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What changed in SAIHEAT Ltd's 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of SAIHEAT Ltd's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+452 added−447 removedSource: 20-F (2025-04-28) vs 20-F (2024-04-23)

Top changes in SAIHEAT Ltd's 2024 20-F

452 paragraphs added · 447 removed · 322 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

101 edited+23 added−39 removed742 unchanged
Biggest changeIf an overseas securities company has entered into engagement agreements before the effectuation of the Trial Administrative Measures and is serving in practice as a sponsor or lead underwriter for overseas securities offering and listing by domestic companies, it shall file with the CSRC within 30 working days after the Trial Administrative Measures take effect. 48 The Trial Administrative Measures also provides that if the issuer meets both of the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (i) 50% or more of any of the issuer’s revenue, profit before tax, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China.
Biggest changeIf an overseas securities company has entered into engagement agreements before the effectuation of the Trial Administrative Measures and is serving in practice as a sponsor or lead underwriter for overseas securities offering and listing by domestic companies, it shall file with the CSRC within 30 working days after the Trial Administrative Measures take effect.
Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Our operating results may fluctuate as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of our control, including: ● changes in the legislative or regulatory environment, or actions by governments or regulators that impact the cryptocurrency industry generally, or our operations specifically; ● difficulty in obtaining new hardware and related installation costs; ● access to cost-effective sources of electrical power; ● adverse legal proceedings or regulatory enforcement actions, judgments, settlements or other legal proceeding and enforcement-related costs; ● increases in operating expenses that we expect to incur to grow and expand our operations and to remain competitive; ● system errors, failures, outages and computer viruses, which could disrupt our ability to continue operating; 4 ● power outages and certain other events beyond our control, including natural disasters and telecommunication failures; ● breaches of security or privacy; ● macroeconomic conditions; ● our ability to attract and retain talent; and ● our ability to compete with our existing and new competitors.
Our operating results may fluctuate as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of our control, including: ● changes in the legislative or regulatory environment, or actions by governments or regulators that impact the cryptocurrency industry generally, or our operations specifically; ● difficulty in obtaining new hardware and related installation costs; ● access to cost-effective sources of electrical power; ● adverse legal proceedings or regulatory enforcement actions, judgments, settlements or other legal proceeding and enforcement-related costs; ● increases in operating expenses that we expect to incur to grow and expand our operations and to remain competitive; ● system errors, failures, outages and computer viruses, which could disrupt our ability to continue operating; ● power outages and certain other events beyond our control, including natural disasters and telecommunication failures; ● breaches of security or privacy; ● macroeconomic conditions; ● our ability to attract and retain talent; and ● our ability to compete with our existing and new competitors.
Specifically, those can be triggered by certain adverse weather conditions or natural disasters, see “ Risk Factors — Risks Related to Our Business, Industry, and Operations — We will be vulnerable to severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations. ” 5 Furthermore, if cryptocurrency mining becomes more widespread, government scrutiny related to restrictions on cryptocurrency mining facilities and their energy consumption may significantly increase.
Specifically, those can be triggered by certain adverse weather conditions or natural disasters, see “ Risk Factors — Risks Related to Our Business, Industry, and Operations — We will be vulnerable to severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations. ” Furthermore, if cryptocurrency mining becomes more widespread, government scrutiny related to restrictions on cryptocurrency mining facilities and their energy consumption may significantly increase.
As a company with operations and opportunities outside of the U.S., we may face additional burdens and be subject to a variety of additional risks or considerations associated with companies operating in an international setting, that may negatively impact our operations, including any of the following: ● higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; 32 ● rules and regulations regarding currency redemption; ● laws governing the manner in which future business combinations may be affected; ● tariffs and trade barriers; ● regulations related to customs and import/export matters; ● local or regional economic policies and market conditions; ● unexpected changes in regulatory requirements; ● longer payment cycles; ● tax issues, such as tax law changes and variations in tax laws as compared to the U.S.; ● complex corporate withholding taxes on individuals; ● currency fluctuations and exchange controls; ● exchange listing and/or delisting requirements; ● challenges in managing and staffing international operations; ● rates of inflation; ● challenges in collecting accounts receivable; ● cultural and language differences; ● employment regulations; ● underdeveloped or unpredictable legal or regulatory systems; ● corruption; ● protection of intellectual property; ● social unrest, crime, strikes, riots, civil disturbances, regime changes, political upheaval, terrorist attacks, natural disasters and wars; ● deterioration of political relations with the U.S.; and ● government appropriation of assets.
As a company with operations and opportunities outside of the U.S., we may face additional burdens and be subject to a variety of additional risks or considerations associated with companies operating in an international setting, that may negatively impact our operations, including any of the following: ● higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; 30 ● rules and regulations regarding currency redemption; ● laws governing the manner in which future business combinations may be affected; ● tariffs and trade barriers; ● regulations related to customs and import/export matters; ● local or regional economic policies and market conditions; ● unexpected changes in regulatory requirements; ● longer payment cycles; ● tax issues, such as tax law changes and variations in tax laws as compared to the U.S.; ● complex corporate withholding taxes on individuals; ● currency fluctuations and exchange controls; ● exchange listing and/or delisting requirements; ● challenges in managing and staffing international operations; ● rates of inflation; ● challenges in collecting accounts receivable; ● cultural and language differences; ● employment regulations; ● underdeveloped or unpredictable legal or regulatory systems; ● corruption; ● protection of intellectual property; ● social unrest, crime, strikes, riots, civil disturbances, regime changes, political upheaval, terrorist attacks, natural disasters and wars; ● deterioration of political relations with the U.S.; and ● government appropriation of assets.
To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, limitations on our business, reputational harm, and other regulatory consequences, as well as criminal penalties, each of which may be significant and could adversely affect our business, operating results and financial condition. 18 In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, as well as in other countries may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development and use of crypto assets as a whole, crypto asset mining operations, and our legal and regulatory status in particular by changing how we operate our business, how our operations are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements or new costs of doing business, or imposing a total ban on certain activities or transactions with respect to crypto assets, as has occurred in certain jurisdictions in the past.
To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, limitations on our business, reputational harm, and other regulatory consequences, as well as criminal penalties, each of which may be significant and could adversely affect our business, operating results and financial condition. 16 In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, as well as in other countries may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development and use of crypto assets as a whole, crypto asset mining operations, and our legal and regulatory status in particular by changing how we operate our business, how our operations are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements or new costs of doing business, or imposing a total ban on certain activities or transactions with respect to crypto assets, as has occurred in certain jurisdictions in the past.
We may not be able to attract customers to our hosting capabilities for a number of reasons, including if: ● there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; ● we fail to provide competitive pricing terms or effectively market them to potential customers; 7 ● we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; ● businesses decide to host internally as an alternative to the use of our services; ● we fail to successfully communicate the benefits of our services to potential customers; ● we are unable to strengthen awareness of our brand; ● we are unable to provide services that our existing and potential customers’ desire; or ● our customers are unable to secure an adequate supply of new generation crypto asset mining equipment to host with us.
We may not be able to attract customers to our hosting capabilities for a number of reasons, including if: ● there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; ● we fail to provide competitive pricing terms or effectively market them to potential customers; 5 ● we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; ● businesses decide to host internally as an alternative to the use of our services; ● we fail to successfully communicate the benefits of our services to potential customers; ● we are unable to strengthen awareness of our brand; ● we are unable to provide services that our existing and potential customers’ desire; or ● our customers are unable to secure an adequate supply of new generation crypto asset mining equipment to host with us.
With respect to all other cryptocurrencies, there is no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset could be deemed a “security” under applicable laws. 14 Under the Investment Company Act, a company may fall within the definition of an investment company under section 3(c)(1)(A) thereof if it is or holds itself out as being engaged primarily, or proposes to engage primarily in the business of investing, reinvesting or trading in securities, or under section 3(a)(1)(C) thereof if it is engaged or proposes to engage in business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire “investment securities” (as defined) having a value exceeding 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.
With respect to all other cryptocurrencies, there is no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset could be deemed a “security” under applicable laws. 12 Under the Investment Company Act, a company may fall within the definition of an investment company under section 3(c)(1)(A) thereof if it is or holds itself out as being engaged primarily, or proposes to engage primarily in the business of investing, reinvesting or trading in securities, or under section 3(a)(1)(C) thereof if it is engaged or proposes to engage in business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire “investment securities” (as defined) having a value exceeding 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.
If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations. ● There is no one unifying principle governing the regulatory status of cryptocurrency nor whether cryptocurrency is a security in each context in which it is viewed.
If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations. 1 ● There is no one unifying principle governing the regulatory status of cryptocurrency nor whether cryptocurrency is a security in each context in which it is viewed.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from any offering of our securities and any accompanied Annual Report on Form 20-F to supplement and capitalize or otherwise fund our PRC operations may be negatively affected. 36 Though we have a Singapore-based auditor and a U.S. based predecessor auditor that are registered with the PCAOB and currently subject to PCAOB inspection, if it is later determined that the PCAOB is unable to inspect or investigate completely the company’s auditors because of a position taken by an authority in a foreign jurisdiction, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act and as a result an exchange may determine to delist our securities .
