Core Points - SAI.TECH has signed a Memorandum of Understanding (MoU) with Al-Farabi Kazakh National University to enhance educational and scientific research initiatives in Kazakhstan [2] - The collaboration includes faculty and administrative staff exchanges, educational training programs, and opportunities for student exchanges at both undergraduate and graduate levels [1][9] - Joint educational programs and curricula, including double diploma initiatives, will be established to promote academic exchange [9] - The partnership will also involve joint research projects, participation in grants, and publication of scientific materials [9] - This collaboration represents a significant step in SAI.TECH's expansion into Kazakhstan, utilizing its AI computing technology and sustainable computing expertise [10] Company Overview - SAI.TECH is a Nasdaq-listed sustainable distributed bitcoin mining operator based in Singapore, aiming to promote clean transitions in the bitcoin mining and energy sectors [4] - The company became publicly traded in May 2022 through a merger with TradeUP Global Corporation [5]

Group 1 - SAI.TECH Global Corporation has signed a Memorandum of Understanding (MoU) with Al-Farabi Kazakh National University to enhance educational and scientific research initiatives in Kazakhstan [6][7] - The collaboration will include joint educational programs, double diploma initiatives, and joint research projects, aiming to enrich academic exchange and foster collaboration [10] - SAI.TECH is a Nasdaq-listed sustainable distributed bitcoin mining operator headquartered in Singapore, focusing on sustainable digital asset mining and heating solutions [3][12] Group 2 - The partnership signifies SAI.TECH's strategic expansion into Kazakhstan, utilizing its AI computing technology and expertise in sustainable computing [7] - Al-Farabi Kazakh National University is one of the largest and oldest universities in Kazakhstan, ranked 150th in the world by QS World University Rankings in 2023 [11]

Group 1 - SAI.TECH Global Corporation will participate in the 2024 SelectUSA Investment Summit on June 23 in Maryland, which is a significant event for business investment and networking among investors, companies, and industry experts [1][8] - The company operates a sustainable distributed bitcoin mining business and aims to promote clean transitions in the bitcoin mining, power, and heating industries [3][5] - SAI.TECH has developed innovative systems for computing heat recycling, including the WITBOX, HEATBOX, and USERBOX, which enhance efficiency and sustainability in data centers [2][4] Group 2 - Dr. Tao Wu, the company's representative, will showcase SAI's initiatives, including the Computing Heat Recycling R&D Center in Marietta, Ohio, which features the Advanced Computing Center Ecosystem (ACCE) [4] - The Computing Heat Recycle Center Education Program has received recognition from the local government and grants from the Marietta Community Foundation, aimed at engaging students in practical learning about AI and computing heat recycling [9]

Company Overview - SAI.TECH Global Corporation is a Nasdaq-listed sustainable distributed bitcoin mining operator headquartered in Singapore, with a mission to promote the clean transition of the bitcoin mining, power, and heating industries globally [12]. Upcoming Event - SAI.TECH will participate in the 2024 SelectUSA Investment Summit on June 23 in Maryland, which is a significant platform for connecting investors, companies, and industry experts [1][10]. Technology and Innovations - The WITBOX system utilizes liquid cooling technologies to enhance efficiency in dissipating heat from servers and can capture over 97% of the heat generated [2]. - The HEATBOX system is designed for transferring and regulating recycled computing heat, capable of providing heating within a temperature range from 120°F to 290°F [2]. - The USERBOX system supports computing heat recycling applications, offering integrated solutions for various industrial heating demands [2]. Educational Initiatives - SAI.TECH's Computing Heat Recycle Center Education Program has received recognition from the Marietta local government and grants from the Marietta Community Foundation, aiming to engage students in practical learning about data center AI and computing heat recycling [11]. Strategic Commitment - The company formed a US subsidiary in 2022 and was listed on Nasdaq in May 2022, indicating its commitment to the US market and sustainable technology solutions [7].

