BTC.com(BTCM) - 2025 Q2 - Quarterly Report

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS The balance sheets show a decrease in total assets from $86,335 thousand as of December 31, 2024, to $69,088 thousand as of June 30, 2025, primarily driven by a significant reduction in current assets, especially cryptocurrency assets, with total liabilities also decreasing and total shareholders' equity seeing a notable decline Interim Condensed Consolidated Balance Sheets (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :----------------------------- | :------------------------------------- | :----------------------------------- | | Total Assets | 86,335 | 69,088 | | Total Liabilities | 19,555 | 15,277 | | Total Shareholders' Equity | 66,780 | 53,811 | | Current Assets | 19,147 | 10,523 | | Cryptocurrency assets | 9,581 | 3,605 | INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) The company shifted from net income in H1 2024 to a substantial net loss in H1 2025, driven by declining revenues, increased operating costs, and negative fair value changes in cryptocurrency assets, with discontinued operations no longer contributing income Interim Condensed Consolidated Statements of Comprehensive Income (Loss) (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Revenues | 19,359 | 11,013 | | Operating loss from continuing operations | (509) | (13,903) | | Changes in fair value of cryptocurrency assets | 1,974 | (2,294) | | Net income from discontinued operations | 18,927 | — | | Net income (loss) attributable to BIT Mining Limited | 18,948 | (13,899) | | Earnings (losses) per ADS | 1.69 | (0.87) | INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Cash outflows from operating activities increased in H1 2025 due to net loss, while investing activities shifted from providing to using cash, and financing activities provided minimal to no cash Interim Condensed Consolidated Statements of Cash Flows (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Net cash used in operating activities | (12,143) | (16,979) | | Net cash provided by investing activities | 11,416 | 16,575 | | Net cash provided by financing activities | 30 | — | | Cash, cash equivalents and restricted cash at end of the period | 2,296 | 1,225 | INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Total shareholders' equity declined from $66,780 thousand to $53,811 thousand primarily due to a net loss of $(13,899) thousand in H1 2025, despite positive contributions from share-based compensation and ordinary share issuance Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Total BIT Mining Limited shareholders' equity | 56,893 | 43,835 | | Total shareholders' equity | 66,780 | 53,811 | | Net income (loss) attributable to BIT Mining Limited | 18,948 (H1 2024) | (13,899) (H1 2025) | | Share-based compensation | 926 (H1 2024) | 851 (H1 2025) | NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION BIT Mining Limited transformed its business to cryptocurrency mining and data center operations, disposing of its mining pool business in January 2024 and expanding data center capacity with a 100 MW Ethiopia project acquisition in December 2024 - Company changed its name to "BIT Mining Limited" and ticker symbol "BTCM" effective April 20, 2021[27] - Completed business transformation to primarily engage in cryptocurrency mining, data center operation, and mining pool operation in 2021, with the mining pool business disposed of in January 2024[28] - Acquired 51% equity interest in Alpha Data Center LLC (Ethiopia data center with 100 MW planned capacity) through Guanghan Data Center Co., Ltd. acquisition on December 9, 2024[29] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section details accounting principles including U.S. GAAP compliance, consolidation, foreign currency translation, fair value measurement for cryptocurrency assets (per ASU 2023-08) and derivatives, related party transactions, revenue recognition for services, cost of services, and recent accounting pronouncements - Unaudited interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules and regulations[33] - Significant estimates and assumptions are made for allowance for credit losses, useful lives of assets, impairment, valuation of cryptocurrencies, deferred tax assets, share-based compensation, and derivative instruments[35] - The Group