Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 39

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 39
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consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction
price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance
obligation.

The
Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which
the Company expects to be entitled in such exchange.

18

The
Company is currently engaged in digital asset mining business, high performance computing (“HPC”) business, including cloud
services and HPC data center services, and Ethereum staking activities.

In
June 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company.
In connection with the transition, the Company intends to convert its BTC holdings into ETH over time and has commenced a strategic
alternatives process for its bitcoin mining operations, which is expected to result in a sale or wind-down, with any net proceeds
to be re-deployed into ETH.

Disaggregation
of revenues

Revenue disaggregated
by reportable segment is presented in Note 17. Segment Reporting.

Cloud
services

The
Company provides cloud services to support customers’ generative AI workstreams. We have determined that cloud services are a single
continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e.
distinct days of service).

These
services are consumed as they are received, and the Company recognizes revenue over time using the variable allocation exception as it
satisfies performance obligations. We apply this exception because we concluded that the nature of our obligations and the variability
of the payment terms based on the number of GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved
on a daily basis as we satisfy our obligations. The Company recognizes revenue net of consideration payable to customers, such as service
credits, and accounted for as a reduction of the transaction price in accordance with guidance in ASC 606-10-32-25.

During
the nine months ended September 30, 2025, the Company accrued an estimated service credit of approximately $2.0 million to a customer
under the terms of the contract. During the nine months ended September 30, 2024, the Company issued a service credit of $1.9 million
to a customer as compensation for decreased utilization during the initial deployment period