,600 USD. To date the Company has purchased tokens amounting to approximately 1,128,770 tokens for a purchase price of 395,069.53 Euros. The Company filled the 2,000,000 Euro obligation for the BlockEx Agreement by pooling with other investors for the remaining 1,604,930 Euros. This investment provides the Company with exposure to a digital asset exchange platform. The BlockEx platform provides an institutional exchange, white-labeled brokerage software, and the ability to launch ICO’s. LegatumX: On February 19, 2018, the Company entered into a Stock Purchase Agreement (“LegatumX Agreement”) with LegatumX, Inc. (“LegatumX”). This investment will provide us with a market share into the legal industry for the storage, authentication and validation of legal documents such as wills, trusts, deeds, mortgages, and more. We expect that the Media and Education segment of our business will be able to assist this company in marketing their products to consumers worldwide, although we will be starting with U.S. consumers. Under the terms of the LegatumX Agreement, we will initially receive 30% of LegatumX’s common stock calculated on a fully diluted basis for a purchase price of $1,300,000: Amount paid by Company Paid or Due on $100,000 February 19, 2018 $200,000 May 20, 2018 100,000 shares of our Common Stock (1) March 1, 2018 The value of our Common Stock for this agreement was valued at $10 per share. The Company may earn an additional (i) 5%, for a total of 35%, of LegatumX’s common stock if LegatumX realizes $2.3 million in gross proceeds from the sale of the 100,000 shares of our common stock within the 12-month period following the effective date of the Company’s filing of a Form 10 with the SEC (the “Form 10”), or (ii) an additional 10%, for a total of 40%, of LegatumX’s common stock if LegatumX realizes $10.1 million in gross proceeds from the sale of the 100,000 shares of our common stock within the 12-month period following the effective date of the Form 10. Basecoin & Origin Protocol: On February 13, 2018 and February 20, 2018, the Company entered into two separate subscription agreements with KR CRYPTO SPE, LLC, a special-purpose entity, for the purpose of acquiring tokens of Basecoin and Origin Protocol, respectively. The Company invested $100,000 and $50,000 into the subscription agreements for Basecoin and Origin Protocol, respectively. Basecoin’s token will be utilized as a form of controlling the supply and demand of fiat-based currencies to expand or contract the money-supply, similar to how current central banks attempt to maintain a normalized supply and demand of their respective fiat currencies. The Origin Protocol utilizes the Ethereum blockchain, allowing developers to build decentralized marketplaces to create and manage listings for the fractional usage of assets and services. |
2. Summary of Significant Acc16
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at April 30, 2017 as presented in the Company’s Annual Report on Form 10-K filed on August 30, 2017 with the SEC, and as amended on May 21, 2018. |
Revenue Recognition | The Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services are rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Amounts collected before these criteria are met are recorded as deferred revenue. Currently, the Company’s revenue is in the form of consulting services provided to customers. Revenue is recognized prorata on a monthly basis over the term of the contractual agreement. At the time of the filing, the Company was unable to determine the percentage of completion for the one project it was contracted to perform and, as such, felt that using a pro rata method of accounting was most appropriate at this time. If and when the services and deliverables have been completed, we will immediately record the remaining portion of the Deferred Revenue. |
