Core Viewpoint - BTC Digital Ltd. is urging shareholders to vote ahead of the rescheduled extraordinary general meeting on August 22, 2025, emphasizing the importance of participation from shareholders with smaller positions to ensure the approval of the company's proposals [1][2][6]. Company Information - BTC Digital Ltd. is a blockchain technology company focused on creating value in the metaverse, blockchain, and cryptocurrency mining sectors. The company aims to develop blockchain-related businesses in North America, including cryptocurrency mining, mining farm construction, mining pool operations, and miner accessories [3]. Meeting Details - The extraordinary general meeting will take place on August 22, 2025, at 9:30 a.m. Eastern Time, with no changes to the physical location, record date, or proposals to be acted upon [1][3]. - Shareholders who held BTCT shares on June 27, 2025, retain their voting rights, even if they have sold their shares since that date [2][6]. Proxy Solicitation - The company has engaged Advantage Proxy, Inc. to assist in soliciting proxies from shareholders prior to the meeting. The total fee for this service is $11,500, plus associated disbursements [4]. - The company will cover all costs related to the solicitation of proxies from its working capital [4]. Voting Importance - The majority of votes received so far are in favor of the company's proposals, but more votes are needed to reach the quorum required to hold the meeting. Every vote is crucial to avoid further delays and additional solicitation costs [6].

Core Viewpoint - BTC Digital Ltd. has adjourned its extraordinary general meeting originally scheduled for July 21, 2025, to August 4, 2025, due to a lack of quorum [1][2]. Group 1: Meeting Details - The extraordinary general meeting was adjourned because a quorum of ordinary shareholders was not present [2]. - The adjourned meeting will still take place at the same physical location: 61 Robinson Road, Level 6 & 7, 738, Singapore 068893 [2]. - The time for the adjourned meeting is set for 9:30 a.m. Eastern Time on August 4, 2025 [1][2]. Group 2: Shareholder Actions - The Board of Directors recommends shareholders vote in favor of the important proposals outlined in the proxy statement [3]. - Shareholders who have already voted do not need to take further action unless they wish to change their votes [3]. - The company encourages shareholders who have not yet voted to do so before the adjourned meeting to avoid additional costs [3]. Group 3: Proxy Solicitation - BTC Digital Ltd. has engaged Advantage Proxy, Inc. to assist in soliciting proxies from shareholders prior to the adjourned meeting [4][7]. - Only shareholders of record as of June 27, 2025, are entitled to vote at the adjourned meeting [4]. - The company will cover the costs associated with proxy solicitation, including a fee of $11,500 to the proxy solicitor [7]. Group 4: Company Overview - BTC Digital Ltd. is a blockchain technology company focused on creating value in the metaverse, blockchain, and cryptocurrency mining sectors [6]. - The company aims to develop blockchain-related businesses in North America, including cryptocurrency mining and data center operations [6].

Company Overview - BTC Digital Ltd. is a blockchain technology company focused on creating value in the metaverse, blockchain, and cryptocurrency mining industry [5] - The company is committed to developing blockchain-related businesses in North America, including cryptocurrency mining, mining farm construction, mining pool and data center operation, and miner accessories [5] Offering Details - The company announced the closing of a registered direct offering with institutional investors, raising approximately $6.0 million by selling 2,000,000 Ordinary Shares at a price of $3.00 per share [1][2] - Aggregate gross proceeds from the offering were approximately $6.0 million before deducting fees and expenses [2] - The transaction closed on July 16, 2025, and the net proceeds will be used for the purchase of Ethereum [2] Legal and Regulatory Information - Aegis Capital Corp. acted as the exclusive placement agent for the offering, with various law firms providing counsel to the company [3] - The offering was made pursuant to an effective shelf registration statement on Form S-3 previously filed with the U.S. Securities and Exchange Commission (SEC) [3]

