Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2023 | May 31, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | Everything Blockchain, Inc. | |
Entity Central Index Key | 0001730869 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Apr. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 9,923,304 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-56142 | |
Entity Incorporation State Country Code | FL | |
Entity Tax Identification Number | 82-1091922 | |
Entity Address Address Line 1 | 12574 Flagler Center Blvd | |
Entity Address Address Line 2 | Suite 101 | |
Entity Address City Or Town | Jacksonville | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 32258 | |
City Area Code | 904 | |
Local Phone Number | 454-2111 | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Current assets | ||
Cash | $ 6 | $ 824 |
Accounts receivable, net | 66 | 89 |
Inventory | 74 | 64 |
Current cryptocurrencies, net | 4 | 4 |
Prepaid expenses | 2,541 | 2,663 |
Other assets | 173 | 127 |
Total current assets | 2,864 | 3,771 |
Property, plant and equipment, net | 654 | 660 |
Goodwill | 16,504 | 16,504 |
Intangible assets, net | 4,439 | 4,270 |
Other assets | 463 | 463 |
Total assets | 24,924 | 25,668 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,497 | 1,151 |
Accounts payable related party | 32 | 13 |
Current portion of long-term debt | 479 | 474 |
Reserve for legal settlements | 154 | 154 |
Deferred revenue | 250 | 279 |
Total current liabilities | 2,412 | 2,071 |
Long-term liabilities | ||
Debt | 40 | 47 |
Total long-term liabilities | 40 | 47 |
Total liabilities | 2,452 | 2,118 |
Stockholders' equity | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,949,966 shares issued and 9,923,304 shares outstanding as of April 30, 2023 and January 31, 2023 | 1 | 1 |
Treasury stock | (1,691) | (1,691) |
Additional paid-in capital | 86,616 | 85,975 |
Receivable from stockholder | (100) | (200) |
Accumulated deficit | (62,354) | (60,535) |
Total stockholders' equity | 22,472 | 23,550 |
Total liabilities and stockholders' equity | 24,924 | 25,668 |
Series A Preferred Stock Member | ||
Stockholders' equity | ||
Preferred stock, value | 0 | 0 |
Series B Preferred Stock | ||
Stockholders' equity | ||
Preferred stock, value | 0 | 0 |
Series C Preferred Stock Member | ||
Stockholders' equity | ||
Preferred stock, value | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 30, 2023 | Jan. 31, 2023 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 9,949,966 | 9,949,966 |
Common stock, shares outstanding | 9,923,304 | 9,923,304 |
Series A Preferred Stock Member | ||
Preferred stock , par value | $ 0.0001 | $ 0.0001 |
Preferred stock , par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 200,000 | 200,000 |
Preferred stock, shares outstanding | 200,000 | 200,000 |
Series B Preferred Stock | ||
Preferred stock , par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 650,000 | 650,000 |
Preferred stock, shares outstanding | 400,000 | 400,000 |
Series C Preferred Stock Member | ||
Preferred stock , par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Consolidated Statements of Operations (unaudited) | ||
Revenue | $ 262 | $ 255 |
Cost of sales | 52 | 15 |
Gross profit | 210 | 240 |
Selling, general, and administrative | 1,230 | 1,093 |
Stock based compensation | 716 | 803 |
Depreciation and amortization | 59 | 50 |
Total operating expenses | 2,005 | 1,946 |
Loss from operations | (1,795) | (1,706) |
Other expense, net | (17) | (160) |
Loss before income taxes | (1,812) | (1,866) |
Income tax expense (benefit) | 7 | (412) |
Net loss | $ (1,819) | $ (1,454) |
Basic and diluted loss per share: | ||
Basic loss per share | $ (0.18) | $ (0.17) |
Diluted loss per share | $ (0.18) | $ (0.17) |
Weighted average shares outstanding - basic | 9,923,304 | 8,665,836 |
Weighted average shares outstanding - diluted | 9,923,304 | 8,665,836 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Receivable From Shareholder [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balance, shares at Jan. 31, 2022 | 600 | 8,604 | |||||
Balance, amount at Jan. 31, 2022 | $ 27,445 | $ 0 | $ 1 | $ 0 | $ (1,599) | $ 80,134 | $ (51,091) |
Issuance of Series C Preferred, shares | 250 | ||||||
Issuance of Series C Preferred, amount | 1,000 | $ 0 | $ 0 | 0 | 0 | 1,000 | 0 |
Warrant exercise, shares | 500 | ||||||