adopted ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets, effective January 1, 2024, requiring cryptocurrency assets to be measured at fair value with changes recorded in net income or loss[41] Basis of presentation and use of estimates - Interim financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain information condensed or omitted consistent with such rules[33][34] - Management makes significant estimates and assumptions, including for asset and liability valuations, which may differ from actual results[35] Principles of consolidation - Consolidated financial statements include the Company and its subsidiaries, with consolidation from the date control is obtained until it ceases[36] - All significant intercompany balances and transactions are eliminated upon consolidation[36] Foreign currency translation - Functional currencies vary by entity: US$ for the Company and many subsidiaries, EUR for The Multi Group, and RMB for mainland China subsidiaries[37] - Operating results are translated using monthly average exchange rates, and financial positions at spot exchange rates, with differences recorded in accumulated other comprehensive loss[37] Cryptocurrency assets - Cryptocurrency assets are included in current assets[40] - Effective January 1, 2024, adopted ASU No. 2023-08, requiring fair value measurement each reporting period with changes recorded in net income or loss[41] - Upon adoption of ASU 2023-08, recognized a cumulative-effect adjustment of $893 thousand increase in retained earnings[41] Derivative contracts - Derivative contracts (accumulator and decumulator agreements) are recognized at fair value on the balance sheet, with changes in fair value recorded in comprehensive income (loss)[44][45] - Derivative contracts are valued using observable market data (Level 2 of the fair value hierarchy)[46] Derivative Contracts (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Derivative assets | 859 | 40 | | Changes in fair value of derivative instruments (H1) | 103 (gain) | 70 (gain) | Fair value measurements - Applies ASC 820, "Fair Value Measurements and Disclosures," establishing a three-tier fair value hierarchy (Level 1, 2, 3)[50][51][52] Fair Value Measurements (US$ thousands) | Description | Fair value at June 30, 2025 (US$ thousands) | Level 1 (US$ thousands) | Level 2 (US$ thousands) | Level 3 (US$ thousands) | | :---------- | :-------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Derivative assets | 40 | — | 40 | — | | Cryptocurrency assets | 3,605 | 3,605 | — | — | | Total Assets | 3,645 | 3,605 | 40 | — | - Non-financial assets (intangible assets, goodwill, property and equipment) are measured at fair value only when an impairment charge is recognized[56] Related party transactions - A related party is defined as any person or entity with 10% or more ownership, management, control, or significant influence over the Company[57] - Transactions with related parties are not presumed to be at arm's-length, and determining their fair value is impractical[58] Revenue recognition - Revenues are derived principally from cryptocurrency mining and data center services, and previously from mining pool business (discontinued)[59] - Revenue is accounted for under ASC Topic 606 and recognized when control of promised goods or services is transferred to customers[60][61] Cryptocurrency mining - The Group provides hash calculation services to mining pools and receives cryptocurrencies as consideration[63] - Revenue is measured at the fair value of cryptocurrencies at contract inception and recognized on the same day control of the service transfers, as agreements are continually renewed daily[63] Data center services - The Group provides data center services including rack space, utility, and cloud services, generally based on monthly services at a defined price[64] - Revenues are recognized monthly based on the services rendered[64] Mining pool services - The Group previously operated BTC.com mining pool, enabling participants to engage in crypto-mining activities[65] - The Group acted as a primary mining pool operator (validating blocks for blockchain rewards) and a sub mining pool operator (contributing hash power to third-party pools)[65] - Mining pool revenue was recognized on a gross basis, with mining rewards earned as revenue and the portion remitted