Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1882

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 6
Chunk 1882
---
 liquid staking, respectively.

Our revenues from ETH staking increased by $0.6
million or 2,508.5%, to $0.7 million for the year ended December 31, 2023 from $25,904 for the year ended December 31, 2022. The increase
was primarily due to an increase of 349.0 ETH earned from staking services partially offset by a decrease in the average price of ETH
for the year ended December 31, 2023 compared to the year ended December 31, 2022.

92

Cost of revenue

The Company’s cost of revenue consists primarily
of i) direct production costs related to mining operations, including electricity costs, profit-sharing fees and other relevant costs,
but excluding depreciation and amortization, which are separately stated in the Company’s consolidated statements of operations,
and ii) direct costs related to specialized cloud-infrastructure services for artificial intelligence applications and ETH staking business
including service fee and profit-sharing fees to the service providers, which were immaterial during the year ended December 31, 2023.

For the years ended December 31, 2023 and 2022,
the cost of revenue were comprised of the following:

    For the Years Ended December 31, 

    2023  
    2022 

    Electricity costs 
    $22,277,038  
    $15,113,046 
  
    Profit-sharing fees 
     5,902,205  
     4,027,597 
  
    Other costs 
     1,377,342  
     1,233,990 
  
    Total 
    $29,556,585  
    $20,374,633 

Electricity costs. These expenses were incurred by mining
facilities for the miners in operation and were closely correlated with the number of deployed miners.

In the year ended December 31, 2023, electricity costs increased by
$7.2 million, or 47%, compared to the electricity costs incurred in the year of 2022. The increase primarily resulted from an increased
number of deployed miners.

Profit-sharing fees. In 2021, we entered into hosting
agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by
the miners. We refer to these fees as profit-sharing fees.

In the year ended December 31, 2023, profit-sharing fees increased