Mawson Infrastructure Group Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
BGDE$3.16+19.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-19.
0001213900-24-070758
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001213900-24-097833
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 112 current paragraphs.
53 unchanged; 39 reworded; 19 added; 19 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 28 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
The Company develops and operates digital infrastructure platforms for enterprise customers and for its own purposes. The Company’s digital infrastructure platforms can be used to operate computing resources for a number of applications, and are offered across digital assets, artificial intelligence (AI), high-performance computing (HPC) and other computing applications. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company adapts its power usage to the real-time needs of the grid. The Company may also transact in digital computational machines, data center infrastructure, and related equipment periodically, subject to business and commercial opportunities.
Current report
The Company has a strategy to prioritize the usage of carbon-free energy sources, including nuclear energy, to power its digital infrastructure platforms and computational machines.
Current report
The Company manages and operates digital infrastructure platforms delivering a total current capacity of approximately 129 megawatts (MW) with its current operational sites with an additional 24 MW of future capacity that is under development, all strategically located in locations served by the PJM Energy Market in the United States. The PJM Energy Market is the largest wholesale power market in North America.
Current report
Previously, the Company also had an interest in the Australian energy market, however for strategic and commercial reasons, the Company is currently focused on advancing its interests in North America. The Company currently operates facilities in the United States of America and does not have operating sites in Australia. The Company has previously reported through an 8-K filing on March 29, 2024 that the Company may seek to exit certain or all of its entities and holdings in Australia. The accompanying consolidated condensed unaudited interim financial statements, including the results of a number of the Company’s Australian subsidiaries: Cosmos Trading Pty Ltd, Cosmos Infrastructure LLC, Cosmos Manager LLC, MIG No.1 Pty Ltd (on March 19, 2024, MIG No.1 Pty Ltd was placed into a Australian court appointed liquidation and wind-up process), MIG No.1 LLC, Mawson AU Pty Ltd (on April 23, 2024, Mawson AU Pty Ltd was placed into a Australian court appointed liquidation and wind-up process, as disclosed in note 3), an Australian entity Mawson Services Pty Ltd (on April 29, 2024, Mawson Services Pty Ltd was placed into a Australian court appointed liquidation and wind-up process, as disclosed in note 3), Luna Squares LLC, Mawson Bellefonte LLC, Luna Squares Repairs LLC, Luna Squares Property LLC, Mawson Midland LLC, Mawson Hosting LLC, Mawson Ohio LLC and Mawson Mining LLC (collectively referred to as the “Group”), have been prepared by the Company, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Current report
On August 6, 2024, the Company announced the future departure of Mr. Craig Hibbard as the Company’s Chief Development Officer given personal reasons. Mr. Hibbard will remain with the Company in a full-time capacity until February 6, 2025 to ensure a structured transition. The Company does not plan to continue with a Chief Development Officer position henceforth and the responsibilities will be divided amongst other management team members.
Current report
On August 9, 2024, a wholly owned subsidiary of the Company, Mawson Hosting, LLC, and BE Global Development Limited, executed a Service Provider Agreement for the provision of AI/HPC digital colocation services for 20MW of power for AI/HPC digital colocation services at the Company’s facilities at pre-determined pricing for the first two years of the agreement, with the pricing subject to updates every two years, and with an initial six-year contract term. The contract is expected to generate $92 million in the first 2 years, with cumulative revenue potential of $285 million through the 6-year initial contract term. In addition, the Company and the Customer also entered into an additional non-binding Letter of Intent (the “LOI”) to supplement the binding 20 MW agreement, to plan for further expansion of their business relationship to a total of 144 MW over time. The Company filed an 8K on August 12, 2024 attaching the agreement as Exhibit 99.1. This filing is incorporated herein by reference.
Current report
On August 21, 2024, the Company secured a lease amendment to expand its Ohio facility and extending the lease term for 9 years, through April 2033. Securing an initial 24 MW of capacity through agreements. The Company filed an 8K on August 27, 2024 announcing the event pursuant to a press release which was attached here to the 8-K as Exhibit 99.1 and is incorporated herein by reference.
Current report
On September 6, 2024, Luna Squares Property, LLC, a wholly-owned subsidiary of the Company, filed a praecipe of lis pendens for the property leased in Sharon, Pennsylvania. It did so to also provide third parties such as Bitfarms Ltd. notice that the property is encumbered by a lease between Luna Squares Property LLC and Vertua Property, Inc. This property is the subject of a current civil lawsuit between the Company and Luna Squares against Vertua. On October 17, 2024, the Company filed several claims against Vertua Property, Inc including claims for breach of the lease agreement and wrongful termination of the lease, as well as for tortious interference with a business relationship, seeking reinstatement of the lease, compensatory damages, disgorgement of revenue, and exemplary and punitive damages, as well as reimbursement for Plaintiffs’ costs and expenses including attorneys’ fees and costs of suit.
Current report
On September 9, 2024, the Company entered into the Third Amendment to Lease Agreement (the “Amendment”) which amended the existing Lease Agreement, dated as of September 20, 2021, by and between the Company and Jewel Acquisition, LLC, pursuant to which the Company leases approximately 8 acres of land and improvements located at 950 10 th Street (950 Railroad Avenue), Midland (Beaver County), Pennsylvania (the “Lease”). The Amendment extends the Lease from September 14, 2024 to September 14, 2027 and sets new rental rates that are effective as of September 15, 2024. Future minimum lease payments for the Lease, as amended, are approximately $1,380,509, with annual increases of 3.1%. All other terms of the Lease remain in full force and effect. The Company filed an 8K on September 11, 2024 attaching the amendment as Exhibit 99.1. This filing is incorporated herein by reference.
Current report
On September 11, 2024, the Company entered into a Marketing Services Agreement with Outside The Box Capital Inc. (“OTB”) pursuant to which OTB will provide certain marketing and distribution services to the Company for a six month term in consideration for the payment of a fee of $100,000 worth of restricted shares of the Company’s common stock, as approved by the Company’s board. The Company filed an 8K on September 11, 2024 attaching the agreement as Exhibit 99.1. This filing is incorporated herein by reference.
Current report
Digital colocation business revenues for the three-months ended September 30, 2024 and 2023, were $9.52 million and $3.00 million, respectively. This represented an increase of $6.56 million or 222% increase.
