Core Insights - Abits Group Inc reported a decline in revenue and mining output for the first quarter of fiscal year 2025, primarily due to the halving of mining rewards [1][3]. Financial Performance - Revenue from operations decreased to $1.78 million in Q1 2025 from $2.15 million in Q1 2024, reflecting a drop of 17.2% [2]. - Costs of revenue increased by 11.6%, rising from $0.86 million in Q1 2024 to $0.96 million in Q1 2025 [2]. - Gross profit from operations was $0.82 million, with a gross margin of 46.1%, attributed to higher average market prices of bitcoin despite lower output [2][3]. Mining Operations - The total output from mining operations was 18.86 coins, a significant decrease of 50.4% compared to the previous year, due to the halving of mining rewards that occurred in late April 2024 [3]. - The company has secured a $3 million loan to acquire 2850 units of Antminer S19XP, which are expected to enhance revenue from a new hosting facility in Memphis starting in the second quarter [4].

[Preliminary Information](index=1&type=section&id=Preliminary%20Information) This section provides the SEC filing details, registrant information (ABITS GROUP INC, British Virgin Islands, Nasdaq Capital Market listing under ABTS), and a cautionary statement regarding forward-looking statements, emphasizing inherent risks and uncertainties Registrant Details | Attribute | Value | | :--- | :--- | | Exact Name | ABITS GROUP INC | | Jurisdiction of Incorporation | British Virgin Islands | | Securities Registered | Ordinary shares, no par value per share | | Symbol | ABTS | | Exchange | Nasdaq Capital Market | | Outstanding Ordinary Shares (as of Dec 31, 2024) | 2,370,139 (retroactively adjusted for 1-for-15 share consolidation on March 10, 2025) | | Filing Type | Annual Report on Form 20-F | | Period Ended | December 31, 2024 | | Filer Status | Non-accelerated filer | | Accounting Standard | U.S. GAAP | - The report contains forward-looking statements that are subjective and involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from those described or implied[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - Investors are advised to consider factors discussed under 'Risk Factors' and 'Operating and Financial Review and Prospects'[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) PART I [Item 1. Identity of Directors, Senior Management and Advisers](index=4&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) This item is not applicable for annual reports on Form 20-F - This item is not applicable for annual reports on Form 20-F[22](index=22&type=chunk) [Item 2. Offer Statistics and Expected Timetable](index=4&type=section&id=Item%202.%20Offer%20Statistics%20and%20Expected%20Timetable) This item is not applicable for annual reports on Form 20-F - This item is not applicable for annual reports on Form 20-F[23](index=23&type=chunk) [Item 3. Key Information](index=4&type=section&id=Item%203.%20Key%20Information) This section details the company's corporate structure, its compliance status under the HFCAA, its foreign private issuer status, and its limited operations in China. It also presents selected financial data and a comprehensive summary of risk factors related to general business operations, bitcoin mining, intellectual property, and regulatory compliance [Corporate Structure and Regulatory Status](index=4&type=section&id=3.1%20Corporate%20Structure%20and%20Regulatory%20Status) Details Abits Group Inc.'s BVI holding structure, U.S. operations, HFCAA status, foreign private issuer exemptions, and limited PRC subsidiary role - Abits Group Inc. is a British Virgin Islands holding company that conducts its operations in the United States through its wholly-owned subsidiaries, Abit USA, Inc. and Abits Inc.[26](index=26&type=chunk)[27](index=27&type=chunk) - The company divested its substantial business operations in the PRC in July 2022, focusing solely on the bitcoin mining industry[26](index=26&type=chunk)[27](index=27&type=chunk) Wholly-owned Subsidiaries | Subsidiary Name | Jurisdiction of Incorporation | | :--- | :--- | | Abit Hong Kong Limited | Hong Kong | | Abit USA, Inc. | Delaware | | Abits Inc. | Delaware | | Beijing Bitmatrix Technology Co. Ltd. | China | - The company was conclusively identified by the SEC as a Commission-Identified Issuer under the HFCAA in June 2022 due to its former auditor[32](index=32&type=chunk)[34](index=34&type=chunk) - It appointed Audit Alliance LLP (based in Singapore and providing complete PCAOB access) as its independent registered public accounting firm, which is not subject to PCAOB's previous adverse determinations[32](index=32&type=chunk)[34](index=34&type=chunk) - As a foreign private issuer, the company is exempt from certain Exchange Act rules applicable to U.S. domestic issuers, including less frequent reporting and different disclosure levels, which may afford less protection to shareholders[36](index=36&type=chunk) - The PRC subsidiary, Bitmatrix, provides limited in-house administrative support and does not conduct revenue-generating business[37](index=37&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) - The company believes it is not required to obtain additional permissions from PRC authorities (CSRC, CAC) for its current operations, based on its limited PRC nexus and senior management residency[37](index=37&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) - Abits Group Inc. relies on its U.S. subsidiaries for funding, which generate cash from bitcoin mining operations and reinvest it[42](index=42&type=chunk)[43](index=43&type=chunk)[48](index=48&type=chunk) - The PRC subsidiary, Bitmatrix, is a stand-alone operation with sufficient cash reserves (approx. **RMB1.0 million**) for its own use and does not rely on funding from the holding company or other subsidiaries[42](index=42&type=chunk)[43](index=43&type=chunk)[48](index=48&type=chunk) Inter-company Loans (Amount due from subsidiaries to holding company) | Year ended December 31 | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Amount due from Abits Group Inc | $1,241,125 | $590,188 | -$550,933 | | Amount due from Abit Hong Kong | $880,841 | $283,058 | — | [Selected Financial Data](index=10&type=section&id=3.2%20Selected%20Financial%20Data) Presents key consolidated financial data, including statements of operations and balance sheet metrics for recent fiscal years Summary Consolidated Statements of Operations (Year ended December 31) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Revenue | $6,711,225 | $1,681,533 | $161,428 | | Profit /(Loss) from operations | $3,375,406 | $1,226,065 | ($19,260,227) | | Loss before taxation | ($798,293) | ($12,585,250) | ($21,520,114) | Summary Consolidated Balance Sheet Data (as of December 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,118,929 | $884,199 | | Digital assets | $257,753 | $1,194,157 | | Property, equipment and vehicles | $9,435,908 | $9,465,567 | | Other assets | $558,707 | $774,345 | | Total assets | $11,371,297 | $12,318,268 | | Total liabilities | ($990,347) | ($1,005,608) | | Shareholders' equity | $10,380,950 | $11,312,660 | [Risk Factors](index=11&type=section&id=3.3%20Risk%20Factors) Highlights risks: liquidity, operating losses, Bitcoin volatility, tech obsolescence, regulatory compliance, and share price - The company faces general risks including liquidity management challenges, a history of operating losses, potential for significant fluctuations in operating results, and risks associated with future acquisitions or joint ventures[63](index=63&type=chunk)[70](index=70&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - Key risks related to bitcoin mining include high volatility in Bitcoin prices, operating costs potentially outpacing revenues, an evolving business model subject to uncertainties, and the impact of regulatory changes on cryptocurrency use and operations[68](index=68&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - The company is exposed to risks from technological obsolescence, global supply chain disruptions for mining hardware, and potential loss or theft of digital assets due to cybersecurity threats or irreversible transactions[118](index=118&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk)[129](index=129&type=chunk)[144](index=144&type=chunk) - Risks related to limited operations in certain jurisdictions include potential delisting under the HFCAA if the auditor cannot be inspected, uncertainties in the interpretation and application of PRC laws (e.g., cybersecurity, data protection) to its limited PRC subsidiary activities, and negative impacts from past association with divested Chinese subsidiaries[156](index=156&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk)[170](index=170&type=chunk)[175](index=175&type=chunk) - Risks related to ordinary shares include thin trading volume, potential inability to sell shares at desired prices, high price volatility unrelated to traditional financial factors, and the unlikelihood of paying cash dividends in the foreseeable future[68](index=68&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) [Item 4. Information on The Company](index=42&type=section&id=Item%204.%20Information

