NEW
YORK, April 28, 2023 /PRNewswire/ -- Bit
Digital, Inc. (Nasdaq: BTBT) (the "Company"), a digital asset
mining company headquartered in New York
City, announced that it filed its annual report on Form 20-F
for the fiscal year ended December 31,
2022 with the U.S. Securities and Exchange Commission
("SEC") on April 27, 2023.
Financial Highlights for Fiscal Year 2022
- Total revenue was $32.3 million
for the fiscal year 2022.
- For the year ended December 31,
2022, we recognized revenue of $31.4
million and $0.9 million from
bitcoin mining services and ETH mining
services, respectively.
- The Company had cash, cash equivalents and restricted cash of
$34.0 million, and total liquidity
(defined as cash equivalents and restricted cash, USDC and digital
assets) of approximately $62.2
million, as of December 31,
2022.
- Net loss was $(105.3) million, or
$(1.34) per share for the
twelve-month period ended December 31,
2022. Net loss includes a $(50.0)
million impairment of fixed assets charge and a $(24.7) million impairment of digital assets
charge.
Operational Highlights for Fiscal Year 2022
- The Company earned 1,247.5 bitcoins during the year.
- The Company generated 294.3 ETH during the year
from mining activities. Bit Digital suspended the ETH
mining operations by September 2022
due to Ethereum blockchain switching from
proof-of-work ("PoW") consensus mechanism to proof-of-stake ("PoS")
validation.
- Treasury holdings of BTC and ETH were 946.3 and
8,799.9, with a fair market value of approximately $15.7 million and $10.5
million on December 31, 2022,
respectively.
- The BTC equivalent[1] of our digital asset holdings
as of December 31, 2022 (defined as
if all ETH, sETH-H, and USDC holdings were converted
into BTC as of that date and added to our BTC holdings) was
approximately 1,765.6 BTC, with a fair market value of
approximately $29.2 million as of
that date.
- The Company owned 37,676 bitcoin miners and 730
Ethereum miners as of December
31, 2022, with an estimated maximum total hash rate of 2.6
EH/s and 0.3 TH/s, respectively.
- The Company's active hash rate of its bitcoin
mining fleet was approximately 1.23 EH/s as of December 31, 2022.
- Approximately 85% of our fleet's run-rate electricity
consumption was generated from carbon-free energy sources as of
December 31, 2022, compared to 67% as
of December 31, 2021. These figures
are 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.
- As of June 30, 2022, the Company
had received the entirety of its previously announced 10,000-unit
miner purchase from Bitmain Technologies Limited. The Company
currently has no outstanding payment obligations for miner
purchases.
- During the second quarter of 2022, the Company signed a new 20
MW hosting agreement with Coinmint LLC ("Coinmint"). All of this
capacity has been delivered as of the date of this Report.
- During the third quarter of 2022, the Company finalized an
agreement with Blockbreakers Inc. for 5 megawatts of incremental
hosting capacity to power its miners. The facility is located in
Canada and primarily utilizes
hydroelectric energy.
- The Company sold 1,106 MicroBT Whatsminer M21S miners and 9
MicroBT Whatsminer M20S miners and wrote off 1 Innosilicon A10
series ETH miner during fiscal year 2022.
Subsequent Events
- On March 22, 2023, Bit Digital
announced a strategic realignment of its executive leadership team.
Effective March 31, 2023,
Bryan Bullett, the Company's Chief
Executive Officer, concluded his term as CEO and assumed the role
of Senior Advisor, in which he will lead strategic growth
initiatives for the Company. Sam
Tabar, previously the Company's Chief Strategy Officer, was
appointed CEO on this date.
- On April 5, 2023, the Company
entered into an amended hosting agreement, pursuant to which
Coinmint agreed to provide to the Company an additional ten MW of
mining capacity.
Strategic Priorities for Fiscal Year 2023
- Maintain a best-in-class balance sheet: Continued focus
on prudent balance sheet management through 2023 and beyond.
- Strategically deploy capital: Bit Digital targets
doubling its operating fleet, to approximately 2.6 EH/s, during
2023. Additionally, the Company intends to continue evaluating and
opportunistically deploy capital in the form of debt and/or
alternative credit products in mining-related opportunities.
- Expand into PoS: The Company targets staking
approximately half of its total digital asset position. Bit Digital
is also exploring incubating additional PoS related
businesses.
- Enhance treasury management solutions: Existing and
prospective strategic partnerships that can activate structured
solutions that may enhance yield on treasury assets and provide
downside protection.
- Continued focus on sustainability: Advancing the
Company's goal of becoming entirely carbon-free.
