HIVE Digital Technologies .(HIVE) - 2023 Q4 - Annual Report

Financial Performance - Revenue from digital currency mining for Q3 2023 was $30,115,000, a 110.5% increase from $14,318,000 in Q3 2022[3] - Net loss for the period was $6,951,000 in Q3 2023, compared to a net loss of $93,459,000 in Q3 2022, indicating a significant reduction in losses[3] - For the nine months ended December 31, 2023, the net loss was $47,751,000, a significant improvement from a net loss of $243,143,000 in the same period of 2022[5] - Revenue recognized from digital currency mined decreased to $75,973,000 from $88,094,000 year-over-year, reflecting a decline of approximately 14%[5] - The company reported a revaluation gain on digital currencies of $19,352,000 in Q3 2023[3] - Basic loss per share improved to $(0.08) in Q3 2023 from $(1.13) in Q3 2022[3] Assets and Equity - Total assets increased to $231,235,000 as of December 31, 2023, up from $196,117,000 as of March 31, 2023, representing a 17.9% growth[2] - The company reported a total equity of $180,053,000 as of December 31, 2023, an increase from $148,815,000 as of March 31, 2023, reflecting a 20.9% rise[2] - Digital currencies held by the company amounted to $71,894,000 as of December 31, 2023, compared to $65,899,000 as of March 31, 2023, showing an increase of 9.1%[2] - The carrying amount of plant and equipment increased to $306.1 million as of December 31, 2023, from $256.4 million as of March 31, 2023, reflecting a growth of approximately 19%[35] Cash Flow and Investments - Cash provided by operating activities was $33,302,000, down from $46,839,000 in the previous year, indicating a decrease of about 29%[5] - The company reported cash used in investing activities of $64,648,000, compared to $40,752,000 in the prior year, representing an increase of approximately 58%[5] - Cash provided by financing activities was $44,758,000, a turnaround from cash used of $2,567,000 in the same period last year[5] - As of December 31, 2023, the company held investments totaling $6,900,000, up from $2,866,000 at the end of the previous fiscal year[28] Costs and Expenses - Operating and maintenance costs for Q3 2023 were $19,963,000, up from $10,703,000 in Q3 2022, representing an increase of 86.5%[3] - The total cost of sales was $19.96 million, a significant increase from $10.70 million in the same period of 2022, representing an increase of 86.5%[82] - Digital currency mining costs for the nine months ended December 31, 2023, were $51.93 million, compared to $41.52 million in the same period of 2022, reflecting a year-over-year increase of 25.0%[82] Shareholder Actions - The company issued 7,549,840 shares in a recent offering, raising $30,302,000[4] - The company issued 1,374,700 common shares under the May 2023 ATM Equity Program for gross proceeds of $6.8 million[65] - Under the August 2023 ATM Equity Program, the company issued 6,175,140 common shares for gross proceeds of $24.4 million[65] - The company completed a bought-deal financing of 5,750,000 special warrants at a price of C$5.00 per warrant, raising aggregate gross proceeds of C$28.75 million[71] Liabilities and Provisions - The company recorded a provision of $4.9 million for uncertain collectability of sales tax receivables as of December 31, 2023[30] - The company is facing a contingent VAT liability of approximately $40.9 million from the Swedish Tax Authority, related to VAT assessments for the period from December 2020 to December 2022[57] - The liability component of the convertible loan decreased to $3.9 million as of December 31, 2023, down from $4.7 million as of March 31, 2023[43] Digital Currency Holdings - The company’s Bitcoin holdings were valued at $71.7 million as of December 31, 2023, with a total of 1,704 coins[32] - The company’s Ethereum Classic holdings increased to 124, with a total of 5,746 coins as of December 31, 2023[32] - The total value of digital currencies held by the company increased to $71.9 million as of December 31, 2023, up from $65.9 million as of March 31, 2023, representing an increase of approximately 3%[32] Market and Operational Risks - The company continues to face challenges related to the global supply chain, including increased shipping costs and delays in obtaining equipment from suppliers[10] - Digital currencies held by the company are subject to significant price risk, with their values being highly volatile and influenced by various market factors[107] - The company does not hedge the conversion of any of its coin sales or future mining of digital currencies, exposing it to market price fluctuations[125] - Regulatory actions in various jurisdictions, such as China’s ban on digital currencies, could adversely affect the digital asset market and the Company's operations[122] Strategic Developments - The company incorporated a wholly owned subsidiary, Bikupa Real Estate AB, on May 24, 2023, to facilitate the acquisition of a data center[8] - The company acquired a data center in Sweden on November 29, 2023, for a total consideration of $2,376, which includes cash payment of $647 and shares issued valued at $1,089[135] - The next Bitcoin halving is expected in April 2024, which could significantly impact the Company's profitability if Bitcoin prices do not adjust favorably[120]