Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 28

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 28
---
 functional currency resulting in exchange gains or losses recorded in other income (expense),
net.

Operating segments

Operating segments are defined as components of
an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”)
in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is composed of the Chief Executive
Officer and Chief Financial Officer, who use segment gross profit (loss) to assess the performance of the business of our reportable operating
segments.

Income taxes

We account for current and deferred income taxes
in accordance with the authoritative guidance, which requires that the income tax impact is to be recognized in the period in which the
law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities
are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases
of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that
a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences
are expected to be recovered or settled on each jurisdiction.

In accordance with the authoritative guidance
on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The
first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more
likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any.
The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

14

Earnings (loss) per share

Basic earnings (loss) per share is computed by
dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during
the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were
exercised or converted into ordinary shares or resulted in the issuance of ordinary share participating in the earnings of the entity.

Commitments and contingencies 

In the normal course of business, the Company
is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities
for contingencies are recorded when it is probable that a liability has been incurred and the amount