Marketable Securities | The Company determines the appropriate classification of its marketable securities, which consist primarily of investments in Digital Assets, such as Bitcoin and Ethereum, at the time of purchase and reevaluates such designation at each balance sheet date. All of the Company’s marketable securities are considered available-for-sale and carried at estimated fair values and reported as available-for-sale securities on the balance sheet. The Company has adopted ASU 2016-01, and now records unrealized gains and losses on available-for-sale securities in net income and reported as “Unrealized gain (loss) of equity securities” on the income statement. Other income includes realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company regularly reviews all of its investments for other-than-temporary declines in fair value. The Company’s review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that it will be required to sell the securities before the recovery of their amortized cost basis. If the Company were to determine that the decline in fair value of an investment is below its accounting basis and the decline is other-than-temporary, the Company would reduce the carrying value of the security and record a loss for the amount of such decline. |
Going Concern | The Company has an accumulated deficit of approximately $26 million from its inception on September 15, 1995 to date. We will need additional working capital for ongoing operations, which raises substantial doubt about our ability to continue as a going concern. Management of the Company is working on a strategy to meet future operational goals which may include equity funding, short term or long-term financing or debt financing, to enable the Company to reach profitable operations, however, there can be no assurances that the plan will succeed, nor that the Company will be able to execute its plans. |
Stock-based compensation | The Company follows the provisions of ASC 718, “Share-Based Payment” and ASC 505-50 “Equity-Based Payments to Non-Employees”. Under this guidance compensation cost generally is recognized at fair value on the date of the grant and amortized over the respective vesting periods. The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of the Company’s shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate approximates the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. Due to limited history of forfeitures, the estimated forfeiture rate included in the option valuation was zero. While ASC 505-50 does not specifically indicate which period expenses should be recognized, the guidance does indicate that the expenses should be recognized in the same period as when the services were performed. The stock-based compensation, that are expensed at fair value, accrue over the service period (vesting period) and are re-measured every period until they are settled if the services are to be performed over a period of time. On the vesting date, a final adjustment is made to reconcile the prior expenses. Note that if the performance requirements have been met but grant has expired, the expenses are not reversed. However, if the performance requirements have not been met then the expenses are reversed. Many of the assumptions require significant judgment and any changes could have a material impact in the determination of stock-based compensation expense. |
Fair Value Measurements | The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of January 31, 2018 and April 30, 2017. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, marketable securities, related party payables, accounts payable and accrued liabilities. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. |
Stock Purchase Warrants | The Company accounts for warrants issued to purchase shares of its Common Stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds, the fair value of which approximates cost. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. The Company classifies certain accounts holding Bitcoin and Ethereum to be cash equivalents and records them at their initial cost, and subsequently re-measures the carrying amounts it owns at each reporting date based on their current fair value. The changes in the fair value are included as a component of income or loss from operations. The Company considers certain accounts holding Bitcoin and Ethereum as cash because they are readily convertible to U.S. Dollars and the Company has used these currencies to receive and make payments for services. The Company obtains the equivalency rate of Bitcoins and Ethereum to U.S. Dollars by using the historical values from Coin Market Cap (https://coinmarketcap.com). The equivalency rate obtained represents a generally well recognized quoted price in an active market for Bitcoin and Ethereum, which website is accessible to the Company on an ongoing basis. The Company may maintain its Bitcoin and Ethereum in wallets of an online exchange or in a cold storage wallet. |