to pool participants as cost of revenue[68][70] Contract balances - The Group does not have any contract assets[72] - Contract liabilities consist of advance from customers, which was $1,269 thousand as of June 30, 2025[72] Cost of services - Cost of services includes direct production costs for data center services, server leasing and maintenance for cryptocurrency mining, depreciation, amortization, employee costs, and other direct costs[74][75][76][77][78] Cost of data center services Cost of Data Center Services (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :----------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Cost of data center services | 7,642 | 10,989 | Cost of cryptocurrency mining Cost of Cryptocurrency Mining (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :-------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Cost of cryptocurrency mining (after inter-segment elimination) | 1,581 | 12 | Depreciation fees Depreciation Fees (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :---------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Depreciation fees | 5,155 | 4,712 | Amortization fees Amortization Fees (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :---------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Amortization fees | 606 | 606 | Recent accounting pronouncements - FASB issued ASU 2023-09 (Income Taxes), effective for annual periods beginning after December 15, 2024[79] - FASB issued ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2026[80] - The Group is currently evaluating the impact of adopting both new standards[79][80] 3. CONCENTRATION OF RISKS The Group faces significant concentration risks across credit, customers, and suppliers, with substantial portions of cash, revenue, accounts receivable, and accounts payable tied to a limited number of entities Concentration of credit risk - Assets subject to significant concentration of credit risk primarily consist of cash and cash equivalents and restricted cash[81] - Substantially all cash and cash equivalents are deposited in financial institutions located in mainland China, Hong Kong, Ethiopia, and United States[81] Concentration of customers Customer Revenue Concentration | Customer | H1 2024 Revenue % | H1 2025 Revenue % | | :------- | :---------------- | :---------------- | | A | 21.3 % | 10.2 % | | B | * % | 19.3 % | | C | 10.5 % | * % | | D | 11.3 % | 16.7 % | Customer Accounts Receivable Concentration | Customer | Dec 31, 2024 A/R % | June 30, 2025 A/R % | | :------- | :----------------- | :------------------ | | A | 29.4 % | 25.6 % | | B | * % | 21.2 % | | C | 19.3 % | 40.1 % | | D | 28.9 % | * % | Concentration of suppliers Supplier Cost Concentration | Supplier | H1 2024 Costs % | H1 2025 Costs % | | :------- | :-------------- | :-------------- | | A | 43.6 % | 57.5 % | Supplier Accounts Payable Concentration | Supplier | Dec 31, 2024 A/P % | June 30, 2025 A/P % | | :------- | :----------------- | :------------------ | | A | 100 % | 100 % | 4. DISCONTINUED OPERATIONS The Group disposed of its mining pool business on January 31, 2024, for $5,000 thousand, recognizing an $18,687 thousand gain and classifying it as discontinued operations due to its strategic impact - The Group sold its entire mining pool business for a total consideration of US$5,000 thousand[86] - The mining pool business was deemed disposed of on January 31, 2024, for accounting purposes[87] - A gain from disposal of discontinued operations of US$18,687 thousand was recognized[89] Discontinued Operations Financials (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | | Revenues | 30,340 | | Cost of revenue | (30,083) | | Net income from discontinued operations, net of income tax | 240 | Disposition of mining pool business - The disposal of the mining pool business represents a strategic shift and has a major effect on the Group's results of operation[88] - Consideration for the disposal was US$5,000 thousand, with initial payment in bitcoins and subsequent payments in USDT[86][87] Net Liabilities and Gain from Disposal (US$ thousands) | Item | As of January 31, 2024 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | | Net liabilities of discontinued operations | (16,687) | | Gain from disposal of discontinued operations | 18,687 | 5. INVESTMENTS The Group's long-term investments, including