Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 33

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 33
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value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information
available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s
incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment
of the associated lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred and
not included in the measurement of right-of-use assets and operating lease liabilities.

For
the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term.
For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and
are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term
lease exception were insignificant.

For
sales-type leases where the Company is the lessor, the Company recognizes a net investment in lease, which comprises of the present value
of the future lease payments and any unguaranteed residual value. Interest income is recognized over the lease term at a constant periodic
discount rate on the remaining balance of the lease net investment using the rate implicit in the lease and is included in “Revenue
– other”. Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which will be recorded
in “Other income, net.”

For
                                            the operating sublease where the Company is the lessor, the Company recognizes lease payments
                                            in income over the lease term on a straight-line basis and is included in “Other income,
                                            net”.

Revenue
recognition

The
Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). 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. Refer to Note 3. Revenue from Contracts with Customers for further information.

Contract
costs

Capitalized
contract costs represent the costs directly related and incremental to the origination of new contracts, including commissions that are
incurred directly related to obtaining customer contracts. We amortize the deferred contract costs on a straight-line basis over the
expected period of benefit. These amounts are included in the accompanying consolidated balance sheets, with the capitalized costs to
be amortized to commission expense