Company: BTBT
Filing Date: 2025-07-02
Form Type: S-8
Source: 0001213900-25-061020
Chunk: 50

Company: Bit Digital, Inc
Filing Date: 2025-07-02
Form: S-8
Chunk 50
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 made a significant capital investment in purchasing
second-hand miners in order to implement them rapidly to mine bitcoin at prices advantageous to us. Management believes, based on its
knowledge of the industry, that the hosting agreements provided many advantages as opposed to other alternative arrangements. However,
we have since been required to deploy or move our miners from their current hosting service providers to other mining facilities, and
we may be forced to accept less advantageous terms. Further, during relocation to a new mining facility, we will not be able to operate
our miners and therefore we will not be able to generate revenue.

From May until September 2022, power was offline
at the Niagara Falls, New York facility hosted by Blockfusion, due to an explosion and subsequent fire. We have estimated the loss of
revenue at the Blockfusion site through September 13, 2022 to be approximately $3,200,000. Our methodology is based on the historical
rate for those impacted miners and the average bitcoin and ETH earned during the above period. Shortly after power was restored, the Company
and Blockfusion received a notice from the City of Niagara Falls, New York directing Blockfusion to cease and desist its cryptocurrency
mining activities at Blockfusion’s Niagara Falls facility. The loss of power at Blockfusion facilities has had a material adverse
effect on our operations. We relocated our miners from Blockfusion facilities to Digihost, Soluna and Bitdeer after our service agreement
with Blockfusion ended in September 2023.

On June 3, 2024, the Company filed suit in Delaware
Superior Court against Blockfusion, Inc. (“Blockfusion”) alleging claims for breach of contract, conversion, and related claims
in connection with, among other things, certain deposits and advances paid to Blockfusion, the return of which is owed to Bit Digital.
Bit Digital is seeking in excess of $4.3 million. On October 22, 2024, Blockfusion denied the Company’s claims and brought reciprocal
breach of contract and related counterclaims. Blockfusion is seeking at least $158,000 in damages. A bench trial has been scheduled for
June 29, 2026. The litigation is at an early stage and a reasonably possible range of loss or recovery cannot be estimated.

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During the same time, a portion of our miners
were offline and power has only been partially used at our hosting partner Digihost’s facility at North Tonawanda, New