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from any offering of our securities and any accompanied Annual Report on Form 20-F to supplement and capitalize or otherwise fund our PRC operations may be negatively affected. 34 Though we have a Singapore-based auditor and a U.S. based predecessor auditor that are registered with the PCAOB and currently subject to PCAOB inspection, if it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditors because of a position taken by an authority in a foreign jurisdiction, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act and as a result an exchange may determine to delist our securities .
If passed by the Senate and enacted into law, the bipartisan bill would create a crypto assets working group to evaluate the current legal and regulatory framework around crypto assets in the United States and define when the SEC may have jurisdiction over a particular token or cryptocurrency (i.e., when it is a security) and when the Commodity Futures Trading Commission (the “CFTC”) may have jurisdiction (i.e., when it is a commodity). 16 If regulatory changes or interpretations require the regulation of bitcoin or other crypto assets under the securities laws of the United States or elsewhere, including the Securities Act of 1933, the Exchange Act and the 1940 Act or similar laws of other jurisdictions and interpretations by the SEC, the CFTC, the IRS, Department of Treasury or other agencies or authorities, we may be required to register and comply with such regulations, including at a state or local level.
If passed by the Senate and enacted into law, the bipartisan bill would create a crypto assets working group to evaluate the current legal and regulatory framework around crypto assets in the United States and define when the SEC may have jurisdiction over a particular token or cryptocurrency (i.e., when it is a security) and when the Commodity Futures Trading Commission (the “CFTC”) may have jurisdiction (i.e., when it is a commodity). 14 If regulatory changes or interpretations require the regulation of bitcoin or other crypto assets under the securities laws of the United States or elsewhere, including the Securities Act of 1933, the Exchange Act and the 1940 Act or similar laws of other jurisdictions and interpretations by the SEC, the CFTC, the IRS, Department of Treasury or other agencies or authorities, we may be required to register and comply with such regulations, including at a state or local level.
On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector. 44 Furthermore, on October 29, 2021, the Cyberspace Administration of China (“CAC”) publicly solicited opinions on the Measures for the Security Assessment of Data Cross-border Transfer for public comments.
On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector. 42 Furthermore, on October 29, 2021, the Cyberspace Administration of China (“CAC”) publicly solicited opinions on the Measures for the Security Assessment of Data Cross-border Transfer for public comments.
The draft measures require a company holding more than one million personal information to submit its initial public offering materials prepared for submission for cybersecurity review before listing on a foreign exchange. 49 In addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021, and takes effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
The draft measures require a company holding more than one million personal information to submit its initial public offering materials prepared for submission for cybersecurity review before listing on a foreign exchange. 46 In addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021, and takes effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
As a result, we expressly exclude working with any auditor or any target whose auditor the PCAOB is not able to inspect for three consecutive years and thus, we may not in the future acquire a target business due to these laws. 37 Additionally, other developments in U.S. laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.) 13959, “Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies,” may further restrict our ability to acquire certain PRC-based businesses.
As a result, we expressly exclude working with any auditor or any target whose auditor the PCAOB is not able to inspect for three consecutive years and thus, we may not in the future acquire a target business due to these laws. 35 Additionally, other developments in U.S. laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.) 13959, “Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies,” may further restrict our ability to acquire certain PRC-based businesses.
Based on the fiscal year 2023 composition of our income, assets and operations and that of our subsidiaries, we do not expect to be a PFIC in the 2024 taxable year or in future taxable years, although there can be no assurance in this regard.
Based on the fiscal year 2024 composition of our income, assets and operations and that of our subsidiaries, we do not expect to be a PFIC in the 2024 taxable year or in future taxable years, although there can be no assurance in this regard.
Our ability to operate profitably may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our ability to operate even we are located outside of China. 46 PRC laws and regulations governing a company’s presence/business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair a company’s ability to operate profitably.
Our ability to operate profitably may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our ability to operate even we are located outside of China. 44 PRC laws and regulations governing a company’s presence/business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair a company’s ability to operate profitably.
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. 56 We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. 54 We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
If a fork occurs on a crypto asset network which we are mining, such as bitcoin, or hold crypto assets in, it may have a negative effect on the value of the crypto asset and could have a material adverse effect on our business, prospects, financial condition, and operating results. 23 Because there has been limited precedent set for financial accounting for bitcoin and other cryptocurrency assets, the determinations that we have made for how to account for cryptocurrency assets transactions may be subject to change and our operating results could be adversely affected.
If a fork occurs on a crypto asset network which we are mining, such as bitcoin, or hold crypto assets in, it may have a negative effect on the value of the crypto asset and could have a material adverse effect on our business, prospects, financial condition, and operating results. 21 Because there has been limited precedent set for financial accounting for bitcoin and other cryptocurrency assets, the determinations that we have made for how to account for cryptocurrency assets transactions may be subject to change and our operating results could be adversely affected.
To the extent that material issues arise with the bitcoin network protocol and the core developers and open-source contributors are unable or unwilling to address the issues adequately or in a timely manner, the bitcoin network and consequently our business, prospects, financial condition and operating results could be adversely affected. 22 Significant contributors to all or a network for any particular crypto asset, such as bitcoin, could propose amendments to the respective network’s protocols and software that, if accepted and authorized by such network, could adversely affect our business.
To the extent that material issues arise with the bitcoin network protocol and the core developers and open-source contributors are unable or unwilling to address the issues adequately or in a timely manner, the bitcoin network and consequently our business, prospects, financial condition and operating results could be adversely affected. 20 Significant contributors to all or a network for any particular crypto asset, such as bitcoin, could propose amendments to the respective network’s protocols and software that, if accepted and authorized by such network, could adversely affect our business.
Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our financial and operational performance. 33 If social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, or policy changes or enactments occur in a country in which we may operate, it may result in a negative impact on our business.
Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our financial and operational performance. 31 If social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, or policy changes or enactments occur in a country in which we may operate, it may result in a negative impact on our business.
If some investors find our Ordinary Shares less attractive as a result, there may be a less active market for our Ordinary Shares, our share price may be more volatile and the price at which our securities trade could be less than if we did not use these exemptions. 57 We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in the Company and, as a result, the value of our Ordinary Shares.
If some investors find our Ordinary Shares less attractive as a result, there may be a less active market for our Ordinary Shares, our share price may be more volatile and the price at which our securities trade could be less than if we did not use these exemptions. 55 We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in the Company and, as a result, the value of our Ordinary Shares.
The organization form, institutional framework and standard of conduct of a foreign-invested enterprise shall be subject to the provisions of the Company Law of the PRC and the Partnership Enterprise Law of the PRC and other law related regulations; or the second, to complete the approval and registration procedures with the relevant regulatory authorities in accordance with the provisions of Administrative Measures for the Registration of Enterprises of Foreign Countries (Regions) Engaging in Production and Operation Activities within the Territory of China (Revised in 2020), or Order No.31. 39 Policy risk of foreign investment in China.
The organization form, institutional framework and standard of conduct of a foreign-invested enterprise shall be subject to the provisions of the Company Law of the PRC and the Partnership Enterprise Law of the PRC and other law related regulations; or the second, to complete the approval and registration procedures with the relevant regulatory authorities in accordance with the provisions of Administrative Measures for the Registration of Enterprises of Foreign Countries (Regions) Engaging in Production and Operation Activities within the Territory of China (Revised in 2020), or Order No.31. 37 Policy risk of foreign investment in China.
In addition, our systems and processes may not prevent or detect all errors, omissions or fraud. 58 As a result of our plans to expand operations, including to jurisdictions in which the tax laws may not be favorable, our tax rate may fluctuate, our tax obligations may become significantly more complex and subject to greater risk of examination by taxing authorities or we may be subject to future changes in tax law, the impacts of which could adversely affect our after-tax profitability and financial results.
In addition, our systems and processes may not prevent or detect all errors, omissions or fraud. 56 As a result of our plans to expand operations, including to jurisdictions in which the tax laws may not be favorable, our tax rate may fluctuate, our tax obligations may become significantly more complex and subject to greater risk of examination by taxing authorities or we may be subject to future changes in tax law, the impacts of which could adversely affect our after-tax profitability and financial results.
Bitcoin has not been in existence long enough for market participants to assess these predictions with any precision, but if these observers are even partially correct, it could have a material adverse effect on our business, prospects, financial condition, and operating results. 28 Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to bitcoin holdings.
Bitcoin has not been in existence long enough for market participants to assess these predictions with any precision, but if these observers are even partially correct, it could have a material adverse effect on our business, prospects, financial condition, and operating results. 26 Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to bitcoin holdings.
If actual results differ from our estimates, analysts or investors may negatively react and our stock price could be materially impacted. 8 We have experienced difficulties in establishing relationships with banks, leasing companies, insurance companies and other financial institutions that are willing to provide us with customary financial products and services, which could have a material adverse effect on our business, financial condition and results of operations.
If actual results differ from our estimates, analysts or investors may negatively react and our stock price could be materially impacted. 6 We have experienced difficulties in establishing relationships with banks, leasing companies, insurance companies and other financial institutions that are willing to provide us with customary financial products and services, which could have a material adverse effect on our business, financial condition and results of operations.