Group 1 - BTC Digital Ltd. has entered into definitive agreements for a registered direct offering with institutional investors, raising approximately $6.0 million by selling 2,000,000 Ordinary Shares at a price of $3.00 per share [1][2] - The gross proceeds from the offering are expected to be around $6.0 million before deducting fees and expenses, with the transaction anticipated to close on or about July 16, 2025 [2] - The net proceeds from the offering will be used, along with existing cash, for the purchase of Ethereum [2] Group 2 - Aegis Capital Corp. is acting as the exclusive placement agent for the offering, with various law firms providing legal counsel to the company and the placement agent [3] - The offering is made under an effective shelf registration statement previously filed with the U.S. Securities and Exchange Commission (SEC) [4] Group 3 - BTC Digital Ltd. is a blockchain technology company focused on creating value in the metaverse, blockchain, and cryptocurrency mining industry, with plans to develop blockchain-related businesses in North America [7]

Core Insights - Bitcoin Treasury Corporation has completed the initial phase of its Bitcoin accumulation plan, acquiring 478.57 Bitcoin for CAD$70 million, bringing its total holdings to 771.37 Bitcoin [1] - The Corporation aims to build long-term shareholder value by deploying its Bitcoin holdings through institutional lending and liquidity services, viewing Bitcoin as a foundational pillar of its business model [2] Company Strategy - The core strategy of Bitcoin Treasury Corporation is to accumulate and actively deploy Bitcoin to enhance shareholder value, recognizing Bitcoin's finite supply and long-term potential [3] - The Corporation plans to maintain a robust treasury position while expanding its service offerings, particularly in Bitcoin-denominated loans [3] Financial Metrics - The acquisition of Bitcoin results in a starting Bitcoin per Share (BPS) of approximately 0.0000634, calculated on a fully diluted basis [1]

[PART I](index=8&type=section&id=PART%20I) [Key Information](index=8&type=section&id=Item%203.%20Key%20Information) The company faces significant risks from its limited operating history, market volatility, and an evolving regulatory landscape [Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) Key risks include a limited operating history, dependence on volatile digital asset prices, and an uncertain regulatory environment - The company has a limited operating history in the cryptocurrency business, generating **$11.7 million in revenue** but incurring a **net loss of $2.0 million** in fiscal year 2024[40](index=40&type=chunk) - The company's revenue is materially dependent on the volatile market value of bitcoin, which rose to over **$1.4 trillion** in market value in March 2024 after falling to **$0.37 trillion** in October 2022[41](index=41&type=chunk)[44](index=44&type=chunk) - Acquiring new mining machines is capital-intensive and their cost can be linked to the market price of bitcoin, potentially increasing operational costs[47](index=47&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) - The company faces significant regulatory uncertainty from entities like the SEC or CFTC, which could impose substantial compliance costs or require business model changes[38](index=38&type=chunk)[118](index=118&type=chunk)[122](index=122&type=chunk) [Information on the Company](index=35&type=section&id=Item%204.%20Information%20on%20the%20Company) The company transitioned from education to focus exclusively on cryptocurrency mining and related services in the U.S [History and Development of the Company](index=35&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) The company divested its education business, rebranded to BTC Digital Ltd, and now focuses solely on U.S-based crypto mining - The company changed its name to 'BTC Digital Ltd' and began trading under the symbol **'BTCT'** on August 24, 2023[167](index=167&type=chunk)[168](index=168&type=chunk) - The company terminated its English Language Training (ELT) business in November 2022, shifting entirely to cryptocurrency mining in the U.S[166](index=166&type=chunk) - In November 2024, the company filed a Form S-3 shelf registration to offer up to **$150 million** in securities[171](index=171&type=chunk)[172](index=172&type=chunk) [Business Overview](index=36&type=section&id=B.