equity investments at cost less impairment and equity method investments, slightly decreased from $3,557 thousand to $3,429 thousand between December 2024 and June 2025 Long-Term Investments (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Carrying amount of long-term investments | 3,557 | 3,429 | | Carrying amount of equity investments without readily determinable fair value | 3,053 | 2,960 | | Carrying amount of equity method investments | 504 | 469 | Equity investments without readily determinable fair value - These investments are measured at cost, less any impairment, plus or minus changes from observable price changes (measurement alternative)[93] - Carrying amount was US$8,611 thousand (net of US$5,651 thousand accumulated impairment) as of June 30, 2025[93] - No impairment was recognized for the six months ended June 30, 2024 and 2025[93] Equity method investments - Investments are classified as equity method investments when the Group has significant influence over the entities[94] Net Operating Income from Equity Method Investments (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :-------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Net operating income from equity method investments | 133 | 2 | 6. CRYPTOCURRENCY ASSETS The Group's cryptocurrency assets decreased from $9,581 thousand to $3,605 thousand by June 30, 2025, driven by significant disposals, mining activities, and a negative fair value change, with the portfolio primarily comprising Ethereum, Dogecoin, and Bitcoin Cryptocurrency Assets (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Ending balance of cryptocurrency assets, net | 9,581 | 3,605 | Key Movements in Cryptocurrency Assets (For the six months ended June 30, 2025) (US$ thousands) | Key Movements (For the six months ended June 30, 2025) | Amount (US$ thousands) | | :----------------------------------------------------- | :--------------------- | | Cryptocurrencies mined from mining business | 4,587 | | Disposal of cryptocurrency assets | (17,491) | | Changes in fair value of cryptocurrency assets | (2,294) | | Cryptocurrency loss from online scam | (1,266) | Cryptocurrency Portfolio (June 30, 2025) | Cryptocurrency | Units (June 30, 2025) | Fair Value (US$ thousands) (June 30, 2025) | | :------------- | :-------------------- | :----------------------------------------- | | Ethereum | 808 | 2,021 | | Dogecoin | 1,832,508 | 311 | | Bitcoin | 8 | 983 | | USDT | 272,715 | 273 | 7. PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets decreased from $5,911 thousand to $4,246 thousand, primarily due to the absence of mining pool disposal receivables and long-term investments, partially offset by increased utility deposits and third-party loans Prepayments and Other Current Assets (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Prepayments and other current assets | 5,911 | 4,246 | | Loans to the third parties | 2,358 | 2,474 | | Utility deposits | 915 | 1,934 | | Receivables from disposal of mining pool business | 1,000 | — | 8. PROPERTY AND EQUIPMENT, NET Net property and equipment decreased from $19,896 thousand to $17,599 thousand due to increased accumulated depreciation totaling $56,027 thousand, with no new impairment losses recognized in H1 2024 or H1 2025 Property and Equipment, Net (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Property and equipment, net | 19,896 | 17,599 | | Accumulated depreciation | (50,308) | (56,027) | | Provision for impairment | (31,143) | (31,143) | Depreciation Expenses from Continuing Operations (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Depreciation expenses from continuing operations | 5,201 | 5,417 | - No impairment loss was recognized for the six months ended June 30, 2024 and 2025; existing impairment was mainly due to mining machines in Kazakhstan and USA[101] 9. INTANGIBLE ASSETS, NET Net intangible assets decreased from $11,084 thousand to $8,882 thousand due to increased accumulated amortization, with amortization expense rising from $608 thousand to $2,234 thousand and no new impairment losses recognized Intangible Assets, Net (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Intangible assets, net | 11,084 | 8,882 | | Accumulated amortization | (17,189) | (19,610) | | Impairment | (34,447) | (34,447) | Amortization Expense (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Amortization expense | 608 | 2,234 | - No impairment loss was recognized for the six months ended June 30, 2024 and 2025; existing impairment was incurred in prior years[103] 10. OPERATING LEASES The Group's operating lease commitments for office spaces have remaining terms of 0.34 to 1.44 years, with right-of-use assets and total liabilities decreasing, and operating lease costs at $894 thousand in H1 2024 and $804 thousand in H1 2025 - The Group entered into various operating lease agreements for office space, with remaining lease terms ranging from 0.34 to 1.44 years[105] Operating Lease Assets and Liabilities (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Right-of-use assets | 2,627 | 1,786 | | Total operating lease liabilities | 2,548 | 1,807 | Operating Lease Costs (US$ thousands) | Item | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Operating lease costs from continuing operations | 894 | 804 | 11. LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS Long-term prepayments and other non-current assets decreased from $27,562 thousand to $24,404 thousand, mainly driven by reduced prepayments for mining machines and data center materials Long-Term Prepayments and Other Non-Current Assets (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Long-term prepayments and other non-current assets | 27,562 | 24,404 | | Prepayment for mining machines | 21,326 | 19,437 | | Prepayment for data center materials | 3,974 | 2,852 | 12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities slightly increased from $9,349 thousand to $9,485 thousand, with unfavorable contracts being the largest component, rising to $5,944 thousand Accrued Expenses and Other Current Liabilities (US$ thousands) | Item | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------------------- | | Accrued expenses and other current liabilities | 9,349 | 9,485 | | Unfavorable contract - current | 5,407 | 5,944 | | Advance from end users | 1,218 | 1,269 | 13. INCOME TAXES The Group's subsidiaries face diverse income tax rates across jurisdictions, holding significant net operating losses in mainland China and Hong Kong for which a full valuation allowance is recorded due to uncertain realization Profits Tax Rates by Jurisdiction | Jurisdiction | Profits Tax Rate | | :----------- | :--------------- | | USA | 21% | | Curacao | 2% | | Malta | 35% (potentially 5% effective) | | Ethiopia | 30% (4-year exemption for Alpha Data Center LLC) | | Hong Kong | 8.25% / 16.5% | | Mainland China | 25% | Net Operating Losses (NOLs) as of June 30, 2025 (US$ thousands) | Net Operating Losses (NOLs) as of June 30, 2025 | Amount (US$ thousands) | Expiration | | :---------------------------------------------- | :--------------------- | :--------- | | Mainland China subsidiaries | 22,368 | 2026 to 2030 | | Hong Kong subsidiaries | 81,862 | N/A | - A full valuation allowance is recorded against deferred tax assets due to the determination that it is more likely than not that all deferred tax assets will not be realized[124] Cayman Islands - The Company is not subject to tax on income or capital gains under current laws[114] - No Cayman Islands withholding tax will be imposed upon payments of dividends[114] USA - Profits tax in USA is generally assessed at the rate of 21% of taxable income for subsidiaries incorporated there[115] British Virgin Islands - Subsidiaries incorporated in British Virgin Islands are not subject to tax on income or capital gains[116] Curacao - Profits tax in Curacao is generally assessed at the rate of 2% of taxable income[117] Malta - Profits tax in Malta is generally assessed at the rate of 35% of taxable income[118] - A 6/7 refund of profit tax paid can effectively reduce the income tax rate to 5% when dividends are paid to the holding company[118] Ethiopia - Profits tax in Ethiopia is generally assessed at the rate of 30% of taxable income[120] - Alpha Data Center LLC is entitled to income tax exemption for four years as a new investor under Council of Ministers Investment Incentive Regulation No. 517/2022[120] Hong Kong - Profits tax in Hong Kong is generally assessed at 8.25% for taxable income up to HKD2,000 and 16.5% for income over HKD2,000[121] Mainland China - Subsidiaries incorporated in mainland China are subject to a uniform 25% enterprise income tax (EIT) rate[122] - No provision for income tax was made for H1 2024 and 2025 as mainland China subsidiaries had no assessable income[122] - As of June 30, 2025, the Group had US$22,368 thousand in net operating losses (NOLs) from mainland China subsidiaries, expiring between 2026 and 2030, with a full valuation allowance[124] 14. SHARE-BASED PAYMENT The Company's 2021 Share Incentive Plan facilitates options and restricted share grants, with significant exercises in H1 2024 and H1 2025, alongside private placement warrants that have either expired or been exercised - The 2021 Share Incentive Plan allows for the grant of options, restricted shares, and other share-based awards, up to 12% of the Company's issued and outstanding ordinary shares[127] Restricted shares granted to employees and directors Restricted Share Options (Shares) | Item | Number of options (shares) | | :-------------------------- | :------------------------- | | Outstanding, January 1, 2024 | 40,318,000 | | Granted (H1 2025) | 38,644,400 | | Exercised (H1 2025) | 38,644,400 | | Outstanding, June 30, 2025 | — | Total Share-based Compensation Expenses (US$ thousands) | Total Share-based Compensation Expenses | For the six months ended June 30, 2024 (US$ thousands) | For the six months ended June 30, 2025 (US$ thousands) | | :-------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Total | 995 | 851 | Warrant issued for private placement - In June 2022, the Company issued pre-funded warrants (exercised in full Aug 2022), Series A warrants (expire 5th anniversary), and Series B warrants (expired Dec 31, 2024)[132] - In August 2022, the Company issued Series A warrants (expire 5th anniversary) and Series B warrants (expired June 30, 2025, with some exercised in Jan 2024)[133] Class A Ordinary Shares and Weighted Average Exercise Price | Item | Class A Ordinary Shares (Number) | Weighted Average Exercise Price (US$) | | :------------------------------------------ | :------------------------------- | :------------------------------------ | | Outstanding, January 1, 2024 | 731,333,300 | 0.17 | | Expired (H1 2024) | (260,000,000) | 0.32 | | Expired (H1 2025) | (155,166,650) | 0.06 | | Outstanding, June 30, 2025 | 315,666,650 | 0.09 | 15. COMMITMENTS AND CONTINGENCIES The Group's commitments include indemnification for officers and directors, legal proceedings resolved with a $10,000 thousand penalty paid in November 2024, and operating lease obligations detailed in Note 10 Guarantees - The Company indemnifies its officers and directors against expenses, judgments, fines, and settlements[137] - The overall maximum amount of indemnification obligations cannot be reasonably estimated[137] - Historically, the Group has not been required to make payments related to these obligations, and their fair value is zero as of December 31, 2024, and June 30, 2025[138] Indemnity cost - There was no indemnity cost incurred as of December 31, 2024, and June 30, 2025[139] Legal proceedings - The Group resolved previously-disclosed investigations by the DOJ and SEC related to a potential casino resort project in Japan[142] - The resolution involved a deferred prosecution agreement (DPA) with the DOJ and a Cease-And-Desist Order (SEC Order)[142] - A combined penalty amount of US$10,000 thousand was paid to the DOJ and SEC in November 2024[142] Operating lease commitments - Information regarding lease commitments is provided in Note 10[143] 16. EARNINGS (LOSSES) PER SHARE Basic and diluted EPS from continuing operations were $0.00 in H1 2024 and $(0.01) in H1 2025, with discontinued operations contributing $0.02 in H1 2024 and $0.00 in H1 2025, and certain stock warrants excluded from diluted EPS in H1 2024 Net Income (Loss) Per Share (US$) | Item | H1 2024 (US$) | H1 2025 (US$) | | :------------------------------------------ | :------------ | :------------ | | Net income (loss) from continuing operations (Basic and Diluted) | 0.00 | (0.01) | | Net income from discontinued operations (Basic and Diluted) | 0.02 | 0.00 | | Net income (loss) (Basic and Diluted) | 0.02 | (0.01) | Net Income (Loss) Per ADS (US$) | Item | H1 2024 (US$) | H1 2025 (US$) | | :------------------------------------------ | :------------ | :------------ | | Net income (loss) from continuing operations per ADS (Basic and Diluted) | 0.00 | (0.87) | | Net income from discontinued