Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2018 | Sep. 15, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | OBITX, Inc. | |
Entity Central Index Key | 1,730,869 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Emerging Growth Company? | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 5,460,000 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2018 | Jan. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 39 | $ 16,350 |
Accounts receivable, net | 1,254,530 | 1,469,986 |
Assets held for sale | 408,166 | |
Prepaid expenses | 224 | |
Total current assets | 1,662,959 | 1,486,336 |
Property, plant and equipment, net | 2,566,481 | 3,227,767 |
Intangible assets, net | 14,523 | 4,091 |
Total assets | 4,243,963 | 4,718,194 |
Current liabilities | ||
Accounts payable and accrued expenses | 116,524 | 62,200 |
Due to related party | 686,026 | 523,878 |
Total current liabilities | 802,549 | 586,078 |
Total liabilities | 802,549 | 586,078 |
Stockholders equity | ||
Series A Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 100,000 shares issued and outstanding, as of October 31, 2018 and January 31, 2018, respectively. | 10 | 10 |
Common stock, $0.0001 par value, voting; 200,000,000 shares authorized; 5,460,000 shares issued and outstanding, as of October 31, 2018 and January 31, 2018, respectively. | 546 | 546 |
Additional paid in capital | 3,442,825 | 3,442,825 |
Accumulated deficit | (1,967) | 688,735 |
Total stockholders equity | 3,441,414 | 4,132,116 |
Total liabilities and stockholders equity | $ 4,243,963 | $ 4,718,194 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2018 | Jan. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Series A Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Series A Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A Preferred stock, shares issued | 100,000 | 100,000 |
Series A Preferred stock, shares outstanding | 100,000 | 100,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,460,000 | 5,460,000 |
Common stock, shares outstanding | 5,460,000 | 5,460,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 46,320 | $ 1,266,150 | $ 84,610 | $ 1,266,150 |
Computer lease | 3,382 | 3,698 | 11,418 | 7,287 |
Cost of services | 29,057 | 205,034 | 65,479 | 205,034 |
Depreciation expense | 121,159 | 41,980 | 363,475 | 83,960 |
Software maintenance | 26,920 | 11,625 | 79,791 | 33,951 |
Freight and shipping costs | 202 | 202 | ||
Total cost of sales | 180,518 | 262,538 | 520,164 | 330,433 |
Gross Income (Loss) | (134,198) | 1,003,611 | (435,554) | 935,717 |
Selling, general, and administrative | 11,156 | 8,852 | 20,051 | 15,649 |
Professional fees | 2,925 | 24,033 | ||
Marketing & advertising | 804 | 1,325 | 9,795 | 4,725 |
Payroll | 8,978 | 3,825 | 30,761 | 41,298 |
Consultant fees | 57,477 | 21,000 | 168,977 | 42,000 |
Amortization & depreciation expense | 646 | 1,531 | ||
Total operating expenses | 81,986 | 35,002 | 255,149 | 103,672 |
Net income (loss) from operations | $ (216,184) | $ 968,610 | $ (690,702) | $ 832,045 |
Basic and diluted (Loss) per share: | ||||
Income(Loss) per share from continuing operations | $ (0.0389) | $ 96.8610 | $ (0.1242) | $ 83.2045 |
Income(Loss) per share | $ (0.0389) | $ 96.8610 | $ (0.1242) | $ 83.2045 |
Weighted average shares outstanding | 5,560,000 | 10,000 | 5,560,000 | 10,000 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Cash flows from operating activities: | ||
Net (Loss) | $ (690,702) | $ 832,045 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 363,475 | 83,960 |
Decrease (Increase) in: | ||
Accounts receivable, net | 215,456 | (1,250,000) |
Prepaid expenses and other current assets | (224) | |
Accounts payable, accrued expenses and taxes payable | 54,324 | |
Total adjustment to reconcile net income to net cash | 634,562 | (1,166,040) |
Net cash provided in operating activities | (56,140) | (333,995) |
Cash flows from investing activities: | ||
Assets held for Sale | (108,196) | |
Acquisition of property, plant and equipment | (5,822) | (3,127,245) |
Acquisition of intangible assets | (8,301) | |
Net cash received in investing activities | (122,319) | (3,127,245) |
Cash Flows From Financing Activities: | ||
Borrowing from related party | 162,148 | |
Proceeds from issuance of common stock | 1 | |
Intercompany transfers | 3,463,737 | |
Net Cash Provided By Financing Activities | 162,148 | 3,463,738 |
Net Change in Cash | (16,311) | 2,498 |
Cash at Beginning of Year | 16,350 | |
