Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 640

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 640
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 incurred and the amount of the assessment can be reasonably
estimated. 

If the assessment of a contingency indicates that
it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued
in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable,
but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate
of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

F-17

Share-based compensation

The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date
fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and
the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent
uncertainties and the application of management’s judgment. These assumptions are the expected stock volatility, the risk-free interest
rate, the expected life of the option, and the dividend yield on the underlying stock. Expected volatility is calculated based on the
historical volatility of the Company’s common stock over the expected term of the option. Risk-free interest rates are calculated
based on risk–free rates for the appropriate term. The Company has elected to account for forfeitures of awards as they occur.

Treasury stock 

The Company accounts for treasury stocks using
the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury stocks account on the consolidated
balance sheets.

The Company treats shares withheld for tax purposes
on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the
number of shares that would have been issued upon vesting.

Reclassification

Certain items in the financial statements of the
comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact
on the total assets and total liabilities as of December 31, 2024 or on the statements of operations for the year ended December 31, 2024.

Recent accounting pronouncements

The Company continually assesses any new accounting
pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the