PART I [Business](index=5&type=section&id=Item%201.%20Business) Mawson Infrastructure Group operates as a digital asset infrastructure business focused on Bitcoin mining in the United States - Mawson's core business is Bitcoin mining, supplemented by hosting services and participation in energy markets to optimize profitability[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) Miner Fleet Status as of December 31, 2022 | Category | Count | | :--- | :--- | | Total miners online | 8,792 | | Total miners on order | 0 | | Total miners in storage | 15,010 | | **Total miners** | **23,802** | - The company operates a **100MW** facility in Midland, PA, and is developing a **120MW** facility in Sharon, PA, scheduled to come online through 2023/24[36](index=36&type=chunk) FY 2022 Bitcoin Mining Performance | Metric | Value | | :--- | :--- | | Bitcoin Mined | 1,342.59 | | Revenue from Mining | $43.11 million | - Mawson's strategy is to **liquidate mined Bitcoin regularly** rather than holding it, positioning itself as a mining operator[39](index=39&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to operations, cryptocurrency volatility, regulatory changes, and stock ownership - The company has a history of net losses and its ability to **raise additional capital is crucial** for continuing operations[72](index=72&type=chunk)[73](index=73&type=chunk) - The business is **highly sensitive to the volatile price of Bitcoin**, which fell from over $65,000 to below $17,000, directly impacting revenue[79](index=79&type=chunk)[80](index=80&type=chunk) - The company's major hosting customer, Celsius Mining LLC, filed for Chapter 11 bankruptcy, resulting in over **$1.8 million in unpaid invoices**[82](index=82&type=chunk) - **Regulatory uncertainty** poses a major threat, as future changes in laws could impose significant costs or restrictions on the business[142](index=142&type=chunk)[145](index=145&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section is not applicable to the company - The company reports no unresolved staff comments[168](index=168&type=chunk) [Properties](index=29&type=section&id=Item%202.%20Properties) The company's principal U.S. mining facilities are located on long-term leased properties in Pennsylvania - The company's two U.S. mining facilities are located on **long-term leased properties** in Midland and Sharon, Pennsylvania[170](index=170&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any significant legal proceedings - The company reports no significant ongoing legal proceedings[172](index=172&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - The company reports that mine safety disclosures are not applicable[173](index=173&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'MIGI', and it does not anticipate paying cash dividends - Common Stock is listed on The Nasdaq Stock Market LLC under the symbol **"MIGI"**[176](index=176&type=chunk) - The company has a policy of **not paying cash dividends** and intends to retain future earnings to fund operations[178](index=178&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenues increased in 2022 due to higher Bitcoin production and new services, but the company's net loss widened Revenue Breakdown (FY 2022 vs FY 2021) | Revenue Source | 2022 (USD Million) | 2021 (USD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Cryptocurrency mining | 43.11 | 38.45 | +12% | | Hosting Co-Location | 13.34 | 0.85 | +1469% | | Sale of equipment | 14.24 | 2.16 | +559% | | Net energy benefits | 13.70 | 0 | N/A | Key Operating Expenses (FY 2022 vs FY 2021) | Expense Category | 2022 (USD Million) | 2021 (USD Million) | | :--- | :--- | :--- | | Cost of revenues | 47.72 | 9.90 | | SG&A | 25.85 | 16.06 | | Depreciation & amortization | 63.20 | 14.11 | Net Loss (FY 2022 vs FY 2021) | Metric | 2022 (USD Million) | 2021 (USD Million) | | :--- | :--- | :--- | | Net Loss | (52.76) | (44.96) | - On September 8, 2022, the company sold its Georgia property to CleanSpark, resulting in a **profit on sale of $8.28 million**[197](index=197&type=chunk)[225](index=225&type=chunk) - **Cash and cash equivalents decreased from $5.47 million to $0.95 million** in 2022, while short-term borrowings increased[235](index=235&type=chunk)[237](index=237&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has elected not to provide this disclosure as a smaller reporting company - Disclosure is not provided due to the company's status as a **smaller reporting company**[264](index=264&type=chunk) [Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the full consolidated financial statements located in Item 15 - All required financial statements and data are located in Item 15 of the report[265](index=265&type=chunk) [Changes In and Disagreements With Accountants on Accounting and Financial Disclosure](index=44&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - There were no disagreements with accountants reported[266](index=266&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective due to several material weaknesses in internal control - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2022, due to material weaknesses[267](index=267&type=chunk) - Identified material weaknesses include inadequate segregation of duties, poor financial closing controls, and deficient IT controls[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - Remediation efforts are underway, including expanding the finance team and implementing new controls[280](index=280&type=chunk)[281](index=281&type=chunk) [Other Information](index=46&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - The company reports no other information[285](index=285&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=46&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable to the company - The company reports this disclosure is not applicable[286](index=286&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's 2023 annual stockholder meeting proxy statement - Information regarding directors, executive officers, and corporate governance will be provided in the forthcoming 2023 proxy statement[289](index=289&type=chunk) [Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the company's 2023 annual stockholder meeting proxy statement - Information regarding executive compensation will be provided in the forthcoming 2023 proxy statement[290](index=290&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information is incorporated by reference from the company's 2023 annual stockholder meeting proxy statement - Information regarding security ownership will be provided in the forthcoming 2023 proxy statement[291](index=291&type=chunk) [Certain Relationships and Related Transactions, Director Independence](index=47&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20Director%20Independence) Required information is incorporated by reference from the company's 2023 annual stockholder meeting proxy statement - Information regarding related transactions and director independence will be provided in the forthcoming 2023 proxy statement[292](index=292&type=chunk) [Principal Accountant Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Required information is incorporated by reference from the company's 2023 annual stockholder meeting proxy statement - Information regarding accountant fees and services will be provided in the forthcoming 2023 proxy statement[293](index=293&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section indexes the consolidated financial statements and lists all exhibits filed with the Annual Report [Financial Statements](index=49&type=section&id=Financial%20Statements) The company's 2022 net loss was $54.0 million on total assets of $133.3 million, with bitcoin revenue recognition noted as a critical audit matter Consolidated Balance Sheet Summary (as of Dec 31) | Metric (USD Million) | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets | 20.3 | 11.4 | | Total Assets | 133.3 | 145.3 | | Total Current Liabilities | 35.5 | 20.1 | | Total Liabilities | 57.2 | 30.7 | | Total Stockholders' Equity | 77.1 | 114.7 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | Metric (USD Million) | 2022 | 2021 | | :--- | :--- | :--- | | Total Revenues | 84.4 | 43.9 | | Gross Profit | 36.7 | 34.0 | | Loss from Operations | (44.1) | (42.7) | | Net Loss | (54.0) | (45.5) | | Net Loss per Share | $(4.16) | $(4.79) | Consolidated Statement of Cash Flows Summary (Year Ended Dec 31) | Metric (USD Million) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | 14.3 | 23.0 | | Net cash used in investing activities | (32.5) | (128.2) | | Net cash provided by financing activities | 14.0 | 109.9 | - The independent auditor's report highlights the **recognition and measurement of bitcoin mining revenue as a critical audit matter**[308](index=308&type=chunk)[310](index=310&type=chunk) [Form 10-K Summary](index=89&type=section&id=Item%2016.%20Form%2010-K%20Summary) No summary is provided under this item - The company reports no Form 10-K summary[491](index=491&type=chunk)

Mawson Infrastructure Group, Inc. (NASDAQ:MIGI) Q3 2022 Earnings Conference Call November 14, 2022 5:00 PM ET Company Participants Nick Hughes-Jones - Chief Commercial Officer James Manning - Chief Executive Officer Liam Wilson - Chief Operating Officer Ariel Sivikofsky - Principal Accounting Officer Conference Call Participants Josh Siegler - Cantor Fitzgerald Kevin Dede - H.C. Wainwright Operator Good day and welcome to the Mawson Infrastructure Group Inc. Third Quarter 2022 Earnings Call. [Operator Instr ...

