Bit Digital, Inc 6-K, filed Aug 30, 2022

Bit Digital, Inc (BTBT)

6-K 2022-08-30 For: 2022-08-30

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Added on April 11, 2026

About this 6-K

Bit Digital, Inc filed this 6-K on August 30, 2022.

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	Bit Digital, Inc.
	(Registrant)

	By:	/s/ Bryan Bullett
	Name:	Bryan Bullett
	Title:	Chief Executive Officer

	●	Subsequent to quarter end, the Company announced that it had finalized an agreement for 5 megawatts of incremental hosting capacity to power its miners. The facility is located in Canada and primarily utilizes hydroelectric energy.

	●	Approximately 69% of our fleet’s run-rate electricity consumption was generated from carbon-free energy sources as of June 30, 2022, based on data provided by our hosts, publicly available sources, and internal estimates, demonstrating our commitment to sustainable practices in the digital asset mining industry.

Model	Owned as of June 30, 2022
MicroBT Whatsminer M21S		15,293
Bitmain Antminer S19 Pro Series		12,005
MicroBT Whatsminer M20S		3,681
Bitmain Antminer S17		3,641
MicroBT Whatsminer M10		1,938
Bitmain Antminer T3		769
Bitmain Antminer T17+		500
MicroBT Whatsminer M30S		261
Bitmain Antminer T17+		44
MicroBT Whatsminer M50S		3
Total number for bitcoin miners		38,135
Innosilicon A10 series ETH miners		731
Total miners		38,866

	Number of bitcoins ⁽¹⁾			Amount ⁽²⁾

Balance at December 31, 2021		808.23		$	35,025,158
Receipt of BTC from mining services		391.76			14,533,217
Sales of and payments made in BTC		(339.42	)		(14,900,799	)
Realized gain on sale of BTC		-			3,692,990
Impairment of BTC		-			(23,044,783	)
Balance at June 30, 2022		860.57		$	15,305,783

	For the Three Months Ended June 30,						Variance
	2022			2021			in Amount
Revenue from digital asset mining	$	6,815,000		$	28,342,694			(21,527,694	)

Operating costs and expenses
Cost of revenue (exclusive of depreciation and amortization shown below)		(3,584,145	)		(10,883,650	)		7,299,505
Depreciation and amortization expenses		(5,322,120	)		(2,348,657	)		(2,973,463	)
General and administrative expenses		(4,598,238	)		(4,335,983	)		(262,255	)
Total operating expenses		(13,504,503	)		(17,568,290	)		4,063,787

(Loss) Income from Operations		(6,689,503	)		10,774,404			(17,463,907	)

Realized gain on exchange of digital assets		2,115,301			(3,503,845	)		5,619,146
Impairment of digital assets		(13,639,386	)		(9,045,007	)		(4,594,379	)
Gain from disposal of property and equipment		1,280,328			43,436			1,236,892
Other (expenses) income, net		(20,179	)		493,519			(513,698	)
Total other expenses, net		(10,263,936	)		(12,011,897	)		1,747,961	)

Loss before income taxes		(16,953,439	)		(1,237,493	)		(15,715,946	)

Income tax benefits (expenses)		(1,171,293	)		(101,907	)		(1,069,386	)
Net loss	$	(18,124,732	)	$	(1,339,400	)		(16,785,332	)

	For the Six Months Ended June 30,						Variance
	2022			2021			in Amount
Revenue from digital asset mining	$	15,388,747		$	72,295,744			(56,906,997	)

Operating costs and expenses
Cost of revenue (exclusive of depreciation and amortization shown below)		(7,852,396	)		(23,351,378	)		15,498,982
Depreciation and amortization expenses		(9,121,749	)		(5,999,031	)		(3,122,718	)
General and administrative expenses		(8,870,933	)		(6,561,153	)		(2,309,780	)
Total operating expenses		(25,845,078	)		(35,911,562	)		10,066,484

(Loss) Income from Operations		(10,456,331	)		36,384,182			(46,840,513	)

