Company: BTBT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044155
Chunk: 24

Company: Bit Digital, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 24
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 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.

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 of the assessment can be reasonably
estimated.

If the assessment of a contingency indicates that
it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued
in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable,
but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate
of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

13

Share-based compensation

The Company expenses stock-based compensation
to employees and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company estimates
the fair value of stock option grants using the Black-Scholes option pricing