Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 32

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 32
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-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.

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

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.

The Company’s colocation services revenue
has been generated from Canada.

Digital asset mining

The Company enters in contracts with mining pool
operators to provide computing power to digital asset mining pools. Providing computing power for digital asset transaction verification
services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation
in the Company’s contracts with mining pool operators.

17

Contract inception and the Company’s enforceable
right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to
the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination.
As such, the duration of a contract is less than 24 hours (a day) and may be continuously renewed throughout the day. The implied renewal
option is not a material right because there are no upfront or incremental fees in the initial contract, and the rate of payments remains
the same upon each implied renewal, as the Full-Pay-Per-Share (FPPS) formula remains the