Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2023 | Nov. 30, 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 | Oct. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 16,532,929 | |
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 | Oct. 31, 2023 | Jan. 31, 2023 |
Current assets | ||
Cash | $ 13 | $ 657 |
Current cryptocurrencies | 9 | 4 |
Prepaid expenses | 333 | 2,601 |
Other assets | 143 | 127 |
Assets of discontinued operations | 0 | 382 |
Total current assets | 498 | 3,771 |
Property, plant and equipment, net | 3 | 5 |
Goodwill | 16,504 | 16,504 |
Intangible assets, net | 4,855 | 4,270 |
Other assets | 221 | 463 |
Assets of discontinued operations | 0 | 655 |
Total assets | 22,081 | 25,668 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,634 | 1,072 |
Accounts payable related party | 0 | 13 |
Current portion of long-term debt | 68 | 0 |
Reserve for legal settlements | 154 | 154 |
Deferred revenue | 250 | 250 |
Liabilities of discontinued operations | 0 | 582 |
Total current liabilities | 2,106 | 2,071 |
Long-term liabilities | ||
Debt | 889 | 0 |
Liabilities of discontinued operations | 0 | 47 |
Total long-term liabilities | 889 | 47 |
Total liabilities | 2,995 | 2,118 |
Stockholders' equity | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 16,673,393 shares issued and 16,482,929 shares outstanding as of October 31, 2023; 9,949,966 shares issued and 9,923,304 shares outstanding as of January 31, 2023 | 1 | 1 |
Treasury stock | (435) | (1,691) |
Additional paid-in capital | 86,673 | 85,975 |
Receivable from stockholder | 0 | (200) |
Accumulated deficit | (67,153) | (60,535) |
Total stockholders' equity | 19,086 | 23,550 |
Total liabilities and stockholders' equity | 22,081 | 25,668 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, Value | 0 | 0 |
Series B Preferred Stock [Member] | ||
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 | Oct. 31, 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 | 16,673,393 | 9,949,966 |
Common stock, shares outstanding | 16,482,929 | 9,923,304 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 150,000 | 200,000 |
Preferred stock, shares outstanding | 150,000 | 200,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 0 | 1,500,000 |
Preferred stock, shares issued | 0 | 650,000 |
Preferred stock, shares outstanding | 0 | 400,000 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 2,000,000 |
Preferred stock, shares issued | 1,412,632 | 1,000,000 |
Preferred stock, shares outstanding | 1,352,632 | 1,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Consolidated Statements of Operations (unaudited) | ||||
Revenue | $ 61 | $ 63 | $ 188 | $ 240 |
Cost of sales | 0 | 0 | 0 | 0 |
Gross profit | 61 | 63 | 188 | 240 |
Selling, general, and administrative | 667 | 643 | 2,285 | 2,228 |
Stock based compensation | 651 | 716 | 2,017 | 2,197 |
Depreciation and amortization | 21 | 13 | 82 | 60 |
Total operating expenses | 1,339 | 1,372 | 4,384 | 4,485 |
Loss from operations | (1,278) | (1,309) | (4,196) | (4,245) |
Other expense, net | (410) | (246) | (1,725) | (2,454) |
Loss from continuing operations before income taxes | (1,688) | (1,555) | (5,921) | (6,699) |
Income tax expense (benefit) | 0 | (378) | 7 | (1,532) |
Loss from continuing operations | (1,688) | (1,177) | (5,928) | (5,167) |
Loss from discontinued operations, net of tax | (20) | (87) | (690) | (219) |
Net loss | $ (1,708) | $ (1,264) | $ (6,618) | $ (5,386) |
Basic and diluted loss per share: | ||||
Continuing operations | $ (0.12) | $ (0.12) | $ (0.52) | $ (0.56) |
Discontinued operations | 0 | (0.01) | (0.06) | (0.02) |
Basic and diluted loss per share | $ (0.12) | $ (0.13) | $ (0.58) | $ (0.58) |
Weighted average shares outstanding - basic and diluted | 14,558,009 | 9,676,492 | 11,485,182 | 9,258,102 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity (unaudited) - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Receivable From Shareholder [Member] | Treasury Stock [Member] | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
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 |
Conversion of Series C Preferred into common stock, shares | (250) | 561 | |||||
Conversion of Series C Preferred into common stock, amount | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 |
Warrant exercise, shares | 785 | ||||||
Warrant exercise, amount | 535 | 0 | $ 0 | (250) | 0 | 785 | 0 |
Sale of asset, shares | 27 | ||||||
Sale of asset, amount | (92) | 0 | $ 0 | 0 | (92) | 0 | 0 |
Stock based compensation | 1,915 | 0 | 0 | 0 | 0 | 1,915 | 0 |
Net loss | (5,386) | $ 0 | $ 0 | 0 | 0 | 0 | (5,386) |
Balance, shares at Oct. 31, 2022 | 600 | 9,923 | |||||
Balance, amount at Oct. 31, 2022 | 25,417 | $ 0 | $ 1 | (250) | (1,691) | 83,834 | (56,477) |
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) |
Issuance of Series C Preferred, shares | 413 | ||||||
Issuance of Series C Preferred, amount | 340 | $ 0 | 0 | 0 | 0 | 340 | 0 |
Stock based compensation | 1,792 | 0 | 0 | 0 | 0 | 1,792 | 0 |
Net loss | (6,618) | $ 0 | $ 0 | 0 | 0 | 0 | (6,618) |
Conversion of Series A Preferred into common stock, shares | (50) | 2,500 | |||||
Conversion of Series A Preferred into common stock, amount | 0 | ||||||
Conversion of Series B Preferred into common stock, shares | (400) | 4,000 | |||||
Conversion of Series B Preferred into common stock, amount | 0 | ||||||
Cancellation of treasury stock | 0 | $ 0 | $ 0 | 0 | 1,599 | (1,599) | 0 |
Cancellation of shares to settle disputed receivable, shares | (49) | ||||||
Cancellation of shares to settle disputed receivable, amount | (127) | $ 0 | $ 0 | 0 | (127) | 0 | 0 |
Sale of Mercury, shares | (60,000) | (115) | |||||
Sale of Mercury, amount | (216) | $ 0 | $ 0 | 0 | (216) | 0 | 0 |
Stock issued in exchange for accounts payable, shares | 224 | ||||||
Stock issued in exchange for accounts payable, amount | 165 | 0 | $ 0 | 0 | 0 | 165 | 0 |
Warrant exercise | 200 | $ 0 | $ 0 | 200 | 0 | 0 | 0 |
Balance, shares at Oct. 31, 2023 | 1,503 | 16,483 | |||||
Balance, amount at Oct. 31, 2023 | $ 19,086 | $ 0 | $ 1 | $ 0 | $ (435) | $ 86,673 | $ (67,153) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash flows from operating activities: | ||