Core Insights - The Marietta Community Foundation awarded a total of $97,290 in grants to local organizations, including $7,582 to the Organization of Clean Energy and Climate Inc. for its Computing Heat Recycle Center Education Program [1][9] - SAI.TECH supports the education program by providing its R&D center as an educational site and leasing its greenhouse facility, which utilizes recycled computing heat [1][2] Grant Details - The grants aim to address critical needs and enhance community resilience in Washington County [1] - The Computing Heat Recycle Center Education Program focuses on involving local students in innovative learning opportunities related to data centers, artificial intelligence, and computing heat recycling [10] Technology Overview - SAI.TECH's Computing Heat Recycling R&D Center features the Advanced Computing Center Ecosystem (ACCE), which includes WITBOX, HEATBOX, and USERBOX systems [2][11] - The ACCE enables the development of sustainable computing facilities by repurposing computing heat, representing a significant advancement in environmental stewardship [3] Environmental Impact - The first ACCE demonstration includes a 1 MW container-based computing server system and a 5,000 ft² greenhouse, capable of recycling computing heat up to 3.4 MMBTUH [4] - If fully utilized, the system could reduce CO2 emissions by 286,000 lb. per month, equivalent to the emissions from burning 14,600 gallons of gasoline [4] Organizational Mission - The Organization of Clean Energy and Climate (OCEC) is dedicated to researching effective ways to recycle computing heat and demonstrating its application in various scenarios [5][16] - SAI.TECH aims to promote sustainable practices in digital asset mining and heating, contributing to carbon-neutral efforts globally [17]

Reporting and Compliance - SAI.TECH Global Corporation announced the reporting of its Annual Report on Form 20-F for fiscal year 2023 on April 23, 2024[3] - The report is filed under the Securities Exchange Act of 1934, indicating compliance with regulatory requirements[7] - The press release regarding the annual report is included as Exhibit 99.1 in the current report on Form 6-K[4]

Financial Performance - Net revenues for the year ended December 31, 2023, were $6.78 million, a decrease of 36.5% compared to $10.64 million in 2022[467]. - The net loss for the year ended December 31, 2023, was $6.12 million, improving from a net loss of $8.85 million in 2022[467]. - Total revenues decreased by $3.86 million, or 36%, from $10.64 million in 2022 to $6.78 million in 2023[485]. - Sales of products revenue fell by $3.82 million, or 44%, from $8.63 million in 2022 to $4.80 million in 2023, primarily due to fewer customer purchase orders[487]. - Hosting service revenue decreased by $0.94 million, or 72%, from $1.30 million in 2022 to $0.37 million in 2023, attributed to clients requesting frequent power-offs due to low BTC prices[488]. - Mining pool revenue declined by $0.37 million, or 54%, from $0.68 million in 2022 to $0.31 million in 2023, influenced by BTC price fluctuations[489]. - Mining revenue surged by $1.27 million, or 3839%, from $0.03 million in 2022 to $1.30 million in 2023, reflecting the increased scale of mining operations launched in July 2023[490]. - Gross profit decreased by $0.68 million, from $1.14 million in 2022 to $0.46 million in 2023, with gross margin dropping from 11% to 7%[493]. - General and administrative expenses decreased by $0.38 million, or 6%, from $6.08 million in 2022 to $5.70 million in 2023, mainly due to reduced depreciation and salary expenses[495]. - Research and development expenses increased by $0.38 million, or 79%, from $0.48 million in 2022 to $0.85 million in 2023, driven by higher share-based compensation[497]. - Total comprehensive loss improved by $3.21 million, or 34%, from $9.39 million in 2022 to $6.18 million in 2023[486]. Bitcoin Holdings and Mining Operations - The company operates a self-mining datacenter in Marietta, Ohio, with 712 bitcoin mining machines, achieving a hash rate of approximately 106.39 PH/s[474]. - As of December 31, 2023, the company held 65.98 bitcoins, a slight increase from 3.05 bitcoins held