%20Business%20Overview) The company's operations center on bitcoin mining, machine resale, and rental, with plans for R&D and asset management services FY 2024 Revenue Breakdown | Revenue Stream | Percentage of Total Revenue | | :--- | :--- | | Bitcoin Mining | 10.2% | | Mining Machines Resale | 78.1% | | Mining Machines Rental | 10.1% | | Other Mining-Related Business | 1.6% | Owned Mining Machines (as of report date) | Model | Total Mining Machines Hosted and Under Operation | | :--- | :--- | | Bitmain Antminer T21 190 /S | 400 | | Bitmain Antminer S19j Pro 100/S | 1,739 | | Bitmain Antminer S19 XP 140/S | 272 | | **Total** | **2,411** | - As of December 31, 2024, the company's network hash rate was **288 PH/S**, and it mined cryptocurrencies valued at **US$1.2 million** in FY2024[204](index=204&type=chunk) - Growth strategies include expanding the mining machine fleet, R&D for proprietary ASIC miners, and launching crypto asset management services in 2025[195](index=195&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - In July 2024, the company acquired a Bitcoin mining facility in Arkansas with a 6MV stable power load for **$1.99 million**[234](index=234&type=chunk) [Organizational Structure](index=47&type=section&id=C.%20Organizational%20Structure) The company operates as a holding company with a portfolio of directly and indirectly owned global subsidiaries - BTC Digital Ltd is a holding company, and all of its subsidiaries are directly or indirectly owned by the Company[245](index=245&type=chunk) [Property, Plants and Equipment](index=47&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The company leases a facility in Manila, Arkansas, for its operations under a one-year renewable term - The company's subsidiary, Quench Data LLC, leases a facility at 3101 AR-77, Manila, Arkansas 72442, under a one-year term that began on May 16, 2024[246](index=246&type=chunk) [Operating and Financial Review and Prospects](index=47&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) The company's financial review shows increased revenue to $11.7 million and a reduced net loss of $2.0 million for FY 2024 [Operating Results](index=49&type=section&id=A.%20Operating%20Results) Revenue grew 28.7% to $11.7 million in FY 2024, driven by machine resales, resulting in a reduced net loss of $2.0 million Consolidated Statements of Operations Summary (in thousands of US$) | | 2023 | 2024 | | :--- | :--- | :--- | | **Revenues** | **9,073** | **11,675** | | Cost of revenues | (10,208) | (11,560) | | **Gross profit/(loss)** | **(1,135)** | **115** | | Loss from operations | (2,481) | (2,678) | | **Net loss** | **(2,824)** | **(1,989)** | Revenue Breakdown by Business Line (in thousands of US$) | Revenue Stream | 2023 | 2024 | | :--- | :--- | :--- | | Bitcoin mining | 2,882 | 1,190 | | Mining machines resale | 5,485 | 9,124 | | Other mining-related business | 706 | 1,361 | | **Total** | **9,073** | **11,675** | - General and administrative expenses increased by **117.5% to $2.4 million** in FY2024, driven by stock option expenses and a credit impairment loss[265](index=265&type=chunk) Non-GAAP Financial Measures Reconciliation (in thousands of US$) | | 2023 | 2024 | | :--- | :--- | :--- | | **Net Loss** | **(2,824)** | **(1,989)** | | Add: Share-based compensation | 138 | 571 | | **Adjusted net loss** | **(2,686)** | **(1,418)** | | **EBITDA** | **389** | **1,730** | | Add: Share-based compensation | 138 | 571 | | **Adjusted EBITDA** | **527** | **2,301** | [Liquidity and Capital Resources](index=53&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Liquidity improved significantly, with cash increasing to $14.9 million due to $20.3 million raised from financing activities Summary of Cash Flows (in thousands of US$) | | 2023 | 2024 | | :--- | :--- | :--- | | Net cash generated from operating activities | 3,808 | 1,557 | | Net cash used in investing activities | (4,620) | (7,000) | | Net cash generated from financing activities | 807 | 20,300 | | **Net increase in cash and cash equivalents** | **(5)** | **14,857** | | Cash and cash equivalents at end of year | 43 | 14,900 | - Net cash from financing activities in 2024 was **$20.3 million**, primarily due to **$19.9 million** in proceeds from the S-3 financing[292](index=292&type=chunk) - Net cash used in investing activities in 2024 was **$7.0 million**, mainly for repayment of related party advances and equipment purchases[290](index=290&type=chunk) [Directors, Senior Management and Employees](index=57&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The company's leadership received $116,000 in cash compensation in FY 2024, with YUN FENG ASSETS INC. as a major shareholder [Directors and Senior Management](index=57&type=section&id=A.