Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 17

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 17
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 made by management include, but are not limited to, the valuation of digital assets and other current assets,
useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and
liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets.
Actual results could differ from those estimates.

We review the useful lives of equipment on an ongoing basis, and effective
January 1, 2025 we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made
to better reflect the expected usage patterns and economic benefits of the assets. The effect of this change in estimate for the first
quarter of 2025, based on cloud service equipment that were included in “Property, plant and equipment, net” as of December
31, 2024 and those acquired during the three months ended March 31, 2025, was a reduction in depreciation and amortization expense of
$2.5 million and a benefit to net income of $2.0 million, or $0.01 per basic share and $0.01 per diluted share.

Fair value of financial instruments

ASC 825-10 requires certain disclosures regarding
the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes
the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:

    ●
    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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    ●
    Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

    ●
    Level 3 - inputs to the valuation methodology are unobservable.

Fair value of digital assets is based on Level
1 inputs as these were based on observable quoted prices in the Company’s principal market for identical assets. The fair value
of the Company’s other financial instruments, including cash and cash equivalents, restricted cash, loans rece