Company: BTBT
Filing Date: 2025-09-29
Form Type: 424B5
Source: 0001213900-25-093122
Chunk: 99

Company: Bit Digital, Inc
Filing Date: 2025-09-29
Form: 424B5
Chunk 99
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 share will be determined by allocating such holder’s tax basis in the ordinary shares, as determined in accordance with the previous sentence, between the ordinary shares actually received and the fractional share deemed received upon conversion, in accordance with their respective fair market values. The U.S. Holder’s holding period in the ordinary shares will include the period during which the U.S. Holder held the notes.

The U.S. federal income tax treatment of the conversion of a note into a combination of cash and ordinary shares is uncertain, and U.S. Holders should consult their tax advisors regarding the consequences of such a conversion. In general, the U.S. federal income tax treatment will depend on whether the conversion is treated as a recapitalization or alternatively as a conversion of a portion of the note for ordinary shares and a taxable sale of a portion of the note for cash. The conversion can only be treated as a recapitalization if the notes are treated as “securities” for U.S. federal income tax purposes. The term “security” is not defined in the Code or the U.S. Treasury Regulations and has not been defined clearly by judicial decisions. The determination of whether a particular obligation constitutes a security depends on an overall evaluation of the nature of the obligation, including whether the holder of such obligation is subject to a material level of entrepreneurial risk and whether a continuing proprietary interest is intended. Although there are a number of factors that may affect the determination of whether a debt instrument is a “security,” one of the most important factors is the original term of the instrument, which is the length of time between the issuance of the instrument and its maturity. In general, instruments with an original term of more than ten years are likely to be treated as “securities,” and instruments with an original term of less than five years are less likely to be treated as “securities.” In addition, the convertibility of a debt instrument into stock of the issuer may favor “security” treatment because of the holder’s possible equity participation in the issuer. We intend to take the position that the notes are securities for U.S. federal income tax purposes and if, upon a conversion, a U.S. Holder receives a combination of cash (other than cash in lieu of a fractional share) and ordinary shares, that the conversion will be treated as a recapitalization for U.S. federal income tax purposes. However, there can be no guarantee that the IRS will not take a different position, and therefore, a note may not constitute a “security” for U.S. federal income