Current report
Energy management business revenues for the three-months ended September 30, 2024 and 2023, were $1.96 million and $1.48 million, respectively. This represented an increase of $0.49 million or 33% increase.
Current report
Selling, general and administrative expenses for the three-months ended September 30, 2024 and 2023 were $6.00 million and $3.66 million, respectively.
Current report
Interest expenses for the three-months ended September 30, 2024 and 2023, were $0.80 million and $0.51 million, respectively driven by default interest on loans outstanding.
Current report
Results of Operations – Nine-months Ended September 30, 2024 compared to the nine-months ended September 30, 2023
Current report
Digital colocation services revenues for nine-months ended September 30, 2024 and 2023, were $25.88 million and $11.88 million, respectively, representing an increase of $14.01 million or 118% increase.
Current report
Energy management revenues for the nine-months ended September 30, 2024 and 2023, were $6.17 million and $2.93 million, respectively, representing an increase of $3.23 million or 110% increase.
Current report
Interest expenses for the nine-months ended September 30, 2024 and 2023, were $2.29 million and $2.06 million, respectively.
Current report
On May 31, 2024, W Capital obtained a judgment from the Australian court awarding it a money judgment for USD $0.17 million as unpaid interest under the convertible note after the Company paid in full the principal of $0.50 million, and AUD $0.30 million under a loan deed. On June 12, 2024, W Capital issued a statutory demand under Australian Law to the Company seeking USD $0.17 million as unpaid interest under a convertible note after the Company paid in full the principal of $0.50 million, and AUD $0.30 million under a loan deed. The Company rejected this demand. Subsequently, on October 3, 2024, a proceeding before the Federal Court of Australia, New South Wales was filed by W Capital against the Company, seeking a hearing on November 29, 2024 regarding its claims related to Company’s solvency under Australian law. The current proceeding is in Australian courts and there are no associated proceedings in the United States. The Company believes that W Capital and Marshall are using this proceeding in Australia as a bad faith attempt to gain leverage in ongoing legal disputes between the parties. For further information, please reference the Marshall and W Capital Australian Loan Disputes found in Part I. Financial Information, Item 1. Financial Statements, made part here of and incorporated herein by reference.
Removed paragraphs (19)
Previous report
The Company has 3 primary lines of business – its digital co-location business, digital assets self-mining business, and energy management business.
Previous report
Throughout this filing, we use the term Bitcoin (with a capital “B”) to represent the overall concept of Bitcoin, including the technology, protocol, and the entire ecosystem. The term bitcoin (with a lower case “b”) refers to the digital bitcoin currency or token.
Previous report
The Company develops and operates next generation digital infrastructure platforms for digital colocation services, and digital assets mining activities including on the Bitcoin blockchain network. The Company also provides digital infrastructure services for its colocation customers that use computational machines through our digital infrastructure platforms. The Company also has an energy management program through which it can receive net energy benefits in exchange for curtailing the power the Company utilizes from the grid in response to instances of high electricity demand.
Previous report
The Company may also transact in digital assets mining, data center infrastructure and related equipment periodically, subject to prevailing market conditions. The Company designs, develops, operates, and manages its next generation digital infrastructure platforms to responsibly support digital assets such as the Bitcoin network and other digital assets by contributing to the scale, structure, and decentralization of these networks and optimizing energy consumption. The Company contributes to the ecosystem and growth of digital assets as there continues to be a global transition to the new digital economy.
Previous report
The Company strives to operate and invest in markets and communities that offer low or zero carbon renewable energy sources and participate in energy management activities. The Company invests in the communities in which it operates and supports our broader ecosystem.
Previous report
The Company seeks to power our operations and facilities with renewable or sustainable power to further support our sustainability priorities.
Previous report
The Company may also operate in related and adjacent businesses, including transacting in new and used digital asset mining and modular data centers (“MDCs”) or other equipment on a periodic basis, subject to prevailing market conditions and any surplus the Company may be experiencing.
Previous report
On April 15, 2024, the Company announced that the Board had appointed Ryan Costello, a former U.S. Congressman, as the Chair of the Company’s Board of Directors effective April 9, 2024.
Previous report
On April 23, 2024, an Australian entity and subsidiary of the Company, Mawson AU Pty Ltd, was placed into an Australian court appointed liquidation and wind-up process.
Previous report
On April 29, 2024, an Australian entity and subsidiary of the Company, Mawson Services Pty Ltd, was placed into an Australian court appointed liquidation and wind-up process.
Previous report
On April 19, 2024, a civil suit entitled “Blockware Solutions, LLC v. Mawson Bellefonte LLC and Mawson Infrastructure Group, Inc.” was filed in the US District Court, Southern District of New York under Civil Action No. 1:24-cv-02976 with the Plaintiff claiming alleged merchandise price and incidental damages of $115,500, alleged consequential damages due to lost profits of $358,689, and other alleged, non-specified damages, for alleged claims of non-payment. Mawson Bellefonte, LLC is a Delaware subsidiary of the Company. Mawson Bellefonte and the Company intends to defend against all alleged claims made related to this matter. The company also reserves and retains all rights against Blockware Solutions, LLC.
Previous report
On June 12, 2024, the Company held its 2024 annual meeting of stockholders. At the Annual Meeting, among other things, the stockholders also adopted and approved the Company’s new 2024 Omnibus Equity Incentive Plan
Previous report
On July 1, 2024, the Board approved the following equity compensation awards to the following named executive officers:
Previous report
On July 1, 2024, Mawson Hosting, LLC (the “Service Provider”), and Krypton Technologies LLC (the “Customer”), executed a Service Framework Agreement for the provision of certain colocation services (the “Agreement”). In accordance with the terms of the Agreement, Service Provider will provide Customer with colocation services for approximately 20MW at Service Provider’s Midland PA site. The Agreement provides for Service Provider to provide colocation services to Customer.
Previous report
Interest expenses for the three-months ended June 30, 2024 and 2023, were $0.75 million and $0.65 million, respectively.
Previous report
Results of Operations – Six-months Ended June 30, 2024 compared to the six-months ended June 30, 2023
Previous report
Digital assets self-mining revenues from production of bitcoin for the six-months ended June 30, 2024, and 2023, were $10.76 million and $7.63 million, respectively, representing an increase of $3.11 million or 41% over the prior period.
