EBZT 10-K & 10-Q changes, risk factors and insider trading
Everything Blockchain, Inc. · OTC · Services-Prepackaged Software · CIK 1730869 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Full comparison: every changed paragraph (1)
Transfers of our common stock may be restricted pursuant to the securities and state laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such laws, our common stock may not be traded in such jurisdictions. Because the shares of our common stock registered hereunder have not been registered for resale under the “Blue Sky” laws of any state, the holders of such shares and persons who desire to purchase such shares in any trading market that might develop in the future, should be aware that there may be significant state “Blue Sky” law restrictions upon the ability of investors to sell and purchasers to purchase such shares. These restrictions prohibit the secondary trading of our common stock. ourWe currently do not intend and may not be able to qualify securities for resale in those states which do not offer manual exemptions and require securities to be qualified before they can be resold by our stockholders. Accordingly, investors should consider the secondary market for our securities to be limited.
Management's Discussion & Analysis (MD&A)
Largest changes
“Operating expenses for the year ended January 31, 2023 of $8.5 million consist primarily of stock-based compensation of $2.9 million, payroll costs of $1.5 million, goodwill impairment of $1.3 million, professional fees and marketing expenses of $0.7 million each, consultant fees and depreciation and amortization expense of $0.2 million each, and software impairment of $0.1 million. The goodwill impairment relates to the write off of the Mercury goodwill. The software impairment relates to the write off of Render software.”see in full comparison
“Operating expenses for the year ended January 31, 2023 of $7.3 million consist primarily of stock-based compensation of $2.9 million, goodwill impairment of $1.3 million, payroll costs of $0.8 million, professional fees and marketing expenses of $0.7 million each, consultant fees of $0.2 million, and depreciation and amortization expense, and software impairment of $0.1 million each. The goodwill impairment relates to the write off of the Mercury goodwill. The software impairment relates to the write off of Render software.”see in full comparison
see in full comparisonOperatingLosslossfromincreasedoperationsbyfor$5.4the year ended January 31, 2024 was $5.3 million compared toan operating loss of $7.4$7.0 million for the year ended January 31,20232023.asThecomparedprimary reason for the decrease in loss from operations is due toantheoperatinggoodwilllossandofsoftware$2.0impairmentsmillionrecorded for the year ended January 31,2022. The primary reasons for the increase in operating loss were due to the increase in revenue and operating expenses as discussed above.2023.
Net cash used in operating activities – continuing operations wassee in full comparison$0.4$2.9 million for the year ended January 31,2022.2023. We had netincomeloss of$2.3$9.0million,million from continuing operations, which included stock-based compensation of $2.9 million, fair value adjustments to cryptocurrency of$3.8$2.2 million,stock-basedduecompensationto decreases in the values of$2.0cryptocurrencies,milliongoodwill impairment of $1.3 million, and realized netgainloss on investment in cryptocurrency of$1.2$0.2 million.
“We were recently notified by the bank that the Mercury Acquisition triggered defaults under both Mercury's line of credit and term loan, due to the change in ownership. Both the line of credit and term loan are classified as current liabilities. We are working on refinancing both loans.”see in full comparison
“On September 7, 2023, Epic formalized its loans to the Company in a $1.0 million note. The note includes a mechanism to increase the amount of the note with the mutual consent of Epic and the Company. As of January 31, 2024, the note balance is $1.1 million. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025. If interest payments are made late after the cure period, the interest due shall be recalculated at the highest rate authorized by Florida law, which is 18% per annum. …”see in full comparison
Full comparison: every changed paragraph (46)
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.
On June 21, 2021, we acquired all of the equity interests of 832. On June 30, 2021, we acquired all of the equity interests of Mercury. On July 31, 2021, we acquired all of the equity interests of Vengar.
On October 31, 2023, the Company completed the sale of Mercury. Therefore, Mercury’s operations are only included in the Company’s results for nine months of 2024 versus twelve months in 2023.
832’s operations are included in our historical operating results as of June 21, 2021. Mercury’s operations are included in our historical operating results as of July 1, 2021. Vengar’s operations are included in our historical operating results as of August 1, 2021.
Revenue
Revenue for the years ended January 31, 2024 and 2023 was $0.3 million. Revenue for the year ended January 31, 20232024 wasprimarily $2.6consists of $0.3 million asfrom comparedconsulting to $2.5 million for the year ended January 31, 2022.services. Revenue for the year ended January 31, 2023 primarily consistedconsists of $1.8 million from product revenue, $0.7$0.2 million from consulting services,services and $0.1 million from staking of cryptocurrency. Revenue for the year ended January 31, 2022 primarily consisted of $1.7 million from consulting services, $0.4 million from product revenue, and $0.3 million from staking of cryptocurrency.
