Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1517

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 4
Chunk 1517
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ity costs. These expenses were incurred by mining
facilities for the miners in operation and were closely correlated with the number of deployed miners.

In the year ended December 31, 2023, electricity costs increased by
$7.2 million, or 47%, compared to the electricity costs incurred in the year of 2022. The increase primarily resulted from an increased
number of deployed miners.

Profit-sharing fees. In 2021, we entered into hosting
agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by
the miners. We refer to these fees as profit-sharing fees.

In the year ended December 31, 2023, profit-sharing fees increased
by $1.9 million, or 47%, compared to profit-sharing fees incurred in the year of 2022. This increase was primarily due to an increase
in the number of digital assets generated and the comparatively higher average price of bitcoin during 2023.

We expect a proportionate increase in cost of
revenue as we continue to focus on the expansion and upgrade of our miner fleet.

Depreciation and amortization expenses

For the years ended December 31, 2023 and 2022,
depreciation and amortization expenses were $14.4 million and $27.8 million, respectively, primarily based on an estimated useful life
of three years for the miners.

General and administrative expenses 

For the year ended December 31, 2023, our general
and administrative expenses, totaling $27.7 million, were primarily comprised of shared-based compensation expenses of $9.1 million, salary
and bonus expenses of $5.5 million, professional and consulting expenses of $5.4 million, directors and officers insurance expenses of
$1.7 million, marketing expenses of $1.2 million, travel expenses of $0.8 million, and transportation expenses of $0.2 million to relocate
miners.

For the year ended December 31, 2022, our general
and administrative expenses, totaling $23.0 million, were primarily comprised of professional and consulting expenses of $7.7 million,
transportation expenses of $0.7 million to relocate miners, salary and bonus expenses of $2.7 million, shared-based compensation expenses
of $2.3 million related to RSUs and share options granted to our employees, consultants and director, directors and officers liability
insurance expenses of $3.3 million,