Warrant exercise, amount | 500 | 0 | $ 0 | 0 | 0 | 500 | 0 |
Stock based compensation | 685 | 0 | 0 | 0 | 0 | 685 | 0 |
Net loss | (1,454) | 0 | 0 | 0 | 0 | 0 | (1,454) |
Balance, amount at Apr. 30, 2022 | 28,176 | $ 0 | $ 1 | 0 | (1,599) | 82,319 | (52,545) |
Balance, shares at Apr 30, 2022 at Apr. 30, 2022 | 850 | 9,104 | |||||
Balance, shares at Jan. 31, 2023 | 1,600 | 9,923 | |||||
Balance, amount at Jan. 31, 2023 | 23,550 | $ 0 | $ 1 | (200) | (1,691) | 85,975 | (60,535) |
Warrant exercise, amount | 100 | 0 | 0 | 100 | 0 | 0 | 0 |
Stock based compensation | 641 | 0 | 0 | 0 | 0 | 641 | 0 |
Net loss | (1,819) | 0 | 0 | 0 | 0 | 0 | (1,819) |
Balance, amount at Apr. 30, 2023 | $ 22,472 | $ 0 | $ 1 | $ (100) | $ (1,691) | $ 86,616 | $ (62,354) |
Balance, shares at Apr 30, 2022 at Apr. 30, 2023 | 1,600 | 9,923 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Cash flows from operating activities: | ||
Net Loss | $ (1,819) | $ (1,454) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 716 | 803 |
Deferred income tax benefit | 0 | (415) |
Realized net gain on investment in cryptocurrency | 0 | (26) |
Fair value adjustment to cryptocurrency | 0 | 147 |
Amortization and depreciation | 59 | 50 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 23 | (48) |
Inventory | (10) | (23) |
Prepaid expenses | 47 | 51 |
Other assets | (46) | (17) |
Accounts payable to related party | 19 | (6) |
Accounts payable and accrued expenses | 352 | 250 |
Deferred revenue | (29) | 152 |
Net cash used in operating activities | (688) | (536) |
Cash flows from investing activities: | ||
Capital expenditures | (222) | (319) |
Net cash used in investing activities | (222) | (319) |
Cash flows from financing activities: | ||
Payment of debt | (8) | (8) |
Proceeds from issuance of Series C Preferred Stock | 0 | 1,000 |
Proceeds from exercise of warrants | 100 | 500 |
Net cash provided by financing activities | 92 | 1,492 |
Net Change in Cash | (818) | 637 |
Cash, beginning of period | 824 | 1,062 |
Cash, end of period | 6 | 1,699 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash paid for interest | 17 | 13 |
Cash paid for income taxes | $ 0 | $ 3 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Apr. 30, 2023 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 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 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 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 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 Securities and Exchange Commission (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 months ended April 30, 2023, are not necessarily indicative of the results for the year ending January 31, 2024, or for any future period. As of April 30, 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 Services revenue Subscription revenue Product revenue 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: · 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. 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. 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 April 30, 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 $4,000 in excess of amounts protected by insurance. 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. The Company had no cash equivalents as of April 30, 2023 and January 31, 2023. Basic and Diluted Net Earnings (Loss) Per Share The Company follows ASC Topic 260 – Earnings Per Share FASB 2015-06, Earnings Per Share 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: - 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 fair value of certain investments). 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. |
Going Concern
Going Concern | 3 Months Ended |
Apr. 30, 2023 | |
Going Concern | |
Going Concern | 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 months ended April 30, 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 funding or generate the revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Apr. 30, 2023 | |
Intangible Assets | |
Intangible Assets | Note 4. Intangible Assets Intangible assets consist of the following: As of April 30, 2023 Gross Amount Accumulated Amortization Net Carrying Amount (in thousands) IP/Technology $ 4,452 $ 21 $ 4,431 Non-compete agreements 82 74 8 Total Intangibles $ 4,534 $ 95 $ 4,439 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. |
Cryptocurrency Assets
Cryptocurrency Assets | 3 Months Ended |