Cash at End of Period | $ 39 | $ 2,498 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | The accompanying audited financial statements of OBITX, Inc., (the “Company”, “we”, “our”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Haute Jobs, LLC, (“HAUTE”), Campaign Pigeon, LLC, (“CAMP”), and altCUBE, Inc., (“altCUBE”). Description of Business The Company was incorporated in the State of Delaware on March 30, 2017 originally under the name GigeTech, Inc. On October 31, 2017 the Company changed its name to OBITX, Inc., and updated its Articles of Incorporation through unanimous consent of its shareholder, MCIG. The Company is headquartered in Jacksonville, Florida. The Company’s primary NAICS CODE is 519130, Internet publishing and broadcasting and web search portals. We publish and generate textual, audio, and/or video content on the Internet, and operate web sites that use a search engine to generate and maintain extensive databases of internet addresses and content. The Company earns revenue through social media advertising, fees, and services. Under its plan, the Company developed its white label software solution for MCIG under the 420 Cloud brand in support of the cannabis industry. The company has expanded its services and solutions in software development and internet advertising and promotion into the social media industries of entertainment, business administration, blockchain technologies, and social media. 1 Subsidiaries of the Company The company currently operates, in addition to OBITX, Inc., three wholly owned subsidiaries which are consolidated: Haute Jobs, LLC We incorporated on May 10, 2018 in the state of Wyoming. Haute Jobs, LLC was created to provide services in the arena of job marketing and matching services, to perform an as an employment center. Campaign Pigeon, LLC We incorporated on May 10, 2018 in the state of Wyoming. Campaign Pigeon, LLC was created to provide services in the arena of online marketing and generating advertising. altCUBE, Inc We incorporated on June 4, 2018 in the state of Wyoming. altCUBE, Inc was created to provide services in the arena of promoting individual advertising solutions and enabling access to the financial crypto global market, providing modern, efficient, clean and intuitive user interface. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Principles of Consolidation The consolidated financial statements include the accounts of the Company, the wholly owned subsidiaries of HAUTE, CAMP, and altCUBE. 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 at the date of the 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 include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment; contingencies; and income taxes. On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Revenue Recognition Policies We intend to earn revenue from the subscription, non-software related hosted services, term-based and perpetual licensing of software products, associated software maintenance and support plans, consulting services, training, and technical support. On February 1, 2018, we adopted Topic 606, using the modified retrospective transition method applied to those contracts which were not completed as of February 1, 2018. Results for reporting periods beginning after February 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on February 1, 2018. Under Topic 606, revenue is recognized 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: We determine revenue recognition through the following steps: · identification of the contract, or contracts, with a customer; · identification of the performance obligations in the contract; · determination of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of revenue when, or as, we satisfy a performance obligation. Research and Development Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized only if the product or process is technically and commercially feasible, if development costs can be measured reliably, if future economic benefits are probable, if the Company intends to use or sell the asset and the Company intends and has sufficient resources to complete development. The Company has recognized $2,160 as a capital asset for the nine months ended October 31, 2018 and $82,800 for the six months ended July 31, 2017. 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. The Company places its temporary cash investments with financial institutions insured by the FDIC. Concentrations of credit risk with respect to trade receivables and commodities are limited due to the diverse group of customers to whom the Company provides services to. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables or the selling of its commodities warrant based upon factors such as the credit risk of specific customers, historical trends, other information and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high-quality financial institutions. The Company had $0 in excess of federally insured limits on October 31, 2018, and October 31, 2017. For the nine month period ended October 31, 2018, sales to the Company’s primary customer, Render Payment, LLC accounted for approximately 0% of revenues and 99.6% of accounts receivable, there were $1,254,530 accounts receivable for the nine month period ended October 31, 2018 and $1,469,986 for the nine month period ended October 31, 2017. Cost of Goods Sold The Company recognizes the direct cost of purchasing product for sale, including freight-in and packaging, as cost of goods sold in the accompanying statement of operations. Cost of Revenue Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by OEMs, to drive traffic to our websites and products, and to acquire online advertising space; costs incurred to support and maintain Internet-based products and services, including data center costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products. 