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q3 2022 financial statements show a $35.23 million net loss and $24.69 million net current liabilities, raising substantial doubt about its going concern [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of Sep 30, 2022, total assets were $180.6M, liabilities $87.8M, equity $93.3M, with a $24.7M net current liability Consolidated Condensed Balance Sheet Highlights (unaudited) | Balance Sheet Item | Sep 30, 2022 ($) | Dec 31, 2021 ($) | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | 1,182,588 | 5,467,273 | | Assets held for sale | 21,646,334 | - | | Total current assets | 37,339,806 | 11,447,007 | | **Non-Current Assets** | | | | Property and equipment, net | 112,506,552 | 76,936,850 | | Derivative asset | 21,383,904 | - | | **Total Assets** | **180,601,574** | **145,294,372** | | **Current Liabilities** | | | | Trade and other payables | 27,529,256 | 7,746,988 | | Borrowings | 31,392,010 | 11,095,388 | | Total current liabilities | 62,029,758 | 20,072,863 | | **Total Liabilities** | **87,836,065** | **30,713,783** | | **Total Stockholders' Equity** | **93,274,185** | **114,745,215** | [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Q3 2022 net loss widened to $21.3M, while nine-month net loss improved to $35.2M, with total revenues reaching $67.5M Statement of Operations Summary (unaudited) | Metric | Q3 2022 ($) | Q3 2021 ($) | Nine Months 2022 ($) | Nine Months 2021 ($) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 28,328,426 | 10,947,786 | 67,533,199 | 24,207,567 | | Gross Profit | 10,144,902 | 8,447,949 | 26,578,242 | 17,989,422 | | Loss from Operations | (8,237,040) | (2,254,096) | (21,106,438) | (45,988,278) | | Net Loss | (21,251,783) | (3,097,875) | (35,227,490) | (47,923,670) | | Net Loss per share | (0.27) | (0.04) | (0.47) | (0.27) | [Consolidated Condensed Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased to $93.3M by Sep 30, 2022, due to a $34.3M net loss, partially offset by stock issuances - Total stockholders' equity decreased to **$93.3 million** as of September 30, 2022, down from **$114.7 million** at December 31, 2021[10](index=10&type=chunk)[20](index=20&type=chunk) - The decrease in equity was driven by a net loss of **$34.3 million** for the nine-month period, which was partially offset by stock and warrant issuances[20](index=20&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Cash decreased by $4.3M for nine months ended Sep 30, 2022, ending at $1.2M, driven by significant investing outflows Cash Flow Summary (Nine Months Ended Sep 30) | Cash Flow Activity | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | 25,141,208 | 8,337,277 | | Net cash used in investing activities | (55,466,574) | (62,261,396) | | Net cash provided by financing activities | 26,240,336 | 86,026,426 | | **Net (decrease)/increase in cash** | **(4,284,685)** | **31,270,586** | | **Cash at end of period** | **1,182,588** | **32,383,397** | [Notes to Consolidated Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) Notes disclose a 'Going Concern' warning due to $35.23M net loss and $24.69M net current liabilities, an asset sale, and new borrowings - **Going Concern:** The company reported a net loss of **$35.23 million** for the nine months ended Sep 30, 2022, and net current liabilities of **$24.69 million**, raising substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk) - Management believes it can continue as a going concern by improving profitability, using proceeds from the CleanSpark asset sale, and accessing debt and equity funding, including an ATM offering of up to **$100 million**[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - **Asset Sale:** On September 8, 2022, the company agreed to sell its Sandersville, Georgia facility and 6,349 miners to CleanSpark. The transaction closed on October 8, 2022. Assets and liabilities related to this sale were reclassified as 'held for sale'[79](index=79&type=chunk)[111](index=111&type=chunk) - An impairment charge of **$4,195,046** was recognized on the processing machines (miners) included in the sale to CleanSpark[53](index=53&type=chunk)[116](index=116&type=chunk) - **Borrowings:** The company entered into several new loan agreements in 2022, including a **$20 million** loan from Celsius Mining, a secured facility with W Capital Advisors, and **$3.6 million** in secured convertible promissory notes[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - **Subsequent Events:** The sale to CleanSpark closed on October 8, 2022, providing consideration of **$13.5 million** in cash, **1.59 million** CleanSpark shares, and **$6.5 million** in seller financing notes. The company also made early loan repayments in October and November 2022[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses digital asset infrastructure, noting increased nine-month revenue to $67.5M, strained liquidity, and $8.8M adjusted EBITDA [Overview and Recent Developments](index=31&type=section&id=Overview%20and%20Recent%20Developments) Mawson operates as a 'Digital Asset Infrastructure' business focused on Bitcoin mining, recently selling its Georgia facility to CleanSpark - The company's primary business is owning and operating ASIC miners for Bitcoin, with three sites in the USA and Australia[154](index=154&type=chunk)[155](index=155&type=chunk) - As of September 30, 2022, Mawson had a total of **33,350 miners**, with **26,360 online** and **6,990 in storage**[158](index=158&type=chunk) - The company sold its Sandersville, Georgia facility and **6,349 miners** to CleanSpark. The deal closed on October 8, 2022, with consideration including **$13.5M cash**, **1.59M CleanSpark shares**, and **$6.5M** in seller financing notes[161](index=161&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q3 2022 total revenue doubled to $28.3M, net loss widened to $21.3M, while nine-month revenue grew to $67.5M with narrowed net loss Q3 2022 vs Q3 2021 Results of Operations ($) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Cryptocurrency mining revenue | 5,913,031 | 10,151,579 | | Hosting Co Location revenue | 5,726,064 | 796,207 | | Sale of equipment | 10,388,223 | - | | Net energy benefits | 6,301,108 | - | | **Total revenues** | **28,328,426** | **10,947,786** | | Cost of revenues | 18,183,524 | 2,499,837 | | **Gross profit** | **10,144,902** | **8,447,949** | | **Net Loss** | **(21,251,783)** | **(3,097,875)** | - Q3 2022 cryptocurrency mining revenue decreased by **42% YoY** due to a lower average Bitcoin price (**$21,293** vs **$41,877**), despite producing more Bitcoin (**282.99** vs **251.52**)[169](index=169&type=chunk) Nine Months 2022 vs 2021 Results of Operations ($) | Metric | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | | Cryptocurrency mining revenue | 40,909,399 | 21,029,492 | | Hosting Co Location revenue | 9,842,924 | 1,020,424 | | **Total revenues** | **67,533,199** | **24,207,567** | | Cost of revenues | 40,954,957 | 6,218,145 | | **Gross profit** | **26,578,242** | **17,989,422** | | **Net Loss** | **(35,227,490)** | **(47,923,670)** | - For the nine months ended Sep 30, 2022, cryptocurrency mining revenue increased **95% YoY**, driven by a **145% increase** in Bitcoin produced, which offset a lower average Bitcoin price[191](index=191&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity pressure with $1.18M cash and $24.69M negative working capital, relying on new borrowings and asset sale proceeds - As of Sep 30, 2022, the company had a cash balance of **$1.18 million** and a negative working capital of **$24.69 million**[217](index=217&type=chunk)[220](index=220&type=chunk) - The company financed operations through **$25.1M** in cash from operations and new borrowings, including from Celsius (**$20M**), Marshall Investments (**AUD$20M** facility), and W Capital (**AUD$8M** facility)[216](index=216&type=chunk)[220](index=220&type=chunk) - The company has an active At The Market (ATM) offering agreement to sell up to **$100.0 million** in common stock to raise capital[224](index=224&type=chunk) - The post-quarter sale to CleanSpark, which included **$22.52 million** in cash and CleanSpark stock, is expected to improve the company's working capital and liquidity[226](index=226&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) The company reports non-GAAP adjusted EBITDA of $8.8M for Q3 2022 and $27.1M for the nine-month period Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA ($) | Period | Net Loss | Adjusted EBITDA (non-GAAP) | | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | (21,251,783) | 8,812,896 | | **Three Months Ended Sep 30, 2021** | (3,097,875) | 3,147,643 | | **Nine Months Ended Sep 30, 2022** | (35,227,490) | 27,079,909 | | **Nine Months Ended Sep 30, 2021** | (47,923,670) | 7,732,470 | [Quantitative and Qualitative Disclosures about Market Risks](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) As a smaller reporting entity, the company elected not to provide required market risk disclosures - The company has opted out of providing this disclosure as permitted for a smaller reporting company[234](index=234&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of Sep 30, 2022, due to material weaknesses, with remediation underway - Management concluded that disclosure controls and procedures were not effective as of September 30, 2022[235](index=235&type=chunk) - Several material weaknesses were identified, including: - Inadequate segregation of duties due to lack of sufficient accounting personnel - Poorly designed controls over the financial statement close and reporting process - Deficient IT general controls over access, program changes, and development - Lack of controls to ensure accuracy of data received from third parties - Failure to properly execute physical asset verification at US mining sites[238](index=238&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) - Remediation efforts are underway, including performing a risk assessment, designing new controls, and implementing formal policies and procedures[245](index=245&type=chunk) [Part II – Other Information](index=43&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is not involved in any material legal proceedings[249](index=249&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include Nasdaq delisting, crypto downturn, Celsius bankruptcy, rising inflation/interest rates, and critical capital needs for going concern - **Nasdaq Listing:** The company is not in compliance with Nasdaq's minimum bid price and audit committee requirements, posing a risk of delisting[251](index=251&type=chunk) - **Industry Downturn:** The significant drop in Bitcoin's price and the bankruptcy of a major customer, Celsius Mining LLC, negatively impact revenue and create counter-party risk[252](index=252&type=chunk) - **Economic Risks:** Rising global inflation increases operating costs, and rising interest rates could make future financing more expensive[253](index=253&type=chunk)[255](index=255&type=chunk) - **Operational Risks:** The company is subject to risks from its need for significant, cost-effective electrical power and the increasing difficulty of the Bitcoin network, which reduces mining rewards[256](index=256&type=chunk)[257](index=257&type=chunk) - **Going Concern Risk:** The company states it may need to raise additional capital or significantly curtail operations to remain a going concern, given its net losses and low cash position[259](index=259&type=chunk)[260](index=260&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[262](index=262&type=chunk) [Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[262](index=262&type=chunk) [Mine Safety Disclosure](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Not applicable[262](index=262&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company eliminated the Chief Commercial Officer role, with the departing officer providing transition services and retaining unvested RSUs - The role of Chief Commercial Officer was eliminated, effective November 18, 2022[263](index=263&type=chunk) - The departing officer, Nicholas Hughes-Jones, will provide transition services for at least 6 months and will not forfeit his unvested RSUs[263](index=263&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, corporate governance documents, officer certifications, and XBRL data - The report includes exhibits such as the Purchase and Sale Agreement with CleanSpark, officer certifications under the Sarbanes-Oxley Act, and financial data in Inline XBRL format[266](index=266&type=chunk)

Mawson Infrastructure Group, Inc. (NASDAQ:MIGI) Q2 2022 Earnings Conference Call August 22, 2022 5:30 PM ET Company Participants Nick Hughes-Jones - Chief Commercial Officer James Manning - Founder and CEO Ariel Sivikofsky - CFO Conference Call Participants Josh Siegler - Cantor Fitzgerald Kevin Dede - H.C. Wainwright Operator Greetings. Welcome to Mawson Infrastructure Group, Inc. Second Quarter 2022 Earnings Results Conference Call. At this time, all participants are in listen-only mode. A question-and-an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Mawson Infrastructure Group Inc. (Exact name of registrant as specified in it ...

