Core Highlights: - Revenue decreased by 7.3% year-over-year to $7.5 million, mainly due to a 52% decline in Bitcoin mining revenue offset by increases in mining machine resale and rental income. - Gross margin improved slightly from -8.6% to -8.0%. - Net loss improved modestly from $2.1 million to $2.0 million.
Revenue Breakdown: - Bitcoin mining revenue decreased by $1.1 million or 52% due to reallocating more mining machines for rentals, reduced production from Bitcoin halving, and delays in deploying new mining machines. - Mining machine resale revenue increased significantly, contributing $5.5 million or 73% of total revenue. - Miner rental and other mining-related business revenue increased by $0.5 million or 116% to $1.0 million.
Management Outlook: Management highlighted the following: - Diversified revenue streams from mining, resale, and rental operations to mitigate volatility in Bitcoin prices and mining economics. - Invested in research and development through a joint venture to improve mining hardware and infrastructure. - Continued expansion of the mining fleet and hosting capacity. - Focus on controlling expenses and cash management.
Operating Data: Other operating data: - Total mining capacity of 213 PH/s as of Q3 2024 from 2,021 machines - Mining machines relocated to newly acquired Arkansas facility - Capital expenditure commitment of $3.83 million for new miners and facility - Net cash from operations of $3.4 million - Net cash used in investing of $4.3 million for purchases of miners and facilities
Operational Risks: Key risk factors disclosed include: - Volatility in Bitcoin prices and cryptocurrency markets - Supply chain constraints impacting ability to acquire new mining machines - Increasing competition in the Bitcoin mining industry - Regulatory uncertainty around cryptocurrencies - Dependency on third-party hosting providers

Original Filing