Cost of Sales
Cost of sales for the year ended January 31, 2023 was $1.5 million as compared to $0.2 million for the year ended January 31, 2022. The primary reason for the increase in cost of sales was due to the increase in product revenue. Cost of sales primarily consisted of product costs and commissions from Mercury.
Gross Profit
Gross profit for the year ended January 31, 2023 was $1.1 million as compared to $2.3 million for the year ended January 31, 2022. The primary reason for the decrease was due to the increase in cost of sales as discussed above.
Operating expenses for the year ended January 31, 2023 of $8.5 million consist primarily of stock-based compensation of $2.9 million, payroll costs of $1.5 million, goodwill impairment of $1.3 million, professional fees and marketing expenses of $0.7 million each, consultant fees and depreciation and amortization expense of $0.2 million each, and software impairment of $0.1 million. The goodwill impairment relates to the write off of the Mercury goodwill. The software impairment relates to the write off of Render software.
Operating expenses for the year ended January 31, 20222024 of $4.3$5.6 million consist primarily of stock-based compensation of $2.0$2.5 million, professional fees of $0.8 million, payroll costs and marketing expenses of $1.1$0.6 million,million professional andeach, consultant fees of $0.3 million each, marketing expenses of $0.1 million, and adepreciation badand debtamortization expense of $0.1$0.2 million.
Operating expenses for the year ended January 31, 2023 of $7.3 million consist primarily of stock-based compensation of $2.9 million, goodwill impairment of $1.3 million, payroll costs of $0.8 million, professional fees and marketing expenses of $0.7 million each, consultant fees of $0.2 million, and depreciation and amortization expense, and software impairment of $0.1 million each. The goodwill impairment relates to the write off of the Mercury goodwill. The software impairment relates to the write off of Render software.
OperatingLoss Lossfrom Operations
OperatingLoss lossfrom increasedoperations byfor $5.4the year ended January 31, 2024 was $5.3 million compared to an operating loss of $7.4$7.0 million for the year ended January 31, 20232023. asThe comparedprimary reason for the decrease in loss from operations is due to anthe operatinggoodwill lossand ofsoftware $2.0impairments millionrecorded for the year ended January 31, 2022. The primary reasons for the increase in operating loss were due to the increase in revenue and operating expenses as discussed above.2023.
Other IncomeExpense, Net
Other incomeexpense, net consists primarily of sales of cryptocurrency and the associated costs, fair market value adjustments to cryptocurrency, and interest income and expense.
Other expense, net for the year ended January 31, 20232024 was $2.5$1.8 million compared to other$2.5 income,million for the year ended January 31, 2023. Other expense, net for the year ended January 31, 20222024 of $5.2$1.8 million 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 year ended January 31, 2023 of $2.5 million consists primarily of fair market value expense adjustments to cryptocurrency of $2.2 million and net loss from sales of cryptocurrency of $0.2 million. Other income, net for the year ended January 31, 2022 of $5.2 million consists primarily of fair market value adjustments to cryptocurrency of $3.8 million and net profit from sales of cryptocurrency of $1.2 million.
The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss).loss.
Net cash used in operating activities – continuing operations was $2.8$1.5 million for the year ended January 31, 2023.2024. We had net loss of $9.4$7.2 million,million from continuing operations, which included stock-based compensation of $2.5 million and fair value adjustments to cryptocurrency of $2.2$1.4 million,million due to decreases in the values of cryptocurrencies, stock-based compensation of $2.9 million and realized net loss on investment in cryptocurrency of $0.2 million.cryptocurrencies.
Net cash used in operating activities – continuing operations was $0.4$2.9 million for the year ended January 31, 2022.2023. We had net incomeloss of $2.3$9.0 million,million from continuing operations, which included stock-based compensation of $2.9 million, fair value adjustments to cryptocurrency of $3.8$2.2 million, stock-baseddue compensationto decreases in the values of $2.0cryptocurrencies, milliongoodwill impairment of $1.3 million, and realized net gainloss on investment in cryptocurrency of $1.2$0.2 million.
Net cash used in operating activities – discontinued operations was $0.8 million for the year ended January 31, 2024. We had net loss of $0.7 million from discontinued operations.
Net cash provided by operating activities – discontinued operations was $0.1 million for the year ended January 31, 2023. We had net loss of $0.4 million from discontinued operations.
