UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to __________
Commission file number:
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| (State or other jurisdiction of Company or organization) | (I.R.S. Employer Identification No.) | |
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Registrant’s telephone number:
Securities registered under Section 12(b) of the Exchange Act:
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Check whether the Issuer (1) filed all reports
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the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Applicable only to Corporate Issuers:
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TABLE OF CONTENTS
| PART I | ||
| Item 1. | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 43 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk. | 73 |
| Item 4. | Controls and Procedures. | 73 |
| PART II | ||
| Item 1. | Legal Proceedings. | 74 |
| Item 1A. | Risk Factors. | 74 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 74 |
| Item 3. | Defaults Upon Senior Securities. | 74 |
| Item 4. | Mine Safety Disclosures. | 74 |
| Item 5. | Other Information. | 74 |
| Item 6. | Exhibits. | 75 |
| SIGNATURES | 76 | |
i
Item 1. Financial Statements and Supplementary Data
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2025 and December 31, 2024
(Expressed in US dollars, except for the number of shares)
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable | ||||||||
| USDC | ||||||||
| Digital assets | ||||||||
| Net investment in lease - current | ||||||||
| Loans receivable | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Deposits for property, plant, and equipment | ||||||||
| Property, plant, and equipment, net | ||||||||
| Goodwill | ||||||||
| Intangible assets | ||||||||
| Operating lease right-of-use assets | ||||||||
| Net investment in lease - non-current | ||||||||
| Investment securities | ||||||||
| Deferred tax asset | ||||||||
| Other non-current assets | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Current portion of deferred revenue | ||||||||
| Current portion of operating lease liability | ||||||||
| Dividend payable | ||||||||
| Income tax payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Non-current portion of deferred revenue | ||||||||
| Non-current portion of operating lease liability | ||||||||
| Long-term income tax payable | ||||||||
| Deferred tax liability | ||||||||
| Other long-term liabilities | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies – Note 19 | ||||||||
| Shareholders’ Equity | ||||||||
| Preferred shares, $ | ||||||||
| Ordinary shares, $ | ||||||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
For the Three and Six Months Ended June 30, 2025 and 2024
(Expressed in US dollars, except for the number of shares)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | ||||||||||||||||
| Digital asset mining | $ | $ | $ | $ | ||||||||||||
| Cloud services | ||||||||||||||||
| Colocation services | ||||||||||||||||
| ETH staking | ||||||||||||||||
| Other | ||||||||||||||||
| Total Revenues | ||||||||||||||||
| Operating costs and expenses | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown below) | ||||||||||||||||
| Digital asset mining | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cloud services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Colocation services | ( | ) | ( | ) | ||||||||||||
| ETH staking | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gains (losses) on digital assets | ( | ) | ( | ) | ||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||||||||||
| Net loss from disposal of property and equipment | ( | ) | ||||||||||||||
| Other income, net | ||||||||||||||||
| Total other income, net | ||||||||||||||||
| Income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Income tax expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ( | ) | ||||||||||
| Weighted average number of ordinary share outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||
| Basic | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Diluted | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three and Six Months Ended June 30, 2025 and 2024
(Expressed in U.S. dollars, except for the number of shares)
| Preferred Shares | Common Shares | Treasury | Additional paid -in | Retained Earnings (Accumulated | Accumulated other comprehensive | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Par Value | Shares | Par Value | capital | deficit) | (loss) income | Equity | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock/At-the-market offering, net of offering costs | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to director | - | |||||||||||||||||||||||||||||||||||||||
| Cumulative effect upon adoption of ASU 2023-08 | - | - | - | |||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock/At-the-market offering, net of offering costs | - | - | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock/At-the-market offering, net of offering costs | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to director | - | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock/At-the-market offering, net of offering costs | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock/public offering, net of offering costs | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to consultants | - | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation in connection with issuance of ordinary shares to employees | - | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | - | - | - | |||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
BIT DIGITAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Expressed in US dollars)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) income | $ | ( | ) | |||||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization expenses | ||||||||
| Loss from disposal of property, plant, and equipment | ||||||||
| Losses (gains) on digital assets | ( | ) | ||||||
| Share-based compensation expenses | ||||||||
| Realized and unrealized gains on digital assets held within Investment Fund | ( | ) | ||||||
| Changes in fair value of investment security | ( | ) | ||||||
| Digital assets mined | ( | ) | ( | ) | ||||
| Digital assets earned from staking | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Digital assets and stable coins | ||||||||
| Operating lease right-of-use assets | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ( | ) | ||||
| Other current assets | ||||||||
| Other non-current assets | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Net investment in lease | ( | ) | ||||||
| Other long-term liabilities | ( | ) | ||||||
| Income tax payable | ||||||||
| Deferred tax liability | ||||||||
| Net Cash Provided by (Used in) Operating Activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of and deposits made for property, plant and equipment | ( | ) | ( | ) | ||||
| Investment in equity securities | ( | ) | ( | ) | ||||
| Investment in SAFE | ( | ) | ||||||
| Proceeds from disposal of property, plant and equipment | ||||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from issuance of common stock for public offering | ||||||||
| Net proceeds from issuance of common stock/At-the-market offering | ||||||||
| Payment of dividends | ( | ) | ||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid for income taxes, net of refunds | $ | $ | ||||||
| Non-cash Transactions of Investing and Financing Activities | ||||||||
| Reclassification of deposits to property and equipment | $ | $ | ||||||
| Right of use assets exchanged for operating lease liability | $ | $ | ||||||
Reconciliation of cash, cash equivalents and restricted cash
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Cash, cash equivalents and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
BIT DIGITAL, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Bit Digital, Inc. (“BTBT” or the “Company”), is a holding company incorporated on February 17, 2017, under the laws of the Cayman Islands. The Company is a digital asset platform focused on Ethereum (ETH)-native treasury, staking strategies and engaged in the digital asset mining business. Through its subsidiaries, the Company also engages in high performance computing (“HPC”) business, including cloud services and HPC data center services.
On August 17, 2023, WhiteFiber Iceland ehf (f/k/a Bit Digital Iceland ehf) was incorporated to support the Company’s cloud services in Iceland.
On June 27, 2024, WhiteFiber HPC, Inc. (f/k/a
Bit Digital HPC, Inc.) (“WF HPC”) was incorporated to support the Company’s cloud services in the United States. WhiteFiber
HPC, Inc. is
On August 15, 2024, WhiteFiber, Inc. (f/k/a Celer,
Inc.) (“WhiteFiber”) was incorporated to support the Company’s generative artificial intelligence (“AI”)
workstreams. As of June 30, 2025, WhiteFiber was
On October 11, 2024, the Company completed the
acquisition of Enovum Data Centers Corp (“Enovum”), a Montreal-based owner, operator, and developer of HPC data centers. Enovum
Data Centers Corp is
On March 11, 2025, WhiteFiber Canada, Inc. (“WF
Canada”) was incorporated to support the Company’s generative AI workstreams in Canada. WF Canada is
On May 7, 2025, Enovum NC-1 BIDCO, LLC (“Enovum
NC”) was incorporated to support the HPC data centers workstreams in North Carolina. Enovum NC is
On May 22, 2025, WhiteFiber Japan GK (“WF
Japan”) was incorporated to support the Company’s generative AI workstreams in Japan. WF Japan is
5
The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company and each of the following entities:
| Name | Background | Ownership | |||
| Bit Digital USA, Inc. (“BT USA”) | ● | ||||
| ● | |||||
| ● | |||||
| Bit Digital Canada, Inc. (“BT Canada”) | ● | ||||
| ● | |||||
| ● | |||||
| ● | |||||
| Bit Digital Hong Kong Limited (“BT HK”) | ● | ||||
| ● | |||||
| ● | |||||
| Bit Digital Strategies Limited | ● | ||||
| (“BT Strategies”) | ● | ||||
| ● | |||||
| Bit Digital Singapore Pte. Ltd. | ● | ||||
| (“BT Singapore”) | ● | ||||
| ● | |||||
| Bit Digital Investment Management | ● | ||||
| Limited (“BT IM”) | ● | Strategies Limited. | |||
| ● | |||||
| ● | |||||
| Bit Digital Innovation Master Fund | ● | ||||
| SPC Limited (“BT SPC”) | ● | Strategies Limited. | |||
| ● | |||||
| ● | |||||
| WhiteFiber AI, Inc. (f/k/a Bit Digital | ● | ||||
| AI, Inc.) (“WF AI”) | ● | ||||
| ● | |||||
| WhiteFiber Iceland ehf (f/k/a Bit Digital | ● | ||||
| Iceland ehf) (“WF Iceland”) | ● | ||||
| ● | |||||
| WhiteFiber HPC, Inc. (f/k/a Bit Digital | ● | ||||
| HPC, Inc.) (“WF HPC”) | ● | ||||
| ● | |||||
| WhiteFiber, Inc. (f/k/a Celer, Inc.) | ● | ||||
| (“WhiteFiber”) | ● | ||||
| ● | |||||
| Enovum Data Centers Corp (“Enovum”) | ● | ||||
| ● | |||||
| ● | |||||
| WhiteFiber Canada, Inc. (“WF Canada”) | ● | ||||
| ● | |||||
| ● | |||||
| Enovum NC-1 BIDCO, LLC | ● | ||||
| (“Enovum NC”) | ● | ||||
| ● | |||||
| WhiteFiber Japan GK (“WF Japan”) | ● | ||||
| ● | |||||
| ● | |||||
| (1) |
6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“US GAAP”).
The unaudited condensed consolidated financial information as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 has been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with US GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 14, 2025.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2024. The results of operations for the three and six months ended June 30, 2025, and 2024 are not necessarily indicative of the results for the full years.
Use of estimates
In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of digital assets and other current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates.
We review the useful lives of equipment on an ongoing basis, and effective
January 1, 2025 we changed our estimate of the useful lives for our cloud service equipment from
Fair value of financial instruments
ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
7
| ● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. |
| ● | Level 3 - inputs to the valuation methodology are unobservable. |
Fair value of digital assets is based on Level 1 inputs as these were based on observable quoted prices in the Company’s principal market for identical assets. The fair value of the Company’s other financial instruments, including cash and cash equivalents, restricted cash, loans receivable, deposits, accounts receivable, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of these assets and liabilities. Non-financial assets, such as goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, are adjusted to fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only upon recognition of an impairment charge.
USDC
USD Coin (“USDC”) is accounted for as a financial instrument that can be redeemed one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash or cash equivalents, we treat our USDC holdings as a liquidity resource.
Accounts Receivable
Accounts receivable consist of amounts due from our customers. Receivables are recorded at the invoiced amount less an allowance for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. In accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit loss that reflects its best estimate of the lifetime expected credit losses. Uncollectible accounts are written off against the allowance when collection does not appear probable.
Due to the short-term nature of the Company’s accounts receivable, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends. In determining the amount of the allowance for credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns.
As of June 30, 2025, the allowance for credit loss has not been material to the consolidated financial statements.
Digital assets
Digital assets (primarily include bitcoin and ETH) are included in current assets in the accompanying consolidated balance sheets. Digital assets purchased are recorded at cost and digital assets awarded to the Company through its mining activities and staking activities are accounted for in accordance with the Company’s revenue recognition policy disclosed below.
Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value.
8
Prior to the adoption of ASU 2023-08, digital assets were accounted for as intangible assets with indefinite useful lives and are recorded at cost less impairment in accordance with ASC 350 - Intangibles-Goodwill and Other. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Digital assets held are accounted for as intangible assets with indefinite useful lives and are subject to impairment losses if the fair value of digital assets decreases below the carrying value at any time during the period. The fair value is measured using the quoted price of the digital assets at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.
ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets held by the Company are traded on a number of active markets globally. The Company uses both exchanges and Amber Group’s OTC desk to buy and sell digital assets, including transactions involving U.S. dollars or exchanges between different types of digital assets. Prior to April 1, 2025, the Company considered CoinMarketCap to be its principal market. Effective April 1, 2025, the Company determined that Coinbase is its principal market as it provides the most reliable and greatest volume and level of activity for bitcoin and ETH for which the Company can access.
The Company recognizes mining revenue by utilizing the spot price of Bitcoin determined using Coinbase at 0:00:00 UTC on the date of contract inception and staking revenue by utilizing the daily close prices obtained from Coinbase. In 2022, the Company also used hourly close price from CryptoCompare to recognize revenue from our digital asset mining activities. The Company believed the hourly close price can better reflect revenue recognized from our digital asset mining activities as compared to the daily close price from CoinMarketCap used at the time.
Purchases of digital assets by the Company and digital assets awarded to the Company through its mining activities and staking activities are included within operating activities on the accompanying consolidated statements of cash flows. The changes of digital assets are included within operating activities in the accompanying consolidated statements of cash flows. After adopting ASU 2023-08, changes in fair value and realized gains or losses are now reported as “gains (losses) on digital assets” in the consolidated statements of operations. Prior to this adoption, realized gains or losses were reported as “realized gains (losses) on exchange of digital assets” in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first-in first-out method of accounting.
Deposits for property, plant, and equipment
The deposits for property, plant, and equipment (“PP&E”) represented advance payments for purchases of miner, high performance computing equipment and other equipment used in our colocation services. The Company initially recognizes deposits for PP&E when cash is advanced to our suppliers. Subsequently, the Company derecognizes and reclassifies deposits for PP&E to PP&E when control is transferred to and obtained by the Company.
Below is the roll forward of the balance of deposits for PP&E for the six months ended June 30, 2025 and 2024, respectively.
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Opening balance | $ | $ | ||||||
| Reclassification to PP&E | ( | ) | ( | ) | ||||
| Addition of deposits for PP&E | ||||||||
| Ending balance | $ | $ | ||||||
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Property, plant, and equipment, net
Property, plant, and equipment are recorded at
cost and depreciated using the straight-line method over the estimated useful lives of the assets or declining-balance method. Direct
costs related to developing or obtaining software for internal use are capitalized as property, plant, and equipment. Capitalized software
costs are amortized over the software’s useful life when the software is placed in service.
| Estimated Useful Life | ||
| Digital asset miners | ||
| Cloud service equipment | ||
| Colocation service equipment | ||
| Building | ||
| Leasehold improvements | ||
| Purchased and internally developed software | ||
| Vehicle | ||
| Other property and equipment |
Effective January 1, 2025, we changed our estimate
of the useful lives for our cloud service equipment from
Impairment of long-lived assets
Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 - Intangibles -Goodwill and Other.
The impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not performed, or after assessing the totality of the events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative assessment for potential impairment is performed.
The quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit.
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Finite-lived intangible Assets
Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date.
Intangible assets with finite lives are comprised
of customer relationships and are amortized on straight-line basis over their estimated useful lives. The Company assesses the appropriateness
of finite-lived classification at least annually. Additionally, the carrying value and remaining useful lives of finite-lived assets are
reviewed annually to identify any circumstances that may indicate potential impairment or the need for a revision to the amortization
period. A finite-lived intangible asset is considered to be impaired if its carrying value exceeds the estimated future undiscounted cash
flows expected to be generated from it. We apply judgment in selecting the assumptions used in the estimated future undiscounted cash
flow analysis. Impairment is measured by the amount that the carrying value exceeds fair value. The useful lives of customer relationships
is
Business combinations
The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates, and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Investment securities
As of June 30, 2025 and December 31, 2024, investment securities represent the Company’s investments in three funds, a privately held company via a simple agreement for future equity (“SAFE”), and four privately held companies over which the Company neither has control nor significant influence through investments in ordinary shares or preferred shares.
Investment in equity method investee
In accordance with ASC 323, Investments - Equity Method and Joint Ventures, the Company accounts for the investment in one privately held company using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.
Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net income or loss into its consolidated statements of operations. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.
The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value.
Investment in funds
Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by the fund administrator.
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Investment in privately held company
Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.
Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established.
Investment in SAFE
SAFE investments provide the Company with the right to participate in future equity financing of preferred stock. The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment under ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
Investment in Innovation Fund/Digital assets held in fund
On October 1, 2023, the Company made an investment of
The Fund qualified and operated as an investment company for accounting purposes pursuant to the accounting and reporting guidance under ASC 946, “Financial Services – Investment Companies” (“ASC 946”), which requires fair value measurement of the Fund. The Company retains the Fund’s investment company specific accounting principles under ASC 946 upon consolidation. The digital assets held by the Fund were traded on a number of active markets globally. A fair value measurement under ASC 820, “Fair Value Measurement” (“ASC 820”) for an asset assumes that the asset is exchanged in an orderly transaction between market participants either in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset (ASC 820-10-35-5). The fair value of the assets within the Fund was primarily determined using the price from CoinMarketCap. Any changes in the fair value of the assets were recorded in Other income (expense), net in the consolidated statements of operations.
On July 1, 2024, the Company entered into a share purchase agreement with Pleasanton Ventures Limited (“Pleasanton Ventures”) for the disposition of Bit Digital Innovation Master Fund SPC Ltd and Bit Digital Investment Management Limited. Refer to Note 20. Disposition of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund SPC Limited, for more information. Upon the disposition, the Company no longer has a controlling financial interest in the Fund and therefore deconsolidated the Fund in accordance with ASC 810 – “Consolidation” (“ASC 810”). The Company did not record any gain or loss upon deconsolidation as the digital assets in the Fund were measured at fair value. Subsequently, the investment in the Fund is included under the caption “Investment securities” as Investment in Innovation Fund. Refer to Note 10. Investment Securities for more information.
Leases
The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.
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For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepayment and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred and not included in the measurement of right-of-use assets and operating lease liabilities.
For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant.
For sales-type leases where the Company is the lessor, the Company recognizes a net investment in lease, which comprises of the present value of the future lease payments and any unguaranteed residual value. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease and is included in “Revenue – other”. Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which will be recorded in “Other income, net.”
For operating sublease where the Company is the lessor, the Company recognizes lease payments in income over the lease term on a straight-line basis and is included in “Other income, net”.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. Refer to Note 3. Revenue from Contracts with Customers for further information.
Contract costs
Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, including commissions that are incurred directly related to obtaining customer contracts. We amortize the deferred contract costs on a straight-line basis over the expected period of benefit. These amounts are included in the accompanying consolidated balance sheets, with the capitalized costs to be amortized to commission expense over the expected period of benefit and commission expense payable included in Other current assets and Other long-term liabilities.
The Company capitalized lease expense incurred in December 2023 that are directly related to fulfilling its cloud services which commenced operations in January 2024. The lease expense is directly related to fulfill customer contracts and is expected to be recovered. The capitalized lease expense was reclassified as lease expense in January 2024.
Deferred Revenue
Deferred revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of June 30, 2025. Deferred revenues are recognized as revenue recognition criteria have been met.
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Remaining performance obligation
Remaining performance obligations represent the transaction price of contracts for work that have not yet been performed. The amount represents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation.