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. For cash management purposes, the company concentrates its cash holdings in an account at Bank of America. The Company had no cash equivalents as of October 31, 2018, or October 31, 2017. Property, Plant, and Equipment Property, plant, and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five periods. The Company classifies its software under the Financial Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, and the Governmental Accounting Standards Board (GASB) Statement No. 42, Accounting of Costs of Computer Software Developed or Obtained for Internal Use. When software is used in providing goods and services it is classified as PPE. Accounts Receivable The Company’s accounts receivable are trade accounts receivable. The Company recognized $0 as an uncollectable reserve for the nine month periods ending October 31, 2018 and 2017. Advertising Costs and Expense The advertising costs are expensed as incurred. Advertising costs were $9,795 for the nine month period ending October 31, 2018 and $4,725 for the nine month period ending October 31, 2017. Foreign Currency Translation The Company’s functional currency and its reporting currency is the United States Dollar. Income Taxes In accordance with SAB Topic 1: Financial Statements, Subsidiary’s or Division’s Separate Financial Statements and Segments Basic and Diluted Net Earnings (Loss) Per Share The Company follows ASC Topic 260 – Earnings Per Share FASB 2015-06, Earnings Per Share Commitments and Contingencies The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments ASC 450 – Contingencies |
Going Concern
Going Concern | 9 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | The Company's financial statements are prepared using generally accepted accounting principles, which contemplate 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 periods ended October 31, 2018, has 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 negative cash flow but has recognized a substantial gain in October 2017, due in large part to the services provided to a single customer, Render Payment, LLC. There are no assurances the Company will generate a profit or obtain positive cash flow. The Company has sustained its solvency through the support of its single shareholder, MCIG, 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 necessary funding or generate the revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | In a major transaction, the Company acquired the 420 Cloud software environment which includes, 420 Cloud mobile, 420 Cloud browser, 420 Cloud API, WhoDab, BangPunch, 420 single sign-on mobile wallet, 420 job search, Weedistry, Ehesive, 420 cue, 420 wise guy, and Palm weed. While some of the software applications are currently in use, others are still under development. The Company launched its 420 cloud software service on April 20, 2017. The company has transferred all digital currency ATMs to assets held for sale as they are no longer going to be used by the company has and will be sold. The following is a detail of equipment: Property, Plant, and Equipment For the 9 months ended October 31, 2018 2017 Software $ 3,129,411 $ 3,127,244 Intangibles 7,753 - Machinery & Equipment - - Total acquisition cost 3,137,164 3,127,244 Accumulated depreciation 564,461 83,960 Total property, plant, and equipment $ 2,572,704 $ 3,043,284 Depreciation expense on property, plant and equipment was $363,475 for the 9 months ended October 31, 2018 and $83,960 for the 9 months ending October 31, 2017. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | On March 31, 2017, MCIG entered into a purchase agreement with APO Holdings, LLC to acquire the 420 Cloud Software Network (see Note 7 – Acquisitions). MCIG acquired the assets and assigned them to OBITX. The cost of the asset was recorded as an intercompany transfer. OBITX has utilized the acquired assets of the 420 Cloud Network for its base of operations. On November 1, 2017, the company assigned all rights and obligations to the 420 Cloud Software Network to OBITX in exchange for 100,000 shares of Series A Preferred Stock and 500,000 shares of OBITX common stock. The cost basis of the Assets at the time of transfer was $3,043,285. MCIG conducted an independent review of the Assets