Realized gain on exchange of digital assets		3,752,324			6,952,652			(3,200,328	)
Impairment of digital assets		(23,684,989	)		(9,045,007	)		(14,639,982	)
Gain from disposal of property and equipment		1,454,896			43,436			1,411,460
Gain from sale of investment security		1,039,999			-			1,039,999
Other (expenses) income, net		(591,069	)		495,710			(1,086,779	)
Total other expenses, net		(18,028,839	)		(1,553,209	)		(16,475,630	)

(Loss) Income before income taxes		(28,485,170	)		34,830,973			(63,316,143	)

Income tax benefits (expenses)		180,649			(384,049	)		564,698
Net (loss) income	$	(28,304,521	)	$	34,446,924			(62,751,445	)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2022			2021		2022			2021
Reconciliation of non-GAAP (loss) income from operations:
(Loss) Income from Operations	$	(6,689,503	)	$	10,774,404	$	(10,456,331	)	$	36,384,182
Depreciation and amortization expenses		5,322,120			2,348,657		9,121,749			5,999,031
Share based compensation expenses		593,413			-		1,057,313			453,472
Non-GAAP (Loss) Income from Operations	$	(773,970	)	$	13,123,061	$	(277,269	)	$	42,836,685

	June 30,			December 31,
	2022			2021
ASSETS
Current Assets
Cash and cash equivalents	$	44,295,291		$	42,398,528
Restricted cash		1,320,000			-
Digital assets		26,945,910			51,112,146
Income tax receivable		171,362			-
Other current assets		5,695,638			3,050,616
Total Current Assets		78,428,201			96,561,290

Non-Current Assets
Investment security		333,334			1,000,000
Deposits for property and equipment		4,094,881			43,094,881
Property and equipment, net		89,995,943			32,489,158
Deferred tax assets		-			58,081
Other non-current assets		6,112,861			6,714,571
Total Non-Current Assets		100,537,019			83,356,691

Total Assets	$	178,965,220		$	179,917,981

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payables	$	1,944,502		$	2,608,899
Income tax payable		-			559,774
Other payables and accrued liabilities		2,151,858			1,875,933
Total Current Liabilities		4,096,360			5,044,606

Non-Current Liabilities
Deferred tax liabilities		-			462,372
Long-term income tax payable		2,905,640			2,767,276
Total Non-Current Liabilities		2,905,640			3,229,648

Total Liabilities		7,002,000			8,274,254

Commitments and Contingencies

Shareholders’ Equity
Preferred shares, $0.01 par value, 10,000,000 and nil shares authorized, 1,000,000 and nil shares issued and outstanding of June 30, 2022 and December 31, 2021, respectively		9,050,000			9,050,000
Ordinary shares, $0.01 par value, 340,000,000 and 50,000,000 shares authorized, 82,420,171 and 69,591,389 shares issued and outstanding of June 30, 2022 and December 31, 2021, respectively		824,202			695,914
Treasury stock, at cost, 129,986 and 115,514 shares as of June 30, 2022 and December 31, 2021, respectively		(1,171,679	)		(1,094,859	)
Additional paid-in capital		211,441,705			182,869,159
Accumulated deficit		(48,181,008	)		(19,876,487	)
Total Shareholders’ Equity		171,963,220			171,643,727
Total Liabilities and Shareholders’ Equity	$	178,965,220		$	179,917,981

	Preferred Shares				Common Shares				Treasury			Additional paid-in		Retained earnings (Accumulated			Total stockholders’
	Shares		Amount		Shares		Par Value		Stocks			capital		deficits)			equity
Balance, December 31, 2020		-	$	-		48,043,788	$	480,438	$	-		$	53,219,626	$	(15,700,489	)	$	37,999,575
Issuance of ordinary shares pursuant to a private placement		-		-		262,082		2,621		-			1,176,747		-			1,179,368
Net income		-		-		-		-		-			-		35,786,323			35,786,323
Balance, March 31, 2021		-	$	-		48,305,870	$	483,059	$	-		$	54,396,373	$	20,085,834		$	74,965,266
Issuance of ordinary shares pursuant to conversion of convertible note		-		-		279,662		2,797		-			1,277,203		-			1,280,000
Issuance of ordinary shares pursuant to direct offerings		-		-		5,240,477		52,405		-			28,497,595		-			28,550,000
Share based compensation in connection with issuance of ordinary shares		-		-		80,232		802		-			932,296		-			933,098
Issuance of ordinary shares in connection with share-based compensation		-		-		-		-		-			453,472		-			453,472
Net income		-		-		-		-		-			-		(1,339,400	)		(1,339,400	)
Balance, June 30, 2021		-	$	-		53,906,241	$	539,063	$	-		$	85,556,939	$	18,746,434		$	104,842,436