Further, we may not realize the anticipated benefits of any acquisition, strategic alliance or joint venture if such investments do not materialize. 12 To finance any acquisitions or joint ventures, we may choose to issue shares of common stock, preferred stock or a combination of debt and equity as consideration, which could significantly dilute the ownership of our existing shareholders or provide rights to such preferred stockholders in priority over our common stock holders.
Further, we may not realize the anticipated benefits of any acquisition, strategic alliance or joint venture if such investments do not materialize. 10 To finance any acquisitions or joint ventures, we may choose to issue shares of common stock, preferred stock or a combination of debt and equity as consideration, which could significantly dilute the ownership of our existing shareholders or provide rights to such preferred stockholders in priority over our common stock holders.
We cannot provide any assurances that we will assist holders of our shares in determining whether SAI or any of our non-U.S. subsidiaries are treated as CFCs or whether any holder of the Ordinary Shares is treated as a United States shareholder with respect to any such CFC, nor do we expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
We cannot provide any assurances that we will assist holders of our shares in determining whether SAIH or any of our non-U.S. subsidiaries are treated as CFCs or whether any holder of the Ordinary Shares is treated as a United States shareholder with respect to any such CFC, nor do we expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
Any such action, if initiated, whether or not it is resolved in our favor, could result in significant expense to us, and divert the efforts of our technical and management personnel, which may have a material adverse effect on our business, financial condition and results of operations. 13 If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.
Any such action, if initiated, whether or not it is resolved in our favor, could result in significant expense to us, and divert the efforts of our technical and management personnel, which may have a material adverse effect on our business, financial condition and results of operations. 11 If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.
The risk applies to securities firms, clearance and settlement firms, national stock and commodities exchanges, the over-the-counter market and the Depository Trust Company. Such factors would have a material adverse effect on our business, prospects, financial condition, and operating results. 24 Cryptocurrencies, including bitcoin, face significant scaling obstacles that can lead to high fees or slow transaction settlement times.
The risk applies to securities firms, clearance and settlement firms, national stock and commodities exchanges, the over-the-counter market and the Depository Trust Company. Such factors would have a material adverse effect on our business, prospects, financial condition, and operating results. 22 Cryptocurrencies, including bitcoin, face significant scaling obstacles that can lead to high fees or slow transaction settlement times.
Any negative actions or publications by shareholder advisory firms could also adversely affect the value of our Class A Ordinary Shares and IPO Warrants. 53 We are a “controlled company” within the meaning of Nasdaq listing rules and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
Any negative actions or publications by shareholder advisory firms could also adversely affect the value of our Class A Ordinary Shares and IPO Warrants. 51 We are a “controlled company” within the meaning of Nasdaq listing rules and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
Our business is subject to the risks of severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, any of which could result in system failures, power supply disruptions and other interruptions that could harm our business. 9 We are exposed to risk of nonperformance by counterparties, including our counterparties under the planned power and hosting arrangements.
Our business is subject to the risks of severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, any of which could result in system failures, power supply disruptions and other interruptions that could harm our business. 7 We are exposed to risk of nonperformance by counterparties, including our counterparties under the planned power and hosting arrangements.
Such circumstances could have a material adverse effect on the amount of bitcoin we may be able to mine, the value of bitcoin and any other cryptocurrencies we may potentially acquire or hold in the future and, consequently, our business, prospects, financial condition and operating results. 17 Competition from central bank digital currencies (“CBDCs”) could adversely affect the value of bitcoin and other crypto assets.
Such circumstances could have a material adverse effect on the amount of bitcoin we may be able to mine, the value of bitcoin and any other cryptocurrencies we may potentially acquire or hold in the future and, consequently, our business, prospects, financial condition and operating results. 15 Competition from central bank digital currencies (“CBDCs”) could adversely affect the value of bitcoin and other crypto assets.
In the recent years, there have been also a series of 51% attacks on a number of other cryptocurrencies, including Verge and Ethereum Classic, which suffered three consecutive attacks in August 2020. 25 The approach towards and possible crossing of the 50% threshold indicate a greater risk that a single mining pool could exert authority over the validation of crypto asset transactions.
In the recent years, there have been also a series of 51% attacks on a number of other cryptocurrencies, including Verge and Ethereum Classic, which suffered three consecutive attacks in August 2020. 23 The approach towards and possible crossing of the 50% threshold indicate a greater risk that a single mining pool could exert authority over the validation of crypto asset transactions.
Such circumstances could have a material adverse effect on our business, prospects, financial condition, and operating results. 31 To the extent that any miners cease to record transactions in solved blocks, transactions that do not include the payment of a transaction fee will not be recorded on the blockchain until a block is solved by a miner who does not require the payment of transaction fees.
Such circumstances could have a material adverse effect on our business, prospects, financial condition, and operating results. 29 To the extent that any miners cease to record transactions in solved blocks, transactions that do not include the payment of a transaction fee will not be recorded on the blockchain until a block is solved by a miner who does not require the payment of transaction fees.
Additionally, if the relevant central and local authorities find us to be in violation of any existing or future laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation: ● levying fines; ● revoking our business and other licenses; 34 ● requiring that we restructure our ownership or operations; and ● requiring that we discontinue any portion or all of our business.
Additionally, if the relevant central and local authorities find us to be in violation of any existing or future laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation: ● levying fines; ● revoking our business and other licenses; 32 ● requiring that we restructure our ownership or operations; and ● requiring that we discontinue any portion or all of our business.
Failure by such shareholders or beneficial owners to comply with SAFE regulations could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities or affect our ownership structure, which could adversely affect our business and prospects. 41 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Failure by such shareholders or beneficial owners to comply with SAFE regulations could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities or affect our ownership structure, which could adversely affect our business and prospects. 39 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
However, we cannot assure you that the government authorities will not impose fines on us due to our failure to register any of our lease agreements, which may negatively impact our financial condition. 35 In addition, some of the ownership certificates or other similar proof of certain leased properties have not been provided to us by the relevant lessors.
However, we cannot assure you that the government authorities will not impose fines on us due to our failure to register any of our lease agreements, which may negatively impact our financial condition. 33 In addition, some of the ownership certificates or other similar proof of certain leased properties have not been provided to us by the relevant lessors.
Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our operations. 40 In addition to the unified policies at the national level, the attitudes of the Chinese local or provincial governments towards mining enterprises have also changed from time to time.
Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our operations. 38 In addition to the unified policies at the national level, the attitudes of the Chinese local or provincial governments towards mining enterprises have also changed from time to time.
Importantly, these functions have no way of identifying their anonymous users. Indeed, bitcoin’s blockchain was designed for anonymity. 19 This reporting requirement went into effect on January 1, 2023 and will impact tax returns filed in 2024. The implementation of these requirements will require further guidance from the federal government.
Importantly, these functions have no way of identifying their anonymous users. Indeed, bitcoin’s blockchain was designed for anonymity. 17 This reporting requirement went into effect on January 1, 2023 and will impact tax returns filed in 2024. The implementation of these requirements will require further guidance from the federal government.
In addition, fluctuations in currencies relative to the periods in which the earnings are generated may make it more difficult to perform period-to period comparisons of our reported results of operations. 43 We primarily conduct our business in Singapore and have re-signed business contracts with current customers and will sign future contracts with customers denominated in U.S. dollar.
In addition, fluctuations in currencies relative to the periods in which the earnings are generated may make it more difficult to perform period-to period comparisons of our reported results of operations. 41 We primarily conduct our business in Singapore and have re-signed business contracts with current customers and will sign future contracts with customers denominated in U.S. dollar.
The government of Kazakhstan also requires foreign-funded enterprises to actively perform higher social responsibilities, donate to local communities, sponsor and participate in community public welfare undertakings. 50 There is a phenomenon of power rent-seeking. Kazakhstan’s investment legislation is relatively complete, but there is a phenomenon of power rent-seeking, which creates difficulties for foreign-funded enterprises to invest in Kazakhstan.
The government of Kazakhstan also requires foreign-funded enterprises to actively perform higher social responsibilities, donate to local communities, sponsor and participate in community public welfare undertakings. 47 There is a phenomenon of power rent-seeking. Kazakhstan’s investment legislation is relatively complete, but there is a phenomenon of power rent-seeking, which creates difficulties for foreign-funded enterprises to invest in Kazakhstan.
To the extent that our activities cause us to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.
To the extent that our activities cause us to be deemed a MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.
Such incidents could result in customer disputes, damage to our brand and reputation, legal claims against us, and financial liabilities, any of which could adversely affect our business, results of operations and/or financial condition. 21 Incorrect or fraudulent cryptocurrency transactions may be irreversible. Cryptocurrency transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable.
Such incidents could result in customer disputes, damage to our brand and reputation, legal claims against us, and financial liabilities, any of which could adversely affect our business, results of operations and/or financial condition. 19 Incorrect or fraudulent cryptocurrency transactions may be irreversible. Cryptocurrency transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable.
As part of our business strategy, we may acquire, make investments in or engage in strategic partnerships with companies, solutions or technologies and issue equity securities to pay for any such acquisition, investment or partnership. 55 Anti-takeover provisions in our governing documents could delay or prevent a change of control.
