Company: BTBT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044155
Chunk: 31

Company: Bit Digital, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 31
---

activities and recognized the ETH staking rewards as revenues.

16

(b) Liquid staking

Liquid staking is similar to native staking in
terms of performance obligations, determination of transaction price and revenue recognition. When we participated in liquid staking
via Portara protocol, the Company received receipt tokens sETH-H to represent the staked ETH at 1:1 ratio. The liquid staking rewards
were in the form of rETH-H which could be redeemed for ETH from the liquid staking provider or exchange for ETH via OTC. When we
participated in liquid staking via Liquid Collective protocol, the Company received receipt tokens Liquid Staked ETH (“LsETH”)
to represent the staked ETH. LsETH uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked
tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked tokens.

For the three months ended March 31, 2025 and
2024, the Company generated revenues of $nil and $4,503, respectively, from the liquid staking.

Contract costs

The Company capitalizes commission expenses directly
related to obtaining customer contracts, which would not have been incurred if the contract had not been obtained. As of March 31, 2025,
capitalized costs to obtain a contract totaled $1.7 million, and the outstanding commission expense payable was $1.6 million. As of December
31, 2024, capitalized costs to obtain a contract totaled $2.0 million, and the outstanding commission expense payable was $1.6 million.

Contract Assets

Contract assets primarily consist of revenue allocated
to complimentary services provided to customers as part of contractual arrangements. As of March 31, 2025 and December 31, 2024, contract
assets were $1.5 million and $nil, respectively.

Contract Liabilities

The Company’s contract liabilities consist
of deferred revenue and customer deposits. The following table presents changes in the total contract liabilities:

    For the Three Months
Ended March 31,

    2025

    2024

    Beginning balance
     
    $
    30,771,952

    $
    13,073,449

    Revenue earned

    (11,113,505
    )

    (9,321,861
    )
  
    Prepayment received

    1,589,580

    -

    Ending