Property and Equipment | Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The Company currently is in the process of building a mining facility for Digital Assets. All cost associated with that project, including the architectural, designs, and planning cost are being capitalized until the completion of the project. The estimated useful lives of property and equipment are as follows: Computer software and office equipment 1-5 years Furniture and fixtures 5-10 years Mining Facility No depreciation is taken until the project is completed and placed into service |
Basic and Diluted Net Loss Per Share | Net earnings or loss per share is calculated in accordance with SFAS No. 128, Earnings Per Share |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Actual results could differ from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation. Management reviews its estimates on a quarterly basis and, where necessary, makes adjustments prospectively. |
Recent Accounting Pronouncements | In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017 but early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification flows of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of the adoption of ASU 2016-09 on its consolidated financial statements. The adoption of ASU No. 2016-09 is not expected to have a material impact on the Company's consolidated financial statements or related disclosures. All other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
4. Available-for-Sale Securit17
4. Available-for-Sale Securities (Tables) | 9 Months Ended |
Jan. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale Securities | January 31, 2018 Description Cost Gross Unrealized gain (loss) Aggregate fair value Chimes - Equity Token $ 200,000 $ – $ 200,000 Chimes - Utility Token 50,000 – 50,000 Video Coin - Utility Token 50,000 – 50,000 Lottery.com - Utility Token 250,000 – 250,000 Academy - Utility Token 250,000 – 250,000 Coral Health - Utility Token 250,000 – 250,000 Kinerjay Pay Common Stock 1,800,000 (550,000 ) 1,250,000 BTC Wallet 26,928 (2,179 ) 24,749 EOS Wallet 20,323 (2,651 ) 17,672 NEO Wallet 101,523 (1,698 ) 99,825 OMG Wallet 20,870 (429 ) 20,441 QTUM Wallet 14,480 1,858 16,338 REP Wallet 55,119 (858 ) 54,261 Total available-for-sale securities $ 3,089,243 $ (555,957 ) $ 2,533,286 |
5. Property and Equipment (Tabl
5. Property and Equipment (Tables) | 9 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | January 31, 2018 Cost Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment 7,527 (125 ) 7,402 Mining Facility (in progress) 101,273 – 101,273 Total fixed assets 108,800 (125 ) 108,675 |
9. Stockholders' Equity (Tables
9. Stockholders' Equity (Tables) | 9 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Schedule of dilutive securities | Preferred shares convertible to Common Stock 13,144,660 Warrants 7,637,500 Stock options 234,247 |
Schedule of outstanding stock | Beginning share balance April 30, 2017 737,406 Control Shares issued 40,000,000 Shares issued in private placements 12,946,700 RSU’s vested 620,000 Shares retired (5,000,000 ) Shares converted to preferred stock. (13,144,660 ) Ending share balance January 31, 2018 36,159,446 |
Schedule of subscription agreements | Issue Price Shares Issued Funds Received $ 0.05 4,000,000 $ 200,000 $ 0.10 6,175,000 $ 617,500 $ 1.25 2,771,700 $ 3,464,625 12,946,700 $ 4,282,125 |
Schedule of stock issued for services | Value Date Value ($ per share) December 1, 2017 0.063 January 1, 2018 0.117 February 1, 2018 1.25 March 1, 2018 1.25 |
Schedule of restricted stock issued for services | RSAs Number of Shares Remeasured Weighted Average Fair Value RSA Unvested at the beginning of the Period $ - RSA Granted During the Period 2,620,000 $ 0.11 RSA Canceled During the Period $ - RSA Vested During the Period 620,000 $ 0.07 RSA Unvested at the End of the Period 2,000,000 $ 0.12 |
