Bit Digital(BTBT) - 2025 Q2 - Quarterly Report

PART I Financial Statements The company's financial statements for H1 2025 reflect significant asset growth and a net loss, driven by strategic investments and shifts in digital asset performance Unaudited Condensed Consolidated Balance Sheets The balance sheets show substantial asset growth, primarily in property, plant, and equipment, alongside increased shareholder equity - Total assets increased by 34.4% to $723.4 million as of June 30, 2025, from $538.2 million as of December 31, 2024. This growth was primarily driven by a significant increase in Property, Plant, and Equipment, which more than doubled to $253.9 million, and a rise in Cash and cash equivalents to $181.2 million[9] - Digital asset holdings decreased by 43.5% to $91.2 million from $161.4 million, reflecting a strategic shift or sales during the period[9] - Total liabilities increased to $90.2 million from $74.8 million, mainly due to a substantial rise in the non-current portion of operating lease liabilities from $9.3 million to $38.3 million[9] - Total Shareholders' Equity grew by 36.6% to $633.2 million, primarily fueled by an increase in Additional paid-in capital from stock offerings[10] Consolidated Balance Sheet Highlights (in USD) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $313,752,970 | $297,256,935 | | Cash and cash equivalents | $181,165,847 | $95,201,335 | | Digital assets | $91,214,450 | $161,377,344 | | Total Non-Current Assets | $409,666,067 | $240,990,729 | | Property, plant, and equipment, net | $253,920,936 | $107,302,458 | | Total Assets | $723,419,037 | $538,247,664 | | Total Current Liabilities | $40,096,441 | $55,026,604 | | Total Liabilities | $90,230,393 | $74,768,515 | | Total Shareholders' Equity | $633,188,644 | $463,479,149 | Unaudited Condensed Consolidated Statements of Operations The statements show a Q2 2025 net income turnaround, contrasting with a H1 2025 net loss primarily due to digital asset performance swings - The company reported a net income of $14.9 million for Q2 2025, a significant turnaround from a net loss of $12.0 million in Q2 2024. This was largely driven by a $27.2 million gain on digital assets in Q2 2025, compared to an $11.5 million loss in the prior-year quarter[11] - For the six months ended June 30, 2025, the company posted a net loss of $42.8 million, compared to a net income of $38.1 million for the same period in 2024. The reversal was primarily due to a $22.1 million loss on digital assets in H1 2025 versus a $34.2 million gain in H1 2024[11] Revenue Breakdown (in USD) | Revenue Source | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Digital asset mining | $6,631,838 | $16,079,893 | $14,408,801 | $37,971,653 | | Cloud services | $16,595,315 | $12,497,197 | $31,437,601 | $20,566,781 | | Colocation services | $1,729,004 | - | $3,367,413 | - | | ETH staking | $365,332 | $373,812 | $925,973 | $699,558 | | Total Revenues | $25,659,419 | $29,043,406 | $50,758,285 | $59,430,244 | Key Performance Indicators (in USD) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $25,659,419 | $29,043,406 | $50,758,285 | $59,430,244 | | Income (loss) from operations | $11,739,005 | $(11,480,293) | $(40,635,561) | $35,678,741 | | Net income (loss) | $14,874,202 | $(11,953,100) | $(42,837,443) | $38,128,757 | | Basic EPS | $0.07 | $(0.09) | $(0.22) | $0.31 | | Diluted EPS | $0.07 | $(0.09) | $(0.22) | $0.31 | Unaudited Condensed Consolidated Statements of Equity Total stockholders' equity significantly increased due to common stock offerings, despite a worsening accumulated deficit from net losses - Total stockholders' equity increased from $463.5 million at the end of 2024 to $633.2 million as of June 30, 2025[12][13] - The increase in equity was primarily driven by the issuance of common stock through at-the-market and public offerings, which added a total of $190 million to additional paid-in capital during the first six months of 2025[13] - The accumulated deficit worsened from $(98.2) million to $(141.0) million during the first half of 2025, reflecting the net loss for the period[10][12][13] Unaudited Condensed Consolidated Statements of Cash Flows Cash flows show positive operating activities, significant investment in property and equipment, and strong financing from equity offerings - Cash from operating activities was a positive $35.1 million for the first six months of 2025, a significant improvement from a $30.4 million use of cash in the same period of 2024. This was mainly due to changes in digital assets and deferred revenue[14] - Investing activities used $148.2 million in cash, a substantial increase from $6.7 million in the prior year period, primarily for purchases of property, plant, and equipment[14] - Financing activities provided $199.3 million in cash, up from $80.3 million in the prior year period, driven by proceeds from a public offering ($141.6 million) and at-the-market offerings ($58.5 million)[14] Cash Flow Summary (in USD) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | $35,095,075 | $(30,370,425) | | Net