Net Loss | $ (6,618) | $ (5,386) |
cash used in operating activities: | ||
Loss from discontinued operations | 690 | 219 |
Loss from sale of subsidiary | 170 | 0 |
Stock based compensation | 2,017 | 2,197 |
Deferred income tax benefit | 0 | (1,535) |
Net loss on exchanges | 0 | 4 |
Realized net loss on investment in cryptocurrency | 77 | 186 |
Fair value adjustment to cryptocurrency | 1,448 | 2,206 |
Amortization and depreciation | 82 | 60 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (199) | (101) |
Other assets | 99 | (69) |
Accounts payable to related party | (13) | (30) |
Accounts payable and accrued expenses | 830 | (40) |
Deferred revenue | 0 | 150 |
Cash used in operating activities of continuing operations | (1,417) | (2,139) |
Cash provided by (used in) operating activities of discontinued operations | (768) | 616 |
Net cash used in operating activities | (2,185) | (1,523) |
Cash flows from investing activities: | ||
Proceeds from cryptocurrencies, net | 961 | 755 |
Capital expenditures | (665) | (861) |
Cash provided by (used in) investing activities of continuing operations | 296 | (106) |
Cash provided by (used in) investing activities of discontinued operations | 401 | (27) |
Net cash provided by (used in) investing activities | 697 | (133) |
Cash flows from financing activities: | ||
Proceeds from debt - related party | 944 | 0 |
Payment of debt | (467) | (24) |
Proceeds from issuance of Series C Preferred Stock | 0 | 1,000 |
Proceeds from exercise of warrants | 200 | 500 |
Net cash provided by financing activities | 677 | 1,476 |
Net Change in Cash | (811) | (180) |
Cash, beginning of period - continuing operations | 657 | 810 |
Cash, beginning of period - discontinued operations | 167 | 252 |
Cash, end of period | 13 | 882 |
Cash from discontinued operations, end of period | 0 | 815 |
Cash from continuing operations, end of period | 13 | 67 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash paid for interest | 24 | 0 |
Cash paid for income taxes | 0 | 3 |
Non-cash Investing and Financing Activities: | ||
Acquisition of cryptocurrency | 2,242 | 0 |
Issuance of Series C Preferred for cryptocurrency | 250 | 0 |
Issuance of Series C Preferred | 90 | 0 |
Settlement of disputed receivable for common stock | 127 | 0 |
Retirement of treasury stock | 1,599 | 0 |
Sale of subsidiary | 217 | 0 |
Issuance of common stock for services | 166 | 0 |
Conversion of accounts payable to related party to common stock | 0 | 35 |
Sale of asset for common stock | 0 | 92 |
Exercise of warrant for receivable | $ 0 | $ 250 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Oct. 31, 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 Securities and Exchange Commission (the “SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation. Description of Business The Company is primarily engaged in the business of consulting and developing data management, blockchain and cybersecurity related solutions. Subsidiaries of the Company The subsidiaries of the Company are Render Payment Corp., DataStone, Inc. (formerly 832 Energy Technology Consultants, LLC), Mercury, Inc. (“Mercury”), Vengar Technologies, Inc. (formerly Vengar Technologies LLC), Everything Blockchain Technology Corporation, and EBI International, Inc. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 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 SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended January 31, 2023, and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on May 1, 2023 (the “2023 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period. The unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the three and nine months ended October 31, 2023, are not necessarily indicative of the results for the year ending January 31, 2024, or for any future period. As of October 31, 2023, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Annual Report. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates and judgments relate to revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation of long-lived assets and finite-lived intangible assets; recoverability of goodwill; acquisition method of accounting; contingencies; and income taxes. On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Revenue Recognition Policies 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 October 31, 2023 and January 31, 2023, respectively. Our cryptocurrency balances are maintained in accounts held by institutions located in and outside the United States. The Company maintains amounts on deposit that often exceed coverage from third party insured limit of up to $1,000,000. The risk is managed by maintaining multiple accounts with various accounts held in a cold storage wallet. The Company had $0 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 October 31, 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 | 9 Months Ended |
Oct. 31, 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 and nine months ended October 31, 2023 and 2022 have been prepared to assume that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has had historically negative cash flow and net losses. Though the year ended January 31, 2022 resulted in positive cash flow and net income, there are no assurances the Company will generate a profit or obtain positive cash flow in the future. The Company has sustained its solvency through the support of its shareholder and chairman, Michael Hawkins, or companies controlled by Michael Hawkins, which raise substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time to the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the funding or generate the revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Oct. 31, 2023 | |
Discontinued Operations | |
