BIT Mining Limited Announces Unaudited Financial Results for the Third Quarter ended September 30, 2021
BIT Mining Limited (BTCM) reported significant changes in its Q3 2021 financials, with revenues of US$404.3 million, down from US$444.9 million in Q2 2021 but up sharply from US$0.5 million in Q3 2020. The company produced 779 ethereum and 79 bitcoins in the period, generating revenue of approximately US$2.5 million and US$3.4 million respectively. Operating loss was US$35.0 million, significantly higher than in previous quarters. BIT Mining is transitioning away from its online lottery business and is investing heavily in cryptocurrency mining operations.
- Shifted focus to global cryptocurrency mining and data center operations.
- Projected production of approximately 80 ethereum daily starting December 2021.
- Began ethereum mining with a theoretical maximum hash rate of 4,800 GH/s by end of November 2021.
- Entered partnership for a new mining data center in Ohio with a total power capacity of 150 megawatts.
- Q3 revenue decreased by US$40.6 million from Q2 2021.
- Operating loss increased to US$35.0 million from US$14.9 million in Q2 2021.
- Expected revenue decline of 10% to 20% in Q4 2021 due to BTC.com exiting the China market.
- Disposal loss of US$6.7 million from terminated lottery business activities.
HONG KONG, Nov. 18, 2021 /PRNewswire/ -- BIT Mining Limited (NYSE: BTCM) ("BIT Mining," "the Company," "we," "us," or "our company"), a leading technology-driven cryptocurrency mining company, today reported its unaudited financial results for the third quarter ended September 30, 2021.
Cryptocurrency Business Progress
BIT Mining has completed the transition of its business to an enterprise that covers cryptocurrency mining, data center operation and mining pool. The Company has adopted a development strategy to focus on the migration and expansion of cryptocurrency mining operations globally.
The Company has commenced ethereum mining operations with a theoretical maximum total hash rate capacity of 3,451 GH/s deployed as of today. Ethereum mining machines with a total theoretical maximum hash rate capacity of 4,800 GH/s are expected to be deployed by the end of November 2021. For the three months ended September 30, 2021, we produced 779 ethereum from our ethereum cryptocurrency mining operations, and recognized revenue of approximately US
As of today, the theoretical maximum total hash rate capacity of our bitcoin mining machines is approximately 800 PH/s. To increase the cost efficiency of its mining business, the Company sold some low-end mining machines with a total hash rate capacity of 610.7 PH/s. As of today, we have completed the migration of all of our bitcoin mining machines to the U.S. and Kazakhstan. In the U.S., we have bitcoin mining machines with a total hash rate capacity of 507.3 PH/s, of which 119.7 PH/s have been deployed in data centers and the remainder have been fine-tuned and are waiting to be deployed. In Kazakhstan, we have bitcoin mining machines with a total hash rate capacity of 292.7 PH/s, of which109.4 PH/s have been deployed in data centers and the remainder have been fine-tuned and are waiting to be deployed. For the three months ended September 30, 2021, we produced 79 bitcoins from our cryptocurrency mining business, and recognized revenue of approximately US
In terms of our data center business, in September 2021 we entered into a Membership Interest Purchase Agreement and certain other auxiliary agreements (the "Ohio Mining Site Agreements") with Viking Data Centers, LLC ("Viking Data Centers") to jointly invest in the development of a cryptocurrency mining data center in Ohio (the "Ohio Mining Site") with power capacity of up to 85 megawatts. In October 2021, we increased our investment in the Ohio Mining Site and brought its total planned power capacity up to 150 megawatts. We currently expect to complete the Ohio Mining Site in March 2022. As of today, we have finished the construction of plant and substantion of power capacity of 50 megawatts, of which 11 megawatts has started to operate. We are also constructing new data centers in Hong Kong and Kazakhstan. The new data center in Hong Kong, with a maximum processing capacity of approximately 1.4 megawatts, has been operational since October 2021. Moreover, we will construct and operate a data center in Kazakhstan which is located in Uralsk region of West Kazakhstan with a maximum processing capacity of approximately 40 megawatts, which is expected to be completed in the first quarter of 2022.