in August 2017. The independent review stated that no impairment was needed and that the assets had a fair market value in excess of the current cost basis. On March 13, 2017 MCIG acquired 10,000 shares of OBITX common shares representing 100% ownership at the time. On August 1, 2017, the Company entered into a contract with MCIG for hosting and email services. In addition, the Company will provide additional marketing services for MCIG and other internet based activities as mutually agreed upon. Under terms of the agreement, MCIG is to $2,000 per month for a period of 12 months. All additional services not identified are billed at an hourly rate of $150 per hour. On September 13, 2017, the company entered into an agreement to provide social media and other advertising services to Render Payment, LLC. The contract calls for the payment of $1,250,000 for services rendered with a 90 day payment term. We provided services for marketing the ICO for Render Payment, LLC which have been completed and are finished. The fee for our service is $1,250,000 per the contract. WE can easily accept payment today in RPM tokens; however we are electing to not do so as we believe we will make more by holding it. Michael Hawkins, the former Chief Financial Officer, is a non-controlling member with greater than 10% ownership in Render Payment, LLC. On November 1, 2017, the Company entered into a consulting agreement with Alex Mardikian, the Chief Executive Officer. The agreements call for $7,000 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less. On November 1, 2017, the Company entered into a consulting agreement with Brandy Craig, the Chief Financial Officer. The agreements call for $3,500 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less. On November 1, 2017, the Company entered into a consulting agreement with Paul Rosenberg, the Director. The agreements call for $3,500 per month for a period of one year. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. . The Company and consultant may elect to convert a portion of this into equity of the company. In addition, each consultant was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and each consultant was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less. The Company entered a Line of Credit with MCIG, for up to $500,000 in funding on November 1, 2016. The Line of Credit will terminate on April 30, 2019. It was given at a 0% interest rate and is payable upon termination date with the option to convert the agreement into equity at a 15% discount to the then current market rate. Since inception, the Company had various transactions in which MCIG paid expenses on behalf of the Company. As of April 30, 2018, the Company borrowed $3,635,253.42 from MCIG. $3,043,285 of which represents the 420 Cloud Software Network that was exchanged for 100,000 shares of Series A Preferred Stock and 500,000 shares of OBITX common stock on November 1, 2017. As of October 31, 2018, the amount outstanding on the Line of Credit with MCIG is $596,526. The Line of Credit was increased to $1,000,000 on January 1, 2018. On November 1, 2017, the company issued five-year warrants for the purchase of a combined total of 3,000,000 common shares to seven individuals/entities at the purchase price of $1.00 per share. On November 1, 2017, the Company entered into a consulting agreement with the Law Offices of Carl G. Hawkins to serve as corporate counsel. The agreement calls for a one-time payment of $5,000 plus $150 per hour for legal services. The payments may be booked as a note due, which may be converted into shares of the company at a then-current price per share. The Company and counsel may elect to convert a portion of this into equity of the company. In addition, counsel was authorized to purchase 50,000 shares of common stock at par value ($0.0001 per share) through a warrant, which was subsequently exercised, and counsel was issued a seven-year warrant to acquire 250,000 shares of the Company Stock at $1.00 per share or at the opening price on a federally regulated exchange service, whichever is less. On November 1, 2017 Alex Mardikian, the company’s Chief Executive Officer, purchased 50,000 shares of common stock for $5.00. On November 1, 2017 Brandy Craig, the company’s Chief Financial Officer, purchased 50,000 shares of common stock for $5.00. On November 1, 2017 Carl G. Hawkins, the company’s Corporate Counsel, purchased 50,000 shares of common stock for $5.00. On November 1, 2017 Paul Rosenberg, the company’s Director, purchased 500,000 shares of common stock for $50.00. On November 1, 2017 Epic Industry Corp, a wholly owned company of MCIG’s Chief Financial Officer, Michael Hawkins, purchased 250,000 shares of common stock for $25. On November 1, 2017 Paul Rosenberg entered into an agreement with the company to purchase up to 5,000,000 shares of common stock