as of December 31, 2022[476]. - The company expects future revenue to include bitcoin transaction fees and income from resales of waste heat from its operations[468]. - The next bitcoin halving is anticipated to occur in April 2024, reducing the block reward from 6.25 bitcoin to 3.125 bitcoin[475]. Customer Concentration and Accounts Receivable - For the year ended December 31, 2023, three customers accounted for 33%, 23%, and 17% of total revenues, indicating a concentration risk[543]. - As of December 31, 2023, three customers accounted for 63%, 25%, and 11% of the total balance of accounts receivable, highlighting significant customer reliance[544]. Financial Position and Liquidity - Net cash used in operating activities for the year ended December 31, 2023, was $3.1 million, compared to $5.0 million in 2022[527]. - As of December 31, 2023, the total operating lease obligations amount to $809,650, with $274,408 due within one year and $535,241 due after one year[538]. - Liquidity risk is managed through financial position analysis and may involve seeking loans for short-term funding needs[545]. - The company is exposed to liquidity risk and may seek loans from financial institutions for short-term funding needs[545]. Accounting and Financial Reporting - The financial statements are prepared in accordance with U.S. GAAP, and significant accounting estimates include allowance for doubtful receivables and impairment losses[552]. - The company classified all proceeds from bitcoin sales as investing activities during the year ended December 31, 2023[564]. - The company early adopted ASU 2023-08, which requires crypto assets to be measured at fair value, impacting the financial statements starting January 1, 2023[575]. - The company has identified two material weaknesses in internal control over financial reporting as of December 31, 2023, 2022, and 2021[579]. - The identified material weaknesses include a lack of key monitoring mechanisms and formal financial closing policies, leading to late adjustments by management[580]. - The Company plans to establish an internal audit department and enhance the effectiveness of its internal control system to remediate the identified weaknesses[582]. - The Company qualifies as an "emerging growth company" with less than $6.78 million in revenue for the last fiscal year, allowing it to take advantage of reduced reporting requirements[583]. Currency and Economic Factors - Foreign currency exchange net losses of $0.06 million were recognized in 2023, while a net gain of $0.06 million was recorded in 2021[547]. - The year-over-year percent change in the consumer price index in China for December 31, 2023, was an increase of 0.2%[548]. - The exchange rate for RMB to USD as of December 31, 2023, was 7.0827, compared to 6.9646 as of December 31, 2022[554]. - The average exchange rate for the year ended December 31, 2023, was 7.0422 RMB to 1 USD, compared to 6.7190 RMB in 2022[554]. - Year-over-year percent changes in the consumer price index for China were increases of 0.2% in 2023, 2% in 2022, and 3.13% in 2021[548]. Regulatory and Compliance Matters - The company has not entered into any financial guarantees or derivative contracts that are indexed to its own shares[539]. - The ability to pay dividends is primarily dependent on receiving distributions from its PRC subsidiary and VIE, which are subject to statutory reserve requirements[540]. - The company has terminated control agreements with its variable interest entity, eliminating uncertainties related to the VIE structure[541]. - The company has not recognized any significant unrecognized uncertain tax positions as of December 31, 2022, and 2023[570]. - The company is currently evaluating the impact of ASU 2023-09, which expands income tax disclosures, effective for annual periods beginning after December 15, 2024[574]. - The Company has not yet performed a comprehensive assessment of internal control under the Sarbanes-Oxley Act, which may reveal additional material weaknesses[581]. - The Company is hiring a qualified consultant to assess compliance readiness with the Sarbanes-Oxley Act and improve internal control over financial reporting[582].

