Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 2250

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7A
Chunk 2250
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 we concluded that the nature of our obligations and the variability of the payment terms based on the number of
GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved on a daily basis as we satisfy our obligations.
The Company recognizes revenue net of consideration payable to customers, such as service credits, and accounted for as a reduction of
the transaction price in accordance with guidance in ASC 606-10-32-25.

During the three months ended March 31, 2024,
the Company issued a service credit of $1.3 million to the customer as compensation for decreased utilization during the initial deployment
period, which included testing and optimization phases. During the three months ended September 30, 2024, the Company issued another service
credit of $0.6 million to the customer as compensation for decreased utilization.

The Company’s cloud services revenue has
been generated from Iceland.

F-19

Colocation services

Colocation services generate revenue by providing
customers with physical space, power, and cooling within the data center facility.

Our revenue is primarily derived from recurring
revenue streams, mainly (1) colocation, which is the leasing of cabinet space and power and (2) connectivity services, which includes
cross-connects. Additionally, The remainder of our revenue is from non-recurring revenue, which primarily includes installation services
related to a customer’s initial deployment.

Revenues from recurring revenue streams are billed
monthly and recognized ratably over the term of the contract, generally 1 to 5 years for data center colocation customers. Non-recurring
installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term.

We guarantee certain service levels, such as uptime,
as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure
or offerings, or in the event of certain instances of damage to customer infrastructure within our data center, we would reduce revenue
for any credits or cash payments given to the customer.

Digital asset mining

The Company has entered into digital asset mining
pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contract is terminable
at any time by either party with no termination penalty. Our enforceable right to compensation begins when, and lasts for as long as,
we provide computing power to the mining pool operator; our performance obligation extends over the contract term given our continuous
provision of computing power. This period of