Apr. 30, 2023 | |
Cryptocurrency Assets | |
Cryptocurrency Assets | 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, which we value at fair market value in accordance with Statement No. 157. Cryptocurrencies that do not trade on a market or have limited liquidity are classified as non-current intangible assets and are recorded on a cost basis. The following chart shows our cryptocurrency assets (in thousands): Current Assets As of April 30, 2023 January 31, 2023 Coin Symbol FMV BTC $ 4 $ 4 $ 4 $ 4 During the three months ended April 30, 2022, the Company recorded in other income (expense), net fair value expense adjustments of $0.1 million. |
Property Plant and Equipment
Property Plant and Equipment | 3 Months Ended |
Apr. 30, 2023 | |
Property Plant and Equipment | |
Property, Plant and Equipment | Note 6. Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): As of April 30, 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 69 60 857 835 Less: Accumulated depreciation (203 ) (175 ) Total property, plant and equipment, net $ 654 $ 660 |
Debt
Debt | 3 Months Ended |
Apr. 30, 2023 | |
Debt | |
Debt | Note 7. Debt As of April 30, 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. 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. We are working on refinancing both loans. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 8. Commitments and Contingencies The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments ASC 450 – Contingencies |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Apr. 30, 2023 | |
Legal Proceedings | 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. |
Related Parties and Related Par
Related Parties and Related Party Transactions | 3 Months Ended |
Apr. 30, 2023 | |
Related Parties and Related Party Transactions | |
Related Parties and Related Party Transactions | Note 10. Related Parties and Related Party Transactions Related party balance sheet items As of April 30, 2023 As of January 31, 2023 Prepaid expenses $ 2,000 $ 2,000 Accounts payable and accrued expenses 67 28 Loans payable 32 13 Related party income statement items For the Three Months Ended April 30, 2023 2022 Consulting expenses $ 66 $ 30 Payroll expenses 119 195 Stock based compensation 650 575 During the quarter ended July 31, 2021, the Company issued 50,000 shares of Series A Preferred Stock to Epic Industry Corp (“Epic”), a wholly owned company of Michael Hawkins. 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. |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Apr. 30, 2023 | |
Stockholders Equity | |
Stockholders' Equity | Note 11. Stockholders’ Equity Common Stock As of April 30, 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 April 30, 2023 and January 31, 2023, the Company had 9,923,304 common shares outstanding. During the three months ended April 30, 2023, stock based compensation expense related to stock grants was $75,000 from a grant to an employee. During the three months ended April 30, 2022, stock based compensation expense related to stock grants was $117,000, which consisted of grants to employee of $75,000 and consultants of $42,000. Preferred Stock Series A Preferred Stock As of April 30, 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. 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. 150,000 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. Effective June 16, 2023, the remaining 50,000 shares of Series A Preferred Stock, if earned, will be eligible to be converted into common stock at the option of the holder of the Series A Preferred Stock. Series B Preferred Stock As of April 30, 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 April 30, 2023 and January 31, 2023, the Company had 2 million Series C Preferred shares, par value $0.0001, authorized, 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. Effective July 5, 2023, the one million shares of Series C Preferred Stock will be eligible to be converted into common stock at the option of the holder of the Series C Preferred Stock. |
Warrants
Warrants | 3 Months Ended |
Apr. 30, 2023 | |
Warrants | |