PART I [Key Information](index=11&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details significant investment risks, including limited operating history, bitcoin price dependency, regulatory uncertainty, operational disruptions in Kazakhstan, and material weaknesses in internal controls - The company has a limited operating history since **2019** in the highly volatile cryptocurrency industry, making future prospects difficult to evaluate[36](index=36&type=chunk)[41](index=41&type=chunk) - Bitcoin mining is energy-intensive, posing a significant operational risk if government regulators restrict electricity supply[36](index=36&type=chunk)[51](index=51&type=chunk) - Regulatory uncertainty is a major risk, with potential violations of the Investment Company Act if cryptocurrencies are deemed securities, and adverse effects from changing regulations in any country of operation[38](index=38&type=chunk) - Material weaknesses in internal control over financial reporting could affect financial statement reliability if not corrected[25](index=25&type=chunk)[346](index=346&type=chunk) - Operations in Kazakhstan faced disruptions from national unrest and regulatory tightening, leading to the termination of a significant expansion plan[42](index=42&type=chunk)[301](index=301&type=chunk) - Trading of the company's securities could be prohibited under the HFCAA if the PCAOB is unable to inspect its Singapore-based auditor due to foreign authority positions[38](index=38&type=chunk)[226](index=226&type=chunk) [Information on the Company](index=73&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) SAI.TECH, founded in 2019, is a global energy-saving Bitcoin mining and clean-tech company, expanding into North America and diversifying into SMR and crypto exchange services - The company's core business integrates bitcoin mining with power and heating industries, utilizing proprietary liquid cooling and waste heat recovery technology (SAIHUB) for **90% thermal efficiency**[365](index=365&type=chunk) - Following China's digital asset mining ban in **May 2021**, the company terminated its China operations and began a strategic global transition, initially to Kazakhstan[372](index=372&type=chunk) - The company is expanding into North America, opening a distribution center in Ohio in **August 2022** for product assembly, service, and heating technology demonstrations[380](index=380&type=chunk) - In **2023**, the company purchased **420 Whatsminer M30s++** machines for self-mining and expanded hosting services in Mexico, bringing total machines there to **900**[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - The company diversified strategic initiatives in **March 2023** by acquiring Atomic Evolution Limited for SMR opportunities and establishing Boltbit Limited for cryptocurrency exchange services[386](index=386&type=chunk)[387](index=387&type=chunk) Pilot Program Operating Statistics (Heating Season Oct 2020 - Apr 2021) | Code of Pilot Project | Heat Output (KW) | Electricity Consumed (KW) | Outdoor Temp (°C) | Indoor Temp (°C) | Hot Water Output Temp (°C) | Cooled Water Input Temp (°C) | Thermal Efficiency (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | HM | 1,467 | 1,631 | (10) | 24 | 53 | 45 | 89.71% | | DQ | 200 | 223 | (11) | 22 | 51 | 43 | 89.78% | | JY* | 90 | 101 | NA | NA | 51 | 43 | 88.95% | [Operating and Financial Review and Prospects](index=88&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) The company's financial performance in 2022 saw a **38% revenue decrease** to **$10.6 million** and an improved net loss of **$8.8 million**, driven by volatile bitcoin markets, regulatory changes, and internal control weaknesses Key Financial Results (in thousands USD) | Metric | FY 2021 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $17,038 | $10,638 | (38%) | | Gross Profit | $1,264 | $1,140 | (10%) | | Operating Expenses | $17,716 | $8,605 | (51%) | | Net Loss | $(16,704) | $(8,845) | 47% (Improvement) | Revenue Breakdown by Segment (in thousands USD) | Revenue Source | FY 2021 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Sales of products | $6,958 | $8,626 | 24% | | Hosting service | $2,600 | $1,303 | (50%) | | Mining pool | $7,480 | $676 | (91%) | | Mining | $0 | $33 | N/A | - The significant decrease in total revenue in **2022** was primarily driven by a **$6.8 million (91%) decline** in mining pool revenue due to a major hosting customer switching suppliers[481](index=481&type=chunk) - General and administrative expenses increased by **155% to $6.08 million** in **2022**, primarily due to a **$2.4 million** increase in salary and benefits and a **$1.18 million** increase in depreciation for idle miners[487](index=487&type=chunk)[488](index=488&type=chunk) - Material weaknesses were identified in the internal audit function and lack of formal financial closing policies, with remediation efforts underway[347](index=347&type=chunk)[557](index=557&type=chunk) Cash Flow Summary (in thousands USD) | Cash Flow | FY 2021 | FY 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(983) | $(4,962) | | Net cash used in investing activities | $(3,970) | $(6,424) | | Net cash provided by financing activities | $8,191 | $18,533 | [Directors, Senior Management and Employees](index=92&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) The