On October 14, 2021, the Company announced that its mining pool subsidiary, BTC.com, would completely exit the China market, cease registering new users from China and start to retire accounts of existing users from China. Due to BTC.com's discontinuation of service to users in China, the Company expects to see a decrease of
Removal of VIE Structure and Disposal of Chinese Lottery Business
We previously conducted a lottery business in China through a series of contractual arrangements with the lottery business-related VIEs. In July 2021, the Company announced its decision to dispose of its Chinese lottery-related business and the Company terminated all of its lottery business-related VIE contracts for nil consideration and recognized a disposal loss of US
Termination of the Online Lottery Business in Europe
The Company is in the process of terminating its online lottery business in Europe being operated under The Multi Group ("TMG"), which the Company acquired in July 2017. We expect to terminate all business operations under the Malta e-Gaming license by the end of November 2021, all business operations under the Sweden e-Gaming license by the end of December 2021, and all business operations under the Curacao e-Gaming license by the end of January 2022. The termination of TMG's online lottery business in Europe is expected to be completed in the first quarter of 2022. TMG contributed US
Conversion of Reporting Currency
Starting from the third quarter of 2021, the Company has changed its reporting currency from the Renminbi ("RMB") to the U.S. Dollar ("USD"), to reduce the impact of increased volatility of the USD to RMB exchange rate on the Company's reported operating results. The alignment of the reporting currency with underlying operations will better depict the Company's results of operations for each period. The related financial statements prior to July 1, 2021 have been recast to USD as if the financial statements originally had been presented in USD since the earliest periods presented.
"We are glad to announce our third quarter 2021 financial results, as we continue to execute our strategy to create value within the cryptocurrency ecosystem," said Mr. Xianfeng Yang, CEO of BIT Mining. "Over the past six months we completed the migration of our mining machines to overseas markets and have made significant progress in the construction of our US data centers, which provide critical operational efficiencies for our business. Additionally, we saw the potential value ethereum has as the fundamental currency for applications such as nonfungible tokens (NFTs), decentralized finance (DeFi), and the metaverse. We foresaw the growth of ethereum mining as a result and have deployed massive ethereum computing power in advance which have generated relatively positive returns. Looking forward, we plan to continue to enhance our value proposition and strengthen our technology on mining techniques."
1 The ethereum price is based on the price on November 18, 2021, at UTC 0:00, published on https://coinmarketcap.com；the bitcoin price is based on the average of the prices on November 18, 2021, at UTC 0:00, published on https://www.bitfinex.com and https://www.bitstamp.net.
Third Quarter 2021 Highlights for Continuing Operations
- Revenues were US
$404.3 million in the third quarter of 2021, representing a decrease of US$40.6 million from US$444.9 million for the second quarter of 2021, and a sharp increase of US$403.8 million from US$0.5 million for the third quarter of 2020. Revenues during the third quarter of 2021 primarily consisted of US$397.8 million in revenue contribution from our mining pool business that we consolidated from April 2021. - Operating loss was US
$35.0 million in the third quarter of 2021, representing an increase of US$20.1 million from US$14.9 million for the second quarter of 2021, and an increase of US$30.1 million from US$4.9 million for the third quarter of 2020. The increase in operating loss was mainly due to a migration that resulted in the decrease of the revenue and the impairment of cryptocurrencies. - Non-GAAP operating loss2 was US
$22.7 million in the third quarter of 2021, as compared with non-GAAP operating income of US$1.8 million for the second quarter of 2021, and non-GAAP operating loss of US$3.1 million for the third quarter of 2020. - Net loss attributable to BIT Mining was US
$29.6 million in the third quarter of 2021, as compared with net loss attributable to BIT Mining of US$14.5 million for the second quarter of 2021, and net loss attributable to BIT Mining of US$4.5 million for the third quarter of 2020. - Non-GAAP net loss2 attributable to BIT Mining was US
$17.3 million in the third quarter of 2021, as compared with non-GAAP net income attributable to BIT Mining of US$2.2 million for the second quarter of 2021, and non-GAAP net loss attributable to BIT Mining of US$2.7 million for the third quarter of 2020. - Basic and diluted loss per American Depositary Share ("ADS") attributable to BIT Mining Limited for the third quarter of 2021 were US
$0.43 . - Non-GAAP basic and diluted loss per ADS2 attributable to BIT Mining Limited for the third quarter of 2021 were US
$0.25 .
