Post by
bohemian61 on Aug 10, 2019 9:59am
GOURAN' WORTHLESS INVESTMENTS !!
9 INVESTMENTS On November 16, 2017, Coinstream purchased 1,500,000 common shares of Distributed Consensus Platform (“DISCO”) (formerly Distributed Mining Inc.), a private US corporation, for $1,888,200 (USD $1,500,000), which resulted in Coinstream owning 25% of DISCO. From November 16, 2017 to February 28, 2018, Coinstream accounted for its investment using the equity method resulting in Coinstream recognizing a portion of DISCO’s net loss in the amount of $162,290, resulting in a decrease of the carrying value of the investment to $1,725,910 (note 5). Coinstream recognized an impairment of this investment of $981,864, resulting in a decrease in the carrying value of the investment to $744,046 (note 4) at April 20, 2018. The Company acquired 100% of Coinstream on March 1, 2018. This investment was spun out as part of the Arrangement discussed in Note 4. On January 23, 2018, the Company purchased 1,000,000 common shares of Breaking Data Corp., a company listed on the TSX Venture Exchange (“TSXV”), at $3.00 per common share for $3,000,000, which represents approximately a 3% ownership interest. On January 10, 2018, the Company subscribed to 8,000,000 Kodak Coins, an Initial Coin Offering (“ICO”) by the Eastman Kodak Company, for $2,509,000 (USD $2,000,000) at the pre-ICO stage. On January 11, 2018, the Company invested $2,000,000 in Spectra7 Microsystems Inc. (“Spectra7”), a company listed on the TSXV. The Company received 2,000 senior unsecured convertible debentures of Spectra7 with a principal amount of $1,000 each, bearing interest at 7% per annum (the “Convertible Debenture”), and 2,850,000 share purchase warrants. Each share purchase warrant entitles the Company to acquire one common share in the capital of Spectra7 at a price of $0.50 per common share until January 9, 2021. At April 30, 2018, the fair value of warrants was $59,070. The warrants were valued using the Black-Scholes Option Pricing Model with the following assumptions: stock price - $0.14; exercise price - $0.50; expected life – 2.70 years; volatility – 71%; dividend yield – 0%; and risk-free rate – 1.84%. On February 8, 2018, the Convertible Debenture was fully converted into 5,714,285 common shares of Spectra7, which represents approximately 4% ownership interest. During the year ended April 30, 2018, the Company sold 276,000 common shares for proceeds of $62,376 resulting in a realized loss of $34,224. At April 30, 2018, the fair value of the shares was $761,360. Global Blockchain Technologies Corp. (formerly Carrus Capital Corporation) Notes to the Consolidated Financial Statements For the years ended April 30, 2018 and 2017 (Expressed in Canadian dollars) 15 9 INVESTMENTS (CONTINUED) On January 15, 2018, the Company invested $2,000,000 in Millennial Esports Corp. (“Millennial”), a company listed on the TSXV. The Company acquired 2,857,143 units of Millennial at a price of $0.70 per unit, which represents approximately 2% ownership interest. Each unit consists of one common share and one half of a share purchase warrant. Each share purchase warrant entitles its holder to purchase one common share of Millennial at a price of $1.20 per share for a period of 24 months. At April 30, 2018, the fair value of shares was $1,285,714 and the fair value of the warrants was $323,850. The warrants were measured using the Black-Scholes Option Pricing Model with the following assumptions: stock price - $0.45; exercise price - $1.20; expected life – 1.70 years; volatility – 150%; dividend yield – 0%; and risk-free rate – 1.84%. On March 23, 2018, the Company completed an investment of $1,000,300 in Fusion Agiletech Partners Inc. (“Fusion”) through a private placement. The Company received 2,858,000 units comprising of one common share and one-half of one Series 2018-I share purchase warrant. Each share purchase warrant entitles its holder to purchase one common share of Fusion at a price of $0.50 per share for a period of 24 months. At April 30, 2018, the fair value of the shares was $1,000,300 and the fair value of the warrants was $331,661. The warrants were measured using the Black-Scholes Option Pricing Model with the following assumptions: stock price - $0.35; exercise price - $0.50; expected life - 2 years; volatility – 150%; dividend yield – 0%; and risk-free rate – 1.84%. The following tables summarize the investments in blockchain technology made by the Company during the years ended April 30, 2018: DISCO Breaking Data Kodak Coin Spectra7 Millennial Fusion Total Balance, April 30, 2017 $ - $ - $ - $ - $ - $ - $ - Purchase of investment 1,725,910 3,000,000 2,509,000 2,000,000 2,000,000 1,000,300 12,235,210 Unrealized gain (loss) from change in fair value (981,864) (1,790,000) - (1,082,970) (390,436) 331,661 (3,913,609) Transferred as part of Arrangement (744,046) - - - - - (744,046) Sale of investment - - - (96,600) - - (96,600) Balance, April 30, 2018 $ - $ 1,210,000 $ 2,509,000 $ 820,430 $ 1,609,564 $1,331,961 $ 7,480,955 10 EQUIPMENT DEPOSIT On December 27, 2017, the Company paid a deposit toward 6,666 Antminer S9s from Bitmain Technologies Ltd., a privately owned multinational semiconductor company headquartered in Beijing, China, for a total purchase price of $25,468,000 (USD $20,000,000). Other costs including shipping and broker fees associated with this purchase amounted to $6,314,436. The Company determined there were indicators of impairment given declines in cryptocurrency prices and it was determined that the carrying amounts exceeded the recoverable amounts. Accordingly, an impairment of $11,637,436 was recognized. The recoverable amounts were estimated for the value-in-use based on a discounted cash flow method and determined in Level 3 of the fair value hierarchy. Pursuant to the Arrangement (note 4), the cryptocurrency mining equipment deposit of $20,145,000 was transferred to Global Blockchain Mining on April 20, 2018. As at April 30, 3018 Number of Shares Number of Warrants Cost Fair value of shares Fair value of warrants Total fair value Balance, April 30, 2017 - - $ - $ - $ - $ - Breaking Data 1,000,000 - 3,000,000 1,210,000 - 1,210,000 Kodak Coin 8,000,000 - 2,509,000 2,509,000 - 2,509,000 Spectra7 5,438,285 2,850,000 1,903,400 761,360 59,070 820,430 Millennial 2,857,143 1,428,571 2,000,000 1,285,714 323,850 1,609,564 Fusion 2,858,000 1,429,000 1,000,300 1,000,300 331,661 1,331,961 Balance, April 30, 2018 $ 10,412,700 $ 6,766,374 $ 714,581 $ 7,480,955