%20Directors%20and%20Senior%20Management) The company is led by CEO Siguang Peng and features a five-member board with three independent directors chairing key committees Directors and Senior Management | Name | Position | | :--- | :--- | | Siguang Peng | Chief Executive Officer and Director | | Xu Peng | Director and Chairman of the Board of Directors | | Yupeng Guo | Acting Chief Financial Officer | | Ye Ren | Independent Director and Chair of the Audit Committee | | Zhiyi Xie | Independent Director and Chair of the Compensation Committee | | Yuejun Jiang | Independent Director and Chair of the Nominating and Corporate Governance Committee | [Compensation](index=59&type=section&id=B.%20Compensation) Aggregate executive cash compensation was $116,000 in FY 2024, with equity awards governed by a 2020 Share Incentive Plan Named Executive Officer Compensation (FY 2024) | Name and Principal Position | Salary ($) | Total ($) | | :--- | :--- | :--- | | Siguang Peng | 60,000 | 60,000 | | Yupeng Guo | 36,000 | 36,000 | - As of December 31, 2024, there were **209,753 outstanding options** granted to non-executive employees under the 2020 Plan[322](index=322&type=chunk) [Share Ownership](index=64&type=section&id=E.%20Share%20Ownership) As of year-end 2024, executives owned 0.26% of shares, with YUN FENG ASSETS INC. holding a 6.46% stake Beneficial Ownership as of December 31, 2024 | Name of Beneficial Owner | Amount of beneficial ownership | Percentage of outstanding ordinary shares | | :--- | :--- | :--- | | **Directors and Executive Officers** | | | | Siguang Peng | 10,936 | 0.17% | | Yupeng Guo | 5,599 | 0.09% | | All directors and executive officers as a group | 16,535 | 0.26% | | **5% or Greater Shareholders** | | | | YUN FENG ASSETS INC. | 415,602 | 6.46% | - As of December 31, 2024, there were **6,434,040 ordinary shares outstanding**[6](index=6&type=chunk)[344](index=344&type=chunk) [Major Shareholders and Related Party Transactions](index=65&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) The company settled all significant amounts due to related parties in FY 2024, including repayments to its former Chairman - In the year ended December 31, 2024, the company repaid advances of **$2.4 million** to former Chairman Mr. Jishuang Zhao and **$1.8 million** to its associate, Met Chain Co., Limited[354](index=354&type=chunk) Balances with Related Parties (in thousands of US$) | | As of Dec 31, 2023 | As of Dec 31, 2024 | | :--- | :--- | :--- | | **Amounts due to related parties** | **4,056** | **-** | | - Mr. Guo Yupeng | 290 | - | | - Mr. Zhao Jishuang | 1,952 | - | | - Met Chain Co., Limited | 1,814 | - | | **Amounts due from related parties** | **-** | **200** | | - Mr. Guo Yupeng | - | 12 | | - Met Chain Co., Limited | - | 188 | [Financial Information](index=66&type=section&id=Item%208.%20Financial%20Information) The company provides consolidated financial statements and does not intend to pay dividends or face material legal proceedings - The company does not intend to declare or pay dividends in the near future, retaining earnings for business operations and expansion[360](index=360&type=chunk) - The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business or financial condition[359](index=359&type=chunk) [Additional Information](index=67&type=section&id=Item%2010.%20Additional%20Information) The company details its share capital, tax status as a Cayman Islands entity, and potential PFIC classification risks for U.S. holders - The company's authorized share capital is **$1,500,000**, divided into **25,000,000 ordinary shares** with a par value of US$0.06 each[372](index=372&type=chunk)[376](index=376&type=chunk) - As a Cayman Islands entity, the company is not subject to income, capital gains, or dividend withholding tax in the Cayman Islands[397](index=397&type=chunk) - The company does not expect to be treated as a Passive Foreign Investment Company (PFIC), but its status is determined annually and subject to market fluctuations[407](index=407&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=76&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is credit and concentration risk related to its cash holdings and accounts receivable - The company's main market risk is credit risk from cash and accounts receivable, which is managed through holding funds in reputable institutions and customer credit evaluations[426](index=426&type=chunk)[428](index=428&type=chunk) [PART II](index=77&type=section&id=PART%20II) [Controls and Procedures](index=77&type=section&id=Item%2015.