Everything Blockchain, Inc 10-Q for FY2024 Q3
Everything Blockchain, Inc. (EBZT)
About this 10-Q
Everything Blockchain, Inc filed this 10-Q on December 15, 2023, covering the quarter ended October 31, 2023 (FY2024 Q3).
Headline figures
Quarter ended October 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $61K
- down 3.2% from $63K a year earlier
- Net loss
- $1.71M
- compared with a net loss of $1.26M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________.
Commission file number:
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(
Registrant’s telephone number, including area code
(Former name and address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 30, 2023, the Company had
Transitional Small Business Disclosure Format Yes ☐ No ☒
Everything Blockchain, Inc.
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Interim Consolidated Financial Statements and Notes to Interim Financial Statements
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and nine months ended October 31, 2023, are not necessarily indicative of the results that can be expected for the year ending January 31, 2024 or any other reporting period. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on May 1, 2023 (the “Annual Report”).
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Everything Blockchain, Inc. | ||||||||
Consolidated Balance Sheets (Amounts in thousands, except share and per share data) | ||||||||
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ASSETS | ||||||||
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Current assets |
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Cash |
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Current cryptocurrencies |
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Prepaid expenses |
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Other assets |
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Assets of discontinued operations |
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Total current assets |
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Property, plant and equipment, net |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Assets of discontinued operations |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities |
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Accounts payable and accrued expenses |
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Accounts payable related party |
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Current portion of long-term debt |
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Reserve for legal settlements |
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Deferred revenue |
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Liabilities of discontinued operations |
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Total current liabilities |
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Long-term liabilities |
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Debt |
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Liabilities of discontinued operations |
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Total long-term liabilities |
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Total liabilities |
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Stockholders’ equity |
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Series A Preferred stock, $ |
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Series B Preferred stock, $ |
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Series C Preferred stock, $ |
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Common stock, $ |
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Treasury stock |
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Additional paid-in capital |
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Receivable from stockholder |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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See accompanying notes to consolidated financial statements.
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Everything Blockchain, Inc. | ||||||||||||||||
Consolidated Statements of Operations (Amounts in thousands, except share and per share data) | ||||||||||||||||
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Revenue |
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Cost of sales |
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Gross profit |
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Selling, general, and administrative |
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Stock based compensation |
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Depreciation and amortization |
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Total operating expenses |
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Loss from operations |
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Other expense, net |
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Loss from continuing operations before income taxes |
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Income tax expense (benefit) |
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Loss from continuing operations |
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Loss from discontinued operations, net of tax |
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Net loss |
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Basic and diluted loss per share: |
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Continuing operations |
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Discontinued operations |
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Basic and diluted loss per share |
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Weighted average shares outstanding – basic and diluted |
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See accompanying notes to consolidated financial statements.
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Everything Blockchain, Inc. |
Consolidated Statements of Stockholders’ Equity (Amounts in thousands) |
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| Receivable from |
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| Total Stockholders’ |
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| Shares |
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Balance – January 31, 2022 |
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Issuance of Series C Preferred |
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Conversion of Series C Preferred into common stock |
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Warrant exercise |
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Sale of asset |
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Stock based compensation |
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Net loss |
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Balance – October 31, 2022 |
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Balance – January 31, 2023 |
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Conversion of Series A Preferred into common stock |
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Conversion of Series B Preferred into common stock |
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Issuance of Series C Preferred |
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Cancellation of treasury stock |
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Cancellation of shares to settle disputed receivable |
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Sale of Mercury |
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Stock issued in exchange for accounts payable |
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Warrant exercise |
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Stock based compensation |
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Net loss |
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Balance – October 31, 2023 |
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See accompanying notes to consolidated financial statements.