Financial Data and Key Metrics Changes - Mawson generated $19.4 million in revenue for Q1 2022, up 178% compared to Q1 2021, and flat compared to Q4 2021 [12] - Gross profit for Q1 2022 was $11 million, an increase of 138% year-over-year [12] - Non-GAAP EBITDA for Q1 2022 was $4.5 million, up 160% compared to Q1 2021 [12] - Cash and cash equivalents rose to $5.8 million from $5.5 million in Q4 2021 [17] - Total assets grew to $166 million in Q1 2022, up from $145.3 million at the end of Q4 2021 [19] Business Line Data and Key Metrics Changes - The self-mining operations are expected to increase from 1.8 exahash to 4 exahash by Q3 2022, resulting in daily Bitcoin production rising from approximately 8 to 18 Bitcoin [23] - Hosting co-location business expanded significantly, with agreements in place for 116 megawatts, expected to increase to 140 megawatts by the end of 2022 [26] - The company signed major hosting customers, Celsius Mining for 100 megawatts and Foundry Digital for 12 megawatts, generating additional revenue streams [14] Market Data and Key Metrics Changes - The company operates five Bitcoin mining sites across the USA and Australia, with a market cap of approximately $180 million [5] - The new Texas facility will increase energy infrastructure capacity for Bitcoin mining by 35%, from 350 megawatts to 470 megawatts [8] Company Strategy and Development Direction - Mawson aims to reach 5.5 exahash by early Q1 2023, producing 24.5 Bitcoin per day and generating $357 million in annualized revenue [24] - The company focuses on securing long-term, low-cost energy infrastructure, with over 75% of its energy coming from sustainable sources [38] - Mawson is committed to being a net zero carbon miner and has a strong ESG strategy, including planting over 100,000 trees by the end of 2022 [45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the rapid expansion of self-mining operations and the hosting co-location business, citing high demand for energy infrastructure in the Bitcoin mining industry [11][25] - The company is cautious about hedging power costs due to market volatility but aims to lock in favorable long-term contracts [69] Other Important Information - Mawson has secured a $20 million debt facility from Celsius Network to support its expansion [15] - The company has a disciplined approach to infrastructure deployment, ensuring projects are completed on time and within budget [28] Q&A Session Summary Question: What was the hash rate at the end of the March quarter? - The average hash rate for March was 1.2 exahash, with the end of month hash rate at 1.35 exahash [60] Question: Can you provide details about the Texas location? - The Texas site has substations in place, allowing for quick activation of smaller sites within close proximity [61] Question: What is the overall cost per kilowatt hour for Mawson? - A weighted average cost per kilowatt hour was not provided, but management is open to follow up on this [70] Question: How is the hosting customer's deployment timeline? - Mawson is currently deploying about four containers a week, translating to 8 to 12 megawatts going online in Pennsylvania [72] Question: What have Bitcoin mining hardware prices done recently? - Mining hardware prices have decreased significantly, making them more attractive for Mawson [82] Question: Where do you see the global hash rate going over the next 12 months? - The global hash rate is expected to face downside risks due to various market conditions [85] Question: Why does Mawson sell Bitcoin instead of holding it? - Selling Bitcoin generates cash flow to fund operations and capital expenditures [87] Question: What will the split on self-mining and hosting be going forward? - Mawson is exploring a 50-50 split between hosting and self-mining, prioritizing the highest margin opportunities [88]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-40849 Mawson Infrastructure Group Inc. (Exact name of registrant as specified in its charter) ...

N A S D A Q : M I G I | --- | --- | --- | --- | |--------------------------------------------------------|-------|-------|-------------------------------| | | | | | | T H E D I G I T A L A S S E T C O M P A N Y March 2022 | | | Q4 2021 Investor Presentation | LEGAL DISCLAIMER Information contained herein is derived from various internal and external sources which are deemed reliable, but no representations or warranties are made by Company, or any of its affiliates, employees or representatives as to the ac ...

Mawson Infrastructure Group, Inc. (NASDAQ:MIGI) Q4 2021 Earnings Conference Call March 21, 2022 5:00 PM ET Company Participants Nick Hughes-Jones - Chief Commercial Officer James Manning - Founder and Chief Executive Officer Hetal Majithia - Chief Financial Officer Conference Call Participants Kevin Dede - H.C. Wainwright Operator Ladies and gentlemen, the conference will now begin. I would like to turn the call over to management. Nick Hughes-Jones Hello, everybody and thank you for taking the time to hear ...