As part of our business strategy, we may acquire, make investments in or engage in strategic partnerships with companies, solutions or technologies and issue equity securities to pay for any such acquisition, investment or partnership. 53 Anti-takeover provisions in our governing documents could delay or prevent a change of control.
Specifically, a United States shareholder of a CFC may be required to annually report and include in its U.S. taxable income its pro rata share of such CFC’s “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property, whether or not SAI makes any distributions of profits or income of such CFC to such United States shareholder.
Specifically, a United States shareholder of a CFC may be required to annually report and include in its U.S. taxable income its pro rata share of such CFC’s “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property, whether or not SAIH makes any distributions of profits or income of such CFC to such United States shareholder.
For instance, the recently enacted Holding Foreign Companies Accountable Act (the “HFCAA”) would (i) prohibit us from using an auditor that the PCAOB determines it could not inspect or fully investigate and (ii) restrict our ability to acquire a business unless that business met certain standards of the PCAOB and would (i) prohibit the trading of securities of a company and (ii) require delisting of a company from U.S. national securities exchanges if the PCAOB is unable to inspect its public accounting firm, for three consecutive years.
For instance, the recently enacted Holding Foreign Companies Accountable Act (the “HFCA Act”) would (i) prohibit us from using an auditor that the PCAOB determines it could not inspect or fully investigate and (ii) restrict our ability to acquire a business unless that business met certain standards of the PCAOB and would (i) prohibit the trading of securities of a company and (ii) require delisting of a company from U.S. national securities exchanges if the PCAOB is unable to inspect its public accounting firm, for three consecutive years.
Human error and the constantly evolving state of cybercrime and hacking techniques may render present security protocols and procedures ineffective in ways which we cannot predict. 20 Regardless of the storage method, the risk of damage to or loss of our crypto assets cannot be wholly eliminated.
Human error and the constantly evolving state of cybercrime and hacking techniques may render present security protocols and procedures ineffective in ways which we cannot predict. 18 Regardless of the storage method, the risk of damage to or loss of our crypto assets cannot be wholly eliminated.
How such supply and demand will be impacted by geopolitical events is largely uncertain but could be harmful to us and our investors. 26 Our interactions with a blockchain may expose us to persons named on The Office of Financial Assets Control of the U.S.
How such supply and demand will be impacted by geopolitical events is largely uncertain but could be harmful to us and our investors. 24 Our interactions with a blockchain may expose us to persons named on The Office of Financial Assets Control of the U.S.
We cannot assure any investor that we will not be a PFIC for the 2023 taxable year or any future taxable year. U.S. investors should consult their own tax advisors about the circumstances that may cause us to be classified as a PFIC and the consequences if we are classified as a PFIC.
We cannot assure any investor that we will not be a PFIC for the 2024 taxable year or any future taxable year. U.S. investors should consult their own tax advisors about the circumstances that may cause us to be classified as a PFIC and the consequences if we are classified as a PFIC.
Such events could have a material adverse effect on our business, prospects, financial condition, and operating results, including our ability to continue as a going concern. 30 We may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect our business.
Such events could have a material adverse effect on our business, prospects, financial condition, and operating results, including our ability to continue as a going concern. 28 We may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect our business.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2022.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2025.
You may not be able to resell your shares at an attractive price due to a number of factors such as the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; 52 ● the impact of the COVID-19 pandemic and its effect on our business and financial conditions; ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of stocks generally; ● strategic actions by us or our competitors; ● announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; ● any significant change in our management; ● changes in general economic or market conditions or trends in our industry or markets, such as recessions, interest rates, local and national elections, international currency fluctuations, corruption, political instability and acts of war or terrorism; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● future sales of our Class A Ordinary Shares or other securities; ● investor perceptions or the investment opportunity associated with our Class A Ordinary Shares relative to other investment alternatives; ● the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; ● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; ● the development and sustainability of an active trading market for our Class A Ordinary Shares; ● actions by institutional or activist shareholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
You may not be able to resell your shares at an attractive price due to a number of factors such as the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; 49 ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of stocks generally; ● strategic actions by us or our competitors; ● announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; ● any significant change in our management; ● changes in general economic or market conditions or trends in our industry or markets, such as recessions, interest rates, local and national elections, international currency fluctuations, corruption, political instability and acts of war or terrorism; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● future sales of our Class A Ordinary Shares or other securities; ● investor perceptions or the investment opportunity associated with our Class A Ordinary Shares relative to other investment alternatives; ● the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; ● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; ● the development and sustainability of an active trading market for our Class A Ordinary Shares; ● actions by institutional or activist shareholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
Any such tax may reduce the returns on your investment in our Class A Ordinary Shares. 42 Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.
Any such tax may reduce the returns on your investment in our Class A Ordinary Shares. 40 Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.
Based upon our audited consolidated financial statements for the year ended on December 31, 2023, and as of December 31, 2023, less than 50% of our revenue, profit before tax, total assets and net assets were attributable to our PRC subsidiaries.
Based upon our audited consolidated financial statements for the year ended on December 31, 2024, and as of December 31, 2024, less than 50% of our revenue, profit before tax, total assets and net assets were attributable to our PRC subsidiaries.
We have filed a registration statement on Form S-8 on October 19, 2022 under the Securities Act to register our Class A Ordinary Shares or securities convertible into or exchangeable for our Class A Ordinary Shares issued pursuant to the SAI Incentive Plan.
We have filed a registration statement on Form S-8 on October 19, 2022 under the Securities Act to register our Class A Ordinary Shares or securities convertible into or exchangeable for our Class A Ordinary Shares issued pursuant to the SAIH Incentive Plan.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
It is estimated that it will “halve” again in about four years after the previous halving. 29 This reduction may result in a reduction in the aggregate hash rate of the bitcoin network as the incentive for miners decreases.
It is estimated that it will “halve” again in about four years after the previous halving. 27 This reduction may result in a reduction in the aggregate hash rate of the bitcoin network as the incentive for miners decreases.
We are required to comply with these rules if the SEC identifies us as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S.
We are required to comply with these rules if the SEC identifies us as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S.
We may not be able to obtain broad protection in Kazakhstan or internationally for all of our existing and future intellectual property and other proprietary rights, and we may not be able to obtain effective protection for our intellectual property and other proprietary rights in every country in which we operate.
We may not be able to obtain broad protection internationally for all of our existing and future intellectual property and other proprietary rights, and we may not be able to obtain effective protection for our intellectual property and other proprietary rights in every country in which we operate.
Senate passed S. 945, the Holding Foreign Companies Accountable Act, or the HFCAA. The HFCAA was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCAA.
Senate passed S. 945, the Holding Foreign Companies Accountable Act, or the HFCA Act. The HFCA Act was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCA Act.
If we are unable to access our private keys (whether due to loss, destruction, security incident or otherwise), it could cause direct financial loss, regulatory scrutiny and reputational harm. ● Distributing crypto assets in connection with our mining pool business involves risks, which could result in loss of customer assets, customer disputes and other liabilities, adversely impact our business, results of operations and/or financial condition. ● If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed. ● Significant contributors to all or a network for any particular crypto asset, such as bitcoin, could propose amendments to the respective network’s protocols and software that, if accepted and authorized by such network, could adversely affect our business. ● The supply of bitcoin is limited, and production of bitcoin is negatively impacted by the bitcoin halving protocol expected every four years. ● Any periodic adjustments to the crypto asset networks, such as bitcoin, regarding the difficulty for block solutions, with reductions in the aggregate hash rate or otherwise, could have a material adverse effect on our business, prospects, financial condition, and operating results.
If we are unable to access our private keys (whether due to loss, destruction, security incident or otherwise), it could cause direct financial loss, regulatory scrutiny and reputational harm. ● Distributing crypto assets in connection with our mining pool business involves risks, which could result in loss of customer assets, customer disputes and other liabilities, adversely impact our business, results of operations and/or financial condition. ● Significant contributors to all or a network for any particular crypto asset, such as bitcoin, could propose amendments to the respective network’s protocols and software that, if accepted and authorized by such network, could adversely affect our business. ● The supply of bitcoin is limited, and production of bitcoin is negatively impacted by the bitcoin halving protocol expected every four years. ● Any periodic adjustments to the crypto asset networks, such as bitcoin, regarding the difficulty for block solutions, with reductions in the aggregate hash rate or otherwise, could have a material adverse effect on our business, prospects, financial condition, and operating results.
Each U.S. investor should consult its advisors regarding the potential application of these rules to an investment in the Ordinary Shares. 59 We may become a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. Holders of Ordinary Shares.
Each U.S. investor should consult its advisors regarding the potential application of these rules to an investment in the Ordinary Shares. 57 We may become a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. Holders of Ordinary Shares.
The enactment of the HFCAA and any additional rulemaking efforts to increase U.S. regulatory access to audit information could cause (i) investor uncertainty for affected issuers, including SAI, (ii) the market price of our securities to be adversely affected, and (iii) us to be delisted if we are unable to meet the PCAOB inspection requirement in time (or unable to cure any requirement noncompliance). 38 On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA.