company's leadership includes a 5-member Board with three independent directors, operating as a "controlled company" due to the founder's majority voting power, and had **28 employees** as of **December 31, 2022** - The Board of Directors comprises **5 members** across three classes with staggered terms, with **three directors** (Yao Shi, Yusen Chen, and Jinlong Zhu) deemed independent[591](index=591&type=chunk)[592](index=592&type=chunk) - The company is a "controlled company" under Nasdaq rules, as Founder Risheng Li holds over **50% of the voting power**, granting exemptions from certain corporate governance requirements[323](index=323&type=chunk) - The **2021 Equity Incentive Plan**, effective **April 29, 2022**, reserves an initial **1,812,663 Class A Ordinary Shares** for awards to employees, directors, and consultants[569](index=569&type=chunk)[571](index=571&type=chunk) - As of **December 31, 2022**, the company had **28 employees**: **17** in General Management and Administration, **8** in Technology and Product Development, and **3** in Sales, Marketing and Operating[607](index=607&type=chunk)[608](index=608&type=chunk) [Major Shareholders and Related Party Transactions](index=102&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's ownership structure, with founder Risheng Li holding **87.9% of voting power**, and outlines related party transaction policies and business combination agreements - Founder Risheng Li beneficially owns **100% of 9,630,634 outstanding Class B Ordinary Shares**, representing **87.9% of total voting power**[612](index=612&type=chunk) Principal Shareholders (5% or more of Class A Shares) | Holder | Class A Shares | % of Class A | | :--- | :--- | :--- | | TradeUp Global Sponsor LLC | 1,287,027 | 9.7% | | Eternal Selead Technology Holding Limited | 668,902 | 5.0% | | Haonan Technology Holding Limited | 668,902 | 5.0% | | Tospring Technology Limited | 974,919 | 7.3% | | Fan Yinliang | 1,201,101 | 9.0% | | ZenGolden L.P. | 1,606,838 | 12.1% | | LilOrange Holding Limited | 1,070,017 | 8.0% | | Tao Huang | 1,310,542 | 9.84% | - Key shareholders entered into lock-up agreements restricting share transfers for generally **one year post-closing**, with early release provisions based on share price performance, in connection with the Business Combination[626](index=626&type=chunk)[627](index=627&type=chunk)[628](index=628&type=chunk) - The company adopted a written policy for audit committee review and approval of related person transactions exceeding **$120,000**[635](index=635&type=chunk)[636](index=636&type=chunk) [Financial Information](index=107&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section references the consolidated financial statements in Item 18 and states the company's policy to reinvest all funds for growth, with no current plans for cash dividends - The company's audited consolidated financial statements are provided under **Item 18** of this report[640](index=640&type=chunk) - The company intends to retain all available funds and future earnings to fund business growth, with no expectation of paying cash dividends in the foreseeable future[641](index=641&type=chunk) [The Offer and Listing](index=107&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section confirms the company's Class A Ordinary Shares and IPO Warrants are listed and traded on the Nasdaq Capital Market - The company's Class A Ordinary Shares are listed on the Nasdaq Capital Market under the trading symbol **"SAI"**[643](index=643&type=chunk)[644](index=644&type=chunk) - The company's IPO Warrants are listed on the Nasdaq Capital Market under the trading symbol **"SAITW"**[643](index=643&type=chunk)[644](index=644&type=chunk) [Additional Information](index=108&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary corporate information, including a **February 2023** purchase order for **420 Whatsminer M30s++** machines and tax considerations for investors - On **February 2, 2023**, the company purchased **420 Whatsminer M30s++** bitcoin mining machines for **$633,360** for self-mining operations[651](index=651&type=chunk) - As a Cayman Islands incorporated entity, the company is not subject to exchange control legislation or regulations in its home jurisdiction[652](index=652&type=chunk) - The company discusses potential U.S. federal income tax consequences for U.S. holders, not expecting to be a Passive Foreign Investment Company (PFIC) for the **2023** taxable year, though no assurance is given[356](index=356&type=chunk)[667](index=667&type=chunk) - Under Cayman Islands law, payments of dividends and capital are not subject to taxation, with the company receiving a **20-year tax concession** undertaking effective **January 29, 2021**[670](index=670&type=chunk)[674](index=674&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=111&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's exposure to market risks, including significant customer concentration, liquidity risk, and foreign currency risk, particularly with the Chinese RMB - The company faces significant customer concentration risk, with **four customers accounting for 88% of total revenues in FY 2022**, and **one customer representing 96% of accounts receivable** as of **December 31, 2022**[680](index=680&type=chunk)[681](index=681&type=chunk) - The company is exposed to foreign