2 Non-GAAP financial measures exclude the impact of share-based compensation expenses, impairment of property and equipment, impairment of cryptocurrencies, net gain or loss on disposal of cryptocurrencies and changes in fair value of derivative instrument. Reconciliations of non-GAAP financial measures to U.S. GAAP financial measures are set forth in the table at the end of this release.
Third Quarter 2021 Financial Results for Continuing Operations
Revenues
Revenues were US
Operating Costs and Expenses
Operating costs and expenses were US
Cost of revenue was US
Sales and marketing expenses were US
General and administrative expenses were US
Service development expenses were US
Net Gain (Loss) on Disposal of Cryptocurrencies
Net gain on disposal of cryptocurrencies was US
Impairment of Cryptocurrencies
Impairment of cryptocurrencies was US
Impairment of Property and Equipment
Impairment of property and equipment was US
Operating Loss
Operating loss was US
Non-GAAP operating loss was US
Net Loss Attributable to BIT Mining
Net loss attributable to BIT Mining was US
Non-GAAP net loss attributable to BIT Mining was US
Third Quarter 2021 Financial Results for Discontinued Operations
Net Loss from Discontinued Operations, Net of Taxes
Net loss from discontinued operations, net of taxes was US
Cash and Cash Equivalents and Restricted Cash
As of September 30, 2021, the Company had cash and cash equivalents of US
Cryptocurrency Assets
As of September 30, 2021, the Company had cryptocurrency assets of US
3 Restricted cash represent deposits in merchant banks yet to be withdrawn.
About BIT Mining Limited
BIT Mining (NYSE: BTCM) is a leading technology-driven cryptocurrency mining company, with a long-term strategy to create value across the cryptocurrency industry. Its business covers cryptocurrency mining, mining pool, and data center operation. The Company owns the world's top blockchain browser BTC.com and the comprehensive mining pool business operated under BTC.com, providing multi-currency mining services including BTC, ETH and LTC. The Company has also entered into a definitive agreement to acquire a 7-nanometer cryptocurrency mining machine manufacturer, Bee Computing, to complete the Company's vertical integration with its supply chain, increase its self-sufficiency and strengthen its competitive position.
Safe Harbor Statements
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
About Non-GAAP Financial Measures
To supplement the Company's financial results presented in accordance with U.S. GAAP, the Company uses non-GAAP financial measures, which are adjusted from results based on U.S. GAAP to exclude share-based compensation expenses, impairment of property and equipment, impairment of cryptocurrencies, net gain or loss on disposal of cryptocurrencies and changes in fair value of derivative instrument relating to valuation allowance in the Company's consolidated affiliated entities. Reconciliations of non-GAAP financial measures to U.S. GAAP financial measures are set forth in table at the end of this release, which provide more details on the non-GAAP financial measures.
Non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of the Company's continuing operations and prospects for the future. Non-GAAP financial information should not be considered a substitute for or superior to U.S. GAAP results. In addition, calculations of this non-GAAP financial information may be different from calculations used by other companies, and therefore comparability may be limited.
For more information:
BIT Mining Limited
ir@btc.com
Ir.btc.com
www.btcm.group
The Piacente Group, Inc.