Discontinued Operations | Note 4. Discontinued Operations On October 31, 2023, the Board of Directors approved, and the Company completed, the sale of Mercury to Chris Carter, founder and CEO of Mercury. The sales price consisted of 115,000 shares of Company common stock and 60,000 shares of Company Series C Preferred Stock, owned by Chris Carter, for a total sales price of $216,583. The sales price was primarily based on estimated net assets of Mercury. In the consolidated statements of cash flows, the cash flows of discontinued operations were separately classified or aggregated under operating and investing activities. The remaining notes to the consolidated financial statements were updated to reflect the impact of these discontinued operations. All discussions and amounts in the consolidated financial statements and related notes for all periods presented relate to continuing operations, unless otherwise noted. The following table summarizes the components of assets and liabilities of discontinued operations (in thousands). As of January 31, 2023 Current assets Cash $ 167 Accounts receivable, net 89 Inventory 64 Prepaid expenses 62 Total current assets 382 Property, plant and equipment, net 655 Total assets $ 1,037 Current liabilities Accounts payable and accrued expenses $ 79 Current portion of long-term debt 474 Deferred revenue 29 Total current liabilities $ 582 Long-term liabilities Debt 47 Total long-term liabilities $ 47 Total liabilities $ 629 The following table summarizes the results of discontinued operations (in thousands). For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 Revenue $ 285 $ 1,759 $ 890 $ 2,220 Cost of sales 79 1,475 210 1,546 Gross profit 206 284 680 674 Selling, general, and administrative 345 352 1,395 839 Depreciation and amortization 24 27 81 80 Total operating expenses 369 379 1,476 919 Loss from operations (163 ) (95 ) (796 ) (245 ) Other income (expense), net 143 (18 ) 106 (41 ) Loss before income taxes (20 ) (113 ) (690 ) (286 ) Income tax benefit - (26 ) - (67 ) Net loss $ (20 ) $ (87 ) $ (690 ) $ (219 ) |
Intangible Assets
Intangible Assets | 9 Months Ended |
Oct. 31, 2023 | |
Intangible Assets | |
Intangible Assets | Note 5. Intangible Assets Intangible assets consist of the following: As of October 31, 2023 Gross Amount Accumulated Amortization Net Carrying Amount (in thousands) IP/Technology $ 4,935 $ 80 $ 4,855 Non-compete agreements 82 82 - Total Intangibles $ 5,017 $ 162 $ 4,855 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 | 9 Months Ended |
Oct. 31, 2023 | |
Cryptocurrency Assets | |
Cryptocurrency Assets | Note 6. Cryptocurrency Assets The Company transacts business with cryptocurrency assets. The Company records cryptocurrency assets as an intangible asset with infinite life. We classify cryptocurrency assets that have a market value and substantial liquidity as current intangible assets. The following chart shows our cryptocurrency assets (in thousands): Current Assets As of Coin Symbol October 31, 2023 January 31, 2023 BTC $ 9 $ 4 $ 9 $ 4 In May 2023, PulseChain (“Pulse”) and PulseX were launched. Pulse is a layer 1 blockchain that is a fork of Ethereum. PulseX is a fork of the Uniswap digital exchange platform (“DEX”) and is the native DEX of the Pulse ecosystem. During the year ended January 31, 2022, we invested $0.1 million in each of Pulse and PulseX. In May 2023, we received 2.3 billion Pulse tokens and 3.0 billion PulseX tokens. Also in May 2023, Overwatch Partners, Inc. (“Overwatch”), an entity controlled by Michael Hawkins, distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic Industry Corp (“Epic”), a wholly owned company of Michael Hawkins, 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million. On September 28, 2023, Robert Adams, a board director, purchased 300,000 shares of Series C preferred stock for 11.0 billion PulseX tokens, which equaled $104,000 at date of transfer of the tokens. For the three and nine months ended October 31, 2023, the Company recorded in other income (expense), net fair market value expense adjustments of $0.1 million and $1.4 million. For the nine months ended October 31, 2022, the Company recorded in other expense, net fair market value expense adjustments of $2.2 million. |
Property Plant and Equipment
Property Plant and Equipment | 9 Months Ended |
Oct. 31, 2023 | |
Property Plant and Equipment | |
Property, Plant and Equipment | Note 7. Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): As of October 31, 2023 January 31, 2023 Computer equipment and computer software $ 19 $ 20 Less: Accumulated depreciation (16 ) (15 ) Total property, plant and equipment, net $ 3 $ 5 |
Debt
Debt | 9 Months Ended |
Oct. 31, 2023 | |
Debt | |
Debt | Note 8. Debt On July 14, 2023, a board director of the Company loaned it $55,000, representing half of the Company’s employee retention credit refund, which the Company expects to receive this year. The note calls for the payment of the principal sum of $55,000 plus interest of $12,500 for a total of $67,500. The maturity date of the note is December 31, 2023. On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $480,000. Mercury used $461,000 of the proceeds from the sale to payoff both Mercury’s line of credit and term loan. After paying off the notes and closing costs, Mercury was left with $11,000 for general corporate purposes. On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $0.7 million. Subsequent to July 31, 2023, Epic has provided funding and plans to provide additional funding to equal a total note principal of $1.0 million. As of October 31, 2023, the remaining amount to be funded by Epic under the note is $111,000. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9. 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 | 9 Months Ended |
Oct. 31, 2023 | |
Legal Proceedings | Note 10. 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 | 9 Months Ended |
Oct. 31, 2023 | |
Related Parties and Related Party Transactions | |