The enactment of the HFCA Act and any additional rulemaking efforts to increase U.S. regulatory access to audit information could cause (i) investor uncertainty for affected issuers, including SAI, (ii) the market price of our securities to be adversely affected, and (iii) us to be delisted if we are unable to meet the PCAOB inspection requirement in time (or unable to cure any requirement noncompliance). 36 On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act.
You may be unable to sell your securities unless a market can be established or sustained. 51 We cannot assure you that our securities will continue to be listed on Nasdaq.
You may be unable to sell your securities unless a market can be established or sustained. 48 We cannot assure you that our securities will continue to be listed on Nasdaq.
In addition, as a consequence of our seeking to avoid the need to register under the 1940 Act on an ongoing basis, we may be limited in our ability to engage in cryptocurrency mining operations or otherwise make certain investments, and these limitations could result in our holding assets we may wish to sell or selling assets we may wish to hold, which could materially and adversely affect our business, financial condition and results of operations. 15 If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by The Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
In addition, as a consequence of our seeking to avoid the need to register under the 1940 Act on an ongoing basis, we may be limited in our ability to engage in cryptocurrency mining operations or otherwise make certain investments, and these limitations could result in our holding assets we may wish to sell or selling assets we may wish to hold, which could materially and adversely affect our business, financial condition and results of operations. 13 If regulatory changes or interpretations of our activities require our registration as a MSB under the regulations promulgated by The Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
In essence, the HFCAA requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021.
In essence, the HFCA Act requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021.
We could incur large losses to modify our operations to avoid the need to register as an investment company or could incur significant expenses to register as an investment company or could terminate operations altogether. ● If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by The Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
We could incur large losses to modify our operations to avoid the need to register as an investment company or could incur significant expenses to register as an investment company or could terminate operations altogether. ● If regulatory changes or interpretations of our activities require our registration as a money service business, or MSB, under the regulations promulgated by The Financial Crimes Enforcement Network (“FinCEN”) under the authority of the U.S.
The HFCAA also requires public companies to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those that are based in or have a majority or significant amount of their operations in the PRC.
The HFCA Act also requires public companies to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those that are based in or have a majority or significant amount of their operations in the PRC.
If the award of new bitcoin for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending processing power, or hash rate, to solve blocks and confirmations of transactions on the bitcoin blockchain could be slowed. ● Bitcoin and any other cryptocurrencies that could be held by us are not insured and not subject to FDIC or SIPC protections. ● As a company with operations and opportunities outside of the U.S., we may face additional burdens and be subject to a variety of additional risks or considerations associated with companies operating in an international setting that may negatively impact our operations. ● If relations between the United States and foreign governments deteriorate, they could affect our operations and cause our goods and services to become less attractive. ● Though we have a Singapore-based auditor and a U.S. based predecessor auditor that are registered with the PCAOB and currently subject to PCAOB inspection, if it is later determined that the PCAOB is unable to inspect or investigate completely the company’s auditors because of a position taken by an authority in a foreign jurisdiction, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act and as a result an exchange may determine to delist our securities. 2 ● The PRC government may exert, at any time, with little to no notice, substantial interventions and influences over the manner in which a business must conduct its business operations that cannot always be expected nor anticipated, if such business has some presence/operations in China.
If the award of new bitcoin for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending processing power, or hash rate, to solve blocks and confirmations of transactions on the bitcoin blockchain could be slowed. ● Bitcoin and any other cryptocurrencies that could be held by us are not insured and not subject to FDIC or SIPC protections. ● As a company with operations and opportunities outside of the U.S., we may face additional burdens and be subject to a variety of additional risks or considerations associated with companies operating in an international setting that may negatively impact our operations. ● If relations between the United States and foreign governments deteriorate, they could affect our operations and cause our goods and services to become less attractive. ● Though we have a Singapore-based auditor and a U.S. based predecessor auditor that are registered with the PCAOB and currently subject to PCAOB inspection, if it is later determined that the PCAOB is unable to inspect or investigate completely the company’s auditors because of a position taken by an authority in a foreign jurisdiction, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act and as a result an exchange may determine to delist our securities. ● PRC regulations relating to offshore investment activities by PRC residents may expose us or our PRC resident beneficial owners to liability and penalties under PRC law. ● The PRC government may exert, at any time, with little to no notice, substantial interventions and influences over the manner in which a business must conduct its business operations that cannot always be expected nor anticipated, if such business has some presence/operations in China.
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a “defacto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%.
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%.
Consistent with the foregoing, we are exposed to a variety of risks, including those associated with the following: ● We have a limited operating history in an evolving and highly volatile industry and are undergoing a business transition, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. ● Our IPO Warrants may never be in the money, and they may expire worthless. ● Our operating results may fluctuate due to the highly volatile nature of cryptocurrencies in general and, specifically, bitcoin. ● Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of mining machines and have a negative environmental impact.
Consistent with the foregoing, we are exposed to a variety of risks, including those associated with the following: ● We have a limited operating history in an evolving and highly volatile industry and are undergoing a business transition, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. ● Our operating results may fluctuate due to the highly volatile nature of cryptocurrencies in general and, specifically, bitcoin. ● Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of mining machines and have a negative environmental impact.
Our business is dependent upon crypto asset mining equipment suppliers such as Bitmain Technologies, Ltd (“Bitmain”) providing an adequate supply of new generation crypto asset mining machines at economical prices to customers intending to purchase our hosting and other solutions.
Our business is dependent on a small number of crypto asset mining equipment suppliers. Our business is dependent upon crypto asset mining equipment suppliers such as Bitmain Technologies, Ltd (“Bitmain”) providing an adequate supply of new generation crypto asset mining machines at economical prices to customers intending to purchase our hosting and other solutions.
In March 2021, the government of China’s Inner Mongolia Autonomous Region (“Inner Mongolia”), where we used to deploy mining machines, has banned cryptocurrency mining in order to constrain growth in energy consumption. In May 2021, other provinces in China have done the same and we terminated our operation in China accordingly. See “BUSINESS — B.
In March 2021, the government of China’s Inner Mongolia Autonomous Region (“Inner Mongolia”), where we used to deploy mining machines, has banned cryptocurrency mining in order to constrain growth in energy consumption. In May 2021, other provinces in China have done the same and we terminated our operation in China accordingly. See “Item 4. Information of the Company— B.
Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little to no advance notice and could cause adverse impact on a company’s ability to operate profitably in the PRC. Our operations have been completely transferred out of China in accordance with PRC regulations.
Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little to no advance notice and could cause adverse impact on a company’s ability to operate profitably in the PRC. We are a global mining operator. Our operations have been completely transferred out of China in accordance with PRC regulations.
Any significant nonperformance by counterparties, could have a material adverse effect on our business, prospects, financial condition, and operating results. Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to an ongoing significant shortage.
Any significant nonperformance by counterparties, could have a material adverse effect on our business, prospects, financial condition, and operating results. Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages, including application-specific integrated circuit (“ASIC”) chips that have been subject to an ongoing significant shortage.
If all of our IPO Warrants were exercised in full for cash, we would receive an aggregate of approximately $25,811,577.50. We do not expect warrant holders to exercise their IPO Warrants and, therefore, we do not expect to receive cash proceeds from any such exercise, for so long as the IPO Warrants remain out-of-the money.
If all of our IPO Warrants were exercised in full for cash, we would receive an aggregate of approximately $387,173,662.50. We do not expect warrant holders to exercise their IPO Warrants and, therefore, we do not expect to receive cash proceeds from any such exercise, for so long as the IPO Warrants remain out-of-the money.
For further details on how our operating results may be directly impacted by changes in the value of bitcoin, see “ — Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to bitcoin holdings.” 27 Furthermore, in our operations we intend to use application-specific integrated circuit (“ASIC”) chips and machines (which we refer to as “mining machines”), which are principally utilized for mining bitcoin.
For further details on how our operating results may be directly impacted by changes in the value of bitcoin, see “ — Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to bitcoin holdings.” 25 Furthermore, in our operations we intend to use ASIC chips and machines (which we refer to as “mining machines”), which are principally utilized for mining bitcoin.
In August 2023, we completed the development of SAI US R&D Center, SAI NODE Marietta, and have deployed 712 bitcoin mining machines for self-mining operation as of the date of this Annual Report.
In August 2023, we completed the development of SAI US R&D Center, SAI NODE Marietta, and have deployed 734 bitcoin mining machines for mining revenue as of the date of this Annual Report.
We may not grow as we expect, if we fail to manage our growth effectively or to develop and expand our managerial, operational and financial resources and systems, our business, prospects, financial condition and operating results could be adversely affected. 11 Unfavorable global economic, business or political conditions, such as the global COVID-19 pandemic and the disruption caused by various countermeasures to reduce its spread, could adversely affect our business, prospects, financial condition, and operating results.
We may not grow as we expect, if we fail to manage our growth effectively or to develop and expand our managerial, operational and financial resources and systems, our business, prospects, financial condition and operating results could be adversely affected. 9 Unfavorable global economic, business or political conditions, such as the sudden tariff adjustments and increases, and the disruption caused by various countermeasures to reduce its spread, could adversely affect our business, prospects, financial condition, and operating results.
