Bit Digital(BTBT) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenue for the second quarter of 2023 was $9.0 million, primarily from bitcoin mining operations[1] - Adjusted EBITDA for the quarter was $1.9 million, with adjusted earnings per share at $0.02[2] - Revenues for the three months ended June 30, 2023, were $9,037,602, an increase of $2,222,602 compared to $6,815,000 for the same period in 2022[48] - The Company reported a net loss of $2,427,010 for the three months ended June 30, 2023, a significant improvement from a net loss of $17,763,417 in the same period of 2022[48] - For the six months ended June 30, 2023, the company recognized revenue of $17.1 million from bitcoin mining services, compared to $14.5 million for the same period in 2022[73] - The net loss for the six months ended June 30, 2023, was $4,687,315, compared to a net loss of $22,096,044 for the same period in 2022, indicating a significant improvement[132] Mining Operations - The company earned 318.4 bitcoins during the quarter, with a total of 613.2 bitcoins and 11,738.8 ETH held as treasury assets[2][4] - The active hash rate of the bitcoin mining fleet was approximately 1.78 EH/s, with a goal to reach 2.6 EH/s by the end of October 2023 and 3.5 EH/s by the end of December 2023[10] - The Company has approximately 44,886 miners for bitcoin mining and 730 ETH miners, with a total maximum hash rate of 3.4 EH/s and 0.3 TH/s, respectively, as of June 30, 2023[35] - The Company entered into agreements to purchase 3,600 S19 miners and 3,300 S19J Pro+ miners to expand its mining capacity[7] - The Company has deployed approximately 3,600 additional miners at one of Coinmint's hosting facilities during the second quarter of 2023[25] Energy and Sustainability - Approximately 99% of the fleet's electricity consumption was generated from carbon-free energy sources as of June 30, 2023[4] - The Company aims to enhance sustainability by utilizing partially carbon-free energy sources and is working with an independent ESG consultant to improve its environmental practices[40] Financial Position and Liquidity - The company had total liquidity of approximately $64.8 million, with cash and cash equivalents of $19.8 million as of June 30, 2023[1] - Cash and cash equivalents decreased to $18.5 million as of June 30, 2023, from $32.7 million as of December 31, 2022, primarily due to net cash used in operating and investing activities[94] - Working capital decreased to $50.6 million as of June 30, 2023, from $57.0 million as of December 31, 2022[110] - The company plans to support future operations primarily through cash generated from operations and equity financings, with potential consideration of debt financing[110] Digital Assets and Staking - The Company’s ETH staking business allows it to earn block rewards and transaction fees, with the ability to withdraw staked ETH following the successful completion of the Shanghai upgrade on April 12, 2023[175] - For the six months ended June 30, 2023, the company earned 45.0 ETH in native staking and 54.6 ETH in liquid staking, generating revenues of $80,881 and $95,387, respectively[79] - The Company generated revenues of $66,649 from native staking, compared to $nil in the same period of 2022, marking a significant increase[177] - The Company generated revenues of $59,010 from liquid staking for the three months ended June 30, 2023, with no revenues reported in the same period of 2022[181] Costs and Expenses - The company's electricity costs for the three months ended June 30, 2023, increased by $2.7 million, or 189%, compared to the same period in 2022[61] - General and administrative expenses for the three months ended June 30, 2023, totaled $5.4 million, an increase from $4.6 million for the same period in 2022[63] - The total cost of revenue for the six months ended June 30, 2023, was $10.8 million, up from $7.9 million in the same period in 2022[81] Gains and Impairments - The company recorded a realized gain of $4.4 million from the exchange of 429.8 bitcoins and 2.2 ETH for the three months ended June 30, 2023, compared to a gain of $2.2 million from 168.9 bitcoins and 57.4 ETH for the same period in 2022[64] - The impairment of digital assets was $1.4 million for the three months ended June 30, 2023, significantly lower than $13.4 million for the same period in 2022[66] - The Company recognized an impairment loss of $1,351,331 on digital assets for the three months ended June 30, 2023, compared to an impairment loss of $13,364,406 in the same period of 2022, indicating a reduction of approximately 90%[191] Investments and Securities - The Company’s investment securities as of June 30, 2023, include one equity method investee and investments in one fund and two privately held companies, reflecting its strategy of diversifying investments[153] - The total balance of investment securities increased to $3.9 million as of June 30, 2023, from $1.8 million as of December 31, 2022, primarily due to investments in Auros Global Limited and Marsprotocol Technologies Pte. Ltd[99]