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

Company: American Bitcoin Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 14
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 arrangements under co-location agreements,
but excluding depreciation and amortization, which are separately stated in the Company’s unaudited condensed consolidated statements
of operations.

ASC 606-10-32-25 through 32-27
in the FASB ASC provides guidance on the consideration of whether fees paid to a mining pool operator should be considered payments to
a customer and treated as a reduction of the transaction price or revenue. The Company’s management reviewed the standards and completed
the following assessment.

Identifying the Customer:
ASC 606-10-32-25 states that an entity should determine whether the counterparty to a contract is a customer. If the counterparty is a
customer, the entity should apply the revenue recognition guidance to that contract. Under ASC 606-10-32-25, the Company identified the
mining pool operator as the customer as the Company entered into a contractual agreement with the pool operator whereas the Company is
to provide services in the form of contributing hashing power to the pool.

Mining Pool Operator as
a Customer: As the Company has determined the mining pool operator to be a customer, any fees paid to the mining pool operator would be
part of the transaction price of the contract. Any fees paid by the Company as a miner to the pool operator would be revenue earned by
the pool operator, and the pool operator is treated as the customer.

Transaction Price: ASC 606-10-32-26
provides guidance on determining the transaction price. The Company considered the effects of variable consideration, constraints on variable
consideration, the existence of a significant financing component in the contract, and non-cash consideration. The Company receives variable
consideration given the variable nature of the amount of mining power (hashrate) contributed on a daily basis (24-hour period per recurring
contract term). The Company completes an analytical procedure as part of its monthly closing process to determine the reasonableness of
consideration received. There are no significant financing components of the transaction or delays in the timing of payments from the
customer to the Company, whereas the Company would need to adjust the transaction price for the time value of money. As the Company receives
non-cash consideration, in the form of bitcoin, ASC 606-10-32-26 specifies that the Company should measure non-cash consideration at fair
value. The fair value of the non-cash consideration would be included in the determination of the transaction price. The Company does
not receive the gross amounts of bitcoin earned prior to