Abits Group Inc

Abits Group Inc. (ABTS) operates primarily in the bitcoin mining industry, focusing on the production of bitcoin through computational operations. The company's business model involves operating mining hardware to perform hashing operations in support of the blockchain, with the primary intent of accumulating bitcoin for sale into fiat currency based on market conditions and cash flow needs. ABTS also generates revenue from hosting activities for third parties, aiming to maximize its electricity supply capacity. The company's main revenue-generating operations are conducted in the United States through its subsidiaries, Abit USA and Abits Inc., with limited administrative functions supported by its mainland China subsidiary, Bitmatrix. ABTS is a holding company incorporated in the British Virgin Islands, and its investors hold equity interests in this holding company, not directly in the operating subsidiaries ¹.

For the fiscal year ended December 31, 2025, ABTS reported total revenue of $9,128,666 ², an increase from $6,711,225 in 2024 ³. The gross profit from operations, excluding amortization of mining equipment and depreciation of site property, was $3,676,498 ⁴, resulting in a gross margin of 40.13% ⁵. Operating expenses included general and administrative overheads of $2,545,907 ⁶, depreciation of $3,519,286 ⁷, and a write-off of miners amounting to $474,872 ⁸. The company reported a loss before taxation of $(2,766,220) ⁹ and a loss after tax of $(2,869,496) ¹⁰. Basic and diluted loss per ordinary share was $(1.21) ¹¹. As of December 31, 2025, cash and cash equivalents stood at $83,837 ¹², digital assets at $1,483,451 ¹³, and total assets were $10,914,350 ¹⁴. Total liabilities were $(3,133,579) ¹⁵, including a short-term loan of $1,500,000 ¹⁶ and a long-term loan of $375,000 ¹⁷. Shareholders' equity was $7,780,771 ¹⁸.

Year-over-year, revenue increased by 37% from $6,711,225 in 2024 to $9,128,666 in 2025 ¹⁹. Profit from operations increased from $3,375,406 in 2024 to $3,676,498 in 2025 ²⁰. The company's net loss widened from $(909,660) in 2024 to $(2,869,496) in 2025 ²¹, primarily due to increased finance expenses from $31,794 in 2024 to $286,102 in 2025 ²² and higher depreciation from $2,626,332 in 2024 to $3,519,286 in 2025 ²³. Cash and cash equivalents significantly decreased from $1,118,929 in 2024 to $83,837 in 2025 ²⁴. Digital assets increased from $257,753 in 2024 to $1,483,451 in 2025 ²⁵, reflecting a strategic shift to hold more bitcoin. The company's mining output declined from 100.55 BTC in 2024 to 89.09 BTC in 2025 ²⁶, attributed to the Bitcoin halving event in April 2024 ²⁷. However, the new Memphis site contributed 27.87 BTC since its operation began at the end of March 2025 ²⁸.

Significant operational developments during the period include the securing of a $3.0 million loan in March 2025 to finance the acquisition of 2,850 units of Antminer S19XP miners for expansion in Memphis, Tennessee ²⁹. This deployment, completed in April 2025, effectively doubled Abit USA's mining capacity by raising its power capacity from 10MW to 22MW ³⁰. The Memphis facility, operated under a hosting joint venture, now delivers a hash rate of approximately 500 PH/s ³¹. Additionally, two water wells were installed and commissioned at the Duff site in the third quarter of 2025, reducing monthly water expenses by up to $25,000 ³² and maintaining an average power cost below $0.04 per kWh ³³. As of December 31, 2025, the total mining fleet across Tennessee operations reached 4,575 miners with an aggregate hash power of roughly 720 PH/s ³⁴. The company also began providing hosting services to third parties from July 1, 2024 ³⁵, generating $309,091 in hosting fees in 2025 ³⁶.

Abits Group Inc. maintains a positive long-term outlook for the digital asset sector, despite recent sluggish performance in the Bitcoin market. The company is actively pursuing capacity expansion as a key growth strategy.

