Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1380

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 1380
---
 were measured
at fair value. Subsequently, the investment in the Fund is included under the caption “Investment securities” as Investment
in Innovation Fund. Refer to Note 10, Investment Securities for more information.

Leases

The Company determines whether an arrangement
contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the
date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the
lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination
options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is
reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement,
which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the
lease term.

For leases with a term exceeding 12 months, an
operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value
of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial
lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the
lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a
given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates
implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the
rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. Variable lease
costs are recognized in the period in which the obligation for those payments is incurred and not included in the measurement of right-of-use
assets and operating lease liabilities.

F-15

For the Company’s operating leases, fixed
lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less,
any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated
balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant.

For sales-type leases where the Company is the
lessor,