Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1379

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 1379
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 value each reporting period, with changes in fair value
recorded in the consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market,
which represents a Level 3 measurement within the fair value hierarchy.

Investment in Innovation Fund/Digital assets
held in fund

On October 1, 2023, the Company made an investment
of 2,701 Ethereum, with a fair value of $4.7 million, into Bit Digital Innovation Master Fund SPC Ltd. (the “Fund”). The Fund
was subsequently consolidated based on the Company’s controlling financial interest. As a result, the assets held in the Fund are
included in current assets in the consolidated balance sheets under the caption “Digital assets held in Fund” as of June 30,
2023 before the disposition.

The Fund qualified and operated as an investment
company for accounting purposes pursuant to the accounting and reporting guidance under ASC 946, “Financial Services – Investment
Companies” (“ASC 946”), which requires fair value measurement of the Fund. The Company retains the Fund’s investment
company specific accounting principles under ASC 946 upon consolidation. The digital assets held by the Fund were traded on a number of
active markets globally. A fair value measurement under ASC 820, “Fair Value Measurement” (“ASC 820”) for an asset
assumes that the asset is exchanged in an orderly transaction between market participants either in the principal market for the asset
or, in the absence of a principal market, the most advantageous market for the asset (ASC 820-10-35-5). The fair value of the assets within
the Fund was primarily determined using the price from CoinMarketCap. Any changes in the fair value of the assets were recorded in Other
income (expense), net in the consolidated statements of operations.

On July 1, 2024, the Company entered into a share
purchase agreement with Pleasanton Ventures Limited (“Pleasanton Ventures”) for the disposition of Bit Digital Innovation
Master Fund SPC Ltd and Bit Digital Investment Management Limited. Refer to Note 21, Disposition of Bit Digital Investment Management
Limited and Bit Digital Innovation Master Fund SPC Limited for more information. Upon the disposition, the Company no longer has
a controlling financial interest in the Fund and therefore deconsolidated the Fund in accordance with ASC 810 – “Consolidation”
(“ASC 810”). The Company did not record any gain or loss upon deconsolidation as the digital assets in the Fund