Related Parties and Related Party Transactions | Note 11. Related Parties and Related Party Transactions Related party balance sheet items As of October 31, 2023 As of January 31, 2023 Prepaid expenses $ - $ 2,000 Accounts payable and accrued expenses 130 28 Loans payable 957 13 Related party income statement items For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 Consulting expenses $ 66 $ 30 $ 198 $ 90 Stock based compensation 631 575 1,931 1,725 Payroll expenses 120 132 358 484 During the quarter ended July 31, 2021, the Company issued 50,000 shares of Series A Preferred Stock to Epic. The issuance was done as a prepayment for services to generate sales for the Company. The shares are earned as sales generated by Epic achieve certain sales targets. In May 2023, Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million. Our board decided that the value received from Pulse and PulseX, in lieu of sales, satisfied the requirements for the Series A Preferred Stock to be earned by Epic. On July 14, 2023, a board director of the Company loaned it $55,000, representing half of the Company’s employee retention credit refund, which the Company expects to receive this year. The note calls for the payment of the principal sum of $55,000 plus interest of $12,500 for a total of $67,500. The maturity date of the note is December 31, 2023. On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $480,000. Mercury used $461,000 of the proceeds from the sale to payoff both Mercury’s line of credit and term loan. After paying off the notes and closing costs, Mercury was left with $11,000 for general corporate purposes. On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $0.7 million. Subsequent to July 31, 2023, Epic has provided funding and plans to provide additional funding to equal a total note principal of $1.0 million. As of October 31, 2023, the remaining amount to be funded by Epic under the note is $111,000. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025. On September 28, 2023, Robert Adams, a board director, purchased 300,000 shares of Series C preferred stock for 11.0 billion PulseX tokens, which equaled $104,000 at date of transfer of the tokens. |
Stockholders Equity
Stockholders Equity | 9 Months Ended |
Oct. 31, 2023 | |
Stockholders Equity | |
Stockholders' Equity | Note 12. Stockholders’ Equity Common Stock As of October 31, 2023 and January 31, 2023, the Company had 200 million common shares authorized, with 16,673,393 and 9,949,966 common shares at a par value of $0.0001 issued, respectively. As of October 31, 2023 and January 31, 2023, the Company had 16,482,929 and 9,923,304 common shares outstanding, respectively. On August 2, 2023, Paul Rosenberg elected to convert 275,000 shares of Series B Preferred Stock into 2,750,000 shares of common stock. On August 2, 2023, Epic elected to convert 125,000 shares of Series B Preferred Stock into 1,250,000 shares of common stock. On September 20, 2023, Epic gave back to the Company 48,802 shares of common stock in settlement of a disputed receivable the Company had with a consultant. The shares are considered treasury stock. During the three months ended October 31, 2023, the Company issued 223,427 shares of common stock for services that totaled $166,000. During the three months ended October 31, 2023, a holder of 50,000 Series A Preferred shares elected to convert his shares into 2.5 million shares of common stock. On October 31, 2023, the Board of Directors approved, and the Company completed, the sale of Mercury to Chris Carter, founder and CEO of Mercury. The sales price consisted of 115,000 shares of Company common stock and 60,000 shares of Company Series C Preferred Stock, owned by Chris Carter, for a total sales price of $216,583. The shares are considered treasury stock. During the three and nine months ended October 31, 2023, stock-based compensation expense related to stock grants was $75,000 and $225,000, respectively, from a grant to an employee. During the three months ended October 31, 2022, stock-based compensation expense related to stock grants was $75,000 from a grant to an employee. During the nine months ended October 31, 2022, stock-based compensation expense related to stock grants was $281,000, which consisted of grants to employee of $225,000 and consultants of $56,000. Preferred Stock Series A Preferred Stock As of October 31, 2023, the Company had one million Series A Preferred shares, par value $0.0001, authorized, with 150,000 Series A Preferred shares issued and outstanding. As of January 31, 2023, the Company had 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. In May 2023, Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock, which were issued to Epic during the quarter ended July 31, 2021 and recorded as a prepaid expense of $2.0 million. Our board decided that the value received from Pulse and PulseX, in lieu of sales, satisfied the requirements for the Series A Preferred Stock to be earned by Epic. During the three months ended October 31, 2023, a holder of 50,000 Series A Preferred shares elected to convert his shares into 2.5 million shares of common stock. The 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. Series B Preferred Stock As of October 31, 2023, the Company had no Series B Preferred shares, par value $0.0001, authorized, issued and outstanding. As of 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. On August 2, 2023, Paul Rosenberg elected to convert 275,000 shares of Series B Preferred Stock into 2,750,000 shares of common stock. On August 2, 2023, Epic elected to convert 125,000 shares of Series B Preferred Stock into 1,250,000 shares of common stock. On August 2, 2023, the Company officially retired the following class of stock: Series B Preferred. Series C Preferred Stock As of October 31, 2023, the Company had 10 million Series C Preferred shares, par value $0.0001, authorized with 1.4 million Series C Preferred shares issued and outstanding. As of 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. On September 28, 2023, Robert Adams, a board director, purchased 300,000 shares of Series C preferred stock for 11.0 billion PulseX tokens, which equaled $104,000 at date of transfer of the tokens. 1.1 million shares of Series C Preferred Stock are eligible to be converted into common stock at the option of the holder of the Series C Preferred Stock. |
Warrants
Warrants | 9 Months Ended |
Oct. 31, 2023 | |
Warrants | |