at the price of $0.10 per share. As of the time of this filing Mr. Rosenberg has purchased 2,500,000 for $250,000. On November 1, 2017 APO Holdings, LLC purchased 1,500,000 shares of common stock with certain registration rights for $150,000. On June 30, 2018 OBITX provided services to their subsidiary altCUBE in the amount of $25,167. This amount was made up of General Administrative expenses of $1,250, Website Design of $16,009, Marketing Expense $7,168, and Website Maintenance of $740. On June 14, 2018 the Company entered a Line of Credit with APO Holdings, LLC for up to $100,000 at any one time. The Line of Credit may be cancelled at any time by either party providing 30 days written notice of cancellation. It was given at a 0.6% interest rate and may be paid at any time with no definitive payoff date. As of October 31, 2018 the current outstanding on the line of credit is $77,400. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | The Company entered into a commitment for its corporate offices on October 30, 2017. The commitment is for a period of twelve (12) months at the rate of $69 per month. The Company may utilize additional space on an as needed basis at an hourly or daily rate. |
Acquisitions
Acquisitions | 9 Months Ended |
Oct. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | On March 31, 2017, MCIG acquired software code for a cloud-based social media platform to be known as 420Cloud, which was assigned to OBITX. The Company considers the acquisition of 420Cloud as a purchase of an asset, not a business. In this particular acquisition, the Company acquired software code and supporting functions for five different software packages that had not been finalized, marketed, and launched at the time of acquisition. The Company expects to continue to expend a significant amount of time and capital to further develop the software. At the time of acquisition, the assets have no operational income and could not generate revenue without major consideration and effort by the Company. The following table summarizes the estimated fair values of the assets acquired and their accounting classifications, at the date of acquisition. We assumed the liability and responsibility to complete the software as it was designed for with the intent to market. 420Cloud Accounting Classifications Software - 420 Cloud - Mobile $ 677,389 Software - 420 Cloud – Browser 315,709 Software – 420 Cloud API 90,116 Software - Whodab 67,587 Software - Ehesive 450,882 Software – 420 Cloud – Single Sign On 450,882 Software – 420 Job Search 135,173 Software – Weedistry 45,058 Software – Marketaro 112,644 Software – 420 Cue 450,882 Software – 420 Wise Guy 225,593 Software – Palm Weed 22,529 Total assets acquired $ 3,044,444 Due to Shareholder – MCIG, Inc. $ 3,044,444 |
Stockholders Equity
Stockholders Equity | 9 Months Ended |
Oct. 31, 2018 | |
Equity [Abstract] | |
Stockholders Equity | Common Stock As of October 31, 2018 and January 31, 2018, the Company had 200,000,000 common shares authorized, with 5,460,000 common shares at a par value of $0.0001 issued and outstanding. As of October 31, 2018 and January 31, 2018, the company had 1,000,000 Series A Preferred shares authorized, with 100,000 Series A Preferred shares at a par value of $10 issued and outstanding. |
Basic Income per Share before N
Basic Income per Share before Non-Controlling Interest | 9 Months Ended |
Oct. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic Income per Share before Non-Controlling Interest | Basic Income Per Share Basic Income Per share For the 9 months Ended October 31, 2018 2017 Net income (690,006) 832,045 Basic income per share (0.09) 83.20 Basic weighted average number of shares outstanding 5,560,000 10,000 The computation of basic loss per common share is based on the weighted average number of shares outstanding during the period. |
Warrants
Warrants | 9 Months Ended |
Oct. 31, 2018 | |
Notes to Financial Statements | |
Warrants | On November 1, 2017 the Company issued 7 warrants to officers, directors, and investors for the purchase of up to 3,000,000 shares of common stock at $1.00 per share. The warrants expire on November 1, 2022 at 5:00 PM Eastern Standard Time. The warrants contain participation rights to any registration statement filed by the Company. The Holder shall not be entitled to exercise their Warrant when the number of shares exercised by the Warrant Holder would cause the Holder to exceed 4.99% of the total outstanding common stock. A summary of warrant activity for six months ended October 31, 2018 is as follows: Weighted Average Conversion Shares Price Warrants outstanding at April 30, 2017 - $ - Exercised - $ - Granted 3,000,000 $ 1.00 Warrants outstanding at April 30, 2018 3,000,000 $ 1.00 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | As of December 10, 2018 OBITX, Inc became a public company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company, the wholly owned subsidiaries of HAUTE, CAMP, and altCUBE. |