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Everything Blockchain, Inc. | ||||||||
Consolidated Statements of Cash Flows (Amounts in thousands) | ||||||||
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| For the Nine Months Ended October 31 |
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Cash flows from operating activities: |
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Net Loss |
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Adjustments to reconcile net loss to net |
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cash used in operating activities: |
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Loss from discontinued operations |
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Loss from sale of subsidiary |
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Stock based compensation |
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Deferred income tax benefit |
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Net loss on exchanges |
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Realized net loss on investment in cryptocurrency |
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Fair value adjustment to cryptocurrency |
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Amortization and depreciation |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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Other assets |
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Accounts payable to related party |
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Accounts payable and accrued expenses |
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Deferred revenue |
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Cash used in operating activities of continuing operations |
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Cash provided by (used in) operating activities of discontinued operations |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Proceeds from cryptocurrencies, net |
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Capital expenditures |
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Cash provided by (used in) investing activities of continuing operations |
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Cash provided by (used in) investing activities of discontinued operations |
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Net cash provided by (used in) investing activities |
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Cash flows from financing activities: |
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Proceeds from debt – related party |
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Payment of debt |
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Proceeds from issuance of Series C Preferred Stock |
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Proceeds from exercise of warrants |
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Net cash provided by financing activities |
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Net Change in Cash |
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Cash, beginning of period – continuing operations |
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Cash, beginning of period – discontinued operations |
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Cash, end of period |
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Cash from discontinued operations, end of period |
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Cash from continuing operations, end of period |
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Supplemental Disclosure of Cash Flows Information: |
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Cash paid for interest |
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Cash paid for income taxes |
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Non-cash Investing and Financing Activities: |
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Acquisition of cryptocurrency |
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Issuance of Series C Preferred for cryptocurrency |
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Issuance of Series C Preferred |
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Settlement of disputed receivable for common stock |
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Retirement of treasury stock |
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Sale of subsidiary |
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Issuance of common stock for services |
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Conversion of accounts payable to related party to common stock |
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Sale of asset for common stock |
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Exercise of warrant for receivable |
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See accompanying notes to consolidated financial statements.
| 7 |
| Table of Contents |
Everything Blockchain, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Organization and Basis of Presentation
The accompanying unaudited consolidated financial statements of Everything Blockchain, Inc. (“EBI”) and its consolidated subsidiaries (collectively, the “Company”, “we”, “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (the “SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation.
Description of Business
The Company is primarily engaged in the business of consulting and developing data management, blockchain and cybersecurity related solutions.
Subsidiaries of the Company
The subsidiaries of the Company are Render Payment Corp., 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.
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.
| 8 |
| Table of Contents |
Revenue Recognition Policies
Services revenue. We generate services revenue via consulting services and software development. The Company is engaged in developing, engineering, and designing blockchain projects, to include platforms and cryptocurrencies for customers.
Subscription revenue. We generate revenue from subscriptions through staking of our current crypto assets. Our primary token being staked is a hybrid Proof of Work (“POW”) and Proof of Stake (“POS”) system. Stakers, in this particular token, are paid inflation based both on the duration of the stake (contract length), as well as based on the volume / quantity of tokens staked. Rewards / interest / inflation are paid in the native token. We also participate in networks with POW consensus algorithms, through creating or validating blocks on the network. In exchange for participating in the consensus mechanism of these networks, the Company earns rewards in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete, and the rewards are available for transfer. Revenue is measured based on the number of tokens received and the fair value of the token at the date of recognition.
Product revenue. We generate product revenue through customized product development and merchandise sales.
We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We determine revenue recognition through the following steps:
| · | identification of the contract, or contracts, with a customer; |
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|
| · | identification of the performance obligations in the contract; |
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| · | determination of the transaction price; |
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| · | allocation of the transaction price to the performance obligations in the contract; and |
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| · | 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 $
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 $
| 9 |
| Table of Contents |
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, and FASB 2015-06, Earnings Per Share to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS calculations are determined by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect, calculated using (i) the “treasury stock” method for warrants and (ii) the “if converted” method for the preferred stock if their inclusion would not have been anti-dilutive.
Fair Value Measurements
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
- 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.
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.