Warrants | Note 13. Warrants A summary of warrant activity for nine months ended October 31, 2023 is as follows: Weighted Average Conversion Shares Price Warrants outstanding at January 31, 2023 3,356,000 $ 3.60 Granted 580,000 1.00 Cancelled/Expired (1,200,000 ) 1.90 Warrants outstanding at October 31, 2023 2,736,000 $ 1.09 On September 5, 2023, the board of directors approved the repricing of the exercise price of 2,125,000 warrants to $1.00 per share and extending the expiration date of the warrants until January 31, 2028. During the three months ended October 31, 2023, stock-based compensation expense related to warrant grants was $576,000, which consisted of grants to employees of $411,000, directors of $145,000, and consultants of $20,000. During the nine months ended October 31, 2023, stock-based compensation expense related to warrant grants was $1,792,000, which consisted of grants to employees of $1,087,000, directors of $620,000, and consultants of $85,000. During the three months ended October 31, 2022, stock-based compensation expense related to warrant grants was $641,000, which consisted of grants to employees of $366,000, directors of $209,000, and consultants of $66,000. During the nine months ended October 31, 2022, stock-based compensation expense related to warrant grants was $1,915,000, which consisted of grants to employees of $1,090,000, directors of $628,000, and consultants of $197,000. |
Treasury Stock
Treasury Stock | 9 Months Ended |
Oct. 31, 2023 | |
Treasury Stock | |
Treasury Stock | Note 14. Treasury Stock As of January 31, 2023, treasury stock consisted of 250,000 shares of Series B Preferred stock and 26,662 shares of common stock. During the three months ended October 31, 2023, the Company retired the treasury stock related to the Series B Preferred stock. As of October 31, 2023, treasury stock consisted of 190,464 shares of common stock and 60,000 shares of Series C Preferred stock. The shares are considered issued but not outstanding. Therefore, the shares are not used in the EPS calculations. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 15. Income Taxes Our consolidated effective income tax rate for the three and nine months ended October 31, 2023 was 0%. Our consolidated effective income tax rates for the three and nine months ended October 31, 2022 were 26% and 23%, respectively. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Oct. 31, 2023 | |
Net Income (Loss) Per Common Share | |
Net Income (Loss) Per Common Share | Note 16. Net Loss Per Common Share For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 (in thousands, except per share data) Numerator: Loss from continuing operations $ (1,688 ) $ (1,177 ) $ (5,928 ) $ (5,167 ) Numerator: Loss from discontinued operations (20 ) (87 ) (690 ) (219 ) Numerator: Net loss $ (1,708 ) $ (1,264 ) $ (6,618 ) $ (5,386 ) Denominator: Weighted average common shares outstanding 14,558 9,676 11,485 9,258 Effect of dilutive securities: Warrants - - - - Preferred stock - - - - Diluted shares outstanding 14,558 9,676 11,485 9,258 Basic and diluted: Continuing operations $ (0.12 ) $ (0.12 ) $ (0.52 ) $ (0.56 ) Discontinued operations - (0.01 ) (0.06 ) (0.02 ) Basic and diluted loss per share $ (0.12 ) $ (0.13 ) $ (0.58 ) $ (0.58 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 17. Subsequent Events On November 27, 2023, the Company entered into a note for $149,500 with a net payment to the Company of $125,000 after an original issue discount of $19,500 and expenses of $5,000. There is a one-time interest charge of 11% which is paid back along with principal over nine monthly payments beginning with the first payment due on December 30, 2023. The maturity date of the note is August 30, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 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 SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended January 31, 2023, and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on May 1, 2023 (the “2023 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period. The unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the three and nine months ended October 31, 2023, are not necessarily indicative of the results for the year ending January 31, 2024, or for any future period. As of October 31, 2023, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Annual Report. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates and judgments relate to revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation of long-lived assets and finite-lived intangible assets; recoverability of goodwill; acquisition method of accounting; contingencies; and income taxes. On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Revenue Recognition Policies | 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 October 31, 2023 and January 31, 2023, respectively. Our cryptocurrency balances are maintained in accounts held by institutions located in and outside the United States. The Company maintains amounts on deposit that often exceed coverage from third party insured limit of up to $1,000,000. The risk is managed by maintaining multiple accounts with various accounts held in a cold storage wallet. The Company had $0 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 October 31, 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. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Discontinued Operations | |
Schedule of components of assets and liabilities of discontinued operations | As of January 31, 2023 Current assets Cash $ 167 Accounts receivable, net 89 Inventory 64 Prepaid expenses 62 Total current assets 382 Property, plant and equipment, net 655 Total assets $ 1,037 Current liabilities Accounts payable and accrued expenses $ 79 Current portion of long-term debt 474 Deferred revenue 29 Total current liabilities $ 582 Long-term liabilities Debt 47 Total long-term liabilities $ 47 Total liabilities $ 629 |
