Everything Blockchain, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Revenue

Revenue

9 Months Ended

Oct. 31, 2021

Note 7. Revenue

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:

	·	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.

Revenue was $62,000 for the three and nine months ended October 31, 2020, consisting of consulting and service revenue. The following table presents revenue for the three and nine months ended October 31, 2021 disaggregated by revenue source (in thousands):

Revenue

Net revenue	For the Three Months Ended October 31, 2021		For the Nine Months Ended October 31, 2021
Transactional revenue
Consulting and services revenue	$	706	$	1,961
Total transaction revenue		706		1,961
Subscription and services revenue
Staking revenue		124		255
Total subscription and services revenue		124		255
Total net revenue		830		2,216
Other revenue
Fair value adjustment to cryptocurrency		2,328		4,685
Crypto asset sales revenue		1,748		4,655
Interest income		-		47
Total other revenue		4,076		9,387
Total revenue	$	4,906	$	11,603

Transaction revenue

The Company charges a fee for its services at the transactional level. Currently the Company is engaged in developing, engineering, and designing blockchain projects, to include platforms and cryptocurrencies for customers. We typically treat all revenue generated from third parties for services as transaction revenue.

Subscription and service revenue

Subscription and service revenue primarily consist of staking revenue. The Company participates in networks with proof-of-stake consensus algorithms, through creating or validating blocks on the network. In exchange for participating in the consensus mechanism of these networks, the Company earns rewards in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete, and the rewards are available for transfer. Revenue is measured based on the number of tokens received and the fair value of the token at the date of recognition.

Other revenues

The Company includes interest income as a part of revenue when generated from non-cash equivalents as other revenue within net revenue. Interest earned on cash and cash equivalents is included in corporate interest income, within other income.

Other revenue also includes the sale of crypto assets. The Company records the total value of the sale in other revenue and the cost of the crypto assets in cost of sales within the consolidated statements of operations.