Previous report
Interest expenses for the six-months ended June 30, 2024 and 2023, were $1.49 million and $1.55 million, respectively. This decrease of $0.06 million was attributable to the paydown of debt during 2023 and 2024.
Previous report
On July 8, 2022, the Company issued secured convertible promissory notes to investors in exchange for cash. The outstanding balance relates to the interest on the convertible note which has been accrued from July 2022 onwards and therefore the outstanding balance is $0.10 million as of June 30, 2024, all of which is classified as a current liability. On March 28, 2024, the Company was made a defendant in a civil suit before the Supreme Court of NSW in Sydney Australia, in the matter entitled “W Capital Advisors Pty Ltd in its capacity as trustee for the W Capital Advisors Fund v. Mawson Infrastructure Group, Inc.”, Docket No. 2024/00117331, alleging a claim to seek USD $0.17 million as unpaid interest for the convertible note and AUD $0.30 million under the loan deed, plus interest and costs. The Company sought dismissal of the Australian proceedings arguing jurisdiction of any claims against the Company was in the United States as set forth in the agreements between the parties. Despite its objections, the Australian court ruled in favor of the Australian claimant and rendered a judgment against the Company under Australian law for US $0.17 million as unpaid interest under a convertible note after the Company paid in full the principal of $0.50 million, and AUD $0.30 million under a loan deed, plus interest and costs for sums due. The Company continues to believe that jurisdiction and adjudication of this matter has to be pursuant to U.S law and has to occur in the United States and the Company retain all rights and shall pursue all remedies as available under U.S. jurisdictions.
Reworded paragraphs (39)
Previous wording
Mawson Infrastructure Group Inc. (“Mawson,” the “Company,” “we,” “us,” and “our”) is a digital infrastructure company headquartered in the United States.
Current wording
Mawson Infrastructure Group Inc. (“Mawson,” the “Company,” “we,” “us,” and “our”) is a technology company focused on digital infrastructure platforms, headquartered in the United States of America.
Previous wording
Mawson is a corporation incorporated in Delaware in 2012. On March 9, 2021, the Company acquired the shares of Cosmos Capital Limited in a stock for stock exchange. This transaction has been accounted for as a reverse asset acquisition. Mawson was previously known as Wize Pharma Inc and changed its name on March 17, 2021. Shares of Mawson’s common stock, par value $0.001 per share (“Common Stock”) have been listed on The Nasdaq Capital Market since September 29, 2021.
Current wording
The Company is a corporation incorporated in Delaware in 2012. On March 9, 2021, the Company acquired the shares of Cosmos Capital Limited in a stock for stock exchange. This transaction has been accounted for as a reverse asset acquisition. The Company was previously known as Wize Pharma Inc and changed its name on March 17, 2021. Shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) have been listed on The Nasdaq Capital Market since September 29, 2021.
Previous wording
Digital colocation services revenues for the three-months ended June 30, 2024 and 2023, were $8.13 million and $4.59 million, respectively. This represented an increase of $3.54 million or 77%. The increase in revenue was due to the Company providing colocation services to multiple colocation customers. For the same period of 2023, the Company only provided colocation services to a single customer. The Company expects to continue to diversify its colocation services customer base to manage its exposure or dependance to any specific customer, as well as to expand its agreements to potentially include enterprise customers mining digital assets other than bitcoin or for other compute purposes.
Current wording
The increase in revenue was due to the Company providing digital colocation services to multiple digital colocation customers. For the same period of 2023, the Company only provided digital colocation services to a single customer whereas the Company now provides digital colocation services to multiple customers. The Company expects to continue to diversify its digital colocation services customer across customers and to expand its business.
Previous wording
Net energy benefits revenues for the three-months ended June 30, 2024 and 2023, were $1.73 million and $1.02 million, respectively. This represented an increase of $0.71 million or a 70% increase. This increase is due to the Company participating more in energy management programs in the three-months ended June 30, 2024 than in the 2023 period. The revenue opportunity from net energy benefits is expected to be impacted by seasonal patterns and other weather-related events as well as the dynamic nature of power prices.
Current wording
This increase is due to the Company enhanced energy management program participation in the three-months ended September 30, 2024 than in the 2023 period. The revenue opportunity from energy management is expected to be impacted by seasonal patterns and other weather-related events as well as the dynamic nature of global power prices.
Previous wording
Digital assets self-mining revenues from the production of bitcoin for the three-months ended June 30, 2024, and 2023, were $3.25 million and $4.90 million, respectively, and represented a decrease of $1.65 million or 34%. The decrease for the three-months ended June 30, 2024, was due in large part to the impact of the April 2024 halving event, and a higher global network difficulty rate in the three-months ended June 30, 2024 compared to the same period in 2023, which led to lower bitcoin production from self-mining. The total bitcoin produced in the three-months ended June 30, 2024 period totaled 49 bitcoin versus 182 bitcoin in the three-months ended June 30, 2023 period; a decrease of 73% bitcoin produced over the respective period. In the three-months ended June 30, 24 period, the Company also expanded its colocation services business absorbing some of its digital asset self-mining capacity. The decrease in digital asset self-mining revenue for the period was slightly offset by the average price of bitcoin increasing. During the three-months ended June 30, 2023, the average price of bitcoin was $28,027, whereas the average price of bitcoin during the three-months ended June 30, 2024, was $65,657. The Company believes its digital assets self-mining revenue may continue to fluctuate with bitcoin pricing and market conditions as the bitcoin industry works through the expected volatility associated with and post the April 2024 halving event.
Current wording
Digital assets mining revenues from the production of bitcoin for the three-months ended September 30, 2024, and 2023, were $0.83 million and $6.90 million, respectively. The decrease for the three-months ended September 30, 2024, was due to a number of factors, including the impact of the April 2024 halving event, and a higher global network difficulty rate in the three-months ended September 30, 2024 compared to the same period in 2023, which led to lower bitcoin production from self-mining. In the three-months ended September 30, 24 period, the Company also significantly expanded and grew its digital colocation services business across multiple customers reallocating some of its digital asset mining capacities. The Company believes its digital mining revenue may continue to fluctuate with bitcoin pricing and market conditions as the bitcoin industry works through the expected volatility inherently associated with bitcoin including the impact post the April 2024 halving event.