Company Overview - Abits Group Inc, formerly known as Moxian (BVI) Inc, was established in May 2021 and became the surviving entity after merging with Moxian, Inc. in August 2021 [2] - The company operates in the bitcoin mining sector in the United States, specifically through its wholly owned subsidiary, ABIT USA, Inc., located in Tennessee [2] Compliance Update - On March 24, 2025, Abits Group Inc received confirmation from NASDAQ that it has regained compliance with the minimum bid price requirement under Listing Rule 5550(a)(2) [1] - NASDAQ has indicated that this matter is now closed, signifying a positive development for the company's stock status [1]

Core Points - Abits Group Inc has secured a $3.0 million loan to purchase new Antminer S19XP machines, which will double its mining capacity from 10MW to 22MW [1] - The deployment of the new miners is expected to be completed by the end of March or early April 2025, with the Memphis hosting facility anticipated to come online in the second quarter of 2025 [1] - The loan carries a simple interest rate of 12% per annum and is secured by Abit USA's assets located in Duff, Tennessee [1] - The company has renegotiated its Hosting Agreement with a service provider, which is expected to enhance cash flows and contribute additional earnings at the EBITDA level over the next three years [2] Company Overview - Abits Group Inc, formerly known as Moxian (BVI) Inc, was organized in the British Virgin Islands in May 2021 and emerged from a merger with Moxian, Inc. in August 2021 [3] - The company operates self-mining operations in Tennessee through its wholly owned subsidiary, ABIT USA, Inc. [3]