Balance, December 31, 2021		1,000,000	$	9,050,000		69,591,389	$	695,914	$	(1,094,859	)	$	182,869,159	$	(19,876,487	)	$	171,643,727
Withholding of ordinary shares for payment of employee withholding taxes		-		-		-		-		(76,820	)		-		-			(76,820	)
Issuance of ordinary shares in connection with share-based compensation		-		-		52,442		524		-			450,472		-			450,996
Issuance of share options in connection with share-based compensation		-		-		-		-		-			12,904		-			12,904
Net loss		-		-		-		-		-			-		(10,179,789	)		(10,179,789	)
Balance, March 31, 2022		1,000,000	$	9,050,000		69,643,831	$	696,438	$	(1,171,679	)	$	183,332,535	$	(30,056,276	)	$	161,851,018
Issuance of restricted shares in connection with share-based compensation		-		-		53,442		535		-			496,262		-			496,797
Issuance of ordinary shares in connection with share-based compensation		-		-		245,098		2,451		-			997,549		-			1,000,000
Share-based compensation in connection with share options to employees and consultant		-		-		-		-		-			92,605		-			92,605
Issuance of ordinary shares in connection with private placements with an institutional investor		-		-		10,990,327		109,903		-			20,900,097		-			21,010,000
Issuance of ordinary shares in exchange of bitcoin miners		-		-		1,487,473		14,875		-			5,622,657		-			5,637,532
Net loss		-		-		-		-		-			-		(18,124,732	)		(18,124,732	)
Balance, June 30, 2022		1,000,000	$	9,050,000		82,420,171	$	824,202	$	(1,171,679	)	$	211,441,705	$	(48,181,008	)	$	171,963,220

	For the Six Months Ended June 30,
	2022			2021
Cash Flows from Operating Activities:
Net (loss) income	$	(28,304,521	)	$	34,446,924
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation of property and equipment		9,121,749			5,999,031
Gain from disposal of property and equipment		(1,454,896	)		(43,436	)
Realized gain on exchange of digital assets		(3,752,324	)		(6,952,652	)
Impairment of digital assets		23,684,989			9,045,007
Gain from sale of investment security		(1,039,999	)		-
Share based compensation expenses in connection with issuance of restricted share units and share options		1,057,313			509,794
Share based compensation expenses in connection with issuance of ordinary shares		-			933,098
Liquidation damage expenses		619,355			-
Gain from divestiture of a subsidiary		(52,383	)		-
Deferred tax (benefits) expenses		(404,291	)		47,684
Changes in operating assets and liabilities:
Digital assets		(15,388,743	)		(71,579,052	)
Other current assets		(740,858	)		(1,750,324	)
Other non-current assets		601,710			-
Accounts payables		697,185			22,985,200
Income tax recoverable/payable		(731,092	)		211,365
Long-term income tax payable		138,364			-
Other payables and accrued liabilities		682,095			1,325,382
Net Cash Used in Operating Activities		(15,266,347	)		(4,821,979	)

Cash Flows from Investing Activities:
Purchases of property and equipment		(19,310,398	)		(686,538	)
Proceeds from sales of property and equipment		958,060			-
Proceeds from sales of digital assets		19,252,500			3,539,450
Purchases of digital assets		(1,998,002	)		-
Proceeds from disposal of long-term investment		850,000			-
Loss of cash in connection with divestiture of a subsidiary		(59,695	)		-
Net Cash (Used in) Provided by Investing Activities		(307,535	)		2,852,912