Schedule of options outstanding | Number of Shares Weighted Average Exercise Price Intrinsic Value Weighted Average Remaining Life Remeasured Weighted Average Fair Value Outstanding at Beginning of Period $ - $ - - $ - Exercisable at the End of the Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Granted During the Period 1,422,000 $ 1.92 $ - 7.92 $ 0.107 Exercised During the Period $ - $ - - $ - Canceled during the Period(Forfeited) $ - $ - - $ - Canceled during the Period(Expired) $ - $ - - $ - Outstanding at the End of the Period 1,422,000 $ 1.92 $ - 7.92 $ 0.107 Options Vested During the Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Vested at end of Period 276,332 $ 0.82 $ - 5.90 $ 0.072 Shares Expected to vest 1,145,668 $ 2.19 $ - 8.40 $ 0.116 Vested and Expected to vest 1,422,000 $ 1.92 $ - 7.92 $ 0.107 |
Schedule of preferred notes convertible to common stock | Issuee Name Series A Convertible Preferred Shares JOJ Holdings, LLC (1) 141,116.50 JFS Investments, Inc. (2) 187,500.00 (1) Mr. Justin Schreiber is the control person of JOJ Holdings, LLC. (2) Mr. Joe Salvani is the control person of JFS Investments, Inc. |
Schedule of warrants outstanding | Quantity Issued Strike Price Average Remaining Contractual Life (years) Amount Exercised Founders 2,500,000 $ 2.50 4.79 $ – Founders 2,000,000 $ 0.25 2.79 – Private Placement 5,137,500 $ 0.25 2.85 – 9,637,500 $ – Weighted-average exercise price $ 0.83 |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |
Jan. 31, 2018 | Apr. 30, 2017 | |
Acccumulated deficit | $ (7,302,998) | $ (11,228,988) |
Computer software and office equipment [Member] | ||
Estimated lives of property and equipment | 1-5 years | |
Furniture and Fixtures [Member] | ||
Estimated lives of property and equipment | 5-10 years | |
Mining Facility [Member] | ||
Estimated lives of property and equipment | No depreciation is taken until the project is completed and placed into service |
3. Provision for Income Taxes (
3. Provision for Income Taxes (Details Narrative) | 9 Months Ended |
Jan. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforward | $ 6,264,744 |
Carryforward expiration date | Dec. 31, 2023 |
4. Available-for-Sale Securit22
4. Available-for-Sale Securities (Details) | 9 Months Ended |
Jan. 31, 2018USD ($) | |
Marketable securities - cost | $ 3,089,243 |
Gross unrealized gain (loss) | (555,957) |
Marketable securities - fair value | 2,533,286 |
Chimes - Equity Token [Member] | |
Marketable securities - cost | 200,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 200,000 |
Chimes - Utility Token [Member] | |
Marketable securities - cost | 50,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 50,000 |
Video Coin - Utility Token [Member] | |
Marketable securities - cost | 50,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 50,000 |
Lottery.com - Utility Token [Member] | |
Marketable securities - cost | 250,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 250,000 |
Academy - Utility Token [Member] | |
Marketable securities - cost | 250,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 250,000 |
Coral Health - Utility Token [Member] | |
Marketable securities - cost | 250,000 |
Gross unrealized gain (loss) | 0 |
Marketable securities - fair value | 250,000 |
Kinerjay Pay Common Stock [Member] | |
Marketable securities - cost | 1,800,000 |
Gross unrealized gain (loss) | (550,000) |
Marketable securities - fair value | 1,250,000 |
BTC Wallet [Member] | |
Marketable securities - cost | 26,928 |
Gross unrealized gain (loss) | (2,179) |
Marketable securities - fair value | 24,749 |
EOS Wallet [Member] | |
Marketable securities - cost | 20,323 |
Gross unrealized gain (loss) | (2,651) |
Marketable securities - fair value | 17,672 |
NEO Wallet [Member] | |
Marketable securities - cost | 101,523 |
Gross unrealized gain (loss) | (1,698) |
Marketable securities - fair value | 99,825 |
OMG Wallet [Member] | |
Marketable securities - cost | 20,870 |
Gross unrealized gain (loss) | (429) |
Marketable securities - fair value | 20,441 |
QTUM Wallet [Member] | |
Marketable securities - cost | 14,480 |
Gross unrealized gain (loss) | 1,858 |
Marketable securities - fair value | 16,338 |
REP Wallet [Member] | |
Marketable securities - cost | 55,119 |
Gross unrealized gain (loss) | (858) |