Warrants | Note 12. Warrants A summary of warrant activity for three months ended April 30, 2023 is as follows: Weighted Average Conversion Shares Price Warrants outstanding at January 31, 2023 3,356,000 $ 3.60 Warrants outstanding at April 30, 2023 3,356,000 $ 3.60 During the three months ended April 30, 2023, stock based compensation expense related to warrant grants was $641,000, which consisted of grants to employees of $338,000, directors of $237,000, and consultants of $66,000. During the three months ended April 30, 2022, stock based compensation expense related to warrant grants was $685,000, which consisted of grants to employees of $407,000, directors of $209,000, and consultants of $66,000. |
Treasury Stock
Treasury Stock | 3 Months Ended |
Apr. 30, 2023 | |
Treasury Stock | |
Treasury Stock | 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2023 | |
Income Taxes | |
Income Taxes | Note 14. Income Taxes Our consolidated effective income tax rates for the three months ended April 30, 2023 and 2022 were 0% and 22%, respectively. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 3 Months Ended |
Apr. 30, 2023 | |
Net Income (Loss) Per Common Share | |
Net Income (Loss) Per Common Share | Note 15. Net Loss Per Common Share For the Three Months Ended April 30, 2023 2022 (in thousands, except per share data) Numerator: Net loss $ (1,819 ) $ (1,454 ) Denominator: Weighted average common shares outstanding 9,923 8,666 Effect of dilutive securities: Warrants - - Preferred stock - - Diluted shares outstanding 9,923 8,666 Basic: Net loss per common share $ (0.18 ) $ (0.17 ) Diluted: Net loss per common share $ (0.18 ) $ (0.17 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2023 | |
Subsequent Events | |
Subsequent Events | Note 16. Subsequent Events 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., a lead generated by Epic, distributed to us Pulse and PulseX tokens of 12.3 billion each. On June 13, 2023, the Company sold 200,000 shares of Series C Preferred Stock for $0.3 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 30, 2023 | |
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 Securities and Exchange Commission (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 months ended April 30, 2023, are not necessarily indicative of the results for the year ending January 31, 2024, or for any future period. As of April 30, 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 | Services revenue Subscription revenue Product revenue 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: · 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. |
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. 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 April 30, 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 $4,000 in excess of amounts protected by insurance. |
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. The Company had no cash equivalents as of April 30, 2023 and January 31, 2023. |
Basic and Diluted Net Earnings (Loss) Per Share | The Company follows ASC Topic 260 – Earnings Per Share FASB 2015-06, Earnings Per Share |
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: - 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 fair value of certain investments). 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. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Intangible Assets | |
Schedule of Intangible Assets | As of April 30, 2023 Gross Amount Accumulated Amortization Net Carrying Amount (in thousands) IP/Technology $ 4,452 $ 21 $ 4,431 Non-compete agreements 82 74 8 Total Intangibles $ 4,534 $ 95 $ 4,439 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 |
Cryptocurrency Assets (Tables)
Cryptocurrency Assets (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Cryptocurrency Assets | |
Schedule of cryptocurrency assets | Current Assets As of April 30, 2023 January 31, 2023 Coin Symbol FMV BTC $ 4 $ 4 $ 4 $ 4 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Property Plant and Equipment | |
Schedule Of Property, Plant And Equipment | As of April 30, 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 69 60 857 835 Less: Accumulated depreciation (203 ) (175 ) Total property, plant and equipment, net $ 654 $ 660 |
Related Parties and Related P_2
Related Parties and Related Party Transactions (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Related Parties and Related Party Transactions | |