[PART I](index=7&type=section&id=PART%20I) [ITEM 1. BUSINESS.](index=7&type=section&id=Item%201%20Business) Mawson is a Digital Asset Infrastructure business focused on Bitcoin mining and hosting solutions, operating MDCs in the U.S. and Australia with a commitment to renewable energy. - Mawson transitioned to a **'Digital Asset Infrastructure' business** focused on Bitcoin mining and hosting after acquiring Mawson AU on March 9, 2021[20](index=20&type=chunk)[28](index=28&type=chunk)[53](index=53&type=chunk) - The company operates **modular data centers (MDCs)** and **ASIC computers** for Bitcoin mining in the U.S. (Georgia, Pennsylvania) and Australia (New South Wales)[21](index=21&type=chunk)[24](index=24&type=chunk)[28](index=28&type=chunk) Miner Fleet Status as of December 31, 2021 | Category | Count | | :----------------- | :---- | | Total miners online | 10,302 | | Total miners in Transit | 4,704 | | Total miners on order | 18,528 | | Total miners in storage | 5,691 | | **Total miners** | **39,225** | - Mawson offers hosting services to other digital asset businesses, with **5 customers** and **2MW installed capacity** as of December 31, 2021[27](index=27&type=chunk)[37](index=37&type=chunk) - The company's policy is to **liquidate mined Bitcoin** promptly, operating as a mining operation rather than a cryptocurrency investment company[32](index=32&type=chunk) - Mawson is committed to powering operations with **renewable energy** and has offset its 2020 carbon footprint, assessing its 2021 footprint[35](index=35&type=chunk)[36](index=36&type=chunk) - Mawson holds a **20.06% interest in DSS**, a Filecoin mining business, and an interest in Cosmos Asset Management with **AUD$8.65 million** in funds under management[38](index=38&type=chunk)[40](index=40&type=chunk) - The company's R&D program focuses on improving hardware, software, and MDC efficiency, including **liquid immersion cooling technology**[41](index=41&type=chunk)[42](index=42&type=chunk) - The cryptocurrency mining industry is highly competitive, with Mawson competing for **Miners, capital, and low-cost electricity** against rivals like Core Scientific and Marathon Digital Holdings[46](index=46&type=chunk)[47](index=47&type=chunk)[56](index=56&type=chunk) [ITEM 1A. RISK FACTORS.](index=12&type=section&id=Item%201A%20Risk%20Factors) Mawson faces significant risks from operating losses, capital needs, supply chain disruptions, Bitcoin price volatility, cybersecurity threats, and evolving digital asset regulations. - Mawson has incurred and expects to continue operating losses, requiring **additional capital** that may lead to stockholder dilution[59](index=59&type=chunk)[60](index=60&type=chunk) - The business is highly dependent on **Bitcoin's volatile market price**, influenced by sentiment and liquidations, without a formal hedging strategy[100](index=100&type=chunk) - **Supply chain disruptions** for Miners, containers, and transformers, primarily from China, pose a material adverse impact risk[61](index=61&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Access to **reliable and reasonably priced electricity** is critical, as energy-intensive digital mining faces risks from economic, environmental, and regulatory events[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - **Cybersecurity threats** like hacking and malware pose risks to digital assets and reputation, with irreversible transactions meaning potential unrecoverable losses[72](index=72&type=chunk)[74](index=74&type=chunk)[79](index=79&type=chunk) - The company may not secure adequate business insurance, and **uninsured digital assets** could lead to unrecoverable losses[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - The digital asset industry faces **increasing government regulation**, potentially leading to new classifications, licensing, and tax treatments that could impose significant costs[123](index=123&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) - Changes to digital asset network protocols or a **'51% attack'** could adversely affect Bitcoin network integrity and Mawson's mining operations[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - A **material weakness in internal control** over financial reporting was identified due to inadequate segregation of duties, insufficient accounting personnel, and IT control deficiencies[136](index=136&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS.](index=25&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) No unresolved staff comments are reported. - The company has **no unresolved staff comments**[147](index=147&type=chunk) [ITEM 2. PROPERTIES.](index=25&type=section&id=Item%202%20Properties) Mawson's principal executive offices are in North Sydney, Australia, with long-term leases for three mining facilities in the U.S. and Australia. - The principal executive offices are in North Sydney, Australia, occupying approximately **710 square feet** of licensed office space[148](index=148&type=chunk) - Mawson holds **long-term leases** for its three mining facilities in Georgia, Pennsylvania (U.S.), and New South Wales (Australia)[148](index=148&type=chunk) - Existing facilities are deemed adequate, with the ability to obtain additional or alternative facilities at commercial rates if required[149](index=149&type=chunk) [ITEM 3. LEGAL PROCEEDINGS.](index=25&type=section&id=Item%203%20Legal%20Proceedings) Mawson is not currently a party to any legal proceedings with significant financial or profitability effects, though routine litigation may occur. - Mawson is not currently a party to any legal proceedings significantly affecting its **financial position or profitability**[150](index=150&type=chunk) - The company may face **routine litigation** incidental to its business in the future[150](index=150&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES.](index=25&type=section&id=Item%204%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company. - **Mine Safety Disclosures** are not applicable to the company[151](index=151&type=chunk) [PART II](index=26&type=section&id=PART%20II) [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.](index=26&type=section&id=Item%205%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Mawson's Common Stock trades on Nasdaq under "MIGI", with 271 stockholders as of March 2022, and no dividends paid or anticipated. - Mawson's Common Stock trades on The Nasdaq Stock Market LLC under the symbol **"MIGI"**[154](index=154&type=chunk) - As of March 15, 2022, there were approximately **271 stockholders of record**[155](index=155&type=chunk) - The company has never paid cash dividends and does not anticipate doing so, retaining earnings for operations and capital requirements[156](index=156&type=chunk) - No **unregistered equity securities** were sold in 2021, and no securities were repurchased in the fourth quarter[157](index=157&type=chunk)[158](index=158&type=chunk) [ITEM 6. [Reserved]](index=26&type=section&id=Item%206%20Reserved) This item is reserved and contains no information. [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=26&type=section&id=Item%207%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Mawson's 2021 financial condition and operations, highlighting revenue growth in crypto mining and hosting, a substantial net loss, and regulatory uncertainties. [Overview](index=26&type=section&id=Overview) Mawson is a Digital Asset Infrastructure business focused on Bitcoin mining, operating MDCs in the U.S. and Australia, offering hosting and selling used equipment. - Mawson is a **'Digital Asset Infrastructure' business** operating MDCs in the U.S. and Australia, primarily focused on Bitcoin mining[160](index=160&type=chunk)[161](index=161&type=chunk) - The company provides **hosting/co-location services** and periodically sells used cryptocurrency mining equipment[162](index=162&type=chunk)[163](index=163&type=chunk) Miner Fleet Status as of December 31, 2021 | Category | Count | | :----------------- | :---- | | Total miners online | 10,302 | | Total miners in Transit | 4,704 | | Total miners on order | 18,528 | | Total miners in storage | 5,691 | | **Total miners** | **39,225** | [Prior LO2A Business](index=27&type=section&id=Prior%20LO2A%20Business) Prior to March 2021, Mawson was a biopharmaceutical company; its LO2A business was fully impaired and expensed for **$23.96 million** in 2021. - Prior to March 9, 2021, Mawson's primary business was a **clinical-stage biopharmaceutical company** focused on ophthalmic disorders[166](index=166&type=chunk)[167](index=167&type=chunk) - The LO2A business's economic benefits were assigned to CVR holders, leading to a **$23.96 million write-off** in 2021 as its fair value was assessed as nil[167](index=167&type=chunk) [Recent Developments.](index=27&type=section&id=Recent%20Developments) Mawson's recent developments include acquiring Luna Squares, Nasdaq listing, securing significant financing, expanding hosting, and a related-party lease in Pennsylvania. - Mawson acquired a **20.06% equity interest** in Distributed Storage Solutions Pty Ltd (DSS) in May 2021[168](index=168&type=chunk) - Mawson acquired Luna Squares LLC on July 5, 2021, for a total purchase price of **$500,000** in cash and common stock[170](index=170&type=chunk)[172](index=172&type=chunk) - Mawson listed its common stock on **The Nasdaq Stock Market LLC** on September 29, 2021[175](index=175&type=chunk) - Luna Squares entered a Co-Location Agreement with Celsius Mining LLC, securing a **US$20 million loan** and issuing warrants[177](index=177&type=chunk) - Luna