Marketable securities - fair value | $ 54,261 |
5. Property and Equipment (Deta
5. Property and Equipment (Details) - USD ($) | Jan. 31, 2018 | Apr. 30, 2017 |
Property and equipment cost | $ 108,800 | |
Accumulated depreciation | (125) | |
Property and equipment net | 108,675 | $ 0 |
Computers, software and office equipment [Member] | ||
Property and equipment cost | 7,527 | |
Accumulated depreciation | (125) | |
Property and equipment net | 7,402 | |
Mining Facility [Member] | ||
Property and equipment cost | 101,273 | |
Accumulated depreciation | 0 | |
Property and equipment net | $ 101,273 |
6. Liabilities Discharged in 24
6. Liabilities Discharged in Receivership (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2018 | Jan. 31, 2017 | |
Notes to Financial Statements | ||||
Gain on extinguishment of debt | $ 20,000 | $ 0 | $ 5,023,192 | $ 0 |
7. Deferred Revenue (Details Na
7. Deferred Revenue (Details Narrative) - USD ($) | Jan. 31, 2018 | Apr. 30, 2017 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Deferred revenue | $ 1,953,694 | $ 0 |
8. Due to Related Parties (Deta
8. Due to Related Parties (Details Narrative) - USD ($) | Jan. 31, 2018 | Apr. 30, 2017 |
Related Party Transactions [Abstract] | ||
Due to related parties | $ 27,289 | $ 3,981,423 |
9. Stockholders' Equity (Detail
9. Stockholders' Equity (Details - Dilutive securities) | 9 Months Ended |
Jan. 31, 2018shares | |
Preferred shares convertible to common stock [Member] | |
Antidilutive shares | 13,144,660 |
Warrants [Member] | |
Antidilutive shares | 7,637,500 |
Stock Options [Member] | |
Antidilutive shares | 234,247 |
9. Stockholders' Equity (Deta28
9. Stockholders' Equity (Details - Stock reconciliation) | 9 Months Ended |
Jan. 31, 2018shares | |
Equity [Abstract] | |
Beginning share balance | 737,406 |
Control Shares issued | 40,000,000 |
Shares issued in private placements | 12,946,700 |
Shares issued for services | 620,000 |
Shares retired | (5,000,000) |
Shares converted to preferred stock | (13,144,660) |
Ending share balance | 36,159,446 |
9. Stockholders' Equity (Deta29
9. Stockholders' Equity (Details - New issues) - USD ($) | 9 Months Ended | ||
Jan. 31, 2018 | Jan. 31, 2018 | Jan. 31, 2017 | |
Shares issued | 12,946,700 | ||
Funds received | $ 4,282,125 | $ 0 | |
Common Stock 1 [Member] | |||
Issue price | $ 0.05 | $ 0.05 | |
Shares issued | 4,000,000 | ||
Funds received | $ 200,000 | ||
Common Stock 2 [Member] | |||
Issue price | $ 0.10 | 0.10 | |
Shares issued | 6,175,000 | ||
Funds received | $ 617,500 | ||
Common Stock 3 [Member] | |||
Issue price | $ 1.25 | $ 1.25 | |
Shares issued | 2,771,700 | ||
Funds received | $ 3,464,625 |
9. Stockholders' Equity (Deta30
9. Stockholders' Equity (Details - Issuance for service) | 9 Months Ended |
Jan. 31, 2018$ / shares | |
Issuance 1 [Member] | |
Value date | Dec. 1, 2017 |
Value per share | $ 0.063 |
Issuance 2 [Member] | |
Value date | Jan. 1, 2018 |
Value per share | $ 0.117 |
Issuance 3 [Member] | |
Value date | Feb. 1, 2018 |
Value per share | $ 1.250 |
Issuance 4 [Member] | |
Value date | Mar. 1, 2018 |
Value per share | $ 1.250 |
9. Stockholders' Equity (Deta31
9. Stockholders' Equity (Details - Restricted stock) - Restricted Stock [Member] | 9 Months Ended |
Jan. 31, 2018$ / sharesshares | |
RSA Unvested, beginning of period | 0 |
RSA granted during period | 2,620,000 |
RSA cancelled during period | 0 |
RSA vested during period | 620,000 |
RSA Unvested, end of period | 2,000,000 |
Weighted average fair value unvested beginning of period | $ / shares | $ 0 |
Weighted average fair value grants | $ / shares | .11 |
Weighted average fair value vested | $ / shares | .07 |
Weighted average fair value unvested end of period | $ / shares | $ .12 |
9. Stockholders' Equity (Deta32
9. Stockholders' Equity (Details - Option activity) - Stock Options [Member] | 9 Months Ended |
Jan. 31, 2018USD ($)$ / sharesshares | |
Options number of shares, outstanding beginning of period | shares | 0 |
Options number of shares, exercisable | shares | 276,332 |
Options number of shares, granted | shares | 1,422,000 |
Options number of shares, exercised | shares | 0 |
Options number of shares, forfeited | shares | 0 |
Options number of shares, expired | shares | 0 |