Previous wording
Our cost of revenue consists primarily of direct power costs related to digital asset mining and digital colocation services and cost of mining equipment sold.
Current wording
Our cost of revenue consists primarily of direct power costs related to digital asset mining and digital colocation services and cost of equipment and infrastructure sold.
Previous wording
Cost of revenue for the three-months ended June 30, 2024 and 2023, were $8.79 million and $7.03 million, respectively. The increase in cost of revenue was primarily attributable to an increase in power costs related to the increase in energy used to operate the colocated mining equipment for our enterprise colocation customers within our facilities.
Current wording
Cost of revenue for the three-months ended September 30, 2024 and 2023, were $8.00 million and $7.72 million, respectively. The increase in cost of revenue was primarily attributable to an increase in power costs related to the increase in energy used to operate the colocated equipment for our enterprise digital colocation customers within our facilities.
Previous wording
Our selling, general and administrative expenses consist primarily of professional and management fees relating to: audit; legal; professional services, employee and director compensation, equipment repairs; marketing; freight; insurance; consultant fees; lease amortization, general and other expenses.
Current wording
Our selling, general and administrative expenses consist primarily of professional and management fees relating to: audit; legal; professional services, director and employee compensation, equipment repairs; marketing; freight; insurance; consultant fees; lease amortization, general and other expenses.
Previous wording
Stock based compensation expenses for the three-months ended June 30, 2024 and 2023 were $1.05 million and $0.69 million, respectively. In the three-months ended June 30, 2024, stockbased compensation expense was attributable to the costs recognized in relation to long-term incentives for the Company’s directors, management, and employees and to align incentives with long-term stockholder value creation.
Current wording
Stock based compensation expenses for the three-months ended September 30, 2024 and 2023 were $5.32 million and $3.78 million, respectively. In the three-months ended September 30, 2024, stock-based compensation expense was attributable to the costs recognized in relation to long-term incentives for the Company’s directors, management, and employees and to continue to align incentives with long-term stockholder value creation.
Previous wording
Depreciation and amortization for the three-months ended June 30, 2024 and 2023, were $4.60 million and $8.79 million, respectively. The lower depreciation and amortization expense is the result of an increased number of the Company’s digital asset mining hardware being fully depreciated and lower number of digital asset miners for the three-months ended June 30, 2024 following the deconsolidation of MIG No. 1 Pty Ltd during the three-months ended March 31, 2024.
Current wording
Depreciation and amortization for the three-months ended September 30, 2024 and 2023, were $3.61 million and $11.88 million, respectively. The lower depreciation and amortization expense is the result of an increased number of the Company’s digital asset mining hardware being fully depreciated and lower number of digital asset miners for the three-months ended September 30, 2024 following the deconsolidation of MIG No. 1 Pty Ltd.
Previous wording
During the three-months ended June 30, 2024 and 2023, there was a loss on the fair value of the derivative asset by $1.78 million and a loss of $5.44 million, respectively, in relation to our power supply arrangements. The loss on the derivative asset was due to a decrease expected in the price of energy costs in 2024 and decrease in the amount of time remaining for the derivative asset.
Current wording
During the three-months ended September 30, 2024 and 2023, there was a loss on the fair value of the derivative asset by $0.79 million and a loss of $0.52 million, respectively, in relation to our power supply arrangements. The loss on the derivative asset was due to an expected decrease in the price of energy costs in 2024 and decrease in the amount of time remaining for the derivative asset.
Previous wording
Non-operating expenses consist primarily of interest expenses, loss on deconsolidation and other expenses.
Current wording
Non-operating expenses consist primarily of interest expenses and other expenses.
Previous wording
During the three-months ended June 30, 2024 and 2023, the realized and unrealized gain on foreign currency transactions was a loss of $0.29 million and a loss of $0.40 million, respectively. This difference was due mostly to the movement in foreign exchange rates.
Current wording
During the three-months ended September 30, 2024 and 2023, the realized and unrealized gain on foreign currency transactions was a loss of $0.35 million and a loss of $0.60 million, respectively. This difference was due mostly to the movement in foreign exchange rates.
Previous wording
As a result of the foregoing, the Company recognized a net loss of $9.62 million for the three-months ended June 30, 2024, compared to a net loss of $17.34 million for the three-months ended June 30, 2023.
Current wording
As a result of the foregoing, the Company recognized a net loss of $12.23 million for the three-months ended September 30, 2024, compared to a net loss of $19.05 million for the three-months ended September 30, 2023.
Previous wording
Digital colocation services revenues for six-months ended June 30, 2024 and 2023, were $16.37 million and $8.92 million, respectively, representing an increase of $7.45 million or 84%. The increase in revenue was due to the significant increase in the colocation business during the six-months ended June 30, 2024, where the Company provided colocation services to multiple colocation customers, whereas for the six-months ended June 30, 2023 the Company provided colocation services to a single customer and began transitioning those services to its Pennsylvania facilities in early 2023 from its prior Georgia facilities that it exited in late 2022.
Current wording
The increase in revenue was due to growth of the digital colocation business during the nine-months ended September 30, 2024, where the Company provided digital colocation services to multiple digital colocation customers, whereas for the nine-months ended September 30, 2023 the Company provided digital colocation services to a single customer.
Previous wording
Net energy benefits revenues for the six-months ended June 30, 2024 and 2023, were $4.21 million and $1.46 million, respectively, representing an increase of $2.75 million or an 188% increase. This increase is due to the Company’s greater participation in energy management programs.
Current wording
This increase is due to the Company’s enhanced participation in energy management programs.
Previous wording
Sales of digital mining and other equipment for the six-months ended June 30, 2024 and 2023, were $0.55 million and $0.19 million, respectively.
Current wording
Sales of digital mining and other equipment for the nine-months ended September 30, 2024 and 2023, were $0.55 million and $0.19 million, respectively.
Previous wording
Our cost of revenue consists primarily of direct power costs related to digital assets mining and colocation services and cost of mining equipment sold.
Current wording
Our cost of revenue consists primarily of direct power costs related to digital assets mining and digital colocation services and cost of mining equipment sold.