Squares entered a **5-year lease** in Sharon, Pennsylvania, with Vertua Property, Inc., a related party to Mawson's CEO[178](index=178&type=chunk) [COVID-19.](index=28&type=section&id=COVID-19) The COVID-19 pandemic caused global economic disruption and supply chain issues, but Mawson does not anticipate a material long-term impact. - The COVID-19 pandemic caused significant **global economic disruption** and supply chain issues for equipment suppliers[179](index=179&type=chunk) - Mawson does not expect a **material long-term impact** on development, operations, or liquidity from the pandemic, but actively monitors the situation[179](index=179&type=chunk) [Regulation of Digital Assets](index=28&type=section&id=Regulation%20of%20Digital%20Assets) The regulatory landscape for digital assets is evolving and uncertain, with anticipated increased regulation potentially impacting Mawson's business model and compliance costs. - The regulatory environment for digital assets and cryptocurrencies is **uncertain and evolving**, with an expectation of increased industry regulation[180](index=180&type=chunk) - Future regulatory changes could make Bitcoin ownership illegal or impose **new compliance expenses** on Mawson's digital asset business[180](index=180&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Mawson saw substantial 2021 revenue growth, primarily from **764% increased crypto mining revenue**, but a **$44.96 million net loss** due to higher operating costs and the LO2A write-off. Revenue Performance (Year Ended December 31) | Revenue Type | 2021 (Millions USD) | 2020 (Millions USD) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Cryptocurrency mining revenue | $38.45 | $4.45 | 764% | | Hosting Co-Location revenue | $0.85 | $0.00 | N/A | | Sale of crypto currency mining equipment | $2.16 | $0.00 | N/A | | Other revenue (R&D tax refund) | $2.41 | $0.00 | N/A | | **Total revenues** | **$43.86** | **$4.45** | **885%** | - **Bitcoin production increased by 94%** to 808.88 in 2021, with maximum hash rate reaching **0.83 EH**[182](index=182&type=chunk) Operating Costs and Expenses (Year Ended December 31) | Expense Category | 2021 (Millions USD) | 2020 (Millions USD) | Change (Millions USD) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | | Cost of revenues (excluding depreciation) | $9.90 | $3.16 | +$6.74 | | Selling, general and administrative | $16.06 | $2.48 | +$13.58 | | LO2A write off | $23.96 | $0.00 | +$23.96 | | Share based payments | $22.49 | $0.00 | +$22.49 | | Depreciation and amortization | $14.11 | $4.62 | +$9.49 | | **Total operating expenses** | **$76.63** | **$7.10** | **+$69.53** | - **Net loss** attributable to shareholders increased significantly from **$5.03 million** in 2020 to **$44.96 million** in 2021[197](index=197&type=chunk)[279](index=279&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Mawson uses adjusted EBITDA as a non-GAAP measure, which was **$17.90 million** in 2021, a significant improvement from negative **$1.19 million** in 2020. - Mawson uses **adjusted EBITDA** as a non-GAAP financial measure to assess performance, excluding interest, taxes, depreciation, amortization, share-based compensation, and the LO2A write-back[198](index=198&type=chunk)[200](index=200&type=chunk) Reconciliation of Non-GAAP Adjusted EBITDA (Year Ended December 31) | Metric | 2021 (USD) | 2020 (USD) | | :------------------------------------------------- | :----------- | :----------- | | Net loss | (45,461,664) | (5,061,314) | | Share of net loss of associates | 368,426 | - | | Depreciation and amortization | 14,113,730 | 4,620,725 | | Share based payments | 22,491,100 | - | | Unrealized and realized losses/(gain) | 932,866 | (797,464) | | Other non-operating revenue | (902,629) | (108,812) | | Other non-operating expenses | 2,114,699 | 28,102 | | Tax | 277,717 | 128,659 | | LO2A write-back | 23,963,050 | - | | **EBITDA (non-GAAP)** | **$17,897,295** | **$(1,190,104)** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) In 2021, Mawson financed operations with **$22.95 million** from operating activities, **$37.43 million** from private placement, **$41.23 million** from IPO, and various debt financings. - For 2021, Mawson financed operations with **$22.95 million** in net cash provided by operating activities[202](index=202&type=chunk) - Significant capital raises included **$3.00 million** from a 2020 private placement, **$37.43 million** from a 2021 private placement, and **$41.23 million** (net) from its IPO[202](index=202&type=chunk) - Debt financing included **$1.06 million** from Foundry Digital LLC, an additional **$13.19 million** expansion, and an **AUD$20 million** secured loan from Marshall Investments[202](index=202&type=chunk)[207](index=207&type=chunk) - The company generated **$1.02 million** from the sale of shares in Bonus Bio Group[203](index=203&type=chunk) [Working Capital and Cash Flows](index=33&type=section&id=Working%20Capital%20and%20Cash%20Flows) Mawson's cash increased to **$5.47 million** in 2021, but working capital was negative **$8.63 million** due to increased borrowings, with operating cash flow at **$22.95 million** and investing cash flow at **$(128.25) million**. Working Capital and Cash Flow Summary (Year Ended December 31) | Metric | 2021 (Millions USD) | 2020 (Millions USD) | | :------------------------------------------ | :------------------ | :------------------ | | Cash and cash equivalents | $5.47 | $1.11 | | Trade and other receivables | $5.61 | $0.62 | | Trade and other payables | $7.75 | $1.88 | | Short-term borrowings | $11.10 | $0.29 | | Long-term borrowings | $7.64 | $0.00 | | **Negative Working Capital** | **$(8.63)** | **$(0.46)** | | Net cash provided by/(used in) operating activities | $22.95 | $(0.19) | | Net cash used in investing activities | $(128.25) | $(5.54) | | Net cash provided by financing activities | $109.85 | $6.23 | - The decrease in working capital was primarily due to an increase in the company's **short-term and long-term borrowings** in 2021[207](index=207&type=chunk) - The increase in net cash provided by operating activities was primarily due to **timing differences** in trade and other receivables and payables[207](index=207&type=chunk) - The significant increase in net cash used in investing activities was primarily due to the **acquisition of cryptocurrency mining equipment**[208](index=208&type=chunk) [Recently Issued Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Mawson adopted several ASUs (2016-13, 2019-12, 2020-10, 2021-10) with no material impact, and is evaluating ASU 2020-06 and 2021-04. - Mawson adopted **ASU 2016-13, 2019-12, 2020-10, and 2021-10**, none of which had a material impact on its financial statements[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[350](index=350&type=chunk)[210](index=210&type=chunk) - The company does not expect a material impact from **ASU 2020-06** and is evaluating **ASU 2021-04** and its disclosures[349](index=349&type=chunk)[351](index=351&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) Mawson's critical accounting policies include revenue recognition for digital asset mining (fair market value upon receipt), property and equipment depreciation, and accounting for reverse asset acquisitions and share-based payments. - **Revenue recognition for digital asset mining** involves significant judgment, recognized at fair market value upon cryptocurrency receipt due to lack of specific U.S. GAAP guidance[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Property and equipment are stated at cost and depreciated over estimated useful lives, such as **Miners over 2 years** and **MDCs over 5 years**[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - Effective October 1, 2021, Mawson capitalized freight costs for processing machines, increasing balance sheet assets by **$2.59 million** and 2021 depreciation by **$0.14 million**[220](index=220&type=chunk) - The acquisition of Mawson AU on March 9, 2021, was accounted for as a **reverse asset acquisition**, with Mawson AU as the accounting acquirer[222](index=222&type=chunk) - **Share-based payments** are expensed over the service period based on grant-date fair value, determined using the Black-Scholes model[224](index=224&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=36&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Mawson has elected not to provide market risk disclosures. - As a smaller reporting company, Mawson has elected not to provide disclosures regarding **quantitative and qualitative market risk**[226](index=226&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.](index=36&type=section&id=Item%208%20Financial%20Statements%20and%20Supplementary%20Data) All required financial statements and supplementary data are incorporated by reference from Item 15 of Part IV. - All required financial statements and supplementary data are included in **Item 15 of Part IV** of this Annual Report[227](index=227&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.](index=36&type=section&id=Item%209%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure are reported. - There are **no changes in or disagreements with accountants** on accounting and financial disclosure[228](index=228&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES.](index=36&type=section&id=Item%209A%20Controls%20and%20Procedures) Mawson's disclosure controls and procedures were ineffective as of December 31, 2021, due to **material weaknesses** in internal control over financial reporting, including inadequate segregation of duties and IT