Options number of shares, outstanding end of period | shares | 1,422,000 |
Options number of shares, vested | shares | 276,332 |
Options number of shares, expected to vest | shares | 1,145,668 |
Options number of shares, vested and expected to vest | shares | 1,422,000 |
Weighted average exercise price, outstanding beginning of period | $ .00 |
Weighted average exercise price, exercisable | .82 |
Weighted average exercise price, granted | 1.92 |
Weighted average exercise price, exercised | .00 |
Weighted average exercise price, forfeited | .00 |
Weighted average exercise price, expired | .00 |
Weighted average exercise price, outstanding end of period | 1.92 |
Weighted average exercise price, vested and expected to vest, beginning | 0.82 |
Weighted average exercise price, vested | .82 |
Weighted average exercise price, expected to vest | 2.19 |
Weighted average exercise price, vested and expected to vest, ending | $ 1.92 |
Intrinsic value, outstanding beginning of period | $ | $ 0 |
Intrinsic value, exercisable | $ | $ 0 |
Intrinsic value, grants | $ 0 |
Intrinsic value, exercised | 0 |
Intrinsic value, forfeited | 0 |
Intrinsic value, expired | $ 0 |
Intrinsic value, outstanding end of period | $ | $ 0 |
Intrinsic value, vested and expected to vest, beginning | $ | 0 |
Intrinsic value, vested | $ | 0 |
Intrinsic value, expected to vest | $ | 0 |
Intrinsic value, vested and expected to vest, ending | $ | $ 0 |
Weighted average remaining life. outstanding | 0 years |
Weighted average remaining life. exercisable | 5 years 10 months 24 days |
Weighted average remaining life. granted | 7 years 11 months 1 day |
Weighted average remaining life, exercised | 0 years |
Weighted average remaining life, forfeited | 0 years |
Weighted average remaining life, expired | 0 years |
Weighted average remaining life, outstanding end of period | 7 years 11 months 1 day |
Weighted average remaining life. vested and expected to vest, beginning | 5 years 10 months 24 days |
Weighted average remaining life. vested | 5 years 10 months 24 days |
Weighted average remaining life. expected to vest | 8 years 4 months 24 days |
Weighted average remaining life. vested and expected to vest, ending | 7 years 11 months 1 day |
Remeasured weighted average fair value, outstanding | $ .000 |
Remeasured weighted average fair value, exercisable | .072 |
Remeasured weighted average fair value, granted | .107 |
Remeasured weighted average fair value, exercised | .000 |
Remeasured weighted average fair value, forfeited | .000 |
Remeasured weighted average fair value, expired | .000 |
Remeasured weighted average fair value, outstanding end of period | 0.107 |
Remeasured weighted average fair value, vested and expected to vest, beginning | 0.072 |
Remeasured weighted average fair value, vested | .072 |
Remeasured weighted average fair value, expected to vest | .116 |
Remeasured weighted average fair value, vested and expected to vest, ending | $ 0.107 |
9. Stockholders' Equity (Deta33
9. Stockholders' Equity (Details - Convertible stock) | 9 Months Ended | |
Jan. 31, 2018shares | ||
JOJ Holdings, LLC [Member] | ||
Series A Convertible Preferred Shares | 141,116.50 | [1] |
JFS Investments, Inc. [Member] | ||
Series A Convertible Preferred Shares | 187,500 | [2] |
[1] | Mr. Justin Schreiber is the control person of JOJ Holdings, LLC. | |
[2] | Mr. Joe Salvani is the control person of JFS Investments, Inc. |
9. Stockholders' Equity (Deta34
9. Stockholders' Equity (Details - Warrants) - Warrants [Member] | 9 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Warrants outstanding | 9,637,500 |
Warrant strike price | $ / shares | $ 0.83 |
Warrants exercised | 0 |
Private Placement [Member] | |
Warrants outstanding | 5,137,500 |
Warrant strike price | $ / shares | $ 0.25 |
Warrant average remaining life | 2 years 10 months 6 days |
Warrants exercised | 0 |
Founders [Member] | |
Warrants outstanding | 2,500,000 |
Warrant strike price | $ / shares | $ 2.50 |
Warrant average remaining life | 4 years 9 months 14 days |
Warrants exercised | 0 |
Founders 2 [Member] | |
Warrants outstanding | 2,000,000 |
Warrant strike price | $ / shares | $ 0.25 |
Warrant average remaining life | 2 years 9 months 14 days |
Warrants exercised | 0 |