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

Company: American Bitcoin Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 10
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 is initially recorded at its fair
value and would then be revalued at each reporting date, with changes in the fair value reported in the statements of operations. If there
are stock-based derivative financial instruments, the Company will use a probability-weighted average series Binomial lattice option pricing
models to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative
instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting
period. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash
settlement of the derivative instrument could be required within 12 months of the balance sheet date. Derivative liability will be measured
initially and subsequently at fair value.

Revenue Recognition

The Company recognizes revenue
under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company
expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

●Step 1: Identify the contract
with the customer

●Step 2: Identify the performance
obligations in the contract

●Step 3: Determine the transaction
price

●Step 4: Allocate the transaction
price to the performance obligations in the contract

●Step 5: Recognize revenue when
the Company satisfies a performance obligation

In order to identify the
performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify
each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct”
good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or
service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable
of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other
promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good
or service is combined with other promised goods or services until a distinct bundle of goods or services