Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1197

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 2
Chunk 1197
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 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.”

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 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 over the expected period of benefit and commission expense payable included in Other current assets and Other long-term
liabilities.

The Company
capitalized lease expense incurred in December 2023 that are directly related to fulfilling its cloud services which commenced operations
in January 2024. The lease expense is directly related to fulfill customer contracts and is expected to be recovered. The capitalized
lease expense was reclassified as lease expense in January 2024.

Deferred Revenue

Deferred
revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of December 31 2024. Deferred
revenues are recognized as revenue recognition criteria have been met. 

Remaining performance obligation

Remaining
performance obligations represent the transaction price of contracts for work that have not yet been performed. The amount represents
estimated revenue expected to be recognized in the future related to the