Management Commentary
"2022 was a pivotal year for Bit Digital and the
bitcoin mining industry at large. The price of
Bitcoin fell over 50% during 2022, declining from over
$47,000 to start the year to under
$17,000 at year-end. Network
difficulty rose 43% over this period, while electricity prices
spiked globally, with U.S. natural gas prices increasing 53%
year-over-year and reaching the highest levels since 2008. This
confluence of challenges created significant distress across the
industry that many participants were unable to endure.
Prudent capital allocation and balance sheet management enabled
Bit Digital to weather this storm. We finished 2022 with
$34.0 million of cash and restricted
cash and $29.2 million worth of
digital assets as of December 31,
2022. We remain debt-free and have no significant capex
obligations, which provides us with appreciable flexibility in the
current environment. Maintaining a best-in class balance sheet
remains one of our top priorities in 2023. As the year progresses,
we aim to deploy capital opportunistically and strategically across
different avenues that we believe will enhance our long-term
earnings power.
Our goal for 2023 is to double our active hash rate to
approximately 2.6 EH/s. To achieve this goal, we intend to
opportunistically acquire new-gen ASICs. Our view has been that
ASIC market conditions would progressively favor buyers and are
ready to capitalize on that trend.
Deteriorating market conditions in 2022 impelled us to take a
cautious approach towards our fleet deployment program. A portion
of our fleet is comprised of legacy ASICs that we are less inclined
to activate on long-term hosting contracts against current
bitcoin prices. Our current plan is to high-grade our
bitcoin fleet and prioritize activating the most
efficient machines, while viewing the legacy component of our fleet
as an option to increase our active hash rate should conditions
warrant. However, we remain mindful of the upcoming 'halvening' in
2024 and will continue to carefully balance our growth and fleet
deployment strategy with our goal of remaining nimble in various
market conditions. Our enhanced treasury management solutions,
including our recent strategic investment in Auros Global, carry
the goal of making our company less susceptible to volatility in
digital asset prices.
The average price for electricity we paid during 4Q 2023 was
approximately $0.051/kWh. Our intent
is to secure a portfolio of attractive hosting agreements to drive
this cost down over time. We encountered certain operational
challenges with some of our hosting partners during 2022. These
experiences have fortified our belief that a well-diversified
hosting portfolio is essential towards mitigating site-specific and
regulatory risk. While we maintain our view that our
'infrastructure light' strategy is the optimal path forward for our
company, we could see a scenario in which we own infrastructure
assets in the future via our nascent lending initiatives.
We commenced our Ethereum staking strategy during
2022 and believe that our PoS initiatives will grow into a more
meaningful earnings driver for Bit Digital over time. As of
December 31, 2022, the Company held
10,820 ETH and ETH equivalents, primarily
acquired through programmatic conversions of BTC mining rewards.
Approximately 2,164 ETH was actively staked as of the
date, both in native and liquid protocols. Our target is to stake
approximately half of our total digital asset position. We believe
our core bitcoin mining business and
Ethereum staking strategy are synergistic. Our overall
strategy is to redeploy ETH validator assets into
bitcoin mining equipment, which we believe creates a
powerful 'flywheel effect'.
Our diversification into Ethereum has also helped
advance our overall sustainability goals, given that
Ethereum's transition to a proof-of-stake consensus
mechanism reduced the network's energy consumption by over 99%. Our
bitcoin mining business increased its carbon-free
electricity consumption rate to 85% at the end of 2022 from 67% to
start the year. We remain committed to our longer-term goal for our
operations to become entirely carbon-free."
About Bit Digital
Bit Digital, Inc. is a sustainability focused generator of
digital assets headquartered in New York
City. Our mining operations are located in North America. For additional information,
please contact ir@bit-digital.com or visit our website
at www.bit-digital.com.
Investor Notice
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 3.D of our most recent Annual Report
on Form 20-F for the fiscal year ended December 31, 2022. 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 or all of your investment.
The risks and uncertainties we describe are not the only ones
facing us. Additional risks not presently known 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
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or bitcoin hash
rate may also materially affect the future performance of Bit
Digital's production of bitcoin. Actual operating
results will vary depending on many factors including network
difficulty rate, total hash rate of the network, the operations of
our facilities, the status of our miners, and other factors. See
"Safe Harbor Statement" below.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Bit Digital, Inc., and its
subsidiary companies. 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," "expects," or
similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. 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. 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.
[1] "BTC equivalent" is a
hypothetical illustration of the value of our digital asset
portfolio in bitcoin terms. BTC equivalent is defined as
if all non-BTC digital assets, comprised of ETH and USDC,
were converted into BTC as of December 31, 2022 and added to our
existing BTC balance. Conversion values are found using the closing
price on coinmarketcap.com.
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SOURCE Bit Digital, Inc.