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 at the date of the 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 include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment; contingencies; and income taxes. On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Revenue Recognition Policies | We intend to earn revenue from the subscription, non-software related hosted services, term-based and perpetual licensing of software products, associated software maintenance and support plans, consulting services, training, and technical support. On February 1, 2018, we adopted Topic 606, using the modified retrospective transition method applied to those contracts which were not completed as of February 1, 2018. Results for reporting periods beginning after February 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on February 1, 2018. Under Topic 606, revenue is recognized 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: We determine revenue recognition through the following steps: · identification of the contract, or contracts, with a customer; · identification of the performance obligations in the contract; · determination of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of revenue when, or as, we satisfy a performance obligation. |
Research and Development | Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized only if the product or process is technically and commercially feasible, if development costs can be measured reliably, if future economic benefits are probable, if the Company intends to use or sell the asset and the Company intends and has sufficient resources to complete development. The Company has recognized $2,160 as a capital asset for the nine months ended October 31, 2018 and $82,800 for the six months ended July 31, 2017. |
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. The Company places its temporary cash investments with financial institutions insured by the FDIC. Concentrations of credit risk with respect to trade receivables and commodities are limited due to the diverse group of customers to whom the Company provides services to. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables or the selling of its commodities warrant based upon factors such as the credit risk of specific customers, historical trends, other information and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high-quality financial institutions. The Company had $0 in excess of federally insured limits on October 31, 2018, and October 31, 2017. For the nine month period ended October 31, 2018, sales to the Company’s primary customer, Render Payment, LLC accounted for approximately 0% of revenues and 99.6% of accounts receivable, there were $1,254,530 accounts receivable for the nine month period ended October 31, 2018 and $1,469,986 for the nine month period ended October 31, 2017. |
Cost of Goods Sold | The Company recognizes the direct cost of purchasing product for sale, including freight-in and packaging, as cost of goods sold in the accompanying statement of operations. |
Cost of Revenue | Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by OEMs, to drive traffic to our websites and products, and to acquire online advertising space; costs incurred to support and maintain Internet-based products and services, including data center costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products. |
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. For cash management purposes, the company concentrates its cash holdings in an account at Bank of America. The Company had no cash equivalents as of October 31, 2018, or October 31, 2017. |
Property, Plant, and Equipment | Property, plant, and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five periods. The Company classifies its software under the Financial Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, and the Governmental Accounting Standards Board (GASB) Statement No. 42, Accounting of Costs of Computer Software Developed or Obtained for Internal Use. When software is used in providing goods and services it is classified as PPE. |
Accounts Receivable | The Company’s accounts receivable are trade accounts receivable. The Company recognized $0 as an uncollectable reserve for the nine month periods ending October 31, 2018 and 2017. |
Advertising Costs and Expense | The advertising costs are expensed as incurred. Advertising costs were $9,795 for the nine month period ending October 31, 2018 and $4,725 for the nine month period ending October 31, 2017. |
Foreign Currency Translation | The Company’s functional currency and its reporting currency is the United States Dollar. |
Income Taxes | In accordance with SAB Topic 1: Financial Statements, Subsidiary’s or Division’s Separate Financial Statements and Segments |