| 10 |
| Table of Contents |
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
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 |
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| |
Cash |
| $ |
| |
Accounts receivable, net |
|
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| |
Inventory |
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| |
Prepaid expenses |
|
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| |
Total current assets |
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| |
Property, plant and equipment, net |
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Total assets |
| $ |
| |
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Current liabilities |
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Accounts payable and accrued expenses |
| $ |
| |
Current portion of long-term debt |
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Deferred revenue |
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| |
Total current liabilities |
| $ |
| |
Long-term liabilities |
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Debt |
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| |
Total long-term liabilities |
| $ |
| |
Total liabilities |
| $ |
| |
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 |
| ||||
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| |||||||||||||
Revenue |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Cost of sales |
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| ||||
Gross profit |
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| ||||
Selling, general, and administrative |
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| ||||
Depreciation and amortization |
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| ||||
Total operating expenses |
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| ||||
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
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| ( | ) |
Other income (expense), net |
|
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|
| ( | ) |
|
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|
| ( | ) | ||
Loss before income taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Income tax benefit |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| 11 |
| Table of Contents |
Note 5. Intangible Assets
Intangible assets consist of the following:
|
| As of October 31, 2023 |
| |||||||||
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
| |||
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| (in thousands) |
| |||||||||
IP/Technology |
| $ |
|
| $ |
|
| $ |
| |||
Non-compete agreements |
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| |||
Total Intangibles |
| $ |
|
| $ |
|
| $ |
| |||
|
| As of January 31, 2023 |
| |||||||||
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
| |||
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| (in thousands) |
| |||||||||
IP/Technology |
| $ |
|
| $ |
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| $ |
| |||
Non-compete agreements |
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| |||
Total Intangibles |
| $ |
|
| $ |
|
| $ |
| |||
The Company’s IP/
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 |
| $ |
|
| $ |
| ||
|
| $ |
|
| $ |
| ||
In May 2023, PulseChain (“Pulse”) and PulseX were launched. Pulse is a layer
| 12 |
| Table of Contents |
Also in May 2023,
On September 28, 2023, Robert Adams, a board director, purchased
For the three and nine months ended October 31, 2023, the Company recorded in other income (expense), net fair market value expense adjustments of $
For the nine months ended October 31, 2022, the Company recorded in other expense, net fair market value expense adjustments of $
| 13 |
| Table of Contents |
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 |
| $ |
|
| $ |
| ||
Less: Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
Total property, plant and equipment, net |
| $ |
|
| $ |
| ||
Note 8. Debt
On July 14, 2023, a board director of the Company loaned it $
On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $
On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $
Note 9. Commitments and Contingencies
The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments and ASC 450 – Contingencies. We recognize a loss on a contingency when it is probable a loss will be incurred and that the amount of the loss can be reasonably estimated. No loss contingencies have been recorded for the three and nine months ended October 31, 2023 and 2022.
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.
| 14 |
| Table of Contents |
Note 11. Related Parties and Related Party Transactions
Related party balance sheet items (in thousands) | ||||||||
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|
| As of October 31, 2023 |
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| As of January 31, 2023 |
| ||
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| ||
Prepaid expenses |
| $ |
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| $ |
| ||
Accounts payable and accrued expenses |
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| ||
Loans payable |
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| ||
Related party income statement items (in thousands) | ||||||||||||||||
| ||||||||||||||||
|
| For the Three Months Ended |
|
| For the Nine Months Ended |
| ||||||||||
|
| October 31, |
|
| October 31, |
| ||||||||||
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
| ||||
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| ||||
Consulting expenses |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Stock based compensation |
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| ||||
Payroll expenses |
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| ||||
During the quarter ended July 31, 2021, the Company issued
In May 2023,
On July 14, 2023, a board director of the Company loaned it $
On August 15, 2023, Epic, with the approval of the board, purchased Mercury’s building for $
On September 7, 2023, Epic formalized the loans to the Company in a note. As of July 31, 2023, the outstanding balance was $
On September 28, 2023, Robert Adams, a board director, purchased
| 15 |
| Table of Contents |
Note 12. Stockholders’ Equity
Common Stock
As of October 31, 2023 and January 31, 2023, the Company had
On August 2, 2023, Paul Rosenberg elected to convert
On September 20, 2023, Epic gave back to the Company
During the three months ended October 31, 2023, the Company issued
During the three months ended October 31, 2023, a holder of
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
During the three and nine months ended October 31, 2023, stock-based compensation expense related to stock grants was $
Preferred Stock
Series A Preferred Stock
As of October 31, 2023, the Company had one million Series A Preferred shares, par value $
During the quarter ended July 31, 2021, the Company issued
