BTC Digital .(US:BTCT)2025-11-12 21:00Financial Performance - Revenues for the six months ended June 30, 2025, were $5,731,000, up from $4,979,000 for the same period in 2024, indicating a growth of about 15.1%[6] - The net loss for the six months ended June 30, 2025, was $4,844,000, compared to a net loss of $1,435,000 for the same period in 2024, reflecting an increase in losses of approximately 237.5%[6] - The company reported a gross loss of $1,314,000 for the six months ended June 30, 2025, compared to a gross loss of $342,000 for the same period in 2024, indicating a deterioration in gross margin[6] - Operating expenses for the six months ended June 30, 2025, were $3,563,000, significantly higher than $1,259,000 for the same period in 2024, reflecting an increase of approximately 183.5%[6] - The Group recognized a net loss available to shareholders of US$4,844,000 for the six months ended June 30, 2025, compared to a net loss of US$1,435,000 for the same period in 2024, indicating a significant increase in losses[85] Assets and Liabilities - As of June 30, 2025, total assets increased to $41,130,000 from $37,457,000 as of December 31, 2024, representing an increase of approximately 7.1%[2] - Cash and cash equivalents increased to $6,398,000 as of June 30, 2025, from $14,900,000 at the beginning of the period, showing a decrease of about 57.0%[9] - Total liabilities rose to $1,213,000 as of June 30, 2025, compared to $557,000 as of December 31, 2024, marking an increase of approximately 117.8%[4] - Shareholders' equity decreased to $36,900,000 as of June 30, 2025, from $39,917,000 as of December 31, 2024, a decline of approximately 7.6%[4] Share Capital and Issuance - The company issued 1,082,935 ordinary shares during the six months ended June 30, 2025, contributing to the total shares outstanding increasing to 7,516,975[7] - On December 14, 2023, the Company entered into subscription agreements for the issuance of 303,497 ordinary shares, resulting in total gross proceeds of $1,014,286, or $3.342 per share[104] - As of June 30, 2025, the Company had 7,516,975 ordinary shares issued and outstanding, an increase from 6,434,040 shares as of December 31, 2024[110] - The Company raised approximately $6.0 million from a registered direct offering on July 16, 2025, selling 2,000,000 ordinary shares at a price of $3.00 per share[131] - The Company has a capital commitment totaling $149,000 as of June 30, 2025, related to the purchase of miners and acquisition of a BTC mining facility[130] - On August 22, 2025, shareholders approved an increase in the Company's authorized share capital from $1,500,000 to $12,000,000, expanding the number of authorized ordinary shares from 25,000,000 to 200,000,000[132] - The Company issued 727,425 and 120,372 ordinary shares on November 13 and 15, 2024, in connection with a cashless warrant exercise[108] - The Company issued 1,408,791 ordinary shares in December 2024 upon the exercise of pre-funded warrants[108] - As of June 30, 2025, all warrants of the Company have been settled in full, with no outstanding warrants remaining[124] - The Company anticipates net proceeds of approximately $5,730,000 from the cash exercise of warrants, expected to be used for potential acquisitions and working capital[115] - The Company offered 40,000,000 ordinary shares at a purchase price of $1.00 per share on May 21, 2021, which led to a reduction in the exercise price of outstanding warrants to $1.00[116] Digital Assets and Revenue Recognition - The primary revenue source is digital asset mining, where the Group provides computing power to mining pools and receives a fractional share of digital assets awarded[48] - Revenue from digital asset mining is recognized only when the Group successfully contributes computing power to solve an algorithm, with all consideration being variable[49] - Fair value of digital assets awarded is determined using quoted prices at the time of receipt, with significant management judgment involved in accounting treatment[50] - The Group's total digital assets increased from US$1,085,000 as of December 31, 2024, to US$1,335,000 as of June 30, 2025, representing a growth of approximately 23%[76] - The Group generated US$427,000 from the receipt of cryptocurrencies through mining services for the six months ended June 30, 2025, compared to US$1,190,000 for the same period in 2024, indicating a decrease of approximately 64%[76] Accounting Policies - The consolidated financial statements have been prepared in accordance with U.S. GAAP, with the reporting currency being US$[28][31] - The Group maintains an allowance for credit loss based on historical losses and current market conditions, with accounts receivable presented net of this allowance[34] - Digital assets are accounted for as intangible assets with indefinite useful lives, assessed for impairment annually[37] - The Group's operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments[46] - The Group adopted ASC 606 for revenue recognition, following a five-step process to ensure compliance[47] - Deferred income tax assets are assessed for realization based on a "more-likely-than-not" threshold, considering factors like cumulative losses and future profitability forecasts[52] - The Group recognizes tax positions that are "more-likely-than-not" to prevail, measuring them at the largest amount of tax benefit with over 50% likelihood of realization[53] - Share-based compensation is recognized over the requisite service period using the straight-line method, with fair value determined at the grant date[54] Investments and Acquisitions - On March 30, 2020, the Company completed the acquisition of Meten International and EdtechX, acquiring 100% of the ordinary shares for a total of 1,613,054 and 65,717 ordinary shares of the Company, respectively[15] - The transaction is accounted for as a reverse recapitalization, with an exchange ratio of 0.1519, resulting in a retrospective restatement of equity and loss per share[17] - Azimut Enterprises Holdings S.r.l. invested $20,000 in EdtechX to purchase 2,000,000 units, which converted into the same number of units of the Company upon merger completion[18] - Three unrelated investors agreed to invest a total of $12,000 in shares of the Company, with the financing completed on March 30, 2020[19] - The Reorganization involved establishing a Cayman Islands holding company for the Business, with a series of steps executed from 2018 to 2019[24] - The Reorganization included transferring equity interests in non-business operations to Shenzhen Yilian Investment, with a net cash distribution of approximately RMB148,270[24] Equity Interests - The Group's equity interest in Met Chain Co Limited increased from 24.3% as of December 31, 2024, to 29.53% as of June 30, 2025, following the acquisition of additional equity interests[78] Depreciation and Expenses - The depreciation expense for property and equipment increased from US$1,781,000 for the six months ended June 30, 2024, to US$1,965,000 for the same period in 2025, showing a rise of approximately 10.3%[80] - Share-based compensation expenses rose from US$571,000 for the six months ended June 30, 2024, to US$1,827,000 for the same period in 2025, reflecting an increase of approximately 220%[89] Credit Risk - As of June 30, 2025, substantially all cash and cash equivalents were deposited in high-quality financial institutions in the U.S., Hong Kong, and the PRC, indicating a concentration of credit risk[71] Accounts Receivable and Current Assets - Accounts receivable increased from US$4,548,000 as of June 30, 2025, to US$5,477,000 as of December 31, 2024, reflecting a growth of approximately 20.4%[73] - Total prepayments and other current assets rose significantly from US$2,891,000 as of December 31, 2024, to US$7,916,000 as of June 30, 2025, marking an increase of about 174%[74] - The total cost of miners for Bitcoin increased from US$20,321,000 as of December 31, 2024, to US$22,128,000 as of June 30, 2025, reflecting a growth of approximately 8.9%[80]