control deficiencies. - Management concluded that **disclosure controls and procedures were not effective** as of December 31, 2021, due to material weaknesses[229](index=229&type=chunk) - Identified material weaknesses include **inadequate segregation of duties** due to significant reliance on key individuals[237](index=237&type=chunk) - Further weaknesses were found in the financial statement close process due to **insufficient accounting personnel** and in **IT general controls**[238](index=238&type=chunk)[239](index=239&type=chunk) - The company lacked controls to ensure **completeness and accuracy of third-party data** used for revenue and cryptocurrency asset determination[240](index=240&type=chunk) - Mawson is undertaking remediation efforts, including developing formal policies, improving control activities, and hiring additional finance personnel, but cannot assure immediate effectiveness[243](index=243&type=chunk) [ITEM 9B. OTHER INFORMATION.](index=38&type=section&id=Item%209B%20Other%20Information) No other information is reported under this item. - **No other information to report**[246](index=246&type=chunk) [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.](index=38&type=section&id=Item%209C%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) No disclosures are provided regarding foreign jurisdictions that prevent inspections. - There are **no disclosures regarding foreign jurisdictions** that prevent inspections[247](index=247&type=chunk) [PART III](index=39&type=section&id=PART%20III) [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.](index=39&type=section&id=Item%2010%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement. - Information on **directors, executive officers, and corporate governance** is incorporated by reference from the 2022 annual stockholder meeting proxy statement[250](index=250&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION.](index=39&type=section&id=Item%2011%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2022 annual stockholder meeting proxy statement. - Information on **executive compensation** is incorporated by reference from the 2022 annual stockholder meeting proxy statement[251](index=251&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.](index=39&type=section&id=Item%2012%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2022 annual stockholder meeting proxy statement. - Information on **security ownership** of beneficial owners and management, and related stockholder matters, is incorporated by reference from the 2022 proxy statement[252](index=252&type=chunk) [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE.](index=39&type=section&id=Item%2013%20Certain%20Relationships%20and%20Related%20Transactions%2C%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2022 proxy statement. - Information on **certain relationships and related transactions**, and director independence, is incorporated by reference from the 2022 proxy statement[253](index=253&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.](index=39&type=section&id=Item%2014%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2022 annual stockholder meeting proxy statement. - Information on **principal accountant fees and services** is incorporated by reference from the 2022 annual stockholder meeting proxy statement[254](index=254&type=chunk) [PART IV](index=40&type=section&id=PART%20IV) [ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](index=40&type=section&id=Item%2015%20Exhibits%2C%20Financial%20Statement%20Schedules) This section indexes the financial statements, schedules, and exhibits, including consolidated financial statements and their notes, filed as part of the Annual Report. [(a) Index to Exhibit and Financial Statement Schedules](index=40&type=section&id=%28a%29%20Index%20to%20Exhibit%20and%20Financial%20Statement%20Schedules) This sub-section lists the consolidated financial statements and their page numbers, including the Independent Auditor's Report and various financial statements. - The index includes the **Report of Independent Registered Public Accounting Firm**, Consolidated Balance Sheets, Statements of Operations, Comprehensive Loss, Changes in Stockholders' Equity, Cash Flows, and Notes[259](index=259&type=chunk) [Report of Independent Registered Public Accounting Firm (PCAOB ID Number 6714)](index=42&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28PCAOB%20ID%20Number%206714%29) LNP Audit issued an **unqualified opinion** on Mawson's 2021 and 2020 financial statements, with digital currency mining revenue recognition as a critical audit matter. - LNP Audit and Assurance International Pty Ltd issued an **unqualified opinion** on Mawson's 2021 and 2020 consolidated financial statements[263](index=263&type=chunk) - A critical audit matter was the evaluation of **digital currency mining revenue recognition and disclosure**, due to lack of specific U.S. GAAP guidance and significant management judgment[269](index=269&type=chunk)[272](index=272&type=chunk) - Audit procedures included site visits, IT general controls evaluation, independent confirmation of digital currency data, comparison to blockchain records, and assessment of accounting rationale and disclosures[274](index=274&type=chunk) [Consolidated Balance Sheets](index=44&type=section&id=Consolidated%20Balance%20Sheets) Mawson's total assets significantly increased from **$9.80 million** in 2020 to **$145.29 million** in 2021, driven by property and equipment, with equity growing to **$114.75 million**. Consolidated Balance Sheet Highlights (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :------------------------------------ | :----------- | :----------- | | Cash and cash equivalents | $5,467,273 | $1,112,811 | | Total current assets | $11,447,007 | $1,754,517 | | Property and equipment, net | $76,936,850 | $7,015,285 | | Equipment deposits | $51,369,216 | - | | Total assets | $145,294,372 | $9,796,741 | | Total current liabilities | $20,072,863 | $2,193,725 | | Total liabilities | $30,713,783 | $2,231,862 | | Total stockholders' equity | $114,745,215 | $7,591,945 | - The substantial increase in total assets was primarily driven by **property and equipment acquisitions** and significant equipment deposits[276](index=276&type=chunk) [Consolidated Statements of Operations](index=45&type=section&id=Consolidated%20Statements%20of%20Operations) Mawson's total revenues increased to **$43.86 million** in 2021, but operating expenses surged to **$76.63 million**, resulting in a **$44.96 million net loss** for the year. Consolidated Statements of Operations Highlights (Year Ended December 31) | Item | 2021 (USD) | 2020 (USD) | | :------------------------------------------ | :----------- | :----------- | | Total revenues | $43,862,656 | $4,448,876 | | Gross profit | $33,958,383 | $1,293,275 | | Total operating expenses | $76,628,968 | $7,104,104 | | Loss from operations | $(42,670,585) | $(5,810,829) | | Net Loss attributed to Mawson Infrastructure Group shareholders | $(44,963,720) | $(5,034,248) | | Net Loss per share, basic & diluted | $(0.80) | $(0.71) | - The substantial increase in total operating expenses was primarily driven by a **$23.96 million LO2A write-off** and **$22.49 million in share-based payments** in 2021[279](index=279&type=chunk) [Consolidated Statements of Comprehensive loss](index=46&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20loss) Mawson reported a net loss of **$45.46 million** in 2021, with comprehensive loss attributable to common stockholders at **$44.14 million** after currency adjustments. Consolidated Statements of Comprehensive Loss (Year Ended December 31) | Item | 2021 (USD) | 2020 (USD) | | :------------------------------------------ | :----------- | :----------- | | Net Loss | $(45,461,664) | $(5,061,314) | | Foreign currency translation adjustment | $820,732 | $(996,644) | | Comprehensive loss | $(44,640,932) | $(6,057,958) | | Comprehensive loss attributable to common stockholders | $(44,142,988) | $(6,030,892) | [Consolidated Statements of Changes in Stockholders' Equity](index=47&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Mawson's total stockholders' equity significantly increased to **$114.75 million** in 2021, primarily driven by common stock issuances from the Cosmos Transaction, PIPE agreements, and the IPO. - Total stockholders' equity increased from **$7.59 million** in 2020 to **$114.75 million** in 2021[284](index=284&type=chunk) - Key drivers of equity increase include common stock issuance from the **Cosmos Transaction, PIPE agreements, and the IPO**[284](index=284&type=chunk) - The company reported a **net loss of $44.96 million** for 2021, which reduced accumulated deficit[284](index=284&type=chunk) [Consolidated Statements of Cash Flows](index=50&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Mawson's operating cash flow improved to **$22.95 million** in 2021, while investing activities used **$128.25 million**, and financing activities provided **$109.85 million**, resulting in a **$4.35 million** net cash increase. Consolidated Statements of Cash Flows Highlights (Year Ended December 31) | Cash Flow Activity | 2021 (USD) | 2020 (USD) | | :------------------------------------------ | :----------- | :----------- | | Net cash provided by/(used in) operating activities | $22,953,792 | $(185,097) | | Net cash used in investing activities | $(128,247,751) | $(5,536,836) | | Net cash provided by financing activities | $109,854,460 | $6,229,882 | | Net increase in cash and cash equivalents | $4,354,462 | $533,521 | | Cash and cash equivalents at end of period | $5,467,273 | $1,112,811 | - The significant increase in net cash used in investing activities was primarily due to **$76.80 million** in property and equipment purchases and **$51.37 million** in fixed asset deposits[290](index=290&type=chunk) - Net cash provided by financing activities was largely driven by **$85.10 million** from common share issuances and **$14.27 million** from borrowings[290](index=290&type=chunk) [Notes to Consolidated Financial Statements](index=51&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail Mawson's financial statements, covering accounting policies, going concern status, revenue recognition, property and equipment, acquisitions, capital structure, debt, and related party transactions. [NOTE 1:- GENERAL](index=51&type=section&id=NOTE%201%3A-%20GENERAL) Mawson transitioned to a Digital Asset Infrastructure business in March 2021, reports **going concern doubts** due to operating losses, and completed an IPO raising **$41.23 million**. - Mawson Infrastructure Group, Inc. transitioned to a **'Digital Asset Infrastructure' business** after acquiring Mawson AU on March 9, 2021[293](index=293&type=chunk)[295](index=295&type=chunk) - The company reports **substantial doubt about its going concern ability** due to a **$42.67 million operating loss** and **$8.63 million net current liabilities**[295](index=295&type=chunk) - Management plans to alleviate going concern doubts through **new capital raises** and improved profitability and cash flow[296](index=296&type=chunk) - Mawson completed an **IPO on September 28, 2021**, raising **$41.23 million** in net proceeds[296](index=296&type=chunk) [NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES](index=52&type=section&id=NOTE%202%3A-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Mawson's significant accounting policies, including estimates, consolidation (reverse asset acquisition), revenue recognition for crypto mining, digital currency classification, property and equipment, share-based payments, and recently adopted ASUs. - Financial statements are prepared under U.S. GAAP, requiring significant management estimates and judgments, including **going concern assumptions** and asset useful lives[299](index=299&type=chunk) - The acquisition of Mawson AU on March 9, 2021, was accounted for as a **reverse asset acquisition**, with Mawson AU as the accounting acquirer[303](index=303&type=chunk) - **Cryptocurrency mining revenue** is recognized under ASC 606 at fair market value upon receipt, due to a lack of specific U.S. GAAP guidance[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) - Digital currencies are classified as **indefinite-lived intangible assets**, assessed for impairment, with a policy to quickly dispose of Bitcoin production to minimize risk[326](index=326&type=chunk)[327](index=327&type=chunk)[330](index=330&type=chunk) - Property and equipment are stated at cost and depreciated; a **policy change from October 1, 2021**, capitalizes freight costs for processing machines[335](index=335&type=chunk)[336](index=336&type=chunk)[338](index=338&type=chunk) - The company adopted **ASU 2016-13, 2019-12, 2020-10, and 2021-10** with no material impact, and is evaluating ASU 2020-06 and 2021-04[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk) [NOTE 3:- BASIC AND DILUTED LOSS PER SHARE:](index=61&type=section&id=NOTE%203%3A-%20BASIC%20AND%20DILUTED%20LOSS%20PER%20SHARE%3A) Mawson's basic and diluted loss per share was **$(0.80)** in 2021, up from **$(0.71)** in 2020, with dilutive securities excluded due to net loss. Basic and Diluted Loss Per Share (Year Ended December 31) | Item | 2021 | 2020 | | :------------------------------------------ | :----- | :----- | | Net loss | $(44,963,720) | $(5,034,248) | | Weighted average common shares - basic and diluted | 56,303,827 | 7,097,883 | | Net loss per share of Common Stock, basic and diluted | $(0.80) | $(0.71) | - Potentially dilutive securities (totaling **6,835,413** in 2021) were excluded from diluted EPS calculations as they were anti-dilutive due to the net loss[355](index=355&type=chunk) - Comparative weighted average common shares for 2020 were revised due to the **reverse asset acquisition** and a **10-for-1 reverse stock split** in August 2021[355](index=355&type=chunk) [NOTE 4:- ACQUISITIONS](index=62&type=section&id=NOTE%204%3A-%20ACQUISITIONS) Mawson's 2021 acquisitions include a **20.06% interest in DSS** and Luna Squares LLC, with the Mawson AU acquisition treated as a reverse asset acquisition and a **$23.96 million LO2A write-off**. - Mawson acquired a **20.06% equity interest** in Distributed Storage Solutions Pty Ltd (DSS) on March 1, 2020[363](index=363&type=chunk) - The acquisition of Mawson AU on March 9, 2021, was accounted for as a **reverse asset acquisition**, with Mawson AU determined to be the accounting acquirer[363](index=363&type=chunk) - The fair value of consideration for the Mawson AU acquisition was **$26.11 million**, based on Mawson common stock's closing share price[362](index=362&type=chunk) - The LO2A IPR&D intangible asset was fully expensed, resulting in a **$23.96 million write-off** in 2021[365](index=365&type=chunk) - On July 5, 2021, Mawson acquired Luna Squares LLC for a total purchase price of **$500,000** in cash and common stock[367](index=367&type=chunk) [NOTE 5:- TRADE AND OTHER RECEIVABLES](index=63&type=section&id=NOTE%205%3A-%20TRADE%20AND%20OTHER%20RECEIVABLES) Mawson's trade and other receivables significantly increased to **$5.61 million** in 2021, primarily due to higher trade receivables, R&D tax credits, and GST refunds. Trade and Other Receivables (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :-------------------------------- | :----------- | :----------- | | Trade receivables | $977,498 | $55,675 | | Research and development tax credit | $2,785,748 | $386,412 | | Goods and service tax refund | $1,843,534 | $173,058 | | **Total** | **$5,606,780** | **$615,145** | - The substantial increase in trade and other receivables was primarily due to **higher trade receivables** and significant increases in **R&D tax credits and GST refunds**[366](index=366&type=chunk) [NOTE 6:- PROPERTY AND EQUIPMENT](index=64&type=section&id=NOTE%206%3A-%20PROPERTY%20AND%20EQUIPMENT) Mawson's net property and equipment significantly increased to **$76.94 million** in 2021, driven by additions of Miners and MDCs, with **$14.11 million** in depreciation expense. Property and Equipment, Net (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :------------------------------------ | :----------- | :----------- | | Cost (total) | $83,325,158 | $12,236,111 | | Accumulated depreciation (total) | $(18,213,672) | $(5,220,826) | | **Closing balance, net** | **$76,936,850** | **$7,015,285** | - Additions to property and equipment in 2021 totaled **$83.33 million**, primarily for processing machines (Miners) and modular data centers[369](index=369&type=chunk) - Depreciation and amortization expense increased from **$4.62 million** in 2020 to **$14.11 million** in 2021[370](index=370&type=chunk) - **No impairment charges** were recognized for property and equipment in 2021 or 2020[370](index=370&type=chunk) [NOTE 7:- DEPOSIT, PROPERTY AND EQUIPMENT](index=64&type=section&id=NOTE%207%3A-%20DEPOSIT%2C%20PROPERTY%20AND%20EQUIPMENT) Mawson made **$51.37 million** in equipment deposits for future ASIC Miners, including payments for two long-term purchase contracts with Canaan Convey Co Ltd. - As of December 31, 2021, Mawson recorded **$51.37 million** in cash paid for equipment as a deposit[376](index=376&type=chunk) - The company entered two long-term purchase contracts with Canaan for **26,760 Avalon A1246 ASIC Miners**, totaling **$33.97 million** and **$73.62 million** respectively[371](index=371&type=chunk)[375](index=375&type=chunk) - In 2021, **$30.80 million** was paid for the first contract (8,232 Miners delivered), and **$39.33 million** for the second, with no deliveries by year-end[374](index=374&type=chunk)[375](index=375&type=chunk) [NOTE 8:- SECURITY DEPOSITS](index=65&type=section&id=NOTE%208%3A-%20SECURITY%20DEPOSITS) Mawson's security deposits increased to **$1.25 million** in 2021, classified as non-current assets, primarily paid to location providers. Security Deposits (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :---------------- | :----------- | :----------- | | Security deposits | $1,246,236 | $969,423 | - Security deposits are refundable upon cessation of services and are classified as **non-current assets**[377](index=377&type=chunk) [NOTE 9:- LEASES](index=65&type=section&id=NOTE%209%3A-%20LEASES) Mawson accounts for leases under ASC 842, with total 2021 lease costs of **$453,588** and operating lease liabilities of **$4.19 million** as of December 31, 2021. - Mawson accounts for leases under **ASC 842**, recognizing ROU assets and lease liabilities for operating and finance leases[344](index=344&type=chunk) - Luna Squares LLC leases **16.35 acres in Georgia** until 2038, and the company also leases its Australian headquarters and a Pennsylvania site[378](index=378&type=chunk)[379](index=379&type=chunk) Lease Costs and Liabilities (as of December 31, 2021) | Item | Operating Leases (USD) | Finance Leases (USD) | | :------------------------------------------ | :--------------------- | :------------------- | | Total lease costs recognized (2021) | $452,479 | $1,109 | | Total undiscounted lease obligations | $4,773,578 | $56,843 | | Total present value of lease liabilities | $4,185,147 | $46,869 | | Non-current lease liabilities | $2,962,765 | $38,764 | | Weighted-average remaining lease term (years) | 3.25 | 4.92 | | Weighted-average discount rate (%) | 8.0% | 8.0% | [NOTE 10:- TRADE AND OTHER PAYABLES](index=67&type=section&id=NOTE%2010%3A-%20TRADE%20AND%20OTHER%20PAYABLES) Mawson's trade and other payables significantly increased to **$7.75 million** in 2021, primarily due to higher trade payables, accrued expenses, and employee payables. Trade and Other Payables (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :---------------- | :----------- | :----------- | | Trade payables | $4,778,784 | $1,294,459 | | Accrued expenses | $1,790,921 | $284,589 | | Employee payables | $754,376 | $139,134 | | Tax payables | $422,907 | $164,065 | | **Total** | **$7,746,988** | **$1,882,247** | - The increase in trade and other payables was primarily due to growth in **trade payables, accrued expenses, and employee payables**[386](index=386&type=chunk) [NOTE 11:- SHORT-TERM BORROWINGS](index=67&type=section&id=NOTE%2011%3A-%20SHORT-TERM%20BORROWINGS) Mawson's short-term borrowings increased to **$11.10 million** in 2021, primarily due to an expanded equipment finance agreement with Foundry Digital LLC for **$16.48 million** in Whatsminers. - Short-term borrowings increased to **$11.10 million** in 2021 from **$0.29 million** in 2020[276](index=276&type=chunk) - The increase was primarily due to an expanded equipment finance agreement with Foundry Digital LLC for **2,000 Whatsminers M30's** totaling **$16.48 million**[390](index=390&type=chunk) - An initial **$1.06 million loan** from Foundry Digital LLC for 500 Whatsminer M30S machines was fully repaid in January 2022[390](index=390&type=chunk) [NOTE 12:- LONG-TERM BORROWINGS](index=67&type=section&id=NOTE%2012%3A-%20LONG-TERM%20BORROWINGS) Mawson's long-term borrowings increased to **$7.63 million** in 2021, primarily from a Secured Loan Facility Agreement with Marshall Investments MIG Pty Ltd at a **12.00% interest rate**. - Long-term borrowings increased to **$7.63 million** in 2021 from **$0** in 2020[276](index=276&type=chunk) - The primary long-term borrowing is a **$7.63 million Secured Loan Facility Agreement** with Marshall Investments MIG Pty Ltd, maturing in 2023 at a **12.00% annual interest rate**[388](index=388&type=chunk) - Mawson also holds a **$14,000 PPP loan** from 2020, maturing in 2022 with a **1.0% interest rate**[389](index=389&type=chunk) [NOTE 13:- SIGNIFICANT TRANSACTIONS](index=68&type=section&id=NOTE%2013%3A-%20SIGNIFICANT%20TRANSACTIONS) Significant 2021 transactions include the Mawson AU reverse asset acquisition, **$37.43 million** from PIPE Agreements, **$41.23 million** from IPO, and a **$7.63 million** secured loan. - The **reverse asset acquisition of Mawson AU** occurred on March 9, 2021[392](index=392&type=chunk) - The 2021 PIPE Agreements were finalized on August 6, 2021, raising gross proceeds of **$37.43 million**[392](index=392&type=chunk) - The company completed an **IPO on September 28, 2021**, generating net proceeds of **$41.23 million**[392](index=392&type=chunk) - A **Secured Loan Facility Agreement** with Marshall Investments MIG Pty Ltd was entered into in December 2021, providing **$7.63 million**[392](index=392&type=chunk) - Cosmos Infrastructure LLC entered into **two long-term purchase contracts** with Canaan for ASIC Miners[392](index=392&type=chunk) [NOTE 14:- TAXES ON INCOME](index=68&type=section&id=NOTE%2014%3A-%20TAXES%20ON%20INCOME) Mawson reported a **$(45.18) million loss** before taxes in 2021, with an income tax expense of **$(277,717)**, and **$13.13 million** in deferred tax assets offset by a valuation allowance. Income Tax Expense (Year Ended December 31) | Item | 2021 (USD) | 2020 (USD) | | :---------------- | :----------- | :----------- | | Current Foreign Tax | $(277,717) | - | | **Total Income Tax Expense** | **$(277,717)** | **-** | - The federal tax on a **$(45.8) million pretax loss** was offset by a **$9.27 million change in valuation allowance**, resulting in a total income tax expense of **$(277,717)**[393](index=393&type=chunk)[396](index=396&type=chunk) Deferred Tax Assets and Liabilities (as of December 31) | Item | 2021 (USD) | 2020 (USD) | | :-------------------------------- | :----------- | :----------- | | Total deferred tax assets | $13,128,139 | $3,261,270 | | Total deferred tax liabilities | $920,775 | $249,361 | | Valuation allowance | $(12,207,364) | $(3,011,909) | | **Net deferred tax assets** | **-** | **-** | - Mawson had approximately **$14.4 million in federal** and **$10.7 million in Australian NOLs** with indefinite carryforward lives as of December 31, 2021[397](index=397&type=chunk) [NOTE 15:- COMMITMENTS AND CONTINGENCIES](index=70&type=section&id=NOTE%2015%3A-%20COMMITMENTS%20AND%20CONTINGENCIES) Mawson's commitments include a CVR agreement for LO2A monetization (not reliably measurable) and outstanding obligations from two long-term purchase contracts with Canaan for ASIC Miners. - A **CVR agreement** for LO2A business monetization is classified as a contingent liability, as its cost cannot be reliably measured and payment is not probable[403](index=403&type=chunk) - Mawson has outstanding commitments from two long-term purchase contracts with Canaan for **11,760 and 15,000 Avalon A1246 ASIC Miners**, totaling **$33.97 million** and **$73.62 million** respectively[403](index=403&type=chunk) [NOTE 16:- STOCKHOLDERS' EQUITY](index=71&type=section&id=NOTE%2016%3A-%20STOCKHOLDERS'%20EQUITY) Mawson's stockholders' equity saw significant 2021 activity, including share issuances for the Cosmos Transaction, PIPE Agreements, and IPO, alongside a **10-for-1 reverse stock split**. - On March 9, 2021, Mawson issued **428,270,616 shares** (pre-split) to Mawson AU shareholders as part of the Cosmos Transaction[405](index=405&type=chunk) - The company finalized 2021 PIPE Agreements, raising **$37.43 million** in gross proceeds, and completed an IPO, generating **$41.23 million** in net proceeds[408](index=408&type=chunk)[411](index=411&type=chunk)[412](index=412&type=chunk) - A **10-for-1 reverse stock split** was executed on August 13, 2021, reducing authorized common stock to 120,000,000 shares[409](index=409&type=chunk) - As of December 31, 2021, **17,628,737 restricted shares** from the Cosmos Transaction remained, with no Series A Preferred Stock outstanding[415](index=415&type=chunk)[416](index=416&type=chunk) Common Stock Warrants Status (as of December 31, 2021) | Item | Count | | :-------------------------------- | :------ | | Outstanding as of December 31, 2020 | 14,219 | | Issued | 5,518,886 | | Exercised | (2,008,916) | | **Outstanding as of December 31, 2021** | **3,524,189** | | Weighted Average Exercise Price | $8.77 | | Weighted Average Remaining Contractual Life (years) | 2.78 | [NOTE 17:- RELATED PARTY TRANSACTIONS](index=72&type=section&id=NOTE%2017%3A-%20RELATED%20PARTY%20TRANSACTIONS) In 2021, Mawson received and repaid **$360,320** in related-party loans from Georgina Manning Pty Ltd, and the Sharon lease is also a related-party transaction. - Mawson received and repaid **$360,320** in loans from Georgina Manning Pty Ltd, a related party, incurring **$4,529 in interest**[420](index=420&type=chunk) - The Sharon lease, entered into on March 16, 2022, is a **related party transaction** involving CEO James Manning's interest in Vertua Ltd[421](index=421&type=chunk)[423](index=423&type=chunk) [NOTE 18:- SUBSEQUENT EVENTS](index=72&type=section&id=NOTE%2018%3A-%20SUBSEQUENT%20EVENTS) Subsequent events include Luna Squares' Co-Location Agreement with Celsius Mining LLC, a **US$20 million loan**, warrant issuance, and a **5-year related-party lease** in Sharon, Pennsylvania. - On February 23, 2022, Luna Squares LLC entered a Co-Location Agreement with Celsius Mining LLC, receiving a **US$20 million loan** at **12% annual interest**[422](index=422&type=chunk) - Mawson issued warrants to Celsius Mining to purchase up to **3,850,000 shares** of common stock at an exercise price of **US$6.50 per share**[422](index=422&type=chunk) - On March 16, 2022, Luna Squares LLC entered a **5-year lease** in Sharon, Pennsylvania, with Vertua Property, Inc., a related party to Mawson's CEO[423](index=423&type=chunk) [(2) Financial Statement Schedules.](index=73&type=section&id=%282%29%20Financial%20Statement%20Schedules%2E) All financial statement schedules are omitted as the information is either not applicable, not required, or already included. - All financial statement schedules are omitted because the information is either **not applicable, not required, or already included**[424](index=424&type=chunk) [(3) Exhibits.](index=73&type=section&id=%283%29%20Exhibits%2E) This section lists various exhibits filed with the SEC, including key agreements and corporate documents, many incorporated by reference from previous filings. - Exhibits include key agreements such as the **Bid Implementation Agreement, Membership Interest Purchase Agreements, and Warrant Agreements**[425](index=425&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk)[430](index=430&type=chunk) - Many exhibits are **incorporated by reference** from previous SEC filings, providing a comprehensive record of documents[425](index=425&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk)[430](index=430&type=chunk) [ITEM 16. FORM 10-K SUMMARY.](index=77&type=section&id=Item%2016%20Form%2010-K%20Summary%2E) No Form 10-K Summary is provided for this item. - **No Form 10-K Summary** is provided[432](index=432&type=chunk)