Halvings are scheduled to occur once every 210,000 blocks, or roughly every four years, with the latest halving having occurred in May 2020, which revised the block reward to 6.25 bitcoin. As a result, the price of bitcoin could rise or fall based on overall investor and consumer demand.
Halvings are scheduled to occur once every 210,000 blocks, or roughly every four years, with the latest halving having occurred in April 2024, which revised the block reward to 3.125 bitcoin. As a result, the price of bitcoin could rise or fall based on overall investor and consumer demand.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeOn April 29, 2022, the Company completed the Business Combination and SAITECH Limited became a wholly owned subsidiary of the TradeUP Global Corporation, subsequently renamed SAI.TECH Global Corporation. See the section entitled “Explanatory Note” in this Form 20-F for additional information regarding SAI.TECH Global Corporation and the Business Combination Agreement.
Biggest changeWe c reatively offer liquid cooling and nuclear SMR technology to optimize the energy efficiency of our customers to the greatest extent possible. The Company was incorporated on February 2, 2021. On April 29, 2022, it completed the Business Combination and SAITECH Limited became a wholly owned subsidiary of the SAI.TECH Global Corporation, subsequently renamed as SAIHEAT Limited.
Our products and solutions also apply to the global heating industry, and we expect to generate waste heat resales or technology-related types of revenue when our products are put into operation in the global market subject to the commercial terms with our heat user collocation partners. Blockchain, Cryptocurrencies and Crypto assets A blockchain is a decentralized, distributed ledger.
Our products and solutions also apply to the global heating industry, and we expect to generate waste heat resales or technology-related types of revenue when our products are put into operation in the global market subject to the commercial terms with our heat user collocation partners. 66 Blockchain, Cryptocurrencies and Crypto assets A blockchain is a decentralized, distributed ledger.
Equipped with an external cooling tower and made ready for recovery of computing waste heat, RACKBOX’s maximum IT power can reach 1,000 kW in high performance mode or 660 kW in normal mode. 64 HYDROBOX HYDROBOX is an outdoor computing infrastructure container with the highest capacity in our current WITBOX fleet.
Equipped with an external cooling tower and made ready for recovery of computing waste heat, RACKBOX’s maximum IT power can reach 1,000 kW in high performance mode or 660 kW in normal mode. HYDROBOX HYDROBOX is an outdoor computing infrastructure container with the highest capacity in our current WITBOX fleet.
Besides, Europe has introduced policies to encourage research on improving the efficiency of coal power generation, expanding utility of geothermal power, growing heat supply from cogeneration, etc. 70 Both primary and secondary energy could be applied for heat generation, while currently, fossil fuel dominates the global heat supply.
Besides, Europe has introduced policies to encourage research on improving the efficiency of coal power generation, expanding utility of geothermal power, growing heat supply from cogeneration, etc. Both primary and secondary energy could be applied for heat generation, while currently, fossil fuel dominates the global heat supply.
Promote the Sale of Our ULTIWIT System Solutions, develop More Institutional Clients With a strategic focus on institutional clients, including large-scale bitcoin miners and investors diversifying their portfolios with crypto assets, we plan to intensify our marketing and sales efforts towards these segments.
Promote the Sale of Our ULTIWIT System Solutions, develop More Retail and Institutional Clients With a strategic focus on institutional clients, including large-scale bitcoin miners and investors diversifying their portfolios with crypto assets, we plan to intensify our marketing and sales efforts towards these segments.
We intent to switch to renewable power source gradually with our datacenter operation to enable the electrification of these heat user’s fossil fuel boilers, which also promotes the decarbonization of traditional heating industry, creating a huge environmental benefit to the global carbon neutrality goal and social benefits. 71 The exponential growth of computing power demand, such as bitcoin mining, GPU computing, and others, brings many challenges to computing center operators, including potential rise of electricity price, increase of carbon footprint when power is sourced from unsustainable power, and demand for increasing power generation and grid infrastructure investment.
We intent to switch to renewable power source gradually with our datacenter operation to enable the electrification of these heat user’s fossil fuel boilers, which also promotes the decarbonization of traditional heating industry, creating a huge environmental benefit to the global carbon neutrality goal and social benefits. 69 The exponential growth of computing power demand, such as bitcoin mining, GPU computing, and others, brings many challenges to computing center operators, including potential rise of electricity price, increase of carbon footprint when power is sourced from unsustainable power, and demand for increasing power generation and grid infrastructure investment.
Each new block requires a method of consensus between nodes of the network in order for the block to post to the ledger and become permanent. There are various methods being developed for executing a consensus. 67 Currently, the most popular application of blockchain is cryptocurrency.
Each new block requires a method of consensus between nodes of the network in order for the block to post to the ledger and become permanent. There are various methods being developed for executing a consensus. Currently, the most popular application of blockchain is cryptocurrency.
These tools and resources provide support for measuring and reporting our emissions, developing climate strategy, reducing our own emissions and the emissions in our value chain and contributing to climate action by us. 72 Rich field experience and unique liquid cooling know-how gives us first-mover advantages Our founding team is comprised of highly experienced mining operators, heating ventilation air conditioning (“HVAC”) engineers, and power infrastructure constructors.
These tools and resources provide support for measuring and reporting our emissions, developing climate strategy, reducing our own emissions and the emissions in our value chain and contributing to climate action by us. 70 Rich field experience and unique liquid cooling know-how gives us first-mover advantages Our founding team is comprised of highly experienced mining operators, heating ventilation air conditioning (“HVAC”) engineers, and power infrastructure constructors.
Bitcoin offers lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority, with only balances kept on a public ledger to which everyone has transparent access. 68 Bitcoin Mining The process of maintaining and developing the blockchain ledger with crypto tokens as reward is called mining, which is an important scenario of encryption computing.
Bitcoin offers lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority, with only balances kept on a public ledger to which everyone has transparent access. 67 Bitcoin Mining The process of maintaining and developing the blockchain ledger with crypto tokens as reward is called mining, which is an important scenario of encryption computing.
Due to compliance and strategic concerns, we terminated all of our hosting service agreements with existing customers in China, revoked our pilot programs testing our SAIHUB CAB equipment, and began strategic global transition starting from establishing hosting operations in Kazakhstan. 65 On July 18, 2021, we entered into a service agreement with Better Tech (the “Power Service Agreement”) for Phase I cooperation in Kazakhstan.
Due to compliance and strategic concerns, we terminated all of our hosting service agreements with existing customers in China, revoked our pilot programs testing our SAIHUB CAB equipment, and began strategic global transition starting from establishing hosting operations in Kazakhstan. 64 On July 18, 2021, we entered into a service agreement with Better Tech (the “Power Service Agreement”) for Phase I cooperation in Kazakhstan.
Our mission is to become the sustainable distributed crypto asset mining operator and heating supplier globally, while simultaneously promote the clean transition of the bitcoin mining, power and heating industries.
Our mission is to become the sustainable distributed crypto asset mining operator and heating supplier globally, while simultaneously promote the clean energy transition of the bitcoin mining, power and heating industries.
With features such as liquid-cooling capability, waste heat recovery capability and overclocking capability, ULTIWIT System can fit both bitcoin mining machines and GPU servers to meet the increasing demand of bitcoin mining and artificial intelligence (“AI”) usage. 62 Our products are equipped with meters and sensors to collect real-time electricity and temperature statistics, they are also equipped with calorimeter and manometer to collect real-time heat and pressure statistics of the waste heat recovery system.
With features such as liquid-cooling capability, waste heat recovery capability and overclocking capability, ULTIWIT System can fit both bitcoin mining machines and GPU servers to meet the increasing demand of bitcoin mining and artificial intelligence (“AI”) usage. 61 Our products are equipped with meters and sensors to collect real-time electricity and temperature statistics, they are also equipped with calorimeter and manometer to collect real-time heat and pressure statistics of the waste heat recovery system.
We believe that the four NPOs in which we have participated (UNFCCC Climate Neutral Now (CNNow), SME Climate Club, Task Force on Climate-Related Financial Disclosures (TCFD) and the Climate Pledge) provide us with the guidance and insights to make a climate commitment and provides us access to tools and resources helpful to take concrete steps towards climate action across multiple pathways.
We believe that the four NPOs in which we have participated (UNFCCC Climate Neutral Now (CNNow), UNFCCC Race to Zero (SME Climate Club), Task Force on Climate-Related Financial Disclosures (TCFD) and the Climate Pledge) provide us with the guidance and insights to make a climate commitment and provides us access to tools and resources helpful to take concrete steps towards climate action across multiple pathways.
By showcasing its cost-saving and environmental benefits, we aim to secure long-term partnerships and contracts with institutional clients, further bolstering our market position and revenue streams. 73 Develop Waste Heat Utilization Scenarios, Increasing Revenue Streams Our innovative approach to utilizing waste heat from bitcoin mining operations for heating purposes has demonstrated significant energy and cost savings.
By showcasing its cost-saving and environmental benefits, we aim to secure long-term partnerships and contracts with institutional clients, further bolstering our market position and revenue streams. 71 Develop Waste Heat Utilization Scenarios, Increasing Revenue Streams Our innovative approach to utilizing waste heat from bitcoin mining operations for heating purposes has demonstrated significant energy and cost savings.