Brandi Piacente
Tel: +1 (212) 481-2050
Email: BITMining@thepiacentegroup.com
BIT Mining Limited | |||
December 31, 2020* | September 30, 2021 | ||
US$ | US$ | ||
Audited | Unaudited | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 47,307 | 34,396 | |
Restricted cash | 587 | 167 | |
Accounts receivable | - | 523 | |
Amounts due from related parties | - | 125 | |
Prepayments and other current assets | 1,562 | 22,812 | |
Cryptocurrency assets | - | 56,784 | |
Current assets for discontinued operations | 2,016 | - | |
Total current assets | 51,472 | 114,807 | |
Non-current assets: | |||
Property and equipment, net | 997 | 50,739 | |
Intangible assets, net | 240 | 56,937 | |
Deposits | 162 | 3,952 | |
Long-term investment | 14,056 | 9,213 | |
Right-of-use assets | 1,429 | 1,848 | |
Other non-current assets | 87 | 29,384 | |
Goodwill | - | 26,915 | |
Non-current assets for discontinued operations | 3,660 | - | |
Total non-current assets | 20,631 | 178,988 | |
TOTAL ASSETS | 72,103 | 293,795 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | - | 60,972 | |
Amounts due to related parties | - | 373 | |
Accrued payroll and welfare payable | 171 | 151 | |
Accrued expenses and other current liabilities | 7,498 | 27,034 | |
Income tax payable | 84 | 880 | |
Operating lease liabilities - current | 569 | 1,024 | |
Current liabilities for discontinued operations | 2,960 | - | |
Total current liabilities | 11,282 | 90,434 | |
Non-current liabilities: | |||
Operating lease liabilities - non-current | 890 | 995 | |
Non-current liabilities for discontinued operations | 81 | - | |
Total non-current liabilities | 971 | 995 | |
TOTAL LIABILITIES | 12,253 | 91,429 | |
Shareholders' Equity: | |||
Class A ordinary shares, par value US | 22 | 36 | |
Class A preference shares, par value | - | - | |
Class B ordinary shares, par value | - | - | |
Additional paid-in capital | 412,364 | 588,183 | |
Treasury shares | (21,604) | (21,604) | |
Accumulated deficit and statutory reserve | (324,351) | (373,852) | |
Accumulated other comprehensive loss | (4,619) | (2,469) | |
Total BIT Mining Limited shareholders' equity | 61,812 | 190,294 | |
Noncontrolling interests | (1,962) | 12,072 | |
Total shareholders' equity | 59,850 | 202,366 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 72,103 | 293,795 | |
| |||
BIT Mining Limited | ||||||
Three Months Ended | ||||||
September 30, | June 30, | September 30, | ||||
US$ | US$ | US$ | ||||
Unaudited | Unaudited | Unaudited | ||||
Revenues | 484 | 444,942 | 404,319 | |||
Operating costs and expenses: | ||||||
Cost of revenue | (449) | (435,591) | (416,052) | |||
Sales and marketing expenses | (359) | (322) | (226) | |||
General and administrative expenses | (3,932) | (6,081) | (8,120) | |||
Service development expenses | (613) | (828) | (1,057) | |||
Total operating costs and expenses | (5,353) | (442,822) | (425,455) | |||
Other operating income | - | 10 | 4 | |||
Government grant | 11 | - | - | |||
Other operating expenses | (74) | (390) | (4,592) | |||
Net gain (loss) on disposal of cryptocurrencies | - | (8,634) | 11,239 | |||
Impairment of cryptocurrencies | - | (8,863) | (13,552) | |||
Changes in fair value of derivative instrument | - | 836 | 2,860 | |||
Impairment of property and equipment | - | - | (9,820) | |||
Operating loss from continuing operations | (4,932) | (14,921) | (34,997) | |||
Other income, net | 6 | 99 | 84 | |||
Interest income | 23 | 22 | 19 | |||
Interest expense | - | (600) | (66) | |||
Gain from equity method investments | 413 | 130 | 24 | |||
Gain from disposal of subsidiaries | - | 126 | 17 | |||
Loss before income tax | (4,490) | (15,144) | (34,919) | |||
Income tax benefit | 1 | - | - | |||
Net loss from continuing operations | (4,489) | (15,144) | (34,919) | |||
Loss from discontinued operations , net of applicable income taxes | (1,811) | (864) | (47) | |||
Loss on disposal of discontinued operations, net of applicable | - | - | (6,697) | |||
Net loss from discontinued operations, net of applicable income | (1,811) | (864) | (6,744) | |||
Net loss | (6,300) | (16,008) | (41,663) | |||
Net loss attributable to noncontrolling interest from continuing | - | (694) | (5,302) | |||
Net income (loss) attributable to noncontrolling interest from | 79 | (134) | - | |||
Less: Net income (loss) attributable to noncontrolling interests | 79 | (828) | (5,302) | |||
Net loss attributable to BIT Mining Limited | (6,379) | (15,180) | (36,361) | |||