Basic and Diluted Net Earnings (Loss) Per Share | The Company follows ASC Topic 260 – Earnings Per Share FASB 2015-06, Earnings Per Share |
Commitments and Contingencies | The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments ASC 450 – Contingencies |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, Plant, and Equipment For the 9 months ended October 31, 2018 2017 Software $ 3,129,411 $ 3,127,244 Intangibles 7,753 - Machinery & Equipment - - Total acquisition cost 3,137,164 3,127,244 Accumulated depreciation 564,461 83,960 Total property, plant, and equipment $ 2,572,704 $ 3,043,284 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions | 420Cloud Accounting Classifications Software - 420 Cloud - Mobile $ 677,389 Software - 420 Cloud – Browser 315,709 Software – 420 Cloud API 90,116 Software - Whodab 67,587 Software - Ehesive 450,882 Software – 420 Cloud – Single Sign On 450,882 Software – 420 Job Search 135,173 Software – Weedistry 45,058 Software – Marketaro 112,644 Software – 420 Cue 450,882 Software – 420 Wise Guy 225,593 Software – Palm Weed 22,529 Total assets acquired $ 3,044,444 Due to Shareholder – MCIG, Inc. $ 3,044,444 |
Basic Income per Share before_2
Basic Income per Share before Non-Controlling Interest (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic Income Per Share | Basic Income Per share For the 9 months Ended October 31, 2018 2017 Net income (690,006) 832,045 Basic income per share (0.09) 83.20 Basic weighted average number of shares outstanding 5,560,000 10,000 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Oct. 31, 2018 | |
Notes to Financial Statements | |
Schedule of Warrants | Weighted Average Conversion Shares Price Warrants outstanding at April 30, 2017 - $ - Exercised - $ - Granted 3,000,000 $ 1.00 Warrants outstanding at April 30, 2018 3,000,000 $ 1.00 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) | 9 Months Ended |
Oct. 31, 2018 | |
Date of Incorporation | Mar. 30, 2017 |
State of Incorporation | Delaware |
Haute Jobs | |
Date of Incorporation | May 10, 2018 |
State of Incorporation | Wyoming |
Ownership | 100.00% |
Campaign Pigeon | |
Date of Incorporation | May 10, 2018 |
State of Incorporation | Wyoming |
Ownership | 100.00% |
altCUBE | |
Date of Incorporation | Jun. 4, 2018 |
State of Incorporation | Wyoming |
Ownership | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Oct. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | Jan. 31, 2018 | |
Capitalized assets | $ 82,800 | $ 2,160 | ||||
Accounts receivable, net | $ 1,254,530 | $ 1,469,986 | 1,254,530 | $ 1,469,986 | $ 1,469,986 | |
Cash equivalents | 0 | 0 | 0 | 0 | ||
Uncollected reserve | 0 | 0 | ||||
Marketing & advertising | $ 804 | $ 1,325 | $ 9,795 | $ 4,725 | ||
Effective Income Tax Rate, Federal | 21.00% | 34.00% | ||||
Loss on contingencies | $ 0 | $ 0 | ||||
Primary Customer | ||||||
Revenues, Percent | 0.00% | |||||
Accounts Receivable, Percent | 99.60% |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Software | $ 3,129,411 | $ 3,127,244 | |
Intangibles | 7,753 | ||
Machinery & Equipment | |||
Total acquisition cost | 3,137,164 | 3,127,244 | |
Accumulated depreciation | 564,461 | 83,960 | |
Total Property and Equipment | $ 2,566,481 | $ 3,043,284 | $ 3,227,767 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 121,159 | $ 41,980 | $ 363,475 | $ 83,960 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | ||||
Oct. 31, 2018 | Oct. 31, 2017 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2016 | |
Date of Agreement | Oct. 30, 2017 | ||||
Series A Preferred stock, shares issued | 100,000 | 100,000 | |||
Common stock, shares issued | 5,460,000 | 5,460,000 | |||
Cost of services | $ 215,456 | $ (1,250,000) | |||
Warrants Issued | 3,000,000 | ||||
Warrant Issuance #1 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Warrants Issued | 3,000,000 | ||||
Exercise price | $ 1 | ||||
Warrant Term | 5 years | ||||
Assignment Agmt #1 | |||||
Date of Agreement | Nov. 1, 2017 | ||||
Series A Preferred stock, shares issued | 100,000 | ||||
Common stock, shares issued | 500,000 | ||||
Fair Value of Assets Acquired | $ 3,043,285 | ||||
MCIG | |||||
Date of Agreement | Mar. 13, 2017 | ||||
Common stock, shares issued | 10,000 | ||||
Fair Value of Assets Acquired | $ 1 | ||||
Contract #1 | |||||
Date of Agreement | Aug. 1, 2017 | ||||
Monthly service cost | $ 2,000 | ||||
Hourly service rate | $ 150 | ||||
Contract #2 | |||||
Date of Agreement | Sep. 13, 2017 | ||||
Cost of services | $ 1,250,000 | ||||
Consulting Agmt #1 | |||||
Date of Agreement | Nov. 1, 2017 | ||||
Monthly service cost | $ 7,000 | ||||
Date of Issuance | Nov. 1, 2017 | ||||
Warrants Issued | 250,000 | ||||
Exercise price | $ 1 | ||||
Warrant Term | 7 years | ||||
Consulting Agmt #2 | |||||
Date of Agreement | Nov. 1, 2017 | ||||
Monthly service cost | $ 3,500 | ||||