Cost of revenue
The Company’s cost of revenue consists primarily of (i) direct production costs related to mining operations, including electricity costs, profit-sharing fees/variable performance fees and/or other relevant costs paid to our hosting facilities, (ii) direct production costs related to our cloud services, including electricity costs, data center lease costs, and other relevant costs, (iii) direct production costs related to our colocation services, including electricity costs, lease costs, data center employees’ wage expenses and other relevant costs, and (iv) direct cost related to ETH staking business, including service fees payable to the service provider.
Cost revenue excludes depreciation expenses, which are separately stated in the Company’s consolidated statements of operations.
Foreign currency
Accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation adjustments are recorded as a separate component of Accumulated other comprehensive income, net of any related taxes, in total shareholders’ equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded in other income (expense), net.
Operating segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is composed of the Chief Executive Officer and Chief Financial Officer, who use segment gross profit (loss) to assess the performance of the business of our reportable operating segments.
Income taxes
We account for current and deferred income taxes in accordance with the authoritative guidance, which requires that the income tax impact is to be recognized in the period in which the law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled on each jurisdiction.
In accordance with the authoritative guidance
on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The
first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more
likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any.
The second step is to measure the tax benefit as the largest amount that is more than
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Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares or resulted in the issuance of ordinary share participating in the earnings of the entity.
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
The Company may also enter into contractual arrangements that result in commitments, including purchase obligations. In addition, the Company may be subject to contingent consideration obligations related to asset acquisitions, which involve potential future payments contingent upon the achievement of specified conditions or milestones.
Share-based compensation
The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the grant-date fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. These assumptions are the expected stock volatility, the risk-free interest rate, the expected life of the option, and the dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of the Company’s common stock over the expected term of the option. Risk-free interest rates are calculated based on risk–free rates for the appropriate term. The Company has elected to account for forfeitures of awards as they occur.
Treasury stock
The Company accounts for treasury stocks using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury stocks account on the consolidated balance sheets.
The Company treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of shares that would have been issued upon vesting.
Reclassification
Certain items in the financial statements of the comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of June 30, 2025 or on the statements of operations for the three and six months ended June 30, 2025.
Recent accounting pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.
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In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is evaluating the impact the updated guidance will have on its disclosures for the year ended December 31, 2025.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the annual and interim financial statements, disaggregated information about certain income statement expense line items in the notes to the financial statements. ASU2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.
In May 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.
3. Revenue from Contracts with Customers
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.
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The Company is currently engaged in digital asset mining business, high performance computing (“HPC”) business, including cloud services and HPC data center services, and Ethereum staking activities.
In June 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company intends to convert its BTC holdings into ETH over time and has commenced a strategic alternatives process for its bitcoin mining operations, which is expected to result in a sale or wind-down, with any net proceeds to be re-deployed into ETH.
Disaggregation of revenues
Revenue disaggregated by reportable segment is presented in Note 17. Segment Reporting.
Cloud services
The Company provides cloud services to support customers’ generative AI workstreams. We have determined that cloud services are a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e. distinct days of service).
These services are consumed as they are received, and the Company recognizes revenue over time using the variable allocation exception as it satisfies performance obligations. We apply this exception because we concluded that the nature of our obligations and the variability of the payment terms based on the number of GPUs providing HPC services are aligned and uncertainty related to the consideration is resolved on a daily basis as we satisfy our obligations. The Company recognizes revenue net of consideration payable to customers, such as service credits, and accounted for as a reduction of the transaction price in accordance with guidance in ASC 606-10-32-25.
During the three months ended March 31, 2024,
the Company issued a service credit of $
The Company’s cloud services revenue has been generated from Iceland.
Colocation services
Colocation services generate revenue by providing customers with physical space, power, and cooling within the data center facility.
Our revenue is primarily derived from recurring revenue streams, mainly (1) colocation, which is the leasing of cabinet space and power and (2) connectivity services, which includes cross-connects. Additionally, the remainder of our revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment.
Revenues from recurring revenue streams are billed monthly and recognized ratably over the term of the contract, generally 1 to 5 years for data center colocation customers. Non-recurring installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term.
We guarantee certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within our data center, we would reduce revenue for any credits or cash payments given to the customer.
The Company’s colocation services revenue has been generated from Canada.
Digital asset mining
The Company enters in contracts with mining pool operators to provide computing power to digital asset mining pools. Providing computing power for digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s contracts with mining pool operators.
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Contract inception and the Company’s enforceable right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than 24 hours (a day) and may be continuously renewed throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract, and the rate of payments remains the same upon each implied renewal, as the Full-Pay-Per-Share (FPPS) formula remains the same. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning 00:00:00 UTC and ending 23:59:59 on a daily basis. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The Company is entitled to its relative share of consideration even if a block is not successfully placed.
The transaction consideration the Company receives, if any, is noncash consideration in the form of digital assets, net of pool fees charged by the mining pool operator. The Company estimates the fair value of noncash consideration at contract inception. This non-cash consideration is variable since the amount of block reward earned depends on the Company’s hash rate provided and transaction fees depend on the actual Bitcoin Network transaction fees. While the non-cash consideration is variable, the payout is settled the next day on a daily basis and the Company has the ability to estimate the variable consideration with reasonable certainty, without the risk of significant revenue reversal because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved.
Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. Revenue is estimated and recognized based on the spot price of Bitcoin determined using the Company’s Principal Market at 0:00:00 UTC on the date of contract inception.
Below table presents the Company’s revenues generated from digital asset mining business from Foundry USA Pool by country:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Iceland | ||||||||||||||||
| Canada | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
ETH staking business
The Company generates revenue through ETH staking
rewards. The Company commenced both native staking business and liquid staking business in 2022. In the first quarter of 2024, the Company
terminated its liquid staking business. During the six months ended June 30, 2025, the Company only participated in native staking. In
July 2025, we resumed liquid staking through the Liquid Collective protocol with
With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we have terminated all liquid staking activities with StakeWise and Liquid Collection in the third quarter of 2023 and in the first quarter of 2024, respectively, reclaiming all staked Ethereum along with the accumulated rewards. In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.
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(a) Native staking
The Company has entered into network-based smart contracts by staking ETH on nodes run by third-party operators or nodes maintained by us in 2022. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw the staked ETH which was previously locked-up in staking contracts since the Shanghai upgrade was successfully completed on April 12, 2023. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to the block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.
The provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation or validation under a smart contract with a network represents a performance obligation. The transaction consideration the Company receives, the digital asset awards, is a non-cash consideration, which the Company measures at fair value on the date received. The fair value of the ETH reward received is determined using the quoted price of the ETH at the time of receipt. The satisfaction of the performance obligation for transaction verification services occurs at a point in time when confirmation is received from the network indicating that the validation is complete, and the awards are deposited to our address. At that point, revenue is recognized.
As of June 30, 2025 and December 31, 2024, the
Company had native staked
(b) Liquid staking
Liquid staking is similar to native staking in terms of performance obligations, determination of transaction price and revenue recognition. When we participated in liquid staking via Portara protocol, the Company received receipt tokens sETH-H to represent the staked ETH at 1:1 ratio. The liquid staking rewards were in the form of rETH-H which could be redeemed for ETH from the liquid staking provider or exchange for ETH via over-the-counter markets. When we participated in liquid staking via Liquid Collective protocol, the Company received receipt tokens Liquid Staked ETH (“LsETH”) to represent the staked ETH. LsETH uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked tokens.
For the six months ended June 30, 2024, the Company
generated revenues of $
Contract costs
The Company capitalizes commission expenses directly
related to obtaining customer contracts, which would not have been incurred if the contract had not been obtained. As of June 30, 2025,
capitalized costs to obtain a contract totaled $
Contract Assets
Contract assets primarily consist of revenue allocated
to complimentary services provided to customers as part of contractual arrangements. As of June 30, 2025 and December 31, 2024, contract
assets were $
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Contract Liabilities
The Company’s contract liabilities consist of deferred revenue and customer deposits. The following table presents changes in the total contract liabilities:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Revenue earned | ( | ) | ( | ) | ||||
| Prepayment received | ||||||||
| Ending balance | $ | $ | ||||||
Remaining performance obligation
The following table presents estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation as of June 30, 2025:
| 2025 | 2026 | 2027 | 2028 | 2029 | Total | |||||||||||||||||||
| Colocation Services | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Other Revenue | $ | |||||||||||||||||||||||
| Total contract liabilities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The amounts presented in the table above exclude variable consideration allocated entirely to wholly unsatisfied performance obligations. Such amounts have been excluded from the disclosure of remaining performance obligations in accordance with ASC 606, as the consideration is not fixed and determinable.
4. Acquisitions
Enovum Data Centers Acquisition
On October 11, 2024, the Company acquired
The acquisition-date fair value of the consideration
transferred totaled $
The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:
| Accounts receivable | $ | |||
| Other current assets | ||||
| Property and equipment, net | ||||
| Operating lease right-of-use assets | ||||
| Intangible asset | ||||
| Deferred tax asset | ||||
| Other non-current assets | ||||
| Accounts payable | ( | ) | ||
| Other payables and accrued liabilities | ( | ) | ||
| Current portion of deferred revenue | ( | ) | ||
| Current portion of operating lease liability | ( | ) | ||
| Non-current portion of deferred revenue | ( | ) | ||
| Non-current portion of operating lease liability | ( | ) | ||
| Deferred tax liability | ( | ) | ||
| Total identifiable assets and liabilities | ||||
| Goodwill | ||||
| Total Purchase Consideration | $ |
20
The acquisition-date fair value of the acquired
accounts receivable was $
The Company recognized customer relationships
as an intangible asset of $
Of the total Goodwill recognized, $
Through June 30, 2025, the Company recognized
$
The following unaudited pro forma financial information represents the consolidated results of operations as if the acquisition had occurred on January 1, 2024:
| For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | |||||||
| Revenue | $ | $ | ||||||
| Net income | $ | ( | ) | $ | ||||
These pro forma results are presented for information purposes only and do not necessarily reflect the actual results that would have been achieved had the acquisition occurred on the date assumed, nor are they indicative of future consolidated results of operations.
These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Enovum to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, right-of-use asset and intangible assets had been applied on January 1, 2024, together with the consequential tax effects.
Enovum commenced its operations in October 2023. Therefore, is it impracticable to estimate and present proforma revenue and net income of the combined entity as though the business combination had occurred as of January 1, 2023.
Real estate Acquisition – Montreal, Canada
On December 27, 2024, the Company, through WhiteFiber,
acquired the building and land, together with all the related improvements, located in Montreal, Canada, from an unrelated third party.
The total consideration consisted of approximately $
The acquired set of assets did not meet the definition
of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets
acquired consisted primarily of land, building and related equipment, which are included in Property and equipment, net on the
consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $
21
Real estate Acquisition – Madison, North Carolina
On May 20, 2025, the Company, through WhiteFiber,
acquired the building and land, together with all the related improvements owned by Unifi Manufacturing, inc. (“Unifi Transaction”)
that were located in Madison, North Carolina. The total consideration consisted of $
The acquired set of assets did not meet the definition
of a business as defined in ASC 805, Business Combinations, as no substantive processes or employees were acquired. The assets
acquired consisted primarily of land, building and related equipment, which are included in Property and equipment, net on the
consolidated balance sheets. The fair value of the tangible assets acquired was estimated to be $
In connection with the agreement, additional contingent consideration may become payable to the seller based on the timing and availability of power at the site (see Note 19. Commitments and Contingencies).
5. USDC
| June 30, 2025 | December 31, 2024 | |||||||
| USDC | $ | $ | ||||||
The following table presents additional information about USDC for the six months ended June 30, 2025 and 2024, respectively:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Opening balance | $ | $ | ||||||
| Receipt of USDC from sales of other digital assets | ||||||||
| Payment of USDC for other expenses | ( | ) | ( | ) | ||||
| Receipt of USDC from sales of property, plant, and equipment | ||||||||
| Ending balance | $ | |||||||
6. DIGITAL ASSETS
Adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets
Effective January 1, 2024, the Company early adopted
ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in net income each reporting period.
The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment
as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and
fair value. As a result of the Company’s early adoption of ASU 2023-08, the Company recorded a $
22
The following table presents the Company’s significant digital assets holdings as of June 30, 2025:
| Quantity | Cost Basis | Fair Value | ||||||||||
| BTC | $ | $ | ||||||||||
| ETH | ||||||||||||
| Total digital assets held as of June 30, 2025 | $ | $ | ||||||||||
The cost basis is equal to the post-impairment value of all BTC and ETH held as of the adoption of ASU 2023-08 on January 1, 2024. For BTC and ETH earned subsequent to the adoption of ASU 2023-08, the cost basis of the BTC and ETH represents the valuation at the time the Company determined for revenue recognition purposes.
The following table presents a roll-forward of BTC for the six months ended June 30, 2025, based on the fair value model under ASU 2023-08:
| Fair value | ||||
| BTC as of December 31, 2024 | $ | |||
| Receipt of BTC from mining services | ||||
| Sales of BTC in exchange of cash | ( | ) | ||
| Sales of BTC in exchange of USDC | ( | ) | ||
| Payment of BTC for service charges from mining facilities | ( | ) | ||
| Payment of BTC for other expenses | ( | ) | ||
| Change in fair value of BTC | ||||
| BTC fair value as of June 30, 2025 | $ | |||
For the additions of BTC generated by the Company’s mining business, see Note 3. Revenue from Contracts with Customers.
Bitcoin is sold on a FIFO basis. For the six months ended June 30, 2025, gains from the sales of bitcoin are included in change in fair value of BTC which is included in the consolidated statements of operations under the caption “Gains (losses) on digital assets”.
The following table presents a roll-forward of ETH for the six months ended June 30, 2025, based on the fair value model under ASU 2023-08:
| Fair value | ||||
| ETH as of December 31, 2024 | $ | |||
| Receipt of ETH from native staking business | ||||
| Investment of ETH in fund | ( | ) | ||
| Payment of ETH for other expenses | ( | ) | ||
| Change in fair value of ETH | ( | ) | ||
| ETH fair value at June 30, 2025 | $ | |||
For the additions of ETH generated by the Company’s ETH staking business, see Note 3. Revenue from Contracts with Customers.
ETH is sold on a FIFO basis. For the six months ended June 30, 2025, gains from the sales of ETH are included in change in fair value of ETH which is included in the consolidated statements of operations under the caption “Gains (losses) on digital assets”.
23
7. OTHER CURRENT ASSETS
Other current assets were comprised of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Deposits (a) | $ | $ | ||||||
| Prepayments to mining facilities (b) | ||||||||
| Prepaid director and officer insurance expenses | ||||||||
| Prepaid consulting service expenses | ||||||||
| Deposit for lease | ||||||||
| Deferred contract costs | ||||||||
| Contract assets | ||||||||
| Prepayment to third parties | ||||||||
| Receivable from third parties | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| (a) |
| (b) |
8. LEASES
Lease as Lessee
For the year ended December 31, 2023, the Company
entered into a capacity lease agreement for its cloud services designed to support generative AI workstreams. The initial lease term is
On July 30, 2024, the Company entered into an
office lease agreement for its headquarters office in New York. The initial lease term is
On August 1, 2024, the Company entered into an
additional capacity lease agreement for its cloud services. The initial lease term is
On October 11, 2024, the Company acquired
On December 3, 2024, the Company entered into
a lease agreement in Singapore for general and administrative purposes. The initial lease term is
On February 11, 2025, the Company, through WhiteFiber, entered into
an additional office lease agreement for its headquarters office in New York. The initial lease term is
On March 1, 2025, the Company entered into an
additional capacity lease agreement for its cloud services. The initial lease term is
On April 1, 2025, the Company entered into a lease
agreement for general and administrative purposes. The lease term is
On April 11, 2025, the Company, through WhiteFiber,
entered into a data center lease agreement in Saint-Jérôme for its data center colocation services. The initial lease term
is for
24
As of June 30, 2025 and December 31, 2024, operating
right-of-use assets were $
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease costs | $ | $ | $ | $ | ||||||||||||
| Short-term lease costs | ||||||||||||||||
| Sublease income | ( | ) | ( | ) | ||||||||||||
| Total lease costs | ||||||||||||||||
Additional information regarding the Company’s leasing activities as a lessee is as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating cash outflows from operating leases | $ | $ | $ | $ | ||||||||||||
| Remaining lease term – operating lease | ||||||||||||||||
| Discount rate – operating lease | % | % | % | % | ||||||||||||
The following table represents our future minimum operating lease payments as of June 30, 2025:
| Year | Amount | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 and thereafter | ||||
| Total undiscounted lease payments | ||||
| Less present value discount | ( | ) | ||
| Present value of lease liability | $ | |||
The Company entered into a GPU server lease agreement
effective January 2024 for its cloud services designed to support generative AI workstreams. The lease payment depends on the usage of
the GPU servers and the Company concludes that the lease payments are variable and will be recognized when they are incurred. For the
three months ended June 30, 2025 and 2024, the GPU server lease expense amounted to $
25
Lease as Lessor
During the quarter ended March 31, 2024, the Company entered into a sales-type lease agreement as a lessor for its data storage equipment. The term of the lease is scheduled to expire in December 2026.
During the quarter ended September 30, 2024, the Company entered into a sales-type lease agreement as a lessor for its data storage equipment. The term of the lease is scheduled to expire in December 2026.
During the quarter ended December 31, 2024, the Company entered into two sales-type lease agreements as a lessor for its cloud service equipment. The term of the lease is scheduled to expire in October 2029 and November 2029 respectively.
During the quarter ended December 31, 2024, the
Company entered into an operating sublease agreement to partially lease out its leased data center to a third party. The term of the sublease
is scheduled to expire on
During the quarter ended June 30, 2025, the Company entered into two sales-type lease agreements as a lessor for its cloud service equipment. The term of the lease is scheduled to expire in April 2030 and May 2030, respectively.
The components of lease income for the sales-type lease were as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Interest income related to net investment in lease | $ | $ | $ | $ | ||||||||||||
Interest income is included in the consolidated statements of operations under the caption “Revenue – Other”.