Net cash usedprovided inby investing activities – continuing operations was $0.5$0.1 million for the year ended January 31, 2023,2024, compared to net cash providedused byin investing activities – continuing operations of $1.2$0.4 million for the year ended January 31, 2022.2023. During the year ended January 31, 2024, we had proceeds from cryptocurrencies of $1.0 million partially offset by capital expenditures of $0.9 million. During the year ended January 31, 2023, we had capital expenditures of $1.2 million,million which werepartially offset by proceeds from sale of cryptocurrencies of $0.8 million. During the year ended January 31, 2022, we sold $5.8 million of cryptocurrency and purchased $3.1 million of cryptocurrency. We also had capital expenditures of $1.5 million.
Net cash provided by investing activities – discontinued operations was $0.4 million for the year ended January 31, 2024, compared to net cash used in investing activities – discontinued operations of $0 for the year ended January 31, 2023. During the year ended January 31, 2024, we had proceeds from sale of building of $0.5 million partially offset by capital expenditures of $0.1 million.
Net cash provided by financing activities was $1.1 million for the year ended January 31, 2024, compared to $3.0 million for the year ended January 31, 2023,2023. compared to $0.3 million forDuring the year ended January 31, 2022.2024, we received proceeds from Epic Industry Corp (“Epic”), a wholly owned company of Michael Hawkins, debt of $1.1 million, third-party debt of $0.2 million, and receivable from stockholder of $0.2 million, partially offset by debt payments of $0.5 million. During the year ended January 31, 2023, we sold 1.3 million shares of Series C Preferred Stock for $2.5 million, and warrants were exercised for a total of 0.6 million shares of common stock resulting in the Company receiving $0.6 million. During the year ended January 31, 2022, we had proceeds from issuance of common stock of $0.8 million and we paid off debt to a related party of $0.5 million.
CashWe on hand as of January 31, 2023 was $0.8 million. During the year ended January 31, 2023, we fundedfund operations primarily through cash on hand andhand, cash from sales of cryptocurrencies,common stock, Series C Preferred StockStock, andcryptocurrencies, exercises of warrants.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 during the year ending January 31, 2025. 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 upon receipt of the employee retention credit refund.
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 its loans to the Company in a $1.0 million note. The note includes a mechanism to increase the amount of the note with the mutual consent of Epic and the Company. As of January 31, 2024, the note balance is $1.1 million. Monthly interest only payments at an annual rate of 4% will be made through the maturity date of February 1, 2025. If interest payments are made late after the cure period, the interest due shall be recalculated at the highest rate authorized by Florida law, which is 18% per annum. Epic in its sole discretion, at any time prior to the maturity date, may convert the principal, partial principal, and/or interest due into shares of the Company’s common stock at a static price of $1.00 per share. During the year ended January 31, 2024, the Company was late on three of its interest payments. Epic chose to take the late interest payments in the form of Company common stock. On January 30, 2024, the Company issued to Epic 45,000 shares of common stock in lieu of interest payments of $45,000.
On March 17, 2022, our board approved the conversion of two million shares of blank check preferred stock into two million shares of Series C Preferred Stock, par value $0.0001. On April 19, 2022, the Company sold 250,000 shares of Series C Preferred Stock for $1.0 million. On June 14, 2022, our board of directors approved the early conversion of 250,000 shares of Series C Preferred Stock into 560,928 shares of common stock.
On April 19, 2022, two warrants were exercised for a total of 500,000 shares of common stock resulting in the Company receiving $0.5 million.
On July 27, 2022, we launched EB Control, our patent-pending, zero-trust data protection solution, which was developed by Vengar.
On August 11, 2022, our board of directors approved the sale of our 2022 Cadillac Escalade to Eric Jaffe, our former chief executive officer and current board member, for $91,983. Mr. Jaffe paid for the vehicle with 26,662 shares of his Company common stock.
On August 14, 2022, to fund operations our board of directors approved the sale of 10 million HEX tokens to Michael Hawkins for $450,000. During the year ended January 31, 2023, the market price of HEX dropped. The Company recorded a loss on the transaction of approximately $47,000.
On September 16, 2022, to fund operations our board of directors approved the sale of approximately 6.7 million HEX tokens and approximately 7 Bitcoins to Michael Hawkins for $304,747. During the year ended January 31, 2023, the market prices of HEX and Bitcoin dropped. The Company recorded a loss on the transaction of approximately $195,000. As of January 31, 2023, the Company owns approximately $4,000 of cryptocurrencies.
On October 31, 2022, two warrants were exercised for a total of 250,000 shares of common stock, resulting in the Company having a receivable for $0.2 million. Since the receivable is from a stockholder, it is recorded as a contra-equity account.
