Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 31

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 31
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 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. 

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 were 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