In May 2023,
During the three months ended October 31, 2023, a holder of
The
| 16 |
| Table of Contents |
Series B Preferred Stock
As of October 31, 2023, the Company had no Series B Preferred shares, par value $
On August 2, 2023, Paul Rosenberg elected to convert
Series C Preferred Stock
As of October 31, 2023, the Company had
On September 28, 2023, Robert Adams, a board director, purchased
Note 13. Warrants
A summary of warrant activity for nine months ended October 31, 2023 is as follows:
|
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| Weighted |
| ||
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| Average |
| ||
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| Conversion |
| ||
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| Shares |
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| Price |
| ||
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| ||
Warrants outstanding at January 31, 2023 |
|
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| $ |
| ||
Granted |
|
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| ||
Cancelled/Expired |
|
| ( | ) |
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| |
Warrants outstanding at October 31, 2023 |
|
|
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| $ |
| ||
On September 5, 2023,
During the three months ended October 31, 2023, stock-based compensation expense related to warrant grants was $
| 17 |
| Table of Contents |
Note 14. Treasury Stock
As of January 31, 2023, treasury stock consisted of
Note 15. Income Taxes
Our consolidated effective income tax rate for the three and nine months ended October 31, 2023 was
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: |
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| ||||
Loss from continuing operations |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Numerator: |
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Loss from discontinued operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Numerator: |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Denominator: |
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Weighted average common shares outstanding |
|
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| ||||
Effect of dilutive securities: |
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Warrants |
|
| - |
|
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| - |
|
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| - |
|
|
| - |
|
Preferred stock |
|
| - |
|
|
| - |
|
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| - |
|
|
| - |
|
Diluted shares outstanding |
|
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| ||||
Basic and diluted: |
|
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Continuing operations |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Discontinued operations |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Basic and diluted loss per share |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Note 17. Subsequent Events
On November 27, 2023, the Company entered into a note for $
| 18 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition, results of operations and cash flows in conjunction with our consolidated financial statements and the related notes presented in this report and in our Annual Report.
FORWARD-LOOKING STATEMENTS
Certain statements in this section contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this report and not clearly historical in nature are forward-looking, and the words “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “potential,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) generally are intended to identify forward-looking statements. Any statements in this report that are not historical facts are forward-looking statements. Actual results may differ materially from those discussed from time to time in the Company’s SEC filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made except as required by law.
OVERVIEW
The overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Quarterly Report on Form 10-Q.
The Company is primarily engaged in the business of consulting and developing data management, blockchain and cybersecurity related solutions. We are a technology company that is blending blockchain, zero-trust, and database management technology to create a platform to solve real world, practical business problems. Our business model is based on building recurring revenue through software subscriptions, licensing agreements, and transaction fees. Our patent-pending advances in blockchain engineering deliver the essential elements needed for real-world business use: speed, security, and energy efficiency. Currently, our lines of business are EB Advise, BuildDB and EB Control.
Our website can be found at www.everythingblockchain.io, which is not incorporated as part of this Form 10-Q.
EMPLOYEES
As of October 31, 2023, the Company has 7 employees.
Available Information
All reports of the Company filed with the SEC are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.
| 19 |
| Table of Contents |
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation, and contingencies.
We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition, and results of operations for future periods could be materially affected.
Results of Operations
Our operating results for the three and nine months ended October 31, 2023 and 2022 are summarized as follows:
|
| For the Three Months Ended October 31, |
|
| For the Nine Months Ended October 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
| (in thousands) |
| |||||||||||||
Revenue |
| $ | 61 |
|
| $ | 63 |
|
| $ | 188 |
|
| $ | 240 |
|
Cost of sales |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Gross profit |
|
| 61 |
|
|
| 63 |
|
|
| 188 |
|
|
| 240 |
|
Selling, general, 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) |
|
| - |
|
|
| (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 | ) |
Revenue
Revenue for the three months ended October 31, 2023 and 2022 was $0.1 million from consulting services. Revenue for the nine months ended October 31, 2023 and 2022 was $0.2 million primarily from consulting services.
| 20 |
| Table of Contents |
Operating Expenses
Operating expenses primarily consist of selling, general and administrative expenses, stock-based compensation expense, and amortization and depreciation expense. Selling, general and administrative expenses primarily consist of personnel costs, consultant fees, professional fees, computer and internet expenses, marketing expenses, utilities expenses, meals and entertainment, office supplies, and reporting fees.
Operating expenses for the three months ended October 31, 2023 were $1.3 million compared to $1.4 million for the three months ended October 31, 2022.
Operating expenses for the nine months ended October 31, 2023 were $4.4 million compared to $4.5 million for the nine months ended October 31, 2022.