Ltd (later on replaced by E2M Technology Limited as designated by the same customer to execute the same agreement) (“E2M”), a large-scale mining asset management group in Asia, for providing hosting services of their bitcoin mining equipment (the “Servers”) to generate computer power at the two facilities in Kazakhstan designated by us (the “Hosing Service Agreement”).
Ltd (later on replaced by E2M Technology Limited as designated by the same customer to execute the same agreement) (“E2M”), a large-scale mining asset management group in Asia, for providing hosting services of their bitcoin mining equipment (the “Servers”) to generate computer power at the two facilities in Kazakhstan designated by us (the “Hosting Service Agreement”).
They are equipped standard liquid cooling capability, i.e. connecting liquid-cooling designed servers, and immersion cooling capabilities. 63 TANKBOX TANKBOX runs on immersion cooling tanks that are able to convert air-cooled servers into liquid-cooled models. It is equipped with an external cooling tower and made ready for high-efficiency recovery of computing waste heat.
They are equipped standard liquid cooling capability, i.e. connecting liquid-cooling designed servers, and immersion cooling capabilities. 62 TANKBOX TANKBOX runs on immersion cooling tanks that are able to convert air-cooled servers into liquid-cooled models. It is equipped with an external cooling tower and made ready for high-efficiency recovery of computing waste heat.
We are required to obtain environmental permits from governmental authorities for certain operations. 76 Government Regulations We operate and plan to operate in a complex and rapid evolving regulatory environment and expects to be subject to a wide range of laws and regulations enacted by Kazakhstan as well as similar entities in other countries.
We are required to obtain environmental permits from governmental authorities for certain operations. 74 Government Regulations We operate and plan to operate in a complex and rapid evolving regulatory environment and expects to be subject to a wide range of laws and regulations enacted by Kazakhstan as well as similar entities in other countries.
Though we have not collected heating service fee in our current operations, we expect to be able to charge heating service fee through providing 24*7 steady hot water when commercial projects are commenced, and thus to effectively subsidize electricity cost on self-mining operations.
Though we have not collected heating service fee in our current operations, we expect to be able to charge heating service fee through providing 24*7 steady hot water when commercial projects are commenced, and thus to effectively subsidize electricity cost on mining revenue.
Furthermore, our commitment to carbon neutrality and climate action is underscored by our participation in global initiatives, enhancing our position in promoting sustainable practices within the industry. 61 Our target customers include both large-scale miners and institutional investors.
Furthermore, our commitment to carbon neutrality and climate action is underscored by our participation in global initiatives, enhancing our position in promoting sustainable practices within the industry. 60 Our target customers include both large-scale miners and institutional investors.
On August 7, 2023, we completed the development of SAI US R&D Center, SAI NODE Marietta, and deployed one TANKBOX and one RACKBOX to serve as the infrastructure of our self-mining operation. 144 Bitmain S19j Pro+ bitcoin mining machines and 90 Whatsminer M53 bitcoin mining machines were powered up with an increased hash rate of 38.52 PH/s.
On August 7, 2023, we completed the development of SAI US R&D Center, SAI NODE Marietta, and deployed one TANKBOX and one RACKBOX to serve as the infrastructure of our mining revenue. 144 Bitmain S19j Pro+ bitcoin mining machines and 90 Whatsminer M53 bitcoin mining machines were powered up with an increased hash rate of 38.52 PH/s.
On February 1, 2024, we deployed two additional TANKBOX at SAI NODE Marietta to serve as the infrastructure of our self-mining operation. 288 Bitmain S19K pro bitcoin mining machines were purchased, installed in the two TANKBOXes. The two TANKBOXes were powered up on February 1 and February 15, 2024, respectively, with a total increased hash rate of 32.91 PH/s.
On February 1, 2024, we deployed two additional TANKBOX at SAI NODE Marietta to serve as the infrastructure of our mining revenue. 288 Bitmain S19K pro bitcoin mining machines were purchased, installed in the two TANKBOXes. The two TANKBOXes were powered up on February 1 and February 15, 2024, respectively, with a total increased hash rate of 32.91 PH/s.
In August 2023, our self-developed SAI US R&D Center, SAI NODE Marietta was successfully powered up, and ULTIWIT System was deployed on-site as part of our self-mining operation and waste heat recovery application.
In August 2023, our self-developed SAI US R&D Center, SAI NODE Marietta was successfully powered up, and ULTIWIT System was deployed on-site as part of our mining revenue and waste heat recovery application.
On December 1, 2023, we deployed one additional HYDROBOX at SAI NODE Marietta to serve as the infrastructure of our self-mining operation. 190 Bitmain S19j pro Hydro bitcoin mining machines were purchased, installed in the HYDROBOX, and powered up with an increased hash rate of 34.96 PH/s.
On December 1, 2023, we deployed one additional HYDROBOX at SAI NODE Marietta to serve as the infrastructure of our mining revenue. 190 Bitmain S19j pro Hydro bitcoin mining machines were purchased, installed in the HYDROBOX, and powered up with an increased hash rate of 34.96 PH/s.
Target institutional investors include entities that are diversifying their portfolios by adopting crypto asset-mining assets, which can be a more economic approach to acquire crypto assets as compared to buying such assets on secondary markets. Starting from 2022, we began to develop our self-mining operations.
Target institutional investors include entities that are diversifying their portfolios by adopting crypto asset-mining assets, which can be a more economic approach to acquire crypto assets as compared to buying such assets on secondary markets. Starting from 2022, we began to develop our mining revenue.
Our registered office in the Cayman Islands is located at the offices of 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, Cayman Islands. We maintain our website at https://sai.tech/. The information contained on the website does not form a part of, and is not incorporated by reference into, this Annual Report.
Our registered office in the Cayman Islands is located at the offices of 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, Cayman Islands. We maintain our website at https://saiheat.com/. The information contained on the website does not form a part of, and is not incorporated by reference into, this Annual Report.
On April 20, 2023, we launched our 2 nd generation product line, ULTIAAS, later named as ULTIWIT System. The product line initially contained three models, TANKBOX, RACKBOX and HYDROBOX, which were all equipped with liquid cooling and waste heat recovery capabilities.
On April 20, 2023, we launched our second generation product line, ULTIAAS, later named as ULTIWIT System. The product line initially contained three models, TANKBOX, RACKBOX and HYDROBOX, which were all equipped with liquid cooling and waste heat recovery capabilities.
Property, Plant and Equipment We are a remote-only company. Accordingly, we have not designated any specific office as our headquarters. Our main business activities are conducted in the United States. Our offices, research and development and manufacturing facilities are located in Singapore and mainland China, where we occupy approximately 508 square meters. Our office lease ends in February 2025.
Property, Plant and Equipment We are a remote-only company. Accordingly, we have not designated any specific office as our headquarters. Our main business activities are conducted in the United States. Our offices, research and development and manufacturing facilities are located in Singapore and mainland China, where we occupy approximately 508 square meters.
Global Expansion Recognizing the global nature of the cryptocurrency mining and clean energy sectors, we are actively pursuing opportunities for international expansion. This includes exploring new markets for our self-mining operations, ULTIWIT System deployments, and waste heat recovery solutions.
Global Expansion Recognizing the global nature of the cryptocurrency mining and clean energy sectors, we are actively pursuing opportunities for international expansion. This includes exploring new markets for our mining revenue, ULTIWIT System deployments, and waste heat recovery solutions.
Concurrently with such acquisition, we succeeded Nanjing Suanneng Wuxian’s licensing agreement with a third-party vendor with respect to SaaS used in connection with such services, and we and Nanjing SuannengWuxian have transitioned hosting services to such customers to our operation.
Concurrently with such acquisition, we succeeded Nanjing SuannengWuxian’s licensing agreement with a third-party vendor with respect to SaaS used in connection with such services, and we and Nanjing SuannengWuxian have transitioned hosting services to such customers to our operation.
Because SAI.TECH Global Corporation is a “foreign private issuer”, it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of SAI.TECH Global Corporation are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of common shares.
Because SAIHEAT Limited is a “foreign private issuer”, it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of SAIHEAT Limited are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of common shares.
In addition, SAI.TECH Global Corporation is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm.
In addition, SAIHEAT Limited is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm.
Our Products Overview Since formation in 2019, we have been developing advanced liquid cooling technologies for crypto assets, specifically, bitcoin mining machines. We developed and integrated waste heat recovery technology into liquid cooling systems that applies to bitcoin mining machines, effectively turning traditional mining machines into “electric boilers” with up to 97% thermal efficiency.
Our Products Overview Since our inception in 2019, we have been developing advanced liquid cooling technologies for crypto assets, specifically, bitcoin mining machines. We develop and integrate waste heat recovery technology into liquid cooling systems that applies to bitcoin mining machines, effectively turning traditional mining machines into “electric boilers” with up to 97% thermal efficiency.
We rely upon a combination of protections afforded to owners of patents, copyrights, trade secrets and trademarks, along with employee and third-party non-disclosure agreements and other contractual restrictions to establish and protect our intellectual property rights.
Intellectual Property Our ability to protect our material intellectual property is important to our business. We rely upon a combination of protections afforded to owners of patents, copyrights, trade secrets and trademarks, along with employee and third-party non-disclosure agreements and other contractual restrictions to establish and protect our intellectual property rights.