Cash Used in Investing Activities | $(148,240,379) | $(6,660,262) | | Net Cash Provided by Financing Activities | $199,313,693 | $80,273,917 | | Net increase in cash | $86,168,389 | $43,243,230 | | Cash, cash equivalents and restricted cash, end of period | $184,898,639 | $61,424,164 | Notes to Financial Statements The notes detail the company's strategic focus on digital assets and HPC, alongside key accounting policy changes and business expansions - The company is a digital asset platform focused on Ethereum (ETH)-native treasury, staking strategies, digital asset mining, and high-performance computing (HPC) services, including cloud and data center services[16] - The company has been expanding its HPC business through the incorporation of new subsidiaries like WhiteFiber in the US, Canada, and Japan, and the acquisition of Enovum Data Centers Corp in Canada[17][18][19][20] - Effective January 1, 2024, the company adopted ASU 2023-08, measuring digital assets at fair value with changes recorded in net income. This resulted in a $21.2 million positive cumulative-effect adjustment to retained earnings[37][139] - Effective January 1, 2025, the company changed its estimate of the useful life for cloud service equipment from three to five years, reducing depreciation expense by $2.5 million in Q1 2025[29][46] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses a strategic shift to Ethereum staking, rapid HPC expansion, and a Q2 2025 net income turnaround driven by digital asset gains and strong liquidity - The company has initiated a strategic transition to become a pure-play Ethereum (ETH) staking and treasury company, planning to convert its Bitcoin (BTC) holdings to ETH and explore a sale or wind-down of its bitcoin mining operations[265][294] - The High-Performance Computing (HPC) business is expanding with the acquisition of Enovum Data Centers and development of new data centers in Montreal (MTL-2, MTL-3) and North Carolina (NC-1)[269][270][271][272] - The company secured a credit facility of up to approximately $43.8 million from the Royal Bank of Canada (RBC) to finance its data center business[273] Q2 2025 vs Q2 2024 Performance (in USD) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $25,659,419 | $29,043,406 | | Digital Asset Mining Revenue | $6,631,838 | $16,079,893 | | Cloud Services Revenue | $16,595,315 | $12,497,197 | | Net Income (Loss) | $14,874,202 | $(11,953,100) | Quantitative and Qualitative Disclosures about Market Risk The company, as a smaller reporting company, is not required to provide the information for this item - As a smaller reporting company, Bit Digital is not required to provide quantitative and qualitative disclosures about market risk[465] Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with ongoing integration of Enovum Data Centers' controls for future reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (June 30, 2025)[467] - The company is in the process of integrating the internal controls of Enovum Data Centers Corp, acquired in October 2024, with plans to include them in the scope of internal control over financial reporting for the fiscal year ending December 31, 2025[469] PART II Legal Proceedings The company is pursuing a lawsuit against Blockfusion, Inc., seeking over $5 million in damages for breach of contract and fraud - The company filed a lawsuit against Blockfusion, Inc. on June 3, 2024, for breach of contract and other claims, initially seeking over $4.3 million related to a terminated mining services relationship[246][472] - On August 1, 2025, the company moved to file a Second Amended Complaint, adding fraud claims and Blockfusion's CEO as a defendant. The total damages sought now exceed $5 million, including punitive damages[247][472] Risk Factors As a Smaller Reporting Company, the company highlights a risk of potential fines from former PRC operations, despite the general statute of limitations passing - The company notes a risk related to its former business in the PRC. Although operations ceased in September 2021, the statute of limitations for non-compliance could be extended from two to five years if prior mining operations are deemed a threat to financial security[474] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period. Information was previously reported on Form 8-K - None. Previously reported on Form 8-K[475] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[476] Mine Safety Disclosures This item is not applicable to the company - Not applicable[477] Other Information During the three months ended June 30, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[478] Exhibits This section lists the exhibits filed with the Form 10-Q, including agreements related to the WhiteFiber contribution and transition services, lease and purchase agreements, officer certifications, and XBRL data files - The exhibits include key agreements such as the Section 351 Contribution Agreement and Transition Services Agreement with WhiteFiber, Inc., various lease and purchase agreements, and required officer certifications[480]