Loss from Operations
Loss from operations for the three months ended October 31, 2023 and 2022 was $1.3 million. Loss from operations for the nine months ended October 31, 2023 and 2022 was $4.2 million.
Other Expense
Other income (expense) consists primarily of sales of cryptocurrency and the associated costs, fair market value adjustments to cryptocurrency, loss on sale of subsidiary, and interest income and expense.
Other expense, net for the three months ended October 31, 2023 was $0.4 million compared to $0.2 million for the three months ended October 31, 2022. Other expense, net for the three months ended October 31, 2023 consists primarily of loss on sale of Mercury of $0.2 million, fair market value expense adjustments related to PulseX of $0.1 million, and loss on sale of cryptocurrencies of $0.1 million. Other expense, net for the three months ended October 31, 2022 consists primarily of loss on sale of cryptocurrencies of $0.2 million.
Other expense, net for the nine months ended October 31, 2023 was $1.7 million compared to $2.5 million for the nine months ended October 31, 2022. Other expense, net for the nine months ended October 31, 2023 consists primarily of fair market value expense adjustments related to PulseX of $1.4 million, loss on sale of Mercury of $0.2 million, and loss on sale of cryptocurrencies of $0.1 million. Other expense, net for the nine months ended October 31, 2022 consists primarily of fair market value expense adjustments to cryptocurrency of $2.2 million and loss on sale of cryptocurrencies of $0.2 million.
Adjusted EBITDA
The Company reports all financial information required in accordance with GAAP. The Company believes, however, that evaluating its ongoing operating results will be enhanced if it also discloses certain non-GAAP information.
Adjusted EBITDA, which is a non-GAAP financial measure, is defined by the Company as net income (loss) plus net interest income, income tax (benefit) expense, depreciation and amortization, and stock-based compensation.
Adjusted EBITDA should not be considered an alternative to net income, operating income, net cash provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP. In addition, Adjusted EBITDA presented by other companies may not be comparable to our presentation since each company may define these terms differently.
| 21 |
| Table of Contents |
The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net loss.
|
| For the Three Months Ended October 31, |
|
| For the Nine Months Ended October 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
| (in thousands) |
| |||||||||||||
Net loss |
| $ | (1,708 | ) |
| $ | (1,264 | ) |
| $ | (6,618 | ) |
| $ | (5,386 | ) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
| - |
|
|
| (405 | ) |
|
| 7 |
|
|
| (1,599 | ) |
Stock based compensation |
|
| 651 |
|
|
| 716 |
|
|
| 2,017 |
|
|
| 2,197 |
|
Depreciation and amortization |
|
| 46 |
|
|
| 40 |
|
|
| 164 |
|
|
| 140 |
|
Net interest expense |
|
| 11 |
|
|
| 15 |
|
|
| 65 |
|
|
| 41 |
|
Adjusted EBITDA |
| $ | (1,000 | ) |
| $ | (898 | ) |
| $ | (4,365 | ) |
| $ | (4,607 | ) |
Analysis of Cash Flows
Operating Activities
Net cash used in operating activities – continuing operations was $1.4 million for the nine months ended October 31, 2023. We had net loss of $5.9 million from continuing operations, which included stock-based compensation of $2.0 million and fair value adjustments to cryptocurrency of $1.4 million due to decreases in the values of cryptocurrencies.
Net cash used in operating activities – continuing operations was $2.1 million for the nine months ended October 31, 2022. We had net loss of $5.2 million from continuing operations, which included fair value adjustments to cryptocurrency of $2.2 million, due to decreases in the values of cryptocurrencies, and stock-based compensation of $2.2 million.
Net cash used in operating activities – discontinued operations was $0.8 million for the nine months ended October 31, 2023. We had net loss of $0.7 million from discontinued operations.
Net cash provided by operating activities – discontinued operations was $0.6 million for the nine months ended October 31, 2022. We had net loss of $0.2 million from discontinued operations.
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| Table of Contents |
Investing Activities
Net cash provided by investing activities – continuing operations was $0.3 million for the nine months ended October 31, 2023, compared to net cash used in investing activities – continuing operations of $0.1 million for the nine months ended October 31, 2022. During the nine months ended October 31, 2023, we had proceeds from cryptocurrencies of $1.0 million partially offset by capital expenditures of $0.7 million. During the nine months ended October 31, 2022, we had capital expenditures of $0.9 million partially offset by proceeds from cryptocurrencies of $0.8 million.