currency risk, primarily with the Chinese RMB, recognizing a foreign currency exchange net loss of **$0.54 million** in **2022**[683](index=683&type=chunk)[684](index=684&type=chunk) - Liquidity risk is present as the company manages capital to meet commitments, potentially seeking loans from financial institutions for short-term funding[682](index=682&type=chunk) PART II [Controls and Procedures](index=113&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective as of **December 31, 2022**, due to material weaknesses in internal control over financial reporting, with remediation efforts targeting completion by **end of 2023** - Management concluded that the company's disclosure controls and procedures were ineffective as of **December 31, 2022**[695](index=695&type=chunk) - Two material weaknesses were identified: lack of an internal audit department and absence of formal financial closing policies and controls[696](index=696&type=chunk) - Remediation efforts, including establishing an internal audit department and implementing review controls, are expected to be completed by the **end of 2023**[698](index=698&type=chunk)[700](index=700&type=chunk) [Audit Committee Financial Expert](index=114&type=section&id=ITEM%2016.A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The board of directors has determined that Yao Shi, an independent director and audit committee chairman, qualifies as an audit committee financial expert - The Board of Directors has identified **Mr. Yao Shi** as the audit committee financial expert[701](index=701&type=chunk) [Code of Ethics](index=114&type=section&id=ITEM%2016.B.%20CODE%20OF%20ETHICS) The company has adopted a Code of Business Conduct and Ethics applicable to all employees, officers, and directors, available on its website - A Code of Business Conduct and Ethics has been adopted, applying to all directors, officers, and employees[702](index=702&type=chunk) [Principal Accountant Fees and Services](index=114&type=section&id=ITEM%2016.C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section summarizes **$215,100** in fees paid to principal accountant Audit Alliance LLP for services from **May 30, 2022**, through **December 31, 2022** Accountant Fees (May 30, 2022 - Dec 31, 2022) | Fee Type | Amount (USD) | | :--- | :--- | | Audit Fees | $198,550 | | Audit-Related Fees | $16,550 | | Tax Fees | $0 | | All Other Fees | $0 | | **Total** | **$215,100** | [Corporate Governance](index=115&type=section&id=ITEM%2016.G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company may follow Cayman Islands corporate governance practices, potentially exempting it from certain Nasdaq standards, which could offer shareholders fewer protections - The company, as a foreign private issuer, is permitted to follow Cayman Islands corporate governance practices instead of certain Nasdaq listing standards[710](index=710&type=chunk) - Potential exemptions include not having a majority of independent directors on the board or fully independent compensation or nominating committees[710](index=710&type=chunk) - While not currently relying on home country practice exemptions, the company may do so in the future, potentially affording shareholders less protection[710](index=710&type=chunk)[711](index=711&type=chunk) PART III [Financial Statements](index=116&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's consolidated financial statements for **FY2020-2022**, showing a **net loss of $8.85 million in 2022** and total assets growing to **$21.1 million**, reflecting the **2022** reverse recapitalization Consolidated Balance Sheet Highlights (in thousands USD) | Account | Dec 31, 2021 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,477 | $11,215 | | Total current assets | $6,880 | $18,691 | | Total assets | $11,533 | $21,100 | | Total current liabilities | $1,396 | $555 | | Total Liabilities | $1,423 | $786 | | Total shareholders' equity | $(2,363) | $20,314 | Consolidated Statement of Operations Highlights (in thousands USD) | Account | FY 2020 | FY 2021 | FY 2022 | | :--- | :--- | :--- | :--- | | Total Revenues | $1,957 | $17,038 | $10,638 | | Gross Profit | $902 | $1,264 | $1,140 | | Net (Loss)/Income | $403 | $(16,704) | $(8,845) | | Basic & Diluted (Loss)/Gain per share | $0.00 | $(1.4274) | $(0.4601) | - The company's financial statements are prepared under U.S. GAAP, with the TradeUP Global Corporation transaction accounted for as a reverse recapitalization, designating SAITECH Limited as the accounting predecessor[744](index=744&type=chunk)[760](index=760&type=chunk) - Cryptocurrencies are accounted for as indefinite-lived intangible assets, assessed for impairment quarterly, with an impairment loss of **$64 thousand** recorded in **FY 2022**[771](index=771&type=chunk) - The company has two reportable segments: equipment sales & hosting and mining pool business, with a third segment, mining, added in **2022**[854](index=854&type=chunk)[856](index=856&type=chunk)