Previous wording
Cost of revenue for the six-months ended June 30, 2024 and 2023, were $20.58 million and $11.71 million, respectively. The increase in cost of revenue was primarily attributable to an increase in power costs related to the energy used to operate the Company’s mining equipment and customer colocated mining equipment within our facilities.
Current wording
Cost of revenue for the nine-months ended September 30, 2024 and 2023, were $28.58 million and $19.42 million, respectively. The increase in cost of revenue was primarily attributable to an increase in power costs related to the energy used to operate the Company’s mining equipment and customer colocated mining equipment within our facilities.
Previous wording
Selling, general and administrative expenses for the six-months ended June 30, 2024 and 2023 were $7.11 million and $11.24 million, respectively, which is a reduction of $4.14 or 37% million from period to period. The decrease is primarily attributable to lower employee compensation expenses including payroll costs, lower doubtful debt expense, reduced freight costs, lower marketing and travel expenses also driven by the cost reduction and optimization actions that the Company had previously undertaken.
Current wording
Selling, general and administrative expenses for the nine-months ended September 30, 2024 and 2023 were $13.10 million and $14.90 million, respectively, which is a reduction of $1.80 million or 12% from period to period. The decrease is primarily attributable to lower employee compensation expenses including payroll costs, lower doubtful debt expense, reduced freight costs, lower marketing and travel expenses also driven by the cost reduction, efficiency, and optimization actions that the Company had previously undertaken.
Previous wording
Stock-based compensation expenses for the six-months ended June 30, 2024 and 2023 were $5.95 million and $1.69 million, respectively. In the six-months ended June 30, 2024, stock-based compensation was attributable to costs recognized in relation to long-term incentives for the Company’s directors and employees and to align incentives with long-term stockholder value creation.
Current wording
Stock-based compensation expenses for the nine-months ended September 30, 2024 and 2023 were $11.28 million and $5.48 million, respectively. In the nine-months ended September 30, 2024, stock-based compensation was attributable to costs recognized in relation to long-term incentives for the Company’s directors and employees and to continue to align incentives with long-term stockholder value creation.
Previous wording
Depreciation and amortization for the six-months ended June 30, 2024 and 2023, were $12.60 million and $16.75 million, respectively.
Current wording
Depreciation and amortization for the nine-months ended September 30, 2024 and 2023, were $16.21 million and $28.63 million, respectively.
Previous wording
During the six-months ended June 30, 2024 and 2023, there was a loss on the fair value of the derivative asset by $0.09 million and a loss of $6.13 million, respectively, in relation to our power supply arrangements. The loss on the derivative asset was due to the passage of time offset by an increase in the price of energy costs in 2024.
Current wording
During the nine-months ended September 30, 2024 and 2023, there was a loss on the fair value of the derivative asset by $0.88 million and a loss of $6.65 million, respectively, in relation to our power supply arrangements. The loss on the derivative asset was due to the passage of time offset by an increase in the price of energy costs in 2024.
Previous wording
During the six-months ended June 30, 2024, the Company recognized a deconsolidation loss of $12.01 million. This loss was as a result of three Australian entities and subsidiaries, MIG No.1 Pty Ltd, Mawson AU Pty Ltd and Mawson Services Pty Ltd going into Australian court appointed liquidation and accordingly these subsidiaries were deconsolidated. The deconsolidation loss recorded was due to the removal of the net assets and certain liabilities of this subsidiary from the condensed consolidated financial statements. See Note 3 - Subsidiary Deconsolidation to the Consolidated Condensed Financial Statements (Unaudited) in Item 1. Financial Statements, for further discussion.
Current wording
During the nine-months ended September 30, 2024, the Company recognized a deconsolidation loss of $12.44 million. This loss was as a result of three Australian entities and subsidiaries, MIG No.1 Pty Ltd, Mawson AU Pty Ltd and Mawson Services Pty Ltd going into Australian court appointed liquidation and accordingly these subsidiaries were deconsolidated. The deconsolidation loss recorded was due to the removal of the net assets and certain liabilities of this subsidiary from the condensed consolidated financial statements. See Note 3 - Subsidiary Deconsolidation to the Consolidated Condensed Financial Statements (Unaudited) in Item 1. Financial Statements, for further discussion.
Previous wording
During the six-months ended June 30, 2024 and 2023, the realized and unrealized loss on foreign currency transactions was a loss of $0.12 million and a loss of $0.82 million, respectively. This difference was due mostly to the movement in foreign exchange rates.
Current wording
During the nine-months ended September 30, 2024 and 2023, the realized and unrealized loss on foreign currency transactions was a loss of $0.47 million and a loss of $1.42 million, respectively. This difference was due mostly to the movement in foreign exchange rates.
Previous wording
As a result of the foregoing, the Company recognized a net loss of $29.38 million for the six-months ended June 30, 2024, compared to a net loss of $28.45 million for the six-months ended June 30, 2023.
Current wording
As a result of the foregoing, the Company recognized a net loss of $41.61 million for the nine-months ended September 30, 2024, compared to a net loss of $47.49 million for the nine-months ended September 30, 2023.
Previous wording
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditure. For the six-month period ended June 30, 2024, we financed our operations primarily through net cash provided by operating activities of $4.34 million and other cash reserves. During the six-months ending June 30, 2024, the Company repaid $0.50 million of principal payments against previous facilities provided by W Capital Advisors Pty Ltd.
Current wording
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditure. For the nine-month period ended September 30, 2024, we financed our operations primarily through net positive cash flow provided by operating activities and other cash reserves. During the nine-months ending September 30, 2024, the Company repaid $0.50 million of principal payments against previous facilities provided by W Capital Advisors Pty Ltd.
Previous wording
On May 27, 2022, the Company entered an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), and filed a prospectus supplement, to sell shares of our Common Stock through an “at the market offering” program as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. Effective May 4, 2023, the Company filed a prospectus supplement to amend, supplement and supersede certain information contained in the earlier prospectus and prospectus supplement, which reduced the number of shares of Common Stock the Company may offer and sell under the ATM Agreement to an aggregate offering price of up to $9.00 million from time to time. Sales of shares of Common Stock pursuant to the ATM Agreement are currently inactive and have been inactive since May 3, 2023. If and when the Company reactivates sales under the ATM Agreement, the Company still expects limitations related to General Instruction I.B.6 of Form S-3, which is referred to as the “baby shelf” rules.