operations per ADS (Basic and Diluted) | 1.69 | 0.00 | | Net income (loss) per ADS (Basic and Diluted) | 1.69 | (0.87) | - 730,844,350 weighted average ordinary share equivalents relating to stock warrants were excluded from diluted EPS in H1 2024 due to their anti-dilutive effect[146] 17. EQUITY TRANSACTIONS Equity transactions included the vesting and exercise of 40,318,000 and 38,644,400 restricted shares in H1 2024 and H1 2025, respectively, issuance of 500,000 Class A ordinary shares from warrants, 2,291,280 incentive shares, and an increase in authorized share capital to 8,800,000,000 ordinary shares - 40,318,000 restricted shares were vested and exercised during H1 2024, and 38,644,400 during H1 2025[148][149] - On January 5, 2024, 500,000 Class A ordinary shares were issued from the exercise of Series B warrants[149] - On March 27, 2024, 2,291,280 Class A ordinary shares were issued as incentive shares to an employee for meeting a research and development project target[150] - On January 7, 2025, the authorized share capital was increased to 8,800,000,000 ordinary shares[151] 18. SEGMENT REPORTING The Group now reports two segments: data center and cryptocurrency mining, with total revenue decreasing from $19,359 thousand to $11,013 thousand and a shift from gross profit to loss, while revenue is concentrated in USA and Hong Kong, and long-lived assets in USA and Ethiopia - The Group has two reportable segments: data center business and cryptocurrency mining, following the disposal of its mining pool business[152] - The chief operating decision maker (Board of Directors and CEO) makes resource allocation decisions and assesses performance based on these segments[152] - Assets are managed on an entity-wide basis and are not separately disclosed for reportable operating segments[153] Reportable segment revenues and costs Segment and Consolidated Revenue (US$ thousands) | Item | H1 2024 (US$ thousands) | H1 2025 (US$ thousands) | | :------------------------------------------ | :---------------------- | :---------------------- | | Total segment and consolidated revenue | 19,359 | 11,013 | | Data center revenue | 15,307 | 11,516 | | Cryptocurrency mining revenue | 9,092 | 4,555 | Segment Gross Profit (Loss) (US$ thousands) | Segment Gross Profit (Loss) | H1 2024 (US$ thousands) | H1 2025 (US$ thousands) | | :-------------------------- | :---------------------- | :---------------------- | | Data center | 1,304 | (5,853) | | Cryptocurrency mining | 3,071 | 547 | | Total segment gross profit (loss) | 4,375 | (5,306) | - Inter-segment eliminations mainly consist of data center revenue and corresponding costs between the data center and cryptocurrency mining segments[155] Revenue by geographical locations Revenues by Geographical Location (US$ thousands) | Revenues | H1 2024 (US$ thousands) | H1 2025 (US$ thousands) | | :--------- | :---------------------- | :---------------------- | | Hong Kong | 9,092 | 4,555 | | USA | 15,307 | 11,516 | | Inter-segment | (5,040) | (5,058) | | Total | 19,359 | 11,013 | Long-lived assets by geographical locations Long-Lived Assets by Geographical Location (US$ thousands) | Long-lived assets | As of December 31, 2024 (US$ thousands) | As of June 30, 2025 (US$ thousands) | | :---------------- | :------------------------------------- | :----------------------------------- | | USA | 18,158 | 13,028 | | Hong Kong | 140 | 107 | | Mainland China | 650 | 498 | | Ethiopia | 3,575 | 5,752 | | Total | 22,523 | 19,385 | 19. SUBSEQUENT EVENTS Subsequent events include completing the Ethiopia data center acquisition, issuing shares for $10,566 thousand net proceeds, a strategic shift to the Solana ecosystem with a SOL validator and 44,378 SOL holdings, and launching the DOLAI stablecoin - Completed the second phase of the Ethiopia data center acquisition on July 14, 2025, issuing 45,278,600 Class A ordinary shares[161] - Issued 186,335,000 Class A ordinary shares (1,863,350 ADSs) in July 2025 for net proceeds of approximately US$10,566 thousand[162] - Announced a strategic shift into the Solana ecosystem on July 10, 2025, including launching a SOL validator and holding 44,378 SOL (valued at approximately $9,393 thousand as of September 25, 2025)[163] - Launched DOLAI, a U.S. dollar-backed stablecoin on Solana, in August 2025, in collaboration with Brale Inc[164]