Business Operations and Expansion - The company began its bitcoin mining operations in late 2021, marking a significant transition in its business model[44]. - The first hosting facility in Uralsk, Kazakhstan, became operational in Q4 2021 with a capacity of 15 MW, while a planned 90 MW expansion is currently being renegotiated due to recent developments in Kazakhstan[49]. - The company is exploring expansion into international markets, including Mexico and the United States, but faces challenges in securing hosting agreements[50]. - The company may incur substantial costs related to relocating mining operations if it cannot renew leases on acceptable terms[52]. - The company may experience difficulties in managing expansion and growth, which could strain resources and systems[90]. Financial Performance and Risks - The company faces significant risks related to the volatility of bitcoin prices, which can impact operating results and financial performance[47]. - Electricity costs are expected to account for a significant portion of overall costs, and any increase in electricity prices could negatively affect the viability of mining operations[53]. - The supply of bitcoin is limited, and the mining economics are subject to fluctuations, which could lead to significant losses if prices decline[46]. - The company reported a net loss of $0.1 million from inception through December 31, 2019, and a net income of $0.4 million for the fiscal year ended December 31, 2020, with an accumulated deficit of $16.4 million as of December 31, 2021[77]. - Any significant decline in Bitcoin's value could adversely affect the company's business, prospects, financial condition, and operating results[172]. Regulatory and Compliance Challenges - The company has identified material weaknesses in its internal controls over financial reporting, which could adversely affect investor confidence[45]. - Regulatory changes in the cryptocurrency industry may impose additional compliance costs and affect the company's operations[45]. - Kazakhstan introduced a new tax for cryptocurrency miners, charging 1 tenge (approximately $0.0023) per kWh starting January 1, 2022, with potential amendments to increase this fee based on electricity consumption[58]. - Future government regulations regarding cryptocurrency mining and energy consumption may increase compliance burdens and adversely affect business operations[58]. - The company may be required to comply with regulations that could classify it as a money services business (MSB), incurring significant compliance costs[117]. Supply Chain and Operational Risks - The company relies on a small number of suppliers for digital asset mining equipment, with potential shortages affecting growth expectations and financial condition[63]. - The ongoing significant shortage of ASIC chips has led to price fluctuations and disruptions in the supply of key mining components[80]. - Supply chain disruptions and delays in obtaining necessary equipment could adversely affect the company's ability to mine bitcoin[82]. - The reliance on specific mining machine models increases operational risks, as technological issues could lead to significant delays or system failures, impacting yields and reputation[183]. Cybersecurity and Digital Asset Management - The company plans to hold the majority of its cryptocurrencies in cold storage to mitigate risks associated with cyber threats[138]. - Cybersecurity breaches could lead to significant losses and harm the company's reputation, impacting the value of its digital assets[139]. - Cryptocurrency transactions are irreversible, and any incorrectly executed or fraudulent transactions could lead to significant losses for the company[145]. - There is currently no established mechanism for recovering missing or stolen cryptocurrency, which could adversely affect the company's financial condition and operating results[146]. Market and Competitive Landscape - The competitive landscape in the cryptocurrency mining industry is intensifying, posing challenges for the company to maintain and expand its operations[94]. - The profit margins of bitcoin mining operations are under pressure, leading to immediate selling of mined bitcoin, which could constrain bitcoin price growth and adversely impact the company[186]. - A decline in bitcoin prices could incentivize professionalized mining operations to sell mined bitcoin rapidly, increasing trading volume and exerting downward pressure on market prices[188]. Geopolitical and Economic Factors - The company is exposed to risks associated with geopolitical tensions, particularly in relation to its operations in China and Kazakhstan[41]. - Inflationary pressures in Asian economies may lead to government actions that could significantly decrease the company's profitability[207]. - Restrictions on foreign investment in certain countries could severely impair the company's operations and profitability[208]. Corporate Governance and Compliance with U.S. Regulations - The company has terminated its operations in China due to regulatory actions against cryptocurrency mining, which may impact its business strategy[212]. - The Holding Foreign Companies Accountable Act may restrict the company's ability to acquire certain businesses and could lead to delisting from U.S. exchanges if the PCAOB cannot inspect its auditors for three consecutive years[220]. - The SEC has issued guidance highlighting risks associated with investments in China-based issuers, which may require enhanced disclosures from the company[221]. - The company may not be able to acquire target businesses due to compliance with U.S. laws and regulations regarding foreign ownership and auditor inspections[222].

