Company: ABTC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076632
Chunk: 13

Company: American Bitcoin Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 13
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 contracts with Foundry Pool USA involves the service of performing hash computations to facilitate
the verification of digital asset transactions. The Company’s miners contribute computing power (i.e. hashrate) that perform hash
calculations to the mining pool operator, engaging in the process of validating and securing transactions through the generation of Bitcoin
hashes. The mining pool then utilizes a specific mining algorithm (e.g. SHA-256) to submit shares (proof of work) to the mining pool’s
server as they contribute to solving the Bitcoin puzzles required to mine a block. The Company reviews and analyzes its individual pool
performance using a dashboard provided by Foundry Pool USA that includes real-time statistics on hashrate, shares submitted and earnings.
The service of performing hash computations in digital asset transaction verification services is an output of the Company’s ordinary
activities. The provision of providing these services is the only performance obligation in the Company’s contracts with mining
pool operators.

Regardless of the pool’s
success, the Company will receive consistent rewards based on the number of valid shares it contributes. The transaction consideration
the Company receives is non-cash consideration, in the form of bitcoin. The Company measures the bitcoin at fair value on the date earned
using the average price (calculated by averaging the daily open price and the daily close price) quoted by its Principal Market at the
date the Company completed the service of performing hash computations for the mining pool operator. There are no deferred revenues or
other liability obligations recorded by the Company since there are no payments in advance of the performance. At the end of each 24-hour
period (00:00:00 UTC and 23:59:59 UTC), there are no remaining performance obligations. By utilizing the average daily price of bitcoin
on the date earned, the Company eliminates any differences that may arise due to the volatility in trading price between bitcoin and fiat
currency during the period where the Company establishes and completes the contract. The consideration is all variable. There is no significant
financing component in these transactions.

If authoritative guidance
is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which
could affect the Company’s financial position and results from operations.

11

Cost of Revenues

The Company’s cost of revenue consists primarily
of direct costs of earning bitcoin related to mining operations, including electric power costs, other utilities, labor, insurance whether
incurred directly from self-mining operations or reimbursed, including any revenue sharing