Core Points - Abits Group Inc announced an amendment to its memorandum and articles of association to allow for an unlimited number of ordinary and preferred shares [1] - The company approved a share consolidation at a ratio of one-for-fifteen to comply with Nasdaq listing requirements [2] - The share consolidation will reduce the number of ordinary shares from 35,554,677 to approximately 2,370,300 and preferred shares from 5,000,000 to approximately 333,333 [5] Company Overview - Abits Group Inc, organized in the British Virgin Islands, is engaged in bitcoin mining through its subsidiary ABIT USA, Inc, with operations in Tennessee [6]

Core Insights - Abits Group Inc. has announced a significant expansion of its operations with a new 10MW hosting facility in Memphis, Tennessee, effectively doubling its mining capacity [1][2] - The deployment of 400 units of Antminer T21 at its Duff operation has resulted in a total hash rate of approximately 500PH/s, and the Memphis facility will increase the total power capacity to 22 MW, raising the total output to approximately 1EH/s [2][3] - The expansion is part of the company's strategic vision to strengthen its position in North America while maintaining operational efficiency and technological advancement [4] Company Operations - The new Memphis facility complements existing operations in Tennessee and is positioned to enhance mining capabilities in a region known for competitive energy costs and reliable infrastructure [3] - The company has initiated the first phase of miner procurement with an order of 800 Antminer T21 for delivery by the end of January, with an additional 1,350 units scheduled for procurement and deployment before the end of Q1 2025 [3] Strategic Vision - The expansion marks a pivotal moment in the company's growth trajectory, aligning with its strategic vision to enhance its operational capabilities in the North American market [3][4]

Core Insights - Abits Group Inc. has deployed 500 S19XP mining machines at its Duff, Tennessee site, enhancing its total hash rate by 70,500 terahashes (TH) [1] - The new machines are expected to be fully operational by the end of October 2024, marking a significant expansion in the company's operational capacity [1] - This strategic move reinforces Abits Group's commitment to strengthening its position in the U.S. Bitcoin mining industry [1] Company Overview - Abits Group Inc. is a U.S.-based digital data center operator specializing in Bitcoin self-mining operations [2] - The company focuses on innovative technologies and operational excellence to expand its footprint in the Bitcoin mining sector [2]

Group 1 - Abits Group Inc has been granted an additional 180 calendar days to comply with NASDAQ's minimum bid price requirement, extending the deadline to April 7, 2025 [1] - To regain compliance, the closing bid price of the Company's common shares must be at least $1.00 per share for at least ten consecutive business days by the new deadline [1] - Abits Group Inc is engaged in bitcoin mining and related services in the United States, with self-mining operations in Tennessee through its subsidiary ABIT USA, Inc [2] Group 2 - Abits Group Inc was formed following a merger with Moxian, Inc. in August 2021 and is organized in the British Virgin Islands [2]

Financial Performance - Abits Group Inc reported a revenue of $3.67 million for the six months ended June 30, 2024, which included 61.5 bitcoins produced, a significant increase compared to the previous period when there was no production due to construction activities [1][6] - The gross profit from mining operations was $0.75 million after accounting for direct costs of $2.68 million, primarily driven by electricity costs of $1.1 million and depreciation of $1.27 million [1][6] - The loss before tax was reduced to $0.14 million, a notable improvement from a loss of $3.5 million in the previous period [2][6] Operational Developments - Administrative and general overheads increased to $1.11 million, nearly doubling from $0.7 million, due to the addition of new staff and increased maintenance and insurance costs as the data center became fully operational [2] - The company improved its water supply in April, ensuring continuous operation of all production lines, supported by a 100,000-gallon reservoir [2] Balance Sheet Overview - The balance sheet showed minimal changes, with the purchase of more Ant-miner machines for $0.86 million and a property acquisition in Wisconsin for $0.65 million [3] - Cash and cash equivalents decreased to $0.4 million as of June 30, 2024, down from $0.88 million at the end of 2023 [4][8] Future Outlook - The company anticipates lower production output for the remainder of 2024 due to the halving of mining rewards that occurred in late April, but it aims to maintain strict cost control and secure more hosting contracts to enhance revenue [3][6]

Core Insights - Abits Group Inc. has reported significant growth in Bitcoin mining capacity, with hash rates increasing from approximately 285 PH/s to nearly 325 PH/s in Q1 2024, and projections to exceed 360 PH/s in Q2 2024 [1][2][3] Operational Achievements - The company completed key infrastructure projects in Q1, including the expansion of a 1 MW facility and the construction of a 100,000-gallon water reservoir to enhance production stability [2] - The workforce at the LaFollette site remains stable with four dedicated employees focused on enhancing their expertise [2] Future Plans - Abits Group is negotiating with its power provider to secure an additional 2 MW of power capacity, aiming for a dynamic 24/7 operation by July 1, 2024 [2] - The company has acquired a 55-acre property in Wisconsin for a new 20 MW site, with construction set to begin in Q2 and continue through Q4 [3]