The components of net investment in sales-type leases were as follows:
| June 30, 2025 | December 31, 2024 | |||||||
| Net investment in lease - lease payment receivable | $ | $ | ||||||
The following table illustrates the Company’s future minimum receipts for sales-type lease as of June 30, 2025:
| Year | Sales-Type Lease | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total future minimum receipts | ||||
| Unearned interest income | ( | ) | ||
| Net investment in sales type lease | $ | |||
The present value of minimum sales-type receipts
of $
The following table illustrates the future lease payments from the Company’s sublease tenant as of June 30, 2025 were as follows:
| Year | Operating Lease | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total future receipts | ||||
26
9. PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant and equipment, net was comprised of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Miners for Bitcoin | $ | $ | ||||||
| Cloud service equipment | ||||||||
| Colocation service equipment | ||||||||
| Purchased and internal-use software development costs | ||||||||
| Land | ||||||||
| Building | ||||||||
| Leasehold Improvements | ||||||||
| Vehicle | ||||||||
| Other property and equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Construction in progress | ||||||||
| Property, plant, and equipment, net | $ | $ | ||||||
For the six months ended June 30, 2025 and 2024,
depreciation expenses were $
During the quarter ended March 31, 2024, we purchased
data storage equipment totaling $
During the quarter ended September 30, 2024, we
purchased data storage equipment totaling $
During the quarter ended December 31, 2024, the
Company purchased servers and network equipment totaling $
During the quarter ended June 30, 2025, the Company
purchased servers and network equipment totaling $
Sales of miners for the three months ended March 31, 2025
For the three months ended March 31, 2025, the
Company sold
27
10. INVESTMENT SECURITIES
Investment securities were comprised of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Investment in Digital Future Alliance Limited (“DFA”) (a) | $ | $ | ||||||
| Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”) (b) | ||||||||
| Investment in Auros Global Limited (c) | ||||||||
| Investment in Ingonyama Ltd (d) | ||||||||
| Investment in Cysic Inc. (e) | ||||||||
| Investment in a SAFE (f) | ||||||||
| Investment in AI Innovation Fund I (“AI fund”) (g) | ||||||||
| Investment in Innovation Fund I (“Innovation fund”) (h) | ||||||||
| Total | $ | $ | ||||||
(a) Investment in Digital Future Alliance Limited (“DFA”)
DFA is a privately held company, over which the Company has neither control nor significant influence through investment in ordinary shares. The Company accounted for the investment in DFA using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.
For the three and six months ended June 30, 2025 and 2024, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2025 and December 31 2024, the Company did not recognize impairment against the investment security.
(b) Investment in Nine Blocks Offshore Feeder Fund (“Nine Blocks”)
On August 1, 2022, the Company entered into a
subscription agreement with Nine Blocks for investment of $
As a practical expedient, the Company uses Net
Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended
June 30, 2025 and 2024, the Company recorded cumulative downward adjustments of $
(c) Investment in Auros Global Limited (“Auros”)
On February 24, 2023, the Company closed an investment
of $
For the three and six months ended June 30, 2025 and 2024, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2025 and December 31, 2024, the Company did not recognize impairment against the investment security.
(d) Investment in Ingonyama Ltd. (“Ingonyama”)
In September 2023, the Company closed an investment
of $
28
For the three and six months ended June 30, 2025 and 2024, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2025 and December 31, 2024, the Company did not recognize impairment against the investment security.
(e) Investment in Cysic Inc (“Cysic”)
On April 2, 2024, the Company closed an investment
of $
For the three and six months ended June 30, 2025, the Company did not record upward adjustments or downward adjustments on the investment. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. As of June 30, 2025 and December 31, 2024, the Company did not recognize impairment against the investment security.
(f) Investment in a SAFE
On June 30, 2024 (the “Effective Date”),
the Company entered into a simple agreement for future equity (“SAFE”) agreement for an initial investment amount of $
The Company accounted for this investment under ASC 320, Investments - Debt Securities and elected the fair value option for the SAFE investment pursuant to ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The decision to elect the fair value option is determined on an instrument-by-instrument basis on the date the instrument is initially recognized, is applied to the entire instrument, and is irrevocable once elected. For instruments measured at fair value, embedded conversion or other features are not required to be separated from the host instrument. Issuance costs related to convertible securities carried at fair value are not deferred and are recognized as incurred on the consolidated statements of operations.
For the three and six months ended June 30, 2025, the Company did not record upward adjustments or downward adjustments on the investment.
(g) Investment in AI Innovation Fund I (“AI fund”)
On July 15, 2024, the Company entered into a subscription
agreement with Pleasanton Ventures Innovation Master Fund SPC Limited for investment of $
As a practical expedient, the Company uses Net
Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. For the three months ended
June 30, 2025, the Company recorded cumulative downward adjustments of $
29
(h) Investment in Innovation Fund I (“Innovation fund”)
After the Company disposed its BVI entities for its previous fund operation (See Note 20. Disposition of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund Spc Limited for more information), the Company no longer consolidates the investment in the fund. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund.
On March 25, 2025, the Company invested an additional
11. OTHER NON-CURRENT ASSETS
Other non-current assets were comprised of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Deposits (a) | $ | $ | ||||||
| Deferred contract costs | ||||||||
| Contract assets | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| (a) |
12. SHARE-BASED COMPENSATION
Share-based compensation such as restricted stock
units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments
may be granted to any directors, employees and consultants of the Company or affiliated companies under the 2021 Omnibus Equity Incentive
Plan (“2021 Plan”), 2021 Second Omnibus Equity Incentive Plan (“2021 Second Plan”), 2023 Omnibus Equity Incentive
Plan (“2023 Plan”), and 2025 Omnibus Equity Incentive Plan (“2025 Plan”). An aggregate of
Restricted Stock Units (“RSUs”)
As of December 31, 2024, the Company had
On January 14, 2025, the Company granted
On February 10, 2025, the Company granted
30
On May 14, 2025, the Company granted
On June 17, 2025, the Company granted
On June 30, 2025, the Company granted
For the three months ended June 30, 2025 and 2024,
the Company recognized share-based compensation expenses of $
As of June 30, 2025, the Company had
Share Options
For the three months ended June 30, 2025 and 2024, the Company did not grant any options.
The Company recognizes compensation expenses related
to options on a straight-line basis over the vesting periods. For the three months ended June 30, 2025 and 2024, the Company recognized
share-based compensation expenses of $
Other share-based compensation
In January 2025, the Company entered into separate
one-year service agreements with three consultants by granting each
In April 2025, the Company entered into a one-year
service agreement with a consulting firm and granted
In April 2025, WhiteFiber entered into a one-year
director agreement with David Andre pursuant to which Mr. Andre would be appointed as a director of WhiteFiber upon the commencement of
trading of our Ordinary Shares on the Nasdaq Capital Market. This agreement granted
13. SHARE CAPITAL
Ordinary shares
As of December 31, 2024, there were
In May 2022, the Company entered into an At-the-Market
Offering Agreement with H.C. Wainwright & Co., LLC relating to the Company’s ordinary shares. In accordance with the terms of
the sales agreement, the Company may offer and sell ordinary shares having an aggregate offering price of up to $
31
On April 29, 2025, the Company filed a registration
statement on Form S-3 (No. 333-286841) to register up to $
In June 2025, the Company completed an underwritten
public offering of its ordinary shares registered under the Registration Statement. In accordance with the terms of the underwriting agreement
entered into with B. Riley Securities, Inc., as representative of the several underwriters, the Company sold
During the six months ended June 30, 2025,
As of June 30, 2025, there were
Preferred shares
As of June 30, 2025 and December 31, 2024, there
were
The preference shares are entitled to the following preference features:
1) an annual dividend of
On December 20, 2024, the Board of Directors declared
an
Treasury stock
The Company treats ordinary shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as ordinary share repurchases because they reduce the number of ordinary shares that would have been issued upon vesting. For the six months ended June 30, 2025 and 2024, the Company withheld ordinary shares that were surrendered to the Company for withholding taxes related to restricted stock vesting valued at $, based on fair value of the withheld shares on the vesting date.
As of June 30, 2025 and December 31, 2024, the
Company had treasury stock of $
Warrants
As of June 30, 2025 and December 31, 2024, the
Company had outstanding
In accordance with ASC 815, the Company determined that the warrants meet the conditions necessary to be classified as equity because the consideration is indexed to the Company’s own equity, there are no exercise contingencies based on an observable market not based on its stock or operations, settlement is consistent with a fixed-for-fixed equity instrument, the agreement contains an explicit number of ordinary shares and there are no cash payment provisions.
32
The fair value of the warrants was estimated at $
The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company’s warrants at their measurement dates:
| As of October 4, 2021 | ||||
| Volatility | % | |||
| Stock price | ||||
| Expected life of the warrants to convert | ||||
| Risk free rate | % | |||
| Dividend yield | % | |||
14. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The components of goodwill as of June 30, 2025 are as follows:
| As of June 30, 2025 | ||||
| Enovum Data Centers Corp. | $ | |||
| Total goodwill | $ | |||
The Company recorded goodwill in the amount of
$
Finite-lived intangible assets
In addition to goodwill, in connection with the
acquisition of Enovum, the Company recorded an identified intangible asset, customer relationships, with a definite useful life of
The following table presents the Company’s finite-lived intangible assets as of June 30, 2025:
| As of June 30, 2025 | ||||||||||||
| Cost | Accumulated amortization | Net | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Total | $ | $ | ( | ) | $ | |||||||
33
The following table presents the Company’s finite-lived intangible assets as of December 31, 2024:
| As of December 31, 2024 | ||||||||||||
| Cost | Accumulated amortization | Net | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Total | $ | $ | ( | ) | $ | |||||||
The following table presents the Company’s estimated future amortization of finite-lived intangible assets as of June 30, 2025:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Thereafter | ||||
| Total | $ |
The Company did not identify any impairment of its finite-lived intangible assets during the six months ended June 30, 2025.
15. INCOME TAXES
The following table provides details of income taxes:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Income (loss) before income taxes | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Provision for (benefit from) income taxes | $ | $ | $ | $ | ||||||||||||
| Effective tax rate | % | ( | )% | ( | )% | % | ||||||||||
Our income tax provision was $
Our income tax provision was $
With the enactment of the One Big Beautiful Bill
Act (“OBBBA”) on July 4, 2025, the Company anticipates a reduction in our U.S. federal cash tax payments for the remainder
of 2025 as the
We also continue to monitor the adoption of Pillar Two relating to the global minimum tax in each of our tax jurisdictions to evaluate its impact on our effective income tax rate. For the three months ended June 30, 2025, the Company is not subject to Pillar Two global minimum tax.
34
16. EARNINGS (LOSS) PER SHARE
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Weighted average number of ordinary share outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||
| Basic | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Diluted | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The computation of diluted net loss per share does not include dilutive ordinary share equivalents in the weighted average shares outstanding, as they would be anti-dilutive.
For the three months ended June 30, 2025, the dilutive effect of preferred shares and unvested RSUs were included in the calculation of diluted earnings per share. The warrants and options were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
For the six months ended June 30, 2025, the unvested RSUs, warrants, options and convertible preferred shares were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
For the three months ended June 30, 2024, the unvested RSUs, warrants, options and convertible preferred shares were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
For the six months ended June 30, 2024, the dilutive effect of preferred shares and unvested RSUs were included in the calculation of diluted earnings per share. The warrants and options were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
17. SEGMENT REPORTING
The Company has
The digital asset mining segment generates revenue from the bitcoin the Company earns through its mining activities. Cost of revenue consists primarily of direct production costs of mining operations, including electricity, management fee and maintenance cost but excluding depreciation and amortization.
The cloud services segment generates revenue from providing high performance computing services to support generative AI workstreams. Cost of revenue consists of direct production costs, including electricity costs, data center lease expense, GPU servers lease expense, and other relevant costs, but excluding depreciation and amortization.
35
Colocation services generate revenue by providing customers with physical space, power and cooling within the data center facility. Cost of revenue consists of direct production costs related to our HPC data center services, including electricity costs, lease costs, data center employees’ wage expenses and other relevant costs.
The Ethereum staking segment generates revenue from both native staking and liquid staking. Cost of revenue consists of direct cost related to ETH staking business including service fee and reward-sharing fees to the service providers.
The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments.
Other than the $
All Other revenue is generated from equipment leases with external customers.
The following table presents segment revenue and segment gross profit reviewed by the CODM:
Three Months Ended June 30, 2025
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | ||||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | ||||||||||||||||||||
| Profit sharing fees | ||||||||||||||||||||
| Datacenter lease expense | ||||||||||||||||||||
| GPU lease expense | ||||||||||||||||||||
| Wage expense | ||||||||||||||||||||
| Service costs - ETH staking | ||||||||||||||||||||
| Other segment items (b) | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) |
| (b) |
Three Months Ended June 30, 2024
| Digital asset mining | Cloud services | ETH staking | Total | |||||||||||||
| Revenue from external customers | $ | $ | $ | $ | ||||||||||||
| Reconciliation of revenue | ||||||||||||||||
| Other revenue (a) | ||||||||||||||||
| Total consolidated revenue | ||||||||||||||||
| Less: | ||||||||||||||||
| Electricity costs | ||||||||||||||||
| Profit sharing fees | ||||||||||||||||
| Datacenter lease expense | ||||||||||||||||
| GPU lease expense | ||||||||||||||||
| Service costs - ETH staking | ||||||||||||||||
| Other segment items (b) | ||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | ||||||||||||
| (a) |
| (b) | All amounts included within Other segment items are individually insignificant. |
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Six Months Ended June 30, 2025
| Digital asset mining | Cloud services | Colocation services | ETH staking | Total | ||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Other revenue (a) | ||||||||||||||||||||
| Total consolidated revenue | ||||||||||||||||||||
| Less: | ||||||||||||||||||||
| Electricity costs | ||||||||||||||||||||
| Profit sharing fees | ||||||||||||||||||||
| Datacenter lease expense | ||||||||||||||||||||
| GPU lease expense | ||||||||||||||||||||
| Wage expense | - | - | - | |||||||||||||||||
| Service costs - ETH staking | ||||||||||||||||||||
| Other segment items (b) | ||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| (a) | Other revenue is primarily attributable to Equipment Leasing and is therefore not included in the total for segment gross profit. |
| (b) | All amounts included within Other segment items are individually insignificant. |
Six Months Ended June 30, 2024
| Digital asset mining | Cloud services | ETH staking | Total | |||||||||||||
| Revenue from external customers | $ | $ | $ | $ | ||||||||||||
| Reconciliation of revenue | ||||||||||||||||
| Other revenue (a) | ||||||||||||||||
| Total consolidated revenue | ||||||||||||||||
| Less: | ||||||||||||||||
| Electricity costs | - | |||||||||||||||
| Profit sharing fees | - | - | ||||||||||||||
| Datacenter lease expense | - | - | ||||||||||||||
| GPU lease expense | - | - | ||||||||||||||
| Service costs - ETH staking | - | - | ||||||||||||||
| Other segment items (b) | ||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | ||||||||||||
| (a) | Other revenue is primarily attributable to Equipment Leasing and is therefore not included in the total for segment gross profit. |
| (b) | All amounts included within Other segment items are individually insignificant. |
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The following table presents the reconciliation of segment gross profit to net (loss) income before taxes:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Segment gross profit | $ | $ | $ | $ | ||||||||||||
| Reconciling Items: | ||||||||||||||||
| Other profit (a) | ||||||||||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gains (losses) on digital assets | ( | ) | ( | ) | ||||||||||||
| Net loss from disposal of property and equipment | ( | ) | ||||||||||||||
| Other income, net | ||||||||||||||||
| Net income (loss) before taxes | ( | ) | ( | ) | ||||||||||||
| (a) |
18. RELATED PARTIES
On December 20, 2024, the Board of Directors declared
an eight (
Bit Digital Iceland ehf appointed Daniel Jonsson
as its part-time Chief Executive Officer starting November 7, 2023, for a six-month term with a three-month probation. His compensation
includes a monthly salary of $
On August 8, 2025, WhiteFiber, a subsidiary of
the Company, completed its initial public offering (the “Offering”) of
Prior to the consummation of the Offering, the
Company entered into a contribution agreement (the “Contribution Agreement”) with WhiteFiber, pursuant to which the Company
contributed its HPC business through the transfer of
In addition, prior to the consummation of
the Offering, the Company entered into a transition services agreement (the “Transition Services Agreement”) with
WhiteFiber, pursuant to which the Company will provide certain services to WhiteFiber, on a transitional basis. The Transition
Services Agreement provides for the performance of certain services by the Company for the benefit of WhiteFiber, or in some cases
certain services provided by WhiteFiber for the benefit of the Company, for a limited period of time after the Offering, including
certain services provided by Sam Tabar, our Chief Executive Officer, and Erke Huang, our Chief Financial Officer and a Director.
During such transition period, Messrs. Tabar and Huang will continue to hold the same position with the Company as well as
WhiteFiber. Messrs. Tabar and Huang have committed to provide the requisite time and effort to fulfill their responsibilities as a
full-time officer of WhiteFiber, supervising a full staff and are expected to provide certain services, representing not more than
approximately 30% of their working time, in respect of the Company’s operations. The services to be provided will include
financial reporting, tax, legal, human resources, information technology, insurance and other general and administrative functions.
All services are to be provided at cost, except if otherwise agreed to. WhiteFiber estimates that the average fees payable by
WhiteFiber to the Company will be approximately $
38
19. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company from time to time may become involved in legal proceedings in the ordinary course of our business. The Company may also pursue litigation to assert its legal rights and assets, and such litigation may be costly and divert the efforts and attention of its management and technical personnel which could adversely affect its business. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters may materially affect our business, results of operations, financial position, or cash flows.
Although we cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, U.S. GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. We follow a thorough process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated.
Bit Digital USA, Inc. v. Blockfusion USA, Inc., C.A. No. N24C-05-306 PRW (CCLD)
On June 3, 2024, the Company filed suit in the
Superior Court of the State of Delaware, Complex Commercial Litigation Division, against Blockfusion USA, Inc. (“Blockfusion”)
alleging claims for breach of contract and related causes of action arising out of a terminated mining services relationship. The Company
initially sought in excess of $
Following limited discovery, the Court entered
a stipulation and order on June 18, 2025, amending the Case Management Order to extend multiple discovery deadlines and vacate the previously
scheduled trial date. On August 1, 2025, the Company moved for leave to file a Second Amended Complaint, which adds claims for fraud and
related causes of action arising out of Blockfusion’s conduct both at the inception of and during the parties’ relationship.
The Second Amended Complaint also names Blockfusion’s CEO, Alexander Martini-Lomanto, as an additional defendant. The Company continues
to seek the recovery of its original investment, invoice payments, and unpaid late development fees, and now seeks additional damages
for the tort and equitable claims contained in the Second Amended Complaint pending Court approval, including punitive damages. If the
Company’s Second Amended Complaint is ultimately accepted by the Court, the total amount of damages sought will be in excess of
$
The litigation remains ongoing, and the Company cannot yet estimate a reasonably possible range of loss or recovery.
Contingent Consideration Liabilities
As part of the Unifi Transaction (See Note 4. Acquisitions), the Company may be required to make additional contingent payments to the seller based on the timing and availability of electric service to the property, as follows:
| ● | A contingent payment of $ |
| ● | If an Electric Service Agreement for at least 99MW is provided, or the property receives 99MW of power within three years, the Company may instead be required to make a contingent payment of $ |
| ● | If an Electric Service Agreement is provided, or the property receives more than 99MW of power within four years, the Company may be required to make an additional payment of $ |
39
Royal Bank of Canada Facility Agreement
On June 18, 2025, the Company entered into a definitive
credit agreement with the Royal Bank of Canada (“RBC”), to finance its data centers business. The credit agreement provides
for an aggregate amount of up to approximately USD $
| ● | Non-revolving three year lease
facility in the amount of USD $ |
| ● | Non-revolving term loan facility
in the amount of USD $ |
| ● | Revolver by way of letters of
credit and letters of guaranty with fees to be determined on a transaction-by-transaction basis. This facility will be available for the
|
The Company agreed to certain financial covenants that are not yet in effect. The facilities have not yet been authorized for use by the lender, as certain conditions precedent have not yet been satisfied. Accordingly, no amounts were drawn, and no borrowings were available under the facility as of the reporting date.