Schedule of discontinued operations | For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 Revenue $ 285 $ 1,759 $ 890 $ 2,220 Cost of sales 79 1,475 210 1,546 Gross profit 206 284 680 674 Selling, general, and administrative 345 352 1,395 839 Depreciation and amortization 24 27 81 80 Total operating expenses 369 379 1,476 919 Loss from operations (163 ) (95 ) (796 ) (245 ) Other income (expense), net 143 (18 ) 106 (41 ) Loss before income taxes (20 ) (113 ) (690 ) (286 ) Income tax benefit - (26 ) - (67 ) Net loss $ (20 ) $ (87 ) $ (690 ) $ (219 ) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Intangible Assets | |
Schedule of Intangible Assets | As of October 31, 2023 Gross Amount Accumulated Amortization Net Carrying Amount (in thousands) IP/Technology $ 4,935 $ 80 $ 4,855 Non-compete agreements 82 82 - Total Intangibles $ 5,017 $ 162 $ 4,855 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) | 9 Months Ended |
Oct. 31, 2023 | |
Cryptocurrency Assets | |
Schedule of cryptocurrency assets | Current Assets As of Coin Symbol October 31, 2023 January 31, 2023 BTC $ 9 $ 4 $ 9 $ 4 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Property Plant and Equipment | |
Schedule Of Property, Plant And Equipment | As of October 31, 2023 January 31, 2023 Computer equipment and computer software $ 19 $ 20 Less: Accumulated depreciation (16 ) (15 ) Total property, plant and equipment, net $ 3 $ 5 |
Related Parties and Related P_2
Related Parties and Related Party Transactions (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Related Parties and Related Party Transactions | |
Schedule Of Related Party Balance Sheet And Income Statement Items | Related party balance sheet items As of October 31, 2023 As of January 31, 2023 Prepaid expenses $ - $ 2,000 Accounts payable and accrued expenses 130 28 Loans payable 957 13 Related party income statement items For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 Consulting expenses $ 66 $ 30 $ 198 $ 90 Stock based compensation 631 575 1,931 1,725 Payroll expenses 120 132 358 484 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Warrants | |
Schedule of warrant activity | Weighted Average Conversion Shares Price Warrants outstanding at January 31, 2023 3,356,000 $ 3.60 Granted 580,000 1.00 Cancelled/Expired (1,200,000 ) 1.90 Warrants outstanding at October 31, 2023 2,736,000 $ 1.09 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Net Income (Loss) Per Common Share | |
Schedule of Net Income (Loss) Per Common Share | For the Three Months Ended For the Nine Months Ended October 31, October 31, 2023 2022 2023 2022 (in thousands, except per share data) Numerator: Loss from continuing operations $ (1,688 ) $ (1,177 ) $ (5,928 ) $ (5,167 ) Numerator: Loss from discontinued operations (20 ) (87 ) (690 ) (219 ) Numerator: Net loss $ (1,708 ) $ (1,264 ) $ (6,618 ) $ (5,386 ) Denominator: Weighted average common shares outstanding 14,558 9,676 11,485 9,258 Effect of dilutive securities: Warrants - - - - Preferred stock - - - - Diluted shares outstanding 14,558 9,676 11,485 9,258 Basic and diluted: Continuing operations $ (0.12 ) $ (0.12 ) $ (0.52 ) $ (0.56 ) Discontinued operations - (0.01 ) (0.06 ) (0.02 ) Basic and diluted loss per share $ (0.12 ) $ (0.13 ) $ (0.58 ) $ (0.58 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Oct. 31, 2023 | Jan. 31, 2023 |
Summary of Significant Accounting Policies | ||
Third party insured limit | $ 1,000,000 | |
Excess Of Amounts Protected By Insurance | 0 | |
Federally Insured Limit | 250,000 | |
federally Limit, Excess | $ 0 | $ 400,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Discontinued Operations | ||
Cash | $ 167 | |
Accounts receivable, net | 89 | |
Inventory | 64 | |
Prepaid expenses | 62 | |
Total current assets | $ 0 | 382 |
Property, plant and equipment, net | 655 | |
Total assets | 1,037 | |
Accounts payable and accrued expenses | 79 | |
Current portion of long-term debt | 474 | |
Deferred revenue | 29 | |
Total current liabilities | 0 | 582 |
Debt | 47 | |
Total long-term liabilities | $ 0 | 47 |
Total liabilities | $ 629 |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 30, 2023 | Oct. 30, 2022 | Oct. 30, 2023 | Oct. 30, 2022 | |
Discontinued Operations | ||||
Revenue | $ 285 | $ 1,759 | $ 890 | $ 2,220 |
Cost of sales | 79 | 1,475 | 210 | 1,546 |
Gross profit | 206 | 284 | 680 | 674 |
Selling, general, and administrative | 345 | 352 | 1,395 | 839 |
Depreciation and amortization | 24 | 27 | 81 | 80 |
Total operating expenses | 369 | 379 | 1,476 | 919 |
Loss from operations | (163) | (95) | (796) | (245) |
Other income (expense), net | 143 | (18) | 106 | (41) |
Loss before income taxes | (20) | (113) | (690) | (286) |
Income tax benefit | 0 | (26) | 0 | (67) |
Net loss | $ (20) | $ (87) | $ (690) | $ (219) |
Discontinued Operations (Deta_3
Discontinued Operations (Details Narrative) | 9 Months Ended |
Oct. 31, 2023 USD ($) shares | |
Chris Carter [Member] | |
Total sales price | $ | $ 216,583 |
Mercury [Member] | |
Sales of stock, shares | 115,000 |
Mercury [Member] | Series C Preferred Stock [Member] | |
Sales of stock, shares | 60,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Gross Amount | $ 5,017 | $ 4,333 |
Accumulated Amortization | 162 | 63 |
Net Carrying Amount | 4,855 | 4,270 |
Non-compete Agreements [Member] | ||
Gross Amount | 82 | 82 |
Accumulated Amortization | 82 | 63 |
Net Carrying Amount | 0 | 19 |
IP Technologies Member | ||
Gross Amount | 4,935 | 4,251 |
Accumulated Amortization | 80 | 0 |
Net Carrying Amount | $ 4,855 | $ 4,251 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 9 Months Ended |
Oct. 31, 2023 | |
Non-compete Agreements [Member] | |
Finite-Lived Intangible Assets, Amortization Method | the non-compete agreements are amortized over two years |
Series A Preferred Stock [Member] | |
Finite-Lived Intangible Assets, Amortization Method | Technology is amortized over five years |
Cryptocurrency Assets (Details)
Cryptocurrency Assets (Details) - USD ($) $ in Thousands | Oct. 30, 2023 | Jan. 31, 2023 |
Current Assets Fmv | $ 9 | $ 4 |
BTC [Member] | ||
Current Assets Fmv | $ 9 | $ 4 |
Cryptocurrency Assets (Details
Cryptocurrency Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 28, 2023 | May 31, 2023 | Oct. 31, 2023 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2022 | Jan. 31, 2023 | Jul. 31, 2021 | |
