Company: ABTC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076632
Chunk: 8

Company: American Bitcoin Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 8
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Cash and Cash Equivalents

The Company considers all
short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents.
Cash and cash equivalents are recorded at cost, which approximates their fair value. The Company maintains its cash and cash equivalents
in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally
insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. As
of June 30, 2025 and December 31, 2024, the Company had $379,000 and $1,081,000 in excess of the federal insurance limit, respectively.
The Company has never suffered a loss due to such excess balances.

8

Prepaid Expenses

Prepaid expenses consist of payments for the Company’s
co-location services, an insurance policy and other professional services, and the amounts are expected to be realized and consumed within
twelve months after the reporting period.

Digital Assets

Digital assets or cryptocurrencies
(including Bitcoin, Ethereum, DAI, and USDT) are included in current assets in the accompanying balance sheets. Cryptocurrencies purchased
are recorded at cost and cryptocurrencies obtained by the Company through its sale of common stock are accounted for based on the value
of the specific digital asset on the date received.

Digital assets are included
in current assets in the unaudited condensed consolidated balance sheets due to the Company’s ability to sell bitcoin in a highly
liquid marketplace and the sale of bitcoin to fund operating expenses to support operations. The Company measures digital assets at fair
value with changes recognized in operating expenses in the unaudited condensed consolidated statement of operations.

Mining Equipment

Mining equipment is stated
at cost, including purchase price and all shipping and customs fees, and depreciated using the straight-line method over the estimated
useful lives of the assets, generally three years for cryptocurrency mining equipment.

The Company reviews the carrying
amounts of mining equipment when events or changes in circumstances indicate the assets may not be recoverable. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is
not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating
unit to which the asset belongs.

The recoverable amount is
the higher of