BIT Mining Releases Financial Results for the Third Quarter of 2021

Hong Kong, November 18, 2021 EST, BIT Mining Limited ($BIT Mining Limited(BTCM)$), a leading technology-driven encrypted mining enterprise in digital currency (hereinafter referred to as "the Company"), today announced its unaudited financial report for the third quarter of 2021.

Development of Encrypted Digital Cash Business

BIT Mining Limited has completed a comprehensive transformation. At present, the company's business covers the whole industrial chain of cryptocurrency including cryptocurrency mining, mines and mining pools in digital cash. The company adopts the global layout strategy to promote the development of encrypted digital cash business.

The company has carried out mining business in Ethereum, and as of press time, the theoretical calculation power of the company's on-line mining machine has reached 3,451 GH/s. It is estimated that by the end of November 2021, the company will deploy Ethereum mining machines with a total theoretical computing power of 4,800 GH/s. In the third quarter of 2021, the company generated about 779 Ethereum workshops by mining, with a confirmed revenue of about 2.5 million US dollars. As of press time, the company can produce 52 Ethereum workshops per day, and has generated about 2,300 Ethereum workshops in total. Based on the current computing power of Ethereum and the price of Ethereum [1], it is estimated that from December 2021, the company will produce 80 Ethereum per day. Based on the current price of Ethereum [1] US $4,279 and Bitcoin [1] US $60,366, it is estimated that the monthly production will reach 2,400 Ethereum, equivalent to 170 Bitcoins, with a value of about US $10.3 million.

As of press time, the theoretical computing power of Bitcoin mining machine held by the company is 800PH/s. In order to improve mining efficiency, the company recently sold low-end mining machines with a total theoretical computing power of 610.7 PH/s. As of press time, the company has moved all bitcoin mining machines to Kazakhstan and the United States. The company has transported the bitcoin mining machine with a total theoretical computing power of 507.3 PH/s to the United States, and the bitcoin mining machine with a total theoretical computing power of about 119.7 PH/s has been deployed, and the rest is waiting to be deployed. The company has transported bitcoin mining machines with a total theoretical computing power of 292.7 PH/s to Kazakhstan, and the bitcoin mining machines with a total theoretical computing power of about 109.4 PH/s have been deployed, while the remaining machines are waiting to be deployed. In the third quarter of 2021, the company mined about 79 bitcoins and confirmed revenue of about $3.4 million.

In terms of data center business, in September 2021, the company signed a cooperation agreement with Viking Data Centers and LLC, and both parties established a joint venture company to jointly invest in the construction and operation of an encrypted digital cash mine with a capacity of 85MW in Ohio, USA. In October 2021, the company made additional investment to increase the mine capacity from 85MW originally planned to 150MW. The company expects to complete the mine construction in March 2022. As of the press release date, the mine has built about 50MW and operated about 11MW. The company has also planned encrypted digital cash mines in Hong Kong and Kazakhstan. The capacity of Hong Kong Encrypted Digital Cash Mine is 1.4 MW, which has been in operation since October 2021. We plan to build an encrypted digital cash mine with a capacity of 40MW in Ural region in western Kazakhstan, which is expected to be completed in the first quarter of 2022.

On October 14, 2021, the company announced that its mine pool company BTC.com would withdraw from the Chinese mainland market. BTC.com will stop registering new users in mainland China and orderly disable the accounts of existing users in mainland China. As BTC.com stops providing services to Chinese mainland users, the company expects revenue to drop by 10% to 20% in the fourth quarter of 2021. The company is working with existing users in Chinese mainland to study solutions, such as migrating their mining machines to overseas markets, so that they can use mine pool services in a compliant manner. In addition, the company expects that its continued growth in the international market will help offset the loss of its business in Chinese mainland. In the third quarter of 2021, the mine pool business generated revenue of about 397.8 million US dollars.

Dissolve VIE structure and dispose of China lottery business

The company has carried out lottery business in China through VIE structure. In July 2021, the company announced its decision to dissolve its variable interest entity ("VIE") structure related to China lottery business. The company disposed of VIE subsidiary at a consideration of zero yuan, and confirmed the disposal loss of 6.7 million US dollars. From the third quarter of 2021, VIE subsidiaries will no longer be included in the scope of consolidation, and their financial results will no longer be included in the company's financial statements in the third quarter and beyond. In the consolidated income statements of the third quarter of 2021, the second quarter of 2021 and the third quarter of 2020 listed below, the financial data of VIE subsidiaries are re-charged as non-continuing operations.

Terminate the online lottery business in Europe

The company will terminate the European online lottery business, which is operated by The Multi Group ("TMG"), a subsidiary acquired by the company in July 2017. The company expects to terminate all businesses under Malta license by the end of November 2021, Sweden license by the end of December 2021 and Cura ç ao license by the end of January 2022. TMG's European online lottery business is expected to end in the first quarter of 2022. In the third quarter of 2021, TMG's operating income was about 600,000 US dollars, accounting for 0.1% of the company's total operating income; In the third quarter of 2021, TMG had a net loss of $200,000. Due to the continuous expansion of the company's cryptocurrency mining business, it is expected that the termination of the European online lottery business will not lead to its operationIf the financial situation has a substantial impact.

Change the reporting currency

From the third quarter of 2021, the company changed its reporting currency from RMB to US dollar to reduce the impact of exchange rate fluctuation between US dollar and RMB on the company's reported operating performance. Reporting the consistency between currency and basic business will better present the company's operating results. The relevant financial statements before July 1, 2021 have been re-charged in US dollars.

Yang Xianfeng, CEO of the company, said: With the implementation of the company's strategy, we continue to create value in the cryptocurrency ecosystem. In the past six months, the company has completed the migration of mining machines to overseas markets, and made significant progress in the construction of encrypted digital cash mines in the United States, which greatly improved the operational efficiency of the company's business. In addition, we foresaw the potential value of Ethereum as the base currency earlier, including its value in non-homogeneous certificates (NFTs), decentralized finance (DeFi) and meta-universe. Therefore, we deployed a lot of Ethereum computing power in advance and began to generate good profits. Looking ahead, the company will continue to enhance its enterprise value and enhance its mining capacity.

To view the complete financial report, please click: https://ir.btc.com/2021-11-18-BIT-Mining-Limited-Announces-Unaudited-Financial-Results-for-the-Third-Quarter-ended-September-30,-2021

For more company information, please click: https://www.btcm.group

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