BitMine Immersion Technologies Inc(BMNR) - 2025 Q2 - Quarterly Report

Part I Item 1. Financial Statements (unaudited) Unaudited interim financial statements for Bitmine Immersion Technologies, Inc. are presented, covering Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, with detailed accounting notes Financial Statements Financial statements show total assets increased to $7.5 million and liabilities to $4.6 million; revenue grew to $2.7 million, but net loss widened to $5.1 million due to a deemed dividend, with cash slightly decreasing Balance Sheet Summary (Unaudited) | Account | Feb 28, 2025 ($) | Aug 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 482,951 | 499,270 | | Total current assets | 1,148,553 | 1,563,679 | | Total assets | 7,500,676 | 7,283,529 | | Total current liabilities | 4,597,248 | 3,130,885 | | Total liabilities | 4,647,527 | 3,195,530 | | Total stockholders' equity | 2,853,149 | 4,087,999 | Statement of Operations Summary (Unaudited, Six Months Ended) | Metric | Feb 28, 2025 ($) | Feb 29, 2024 ($) | | :--- | :--- | :--- | | Total revenue | 2,718,252 | 1,402,921 | | Gross profit | 424,922 | 427,704 | | Loss from operations | (1,797,641) | (1,258,591) | | Net loss | (2,131,629) | (1,830,522) | | Deemed dividend on Series A Preferred Stock | (2,960,648) | 0 | | Net loss attributable to common stockholders | (5,092,277) | (1,830,522) | | Basic and diluted (loss) per common share | (0.12) | (0.04) | Statement of Cash Flows Summary (Unaudited, Six Months Ended) | Cash Flow Activity | Feb 28, 2025 ($) | Feb 29, 2024 ($) | | :--- | :--- | :--- | | Net cash (used in) operating activities | (310,144) | (204,304) | | Net cash (used in) investing activities | (18,000) | (48,946) | | Net cash provided by financing activities | 311,825 | 325,000 | | Net (decrease) increase in cash | (16,319) | 71,749 | Notes to the Unaudited Interim Financial Statements Notes detail key financial events and accounting policies, including early adoption of ASC 350-60 for crypto assets, a Hash Rate Sale Agreement, related-party transactions, a $2.96 million non-cash deemed dividend, and the non-renewal of a key hosting contract - The company's primary business is creating hosting centers for bitcoin mining computers, utilizing immersion cooling technology, and mining bitcoin for its own account[26][27] - The company elected to early adopt ASC 350-60, which requires crypto assets to be measured at fair value with changes recorded in net income, resulting in a $0 cumulative-effect change upon adoption on September 1, 2024[75] Revenue Disaggregation (Six Months Ended) | Revenue Source | Feb 28, 2025 ($) | Feb 29, 2024 ($) | | :--- | :--- | :--- | | Sale of mining equipment | 717,147 | 190,192 | | Hosting | 0 | 21,980 | | Self-mining | 2,001,105 | 1,190,749 | | Total Revenue | 2,718,252 | 1,402,921 | - As of February 28, 2025, the company had $3,228,600 in fixed assets not yet in service, primarily consisting of transformers, immersion containers, and ASIC miners[80][81] - A note receivable from the ROC Digital joint venture is in default, leading the company to write down its value to an estimated net realizable value of $468,056 and record a bad debt expense of $124,815[87][175] - The company relies on a line of credit from IDI, a related party controlled by the CEO and CFO, with an outstanding principal of $1,875,000 and interest of $444,540 as of February 28, 2025[89][90] - The issuance of Series B Preferred Stock triggered an anti-dilution provision, lowering the conversion price of Series A Preferred Stock, which resulted in a non-cash deemed dividend charge of $2,960,648[108] - Subsequent to the quarter end, a key hosting agreement with Soluna SW, LLC for 1,095 ASIC miners was not renewed, requiring the company to find an alternative solution for these miners[133] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's digital asset mining and hosting operations, highlighting revenue growth from self-mining, increased operating costs, a substantial net loss due to a deemed dividend, and tight liquidity reliant on related-party debt, with plans for a public offering Overview and Operations The company's business focuses on bitcoin self-mining and hosting using immersion cooling, driven by bitcoin price and network difficulty, with operations across Trinidad, Texas, and Kentucky, totaling 4,640 miners, of which 4,204 are operational - The company's business is building industrial-scale digital asset mining, equipment sales, and hosting operations, with a focus on immersion cooling to reduce energy costs and extend equipment life[135][136] Key Bitcoin Mining Metrics (Change from Aug 31, 2024 to Feb 28, 2025) | Metric | Feb 28, 2025 | Aug 31, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Network hash rate (EH/s) | 