Abits Group Inc Annual Report - How They Did This Year

I’m putting together a guide to help you understand how Abits Group Inc performed this year. My goal is to cut through the corporate jargon so you can decide if this company fits your portfolio.

1. The Big Picture

Abits Group Inc is a holding company based in the British Virgin Islands that operates almost entirely as a Bitcoin mining business. Think of them as a landlord for the high-powered computers that run the Bitcoin network. They own mining sites and earn money by mining their own Bitcoin and by renting out space, power, and infrastructure to other miners. Their U.S. subsidiary manages the hardware and electricity needed to secure the Bitcoin blockchain.

2. Financial Health: The "Money Flow" Problem

While the company is bringing in more money, their financial health is a mixed bag.

• Revenue is Growing: They brought in $9.1 million in 2025, up from $6.7 million in 2024 and $1.7 million in 2023. This growth comes from expanding their mining capacity and buying more hardware.
• The Profit Paradox: Even though they report a $3.6 million "operating profit" for 2025, they still report a total loss after taxes. Once you account for interest on debt and tax bills, the company spends more than it earns.
• Cash Crunch: Their cash on hand dropped from $1.1 million in 2024 to just $83,837 in 2025. This leaves them with almost no cushion for equipment failures or rising electricity costs.
• Growing Debt: The parent company relies entirely on its U.S. mining subsidiary to pay the bills. The U.S. business "loans" money to the parent company. These internal loans grew from $590,188 in 2023 to $2.24 million in 2025. The parent company is now heavily dependent on the subsidiary’s success.

3. Regulatory Risks: The "China Factor"

Because they have a subsidiary in China, investors face geopolitical risks. The company notes that if the Chinese government changes its rules or restricts money moving out of the country, it could hurt the stock price or make the subsidiary’s assets difficult to access. Any policy shift could force them to abandon their Chinese operations.

4. What This Means for You

• No Dividends: The company has never paid a dividend and has no plans to do so. They keep all earnings to buy new mining rigs and cover costs.
• High Risk: This is a volatile business. They depend on Bitcoin prices, electricity costs, and "halving" cycles, which periodically cut mining rewards in half.
• Transparency: Because they are a "foreign private issuer," they do not file quarterly reports like standard U.S. companies. You have less visibility into their day-to-day operations.

5. The Bottom Line

Abits is in a "growth at all costs" phase. They are scaling revenue, but they are burning cash and relying on internal loans to survive. Their shrinking cash and rising debt suggest they may need to raise money by issuing more shares, which would reduce your ownership percentage.

Decision Checklist:

• Are you comfortable with high volatility? This stock is tied directly to the unpredictable Bitcoin market.
• Can you handle limited transparency? Without quarterly updates, you will have to wait for annual filings to see major changes.
• Are you looking for income? If you need dividends, this is not the right investment, as all cash is being reinvested into hardware.
• What is your risk tolerance? Given the tight cash position and reliance on debt, this company is currently a high-stakes bet on their ability to scale mining operations faster than their expenses grow.