Other comprehensive income (loss) | ||||||
Share of other comprehensive income of an equity method investee | 103 | - | - | |||
Foreign currency translation loss | (1,742) | (1,526) | (470) | |||
Other comprehensive loss, net of tax | (1,639) | (1,526) | (470) | |||
Comprehensive loss | (7,939) | (17,534) | (42,133) | |||
Less: Comprehensive income (loss) attributable to noncontrolling | 79 | (828) | (5,268) | |||
Comprehensive loss attributable to BIT Mining Limited | (8,018) | (16,706) | (36,865) | |||
Weighted average number of Class A and Class | ||||||
Basic | 430,014,891 | 596,995,942 | 692,417,296 | |||
Diluted | 430,014,891 | 596,995,942 | 692,417,296 | |||
Losses per share attributable to BIT Mining Limited-Basic and Diluted | ||||||
Net loss from continuing operations | (0.011) | (0.024) | (0.04) | |||
Net loss from discontinued operations | (0.004) | (0.001) | (0.01) | |||
Net loss | (0.015) | (0.025) | (0.05) | |||
Losses per ADS** attributable to BIT Mining Limited-Basic and Diluted | ||||||
Net loss from continuing operations | (0.11) | (0.24) | (0.43) | |||
Net loss from discontinued operations | (0.04) | (0.01) | (0.10) | |||
Net loss | (0.15) | (0.25) | (0.53) | |||
*The Company has changed its reporting currency from Renminbi ("RMB") to U.S dollars ("USD") for the period commencing July | ||||||
** American Depositary Shares, which are traded on the NYSE. Each ADS represents ten Class A ordinary shares of the | ||||||
BIT Mining Limited | ||||||
Three Months Ended | ||||||
September 30, | June 30, | September 30, | ||||
US$ | US$ | US$ | ||||
Unaudited | Unaudited | Unaudited | ||||
Operating loss from continuing operations | (4,932) | (14,921) | (34,997) | |||
Adjustment for share-based compensation expenses | 1,824 | 29 | 3,040 | |||
Adjustment for impairment of property and equipment | - | - | 9,820 | |||
Adjustment for impairment of cryptocurrencies | - | 8,863 | 13,552 | |||
Adjustment for net (gain) loss on disposal of cryptocurrencies | - | 8,634 | (11,239) | |||
Adjustment for changes in fair value of derivative instrument | - | (836) | (2,860) | |||
Adjusted operating (loss) income from continuing operations (non- | (3,108) | 1,769 | (22,684) | |||
Net loss attributable to BIT Mining Limited from continuing operations | (4,489) | (14,450) | (29,617) | |||
Net loss attributable to BIT Mining Limited from discontinued operations | (1,890) | (730) | (6,744) | |||
Net loss attributable to BIT Mining Limited | (6,379) | (15,180) | (36,361) | |||
Adjustment for share-based compensation expenses | 1,824 | 29 | 3,040 | |||
Adjustment for impairment of property and equipment | - | - | 9,820 | |||
Adjustment for impairment of cyptocurrencies | - | 8,863 | 13,552 | |||
Adjustment for net (gain) loss on disposal of cryptocurrencies | - | 8,634 | (11,239) | |||
Adjustment for changes in fair value of derivative instrument | - | (836) | (2,860) | |||
Adjusted net (loss) income attributable to BIT Mining Limited from | (2,665) | 2,240 | (17,304) | |||
Adjusted net loss attributable to BIT Mining Limited from discontinued | (1,890) | (730) | (6,744) | |||
Adjusted net (loss) income attributable to BIT Mining Limited (non- | (4,555) | 1,510 | (24,048) | |||
Weighted average number of Class A and Class B ordinary shares | ||||||
Basic | 430,014,891 | 596,995,942 | 692,417,296 | |||
Diluted | 430,014,891 | 599,477,107 | 692,417,296 | |||
(Losses) earnings per share attributable to BIT Mining Limited (non- GAAP)-Basic and Diluted | ||||||
Net (loss) income from continuing operations (non-GAAP) | (0.006) | 0.004 | (0.02) | |||
Net loss from discontinued operations (non-GAAP) | (0.004) | (0.001) | (0.01) | |||
Net (loss) income (non-GAAP) | (0.01) | 0.003 | (0.03) | |||
(Losses) earnings per ADS** attributable to BIT Mining Limited (non- | ||||||
Net (loss) income from continuing operations (non-GAAP) | (0.07) | 0.04 | (0.25) | |||
Net loss from discontinued operations (non-GAAP) | (0.04) | (0.01) | (0.10) | |||
Net (loss) income (non-GAAP) | (0.11) | 0.03 | (0.35) | |||
*The Company has changed its reporting currency from Renminbi ("RMB") to U.S dollars ("USD") for the period | ||||||
** American Depositary Shares, which are traded on the NYSE. Each ADS represents ten Class A ordinary shares of the Company. | ||||||
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SOURCE BIT Mining Limited
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