Current wording
On May 27, 2022, the Company entered an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), and filed a prospectus supplement, to sell shares of its Common Stock through an “at the market offering” program as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. Effective May 4, 2023, the Company filed a prospectus supplement to amend, supplement and supersede certain information contained in the earlier prospectus and prospectus supplement, which reduced the number of shares of Common Stock the Company may offer and sell under the ATM Agreement to an aggregate offering price of up to $9.00 million from time to time. The Company terminated the ATM Agreement effective September 6, 2024. The Company may choose to enter into other “at the market offering” programs with other parties in the future.
Previous wording
We believe our near-term working capital requirements will continue to be funded through a combination of the cash we expect to generate from future operations, our existing funds, external debt facilities that may be available to us, further issuances of shares, and other potential sources of capital, monetization, or funds. We believe a combination of these opportunities are expected to be adequate to fund our longer-term operations needed over the next twelve-months. For our business growth, it is expected we may continue investing in expanding our infrastructure, expanding and/or upgrading our miners, and/or other equipment and will require additional working capital in the short-term and long-term. As of June 30, 2024, we had an aggregate of $20.15 million of debt all of which is overdue for repayment unless we refinance or renegotiate the terms. In addition, the Celsius deposit of $15.33 million is the subject of an ongoing legal dispute. The Company reserves and retains all its legal rights and remedies under applicable law related to the debt, deposit and other related matters.
Current wording
We believe our near-term working capital requirements will continue to be funded through a combination of the cash we expect to generate from future operations, our existing funds, external debt facilities that may be available to us, future issuances of shares, and other potential sources of capital, monetization, or funds. We believe a combination of these opportunities are expected to be adequate to fund our longer-term operations needed over the next twelve-months. For our business growth, it is expected we may continue investing in expanding our infrastructure, expanding and/or upgrading our infrastructure and/or other equipment and will require additional working capital in the short-term and long-term. As of September 30, 2024, we had an aggregate of $21.37 million of debt all of which is overdue for repayment unless we refinance, renegotiate the terms or prevail in our disputes and/or related claims. In addition, the Celsius deposit of $15.33 million is the subject of an ongoing legal dispute in arbitration. For more details on this dispute, please see the Celsius Collocation Agreement Dispute found in Part I. Financial Information, Item 1. Financial Statements, contained in this Form 10-Q and made part here of and incorporated herein by reference.
Previous wording
As of June 30, 2024 and December 31, 2023, we had a cash and cash equivalent balance of $6.78 million and $4.48 million, respectively, representing an increase of 52% in our cash and cash equivalent balance. As of June 30, 2024 and December 31, 2023, the trade receivables balance was $11.19 million and $12.11 million, respectively. As of June 30, 2024, we had $20.12 million of outstanding short-term borrowings, and as of December 31, 2023, we had $19.35 million of short-term borrowings. The short-term borrowings as of June 30, 2024, relate to Celsius Mining LLC, W Capital Advisors Pty Ltd, the secured convertible promissory notes issued to investors and Marshall Investments MIG Pty Ltd (these loans are currently in default, refer to Material Cash Requirements section below for more information*)*. As of June 30, 2024 and December 31, 2023, we had negative working capital of $34.50 million and $33.18 million, respectively.
Current wording
As of September 30, 2024 and December 31, 2023, we had a cash and cash equivalent balance of $5.76 million and $4.48 million, respectively, representing a positive increase of 29% in our cash and cash equivalent balance. As of September 30, 2024 and December 31, 2023, the trade receivables balance was $12.84 million and $12.11 million, respectively. As of September 30, 2024, we had $21.37 million of outstanding short-term borrowings, and as of December 31, 2023, we had $19.35 million of short-term borrowings. The short-term borrowings as of September 30, 2024, relate to Celsius Mining LLC, W Capital Advisors Pty Ltd, the secured convertible promissory notes issued to investors and Marshall Investments MIG Pty Ltd (these loans are currently in default, refer to Material Cash Requirements section below for more information*)*. As of September 30, 2024 and December 31, 2023, we had negative working capital of $36.09 million and $33.18 million, respectively.
Previous wording
For the six-month period ended June 30, 2024, net cash provided by operating activities was $4.34 million and for the six-months period ended June 30, 2023, net cash used operating activities was $4.19 million. The increase in net cash provided by operating activities was attributable to operations and timing differences in trade and other receivables and trade and other payables amongst other factors.
Current wording
For the nine-month period ended September 30, 2024, net cash provided by operating activities was $3.11 million and for the nine-months period ended September 30, 2023, net cash used operating activities was $4.82 million. The increase in net cash provided by operating activities was attributable to operations and timing differences in trade and other receivables and trade and other payables amongst other factors.
Previous wording
For the six-month period ended June 30, 2024, net cash used in investing activities was $1.42 million and for the six-month period ended June 30, 2023, net cash provided by investing activities was $10.77 million. The net cash used in investing activities during the six-months ended June 30, 2024, was primarily attributable to the proceeds from sale of certain non-utilized equipment. The net cash provided by investing activities during the six-month period to June 30, 2023 was primarily attributable to the proceeds from sale of investment shares in CleanSpark, Inc.
Current wording
For the nine-month period ended September 30, 2024, net cash used in investing activities was $1.10 million and for the nine-month period ended September 30, 2023, net cash provided by investing activities was $10.51 million. The net cash used in investing activities during the nine-months ended September 30, 2024, was primarily attributable to the proceeds from sale of certain non-utilized equipment. The net cash provided by investing activities during the nine-month period to September 30, 2023 was primarily attributable to the proceeds from sale of investment shares in CleanSpark, Inc.
Previous wording
For the six-month period ended June 30, 2024, net cash used in financing activities was $0.62 million and for the six-month period ended June 30, 2023, net cash used in financing activities was $1.89 million. The cash used in financing activities during the six-month period ended June 30, 2024, was primarily attributable to the repayment of borrowings.
