Table of Contents
Introduction
Everything Blockchain, Inc., a leading company in the blockchain industry, has recently released its quarterly report for the period ending April 30, 2023. The report highlights the company’s revenue generation through subscriptions and product development, as well as its positive cash flow.
Revenue Generation through Subscriptions
A significant source of revenue for Everything Blockchain, Inc. is its subscription model, which involves staking crypto assets. The company’s primary token utilizes both Proof of Work (POW) and Proof of Stake (POS) systems, allowing stakers to earn rewards based on the duration and volume of tokens staked. Rewards, interest, and inflation are paid in the native token. Additionally, the company participates in networks with POW consensus algorithms, earning rewards for creating or validating blocks.
Product Revenue
In terms of product revenue, Everything Blockchain, Inc. generates income through customized product development and merchandise sales. Revenue recognition for product sales is based on the transfer of control of goods or services to customers and the consideration received.
Credit Risk
The company’s credit risk is limited due to its diverse customer base. Potential credit risk comes from temporary cash investments and accounts receivable. Everything Blockchain, Inc. maintains cash balances in major banks and financial institutions in the United States. To manage the risk of deposits exceeding insured limits, the company maintains deposits in high-quality financial institutions.
Cryptocurrency Balances
Regarding cryptocurrency balances, Everything Blockchain, Inc. holds accounts with both domestic and international institutions. The company manages risk by utilizing cold storage wallets. As of the reporting period, the company had $4,000 in excess of insured amounts.
Current Assets and Liabilities
Everything Blockchain, Inc. includes short-term, highly liquid investments with maturities within three months in its cash. As of April 30, 2023, the company did not have any cash equivalents. Other current assets and liabilities are carried at amounts approximating their fair values due to their short maturities.
Going Concern
The company’s consolidated financial statements assume that Everything Blockchain, Inc. will continue as a going concern. However, there is uncertainty due to historically negative cash flow and net losses. The company has relied on the support of its shareholder and chairman, Michael Hawkins, to sustain solvency. Management is actively working on raising additional funds through debt and equity financing and generating revenue to meet its operating and financial cash requirements.
Intangible Assets
Intangible assets of Everything Blockchain, Inc. include intellectual property (IP)/technology and non-compete agreements. The IP/Technology assets are amortized over five years, while non-compete agreements are amortized over two years.
Cryptocurrency Assets
The company reports cryptocurrency assets as intangible assets, with market value and substantial liquidity classified as current intangible assets valued at fair market value. Cryptocurrencies without market trading or limited liquidity are classified as non-current intangible assets recorded on a cost basis.
Property, Plant, and Equipment
Everything Blockchain, Inc. owns various property, plant, and equipment, including land, buildings, machinery, equipment, furniture, fixtures, office equipment, computer equipment, computer software, and vehicles. The net carrying amount of these assets as of April 30, 2023, was $654,000.
Outstanding Debt
As of April 30, 2023, Everything Blockchain, Inc. had outstanding debt of $500,000, primarily consisting of term loans and a line of credit with various financial institutions. The debt is collateralized by the company’s assets and has maturity dates ranging from 2023 to 2026. The company is working on refinancing both loans after triggering defaults due to a change in ownership.
Loss Contingencies
The company has not recorded any loss contingencies for the period, and management is not aware of any pending or threatened litigation that could have a material adverse effect on the company’s financial position.
Related Party Transactions
Everything Blockchain, Inc. has engaged in related party transactions, including prepaid expenses, accounts payable and accrued expenses, loans payable, consulting expenses, payroll expenses, and stock-based compensation. These transactions involve entities controlled by Michael Hawkins, the company’s shareholder and chairman.
Stockholders’ Equity
The company’s stockholders’ equity includes common stock and preferred stock, including Series A, B, and C Preferred Stock. As of April 30, 2023, the company had 9,923,304 common shares outstanding and 650,000 Series B Preferred shares outstanding.
Outstanding Warrants
During the three months ended April 30, 2023, Everything Blockchain, Inc. had outstanding warrants of 3,356,000 with an average exercise price of $3.60.
Subsequent Events
In subsequent events, in May 2023, the company launched PulseChain and PulseX, a layer 1 blockchain and a fork of the Uniswap digital exchange platform. The company received tokens from these launches and sold 200,000 shares of Series C Preferred Stock for $300,000 in June 2023.
Conclusion
Overall, Everything Blockchain, Inc. continues to generate revenue through subscriptions and product development. The company is actively working on raising additional funds and generating positive cash flow to sustain its operations.
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!