Date of Issuance | Nov. 1, 2017 | ||||
Warrants Issued | 250,000 | ||||
Exercise price | $ 1 | ||||
Warrant Term | 7 years | ||||
Consulting Agmt #3 | |||||
Date of Agreement | Nov. 1, 2017 | ||||
Monthly service cost | $ 3,500 | ||||
Date of Issuance | Nov. 1, 2017 | ||||
Warrants Issued | 250,000 | ||||
Exercise price | $ 1 | ||||
Warrant Term | 7 years | ||||
Line of Credit | |||||
Date of Agreement | Nov. 1, 2016 | ||||
Line of Credit, Capicity | $ 1,000,000 | $ 500,000 | |||
Line of Credit, Current | $ 596,526 | $ 3,635,253 | |||
Line of Credit, Interest Rate | 0.00% | ||||
Line of Credit, Termination Date | Apr. 30, 2019 | ||||
Consulting Agmt #4 | |||||
Date of Agreement | Nov. 1, 2017 | ||||
Monthly service cost | $ 5,000 | ||||
Hourly service rate | $ 150 | ||||
Date of Issuance | Nov. 1, 2017 | ||||
Warrants Issued | 250,000 | ||||
Exercise price | $ 1 | ||||
Warrant Term | 7 years | ||||
Line of Credit #2 | |||||
Date of Agreement | Jun. 14, 2018 | ||||
Line of Credit, Capicity | $ 100,000 | ||||
Line of Credit, Current | $ 77,400 | ||||
Line of Credit, Interest Rate | 0.60% | ||||
Share Issuance #1 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 50,000 | ||||
Shares Issued, Amount | $ 5 | ||||
Share Issuance #2 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 50,000 | ||||
Shares Issued, Amount | $ 5 | ||||
Share Issuance #3 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 50,000 | ||||
Shares Issued, Amount | $ 5 | ||||
Share Issuance #4 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 500,000 | ||||
Shares Issued, Amount | $ 50 | ||||
Share Issuance #5 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 250,000 | ||||
Shares Issued, Amount | $ 25 | ||||
Share Issuance #6 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 2,500,000 | ||||
Shares Issued, Amount | $ 250,000 | ||||
Share Issuance #7 | |||||
Date of Issuance | Nov. 1, 2017 | ||||
Shares Issued, Purchase | 1,500,000 | ||||
Shares Issued, Amount | $ 150,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Oct. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Date of Agreement | Oct. 30, 2017 |
Monthly rent | $ 69 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisitions (Details) | 9 Months Ended |
Oct. 31, 2018USD ($) | |
Total assets acquired | $ 3,044,444 |
Asset #1 | |
Software, Intangible asset purchase | 677,389 |
Asset #2 | |
Software, Intangible asset purchase | 315,709 |
Asset #3 | |
Software, Intangible asset purchase | 90,116 |
Asset #4 | |
Software, Intangible asset purchase | 67,587 |
Asset #5 | |
Software, Intangible asset purchase | 450,882 |
Asset #6 | |
Software, Intangible asset purchase | 450,882 |
Asset #7 | |
Software, Intangible asset purchase | 135,173 |
Asset #8 | |
Software, Intangible asset purchase | 45,058 |
Asset #9 | |
Software, Intangible asset purchase | 112,644 |
Asset #10 | |
Software, Intangible asset purchase | 450,882 |
Asset #11 | |
Software, Intangible asset purchase | 225,593 |
Asset #12 | |
Software, Intangible asset purchase | $ 22,529 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - $ / shares | Oct. 31, 2018 | Jan. 31, 2018 |
Equity [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,460,000 | 5,460,000 |
Common stock, shares outstanding | 5,460,000 | 5,460,000 |
Series A Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Series A Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A Preferred stock, shares issued | 100,000 | 100,000 |
Series A Preferred stock, shares outstanding | 100,000 | 100,000 |
Basic Income per Share before_3
Basic Income per Share before Non-Controlling Interest - Schedule of Basic Income Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Net (Loss) | $ (690,702) | $ 832,045 | ||
Income(Loss) per share | $ (0.0389) | $ 96.8610 | $ (0.1242) | $ 83.2045 |
Weighted average shares outstanding | 5,560,000 | 10,000 | 5,560,000 | 10,000 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants (Details) - $ / shares | 9 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Notes to Financial Statements | ||
Beginning Balance, Issued Warrants | ||
Beginning Balance, Average Exercise Price | ||
Exercised, Warrants | ||
Exercised, Average Exercise Price | ||
Granted, Warrants | 3,000,000 | |
Granted, Average Exercise Price | $ 1 | |
Ending Balance, Issued Warrants | 3,000,000 | |
Ending Balance, Average Exercise Price | $ 1 |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | 9 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Warrants Issued | 3,000,000 | |
Warrant Issuance #1 | ||
Date of Issuance | Nov. 1, 2017 | |
Warrants Issued | 3,000,000 | |
Exercise price | $ 1 | |
Warrant Term | 5 years | |
Warrant Description | The Holder shall not be entitled to exercise their Warrant when the number of shares exercised by the Warrant Holder would cause the Holder to exceed 4.99% of the total outstanding common stock. |