On December 12, 2022, we launched BuildDB, our patent-pending blockchain platform, which serves as the backbone of the Company’s proprietary blockchain and trust ecosystem. EBI’s subsidiary, 832, developed BuildDB.
On JanuarySeptember 5,28, 2023, theRobert CompanyAdams, solda oneboard milliondirector, purchased 300,000 shares of Series C Preferredpreferred Stockstock for $1.511.0 millionbillion toPulseX OEMtokens, partner,which Alamoequaled City$104,000 Engineeringat Services.date of transfer of the tokens.
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.
During the year ended January 31, 2024, the Company issued 598,044 shares of common stock for services that totaled $461,957. Also, during the year ended January 31, 2024, we received the $0.2 million receivable from stockholder.
On March 7, 2024, the Company sold 118,585 shares of common stock for $0.1 million to OEM partner, Alamo City Engineering Services, Inc. (“ACES”), which is owned by our board member Craig Stephens. On April 19, 2024, the Company sold 184,802 shares of common stock for $0.1 million to ACES.
On March 21, 2024, the Company entered into a note for $83,300 with a net payment to the Company of $65,000 after an original issue discount of $13,300 and expenses of $5,000. There is a one-time interest charge of 14% which is paid back along with principal over the term of the note beginning with the first payment due on September 30, 2024. The maturity date of the note is December 30, 2024.
On April 9, 2024, we sold 50,000 shares of common stock to a third party for $28,500.
We were recently notified by the bank that the Mercury Acquisition triggered defaults under both Mercury's line of credit and term loan, due to the change in ownership. Both the line of credit and term loan are classified as current liabilities. We are working on refinancing both loans.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company, we are not required to provide the information required by this Item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Removed heading “Adjusted EBITDA”
Largest changes
“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.”see in full comparison
“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.”see in full comparison
“Strategic Investments: The Company identifies and invests in early-stage enterprises within the AI and blockchain domains, targeting ventures that exhibit strong potential for technological innovation, competitive differentiation, and market leadership. Through a disciplined investment strategy, the Company will curate a portfolio of businesses poised for long-term value creation and sustainable growth.”see in full comparison
“Building on this foundation, the Company has pivoted to become a specialized investment and technology development firm at the intersection of cryptocurrency, and artificial intelligence (AI) sectors. This strategic shift reflects the Company’s commitment to embracing emerging technologies and aligning its operations with high-growth, future-focused industries.”see in full comparison
“Proprietary Technology Development: Complementing its investment activities, Everything Blockchain will develop and acquire proprietary AI and blockchain technologies. These efforts span various industries and applications, enabling the Company to create unique value propositions and diversify its revenue streams.”see in full comparison
Full comparison: every changed paragraph (39)
Everything Blockchain (the "Company") has undergone a significant strategic transformation. Historically, the Company operated as a provider of database management and cybersecurity solutions. Its flagship products included EB Build and EB Control, which facilitated the management of complex database systems for businesses, and EB Control, a cybersecurity platform focused on data security and access management.
Building on this foundation, the Company has pivoted to become a specialized investment and technology development firm at the intersection of cryptocurrency, and artificial intelligence (AI) sectors. This strategic shift reflects the Company’s commitment to embracing emerging technologies and aligning its operations with high-growth, future-focused industries.
Everything Blockchain will operate as an actively managed investment vehicle and technology innovator, focusing on two primary operational segments:
Strategic Investments: The Company identifies and invests in early-stage enterprises within the AI and blockchain domains, targeting ventures that exhibit strong potential for technological innovation, competitive differentiation, and market leadership. Through a disciplined investment strategy, the Company will curate a portfolio of businesses poised for long-term value creation and sustainable growth.
Proprietary Technology Development: Complementing its investment activities, Everything Blockchain will develop and acquire proprietary AI and blockchain technologies. These efforts span various industries and applications, enabling the Company to create unique value propositions and diversify its revenue streams.
This dual approach positions Everything Blockchain as both an investor in transformative technologies and a creator of innovative solutions. By leveraging its expertise in blockchain and AI, the Company aims to shape the future of these industries while delivering sustained value to its shareholders.
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.
As of JulyOctober 31, 2024, the Company has 5 employees.
Our operating results for the three and sixnine months ended JulyOctober 31, 2024 and 2023 are summarized as follows (in thousands):
Revenue
Revenue for the three and sixnine months ended JulyOctober 31, 2024 and 2023 was $0.1$0.0 millionand from$0.0 consulting services.million.
All operating expenses were reassigned to discontinued operations.
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 July 31, 2024 were $1.1 million compared to $1.5 million for the three months ended July 31, 2023. The primary reason for the decrease was due to decreases in stock-based compensation of $0.3 million and professional fees of $0.2 million, partially offset by an increase in depreciation and amortization of $0.2 million.