Financial Performance - The company has incurred losses since inception and currently has no revenue, relying on the sale of securities and loans from its Sponsor to fund operations[129]. - For the three months ended March 31, 2022, TradeUP reported a net loss of $632,172, primarily due to formation and operating costs[148]. - TradeUP incurred $3,405,312 in transaction costs related to the Initial Public Offering, including $897,797 in underwriting fees[149]. - The company expects to continue incurring significant costs in pursuit of its acquisition plans[130]. Initial Public Offering - TradeUP Global Corporation completed its Initial Public Offering of 4,000,000 Units at $10.00 per Unit, generating gross proceeds of $40,000,000[127]. - The underwriters partially exercised their over-allotment option, generating additional gross proceeds of $4,889,860 from the sale of 488,986 Option Units[128]. - The company is obligated to pay underwriters a deferred fee of $1,571,145 upon completion of the Business Combination[156]. Business Combination - The Business Combination Agreement with SAITECH involves a Merger Consideration valued at $188,000,000, based on a price of $10.00 per share[133]. - The Business Combination is subject to conditions including a minimum cash amount of $17.5 million available at Closing in TradeUP's trust account[137]. - The Sponsor and insiders agreed to vote in favor of the Business Combination and not to redeem any of their shares[141]. - The Business Combination Agreement may be terminated under certain circumstances, including failure to obtain shareholder approval[139]. - The company intends to use substantially all funds in the Trust Account to complete its Business Combination, with remaining proceeds for working capital and growth strategies[150]. Financial Position - As of March 31, 2022, TradeUP had $44,889,860 in the Trust Account and $413,633 in cash held outside the Trust Account for working capital purposes[149]. - TradeUP has no long-term debt or off-balance sheet financing arrangements as of March 31, 2022[155]. - As of March 31, 2022, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity[168]. - TradeUP has not experienced losses on its cash account and believes it is not exposed to significant credit risks[170]. - The fair value of TradeUP's financial assets and liabilities approximates their carrying amounts due to their short-term nature[171]. - As of March 31, 2022, there were no unrecognized tax benefits and no amounts accrued for interest and penalties[175]. - The Cayman Islands is the only major tax jurisdiction for the company[176]. - The company does not expect any significant changes in unrecognized tax benefits over the next twelve months[177]. - There is no taxation imposed on income by the Government of the Cayman Islands from January 26, 2021, through March 31, 2022[178]. - As of March 31, 2022, the company was not subject to any market or interest rate risk[180]. - The net proceeds from the Initial Public Offering have been invested in U.S. government securities with a maturity of 185 days or less[180]. - The company believes there will be no associated material exposure to interest rate risk due to the short-term nature of its investments[180]. Management and Employment - TradeUP entered into employment agreements with SAITECH's CEO and CFO, providing base salaries of $200,000 and annual bonuses of 50% and 25% of the base salary respectively[145]. Impact of COVID-19 - The company has been evaluating the impact of the COVID-19 pandemic on its financial position and operations[131]. Accounting Standards - Management does not anticipate that recently issued accounting standards will materially affect financial statements[179].