Net cash provided by investing activities – discontinued operations was $0.4 million for the nine months ended October 31, 2023, compared to net cash used in investing activities – discontinued operations of $0 for the nine months ended October 31, 2022. During the nine months ended October 31, 2023, we had proceeds from sale of building of $0.5 million partially offset by capital expenditures of $0.1 million.
Financing Activities
Net cash provided by financing activities was $0.7 million for the nine months ended October 31, 2023, compared to $1.5 million for the nine months ended October 31, 2022. During the nine months ended October 31, 2023, we received proceeds from Epic debt of $0.9 million and $0.2 million receivable from stockholder, partially offset by debt payments of $0.5 million. During the nine months ended October 31, 2022, we sold 250,000 shares of Series C Preferred Stock for $1.0 million and two warrants were exercised for a total of 500,000 shares of common stock resulting in the Company receiving $0.5 million.
Liquidity and Capital Resources
We fund operations primarily through cash on hand, cash from sales of Series C Preferred Stock, cryptocurrencies, and exercises of warrants, and the support of Michael Hawkins.
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.
During the nine months ended October 31, 2023, we received the $0.2 million receivable from stockholder.
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.
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| Table of Contents |
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.
During the three months ended October 31, 2023, the Company issued 223,427 shares of common stock for services that totaled $166,000.
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.
Off-Balance Sheet Arrangements
We did not have any material off-balance sheet arrangements as of October 31, 2023.
Going Concern
Our financial statements are prepared in accordance with GAAP, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the three and nine months ended October 31, 2023 and 2022 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company and therefore, we are not required to provide the information required by this Item of Form 10-Q.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.
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| Table of Contents |
We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2023. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.
As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.
Changes in internal controls over financial reporting
There have been no changes in our internal control over financial reporting during the quarter ended October 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its principal executive officer and its principal financial officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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| Table of Contents |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any legal proceedings which management believes will have a material effect upon the financial condition of the Company, nor are any such material legal proceedings anticipated.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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.
During the three months ended October 31, 2023, the Company issued 223,427 shares of common stock for services that totaled $166,000.
Item 3. Defaults Upon Senior Securities
There have been no events that are required to be reported under this Item.
Item 4. Mine Safety Disclosures
There have been no events that are required to be reported under this Item.
Item 5. Other Information
There have been no events that are required to be reported under this Item.
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| Table of Contents |
Item 6. Exhibits
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|
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|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
|
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|
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
|
|
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
|
|
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document. |
|
|
|
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
|
|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
| 27 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Everything Blockchain, Inc. |
| |
|
|
|
|
Dated: December 15, 2023 | By: | /s/ Toney Jennings |
|
|
| Toney Jennings |
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| Its: | Chief Executive Officer (Principal Executive Officer) |
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Dated: December 15, 2023 | By: | /s/ William Regan |
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|
| William Regan |
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| Its: | Chief Financial Officer (Principal Financial Officer) |
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| 28 |
EXHIBIT 31.1
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
I, Toney Jennings, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Everything Blockchain, Inc.; | |
|
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
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| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: December 15, 2023 | By: | /s/ Toney Jennings |
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| Toney Jennings |
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| Its: | Chief Executive Officer (Principal Executive Officer) |
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EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
I, William Regan, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Everything Blockchain, Inc.; | |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
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| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: December 15, 2023 | By: | /s/ William Regan |
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| William Regan |
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| Its: | Chief Financial Officer (Principal Financial Officer) |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 USC SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended October 31, 2023 of Everything Blockchain, Inc. (the “Company”), as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Toney Jennings, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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| (1) | The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| (2) | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: December 15, 2023 | By: | /s/ Toney Jennings |
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| Toney Jennings |
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| Its: | Chief Executive Officer |
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| (Principal Executive Officer) |
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This certification accompanies this report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purpose of Section 18 of the Securities Exchange Act of 1934, as amended.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 USC SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended October 31, 2023 of Everything Blockchain, Inc. (the “Company”), as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, William Regan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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| (1) | The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| (2) | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: December 15, 2023 | By: | /s/ William Regan |
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| William Regan |
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| Its: | Chief Financial Officer |
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| (Principal Financial Officer) |
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This certification accompanies this report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purpose of Section 18 of the Securities Exchange Act of 1934, as amended.