%20Controls%20And%20Procedures) Management concluded internal control over financial reporting was ineffective due to insufficient U.S. GAAP expertise and system weaknesses - Management concluded that as of December 31, 2024, the company's **internal control over financial reporting was ineffective**[441](index=441&type=chunk) - Material weaknesses identified include a lack of sufficient finance personnel with U.S. GAAP experience and inadequate financial system controls[442](index=442&type=chunk) - Remediation plans include hiring experienced staff, providing U.S. GAAP training, and optimizing financial system controls[442](index=442&type=chunk) [Corporate Governance and Other Matters](index=78&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) The company details its governance practices, including its audit committee expert, code of ethics, and cybersecurity risk program - The Board of Directors has identified **Ms. Ye Ren** as the 'audit committee financial expert'[446](index=446&type=chunk) Principal Accountant Fees (in thousands of US$) | | 2023 | 2024 | | :--- | :--- | :--- | | Audit fees | 240 | 265 | | Total | 240 | 265 | - As a foreign private issuer, the company follows home country (Cayman Islands) practices for certain Nasdaq governance rules[455](index=455&type=chunk)[456](index=456&type=chunk) - The company has a cybersecurity risk management program overseen by the Board, and no material threats were identified in 2024[460](index=460&type=chunk)[462](index=462&type=chunk)[465](index=465&type=chunk) [PART III](index=82&type=section&id=PART%20III) [Financial Statements](index=82&type=section&id=Item%2018.%20Financial%20Statements) The company presents its audited consolidated financial statements, highlighting key accounting policies and financial positions Consolidated Balance Sheet Summary (in thousands of US$) | | As of Dec 31, 2023 | As of Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **8,944** | **24,553** | | Cash and cash equivalents | 43 | 14,900 | | Digital assets | 436 | 1,085 | | **Total Assets** | **24,543** | **41,130** | | **Total Liabilities** | **5,101** | **1,213** | | **Total Shareholders' Equity** | **19,442** | **39,917** | - Digital assets (bitcoin) are accounted for as **indefinite-lived intangible assets** and are tested for impairment without subsequent reversal of losses[523](index=523&type=chunk) Property and Equipment, Net (in thousands of US$) | | As of Dec 31, 2023 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Cost: Miners for Bitcoin | 17,241 | 20,321 | | Less: Accumulated depreciation | 4,539 | 8,151 | | **Property and equipment, net** | **12,702** | **12,170** | - As of December 31, 2024, the company held a **29.53% equity interest** in its joint venture, Met Chain Co Limited, valued at **$4.023 million**[568](index=568&type=chunk) - Share-based compensation expense recognized was **$571,000** for the year ended December 31, 2024, up from $138,000 in 2023[579](index=579&type=chunk) [Exhibits](index=82&type=section&id=Item%2019.%20Exhibits) This section provides an index of all exhibits filed with the report, including corporate documents and material contracts

Core Viewpoint - BTC Digital Ltd. is advancing its strategic partnership with BITMAIN by deploying 2,000 high-performance T21 miners, which will significantly enhance its mining capacity and efficiency in the cryptocurrency market [1][4]. Group 1: Deployment and Technology - The T21 miners, BITMAIN's latest flagship product, offer exceptional computational performance of 190 terahashes per unit and energy efficiency of 3,610 watts per unit [2]. - Upon completion of the deployment, BTC Digital's total hash rate capacity will increase to 600 petahashes, nearly tripling its current capacity [2]. Group 2: Operational Strategy - BTC Digital is streamlining its deployment process through detailed logistics, equipment installation, and network optimization to ensure the new miners are operational within the next 3 to 6 months [3]. - The introduction of the T21 miners is expected to significantly enhance BTC Digital's mining efficiency and competitiveness, thereby increasing Bitcoin output [3]. Group 3: Company Outlook - The CEO of BTC Digital emphasized that the deployment of T21 miners represents a significant milestone, aiming to boost mining capacity and optimize energy efficiency [4]. - The company is committed to technological innovation and strategic scaling to create more opportunities and returns for investors, while exploring partnerships with industry leaders to maintain a competitive edge [4][5].

