Everything Blockchain Inc (EBZT)

[Perfectson]

Hi -

In a previous PR and it was noted that the revenue came from one large development contract.

But as mentioned in the other PR it was noted that the majority came from the "involvement" in HEX.

As HEX is a fully functional and not under development Crypto - I still don't see where the accretive growth is coming from in a development.

Still as mentioned the accounting doesn't add up.

https://www.globenewswire.com/news-release/2020/11/09/2122763/0/en/OBITX-Blockchain-Assets-Grow-510-FMV.html?pdf=1

per the annual report

It changed directions and began providing consulting services, software and hardware
development, and earned additional revenue through the staking, mining1 , and fair market
value appreciation of assets held in the Blockchain. INC.

they also took a loss on marketing software that was impaired and sold (so lost money on that transaction)
however, what's noted after this is of interest

OBITX received $61K for consulting
through the payment of cryptocurrencies.
Due to an increase of the cryptocurrency
assets, the Company was able to recognize
an additional $83K in Fair Market Value (FMV)
which the Company classifi es as current
cryptocurrency2 . Additionally, OBITX earned
$865K revenue through the sale and transfer
of cryptocurrency held. This was offset by
$423K in cost of the asset.

During the three months ended October 31, 2020 the Company expended the following cryptocurrency. We recognized revenue for the amount of the transaction above the cost basis in which we had a definitive agreement. Additionally, in accordance with IRS policies and standards for transacting with cryptocurrencies, we allocated the price of the cryptocurrency on the date the transaction occurred. Where the transferred amount exceeded the cost basis, we recognized revenue and when the cost basis was below the cost basis we recorded a reduction to revenue.

this was in the annual report, so I believe they got some gains in HEX on maybe consulting services that were paid in HEX that they saw a gain on and were able to book the revenue.

Again just my guess but perhaps they are working on actual projects; however, the fact that they said this was HEX related and HEX is a closed project makes me think it was more of capital gains.

Also they do state that the latest purchase was to mimic HEX and create a CD project. HEX co-founder is working on an ETH alternate called Pulse and he might have used OBTX; however, I don't believe it's a Europe based company.


Mike Hawkins has never been fully transparent and so it's not clear regardless, which has always been an issue.

there are some other things going on with the stock based comp and warrants as well that I will detail later.