Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 346

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 346
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 with a term exceeding 12 months, an
operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value
of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial
lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the
lease and reduced by any lease incentives received. For purposes of measuring the present 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.

F-15

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.”

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