Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 29

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 29
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 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.

The Company may also enter into contractual arrangements
that result in commitments, including purchase obligations. In addition, the Company may be subject to contingent consideration obligations
related to asset acquisitions, which involve potential future payments contingent upon the achievement of specified conditions or milestones.

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 June 30, 2025 or on the statements of operations for the three and six months ended