A major growth area is the continued expansion of its bitcoin mining operations. On April 7, 2026, the company acquired an additional 200 brand-new Antminer T21 miners, each with a hash rate of 190 TH/s ³⁷. These units have been fully deployed and are now in stable operation at the Duff facility in Tennessee ³⁸. This expansion follows the deployment of 2,850 units of S19XP miners at the Memphis facility in April 2025, which increased the company's power capacity from 10MW to 22MW and contributed approximately 500 PH/s to the hash rate ³⁹. The total mining fleet across Tennessee operations reached 4,575 miners with an aggregate hash power of roughly 720 PH/s as of December 31, 2025 ⁴⁰.

Operationally, the company is focused on optimizing its cost structure and efficiency. The installation of two water wells at the Duff site in the third quarter of 2025 has already reduced monthly water expenses by up to $25,000 ⁴¹ and helped maintain an average power cost below $0.04 per kWh ⁴². This focus on reducing operational costs is crucial given the increasing competitiveness of the bitcoin mining industry due to halving events.

In terms of capital allocation, the company recently closed a registered direct offering on February 24, 2026, raising approximately $2.1 million ⁴³ through the sale of 792,452 ordinary shares and pre-funded warrants ⁴⁴. The proceeds from this offering are expected to be used for general corporate purposes and working capital ⁴⁵. The company also incurred a $3 million loan in March 2025 to fund the acquisition of new Antminer S19XP miners for the Memphis project ⁴⁶, indicating a willingness to use debt for strategic growth initiatives. ABTS currently intends to retain most, if not all, of its available funds and future earnings to support operations and finance business growth and development, and does not plan to pay cash dividends in the foreseeable future ⁴⁷.

Abits Group Inc. faces several material risks. Macroeconomic risks include the significant volatility of Bitcoin prices, which directly impacts revenue and profitability, as the company's operations are largely dependent on the value of bitcoin ⁴⁸. Regulatory changes or actions, particularly in the U.S., could restrict the use of cryptocurrencies or alter the nature of investment in the company, potentially affecting its ability to operate or pursue its strategy ⁴⁹. Geopolitical and economic events can also impact the supply and demand for cryptocurrencies, leading to price fluctuations ⁵⁰. Operationally, the company is highly dependent on a single self-owned mining site in Duff, Tennessee, which exposes it to risks from local factors like power failures or adverse weather conditions ⁵¹. The company's reliance on a single model of miner (MicroBT) increases the risk of system-wide failure if issues arise with those machines ⁵². Cybersecurity threats, including hacks and malware attacks, pose a risk to the company's digital assets and operations ⁵³. Furthermore, the company is subject to risks associated with its need for significant electrical power, and government regulators may restrict electricity supply to mining operations ⁵⁴. The halving of bitcoin rewards, which occurred in April 2024, reduces the incentive for mining and could negatively impact revenue if bitcoin prices do not increase proportionally ⁵⁵. The company also has a history of operating losses and may not achieve or sustain profitability ⁵⁶. There is a risk of inadvertently violating the Investment Company Act if the value of its investment securities (potentially including bitcoins) exceeds 40% of its total assets ⁵⁷.

Management expresses a positive long-term outlook for the digital asset sector, despite recent market sluggishness. They emphasize the company's ongoing capacity expansion strategy, highlighted by the recent acquisition and deployment of an additional 200 Antminer T21 miners at the Duff facility in Tennessee ⁵⁸. A key strategic priority is to maximize the efficiency and capacity of its mining operations, as evidenced by the increase in power capacity at the Memphis site from 10MW to 22MW ⁵⁹ and the successful installation of water wells at the Duff site, which reduced monthly water expenses by up to $25,000 ⁶⁰. Management also notes a strategic shift to holding more bitcoin, with the amount increasing from 2.58 coins at the beginning of the year to 15.99 coins ⁶¹, demonstrating confidence in the future market. The company recently completed a registered direct offering on February 24, 2026, raising approximately $2.1 million ⁶² for general corporate purposes and working capital, indicating a focus on strengthening its financial position to support growth.