Abits Group Inc Secures Loan for Memphis Expansion, Doubling Mining Capacity by Early April 2025
Rhea-AI Summary
Abits Group Inc (NASDAQ: ABTS) has secured a $3.0 million loan to expand its bitcoin mining operations in Memphis, Tennessee. The loan, carrying a 12% annual interest rate, will fund the purchase of new Antminer S19XP machines and is secured by assets in Duff, Tennessee.
The expansion project will double the company's mining capacity by increasing power capacity from 10MW to 22MW, with deployment expected by early April 2025. The Memphis hosting facility is scheduled to begin operations in Q2 2025.
The company has also successfully renegotiated its Hosting Agreement with a service provider for improved terms. The Memphis expansion is projected to generate additional EBITDA earnings over the next three years.
Positive
- Secured $3.0M loan for expansion and new mining equipment
- Power capacity increasing from 10MW to 22MW, doubling mining capacity
- Successfully renegotiated hosting agreement for better terms
- Expansion expected to contribute additional EBITDA earnings over next 3 years
Negative
- 12% annual interest rate on loan indicates relatively high borrowing costs
- Additional debt burden with asset-backed security requirements
Insights
Abits Group's $3 million loan to double its mining capacity represents a significant expansion move with important financial implications. The 12% interest rate is noteworthy - while relatively high, it reflects the risk profile typical in cryptocurrency mining operations. With the company's current market cap of $7.8 million, this loan represents nearly 38% of its market value, indicating substantial leverage being deployed for growth.
The loan's collateralization against existing Duff, Tennessee assets demonstrates a strategic use of established operations to fund expansion. Most critically, management expects this Memphis expansion to generate enhanced cash flows that will contribute additional EBITDA over a three-year period, suggesting they anticipate returns exceeding the 12% cost of capital.
The renegotiated hosting agreement with improved terms adds another positive financial dimension, potentially reducing operational costs. While specific savings aren't quantified, such negotiations typically yield material operational efficiencies. For a small-cap mining operation, these marginal improvements combined with substantial capacity expansion could significantly impact financial performance, particularly if the timing aligns favorably with Bitcoin mining economics post the recent halving event.
This expansion represents a substantial operational scaling for Abits Group, with mining capacity set to double through deployment of Antminer S19XP machines - currently among the more efficient ASIC miners in the market. The power capacity increase from 10MW to 22MW is particularly significant, as electricity consumption directly correlates to potential hashrate and thus mining revenue.
The Memphis facility's expected online timing in Q2 2025 provides a clear operational milestone. With deployment of new machines targeted for completion by early April, Abits is positioning for rapid capacity utilization once the facility is operational. This aggressive timeline suggests confidence in their operational execution capabilities.
For context, doubling mining capacity typically translates to proportional hashrate increases, assuming consistent machine efficiency. This expansion effectively recalibrates Abits' potential revenue generation ceiling, though actual returns remain dependent on Bitcoin price movements and network difficulty adjustments. The improved hosting agreement terms mentioned are equally important - competitive hosting arrangements can substantially impact operational margins in mining operations where power costs frequently represent 70-80% of ongoing expenses.
Hong Kong, March 19, 2025 (GLOBE NEWSWIRE) -- Abits Group Inc (the “Company”) (NASDAQ: ABTS), a bitcoin mining and related services company operating in the United States, announced today that its wholly owned subsidiary, Abit USA, Inc. (“Abit USA”), has secured a
Additionally, the Company is pleased to announce that it has successfully renegotiated and secured improved terms under its Hosting Agreement with a service provider. The enhanced cash flows from this Memphis expansion are expected to contribute additional earnings at the EBITDA level over the next three years.
About Abits Group Inc
Abits Group Inc (formerly Moxian (BVI) Inc), a company organized in the British Virgin Islands in May 2021, is the surviving company following its merger with Moxian, Inc. in August 2021. Abits Group Inc is a new generation digital company, with self-mining operations in the State of Tennessee through a wholly owned subsidiary, ABIT USA, Inc.
Forward-Looking Statements
This announcement contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements are based on the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and may be governed by terms such as “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” Believe, “estimate”, “potential”, “continue”, “in progress”, “goal”, “guidance expectations” and similar statements are identified. The company may also include in its periodic reports to the US Securities and Exchange Commission (“SEC”), annual reports to shareholders, press releases and other written materials, as well as oral statements from third parties to the company’s management, directors or employees. Any statements that are not historical facts, including statements about the company’s philosophy and expectations, are forward-looking statements that involve factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These factors and risks include, but are not limited to, the following: company’s goals and strategies; future business development; financial status and operating results; expected growth of bitcoin mining industry and Internet media marketing industry; demand and acceptance of the company’s products and services; the relationship between the company and strategic partners; industry competition; and policies and regulations related to the company’s structure, business and industry. More detailed information about these and other risks and uncertainties is included in the company’s filings with the Securities and Exchange Commission. All information provided in the company’s introduction is the latest information as of the date of publication of the company. Except as provided by applicable law, the company is not obligated to update such information.
For further information, please contact:
Abits Group Inc
Investor Relations
ir@abitsgroup.com
FAQ
What is the size and purpose of ABTS's new loan secured in March 2025?
How much will ABTS's mining capacity increase with the Memphis expansion?
When will ABTS's new Memphis hosting facility become operational?
What are the terms of ABTS's new loan for the Memphis expansion?
How will the Memphis expansion impact ABTS's financial performance?