Current wording
For the nine-month period ended September 30, 2024, net cash used in financing activities was $0.73 million and for the nine-month period ended September 30, 2023, net cash used in financing activities was $5.12 million. The cash used in financing activities during the nine-month period ended September 30, 2024, was primarily attributable to the repayment of borrowings.
Previous wording
The Company is the guarantor on a Secured Loan Facility Agreement by MIG No. 1 with Marshall. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments commencing that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 Pty Ltd and a general security agreement given by the Company. Principal repayments began during November 2022. The outstanding balance including interest is $9.71 million as of June 30, 2024, all of which is classified as a current liability. There has been no principal and interest payments made since May 2023. This Secured Loan Facility Agreement was entered into with an Australian entity MIG No.1, this company was placed into a court appointed liquidation and wind-up process and was deconsolidated from the group on March 19, 2024. On March 19, 2024, Marshall appointed receivers and managers in Australia under the terms of their security relating to their secured loan facility. The direct assets that secure this loan include 5,372 miners and 8 modular data centers (“MDCs”), these assets are held by the MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory duty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably obtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt. It is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these miners and MDCs. The Company also reserves and retains all rights against Marshall.
Current wording
The Company is the guarantor of a Secured Loan Facility Agreement by MIG No. 1 with Marshall. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments commencing that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 Pty Ltd and a general security agreement given by the Company. Principal repayments began during November 2022. The outstanding balance including interest is $10.53 million as of September 30, 2024, all of which is classified as a current liability. There has been no principal and interest payments made since May 2023. This Secured Loan Facility Agreement was entered into with an Australian entity MIG No.1, this company was placed into a court appointed liquidation and wind-up process and was deconsolidated from the group on March 19, 2024. On March 19, 2024, Marshall appointed receivers and managers in Australia under the terms of their security relating to their secured loan facility. The direct assets that secure this loan include 5,372 miners and 8 modular data centers (“MDCs”), these assets are held by the MIG No.1 and therefore were included in the deconsolidation. The receiver’s statutory duty includes the obligation to sell the secured assets at market value or, if market value is not known, at the best price reasonably obtainable to maximize the prospects of there being sufficient proceeds available to satisfy the balance of the outstanding secured debt. It is therefore expected that this loan balance will be offset in the future by the amount received from the sale of these miners and MDCs. The Company also reserves and retains all rights against Marshall.
Previous wording
On February 23, 2022, Luna entered into a Colocation Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna a principal amount of $20.00 million, for the purpose of funding the infrastructure required to meet the obligations of the Colocation Agreement, for which Luna issued a Secured Promissory Note for repayment of such amount. The Secured Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Secured Promissory Note had a maturity date of August 23, 2023, the outstanding balance including interest is $9.10 million as of June 30, 2024, all of which is classified as a current liability. Celsius Mining LLC transferred the benefit of the promissory note to Celsius Network Ltd. Celsius Mining LLC and Celsius Network Ltd filed for Chapter 11 bankruptcy protection on July 13, 2022. Under the Colocation Agreement, Celsius Mining LLC advanced $15.33 million to Luna that were held as a deposit. Whether that amount has been forfeited or must be returned to Celsius Mining LLC is the subject of a dispute between the parties. On July 18, 2024, Celsius Network, LLC filed for arbitration of its claims against the Company with the American Arbitration Association in the matter entitled, “Celsius Network Ltd., Celsius Mining LLC and Ionic Digital Mining LLC v. Mawson Infrastructure Group, Luna Squares LLC and Cosmos Infrastructure LLC - Case 01-24-0006-4462”. The Company opposes the claim in arbitration and on August 12, 2024, has filed responsive pleadings denying the claims and asserting affirmative defenses, including set off against theclaims, and asserted cross claims against Celsius for sums due to the Company in excess of $115.00 million. This includes counter claims asserted by the Company against Celsius Network Ltd., Celsius Mining LLC and Ionic Digital Mining LLC in excess of $115.00 million for damages due to the Company, including for breach of the Colocation Agreement by Celsius. The matter is proceeding through the arbitration process.
Current wording
On February 23, 2022, Luna entered into a Digital Colocation Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna a principal amount of $20.00 million, for the purpose of funding the infrastructure required to meet the obligations of the Digital Colocation Agreement, for which Luna issued a Secured Promissory Note for repayment of such amount. The Secured Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Secured Promissory Note had a maturity date of August 23, 2023, the outstanding balance including interest is $9.38 million as of September 30, 2024, all of which is classified as a current liability. Celsius Mining LLC transferred the benefit of the promissory note to Celsius Network Ltd. Celsius Mining LLC and Celsius Network Ltd filed for Chapter 11 bankruptcy protection on July 13, 2022. Under the Digital Colocation Agreement, Celsius Mining LLC advanced $15.33 million to Luna that were held as a deposit. Whether that amount has been forfeited or must be returned to Celsius Mining LLC is the subject of a dispute between the parties. On July 18, 2024, Celsius Network, LLC filed for arbitration of its claims against the Company. The Company has filed cross-claims against Celsius. For more details on this dispute, please see the Celsius Collocation Agreement Dispute found in Part I. Financial Information, Item 1. Financial Statements, contained in this Form 10-Q and made part here of and incorporated herein by reference.
Previous wording
The Company is the guarantor on a Secured Loan Facility Agreement for working capital by an Australian entity Mawson Infrastructure Group Pty Ltd with W Capital Advisors Pty Ltd. As of June 30, 2024, AUD $1.86 million (USD $1.24 million) has been drawn down from this facility, all of which is classified as a current liability. The Secured Loan Facility accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps) and is paid monthly. Principal repayments are paid ad hoc in line with the loan facility agreement. The Secured Loan Facility expired in March 2023. This Secured Loan Facility Agreement was originally with Mawson Infrastructure Group Pty Ltd and this Australian entity was placed into Australian voluntary administration on October 30, 2023 and on November 3, 2023, W Capital Advisors appointed receivers and managers in Australia under the terms of their security relating to their working capital facility. The receiverships of these two Australian companies are proceeding, and the Company is dependent on the appointed receivers and managers to send information on their respective status.