Cash Flows from Financing Activities:
Payment of liquidated damages related to private placement transactions		(2,219,355	)		-
Proceeds from issuance of ordinary shares under private placements, net of issuance costs		21,010,000			-
Proceeds from issuance of ordinary shares under direct offering		-			28,550,000
Proceeds from issuance of convertible notes, net of issuance costs		-			1,280,000
Repayment of borrowings to related parties		-			(12,000	)
Net Cash Provided by Financing Activities		18,790,645			29,818,000

Effect of exchange rate changes on cash and cash equivalents		-			-
Net decrease in cash, cash equivalents and restricted cash		3,216,763			27,848,933
Cash, cash equivalents and restricted cash, beginning of period		42,398,528			405,133
Cash, cash equivalents and restricted cash, end of period	$	45,615,291		$	28,254,066

Supplemental Cash Flow Information
Cash paid for interest expense	$	-		$	-
Cash paid for income tax	$	734,150		$	125,000

Non-cash Transactions of Investing and Financing Activities
Collection of USDC from private placement	$	-		$	1,179,368
Receivable due from three third parties for sales of miners	$	-		$	5,410,349
Investment in an investment security in USDC	$	-		$	(1,000,000	)
Purchases of property and equipment in USDT	$	-		$	(17,503,910	)
Purchases of property and equipment in USDC	$	(1,658,980	)	$	(895,893	)
Purchases of property and equipment by issuance of ordinary shares	$	(5,637,532	)	$	-
Receipt of property and equipment which were prepaid	$	39,000,000		$	-
Payable for purchases of property and equipment	$	(1,297,598	)	$	-
Payment of deposits on equipment in BTC	$	-		$	(9,327,997	)
Repayment of USDC to a related party	$	-		$	(329,722	)
Receivable due from a third party for sales of investment security	$	856,665		$	-
Collection of USDC from sales of property and equipment	$	712,800		$	-

Name	Background	Ownership
Bit Digital USA, Inc. (“BT USA”)	● A United States company ● Incorporated on September 1, 2020 ● Engaged in digital asset mining business	100% owned by Bit Digital, Inc.
Bit Digital Canada, Inc. (“BT Canada”)	● A Canadian company ● Incorporated on February 23, 2021 ● Engaged in bitcoin mining business	100% owned by Bit Digital, Inc.
Bit Digital Hong Kong Limited (“BT HK”)	● A Hong Kong company ● Acquired on April 8, 2020 ● Engaged in bitcoin mining related business	100% owned by Bit Digital, Inc.
Bit Digital Strategies Limited (“BT Strategies”)	● A Hong Kong company ● Incorporated on June 1, 2021 ● Engaged in treasury management activities	100% owned by Bit Digital, Inc.
Bit Digital Singapore PTE. LTD. (“BT Singapore”)	● A Singapore company ● Incorporated on July 1, 2021 ● Engaged in treasury management activities	100% owned by Bit Digital, Inc.

	●	Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

	●	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.

	Number of RSUs			Weighted average grant date fair value

Awarded and unvested as of January 1, 2022		178,676		$	13.67
Granted		24,000		$	3.75
Vested		(111,484	)	$	11.79
Awarded and unvested as of June 30, 2022		91,192		$	13.54
Expected to vest as of June 30, 2022		91,192		$	13.54

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (in years)

Options outstanding on December 31, 2021		—		—		—
Granted		325,000	$	3.30		2.31
Forfeited		—		—		—
Expired		—		—		—
Exercised		—		—		—
Options outstanding on June 30, 2022		325,000	$	3.30		2.02
Vested and exercisable on June 30, 2022		36,458		3.27		2.02
Vested and expected to vest on June 30, 2022		325,000	$	3.30		2.02

	As of October 4, 2021

Volatility		192.85	%
Stock price		7.59
Expected life of the warrants to convert		3.81
Risk free rate		0.97	%
Dividend yield		0.0	%