Schedule Of Related Party Balance Sheet And Income Statement Items | Related party balance sheet items As of April 30, 2023 As of January 31, 2023 Prepaid expenses $ 2,000 $ 2,000 Accounts payable and accrued expenses 67 28 Loans payable 32 13 Related party income statement items For the Three Months Ended April 30, 2023 2022 Consulting expenses $ 66 $ 30 Payroll expenses 119 195 Stock based compensation 650 575 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Warrants | |
Schedule of warrant activity | Weighted Average Conversion Shares Price Warrants outstanding at January 31, 2023 3,356,000 $ 3.60 Warrants outstanding at April 30, 2023 3,356,000 $ 3.60 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Net Income (Loss) Per Common Share | |
Schedule of Net Income (Loss) Per Common Share | For the Three Months Ended April 30, 2023 2022 (in thousands, except per share data) Numerator: Net loss $ (1,819 ) $ (1,454 ) Denominator: Weighted average common shares outstanding 9,923 8,666 Effect of dilutive securities: Warrants - - Preferred stock - - Diluted shares outstanding 9,923 8,666 Basic: Net loss per common share $ (0.18 ) $ (0.17 ) Diluted: Net loss per common share $ (0.18 ) $ (0.17 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Apr. 30, 2023 | Jan. 31, 2023 |
Summary of Significant Accounting Policies | ||
Deposits | $ 1,000,000 | |
Excess Of Amounts Protected By Insurance | 4,000 | |
Federally Insured Limit | 250,000 | |
Fcid Limit, Excess | $ 0 | $ 400,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Apr. 30, 2023 | Jan. 31, 2023 |
Gross Amount | $ 4,534,000 | $ 4,333,000 |
Accumulated Amortization | 95 | 63 |
Net Carrying Amount | 4,439,000 | 4,270,000 |
IP Technology [Member] | ||
Gross Amount | 4,452,000 | 4,251,000 |
Accumulated Amortization | 21 | 0 |
Net Carrying Amount | 4,431,000 | 4,251,000 |
Non-compete Agreements [Member] | ||
Gross Amount | 82,000 | 82,000 |
Accumulated Amortization | 74,000 | 63,000 |
Net Carrying Amount | $ 8,000 | $ 19,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 3 Months Ended |
Apr. 30, 2023 | |
IP Technology [Member] | |
Finite-Lived Intangible Assets, Amortization Method | Technology is amortized over five years |
Non-compete Agreements [Member] | |
Finite-Lived Intangible Assets, Amortization Method | the non-compete agreements are amortized over two years |
Cryptocurrency Assets (Details)
Cryptocurrency Assets (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Current Assets Fmv | $ 4 | $ 4 |
BTC [Member] | ||
Current Assets Fmv | $ 4 | $ 4 |
Cryptocurrency Assets (Details
Cryptocurrency Assets (Details Narrative) $ in Millions | 3 Months Ended |
Apr. 30, 2023 USD ($) | |
Cryptocurrency Assets | |
Other Income Fair Market Value Adjustments | $ 0.1 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Property, Plant And Equipment, Gross | $ 857 | $ 835 |
Less: Accumulated Depreciation | (203) | (175) |
Total Property, Plant And Equipment, Net | 654 | 660 |
Land [Member] | ||
Property, Plant And Equipment, Gross | 36 | 36 |
Furniture, fixtures, and office equipment [Member] | ||
Property, Plant And Equipment, Gross | 77 | 75 |
Computer Equipment and Computer Software [Member] | ||
Property, Plant And Equipment, Gross | 126 | 114 |
Vehicles [Member] | ||
Property, Plant And Equipment, Gross | 69 | 60 |
Building and Building Improvements [Member] | ||
Property, Plant And Equipment, Gross | 339 | 339 |
Machinery and Equipment [Member] | ||
Property, Plant And Equipment, Gross | $ 210 | $ 211 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Jan. 31, 2023 | |
Debt | ||
Outstanding Debt | $ 0.5 | |
Weighted Average Interest Rate | 6.30% | |
Debt Maturity Range | from 2023 through 2026 |
Related Parties and Related P_3
Related Parties and Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Jan. 31, 2023 | |
Prepaid Expenses | $ 2,541 | $ 2,663 | |
Accounts Payable And Accrued Expenses | 1,497 | 1,151 | |
Stock Based Compensation | 641 | $ 685 | |
FMV [Member] | |||
Prepaid Expenses | 2,000 | 2,000 | |
Accounts Payable And Accrued Expenses | 67 | 28 | |
Loans Payable | 32 | $ 13 | |
Consulting Expenses | 66 | 30 | |
Payroll expenses | 119 | 195 | |
Stock Based Compensation | $ 650 | $ 575 |
Related Parties and Related P_4
Related Parties and Related Party Transactions (Details Narrative) | 3 Months Ended |
Jul. 31, 2021 shares | |
Epic [Member] | |
Preferred Stock Series A, Shares Issued | 50,000 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 05, 2023 | Mar. 17, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Jul. 31, 2021 | Jan. 31, 2022 | Jan. 31, 2023 | Apr. 17, 2022 | |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 | ||||||