Current wording
The Company is the guarantor of a Secured Loan Facility Agreement for working capital by an Australian entity Mawson Infrastructure Group Pty Ltd with W Capital Advisors Pty Ltd. As of September 30, 2024, AUD $1.95 million (USD $1.35 million) has been drawn down from this facility, all of which is classified as a current liability. The Secured Loan Facility accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps) and is paid monthly. Principal repayments are paid ad hoc in line with the loan facility agreement. The Secured Loan Facility expired in March 2023. This Secured Loan Facility Agreement was originally with Mawson Infrastructure Group Pty Ltd and this Australian entity was placed into Australian voluntary administration on October 30, 2023 and on November 3, 2023, W Capital Advisors appointed receivers and managers in Australia under the terms of their security relating to their working capital facility. The receiverships of these two Australian companies are proceeding, and the Company is dependent on the appointed receivers and managers to send information on their respective status.
Previous wording
As of June 30, 2024, and December 31, 2023, we had negative working capital of $34.50 million and $33.18 million, respectively. As of June 30, 2024, and December 31, 2023, we had net assets of $4.40 million and $30.38 million, respectively. As of June 30, 2024, we had an accumulated deficit of $212.05 million compared to $182.67 million as of December 31, 2023. Our cash position of June 30, 2024, was $6.78 million in comparison to $4.48 million as of December 31, 2023. For the six-month period ended June 30, 2024 and 2023 the Company incurred a loss after tax of $29.38 million and $29.03 million, respectively. Included in trade and other receivables is a $2.00 million payment due and pending from CleanSpark, Inc. for the sale of the Georgia facility. CleanSpark, Inc has disputed the obligation to make this payment. On July 16, 2024, the Company filed a civil lawsuit for its claims against CleanSpark, Inc and CSRE with the United States District Court for the Southern District of New York in the matter entitled, “Mawson Infrastructure Group, Inc. and Luna Squares, LLC v. CleanSpark, Inc. and CSRE Properties Sandersville, LLC” under Civil Action Number 1:24-cv-5379 for claims and payments due to the Company in excess of $2.00 million. The matter is proceeding through the court system.
Current wording
As of September 30, 2024, and December 31, 2023, we had negative working capital of $36.09 million and $33.18 million, respectively. As of September 30, 2024, and December 31, 2023, we had negative net assets of $1.56 million and $30.38 million, respectively. As of September 30, 2024, we had an accumulated deficit of $224.28 million compared to $182.67 million as of December 31, 2023. Our cash position of September 30, 2024, was $5.76 million in comparison to $4.48 million as of December 31, 2023. For the nine-month period ended September 30, 2024 and 2023 the Company incurred a loss after tax of $41.61 million and $48.36 million, respectively. Included in trade and other receivables is a $2.00 million payment due and pending from CleanSpark, Inc. for the sale of the Georgia facility. CleanSpark, Inc has disputed the obligation to make this payment. On July 16, 2024, the Company filed a civil lawsuit for its claims against CleanSpark, Inc and CSRE with the United States District Court for the Southern District of New York in the matter entitled, “Mawson Infrastructure Group, Inc. and Luna Squares, LLC v. CleanSpark, Inc. and CSRE Properties Sandersville, LLC” under Civil Action Number 1:24-cv-5379 for claims and payments due to the Company in excess of $2.00 million. The matter is proceeding through the court system. For more details, please see the CleanSpark Litigation found in Item 1. Legal Proceedings, Part II Other Information contained in this Form 10-Q.
Previous wording
We require additional capital to respond to near-term debt repayment obligations, competitive pressure, market dynamics, new technologies, customer demands, business opportunities, challenges, potential acquisitions or unforeseen circumstances, and we will likely need to determine to engage in equity or debt financings in the short term. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to fund, grow or support our business model and to respond to business challenges could be significantly limited, our business, financial condition and results of operations could be adversely affected, and this may result in bankruptcy or our ceasing operations.
Current wording
We require additional capital to respond to near-term debt repayment obligations, competitive pressure, market dynamics, new technologies, customer demands, business opportunities, challenges, potential acquisitions or unforeseen circumstances, and we will likely need to determine to engage in equity, debt or other financings in the short term. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to fund, grow or support our business model and to respond to business challenges could be significantly limited, our business, financial condition and results of operations could be adversely affected, and this may result in bankruptcy or our ceasing operations.
Previous wording
The Company continues to take steps to preserve cash by optimizing costs and negotiating with its suppliers to improve or extend their terms of trade. The Company has been improving its revenue generation by improving the efficiency of its operations and adding multiple, institutional colocation services customers. The Company will continue to seek to optimize its cashflows through these and other initiatives.
Current wording
The Company continues to take steps to preserve cash by optimizing operations, costs and pursuing efficiencies. The Company has been improving its revenue generation by enhancing its operations, driving growth in business lines, and adding multiple, enterprise digital colocation services customers and diversifying its businesses. The Company will continue to seek to optimize its cashflows through these and other initiatives.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Digital assets revenues from production of bitcoin for the nine-months ended September 30, 2024, and 2023, were $11.60 million and $14.55 million, respectively. In the nine-months ended September 30, 24 period, the Company also significantly expanded its digital colocation services business reallocating some of its digital asset mining capacities. The Company believes its digital mining revenue may continue to fluctuate with bitcoin pricing and market conditions as the bitcoin industry works through the expected volatility inherently associated with bitcoin including the impact post the April 2024 halving event.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Selling, general and administrative expenses for the three-months ended June 30, 2024 and 2023 were $3.64 million and $6.27 million, respectively, which is a reduction of $2.62 million from period to period. The decrease in these expenses is primarily attributable to reduced freight costs, lower marketing and travel expenses and lower employee compensation expenses including payroll costs; due to cost reduction and optimization actions that the Company had previously undertaken.
Previous report — wording carried elsewhere
During the three-months ended June 30, 2024, the Company recognized a deconsolidation loss of $0.08 million. This loss was as a result of two Australian entities and subsidiaries, Mawson AU Pty Ltd and Mawson Services Pty Ltd proceeding through into Australian court appointed liquidation and accordingly these subsidiaries were deconsolidated. The deconsolidation loss recorded was due to the removal of the net assets and certain liabilities of the subsidiaries from the condensed consolidated financial statements. See Note 3 - Subsidiary Deconsolidation to the Consolidated Condensed Financial Statements (Unaudited) in Item 1. Financial Statements, for further discussion.