Core Insights - BTC Digital Ltd. is actively seeking business opportunities in Arkansas, Tennessee, Georgia, and Missouri to expand its Bitcoin mining facilities, aiming to meet growing computational power demands and enhance sustainability commitments [1][2][3] Expansion Strategy - The company is exploring various approaches such as building new facilities, acquiring existing mines, and forming strategic joint ventures to ensure a stable and sustainable energy supply [2][3] - The Southeastern United States is identified as a key region for expansion due to its abundant energy resources and supportive business environment [3] Commitment to Sustainability - The company emphasizes the importance of a stable, reliable, and green energy supply for the future success of Bitcoin mining operations [3] - BTCT plans to prioritize projects that align with renewable energy and low-carbon emission goals to support global energy transition and emission reduction targets [3][4] Value Creation and Economic Impact - BTCT aims to create value for shareholders through technological innovation and economies of scale while addressing the global demand for blockchain computational power [4] - The strategic expansion is expected to contribute to regional economic development by creating jobs and fostering collaboration with local communities [4] Future Outlook - The company plans to accelerate its global strategy implementation and partner with more collaborators to promote sustainable development in the Bitcoin mining industry [5]

Financial Performance - Revenues for the nine months ended September 30, 2023, were $845,000, a significant increase from $2,559,000 in 2024[11] - Gross loss for the three months ended September 30, 2023, was $(651,000), compared to $(603,000) in 2024[11] - Net loss for the nine months ended September 30, 2023, was $(1,007,000), while the net loss for the same period in 2024 was $(571,000)[11] - For the nine months ended September 30, 2023, BTC Digital Ltd. reported a net loss of $2,122,000, which is a slight improvement from the net loss of $2,006,000 for the same period in 2024[17] - The Group's net loss per share for the nine months ended September 30, 2024, was $0.21, a decrease from $0.63 for the same period in 2023[92] Equity and Shareholder Information - Total equity attributable to shareholders of the company increased from $19,442,000 as of December 31, 2023, to $20,431,000 as of September 30, 2024[10] - The company issued 1,199,917 ordinary shares, raising $2,424,000 during the reporting period[14] - The weighted average shares used in calculating net loss per share increased from 1,593,789 in 2023 to 2,695,568 in 2024[11] - As of December 31, 2023, there were 2,097,535 ordinary shares issued and outstanding, which increased to 3,297,452 by September 30, 2024[115] - The Company authorized the issuance of 500,000,000 ordinary shares with a par value of $0.0001 per share as of September 27, 2019[98] Cash Flow and Investments - The company generated a net cash flow of $2,048,000 from operating activities in 2023, increasing to $3,385,000 in 2024[17] - Cash used in investing activities was $3,082,000 in 2023, which increased to $4,292,000 in 2024, indicating a rise in capital expenditures[17] - Financing activities generated a net cash inflow of $1,353,000 in 2023, which decreased to $891,000 in 2024[17] - The Company has a capital commitment totaling $3.83 million as of September 30, 2024, related to the purchase of miners and acquisition of a BTC mining facility[131] Assets and Liabilities - Accumulated deficit as of September 30, 2024, was $(188,605,000), compared to $(186,599,000) as of December 31, 2023[15] - Total liabilities and shareholders' equity as of September 30, 2024, were $25,063,000, up from $24,543,000 as of December 31, 2023[10] - The Group's property and equipment, net, decreased to $11,145,000 as of September 30, 2024, from $12,702,000 as of December 31, 2023, reflecting a decline in asset value[87] - The Group's accounts receivable decreased to $1,692,000 from $5,485,000 as of December 31, 2023, indicating a significant reduction in receivables[82] Operational Highlights - The company is primarily engaged in the bitcoin mining business and also generates revenue through mining machines resale and rental operations[18] - The Group's revenue primarily comes from digital asset mining, where it provides computing power to mining pool operators[58] - The Group generated a total of 1,049 bitcoins from mining services for the nine months ended September 30, 2024, compared to 2,882 bitcoins for the year ended December 31, 2023[84] Expenses and Costs - Operating expenses for the three months ended September 30, 2023, were $(1,793,000), while in 2024, they increased to $(2,239,000)[11] - The company reported a depreciation expense of $2,305,000 in 2023, which is projected to increase to $2,700,000 in 2024[17] - Share-based compensation expenses rose significantly from $138,000 in 2023 to $571,000 in 2024, indicating increased employee compensation costs[17] - The Group recognized