Common Stock, Shares Issued | 9,949,966 | 9,949,966 | ||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | ||||||
Common Stock, Shares Outstanding | 9,923,304 | 9,923,304 | ||||||
Stock based compensation expense related to stock grants | $ 716,000 | $ 803,000 | ||||||
Employee [Member] | ||||||||
Stock based compensation expense related to stock grants | $ 75,000 | 75,000 | ||||||
Consultant [Member] | ||||||||
Stock based compensation expense related to stock grants | 42,000 | |||||||
Epic [Member] | ||||||||
Preferred Stock Series A, Shares Issued | 50,000 | |||||||
Equity Option [Member] | ||||||||
Stock based compensation expense related to stock grants | $ 117,000 | |||||||
Series B Preferred Stock | ||||||||
Preferred Stock, Shares Authorized | 1,500,000 | 1,500,000 | ||||||
Preferred Stock, Description | 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 | |||||||
Series A Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | ||||||
Series A Preferred Stock, Shares Issued | 650,000 | 650,000 | ||||||
Series B Preferred Stock, Shares Authorized | 1,500,000 | |||||||
Series B Preferred Stock, Shares Outstanding | 400,000 | 400,000 | ||||||
Series C Preferred Stock Member | ||||||||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 | ||||||
Preferred Stock, Par Value | $ 0.0001 | |||||||
Preferred Stock Sold, Value | $ 1,500,000 | |||||||
Preferred Stock, Description | 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 | |||||||
Series A Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | ||||||
Series A Preferred Stock, Shares Issued | 1,000,000 | 1,000,000 | ||||||
Series B Preferred Stock, Shares Outstanding | 1,000,000 | 1,000,000 | ||||||
Series A Preferred Stock Member | ||||||||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | ||||||
Preferred Stock, Description | 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 | |||||||
Series A Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | ||||||
Series A Preferred Stock, Shares Issued | 200,000 | 200,000 | ||||||
Series A Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | ||||||
Series A Preferred Stock, Shares Outstanding | 200,000 | 200,000 | 150,000 | |||||
Series A Preferred Stock Member | Epic [Member] | ||||||||
Preferred Stock Series A, Shares Issued | 50,000 | |||||||
Common Shares Purchased | 50,000 |
Warrants (Details)
Warrants (Details) | 3 Months Ended |
Apr. 30, 2023 $ / shares shares | |
Warrants | |
Warrants Outstanding Shares, Beginning | shares | 3,356,000 |
Warrants Outstanding Shares, Ending | shares | 3,356,000 |
Warrants Outstanding Weighted Average Conversion Price, Beginning | $ / shares | $ 3.60 |
Warrants Outstanding Weighted Average Conversion Price, Ending | $ / shares | $ 3.60 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Stock Based Compensation | $ 641,000 | $ 685,000 |
Employee Stock Warrant Grant Member | ||
Stock Based Compensation | 338,000 | 407,000 |
Director Member | ||
Stock Based Compensation | 237,000 | 209,000 |
Consulatant Member | ||
Stock Based Compensation | 66,000 | 66,000 |
Warrants Member | ||
Stock Based Compensation | $ 641,000 | $ 685,000 |
Treasury Stock (Details Narrati
Treasury Stock (Details Narrative) | Apr. 30, 2023 shares |
Treasury Stock | |
Treasury stock Series B Preferred stock shares | 250,000 |
Treasury Stock common shares | 26,662 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Income Taxes | ||
Effective income tax rate | 0% | 22% |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Net Income (Loss) Per Common Share | ||
Net Loss | $ (1,819) | $ (1,454) |
Weighted Average Common Shares Outstanding | 9,923 | 8,666 |
Warrants | 0 | 0 |
Preferred Stock | 0 | 0 |
Diluted shares outstanding | 9,923 | 8,666 |
Basic: Net loss per common share | $ (0.18) | $ (0.17) |
Diluted: Net loss per common share | $ (0.18) | $ (0.17) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 13, 2023 | May 30, 2023 | Jan. 31, 2022 | |
Subsequent Event Member | |||
Sold Series C Preferred stock | 200,000 | ||
Value of sale Series C Preferred stock | $ 0.3 | ||
Pulse and PulseX [Member] | |||
Invested amount | $ 0.1 | ||
Distributed amount | $ 12,300 | ||
PulseX [Member] | |||
Token amount received | 3,000 | ||
Pulse [Member] | |||
Token amount received | $ 2,300 |