BITMINE IMMERSION TECHNOLOGIES, INC. — FY2021 Form 10-K
Reporting period: Fiscal year ended August 31, 2021. The filing is an annual report, not a calendar-year fourth-quarter report; comparative results include only July 16–August 31, 2020 for the newly organized company. The company transitioned from a shell to a planned Bitcoin mining and hosting business during FY2021.
Business context and outlook
Bitmine plans to host third-party mining equipment and mine Bitcoin for its own account, using immersion cooling. It reported no operating revenue in FY2021 and had not yet begun revenue-generating operations. Management expected revenue-generating operations in FY2022 and targeted an initial Trinidad facility by January 2022. The company said it had an agreement allowing for up to 100 MW of hosting equipment at a regional enterprise’s sites, and was evaluating locations in Trinidad.
The company described no quantified revenue or earnings guidance. Management said cash on hand and access to its related-party credit facility were expected to fund operations for the next 12 months, while also pursuing additional capital. This outlook depends on facility execution, equipment availability, low-cost power, customer demand, and Bitcoin mining economics.
Financial results and liquidity
| Metric | FY2021 / August 31, 2021 | Comparison or context |
|---|---|---|
| Revenue | $0 | $0 in the comparative period |
| Operating expenses | $131,815 | $0 in the comparative period |
| Interest expense | $22,424 | $1,558 in the comparative period |
| Net loss | $154,239; $(0.02) per share | $1,558 loss in the comparative period |
| Cash and cash equivalents | $218,737 | $1,930 at August 31, 2020 |
| Cash flow from operations | $(76,361) | Nil in the comparative period |
| Investing cash flow | $(427,296) | Equipment purchases and deposits |
| Financing cash flow | $720,464 | $493,615 from stock sales; $226,849 net related-party borrowing |
| Total assets | $646,033 | Includes $427,296 of equipment not yet in service |
| Total liabilities | $285,481 | Includes $277,296 in related-party loans |
| Stockholders’ equity | $360,551 | Compared with a $50,075 deficit at August 31, 2020 |
Current assets were $218,737 against current liabilities of $285,481, implying negative working capital of $66,744. The filing reports no operating revenue, so operating margins are not meaningful. The company reported no off-balance-sheet arrangements.
Material changes and financing
- New directors and executives took control in July 2021 as the company entered the mining and hosting business. The company issued 32,994,999 shares in a private placement at $0.015 per share and granted shares for services. As of December 1, 2021, 41,208,399 shares were outstanding; insiders and affiliates beneficially owned approximately 65.1%.
- The company invested $427,296 in mining equipment or equipment deposits during FY2021; those assets were not yet in service at year-end.
- A credit line from a fund controlled by the chairman provides up to $2.5 million at 15% annual interest, compounded monthly. The filing reports $277,296 drawn at August 31, 2021 and $1,747,296 principal outstanding at December 1, 2021. Under the amended terms, amounts drawn and accrued interest were due April 1, 2022.
- Management said it was exploring additional equity, convertible-note, or preferred-stock financing. It cautioned that additional financing was not assured and could dilute shareholders or have unfavorable terms.
Risks, contingencies, and unusual matters
- Execution and funding: The business was pre-revenue, with its initial facility still planned. Construction delays, cost overruns, insufficient capital, equipment constraints, or failure to secure hosting customers could impair the plan.
- Mining economics: Results are exposed to Bitcoin price volatility, network difficulty and hash rate growth, reward halvings, equipment costs, and electricity prices and availability.
- Regulation and energy: The filing highlights evolving digital-asset regulation, mining restrictions, power-use constraints, and environmental and ESG scrutiny. It notes China’s 2021 mining ban and the uncertainty of its effects.
- Related-party dependence: The credit facility is provided by an entity controlled by the chairman and CFO, and carries a stated 15% rate. The company also reported prior high-interest borrowing from an entity controlled by its CEO, repaid in FY2021.
- Controls: Management concluded disclosure controls and internal control over financial reporting were ineffective at August 31, 2021, citing inadequately designed controls for complex or nonroutine transactions and insufficient accounting and SEC-reporting expertise. The auditor did not audit internal control effectiveness.
- Governance and market: The company had no separate audit committee, only one director it identified as independent, and a very limited OTC trading market. Management reported that several insiders and 5% holders filed ownership reports late or had not filed required initial reports.
- Legal matters: The company said it was not party to legal proceedings at the filing date; it also stated that ordinary-course litigation claims were adequately accrued.
The independent auditor issued an unqualified opinion on the financial statements. The filing contains some inconsistent or potentially stale wording, including a risk-factor reference to an April 1, 2020 credit-line maturity that conflicts with the amended April 1, 2022 repayment terms, and a narrative operating-loss figure that differs from the financial statements’ net loss. The financial statements report net loss of $154,239.
Investor verification priorities
- Confirm whether the Trinidad facility became operational, the timeline and costs to commission it, actual power capacity and pricing, and whether the stated hosting-site agreement is binding and usable.
- Verify subsequent revenue, customer commitments, equipment deployment, mining capacity, and unit economics against the pre-revenue FY2021 baseline.
- Reconcile current related-party debt, accrued interest, maturity, collateral or security, and repayment or refinancing arrangements, including the increase in draws after year-end.
- Track cash needs and any subsequent financing, dilution, share issuances, warrants, or changes in insider ownership.
- Assess remediation of the disclosed material weaknesses and any later auditor or management findings on financial reporting controls.
- Review the full financial statements and subsequent filings for resolution of the filing’s inconsistent debt-maturity and loss references.