share-based compensation expenses of $571,000 for the nine months ended September 30, 2024, up from $138,000 for the same period in 2023[97] Financial Reporting and Compliance - The Company has consolidated the financial results of Shenzhen Meten and Shenzhen Likeshuo in accordance with U.S. GAAP[38] - The Group's consolidated financial statements are presented in US dollars, rounded to the nearest thousands[39] - Digital assets held are accounted for as intangible assets with indefinite useful lives and are assessed for impairment annually[48] - The Group has not recorded any impairment losses for the years ended December 31, 2023, and for the nine months ended September 30, 2024[53] - Deferred income tax assets and liabilities are recognized for future tax consequences attributable to temporary differences[61] Market and Risk Factors - Market risks for the three months ended September 30, 2024, remain consistent with the previous annual report disclosures[188] - The outstanding loan balance secured by BTC collateral increased from 125,000 USDT as of December 31, 2023, to 544,000 USDT as of September 30, 2024[91]

```markdown PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for H1 2024 detail stable assets, a widened net loss, and positive operating cash flow [Unaudited Consolidated Balance Sheets](index=4&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets slightly increased to **$24.66 million** as of June 30, 2024, driven by equipment prepayments Consolidated Balance Sheet Highlights (in thousands of US$) | Account | As of June 30, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | 9,675 | 8,944 | | Total non-current assets | 14,986 | 15,599 | | **Total assets** | **24,661** | **24,543** | | **Liabilities & Equity** | | | | Total current liabilities | 5,069 | 5,101 | | **Total liabilities** | **5,069** | **5,101** | | **Total shareholders' equity** | **19,592** | **19,442** | - Prepayments for equipment significantly increased from **$2.29 million** to **$7.46 million**, indicating future expansion of mining capacity[80](index=80&type=chunk) - Digital assets (BTC) held by the company increased in value from **$436 thousand** to **$815 thousand**[81](index=81&type=chunk) [Unaudited Consolidated Statements of Operations Loss](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20LOSS) H1 2024 revenues decreased **31.6%** to **$5.0 million**, resulting in a widened net loss and a gross loss Statement of Operations Summary (in thousands of US$) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenues | 4,979 | 7,284 | | Gross loss | (342) | (110) | | Loss from operations | (1,697) | (1,099) | | **Net loss** | **(1,435)** | **(1,115)** | | **Net loss per share (Basic)** | **(0.56)** | **(0.91)** | Quarterly Statement of Operations Summary (in thousands of US$) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenues | 2,329 | 6,377 | | Gross loss | (214) | 233 (Profit) | | **Net loss** | **(704)** | **(135)** | [Unaudited Consolidated Statements of Cash Flows](index=9&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) H1 2024 saw net cash from operations at **$3.7 million**, offset by **$4.3 million** used in investing activities Cash Flow Summary (in thousands of US$) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | 3,669 | 2,411 | | Net cash used in investing activities | (4,282) | (1,827) | | Net cash from/(used in) financing activities | 857 | (417) | | **Net increase in cash** | **244** | **167** | | **Cash at end of period** | **287** | **215** | - The primary use of cash in investing activities was for the purchase of property and equipment, amounting to **$4.0 million** in H1 2024[21](index=21&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail the company's transformation to bitcoin mining, key accounting policies, capital commitments, and loans - The company changed its name to "BTC Digital Ltd." on August 11, 2023, and is now primarily engaged in the bitcoin mining business, as well as mining machine resale and rental[23](index=23&type=chunk) - Digital assets are treated as indefinite-lived intangible assets, tested for impairment when the carrying amount exceeds fair value. Revenue from mining is recognized when the company receives confirmation of the consideration from the mining pool[50](index=50&type=chunk)[61](index=61&type=chunk) - As of June 30, 2024, the company had an outstanding collateralized loan of **510,000 USDT**, with **11.62 BTC** pledged as collateral[94](index=94&type=chunk) - The company has capital expenditure commitments of **$4.29 million** as of June 30, 2024, for purchasing miners and acquiring a BTC mining facility[123](index=123&type=chunk) [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A covers bitcoin mining operations, H1 2024 revenue decline, increased net loss, and liquidity - As of June 30, 2024, the company owned **2,021** mining machines with a total hash rate of **213PH/S**, operating at a facility in New Tazewell, Tennessee[128](index=128&type=chunk) - In the first six months of 2024, the company mined **16.45 bitcoins**, generating **$0.94 million** in revenue[128](index=128&type=chunk) - The company uses a diversified strategy to mitigate bitcoin price volatility, including reselling mining machines when prices are high and renting them out when prices are lower[129](index=129&type=chunk) [Results of Operations: Three Months Ended June 30, 2024 vs 2023](index=31&type=section&id=Results%20of%20Operations%20-%20Three%20Months) Q2 2024 total revenue decreased **63.5%** to **$2.3 million** due to lower machine resale and mining Q2 Revenue Breakdown (in thousands of US$) | Revenue Source | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Bitcoin mining | 267 | 892 | | Mining machines resale | 1,707 | 5,485 | | Miner rental and other | 355 | - | | **Total** | **2,329** | **6,377** | - The decrease in mining revenue was attributed to using more machines for rentals, delays in deploying new machines, and the Bitcoin halving event[133](index=133&type=chunk) - General and administrative expenses increased by **34.7%** to **$0.4 million**, primarily due to an increase in employees and office expenses for business development[138](index=138&type=chunk) [Results of Operations: Six Months Ended June 30, 2024 vs 2023](index=33&type=section&id=Results%20of%20Operations%20-%20Six%20Months) H1 2024 total revenue decreased **31.6%** to **$5.0 million**, primarily from machine resale H1 Revenue Breakdown (in thousands of US$) | Revenue Source | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Bitcoin mining | 939 | 1,342 | | Mining machines resale | 3,435 | 5,485 | | Miner rental and other | 605 | 457 | | **Total** | **4,979** | **7,284** | - General and administrative expenses increased by **59.1%**, primarily due to a **$0.57 million** rise in expenses related to the Employee Stock Option Plan[147](index=147&type=chunk) - The company realized a gain on the exchange of digital assets of **$256 thousand** in H1 2024, compared to a gain of **$34 thousand** in H1 2023[141](index=141&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show H1 2024 Adjusted Net Loss of **$864 thousand** and Adjusted EBITDA of **$932 thousand** Reconciliation of Net Loss to Adjusted Net Loss (in thousands of US$) | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net loss | (1,435) | (1,115) | | Add: Share-based compensation | 571 | 138 | | **Adjusted net loss** | **(864)** | **(977)** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands of US$) | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net loss | (1,435) | (1,115) | | Adjustments (Interest, Tax, D&A) | 1,796 | 1,723 | | EBITDA | 361 | 608 | | Add: Share-based compensation | 571 | 138 | | **Adjusted EBITDA** | **932** | **746** | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, cash was **$287 thousand**, with positive operating cash flow offset by investing - Cash and cash equivalents stood at **$287,000** as of June 30, 2024, up from **$43,000** at the end of 2023[164](index=164&type=chunk) - Capital expenditures were **$4.0 million** for the six months ended June 30, 2024, a significant increase from **$1.8 million** in the same period of 2023[172](index=172&type=chunk) - The company may require additional cash resources for future investments or acquisitions and may seek to sell equity or debt securities if needed[165](index=165&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) Market risk disclosures for Q2 2024 do not materially differ from the 2023 Annual Report on Form 10-K - There have been no material changes in the company's market risk disclosures since the 2023 Annual Report[178](index=178&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO confirm effective disclosure controls and procedures with no material changes to internal controls - The CEO and CFO have certified that the company's disclosure controls and procedures were effective as of the end of the quarter[179](index=179&type=chunk) - No material changes to internal controls over financial reporting occurred during the second quarter of 2024[179](index=179&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material litigation, arbitration, or administrative proceedings - The company is not currently involved in any material legal proceedings[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On June 28, 2024, the company agreed to acquire a Bitcoin mining facility for **$1.99 million** - The company agreed to acquire a Bitcoin mining facility for **$1.99 million** on June 28, 2024[182](index=182&type=chunk) [Other Items (Risk Factors, Defaults, Mine Safety, Other Info)](index=40&type=section&id=Other%20Items) No new risk factors, defaults, or Rule 10b5-1 trading plan changes were reported for the quarter - No new risk factors are reported for the quarter[182](index=182&type=chunk) - No directors or officers adopted or terminated a Rule 10b5-1 trading plan in Q2 2024[182](index=182&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed, including CEO and CFO certifications and Inline XBRL data files - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer, along with XBRL data[183](index=183&type=chunk) ```