Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1390

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 1390
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 the Company
had native staked 21,568 ETH and 12,352 ETH, respectively, on the Ethereum blockchain. For the years ended December 31, 2024 and 2023,
the Company earned 565.1 ETH valued at $1,815,373 and 287.0 ETH valued at $531,702, respectively, from such staking activities and recognized
the ETH staking rewards as revenues.

(b) Liquid staking

Liquid staking is similar to native staking in
terms of performance obligations, determination of transaction price and revenue recognition. When we participated in liquid staking
via Portara protocol, the Company received receipt tokens sETH-H to represent the staked ETH at 1:1 ratio. The liquid staking rewards
were in the form of rETH-H which could be redeemed for ETH from the liquid staking provider or exchange for ETH via OTC. When we
participated in liquid staking via Liquid Collective protocol, the Company received receipt tokens Liquid Staked ETH (“LsETH”)
to represent the staked ETH. LsETH uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked
tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked tokens.

For the years ended December 31, 2024 and 2023,
the Company generated revenues of $4,503 and $144,011, respectively, from the liquid staking.

F-21

Contract costs

The Company
capitalizes commission expenses directly related to obtaining customer contracts, which would not have been incurred if the contract had
not been obtained. As of December 31, 2024, capitalized costs to obtain a contract totaled $2.0 million, and the outstanding commission
expense payable was $1.6 million. As of December 31, 2023, capitalized costs to obtain a contract totaled $2.8 million, and the outstanding
commission expense payable was $1.9 million. 

The Company
capitalizes lease expense that are directly related to fulfilling its cloud services which commenced operations in January 2024. The lease
expense is directly related to fulfill customer contracts and is expected to be recovered. As of December 31, 2024 and
2023, capitalized costs to fulfill a contract totaled $nil and $100 thousand, respectively.

Contract Liabilities

The Company’s
contract liabilities consist of deferred revenue and customer deposits.