20. DISPOSITION OF BIT DIGITAL INVESTMENT MANAGEMENT LIMITED AND BIT DIGITAL INNOVATION MASTER FUND SPC LIMITED
On July 1, 2024, the Company entered into a share
purchase agreement (the “Disposition SPA”) with Pleasanton Ventures Limited (“Pleasanton Ventures”), an unrelated
Hong Kong entity (the “Purchaser”). Pursuant to the Disposition SPA, the Purchaser purchased Bit Digital Investment Management
Limited and Bit Digital Innovation Master Fund SPC Limited in exchange for a consideration of $
On the same date, the parties completed all of the share transfer registration procedures as required by the laws of the British Virgin Islands and all other closing conditions had been satisfied. As a result, the disposition contemplated by the Disposition SPA was completed. Upon completion of the disposition, the Purchaser became the sole shareholder of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund SPC Limited. Upon the closing of the transactions, the Company does not bear any contractual commitment or obligation to the business of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund SPC Limited, nor to the Purchaser.
Bit Digital Investment Management Limited was
incorporated on April 17, 2023 and engaged in fund and investment management activities. Bit Digital Investment Management Limited had
total assets of $
40
Bit Digital Innovation Master Fund SPC Limited
was incorporated on May 31, 2023 and is a segregated portfolios company. Bit Digital Innovation Master Fund SPC Limited did not have any
net assets as of September 30, 2024. The Company recorded a gain of $
Management believes that the disposition of Bit Digital Investment Management Limited and Bit Digital Innovation Master Fund SPC Limited does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. The disposition is not accounted for discontinued operations in accordance with ASC 205-20.
21. SUBSEQUENT EVENTS
On July 14, 2025, the Company entered into a placement
agency agreement (the “Placement Agent Agreement”) with B. Riley Securities, Inc. (the “Placement Agent”), pursuant
to which the Placement Agent agreed to serve as the sole placement agent for the Company in connection with a registered direct offering
(the “Registered Direct Offering”) of an aggregate of
On August 5, 2025, the Company filed a definitive
proxy statement on Schedule 14A to provide notice of a general meeting of shareholders, pursuant to which shareholders will consider and
vote upon a resolution to approve an increase to the Company’s authorized share capital from $
On August 8, 2025, WhiteFiber, a subsidiary of the Company, completed its initial public offering of ordinary shares. In connection with the offering, the Company also completed a series of related transactions, including a contribution of the cloud services business to WhiteFiber and the execution of a transition services agreement. These transactions occurred after the balance sheet date and are more fully described in Note 18. Related Parties.
41
Forward Looking Statements
The discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this report. Except for the statements of historical fact, this report contains “forward-looking information” and “forward-looking statements reflecting our current expectations that involve risks and uncertainties (collectively, “forward-looking information”) that is based on expectations, estimates and projections as at the date of this report. All statements, other than statements of historical fact, included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “intends,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looing statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 (Annual Report) and any subsequently filed quarterly reports on Form 10-Q and any Current Reports on Form 8-K. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part of all of your investment. Additional risks not presently know to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicate of future performance, and historical trends should not be used to anticipate results in the future. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the company does not assume a duty to update these forward-looking statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with our interim Condensed Consolidated Financial Statements and the related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2025 as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2024 (“Form 10-K”).
Overview
Bit Digital, Inc. or the “Company”, is a global platform for high performance computing (“HPC”) business including cloud services and HPC data center services and digital asset business, including Etherum (ETH) staking business, with headquarters in New York City. On June 25, 2025, the Company announced that it has initiated a strategic transition to become a pure play Ethereum staking and treasury company. The Company began accumulating ETH and operating staking infrastructure in 2022 and has steadily increased its holdings since that time.
HPC Business
We believe we are a leading provider of artificial intelligence (“AI”) infrastructure solutions. We own high-performance computing (“HPC”) data centers and provide cloud-based HPC graphics processing units (“GPU”) services, which we term cloud services, for customers such as AI application and machine learning (“ML”) developers (the “HPC Business”). Our Tier-3 data centers provide hosting and colocation services. Our cloud services support generative AI workstreams, especially training and inference.
Data centers
We design, develop, and operate data centers, through which we offer our hosting and colocation services. Our operational data centers meet the requirements of the Tier-3 standard, including N+1 redundancy architecture, concurrent maintainability, uninterruptible power supply, advanced and highly reliable cooling systems, strict monitoring and management systems, SOC 2 Type 2, differentiated software supporting AI workloads, high density and robust bandwidth, and infrastructure to support AI workloads.
On July 30, 2025, we entered into a Contribution Agreement with WhiteFiber, pursuant to which we agreed to contribute our HPC business through the transfer of 100% of the capital shares of our cloud services subsidiary, WhiteFiber AI, Inc. and its wholly-owned subsidiaries WhiteFiber HPC, Inc., WhiteFiber Canada, Inc., WhiteFiber Japan G.K. and WhiteFiber Iceland, ehf, to WhiteFiber, upon the effectiveness of WhiteFiber’s registration statement on Form S-1 in connection with WhiteFiber’s initial public offering. For more information, see Note 21. Subsequent Events in our Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.
We acquired Enovum Data Centers Corp (“Enovum”) on October 11, 2024. The transaction included the lease to MTL-1, a fully operational and fully leased to customers 4 MW (gross) Tier-3 datacenter headquartered in Montreal, Canada.
On December 27, 2024, we acquired the real estate and building for a build-to-suit 5 MW (gross) Tier-3 data center (“MTL-2”) expansion project near Montreal, Canada which we refer to as MTL-2. MTL-2 is a 160,000 square foot site that was previously used as an encapsulation manufacturing facility, is located in Pointe-Claire, Quebec. We initially funded the purchase of CAD $33.5 million (approximately USD $23.3) million with cash on hand. We expect to invest approximately USD $23.6 million to develop the site to Tier-3 standards with an initial load of 5 MW (gross). MTL-2 is expected to be completed and operational in the fourth quarter of 2025, with a one-month delay before it begins to generate revenue.
On April 11, 2025, we entered into a lease for a new data center site in Saint-Jerome, Quebec, a suburb of Montreal, MTL-3. The MTL-3 facility spans approximately 202,000 square feet on 7.7 acres and is being developed to as a 7 MW (gross) Tier-3 data center. It will support current contracted capacity, with Cerebras (5 MW IT Load), with future expansion potential subject to utility approvals. The transaction was executed under a lease-to-own structure, which includes a fixed-price purchase option of CAD $24.2 million (approximately USD $17.3 million) exercisable by December 2025. The lease term is 20 years, with two 5-year extensions at the Company’s option. Subject to our receipt of all required permits, the facility is being retrofitted to Tier-3 standards, with development costs expected to total approximately USD $41 million, and is expected to be completed and operational in the fourth quarter of 2025, with a one-month delay before we expect to begin to generate revenue.
43
On May 20, 2025 (the “Closing Date”), we completed the purchase of a former industrial/manufacturing building from Unifi Manufacturing, Inc. (“UMI”). Pursuant to the Purchase Agreement we agreed to purchase from UMI, an industrial/manufacturing building together with the underlying land (“NC-1”) located in Madison, North Carolina, as well as certain machinery and equipment located thereon for a cash purchase price of $45 million. The purchase price will increase by (i) $8 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) within two years of the Closing Date or (ii) $5 million, if Duke Energy actually provides, or provides an Electric Services Agreement providing for, at least 99 MW (gross) more than two years but less than three years after the Closing Date. Additionally, the purchase price will increase by an additional $200,000 per MW over 99 MW (gross) up to a maximum of $5 million if at least 99 MW (gross) are actually delivered, or Duke Energy provides an Electric Services Agreement for the provision of at least 99 MW (gross), within four years of the Closing Date. Separately, the Company entered into a Capacity Agreement with Duke Energy pursuant to which Duke Energy agreed to use commercially reasonable efforts to achieve 24 MW (gross) of service to the Property by September 1, 2025, 40 MW (gross) by April 1, 2026 and 99 MW (gross) within four years of May 16, 2025. Management believes based upon its review of the site and a Duke Energy preliminary transmission study, that the Property may receive and support up to 200 MW (gross) of total electrical supply over an extended period of time, subject to infrastructure upgrades, such as developing new substations and other conditions.
On June 18, 2025, the Company entered into a definitive credit agreement (the “Facility”) with the Royal Bank of Canada (“RBC”). The Facility provides for an aggregate of up to approximately CAD $60 million (approximately USD $43.8 million) of financing. The proceeds are to be used primarily to refinance the buildout of Tier-3 AI data center at 7300 Trans Canada Highway, Pointe-Claire, Quebec (“MTL-2”) as well as USD $5.8 million of revolving term financing (the “Revolver”). The Facility is non-recourse to the Company. The Company entered into a three-year USD $18.5 million non-revolving lease facility to finance equipment costs and building improvements to build out the site. The lease facility provides for straight-line amortization of six years and capital moratorium of six months after disbursement is complete. RBC may cancel any unutilized portion of the facility after March 31, 2026. The interest rate is fixed based on the rental rate determined by RBC for the three-year term of the lease.
As part of the Facility, the Company entered into a three-year USD $19.6 million non-revolving real estate term loan facility. The purpose of this facility is to refinance the Company’s purchase of MTL-2. The interest rate of the real estate term loan facility will be determined at the time of borrowing, or a floating interest rate ranging from RBP plus 0.75% to CORRA (“Canadian Overnight Repo Rate Average”) plus 250 bps. Payment of principal and interest is due 30 days after drawdown and is repayable in full on the last day of the three-year term.
The Revolver is being provided by RBC by way of Letters of Credit and Letters of Guaranty with fees to be determined on a transaction by transaction basis. This facility will be available for the 36 month term subject to the issuance of the EDC (Export and Development Canada) Performance Security Guaranty in the amount of USD $5.8 million and other related supporting documents. The Company agreed to certain financial covenants included maintaining on a combined basis between MTL-1 and MTL-2: fixed charge coverage of not less than 1.20:1 and a ratio of Net Funded Debt to EBITDA of not greater than 4.25:1 and decreasing to 3.50:1 from December 31, 2027.
Cloud Services
We provide specialized cloud services to support generative AI workstreams, especially training and inference, emphasizing cost-effective utility and tailor-made solutions for each client. We are an authorized NVIDIA Preferred Partner through the NVIDIA Partner Network (“NPN”), an authorized partner with SuperMicro Computer Inc.®, an authorized Communications Service Provider (“CSP”) with Dell (through Dell’s exclusive distributor in Iceland, Advania), an official partnership with Hewlett Packard Enterprise and a commercial relationship with Quanta Computer Inc. (“QCT”). Based on Management’s knowledge of the industry, we are proud to be among the first service providers to offer H200, B200, and GB200 servers. We provide a high-standard service lease with an Uptime percentage > 99.5%.
44
We expect to leverage a global network of data centers for hosting capacity for our GPU business, in many instances, by negotiating with third-party providers to seamlessly integrate our cloud services at data centers across key regions in Europe, North America and Asia. Our initial data center partnership through which we lease capacity is at Blönduós Campus, Iceland, offering a world-class operations team with certified technicians and reliable engineers. The facility has 45kW rack density and 6 MW (gross) total capacity. We have executed contracts for 5.5 MW at the data center. The center’s energy source is 100% renewable energy, mainly from Blanda Hydro PowerStation, the winner of an IHA Blue Planet Award in 2017.
The following summaries reflect selected GPU cloud service agreements that we consider to be material or representative. We have entered into additional agreements that are not individually material and are not included below.
On October 23, 2023, Bit Digital announced that it had commenced AI operations by signing a binding term sheet with a customer (the “Initial Customer”) to support the customer’s GPU workloads. On December 12, 2023, we finalized a Master Services and Lease Agreement (“MSA”), as amended, with our Initial Customer for the provision of cloud services from a total of 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, selling 96 AI servers (equivalent to 768 GPUs) and leasing them back for three years. The total contract value with the Initial Customer for the aggregated 2,048 GPUs was estimated to be worth more than $50 million of annualized revenue. On January 22, 2024, approximately 192 servers (equivalent to 1,536 GPUs) were deployed at a specialized data center and began generating revenue, and subsequently on February 2, 2024, approximately an additional 64 servers (equivalent to 512 GPUs) also started to generate revenue.
In the second quarter of 2024, we finalized an agreement to supply our Initial Customer with an additional 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, agreeing to sell 128 AI servers (equivalent to 1,024 GPUs) and leasing them back for three years. In late July, at the customer’s request, we agreed with the customer to temporarily delay the purchase order so the customer could evaluate an upgrade to newer generation Nvidia GPUs. Consequently, the Company and manufacturer postponed the purchase order. In early August, the customer made a non-refundable prepayment of $30.0 million for the services to be rendered under this agreement.
In January 2025, the Company entered into a new agreement to supply its Initial Customer with an additional 464 GPUs for a period of eighteen months. This new agreement replaces the prior agreement whereby the Company was to provide the customer with an incremental 2,048 H100 GPUs. The contract represents approximately $15 million of annualized revenue and features a two-month prepayment from the customer. The customer has elected to defer the commencement date until August 20, 2025, which is the latest allowable date under the agreement.
In August 2024, we executed a binding term sheet with Boosteroid Inc. (“Boosteroid”), a global cloud gaming provider pursuant to which, we finalized initial orders of 489 GPUs, projected to generate approximately $7.9 million in contracted value in the aggregate through November 2029. The GPUs were delivered to respective data centers across the U.S. and Europe and began earning fees in November 2024. On October 9, 2024, we executed a Master Services and Lease Agreement (the “MSA”) with Boosteroid, pursuant to which Boosteroid may, from time to time, lease certain equipment, including GPUs, from the Company upon delivery of a purchase order. The MSA provides the general terms and conditions for such equipment leases. Pursuant to the MSA, we are granted a right of first refusal with respect to the next 5,000 servers that Boosteroid leases during the term of the MSA. The MSA provides Boosteroid with the option to expand in increments of 100 servers, up to 50,000 servers, representing a potential contract value of approximately $700 million over the five-year term assuming Boosteroid utilizes the GPUs and services at full capacity for the duration of the contract. Expansion depends upon the internal development roadmap of Boosteroid, Boosteroid has full discretion to decide when and the quantity to pursue separate source orders (for GPU servers) under the MSA. In the third quarter of 2025, the Company finalized additional purchase orders for 302, 120, and 279 GPUs, totaling approximately $10.4 million in contracted value over a five-year term.
45
On November 6, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 16 GPUs, along with an associated purchase order, from a new customer. The purchase order provides for services utilizing a total of 16 H200 GPUs over a minimum of a six month period, representing total contracted value of approximately $160,000 for the term. The deployment commenced on November 7, 2024, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in May 2025. Between May and August 2025, the Company signed four additional agreements on a month-to-month basis for a total of 64 H200 GPUs.
On November 14, 2024, we entered into a Terms of Supply and Service Level Agreement (together, the “Agreement”) and an Order Form with a new customer. The order form provides for services utilizing a total of 64 H200 GPUs on a month-to-month basis, which either party may terminate upon at least 14 days’ written notice prior to any renewal date. It represents annual revenue of approximately $1.2 million. The deployment commenced and revenue generation began on November 15, 2024, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in December 2024.
On December 30, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 32 GPUs, along with an associated purchase order, from a new customer, an AI Compute Fund managed by DNA Holdings Venture Inc. (“DNA Fund”). The purchase order provides for services utilizing a total of 576 H200 GPUs over a twenty-five month period and terminable by either party upon at least 90 days’ written notice prior to any renewal date. It represents an aggregate revenue opportunity of approximately $20.2 million. Concurrently, we placed a purchase order for 130 H200 servers for approximately $30 million. The deployment commenced in February 2025.
In April 2025, the Company signed two additional cloud services agreements with DNA Fund. The first agreement includes 104 NVIDIA H200 GPUs under a 23-month term and was deployed in May 2025. The second agreement includes 512 H200 GPUs under a 24-month term and was deployed in July 2025. With these additions, DNA Fund’s total contracted deployment increased to 1,192 GPUs. Combined, the agreements represent approximately $20.8 million of annualized revenue.
On January 6, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 32 GPUs, along with an associated purchase order, from a new customer. The purchase order provided for services utilizing a total of 32 H200 GPUs over a minimum of six month period, representing total revenue of approximately $300,000 for the term. The deployment commenced and revenue generation began on January 8, 2025, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in April 2025 following a change in the customer’s ownership, and the customer paid the remaining contract value as an early termination penalty.
In January 2025, we entered into a Master Services Agreement (“MSA”), along with two associated purchase orders, from a new customer. The purchase orders provide for services utilizing a total of 24 H200 GPUs over a minimum twelve (12) month period, representing total revenue of approximately $450,000 for the term. The deployment commenced and revenue generation began on January 27, 2025, using the Company’s existing inventory of H200 GPUs. The service under the purchase order concluded in March 2025 after the customer ceased operations.
On January 30, 2025, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 40 GPUs, along with an associated purchase order, from a new customer. The purchase orders provide for services utilizing a total of 40 H200 GPUs over a minimum of 12 month period, representing total revenue of approximately $750,000 for the term. The deployment commenced and revenue generation began on January 24, 2025, using the Company’s existing inventory of H200 GPUs. Between April and July 2025, the Company signed four additional agreements on a month-to-month basis for a total of 184 H200 GPUs including one purchase order for 32 GPUs that was terminated in August 2025.
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In March 2025, we entered a strategic partnership with Shadeform, Inc., the premier multi-cloud GPU marketplaces, to bring on-demand NVIDIA B200 GPUs to customers beginning in May 2025.
In April 2025, we received our first shipment of NVIDIA GB200 Grace Blackwell Superchip powered NVIDIA GB200 NVL72 system chips, from Quanta Cloud Technology, a leading provider of data center solutions. We believe that support with proof of concept (POC) access from Quanta will enable us to meet and exceed expectations around delivery and timeline, performance and reliability.
Digital Asset Business
The digital asset business is comprised primarily of two distinct but highly complementary operations: (i) digital asset mining (the “Digital Asset Mining Operations”); and (ii) ETH staking (the “ETH Staking Operations”).
In June of 2025, the Company announced that it had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company intends to convert its BTC holdings into ETH over time and has commenced a strategic alternatives process for its bitcoin mining operations, which is expected to result in a sale or wind-down, with any net proceeds to be re-deployed into ETH.
Digital Asset Mining Business
We commenced our bitcoin (“BTC”) mining business in February 2020. We initiated limited Ethereum mining operations in January 2022, however discontinued the operations by September 2022 due to Ethereum blockchain switching from proof-of-work (“PoW”) consensus mechanism to proof-of-stake (“PoS”) validation. Our mining operations, hosted by third-party providers, use specialized computers, known as miners, to generate digital assets. Our miners use application specific integrated circuit (“ASIC”) chips. These chips enable the miners to apply high computational power, expressed as “hash rate”, to provide transaction verification services (generally known as “solving a block”) which helps support the blockchain. For every block added, the blockchain provides an award equal to a set number of digital assets per block. Miners with a greater hash rate generally have a higher chance of solving a block and receiving an award.
