Company: ABTC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076632
Chunk: 9

Company: American Bitcoin Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 9
---
 fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows to be derived
from continuing use of the asset or cash-generating unit are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Fair value less costs of disposal is the amount
obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable, willing parties,
less the cost of disposal. When a binding sale agreement is not available, fair value less costs of disposal is estimated using a discounted
cash flow approach with inputs and assumptions consistent with those of a market participant. If the recoverable amount of an asset or
cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the cash-generating unit is reduced to its
recoverable amount. An impairment loss is recognized immediately in net income.

At the point in time a miner
becomes inoperable and not repairable, the Company records an expense amounting to the carrying value, which is the cost basis less accumulated
depreciation at the time of write off.

Leases

The Company accounts for
its leases under ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are
classified as operating or financing leases and are recorded on the balance sheet as both a right-of-use asset and a lease liability,
calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental
borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized
over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line
rent expense over the lease term.

In calculating the right-of-use
asset and the lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes
short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent
expense on a straight-line basis over the lease term.

9

Derivatives

The Company evaluates all
of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument