Company: BTBT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044155
Chunk: 14

Company: Bit Digital, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 14
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 projected undiscounted cash flows. These assets are recorded at fair value only upon recognition of an impairment charge.

USDC

USD Coin (“USDC”) is accounted for
as a financial instrument that can be redeemed one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash
or cash equivalents, we treat our USDC holdings as a liquidity resource.

Accounts Receivable

Accounts receivable consist of amounts due from
our customers. Receivables are recorded at the invoiced amount less an allowance for any potentially uncollectable accounts under the
current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to
be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument,
that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance
with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability
of outstanding accounts receivable balances to determine an allowance for credit loss that reflects its best estimate of the lifetime
expected credit losses. Uncollectible accounts are written off against the allowance when collection does not appear probable.

Due to the short-term nature of the Company’s
accounts receivable, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends.
In determining the amount of the allowance for credit losses, the Company considers historical collection history based on past due status,
the current aging of receivables, customer-specific credit risk factors including their current financial condition, current market conditions,
and probable future economic conditions which inform adjustments to historical loss patterns.

As of March 31, 2025, the allowance for credit
loss has not been material to the consolidated financial statements.

7

Digital assets

Digital assets (primarily include bitcoin and
ETH) are included in current assets in the accompanying consolidated balance sheets. Digital assets purchased are recorded at cost and
digital assets awarded to the Company through its mining activities and staking activities are accounted for in accordance with the Company’s
revenue recognition policy disclosed below.

Effective January 1, 2024, the Company early adopted
ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net
income in each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and