We operate our mining assets with the primary intent of accumulating digital assets which we may sell for fiat currency from time to time depending on market conditions and management’s determination of our cash flow needs, and/or exchange into ETH or USD Coin (“USDC”). Our mining strategy has been to mine bitcoins as quickly and as many as possible given the fixed supply of bitcoins. In view of historically long delivery lead times to purchase miners from manufacturers like Bitmain Technologies Limited (“Bitmain”) and MicroBT Electronics Technology Co., Ltd (“MicroBT”), and other considerations, we have chosen to acquire miners on the spot market, which can typically result in delivery within a relatively short time.
We have signed service agreements with third-party hosting partners in North America and Iceland. These partners operate specialized mining data centers, where they install and operate the miners and provide IT consulting, maintenance, and repair work on site for us. Our mining facilities in New York are maintained by Digihost Technologies Inc. (“Digihost”). Our mining facilities in Texas are maintained by Dory Creek, LLC, a subsidiary of Bitdeer Technologies Group (“Bitdeer”) and A.R.T. Digital Holdings Corp (“KaboomRacks”). Soluna Computing, Inc and DVSL ComputeCo, LLC (collectively “Soluna”) maintained our mining facilities in Kentucky and Texas. Our mining facility in Iceland is maintained by GreenBlocks ehf, an Icelandic private limited company (“GreenBlocks”). We have relocated our miners from our mining facility in Canada maintained by Blockbreakers Inc. (“Blockbreakers”) to Soluna and Coinmint after our service agreement expired in November 2024.
From time to time, the Company may change partnerships with hosting facilities to recalibrate its bitcoin mining operations. These terminations are strategic, targeting reduced operational costs, enhanced energy efficiency for a smaller carbon footprint, increased flexibility in operational control, and minimized geopolitical risks. While a short-term decrease in mining output might occur, we expect these changes to yield long-term operational improvements.
We are a sustainability-focused digital asset mining company. On June 24, 2021, we signed the Crypto Climate Accord, a private sector-led initiative that aims to decarbonize the crypto and blockchain sectors. On December 7, 2021, we became a member of the Bitcoin Mining Council (“BMC”), joining MicroStrategy and other founding members to promote transparency, share best practices, and educate the public on the benefits of bitcoin and bitcoin mining.
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Miner Deployments
During the three months ended June 30, 2025, we continued to work with our hosting partners to deploy our miners in North America and Iceland.
During the first quarter of 2025, the Company deployed an additional 1,441 miners at one of Soluna’s hosting facilities.
During the second quarter of 2025, the Company received an additional 1,720 miners, which were deployed in July 2025.
As of June 30, 2025, the Company’s active hash rate totals approximately 1.2 EH/s, with operations in North America and Iceland.
Power and Hosting Overview
During the three and six months ended June 30, 2025, our hosting partners continued to prepare sites to deliver our contracted hosting capacity, bringing additional power online for our miners.
The Company’s subsidiary, Bit Digital Canada, Inc., entered into a Mining Services Agreement effective September 1, 2022, for Blockbreakers, Inc. to provide five MW of incremental hosting capacity at its facility in Canada. The facility utilizes an energy source that is primarily hydroelectric.
On May 8, 2023, the Company entered into a Master Mining Services Agreement with Blockbreakers, pursuant to which Blockbreakers agreed to provide the Company with four (4) MW of additional mining capacity at its hosting facility in Canada. The agreement is for two (2) years automatically renewable for additional one (1) year terms unless either party gives at least 60 days’ advance written notice. The performance fee is 15% of the net profit. Additionally, Bit Digital has secured a side letter agreement with Blockbreakers, granting the Company the right of first refusal for any future mining hosting services offered by Blockbreakers in Canada. This agreement brought the Company’s total contracted hosting capacity with Blockbreakers to approximately 9 MW. Our service agreement with Blockbreakers expired in November 2024. A portion of the miners were transferred to other hosting facilities, and the inefficient units were sold.
On June 7, 2022, we entered into a Master Mining Services Agreement (the “MMSA”) with Coinmint LLC, pursuant to which Coinmint will provide the required mining colocation services for a one-year period automatically renewing for three-month periods unless earlier terminated. The Company paid Coinmint electricity costs, plus operating costs required to operate the Company’s mining equipment, as well as a performance fee equal to 27.5% of the net profit, subject to a 10% reduction if Coinmint fails to provide uptime of 98% or better for any period. We were not privy to the emissions rate at the Coinmint facility or at any other hosting facility. However, the Coinmint facility operated in an upstate New York region that reportedly utilized power that is 99% emissions-free, as determined based on the 2023 Load & Capacity Data Report published by the New York Independent System Operator, Inc. (“NYISO”).
On April 5, 2023, the Company entered into a letter agreement and MMSA Amendment with Coinmint pursuant to which Coinmint agreed to provide the Company with up to ten (10) MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Plattsburgh, New York. The agreement was for two years automatically renewing for three (3) months unless terminated by either party on at least ninety (90) days prior written notice. The performance fees under this letter agreement range from 30% to 33% of the net profit. This agreement brought the Company’s total contracted hosting capacity with Coinmint to approximately 30 MW at this facility.
On April 27, 2023, the Company entered into a letter agreement and MMSA Amendment with Coinmint pursuant to which Coinmint agreed to provide the Company with up to 10 MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Massena, New York. The agreement was for one year automatically renewing for three (3) months unless terminated by either party on at least 90 days prior written notice. The performance fees under this letter agreement are 33% of the net profit. This new agreement brought the Company’s total contracted hosting capacity with Coinmint to approximately 40 MW.
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On January 26, 2024, the Company entered into a letter agreement and MMSA Amendment with Coinmint pursuant to which Coinmint agreed to provide the Company with up to six MW of additional mining capacity to energize the Company’s mining equipment at Coinmint’s hosting facility in Massena, New York. The agreement was for one year automatically renewing for three months unless terminated by either party on at least 90 days prior written notice. The performance fees under this letter agreement are 28% of the net profit. This agreement brought the Company’s total contracted hosting capacity with Coinmint to approximately 46 MW.
On September 5, 2024, the Company received a 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent not to renew 27 MW of the 36 MW total contracted capacity at its Massena, New York site, effective December 7, 2024. Subsequently, on October 29, 2024, the Company received an additional 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent to not renew the remaining 9 MW of the 36 MW total contracted capacity at its Massena, New York site, effective January 28, 2024. On January 3, 2025, the Company received an additional 90-days notice of non-renewal of colocation mining services agreement from Coinmint, which informed the Company of its intent not to renew the 10 MW total contracted capacity at its Plattsburgh, New York site, effective April 5, 2025. After the contracts with Coinmint expired, a portion of the miners were transferred to other hosting facilities, and the inefficient units were sold.
In June 2021, we entered into a strategic co-mining agreement with Digihost Technologies in North America. Pursuant to the terms of the agreement, Digihost provides certain premises to Bit Digital for the purpose of the operation and storage of a 20 MW bitcoin mining system to be delivered by Bit Digital. Digihost provides services to maintain the premises for a term of two years. Digihost shall also be entitled to 20% of the net profit generated by the miners.
In April 2023, we renewed the co-mining agreement with Digihost, previously executed in June 2021. Pursuant to the terms of the new agreement, Digihost provides certain premises to Bit Digital for the purpose of the operation and storage of an up to 20 MW bitcoin mining system to be delivered by Bit Digital. Digihost also provides services to maintain the premises for a term of two years, automatically renewing for a period of one (1) year. Digihost shall also be entitled to 30% of the net profit generated by the miners. As of June 30, 2025, Digihost provided approximately 6.0 MW of capacity for our miners at their facility.
On May 9, 2023 (“Effective Date”), the Company entered into a Term Loan Facility and Security Agreement (the “Loan Agreement”) with GreenBlocks. Pursuant to the Loan Agreement, GreenBlocks has requested the Company to extend one or more loans (“Advances”) under a senior secured term loan facility in an aggregate outstanding principal amount not to exceed $5 million. The interest rate of the Loan Agreement is 0% and Advances are to be repaid on the maturity date, which is the thirty-nine-month anniversary of the Effective Date. GreenBlocks will exclusively use the Advances to buy miners that will be operated for the benefit of the Company at a facility in Iceland, with an overall capacity of 8.25 MW. To secure the prompt payment of Advances, the Company has been granted a continuing first priority lien and security interest in all of GreenBlocks’s rights, title and interest to the financed miners. The miners are the sole property of GreenBlocks, of which they are responsible for the purchase, installation, operation, and maintenance.
On May 9, 2023, the Company entered into a Computation Capacity Services Agreement (the “Services Agreement”) with GreenBlocks. Pursuant to the Agreement, GreenBlocks will provide computational capacity services and other necessary ancillary services, such as operation, management, and maintenance, at the facility in Iceland for a term of two years. GreenBlocks will own and operate the miners financed through the Loan Agreement for the purpose of providing computational capacity of up to 8.25 MW. The Company will pay power costs of $0.05 per kilowatt hour, a pod fee of $22,000 per pod per month, and a depreciation fee equal to 1/36 of the facility size per month. The performance fees under this agreement are 20% of the net profit. The Company submitted to Greenblocks a deposit in the amount of $1,052,100, which was exclusively for the purpose of paying the landlord of the facility for hosting space.
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On June 1, 2023, the Company and GreenBlocks entered the Omnibus Amendment to Loan Documents and Other Agreements (“Omnibus Amendment”). This amendment revised both the Loan Agreement and the Services Agreement previously entered on May 9, 2023. While the core terms remained consistent, notable modifications pertained to the facility size and contracted capacity. Specifically, the facility size was increased from $5 million to $6.7 million. Moreover, GreenBlocks agreed to expand the computation capacity to approximately 10.7 MW. Advances of $6.4 million have been financed by the Company to GreenBlocks.
In May 2025, we amended the Services Agreement with Greenblocks, originally executed in May 2023 and previously amended in June 2023. Pursuant to the terms of the amended agreement, Greenblocks shall provide services to support 8.9 MW of power capacity from March 1, 2025 through April 30, 2025 and 5 MW of computational capacity starting May 1, 2025 through December 31, 2025. The Company will pay power costs of $0.067 per kilowatt hour and a pod fee of $10,000 per pod per month, subject to pro rata adjustment if usage falls below 2 MW. All other provisions of the original agreement and previous appendices remain in effect. The amended terms may be modified by mutual agreement, and either party may terminate with one month’s notice. As of June 30, 2025, GreenBlocks provided approximately 5.0 MW of capacity for our miners at their facility.
In October 2023, we entered into a strategic co-location agreement with Soluna Computing, Inc. for a term of one year automatically renewing on a month-to-month basis unless terminated by either party. Pursuant to the terms of the agreement, Soluna provided certain required mining colocation services at their hosting facility in Murray, Kentucky to the Company for the purpose of the operation and storage of up to 4.4 MW bitcoin mining system to be delivered by Bit Digital. Soluna was also entitled to 42.5% of the net profit generated by the miners. This agreement expired at the end of October 2024.
In October 2024, we entered into a co-location agreement with Soluna SW, Inc. to continue our business relationship. Under this agreement, Soluna provides certain required mining colocation services to the Company at their hosting facility in Murray, Kentucky for the purpose of the operation and storage of bitcoin mining system to be delivered by the Company up to 6.6 MW (3.3 MW for terms of nine months and 3.3 MW for terms of one (1) year), automatically renewing on a month-to-month basis unless terminated by either party. Soluna shall also be entitled to 35% of the net profit generated by the miners.
In December 2024, we entered into two additional co-location agreements with Soluna DVSL ComputerCo, LLC. pursuant to which Soluna agreed to provide the Company with up to 11 MW (5.5 MW and 5.5 MW, respectively) at their hosting facility in Silverton, Texas. Both agreements are for one (1) year automatically renewing on a month-to-month basis unless terminated by either party on at least 60 days prior written notice. Soluna shall also be entitled to 35% and 27.5%, respectively, of the net profit generated by the miners. These new agreements bring the Company’s total contracted hosting capacity with Soluna to approximately 17.6 MW. As of June 30, 2025, Soluna provided approximately 15.8 MW of capacity for our miners at their facility.
In November 2023, we entered into a hosting services agreement, which was amended on March 7, 2024, with Dory Creek, LLC, a subsidiary of Bitdeer Technologies Group (“Bitdeer”), for a term of one year automatically renewing on an annual basis unless terminated by either party by giving a 30-day prior notice to the other Party in writing. Pursuant to the terms of the agreement, Bitdeer provides maintenance and operation services to the Company to support 17.5 MW of capacity. Bitdeer shall also be entitled to 30% of the net profit generated by the miners. the Company shall have the first right, but not obligation, to accept services for any extra capacity under the terms of this Agreement. As of June 30, 2025, Bitdeer provided approximately 15.5 MW of capacity for our miners at their facility.
In February 2025, we entered into two hosting services agreements with A.R.T. Digital Holdings Corp (“KaboomRacks”) for terms of nine (9) months and three years automatically renewing on an annual basis unless terminated by either party. Pursuant to the terms of the agreements, KaboomRacks provides maintenance and operation services to Bit Digital to support 6 MW and 13 MW of capacity. On July 1, 2025, we entered into the first amendment to the hosting service agreement for 13 MW of capacity. The amendment modified the existing agreement, identifying the two facilities that will provide maintenance and operations service to Bit Digital to support 5 MW and 8 MW of capacity. KaboomRacks shall also be entitled to respective 40%, 14.75% and 22.5% of the net profit generated by the miners. As of June 30, 2025, KaboomRacks provided approximately 4.5 MW of capacity for our miners at their facility.
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In May 2022, our hosting partner Blockfusion advised us that the substation at its Niagara Falls, New York facility was damaged by an explosion and fire, and power was cut off to approximately 2,515 of the Company’s bitcoin miners and approximately 710 ETH miners that had been operating at the site immediately prior to the incident. The explosion and fire are believed to have been caused by faulty equipment owned by the power utility. Blockfusion and the Company have entered into a common interest agreement to jointly pursue any claims evolving from the explosion and fire. Prior to the incident, our facility with Blockfusion in Niagara Falls, provided approximately 9.4 MW to power our miners. Power was restored to the facility in September 2022. However, we received a notice dated October 4, 2022 (the “Notice”), from the City of Niagara Falls, which ordered the cease and desist from any cryptocurrency mining or related operations at the facility until such time as Blockfusion complies with Section 1303.2.8 of the City of Niagara Falls Zoning Ordinance (the “Ordinance”), in addition to all other City ordinances and codes. Blockfusion has advised us that the Ordinance came into effect on October 1, 2022, following the expiration of a related moratorium on September 30, 2022. Blockfusion has further advised that it has submitted applications for new permits based on the Ordinance’s new standards and that the permits may take several months to process. Pursuant to the Mining Services Agreement between Bit Digital and Blockfusion dated August 25, 2021, Blockfusion represents, warrants and covenants that it “possesses, and will maintain, all licenses, registrations, authorizations and approvals required by any governmental agency, regulatory authority or other party necessary for it to operate its business and engage in the business relating to its provision of the Services.” On October 5, 2022, Bit Digital further advised Blockfusion that it expects it to comply with the directives of the Notice. Our service agreement with Blockfusion ended in September 2023. On June 3, 2024, the Company filed suit in Delaware Superior Court against Blockfusion alleging claims for breach of contract, conversion, and related claims in connection with, among other things, certain deposits and advances paid to Blockfusion, the return of which is owed to the Company. The Company is seeking in excess of $4.3 million. On October 22, 2024, Blockfusion denied the Company’s claims and brought reciprocal breach of contract and related counterclaims. Following limited discovery, the court entered a stipulation and order on June 18, 2025, amending the Case Management Order to extend multiple discovery deadlines and vacate the previously scheduled trial date. On August 1, 2025, the Company moved for leave to file a Second Amended Complaint, which adds claims for fraud and related causes of action arising out of Blockfusion’s, conduct both at the inception of and during the parties’ relationship. The second Amended Complaint also names Blockfusion’s CEO, Alexander Martini-Lomanto, as an additional defendant. The Company continues to seek the recovery of its original investment, invoices payments, and unpaid late development fees and now seeks additional damages for the tort and equitable claims contained in the Second Amended Complaint pending Court approval, including punitive damages. If the Company’s Second Amended Complaint is ultimately accepted by the Court, the total amount of damages sought will be in excess of $5 million. Refer to Note 19. Commitments and Contingencies for further details.
Miner Fleet Update and Overview
As of December 31, 2024, we had 24,239 miners owned or operating (in Iceland) for bitcoin mining with a total maximum hash rate of 2.6 EH/s.
On December 10, 2024, we entered into an agreement with an unaffiliated seller of bitcoin mining computers, from whom we acquired 191 S21 miners. As of the date of this report, all of the miners were delivered.
On December 15, 2024, we entered into an agreement with an unaffiliated seller of bitcoin mining computers, from whom we acquired 750 S21 miners. As of the date of this report, all of the miners were delivered.
On December 23, 2024, we entered into an agreement with an unaffiliated seller of bitcoin mining computers, from whom we acquired 4,300 S21+ miners. As of the date of this report, 2,630 miners were delivered.
For the three and six months ended June 30, 2025, the Company disposed of nil and 4,828 bitcoin miners. In July 2025, the Company disposed of 2,972 bitcoin miners.
As of June 30, 2025, we had 22,574 miners owned or operating (in Iceland) for bitcoin mining with a total maximum hash rate of 2.7 EH/s.
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Bitcoin Production
From the inception of our bitcoin mining business in February 2020 to June 30, 2025, we earned an aggregate of 7,431.6 bitcoins.
The following table presents our bitcoin mining activities for the six months ended June 30, 2025:
| Number of bitcoins | Amount (1) | |||||||
| Balance at December 31, 2024 | 741.9 | $ | 69,319,731 | |||||
| Receipt of BTC from mining services | 151.5 | 14,408,801 | ||||||
| Exchange of BTC into USDC | (15.0 | ) | (1,223,250 | ) | ||||
| Sales of and payments made in BTC | (598.0 | ) | (55,204,163 | ) | ||||
| Change in fair value of BTC | - | 2,750,481 | ||||||
| Balance at June 30, 2025 | 280.4 | $ | 30,051,600 |
| (1) | Receipt of digital assets from mining services are the product of the number of bitcoins received multiplied by the bitcoin price obtained from Coinbase, calculated on a daily basis. Sales of bitcoin represent the carrying value of bitcoin at the time of sale. |
ETH Staking Business
In the fourth quarter of 2022, we formally commenced Ethereum staking operations. We delegate or stake our ETH holdings to an Ethereum validator node to help secure and strengthen the blockchain network. Stakers are compensated for this commitment in the form of a reward of the native network token.
Our native staking operations are enhanced by a partnership with Blockdaemon, the leading institutional-grade blockchain infrastructure company for node management and staking. In the fourth quarter of 2022, following a similar mechanism to native Ethereum staking, we also participated in liquid staking via Portara protocol (formerly known as Harbour), the liquid staking protocol developed by Blockdaemon and StakeWise and the first of its kind tailored to institutions. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon.
Our native staking operations with MarsProtocol Technologies Pte. Ltd. (“Marsprotocol”) commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking with MarsLand Global Limited (“MarsLand”) in August 2023. Subsequently, we have ceased our native staking with MarsLand in the first quarter of 2024 and initiated our native staking with Figment Inc.
We started participating in liquid staking via Liquid Collective protocol on the Coinbase platform in the first quarter of 2023. Liquid staking allows participants to achieve greater capital efficiency by utilizing their staked ETH as collateral and trading their staked ETH tokens on the secondary market. In the first quarter of 2024, we have reclaimed all the liquid staked ETH from Liquid Collective protocol. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. This approach provides flexibility to engage in both staking and restaking through a broader range of strategies and platforms.
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Results of operations
The following table summarizes the results of our operations during the three months ended June 30, 2025 and 2024, respectively, and provides information regarding the dollar increase or (decrease) during the period.
| For the Three Months Ended June 30, | Variance in | |||||||||||
| 2025 | 2024 | Amount | ||||||||||
| Revenues | ||||||||||||
| Digital asset mining | $ | 6,631,838 | $ | 16,079,893 | $ | (9,448,055 | ) | |||||
| Cloud services | 16,595,315 | 12,497,197 | 4,098,118 | |||||||||
| Colocation services | 1,729,004 | - | 1,729,004 | |||||||||
| ETH staking | 365,332 | 373,812 | (8,480 | ) | ||||||||
| Other | 337,930 | 92,504 | 245,426 | |||||||||
| Total revenues | 25,659,419 | 29,043,406 | (3,383,987 | ) | ||||||||
| Operating costs and expenses | ||||||||||||
| Cost of revenue (exclusive of depreciation shown below) | ||||||||||||
| Digital asset mining | (6,075,585 | ) | (10,537,841 | ) | 4,462,256 | |||||||
| Cloud services | (6,391,120 | ) | (4,595,301 | ) | (1,795,819 | ) | ||||||
| Colocation services | (687,880 | ) | - | (687,880 | ) | |||||||
| ETH staking | (29,633 | ) | (24,456 | ) | (5,177 | ) | ||||||
| Depreciation and amortization expenses | (8,223,538 | ) | (8,346,633 | ) | 123,095 | |||||||
| General and administrative expenses | (19,667,364 | ) | (5,480,519 | ) | (14,186,845 | ) | ||||||
| Gains (losses) on digital assets | 27,154,706 | (11,538,949 | ) | 38,693,655 | ||||||||
| Total operating expenses | (13,920,414 | ) | (40,523,699 | ) | 26,603,285 | |||||||
| Income (loss) from operations | 11,739,005 | (11,480,293 | ) | 23,219,298 | ||||||||
| Other income, net | 4,726,754 | 68,974 | 4,657,780 | |||||||||
| Total other income, net | 4,726,754 | 68,974 | 4,657,780 | |||||||||
| Income (loss) before income taxes | 16,465,759 | (11,411,319 | ) | 27,877,078 | ||||||||
| Income tax expenses | (1,591,557 | ) | (541,781 | ) | (1,049,776 | ) | ||||||
| Net income (loss) | $ | 14,874,202 | $ | (11,953,100 | ) | $ | 26,827,302 | |||||
Revenue
We generate revenues from cloud services, colocation services, digital asset mining, and ETH staking businesses.
Revenue from cloud services
In the fourth quarter of 2023, we initiated WhiteFiber, a new business line to provide cloud services to support generative AI workstreams. The Company commenced the cloud services in January 2024.
Our revenues from cloud services increased by $4.1 million, or 32.8%, to $16.6 million for the three months ended June 30, 2025 from $12.5 million for the three months ended June 30, 2024. The increase was primarily due to an increase in deployed GPU servers in the first quarter of 2025 and the $1.3 million service credit issued to the customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases, in the first quarter of 2024.
Revenue from colocation services
In the fourth quarter of 2024, we acquired Enovum which provides customers with physical space, power, and cooling within the data center facility.
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Our revenue from colocation services was $1.7 million and $nil for the three months ended June 30, 2025. We had no revenue from colocation services for the three months ended June 30, 2024.
Revenue from digital asset mining
We provide computing power to digital asset mining pools, and receive consideration in the form of digital assets, the value of which is determined using the market price of the related digital asset at the time of receipt. By providing computing power to successfully add a block to the blockchain, the Company is entitled to a fractional share of the digital assets award from the mining pool operator, which is based on the proportion of computing power the Company contributed to the mining pool to the total computing power contributed by all mining pool participants in solving the current algorithm.
For the three months ended June 30, 2025, we received 68.2 bitcoins from the Foundry mining pool. As of June 30, 2025, our maximum hash rate was at an aggregate of 2.7 EH/s for our bitcoin miners. For the three months ended June 30, 2025, we recognized revenue of $6.6 million from bitcoin mining services.
For the three months ended June 30, 2024, we received 244.2 bitcoins from the Foundry mining pool. As of June 30, 2024, our maximum hash rate was at an aggregate of 4.2 EH/s for our bitcoin miners. For the three months ended June 30, 2024, we recognized revenue of $16.1 million from bitcoin mining services.
Our revenues from digital asset mining services decreased by $9.4 million, or 58.8%, to $6.6 million for the three months ended June 30, 2025 from $16.1 million for the three months ended June 30, 2024. The decrease was primarily due to a decrease of 176.0 bitcoins generated from our mining business and partially offset by a higher average BTC price in the second quarter of 2025, compared to the same period in 2024.
Revenue from ETH staking
During the fourth quarter of 2022, we commenced ETH staking business, in both native staking and liquid staking.
For the ETH native staking business, we previously partnered with Blockdaemon, Marsprotocol and MarsLand. Currently, we stake ETH with Figment, using network-based smart contracts, on a node for the purpose of validating transactions and adding blocks to the network. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw staked ETH under contracted staking since April 12, 2023 when the announced Shanghai upgrade was completed. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.
In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Our native staking operations with Marsprotocol commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking operations with MarsLand in August 2023. In the first quarter of 2024, we concluded our operations with MarsLand and initiated our native staking operations with Figment. As of December 31, 2024, all of our native staking operations are with Figment.
For the liquid staking business, the Company has deployed ETH into Portara protocol (formerly known as Harbour) supported by liquid staking solution provider under the consortium of Blockdaemon and Stakewise, and Liquid Collective protocol supported by Coinbase. By staking, we receive receipt tokens for the ETH staked which could be redeemed to ETH or can be traded or collateralized elsewhere, at any time. In addition, we receive rETH-h for rewards earned from Portara protocol. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the first quarter of 2024, we ceased our liquid staking activities with Liquid Collective protocol and reclaimed all our staked Ethereum. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH.
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In the first quarter of 2024, the Company has restaked 3,008 ETH into EigenLayer, a protocol built on Ethereum that enables restaking of the already-staked ETH, through Figment. To mitigate potential risks, we restake our ETH without delegating to any operator and the Company received 33,568 EigenLayer in the fourth quarter of 2024 from this restaking activity. As of the date of this report, the reward earned in 2025 from this restaking activity is not significant.
For the three months ended June 30, 2025, we earned 166.8 ETH in native staking. For the three months ended June 30, 2025, we recognized revenues of $365,332 from native staking.
For the three months ended June 30, 2024, we earned 109.4 ETH in native staking. For the three months ended June 30, 2024, we recognized revenues of $373,812 from native staking.
Our revenues from ETH native staking decreased by $8,480, or 2.3%, to $365,332 for the three months ended June 30, 2025 from $373,812 for the three months ended June 30, 2024. The decrease was primarily due to an increase of 57.4 ETH earned from staking services partially offset by a decrease in the average price of ETH for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Cost of revenue
We incur cost of revenue from digital asset mining, cloud services, colocation services, and ETH staking businesses.
The Company’s cost of revenue consists primarily of direct production costs associated with its core operations, excluding depreciation and amortization, which are separately stated in the Company’s consolidated statements of operations. Specifically, these costs consist of:
| i. | cloud services operations - electricity costs, datacenter lease expense, GPU servers lease expense, and other relevant costs |
| ii. | colocation services - electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs |
| iii. | mining operations - electricity costs, profit-sharing fees and other relevant costs |
| iv. | ETH staking business - service fee and reward-sharing fees to the service providers. |
Cost of revenue - cloud services
For the three months ended June 30, 2025 and 2024, the cost of revenue from cloud services was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 601,655 | $ | 143,043 | ||||
| Datacenter lease expenses | 1,365,599 | 605,220 | ||||||
| GPU servers lease expenses | 3,749,470 | 3,830,061 | ||||||
| Other costs | 674,396 | 16,977 | ||||||
| Total | $ | 6,391,120 | $ | 4,595,301 | ||||
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Electricity costs. These expenses were incurred by the data center for the high performance computing equipment and were closely correlated with the number of deployed GPU servers.
For the three months ended June 30, 2025, electricity costs increased by $0.5 million, or 321%, compared to the electricity costs incurred for the three months ended June 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.
Datacenter lease expenses. We entered into datacenter lease agreements for fixed monthly recurring costs.
For the three months ended June 30, 2025, datacenter lease expenses increased by $0.8 million, or 126%, compared to the datacenter lease expenses incurred for the three months ended June 30, 2024. The increase primarily resulted from two additional datacenter leases entered into after the second quarter of 2024.
GPU servers lease expenses. We entered into a GPU servers lease agreement to support our cloud services. The lease payment depends on the usage of the GPU servers.
For the three months ended June 30, 2025, GPU servers lease expenses were relatively consistent with the same period in 2024, with a slight decrease of $0.1 million, or 2%.
Cost of revenue - Colocation Services
In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the three months ended June 30, 2025 and 2024, the cost of revenue from colocation services was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 270,003 | $ | - | ||||
| Lease expenses | 156,740 | - | ||||||
| Wage expenses | 169,543 | - | ||||||
| Other costs | 91,594 | - | ||||||
| Total | $ | 687,880 | $ | - | ||||
Electricity costs. These expenses were closely correlated with the number of deployed servers hosted by the data center.
For the three months ended June 30, 2025, electricity costs totaled $0.3 million. We had no electricity costs for the three months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
Lease expenses. These expenses were incurred by the data center for lease agreement for a fixed monthly recurring cost.
For the three months ended June 30, 2025 , data center lease expenses totaled $0.2 million. We had no data center lease expenses for the three months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
Wage expenses. These expenses represent the salaries and benefits of data center employees involved in the operation of our facilities.
For the three months ended June 30, 2025, wage expenses totaled $0.2 million. We had no wage expenses for the three months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
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Cost of revenue - digital asset mining
For the three months ended June 30, 2025 and 2024, the cost of revenue from digital asset mining was comprised of the following:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 4,334,282 | $ | 7,177,302 | ||||
| Profit-sharing fees | 1,051,811 | 2,714,035 | ||||||
| Other costs | 689,492 | 646,504 | ||||||
| Total | $ | 6,075,585 | $ | 10,537,841 | ||||
Electricity costs. These expenses were incurred by mining facilities for the miners in operation and were closely correlated with the number of deployed miners.
For the three months ended June 30, 2025, electricity costs decreased by $2.8 million, or 40%, compared to the electricity costs incurred for the three months ended June 30, 2024. The decrease primarily resulted from a decrease in the number of deployed miners.
Profit-sharing fees. We enter into hosting agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by the miners. We refer to these fees as profit-sharing fees.
For the three months ended June 30, 2025, profit-sharing fees decreased by $1.7 million, or 61%, compared to profit-sharing fees incurred in the three months ended June 30, 2024. The decrease in profit-sharing fees was primarily due to a lower bitcoin production and partially offset by the higher average BTC price for three months ended June 30, 2025.
Cost of revenue - ETH staking
For the three months ended June 30, 2025, cost of revenue from ETH staking business increased by $5,177, or 21%, compared to the cost of revenue incurred for the three months ended June 30, 2024. The increase was primarily driven by an increased number of staked ETH from 17,184 ETH in the three months ended June 30, 2024 to 21,568 ETH in the three months ended June 30, 2025.
Depreciation and amortization expenses
For the three months ended June 30, 2025 and 2024, depreciation and amortization expenses were $8.2 million and $8.3 million, respectively, based on an estimated useful life of property, plant, and equipment.
Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2. Summary of Significant Accounting Policies.
General and administrative expenses
For the three months ended June 30, 2025, our general and administrative expenses, totaling $19.7 million, were primarily comprised of professional and consulting expenses of $7.9 million, shared-based compensation expenses of $6.9 million, salary and bonus expenses of $1.8 million, marketing expenses of $0.6 million, travel expenses of $0.3 million, and directors and officers insurance expenses of $0.2 million.
For the three months ended June 30, 2024, our general and administrative expenses, totaling $5.5 million, were primarily comprised of shared-based compensation expenses of $0.4 million, salary and bonus expenses of $1.0 million, professional and consulting expenses of $2.3 million, directors and officers insurance expenses of $0.2 million, marketing expenses of $0.4 million, and travel expenses of $0.3 million.
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Gains (losses) on digital assets
For the three months ended June 30, 2025, a gain of $27.2 million was recognized, primarily attributable to the increase in the prices of bitcoin and ETH as of June 30, 2025.
For the three months ended June 30, 2024, a loss of $11.5 million was recognized, primarily attributable to the decreases in the prices of bitcoin and ETH as of June 30, 2024.
Income tax provisions
Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the three months ended June 30, 2025 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States, Singapore and Hong Kong. We continue to maintain a valuation allowance against the deferred tax assets in United States, Singapore and Hong Kong as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.
Our income tax provision was $1.6 million and $0.5 million for the three months ended June 30, 2025 and 2024, respectively. The income tax provision was higher during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to increase of $0.9 million in Canada due to the higher unrealized gain resulted from increased Bitcoin price and increase of $0.2 million in the United States due to higher taxable profits from digital assets sales.
Net income (loss) and earnings (loss) per share
For the three months ended June 30, 2025, our net income was $14.9 million, representing a change of $26.8 million from a net loss of $12.0 million for the three months ended June 30, 2024.
Basic and diluted earning per share was $0.07 and $0.07 for the three months ended June 30, 2025, respectively. Basic and diluted loss per share was $0.09 and $0.09 for the three months ended June 30, 2024, respectively.
Basic and diluted weighted average number of shares was 206,889,826 and 208,817,806 for the three months ended June 30, 2025, respectively. Basic and diluted weighted average number of shares was 128,053,586 and 128,053,586 for the three months ended June 30, 2024, respectively.
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The following table summarizes the results of our operations during the six months ended June 30, 2025 and 2024, respectively, and provides information regarding the dollar increase or (decrease) during the period.
| For the Six Months Ended June 30, | Variance in | |||||||||||
| 2025 | 2024 | Amount | ||||||||||
| Revenues | ||||||||||||
| Digital asset mining | $ | 14,408,801 | $ | 37,971,653 | $ | (23,562,852 | ) | |||||
| Cloud services | 31,437,601 | 20,566,781 | 10,870,820 | |||||||||
| Colocation services | 3,367,413 | - | 3,367,413 | |||||||||
| ETH staking | 925,973 | 699,558 | 226,415 | |||||||||
| Other | 618,497 | 192,252 | 426,245 | |||||||||
| Total revenues | 50,758,285 | 59,430,244 | (8,671,959 | ) | ||||||||
| Operating costs and expenses | ||||||||||||
| Cost of revenue (exclusive of depreciation shown below) | ||||||||||||
| Digital asset mining | (12,199,474 | ) | (23,522,773 | ) | 11,323,299 | |||||||
| Cloud services | (12,479,120 | ) | (7,752,628 | ) | (4,726,492 | ) | ||||||
| Colocation services | (1,199,882 | ) | - | (1,199,882 | ) | |||||||
| ETH staking | (62,201 | ) | (40,889 | ) | (21,312 | ) | ||||||
| Depreciation and amortization expenses | (15,465,527 | ) | (15,192,582 | ) | (272,945 | ) | ||||||
| General and administrative expenses | (27,937,121 | ) | (11,436,259 | ) | (16,500,862 | ) | ||||||
| (Losses) gains on digital assets | (22,050,521 | ) | 34,193,628 | (56,244,149 | ) | |||||||
| Total operating expenses | (91,393,846 | ) | (23,751,503 | ) | (67,642,343 | ) | ||||||
| (Loss) income from operations | (40,635,561 | ) | 35,678,741 | (76,314,302 | ) | |||||||
| Net loss from disposal of property and equipment | (333,620 | ) | - | (333,620 | ) | |||||||
| Other income, net | 395,011 | 4,569,147 | (4,174,136 | ) | ||||||||
| Total other income, net | 61,391 | 4,569,147 | (4,507,756 | ) | ||||||||
| (Loss) income before income taxes | (40,574,170 | ) | 40,247,888 | (80,822,058 | ) | |||||||
| Income tax expenses | (2,263,273 | ) | (2,119,131 | ) | (144,142 | ) | ||||||
| Net (loss) income | $ | (42,837,443 | ) | $ | 38,128,757 | $ | (80,966,200 | ) | ||||
Revenue
We generate revenues from cloud services, colocation services, digital asset mining, and ETH staking businesses.
Revenue from cloud services
In the fourth quarter of 2023, we initiated WhiteFiber, a new business line to provide cloud services to support generative AI workstreams. The Company commenced the cloud services in January 2024.
Our revenues from cloud services increased by $10.9 million, or 52.9%, to $31.4 million for the six months ended June 30, 2025 from $20.6 million for the six months ended June 30, 2024. The increase was primarily due to an increase in deployed GPU servers for the six months ended June 30, 2025 and the $1.3 million service credit issued to the customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases, in the first quarter of 2024.
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Revenue from colocation services
Our revenue from colocation services was $3.4 million for the six months ended June 30, 2025. We had no revenue from colocation services for the six months ended June 30, 2024. In the fourth quarter of 2024, we acquired Enovum which provides customers with physical space, power, and cooling within the data center facility.
Revenue from digital asset mining
The Company enters in contracts with mining pool operators to provide computing power to digital asset mining pools. Providing computing power for digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s contracts with mining pool operators.
For the six months ended June 30, 2025, we received 151.5 bitcoins from the Foundry USA Pool (“Foundry”) mining pool. As of June 30, 2025, our maximum hash rate was at an aggregate of 2.7 EH/s for our bitcoin miners. For the six months ended June 30, 2025, we recognized revenue of $14.4 million from bitcoin mining services.
For the six months ended June 30, 2024, we received 654.9 bitcoins from the Foundry mining pool. As of June 30, 2024, our maximum hash rate was at an aggregate of 4.3 EH/s for our bitcoin miners. For the six months ended June 30, 2024, we recognized revenue of $38.0 million from bitcoin mining services.
Our revenues from digital asset mining services decreased by $23.6 million, or 62.1%, to $14.4 million for the six months ended June 30, 2025 from $38.0 million for the six months ended June 30, 2024. The decrease was primarily due to a decrease of 503.4 bitcoins generated from our mining business and partially offset by a higher average BTC price for the six months ended June 30, 2025, compared to the same period in 2024.
Revenue from ETH staking
During the fourth quarter of 2022, we commenced ETH staking business, in both native staking and liquid staking.
For the ETH native staking business, we previously partnered with Blockdaemon, Marsprotocol and MarsLand. Currently, we stake ETH with Figment, using network-based smart contracts, on a node for the purpose of validating transactions and adding blocks to the network. Through these contracts, the Company stakes ETH on nodes for the purpose of validating transactions and adding blocks to the Ethereum blockchain network. The Company is able to withdraw staked ETH under contracted staking since April 12, 2023 when the announced Shanghai upgrade was completed. In exchange for staking the ETH and validating transactions on blockchain networks, the Company is entitled to block rewards and transaction fees for successfully validating or adding a block to the blockchain. These rewards are received by the Company directly from the Ethereum network and are calculated approximately based on the proportion of the Company’s stake to the total ETH staked by all validators.
In the fourth quarter of 2023, the Company terminated the native staking activities and reclaimed all staked Ethereum with Blockdaemon. Our native staking operations with Marsprotocol commenced in the first quarter of 2023 and concluded in July 2023. After ceasing operations with Marsprotocol, we initiated our native staking operations with MarsLand in August 2023. In the first quarter of 2024, we concluded our operations with MarsLand and initiated our native staking operations with Figment. As of December 31, 2024, all of our native staking operations are with Figment.
For the liquid staking business, the Company has deployed ETH into Portara protocol (formerly known as Harbour) supported by liquid staking solution provider under the consortium of Blockdaemon and Stakewise, and Liquid Collective protocol supported by Coinbase. By staking, we receive receipt tokens for the ETH staked which could be redeemed to ETH or can be traded or collateralized elsewhere, at any time. In addition, we receive rETH-h for rewards earned from Portara protocol. With the introduction of staked ETH withdrawals in April 2023, we have reassessed our Ethereum network staking approaches, weighing the advantages of traditional staking against liquid staking solutions. The withdrawal feature in native staking, coupled with yields that are on par with those of liquid staking, has encouraged us to expand our collaborations with other service providers in this domain. As a result, we terminated all liquid staking activities with StakeWise in the third quarter of 2023, reclaiming all staked Ethereum along with the accumulated rewards. In the first quarter of 2024, we ceased our liquid staking activities with Liquid Collective protocol and reclaimed all our staked Ethereum. Since the first quarter of 2024, the Company has no liquid staking activities. In July 2025, we resumed liquid staking through the Liquid Collective protocol with 5,120 ETH. This approach provides flexibility to engage in both staking and restaking through a broader range of strategies and platforms.
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In the first quarter of 2024, the Company has restaked 3,008 ETH into EigenLayer, a protocol built on Ethereum that enables restaking of the already-staked ETH, through Figment. To mitigate potential risks, we restake our ETH without delegating to any operator and the Company received 33,568 EigenLayer in the fourth quarter of 2024 from this restaking activity. As of the date of this report, the reward earned in 2025 from this restaking activity is not significant.
For the six months ended June 30, 2025, we earned 377.8 ETH in native staking and nil ETH in liquid staking, respectively. For the six months ended June 30, 2025, we recognized revenues of $925,973 and $0 from native staking and liquid staking, respectively.
For the six months ended June 30, 2024, we earned 220.5 ETH in native staking and 1.3 ETH in liquid staking, respectively. For the six months ended June 30, 2024, we recognized revenues of $695,055 and $4,503 from native staking and liquid staking, respectively.
Our revenues from ETH native staking increased by $230,918, or 33.2%, to $925,973 for the six months ended June 30, 2025 from $695,055 for the six months ended June 30, 2024. The increase was primarily due to an increase of 157.3 ETH earned from staking services partially offset by a decrease in the average price of ETH for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Our revenues from ETH liquid staking decreased by $4,503, or 100%, to $0 for the six months ended June 30, 2025 from $4,503 for the six months ended June 30, 2024. The decrease was due to the termination of liquid staking activities in the first quarter of 2024.
Cost of revenue
We incur cost of revenue from digital asset mining, cloud services, colocation services, and ETH staking businesses.
The Company’s cost of revenue consists primarily of direct production costs associated with its core operations, excluding depreciation and amortization, which are separately stated in the Company’s consolidated statements of operations. Specifically, these costs consist of:
| i. | cloud services operations - electricity costs, datacenter lease expense, GPU servers lease expense, and other relevant costs |
| ii. | colocation services - electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs |
| iii. | mining operations - electricity costs, profit-sharing fees and other relevant costs |
| iv. | ETH staking business - service fee and reward-sharing fees to the service providers. |
Cost of revenue - cloud services
For the six months ended June 30, 2025 and 2024, the cost of revenue from cloud services was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 1,171,592 | $ | 226,421 | ||||
| Datacenter lease expenses | 2,639,653 | 1,306,110 | ||||||
| GPU servers lease expenses | 7,496,856 | 5,912,240 | ||||||
| Other costs | 1,171,019 | 307,857 | ||||||
| Total | $ | 12,479,120 | $ | 7,752,628 | ||||
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Electricity costs. These expenses were incurred by the data center for the high performance computing equipment and were closely correlated with the number of deployed GPU servers.
For the six months ended June 30, 2025, electricity costs increased by $0.9 million, or 417%, compared to the electricity costs incurred for the six months ended June 30, 2024. The increase primarily resulted from an increase in the number of deployed GPU servers.
Datacenter lease expenses. We entered into datacenter lease agreements for fixed monthly recurring costs.
For the six months ended June 30, 2025, datacenter lease expenses increased by $1.3 million, or 102%, compared to the datacenter lease expenses incurred for the six months ended June 30, 2024. The increase primarily resulted from two additional datacenter leases entered into after the second quarter of 2024.
GPU servers lease expenses. We entered into a GPU servers lease agreement to support our cloud services. The lease payment depends on the usage of the GPU servers.
For the six months ended June 30, 2025, GPU servers lease expenses increased by $1.6 million, or 27%, compared to the GPU servers lease expenses incurred for the six months ended June 30, 2024. The increase primarily resulted from a higher average number of GPU servers leased.
Cost of revenue - Colocation Services
In the fourth quarter of 2024, we acquired Enovum which provides colocation services. For the six months ended June 30, 2025 and 2024, the cost of revenue from colocation services was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 493,061 | $ | - | ||||
| Lease expenses | 307,277 | - | ||||||
| Wage expenses | 169,543 | - | ||||||
| Other costs | 230,001 | - | ||||||
| Total | $ | 1,199,882 | $ | - | ||||
Electricity costs. These expenses were closely correlated with the number of deployed servers hosted by the data center.
For the six months ended June 30, 2025, electricity costs totaled $0.5 million. We had no electricity costs for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
Lease expenses. These expenses were incurred by the data center for lease agreement for a fixed monthly recurring cost.
For the six months ended June 30, 2025, data center lease expenses totaled $0.3 million. We had no data center lease expenses for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
Wage expenses. These expenses represent the salaries and benefits of data center employees involved in the operation of our facilities.
For the six months ended June 30, 2025, wage expenses totaled $0.2 million. We had no wage expenses for the six months ended June 30, 2024 as we acquired Enovum in the fourth quarter of 2024, which provides colocation services.
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Cost of revenue - digital asset mining
For the six months ended June 30, 2025 and 2024, the cost of revenue from digital asset mining was comprised of the following:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Electricity costs | $ | 8,567,364 | $ | 15,264,702 | ||||
| Profit-sharing fees | 2,242,111 | 6,977,443 | ||||||
| Other costs | 1,389,999 | 1,280,628 | ||||||
| Total | $ | 12,199,474 | $ | 23,522,773 | ||||
Electricity costs. These expenses were incurred by mining facilities for the miners in operation and were closely correlated with the number of deployed miners.
For the six months ended June 30, 2025, electricity costs decreased by $6.7 million, or 44%, compared to the electricity costs incurred for the six months ended June 30, 2024. The decrease primarily resulted from a decrease in the number of deployed miners.
Profit-sharing fees. We enter into hosting agreements with certain mining facilities, which included performance fees calculated as a fixed percentage of net profit generated by the miners. We refer to these fees as profit-sharing fees.
For the six months ended June 30, 2025, profit-sharing fees decreased by $4.7 million, or 68%, compared to profit-sharing fees incurred in the six months ended June 30, 2024. The decrease in profit-sharing fees was primarily due to a lower bitcoin production and partially offset by the higher average BTC price for six months ended June 30, 2025.
Cost of revenue - ETH staking
For the six months ended June 30, 2025, cost of revenue from ETH staking business increased by $21,312, or 52%, compared to the cost of revenue incurred for the six months ended June 30, 2024. The increase was primarily driven by an increased number of staked ETH from 17,184 ETH in the six months ended June 30, 2024 to 21,568 ETH in the six months ended June 30, 2025.
Depreciation and amortization expenses
For the six months ended June 30, 2025 and 2024, depreciation and amortization expenses were $15.5 million and $15.2 million, respectively based on an estimated useful life of property, plant, and equipment.
Effective January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was made to better reflect the expected usage patterns and economic benefits of the assets. Refer to Note 2. Summary of Significant Accounting Policies.
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General and administrative expenses
For the six months ended June 30, 2025, our general and administrative expenses, totaling $27.9 million, were primarily comprised of professional and consulting expenses of $12.2 million, shared-based compensation expenses of $7.1 million, salary and bonus expenses of $3.2 million, marketing expenses of $1.0 million, travel expenses of $0.5 million, and directors and officers insurance expenses of $0.4 million.
For the six months ended June 30, 2024, our general and administrative expenses, totaling $11.4 million, were primarily comprised of shared-based compensation expenses of $0.9 million, salary and bonus expenses of $2.0 million, professional and consulting expenses of $4.9 million, directors and officers insurance expenses of $0.4 million, marketing expenses of $0.7 million, and travel expenses of $0.5 million.
Gains (losses) on digital assets
For the six months ended June 30, 2025, a loss of $22.1 million was recognized, primarily attributable to the decreases in the price of ETH as of June 30, 2025, partially offset by an increase in the price of bitcoin as of June 30, 2025.
For the six months ended June 30, 2024, a gain of $34.2 million was recognized, primarily attributable to the increases in the prices of bitcoin and ETH as of June 30, 2024.
Income tax provisions
Provision for income taxes consists of federal, state and foreign income taxes. Our income tax provision for the six months ended June 30, 2025 is primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, and the valuation allowance applied to the Company’s deferred tax assets in the United States, Singapore and Hong Kong. We continue to maintain a valuation allowance against the deferred tax assets in United States, Singapore and Hong Kong as the Company does not expect those deferred tax assets are “more likely than not” to be realized in the near future, particularly due to the uncertainty on macroeconomy, politics and profitability of the business.
Our income tax provision was $2.3 million and $2.1 million for the six months ended June 30, 2025 and 2024, respectively. The income tax provision did not change materially during the six months ended June 30, 2025 compared to the same period in 2024.
Net income (loss) and earnings (loss) per share
For the six months ended June 30, 2025, our net loss was $42.8 million, representing a change of $81.0 million from a net income of $38.1 million for the six months ended June 30, 2024.
Basic and diluted loss per share was $0.22 and $0.22 for the six months ended June 30, 2025, respectively. Basic and diluted earnings per share was $0.31 and $0.31 for the six months ended June 30, 2024, respectively.
Basic and diluted weighted average number of shares was 194,355,223 and 194,355,223 for the six months ended June 30, 2025, respectively. Basic and diluted weighted average number of shares was 121,362,883 and 122,374,103 for the six months ended June 30, 2024, respectively.
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Discussion of Certain Balance Sheet Items
The following table sets forth selected information from our consolidated balance sheets as of June 30, 2025 and December 31, 2024. This information should be read together with our consolidated financial statements and related notes included elsewhere in this report.
| June 30, | December 31, | Variance in | ||||||||||
| 2025 | 2024 | Amount | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 181,165,847 | $ | 95,201,335 | $ | 85,964,512 | ||||||
| Restricted cash | 3,732,792 | 3,732,792 | - | |||||||||
| Accounts receivable | 6,491,562 | 5,267,863 | 1,223,699 | |||||||||
| USDC | 515,242 | 411,413 | 103,829 | |||||||||
| Digital assets | 91,214,450 | 161,377,344 | (70,162,894 | ) | ||||||||
| Net investment in lease - current | 3,517,921 | 2,546,519 | 971,402 | |||||||||
| Loans receivable | 400,000 | 400,000 | - | |||||||||
| Other current assets | 26,715,156 | 28,319,669 | (1,604,513 | ) | ||||||||
| Total Current Assets | 313,752,970 | 297,256,935 | 16,496,035 | |||||||||
| Non-Current Assets | ||||||||||||
| Deposits for property, plant, and equipment | 21,066,026 | 39,059,707 | (17,993,681 | ) | ||||||||
| Property, plant, and equipment, net | 253,920,936 | 107,302,458 | 146,618,478 | |||||||||
| Goodwill | 20,190,268 | 19,383,291 | 806,977 | |||||||||
| Intangible Assets | 13,210,056 | 13,028,730 | 181,326 | |||||||||
| Operating lease right-of-use assets | 44,799,045 | 14,967,569 | 29,831,476 | |||||||||
| Net investment in lease - non-current | 9,367,633 | 6,782,479 | 2,585,154 | |||||||||
| Investment securities | 38,953,792 | 30,797,365 | 8,156,427 | |||||||||
| Deferred tax asset | 92,962 | 89,246 | 3,716 | |||||||||
| Other non-current assets | 8,065,349 | 9,579,884 | (1,514,535 | ) | ||||||||
| Total Non-Current Assets | 409,666,067 | 240,990,729 | 168,675,338 | |||||||||
| Total Assets | $ | 723,419,037 | $ | 538,247,664 | $ | 185,171,373 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ | 2,087,887 | $ | 3,418,172 | $ | (1,330,285 | ) | |||||
| Current portion of deferred revenue | 11,640,667 | 30,698,458 | (19,057,791 | ) | ||||||||
| Current portion of operating lease liability | 5,487,628 | 4,529,291 | 958,337 | |||||||||
| Income tax payable | 1,936,542 | 1,595,308 | 341,234 | |||||||||
| Dividend payable | - | 800,000 | (800,000 | ) | ||||||||
| Other payables and accrued liabilities | 18,943,717 | 13,985,375 | 4,958,342 | |||||||||
| Total Current Liabilities | 40,096,441 | 55,026,604 | (14,930,163 | ) | ||||||||
| Non-Current Liabilities | ||||||||||||
| Other long-term liabilities | 392,686 | 785,372 | (392,686 | ) | ||||||||
| Non-current portion of deferred revenue | 28,046 | 73,494 | (45,448 | ) | ||||||||
| Non-current portion of operating lease liability | 38,257,665 | 9,276,926 | 28,980,739 | |||||||||
| Long-term income tax payable | 3,196,204 | 3,196,204 | - | |||||||||
| Deferred tax liability | 8,259,351 | 6,409,915 | 1,849,436 | |||||||||
| Total Non-Current Liabilities | 50,133,952 | 19,741,911 | 30,392,041 | |||||||||
| Total Liabilities | $ | 90,230,393 | $ | 74,768,515 | $ | 15,461,878 | ||||||
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Cash and cash equivalents
Cash and cash equivalents primarily consist of funds deposited with banks, which are highly liquid and are unrestricted to withdrawal or use. The total balance of cash and cash equivalents were $181.2 million and $95.2 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the balance of cash and cash equivalents was a result of net cash of $35.1 million provided by operating activities and net cash of $199.3 million provided by financing activities, partially offset by net cash of $148.2 million used in investing activities.
Accounts receivable, net
Accounts receivable consists of amounts due from our customers. The total balance of accounts receivable was $6.5 million and $5.3 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the balance of accounts receivable is attributable to unpaid invoices from our customers.
USDC
USD Coin (“USDC”) is accounted for as a financial instrument; one USDC can be redeemed for one U.S. dollar on demand from the issuer. The balance of USDC was $0.5 million and $0.4 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the balance of USDC was primarily due to the receipt of USDC from sales of other digital assets of $1.2 million and receipt of USDC from other income of $40,100, partially offset by the payment of other expenses of $1.2 million.
Digital assets
Digital assets primarily consist of BTC and ETH. For the three months ended June 30, 2025, we earned digital assets from mining services and ETH staking services. We exchanged BTC into ETH or USDC, exchanged BTC and ETH into cash, or used BTC and ETH to pay certain operating costs and other expenses. Digital assets held are accounted for as intangible assets measured at fair value, with changes in fair value recorded in net income in each reporting period.
As compared with the balance as of December 31, 2024, the balance of digital assets as of June 30, 2025 decreased by $70.2 million, which was primarily attributable to exchange of bitcoins of $54.0 million into cash, exchange of bitcoins of $1.2 million into USDC, payment of ETH to investment fund of $7.0 million, and change in fair value of $22.0 million, partially offset by the generation of bitcoins of $14.4 million from our mining business.
Loans Receivable
Loans receivable consist of a loan issued by the Company to a third party. The total balance of loans receivable was $0.4 million and $0.4 million as of June 30, 2025 and December 31, 2024, respectively.
Net investment in lease
Net investment in lease represents the present value of the lease payments not yet received from lessee. The current and non-current balance of net investment in lease was $3.5 million and $9.4 million, respectively as of June 30, 2025. The current and non-current balance of net investment in lease was $2.5 million and $6.8 million, respectively as of December 31, 2024.
Deposits for property, plant, and equipment
The deposits for property, plant, and equipment consists of advance payments for property, plant, and equipment. The balance was derecognized once the control of the property, plant, and equipment was transferred to and obtained by us.
Compared with December 31, 2024, the balance as of June 30, 2025 decreased $18.0 million, mainly due to the receipt of property and equipment of $97.3 million, offset by prepayment of $79.3 million for property, plant and equipment.
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Property, plant, and equipment, net
Property, plant, and equipment primarily consisted of equipment used in our HPC business and digital asset business as well as construction in progress representing assets received but not yet put into service.
As of June 30, 2025, we had 22,574 bitcoin miners with net book value of $22.9 million, cloud service computing equipment with a net book value of $75.4 million, property, plant, and equipment for colocation service with a net book value of $82.9 million, and construction in progress of $70.0 million.
As of December 31, 2024, we had 24,239 bitcoin miners with net book value of $17.9 million, cloud service computing equipment with a net book value of $47.2 million, property, plant, and equipment acquired as part of the acquisition of Enovum with a net book value of $36.4 million for colocation service, and construction in progress of $5.1 million.