Description of distribution of tokens | Overwatch Partners, Inc. (“Overwatch”), an entity controlled by Michael Hawkins, distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic Industry Corp (“Epic”), a wholly owned company of Michael Hawkins, 2.5 billion Pulse tokens | |||||||
Prepaid expense | $ 333,000 | $ 333,000 | $ 2,601,000 | |||||
Series A Preferred Stock [Member] | ||||||||
Preferred Stock Series A, Shares Issued | 150,000 | 150,000 | 200,000 | |||||
Prepaid expense | $ 2,000,000 | |||||||
Series B Preferred Stock Member | ||||||||
Preferred Stock Series A, Shares Issued | 0 | 0 | 650,000 | |||||
Epic [Member] | ||||||||
Prepaid expense | $ 2,000,000 | |||||||
Epic [Member] | Series A Preferred Stock [Member] | ||||||||
Preferred Stock Series A, Shares Issued | 50,000 | |||||||
Robert Adams [Member] | ||||||||
Token transferred value | $ 104,000 | |||||||
Robert Adams [Member] | Series B Preferred Stock Member | ||||||||
Puchase of preferred stock | 300,000 | |||||||
PLS [Member] | ||||||||
Tokens received | 11.0 billion | 2.3 billion | ||||||
Invested amount | $ 100,000 | |||||||
PLSX [Member] | ||||||||
Token transferred value | $ 104,000 | |||||||
Tokens received | 3.0 billion | |||||||
Impairment | $ 100,000 | $ 1,400,000 | $ 2,200,000 | |||||
Invested amount | $ 100,000 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Total Property, Plant And Equipment, Net | $ 3 | $ 5 |
Computer Equipment and Computer Software [Member] | ||
Property, Plant And Equipment, Gross | 19 | 20 |
Less: Accumulated Depreciation | (16) | (15) |
Total Property, Plant And Equipment, Net | $ 3 | $ 5 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | |||
Aug. 15, 2023 | Jul. 14, 2023 | Oct. 31, 2023 | Jul. 31, 2023 | |
Epic [Member] | ||||
Loan Maturity Date | Feb. 01, 2025 | |||
Purchase of Mercury's building | $ 480,000 | |||
Proceeds from the sale Mercury's line of credit and term loan payment | 461,000 | |||
Closing balance for general corporate purposes | $ 11,000 | |||
Principal amount | $ 1,000,000 | |||
Loan outstanding balance | $ 700,000 | |||
Interest rate of note | 4% | |||
Note remaining amount | $ 111,000 | |||
Board Of Directors [Member] | ||||
Loan amount | $ 55,000 | |||
Loan Maturity Date | Dec. 31, 2023 | |||
Notes principal amount | $ 55,000 | |||
Interest on Loan amount | 12,500 | |||
Notes payable | $ 67,500 |
Related Parties and Related P_3
Related Parties and Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Prepaid Expenses | $ 333 | $ 333 | $ 2,601 | ||
Accounts Payable And Accrued Expenses | 1,634 | 1,634 | 1,072 | ||
Stock Based Compensation | 1,792 | $ 1,915 | |||
FMV [Member] | |||||
Prepaid Expenses | 0 | 0 | 2,000 | ||
Accounts Payable And Accrued Expenses | 130 | 130 | 28 | ||
Loans Payable | 957 | 957 | $ 13 | ||
Consulting Expenses | 66 | $ 30 | 198 | 90 | |
Payroll expenses | 120 | 132 | 358 | 484 | |
Stock Based Compensation | $ 631 | $ 575 | $ 1,931 | $ 1,725 |
Related Parties and Related P_4
Related Parties and Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Aug. 15, 2023 | Jul. 14, 2023 | Oct. 31, 2023 | Sep. 28, 2023 | May 31, 2023 | Jul. 31, 2021 | Jul. 31, 2023 | Jan. 31, 2023 | |
Prepaid Expenses | $ 333,000 | $ 2,601,000 | ||||||
Series A Preferred Stock [Member] | ||||||||
Prepaid Expenses | $ 2,000,000 | |||||||
Description of distribution of tokens | Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock | |||||||
Epic [Member] | ||||||||
Loan Maturity Date | Feb. 01, 2025 | |||||||
Prepaid Expenses | $ 2,000,000 | |||||||
Description of distribution of tokens | Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock | |||||||
Purchase of Mercury's building | $ 480,000 | |||||||
Proceeds from the sale Mercury's line of credit and term loan payment | 461,000 | |||||||
Closing balance for general corporate purposes | $ 11,000 | |||||||
Principal amount | $ 1,000,000 | |||||||
Loan outstanding balance | $ 700,000 | |||||||
Interest rate of note | 4% | |||||||
Note remaining amount | $ 111,000 | |||||||
Epic [Member] | Series A Preferred Stock [Member] | ||||||||
Issuance shares of preferred stock | 50,000 | |||||||
Board Of Directors [Member] | ||||||||
Loan amount | $ 55,000 | |||||||
Loan Maturity Date | Dec. 31, 2023 | |||||||
Notes principal amount | $ 55,000 | |||||||
Interest on Loan amount | 12,500 | |||||||
Notes payable | $ 67,500 | |||||||
Robert Adams [Member] | ||||||||
Number of PulseX tokens | 11.0 billion | |||||||
Purchased shares of preferred stock for PulseX tokens | 300,000 | |||||||
Token transferred value | $ 104,000 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 02, 2023 | Sep. 28, 2023 | May 31, 2023 | Mar. 17, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2021 | Oct. 31, 2023 | Oct. 31, 2022 | Sep. 20, 2023 | Jan. 31, 2023 | |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common Stock, Shares Issued | 16,673,393 | 16,673,393 | 9,949,966 | ||||||||
Prepaid Expenses | $ 333,000 | $ 333,000 | $ 2,601,000 | ||||||||
Common shares authorized | 200,000,000 | 200,000,000 | |||||||||
Common stock, shares outstanding | 16,482,929 | 16,482,929 | 9,923,304 | ||||||||
Issued shares of common stock for services, shares | 223,427 | ||||||||||
Issued shares of common stock for services, value | $ 166,000 | ||||||||||
Stock based compensation expense related to stock grants | $ 281,000 | ||||||||||
Treasury stock issued | 60,000 | 60,000 | 26,662 | ||||||||
Mercury [Member] | |||||||||||
Sales of stock, shares | 115,000 | ||||||||||
Employee [Member] | |||||||||||
Stock based compensation expense related to stock grants | $ 75,000 | $ 75,000 | $ 225,000 | 225,000 | |||||||
Consultant [Member] | |||||||||||
Stock based compensation expense related to stock grants | $ 56,000 | ||||||||||
Chris Carter [Member] | |||||||||||
Total sales price | $ 216,583 | $ 216,583 | |||||||||
Epic [Member] | |||||||||||
Prepaid Expenses | $ 2,000,000 | ||||||||||
Description of distribution of tokens | Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock | ||||||||||
Robert Adams [Member] | |||||||||||
Number of PulseX tokens | 11.0 billion | ||||||||||
Purchased shares of preferred stock for PulseX tokens | 300,000 | ||||||||||