Operating expenses for the six months ended July 31, 2024 were $2.5 million compared to $3.0 million for the six months ended July 31, 2023. The primary reason for the decrease was due to decreases in stock-based compensation of $0.6 million and professional fees of $0.3 million, partially offset by an increase in depreciation and amortization of $0.3 million.
Loss from operations for the three months ended October 31, 2024, and 2023, were $0.0 million. All losses are accounted for under discontinued operations.
Loss from operations for the three months ended July 31, 2024 was $1.0 million compared to $1.4 million for the three months ended July 31, 2023. Loss from operations for the six months ended July 31, 2024 was $2.4 million compared to $2.9 million for the six months ended July 31, 2023. The primary reasons for the decrease in loss from operations were due to the decrease in operating expenses as discussed above.
Other Expense
Other income (expense) consists primarily of fair market value adjustments to cryptocurrency and interest income and expense.
Other expense, net for the three months ended July 31, 2024 was $0 million compared to $1.3 million for the three months ended July 31, 2023. Other expense, net for the three months ended July 31, 2023 consists primarily of fair market value expense adjustments related to cryptocurrency of $1.3 million.
Other expense, net for the six months ended July 31, 2024 was $0.1 million compared to $1.3 million for the six months ended July 31, 2023. Other expense, net for the six months ended July 31, 2023 consists primarily of fair market value expense adjustments related to cryptocurrency of $1.3 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.
The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net loss.
Net cash used in operating activities – continuing operations was $0.9 million for the six months ended July 31, 2024. We had net loss of $2.4 million from continuing operations, which included stock-based compensation of $0.8 million.
Net cash used in operating activities – continuing operations was $0.3 million for the six months ended July 31, 2023. We had net loss of $4.2 million from continuing operations, which included fair value adjustments to cryptocurrency of $1.3 million and stock-based compensation of $1.4 million.
Net cash used in operating activities – discontinueddiscontinuing operations was $0.3$0.8 million for the sixnine months ended JulyOctober 31, 2023.2024, Weand had net loss of $0.7$2.2 million fromfor discontinuedthe operations.nine months ended October 31,2023.
Net cash used in operating activities – continuing operations was $0.0 million for the nine months ended October 31, 2024 and 2023.
Net cash used in investing activities – continuingdiscontinuing operations was $0 for the sixnine months ended JulyOctober 31, 2024, comparedand to $0.3 million$697 for the sixnine months ended JulyOctober 31, 2023. DuringAll thecash sixused monthsin endedinvesting Julyactivities 31,was 2023,in wediscontinued had capital expenditures of $0.5 million, partially offset by proceeds from cryptocurrencies of $0.2 million.operations.
Net cash provided by financing activities was $0.8$0.7 million for the sixnine months ended JulyOctober 31, 2024, compared to $0.2$0.7 million for the sixnine months ended JulyOctober 31, 2023. During the sixnine months ended JulyOctober 31, 2024, we sold 953,387 shares of common stock for $0.5 million and borrowed an additional $0.4$0.3 million, which was partially offset by debt payments of $0.1 million. During the sixnine months ended JulyOctober 31, 2023, we received a $0.2 million receivable from a stockholder.stockholder and borrowed an additional $0.9 million, which was offset by debt payments of $0.5 million. Out of the amount mentioned above proceeds from related party of $0.1 million for the nine month ended October 31, 2023 and $0.9 million for the nine months ended October 31, 2024 used in discontinued operations.
We fund operations primarily through cash on hand, cash from sales of Common Stock and Series C Preferred Stock, debt, and exercises of warrants, and the support of Michael Hawkins.warrants.
During the sixnine months ended JulyOctober 31, 2024, the Company issued 241,735 shares of common stock for services that totaled $0.2 million.
During the sixnine months ended JulyOctober 31, 2024, in a series of transactions, the Company sold a total of 903,387 shares of common stock for $0.5 million to ACES.
In September 2024, the Company was unable to make a debt payment. The lender chose to take payment in the form of Company common stock. Therefore, the Company issued to the lender 751,819 shares of common stock in lieu of payment of $29,815.
In October 2024, the Company was unable to make a debt payment. The lender chose to take payment in the form of Company common stock. Therefore, the Company issued to the lender 459,770 shares of common stock in lieu of payment of $12,000.
We did not have any material off-balance sheet arrangements as of JulyOctober 31, 2024.
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 sixnine months ended JulyOctober 31, 2024 and 2023 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.
EBZT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding EBZT (13F)
None of the 59 investors we track reported a position in their latest 13F.