797.818 | 620.355 | 28.61% | | Difficulty index (trillion) | 110.57 | 89.47 | 23.58% | | Bitcoin market price ($) | 84,705.63 | 58,969.90 | 43.64% | ASIC Miner Inventory Summary (as of Feb 28, 2025) | Site | Present | Installed | Immersion/Air-cooled | | :--- | :--- | :--- | :--- | | Trinidad | 500 | 367 | Immersion | | Pecos, Texas | 145 | 145 | Immersion | | Murray, Kentucky | 1,095 | 1,095 | Air Cooled | | Silverton, TX | 2,900 | 2,597 | Air Cooled | | Total | 4,640 | 4,204 | | Results of Operations Revenue for the six months ended Feb 28, 2025, increased 94% to $2.7 million, driven by self-mining and equipment sales, but operating expenses rose 32% to $2.2 million, leading to a net loss of $5.1 million due to a $2.96 million deemed dividend Revenue Comparison (Three Months Ended) | Revenue Source | Feb 28, 2025 ($) | Feb 29, 2024 ($) | | :--- | :--- | :--- | | Self-mining | 1,517,422 | 861,026 | | Equipment Sales | 0 | 20,471 | | Hosting | 0 | 10,116 | | Total Revenue | 1,517,422 | 891,613 | Revenue Comparison (Six Months Ended) | Revenue Source | Feb 28, 2025 ($) | Feb 29, 2024 ($) | | :--- | :--- | :--- | | Self-mining | 2,001,105 | 1,190,749 | | Equipment Sales | 717,147 | 190,192 | | Hosting | 0 | 21,980 | | Total Revenue | 2,718,252 | 1,402,921 | - Operating expenses for the six months ended Feb 28, 2025, increased to $2.22 million from $1.69 million year-over-year, primarily due to a 109% increase in officers' compensation and a 377% increase in directors' compensation, largely from new stock and cash accruals[199][200] - The net loss attributable to common stockholders for the six months ended Feb 28, 2025, was $5,092,277, which included a one-time, non-cash deemed dividend charge of $2,960,648 related to the repricing of Series A Preferred Stock[204] Liquidity and Capital Resources With $482,951 cash, the company relies on related-party debt and equipment financing, pursuing a public offering and reverse stock split for national exchange listing, while management believes current liquidity is sufficient for 12 months but additional capital is needed for growth - As of February 28, 2025, the company had $482,951 in cash and is primarily funded by related-party loans and equipment financing[206] - The company has engaged ThinkEquity LLC for a best-efforts firm underwritten public offering and is planning a reverse stock split to list on a national exchange (NYSE Amex or NASDAQ)[208][209] - An agreement is in place with related-party lender IDI to restructure its debt upon a successful public offering, involving conversion to a term loan, an exchange for a note receivable, and conversion of the balance to common stock[210][213] - Management believes it has sufficient liquidity for the next 12 months but will need additional capital to expand its business and pay market compensation to officers[211][212] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Bitmine Immersion Technologies, Inc. is exempt from providing market risk disclosures - The company is a smaller reporting company and is not required to provide the information called for by this Item[221] Item 4. Controls and Procedures The company's disclosure controls and procedures were deemed effective as of February 28, 2025, with no material changes in internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of February 28, 2025[222] - There were no changes in internal control over financial reporting during the quarter ended February 28, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[223] Part II – OTHER INFORMATION Item 1. Legal Proceedings The company's officers and directors are unaware of any threatened or pending litigation - Officers and directors are not aware of any threatened or pending litigation to which the company is a party[225] Item 1A. Risk Factors As a smaller reporting company, Bitmine Immersion Technologies, Inc. is exempt from providing risk factor disclosures - The company is a smaller reporting company and is not required to provide the information under this item[226] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not issue any securities in unregistered transactions during the three months ended February 28, 2025 - During the three months ended February 28, 2025, the company did not issue any securities in unregistered transactions[227] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[228] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[229] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - During the three months ended February 28, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement[230] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL data files - The exhibits filed with the report include officer certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and various Inline XBRL documents[232]