Token transferred value | $ 104,000 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Prepaid Expenses | $ 2,000,000 | ||||||||||
Description of distribution of tokens | Overwatch distributed to us Pulse and PulseX tokens of 12.3 billion each. As a result of this transaction, the Company distributed to Epic 2.5 billion Pulse tokens. The receipt of Pulse and PulseX also earned Epic 50,000 shares of Series A Preferred Stock | ||||||||||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares issued | 150,000 | 150,000 | 200,000 | ||||||||
Preferred stock, shares outstanding | 150,000 | 150,000 | 200,000 | ||||||||
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 | ||||||||||
Common stock shares issued of conversion shares | 2,500,000 | ||||||||||
Convertible preferred stock shares | 50,000 | 150,000 | |||||||||
Series A Preferred Stock [Member] | Epic [Member] | |||||||||||
Preferred stock, shares issued | 50,000 | ||||||||||
Issued shares of Preferred Stock | 50,000 | ||||||||||
Series B Preferred Stock Member | |||||||||||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares issued | 0 | 0 | 650,000 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | 400,000 | ||||||||
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 B preferred stock, shares authorized | 0 | 0 | 1,500,000 | ||||||||
Series B Preferred Stock Member | Epic [Member] | |||||||||||
Common stock shares issued of conversion shares | 1,250,000 | ||||||||||
Convertible preferred stock shares | 125,000 | ||||||||||
Treasury stock issued | 48,802 | ||||||||||
Series B Preferred Stock Member | Epic [Member] | August 2, 2023 [Member] | |||||||||||
Common stock shares issued of conversion shares | 1,250,000 | ||||||||||
Convertible preferred stock shares | 125,000 | ||||||||||
Series B Preferred Stock Member | Paul Rosenberg [Member] | |||||||||||
Common stock shares issued of conversion shares | 2,750,000 | ||||||||||
Convertible preferred stock shares | 275,000 | ||||||||||
Series B Preferred Stock Member | Paul Rosenberg [Member] | August 2, 2023 [Member] | |||||||||||
Common stock shares issued of conversion shares | 2,750,000 | ||||||||||
Convertible preferred stock shares | 275,000 | ||||||||||
Series C Preferred Stock [Member] | |||||||||||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares issued | 1,412,632 | 1,412,632 | 1,000,000 | ||||||||
Preferred stock, shares outstanding | 1,352,632 | 1,352,632 | 1,000,000 | ||||||||
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 share whichever is less | ||||||||||
Series C preferred stock, shares authorized | 10,000,000 | 10,000,000 | 2,000,000 | ||||||||
Series C preferred stock, shares issued | 1,400,000 | 1,400,000 | 1,000,000 | ||||||||
Series C preferred stock, shares outstanding | 1,400,000 | 1,400,000 | 1,000,000 | ||||||||
Preferred Stock to be converted into common stock | 1,100,000 | 1,100,000 | |||||||||
Series C Preferred Stock [Member] | Mercury [Member] | |||||||||||
Sales of stock, shares | 60,000 | ||||||||||
Comman Stocks [Member] | |||||||||||
Common stock shares issued of conversion shares | 2,500,000 | ||||||||||
Convertible preferred stock shares | 50,000 |
Warrants (Details)
Warrants (Details) | 9 Months Ended |
Oct. 31, 2023 $ / shares shares | |
Warrants | |
Warrants Outstanding Shares, Beginning | shares | 3,356,000 |
Granted | shares | 580,000 |
Warrants Outstanding Shares Cancelled/Expired | shares | (1,200,000) |
Warrants Outstanding Shares, Ending | shares | 2,736,000 |
Warrants Outstanding Weighted Average Conversion Price, Beginning | $ / shares | $ 3.60 |
Weighted Average Conversion Price, Granted | $ / shares | 1 |
Warrants Outstanding Weighted Average Conversion Price, Cancelled/Expired | $ / shares | 1.90 |
Warrants Outstanding Weighted Average Conversion Price, Ending | $ / shares | $ 1.09 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 05, 2023 | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Description of repricing of the exercise price | the board of directors approved the repricing of the exercise price of 2,125,000 warrants to $1.00 per share and extending the expiration date of the warrants until January 31, 2028 | ||||
Stock Based Compensation | $ 1,792,000 | $ 1,915,000 | |||
Employee Stock Warrant Grant Member | |||||
Stock Based Compensation | $ 411,000 | $ 366,000 | 1,087,000 | 1,090,000 | |
Director Member | |||||
Stock Based Compensation | 145,000 | 209,000 | 620,000 | 628,000 | |
Consultants Member | |||||
Stock Based Compensation | 20,000 | 66,000 | 85,000 | 197,000 | |
Warrants Member | |||||
Stock Based Compensation | $ 576,000 | $ 641,000 | $ 1,792,000 | $ 1,915,000 |
Treasury Stock (Details Narrati
Treasury Stock (Details Narrative) - shares | Oct. 31, 2023 | Jan. 31, 2023 |
Treasury Stock | ||
Treasury stock Series B Preferred stock shares | 190,464 | 250,000 |
Treasury Stock common shares | 60,000 | 26,662 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Income Taxes | ||||
Effective income tax rate | 0% | 26% | 0% | 23% |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Net Income (Loss) Per Common Share | ||||
Loss from continuing operations | $ (1,688) | $ (1,177) | $ (5,928) | $ (5,167) |
Loss from discontinued operations | (20) | (87) | (690) | (219) |
Net Loss | $ (1,708) | $ (1,264) | $ (6,618) | $ (5,386) |
Weighted Average Common Shares Outstanding | 14,558,000 | 9,676,000 | 11,485,000 | 9,258,000 |
Effect of dilutive securities Warrants | 0 | 0 | 0 | 0 |
Effect of dilutive securities Preferred stock | 0 | 0 | 0 | 0 |
Diluted shares outstanding | 14,558,000 | 9,676,000 | 11,485,000 | 9,258,000 |
Basic and diluted Continuing operations | $ (0.12) | $ (0.12) | $ (0.52) | $ (0.56) |
Basic and diluted Discontinued operations | 0 | (0.01) | (0.06) | (0.02) |
Basic and diluted loss per share | $ (0.12) | $ (0.13) | $ (0.58) | $ (0.58) |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Events [Member] | 1 Months Ended |
Nov. 27, 2023 USD ($) | |
Notes payble | $ 149,500 |
Proceeds from notes payble | 125,000 |
Origional issue discount | 19,500 |
Expenses | $ 5,000 |
Maturity date | Aug. 30, 2024 |
Interest rate | 11% |