Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 344

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 344
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 uses Net Asset Value (“NAV”) or
its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by the
fund administrator.

Investment
in privately held company

Equity securities
not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income
statements, according to ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in
privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price
changes resulting from orderly transactions for identical or similar investments of the same issuer. 

Equity investments
in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s
impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these
equity securities. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using
the average cost method. Dividend income is recognized when the right to receive the payment is established. 

F-14

Investment
in SAFE

SAFE investments
provide the Company with the right to participate in future equity financing of preferred stock. The Company accounted for this investment
under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment under ASC 825, Financial
Instruments, which requires financial instruments to be remeasured to fair 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