Operating lease right-of-use assets and operating lease liability
As of June 30, 2025, the Company’s operating lease right-of-use assets and total operating lease liability were $44.8 million and $43.7 million respectively. As of December 31, 2024, the Company’s operating lease right-of-use assets and total operating lease liability were $15.0 million and $13.8 million respectively
The increase in operating lease right-of-use assets and total operating lease liability of $29.8 million and $29.9 million respectively, were due to one additional data center lease entered in 2025, one additional capacity lease entered in 2025, one additional office lease entered in 2025, and one additional lease entered in 2025 for general and administrative purposes totaling $32.1 million, partially offset by the amortization of the operating lease right-of-use assets totaling $2.4 million for the six months ended June 30, 2025.
Investment Securities
As of June 30, 2025, our portfolio consists of investments in three funds, a privately held company via a simple agreement for future equity (“SAFE”), and four privately held companies over which the Company neither has control nor significant influence. The total balance of investment securities was $39.0 million and $30.8 million as of June 30, 2025, and December 31, 2024, respectively. The increase of $8.2 million in the value of our investment securities was mainly driven by an additional investment of $7.0 million in Innovation Fund I and an additional investment of $2.0 million in AI Innovation Fund I, which partially offset by downward fair value adjustments of $0.8 million.
Accounts payable
Accounts payable primarily consists of amounts due for costs related to our digital asset mining, cloud services, colocation services and ETH staking. Compared with December 31, 2024, the balance of accounts payable decreased by $1.3 million in the three months ended June 30, 2025, largely due to a higher volume of payments made.
Deferred revenue
Deferred revenue pertains to prepayments received from customers for HPC business.
As of June 30, 2025, the Company’s current and non-current portion of deferred revenue was $11.6 million and $28 thousand, respectively, compared to $30.7 million and $0.1 million, respectively, as of December 31, 2024. The decrease in deferred revenue of $19.1 million reflects the recognition of $22.5 million in revenue related to the successful fulfillment of performance obligations from our HPC services, partially offset by $3.4 million prepayments from customers for HPC services to be rendered in the future.
Long-term income tax payable
Compared with December 31, 2024, the balance as of June 30, 2025 did not change as no incremental penalty was accrued on the existing unrecognized tax benefits for the three months ended June 30, 2024. Refer to Note 15. Income Taxes, for more information.
Non-GAAP Financial Measures
In addition to consolidated U.S. GAAP financial measures, we consistently evaluate our use of and calculation of the non-GAAP financial measures, such as “Adjusted EBITDA”.
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EBITDA is computed as net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA is a financial measure defined as our EBITDA adjusted to eliminate the effects of certain non-cash and / or non-recurring items that do not reflect our ongoing strategic business operations, which management believes results in a performance measurement that represents a key indicator of the Company’s core business operations. The adjustments currently include fair value adjustments such as investment securities value changes and non-cash share-based compensation expenses, in addition to other income and expense items.
We believe Adjusted EBITDA can be an important financial measure because it allows management, investors, and our board of directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments.
Adjusted EBITDA is provided in addition to and should not be considered to be a substitute for, or superior to net income, the comparable measures under U.S. GAAP. Further, Adjusted EBITDA should not be considered as an alternative to revenue growth, net income, diluted earnings per share or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under U.S. GAAP.
Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP financial metric for historical periods are presented in the table below:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Reconciliation of non-GAAP income (loss) from operations: | ||||||||||||||||
| Net income (loss) | $ | 14,874,202 | $ | (11,953,100 | ) | $ | (42,837,443 | ) | $ | 38,128,757 | ||||||
| Depreciation and amortization expenses | 8,223,538 | 8,346,633 | 15,465,527 | 15,192,582 | ||||||||||||
| Income tax expenses | 1,591,557 | 541,781 | 2,263,273 | 2,119,131 | ||||||||||||
| EBITDA | 24,689,297 | (3,064,686 | ) | (25,108,643 | ) | 55,440,470 | ||||||||||
| Adjustments: | ||||||||||||||||
| Net loss from disposal of property and equipment | - | - | 333,620 | - | ||||||||||||
| Share based compensation expenses | 6,890,646 | 423,736 | 7,143,036 | 916,335 | ||||||||||||
| Changes in fair value of long-term investments | (3,816,856 | ) | (1,182,792 | ) | 875,572 | (1,637,497 | ) | |||||||||
| Adjusted EBITDA | $ | 27,763,087 | $ | (3,823,742 | ) | $ | (16,756,415 | ) | $ | 54,719,308 | ||||||
Liquidity and capital resources
As of June 30, 2025, we had working capital of $273.7 million which includes USDC of $0.5 million and digital assets of $91.2 million as compared with working capital of $242.2 million as of December 31, 2024. Working capital is the difference between the Company’s current assets and current liabilities.
To date, we have financed our operations primarily through cash flows from operations, and equity financing through public and private offerings of our securities. We plan to support our future operations primarily from cash generated from our operations and equity financings. We may also consider debt, preferred and convertible financing on favorable terms.
We believe our existing cash will be sufficient to fund our anticipated operating cash requirements for at least twelve months following the date of this filing.
We have sold from time to time in one or more offerings at the market (ATM) at prices and on terms which the Company will then determine for an initial aggregate offering price of $500 million pursuant to a registration statement on Form F-3 declared effective by the SEC on May 4, 2022.
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Between May and August 2023, the Company issued an aggregate of 6,747,663 ordinary shares to Ionic Ventures LLC for gross proceeds of $22.0 million. The Company received net proceeds of approximately $21.0 million after deducting commissions payable to the placement agent.
In 2023, the Company sold an aggregate of 14,744,026 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $45.3 million, net of offering costs.
In 2024, the Company sold an aggregate of 67,246,628 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $242.9 million, net of offering costs.
In the first quarter of 2025, the Company sold an aggregate of 3,149,887 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $10.2 million, net of offering costs.
In the second quarter of 2025, the Company sold an aggregate of 25,504,699 ordinary shares in connection with the at-the-market offering. The Company received net proceeds of $48.3 million, net of offering costs.
On October 11, 2024, the Company acquired all of the issued and outstanding capital stock of Enovum Data Centers Corp. in a transaction valued at approximately CAD 62.8 million (approximately 46.0 million).
On April 29, 2025, the Company filed a registration statement on Form S-3 (No. 333-286841) to register up to $500 million of its Ordinary Shares, preference shares, debt securities, warrants, units and subscription rights (the “Registration Statement”).
In June 2025, the Company completed an underwritten public offering of its ordinary shares registered under the Registration Statement. In accordance with the terms of the underwriting agreement entered into with B. Riley Securities, Inc., as representative of the several underwriters, the Company sold 75,000,000 ordinary shares at a price to the underwriters of $1.90 per share. The Company received net proceeds of approximately $141.6 million, after deducting the underwriting discount and offering expenses. On July 1, 2025, the underwriters related to this public offering fully exercised their option to purchase an additional 11,250,000 ordinary shares, resulting in additional net proceeds to the Company of $21.3 million, after deducting the underwriting discount and offering expenses.
On July 15, 2025, the Company entered into a registered direct offering with B. Riley Securities, Inc. relating to its ordinary shares. In accordance with the terms of the sales agreement, the Company agreed to issue and sell 22,000,000 ordinary shares having an aggregate purchase price of $63.6 million, net of offering costs. The registered direct offering closed on July 15, 2025. The Company intends to use the net proceeds from the registered direct offering to purchase Ethereum.
Revenue from Operations
Funding our operations on a going-forward basis will rely significantly on the revenue earned from our high performance computing business, as well as our ability to earn ETH rewards from ETH staking business and the spot or market price of ETH.
On October 23, 2023, Bit Digital announced that it had commenced AI operations by signing a binding term sheet with a customer (the “Initial Customer”) to support the customer’s GPU workloads. On December 12, 2023, we finalized a Master Services and Lease Agreement (“MSA”), as amended, with our Initial Customer for the provision of cloud services from a total of 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, selling 96 AI servers (equivalent to 768 GPUs) and leasing them back for three years. The total contract value with the Initial Customer for the aggregated 2,048 GPUs was estimated to be worth more than $50 million of annualized revenue. On January 22, 2024, approximately 192 servers (equivalent to 1,536 GPUs) were deployed at a specialized data center and began generating revenue, and subsequently on February 2, 2024, approximately an additional 64 servers (equivalent to 512 GPUs) also started to generate revenue.
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In the second quarter of 2024, we finalized an agreement to supply our Initial Customer with an additional 2,048 GPUs over a three-year period. To finance this operation, we entered into a sale-leaseback agreement with a third party, agreeing to sell 128 AI servers (equivalent to 1,024 GPUs) and leasing them back for three years. In late July, at the customer’s request, we agreed with the customer to temporarily delay the purchase order so the customer could evaluate an upgrade to newer generation Nvidia GPUs. Consequently, the Company and manufacturer postponed the purchase order. In early August, the customer made a non-refundable prepayment of $30.0 million for the services to be rendered under this agreement.
In January 2025, the Company entered into a new agreement to supply its Initial Customer with an additional 464 GPUs for a period of eighteen months. This new agreement replaces the prior agreement whereby the Company was to provide the customer with an incremental 2,048 H100 GPUs. The contract represents approximately $15 million of annualized revenue and features a two-month prepayment from the customer. The customer has elected to defer the commencement date until August 20th, 2025, which is the latest allowable date under the agreement.
On October 9, 2024, we executed a Master Service Agreement (the “MSA”) with Boosteroid Inc. (“Boosteroid”), a global cloud gaming provider. Following execution of a binding term sheet with Boosteroid on August 19, 2024, we finalized initial orders of 489 GPUs, projected to generate approximately $7.9 million in contracted value in the aggregate through November 2029. The GPUs have been delivered to respective data centers across the U.S. and Europe and began earning fees in November 2024. The MSA provides Boosteroid with the option to expand in increments of 100 servers, up to 50,000 servers, representing a potential contract value of approximately $700 million over the five-year term assuming Boosteroid utilizes the GPUs and services at full capacity for the duration of the contract. Expansion depends upon the internal development roadmap of Boosteroid, Boosteroid has full discretion to decide when and the quantity to pursue separate source orders (for GPU servers) under the MSA. In the third quarter of 2025, the Company finalized additional purchase orders for 302, 120, and 279 GPUs, totaling approximately $10.4 million in contracted value over a five-year term.
On December 30, 2024, we entered into a Master Services Agreement (“MSA”) with a minimum purchase commitment of 32 GPUs, along with an associated purchase order, from a new customer, an AI Compute Fund managed by DNA Holdings Venture Inc. (“DNA Fund”). The purchase order provides for services utilizing a total of 576 H200 GPUs over a twenty-five month period, terminable by either party upon at least 90 days’ written notice prior to any renewal date. It represents an aggregate revenue opportunity of approximately $20.2 million. Concurrently, we placed a purchase order for 130 H200 servers for approximately $30 million. The deployment commenced in February 2025. In April 2025, the Company signed two additional cloud services agreements with DNA Fund. The first agreement, commencing in early May, includes 104 NVIDIA H200 GPUs under a 23-month term. The second, commencing mid-May, includes 512 H200 GPUs under a 24-month term. With these additions, DNA Fund’s total contracted deployment increased to 1,192 GPUs. Combined, the agreements represent approximately $20.9 million of annualized revenue.
Regardless of our ability to generate revenue from our high performance computing business, or our Ethereum staking business, we may need to raise additional capital in the form of equity or debt to fund our operations and pursue our business strategy. The ability to raise funds such as equity, debt or conversion of digital assets to maintain our operations is subject to many risks and uncertainties and, even if we are successful, future equity issuances would result in dilution to our existing stockholders and any future debt or debt securities may contain covenants that limit our operations or ability to enter into certain transactions. Our ability to realize revenue through conversion of digital assets into cash or fund overhead with digital assets is subject to a number of risks, including regulatory, financial and business risks, many of which are beyond our control. Additionally, the value of digital asset rewards has historically been extremely volatile, and future prices cannot be predicted.
If we are unable to generate sufficient revenue when needed or secure additional funding, it may become necessary to significantly reduce our current rate of expansion or to explore other strategic alternatives.
Cash flows
| For the Six Months Ended June 30, | ||||||||
| 2025 | 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 (decrease) increase in cash, cash equivalents and restricted cash | 86,168,389 | 43,243,230 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (203,877 | ) | - | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 98,934,127 | 18,180,934 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 184,898,639 | $ | 61,424,164 | ||||
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Operating Activities
Net cash provided by operating activities was $35.1 million for the six months ended June 30, 2025, derived mainly from (i) a net loss of $42.8 million for the six months ended June 30, 2025 adjusted for digital assets mined of $14.4 million from our mining services, depreciation expenses and amortization expense of $15.5 million, losses on digital assets of $22.1 million, share based compensation expenses of $7.1 million, loss from disposal of property, plant, and equipment of $0.3 million, and changes in fair value of investment security of $0.9 million, and (ii) net changes in our operating assets and liabilities, principally comprising of a decrease in digital assets and stable coins of $54.0 million, decrease in deferred revenue of $19.0 million, an increase in accounts receivable of $1.2 million, an increase in other payable and accrued liabilities of $5.3 million, a decrease in net investment in lease of $1.3 million, a decrease in accounts payable of $0.3 million, a decrease in other current assets of $3.9 million, and a decrease in other non-current assets of $1.6 million.
Net cash used in operating activities was $30.4 million for the six months ended June 30, 2024, derived mainly from (i) a net income of $38.1 million for the six months ended June 30, 2024 adjusted for digital assets of $38.0 million from our mining services, depreciation expenses of property and equipment of $15.2 million, unrealized gain on digital assets held in fund of $2.7 million, and gains on digital assets of $34.2 million, and (ii) net changes in our operating assets and liabilities, principally comprising of a decrease in deferred revenue of $13.1 million, decrease in other payable and accrued liabilities of $3.7 million, and a decrease in net investment in lease of $2.9 million, offset by and an increase in accounts payable of $3.8 million and other current assets of $8.4 million.
Investing Activities
Net cash used in investing activities was $148.2 million for the six months ended June 30, 2025, primarily attributable to purchases of and deposits made for property, plant, and equipment of $147.1 million, investment in equity securities of $2.0 million, and proceeds from disposal of property, plant and equipment of $0.9 million.
Net cash used in investing activities was $6.7 million for the six months ended June 30, 2024, primarily attributable to purchases of and deposits made for property and equipment of $5.6 million, investment in a SAFE of $1.0 million and investment in one equity investee of $0.1 million.
Financing Activities
Net cash provided by financing activities was $199.3 million for the six months ended June 30, 2025, attributable to net proceeds of $58.5 million from the at-the-market offering, net proceeds of $141.6 million from the public offering, and offset by the payment of dividends of $0.8 million.
Net cash provided by financing activities was $80.3 million for the six months ended June 30, 2024, attributable to net proceeds of $80.3 million from the at-the-market offering.
Royal Bank of Canada Credit Facility
On June 18, 2025, the Company entered into a definitive credit agreement with the Royal Bank of Canada (“RBC”), the largest bank in Canada, to finance its data centers business. The facility provides up to CAD $60 million (approximately USD $43.8) in aggregate financing. Proceeds will be used to support the continued buildout of the Company’s HPC data center portfolio. Refer to Data Centers section above for further details.
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Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues, and expenses, to disclose contingent assets and liabilities on the dates of the unaudited condensed consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting periods. The most significant estimates and assumptions include, but are not limited to, the valuation of current assets, useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates as a result of changes in our estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this release reflect the more significant judgments and estimates used in preparation of our unaudited condensed consolidated financial statements. For a summary of significant accounting policies, refer to Note 2. Summary of Significant Accounting Policies in our Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere herein.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable. A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.
Based on this evaluation, our management, with the participation of our Chief Executive Officer and our Principal Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in conducting a cost-benefit analysis of possible controls and procedures.
Changes in Internal Control over Financial Reporting
In October 2024, we acquired 100% of the equity interests of Enovum Data Centers Corp (“Enovum”). We are currently in the process of integrating Enovum’s operations, control processes, and information systems into our systems and control environment and expect to include them in scope of design and operation of our internal control over financial reporting for the year ending December 31, 2025. We believe that we have taken the necessary steps to monitor and maintain appropriate internal control over financial reporting during this integration. Other than changes made in connection with the acquisitions, there were no changes in our internal control over financial reporting during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Except as set forth herein, there have been no changes since the filing of the Company’s Form 10-K for the year ended December 31, 2024 and the Company’s Form 10-Q for the period ended March 31, 2025.
On June 3, 2024, the Company filed suit in Delaware Superior Court against Blockfusion, Inc. (“Blockfusion”) alleging claims for breach of contract, conversion, and related claims in connection with, among other things, certain deposits and advances paid to Blockfusion, the return of which is owed to Bit Digital. Bit Digital is seeking in excess of $4.3 million. On October 22, 2024, Blockfusion denied the Company’s claims and brought reciprocal breach of contract and related counterclaims. Following limited discovery, the Court entered a stipulation and order on June 18, 2025, amending the Case Management Order to extend multiple discovery deadlines and vacate the previously scheduled trial date. On August 1, 2025, the Company moved for leave to file a Second Amended Complaint, which adds claims for fraud and related causes of action arising out of Blockfusion’s conduct both at the inception of and during the parties’ relationship. The Second Amended Complaint also names Blockfusion’s CEO, Alexander Martini-Lomanto, as an additional defendant. The Company continues to seek the recovery of its original investment, invoice payments, and unpaid late development fees, and now seeks additional damages for the tort and equitable claims contained in the Second Amended Complaint pending Court approval, including punitive damages. If the Company’s Second Amended Complaint is ultimately accepted by the Court, the total amount of damages sought will be in excess of $5 million.
Item 1A. Risk Factors
The Company is not required to provide the information called for in this item due to its status as a Smaller Reporting Company. You should refer to the other information set forth in this report, including the information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our consolidated financial statements and the related notes. Our business prospects, financial condition or results of operations could be adversely affected by any of these risks.
Please note in considering the “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 (Annual Report) that, notwithstanding the fact that Bit Digital, Inc. has not conducted operations in the PRC since September 30, 2021, we have previously disclosed under Risk Factors in our Annual Report. “We may be subject to fines and penalties for any noncompliance with or any liabilities in our former business in China in a certain period from now on.” Although the statute of limitations for non-compliance by our former business in the PRC is generally two years and the Company has been out of the PRC, for more than two years, the Authority may still find its prior bitcoin mining operations involved a threat to financial security. In such event, the two-year period would be extended to five years.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None. Previously reported on Form 8-K.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three months ended June 30, 2025, no
director or officer of the Company
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Item 6. Exhibits.
(a) Exhibits.
| * | Filed herewith (unless otherwise noted as being furnished herewith). |
| ** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| + | Certain portions of this exhibit have been redacted in accordance with Item 601(b)(10) of Regulation S-K. |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Bit Digital, Inc. | |
| Date: August 14, 2025 | By: | /s/ Sam Tabar |
| Sam Tabar | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Erke Huang |
| Erke Huang | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) |
|
Date: August 14, 2025 |
By: | /s/ Justin Zhu |
| Justin Zhu | ||
| Chief Accounting Officer and Senior Vice President of Finance | ||
| (Principal Financial Officer) |
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