Bitcoin’s daily exchange volume has grown from $92 million in January 2017 to more than $30 billion in February 2023. The initial exchange rate recorded on October 5, 2009 was one bitcoin equaled $0.000764. Bitcoin remains the leading crypto asset in terms of market capitalization, which, based on data sourced from ycharts.com, exceeded $1.216 trillion as of February 29, 2024.
Bitcoin’s daily exchange volume has grown from $92 million in January 2017 to more than $90 billion in February 2024. The initial exchange rate recorded on October 5, 2009 was one bitcoin equaled $0.000764. Bitcoin remains the leading crypto asset in terms of market capitalization, which, based on data sourced from ycharts.com, exceeded $2 trillion as of December 2024.
For the fiscal year ended December 31, 2021, 2022, and 2023, we generated nil, $0.03 million, and $1.30 million in revenue, respectively, from our self-mining operation. We build our own mining facilities, or contract third-party datacenter partners, to deploy our fleet of bitcoin mining machines.
For the fiscal year ended December 31, 2022, 2023, and 2024, we generated $0.03 million, $1.30 million, and $2.92 million in revenue, respectively, from our mining revenue. We build our own mining facilities, or contract third-party datacenter partners, to deploy our fleet of bitcoin mining machines.
Below is a summary listing our current self-mining operations: Project Name Location Fleet Size Operating Hash Rate Power SAI NODE Marietta Marietta, OH, U.S. 712 106.39 PH/s 2.81 MW Mexico Operation La Pachuga, Mexico 420 43.68 PH/s 1.29 MW Total 1,132 150.07 PH/s 4.1 MW We distinguish ourselves in the crypto asset mining sector with our innovative liquid cooling and waste heat recovery technology, marking a pivotal shift towards energy efficiency and environmental sustainability in bitcoin mining operations.
Below is a summary listing our current mining revenue: Project Name Location Fleet Size Operating Hash Rate Power SAI NODE Marietta Marietta, OH, U.S. 734 110.85 PH/s 2.81 MW Mexico Operation La Pachuga, Mexico 420 43.68 PH/s 1.29 MW Total 1,154 154.53 PH/s 4.1 MW We distinguish ourselves in the crypto asset mining sector with our innovative liquid cooling and waste heat recovery technology, marking a pivotal shift towards energy efficiency and environmental sustainability in bitcoin mining operations.
As a specialized high-performance computer, bitcoin mining machines mostly utilize application-specific integrated circuit (“ASIC”) processors, which are chips manufactured specifically for mining bitcoin by solving blocks on blockchains using the 256-bit secure hashing algorithm.
As a specialized high-performance computer, bitcoin mining machines mostly utilize ASIC processors, which are chips manufactured specifically for mining bitcoin by solving blocks on blockchains using the 256-bit secure hashing algorithm.
Our products provide the heating industry with an innovative and low-cost “electric boiler”. This technology takes advantage of the highly mobile nature of bitcoin mining activity and assets, and the ability to deploy operations in commercial and residential buildings and greenhouses. Intellectual Property Our ability to protect our material intellectual property is important to our business.
Our products provide the heating industry with an innovative and low-cost “electric boiler”. This technology takes advantage of the highly mobile nature of bitcoin mining activity and assets, and the ability to deploy operations in commercial and residential buildings and greenhouses.
Our 1 st generation of product is SAIHUB CAB, which was developed in the year of 2019, and was equipped in operation from 2019 to 2022. SAIHUB CAB is an indoor cabinet that turns traditional air-cooled bitcoin mining machines into liquid-cooled bitcoin mining machines, enabling both waste heat recovery capability and overclocking capability.
Our first generation of product is SAIHUB CAB, which was developed in 2019, and was equipped in operation from 2019 to 2022. SAIHUB CAB is an indoor cabinet that turns traditional air-cooled bitcoin mining machines into liquid-cooled bitcoin mining machines, enabling both waste heat recovery capability and overclocking capability. The second generation of product, ULTIWIT System, was developed in 2024.
ULTIWIT System – HEATBOX HEATBOX is a product line that regulates, supplies, and controls recovered computing heat generated from computing servers. Serving as a supporting role of the WITBOX series, HEATBOX is a key intermediate product line in ULTIWIT System that bridges the waste heat recovered from WITBOX and heating scenarios.
Serving as a supporting role of the WITBOX series, HEATBOX is a key intermediate product line in ULTIWIT System that bridges the waste heat recovered from WITBOX and heating scenarios.
As of the date of this Annual Report, our self-mining operation consist of one datacenter, which consist of 712 bitcoin mining machines, in Marietta, Ohio, the United States (“SAI NODE Marietta”) with a hash rate of approximately 106.39 PH/s, and a group of 420 bitcoin mining machines hosted at our datacenter partner in La Pechuga, Mexico (“Mexico Operation”) with a hash rate of approximately 43.68 PH/s.
As of the date of this Annual Report, our mining revenue involved one datacenter, which consisted of 734 bitcoin mining machines, in Marietta, Ohio, the United States (“SAI NODE Marietta”), with a hash rate of approximately 110.85 PH/s, and a group of 420 bitcoin mining machines hosted at our datacenter partner in La Pechuga, Mexico (the “Mexico Operation”), with a hash rate of approximately 43.68 PH/s.
Our 2 nd generation HEATBOX product with higher temperature supply is currently under development, and will significantly increase the water temperature for waste heat re-utilization, which can expand the product application to more industrial and agricultural heating scenarios and provide broader commercial value.
Our second generation HEATBOX product with higher temperature supply is currently under development, and will significantly increase the water temperature for waste heat re-utilization, which can expand the product application to more industrial and agricultural heating scenarios and provide broader commercial value. HEATBOX is designed for automated control and stable operation, ensuring continuous and efficient heat dissipation for the chip.
For example, this could include providing an integrated solution for greenhouse construction design, materials, and implementation. USERBOX aims to leverage the free computing waste heat to assist industries with high energy costs in becoming more profitable. Transition And Expansion into Global Market On May 21, 2021, China issued strict policies to ban crypto assets mining activities in mainland China.
USERBOX aims to leverage the free computing waste heat to assist industries with high energy costs in becoming more profitable. Transition and Expansion into Global Market On May 21, 2021, China issued strict policies to ban crypto assets mining activities in mainland China.
In addition, we may in the future develop certain proprietary software applications for purposes of our cryptocurrency mining operation. 75 Research and Development Our research and development efforts are focused primarily on developing technologies and solutions to reduce the major cost factors of crypto asset mining datacenter operations and other types of high-performance computing datacenter operations, including but not limited to electricity, cooling, chip supply and services.
Research and Development Our research and development efforts are focused primarily on developing technologies and solutions to reduce the major cost factors of crypto asset mining datacenter operations and other types of high-performance computing datacenter operations, including but not limited to electricity, cooling, chip supply and services.
Chips have to operate healthily and steadily to guarantee computing efficiency in a relatively low temperate and clean environment, and major bitcoin mining machine manufacturers develop and design different cooling systems to provide such environment.
Chips have to operate healthily and steadily to guarantee computing efficiency in a relatively low temperate and clean environment, and major bitcoin mining machine manufacturers develop and design different cooling systems to provide such environment. Though most mining machines manufacturers are still adapting traditional air-cooling systems, some have been developing liquid cooling systems.
Our research and development and manufacturing facilities lease ends in October 2023, and was renewed for an additional year. We have leased the plot on which we have developed SAI NODE Marietta, the lease starts in April 2023, and ends in March 2033. Our monthly total rent payments are approximately $27,000.
The lease for our research and development and manufacturing facilities expired in October 2024, and was renewed for another year. We have also leased the plot of land on which we have developed SAI NODE Marietta, the lease for this land began in April 2023, and will expire in March 2033. Our monthly total rent payments globally are approximately $27,000.
Heat could be generated from energy via specific suppliers, cogeneration, waste heat recovery and distributed heaters. Despite the direct use of renewables, cogeneration and waste heat recovery are considered cleaner ways to produce heat. Waste Heat Utilization Waste heat utilization is the process to collect and reuse the heat generated by industrial processes that was wasted otherwise.
Heat could be generated from energy via specific suppliers, cogeneration, waste heat recovery and distributed heaters. Despite the direct use of renewables, cogeneration and waste heat recovery are considered cleaner ways to produce heat.
Considering our review of global bitcoin mining industry and changing regulatory framework in different countries, we are currently focusing on expansion opportunities primarily in North American countries. See “ Business Overview — Transition and Expansion into Global Market ”.
Considering our review of global bitcoin mining industry and changing regulatory framework in different countries, we are currently focusing on expansion opportunities primarily in North American and Central Asia countries. Industry and Market Our business model centers on cryptocurrency mining operations and, specifically, bitcoin mining.
According to data sourced from glassnode.com, the Bitcoin Network hash rate has increased from 1.03 EH/s at the beginning of 2016 to 556.06 EH/s by the end of 2023, with a CAGR of 119.5%. Subsequently, the Bitcoin Network hash rate peaked over 670 EH/s in February 2024.
According to data sourced from glassnode.com, the Bitcoin Network hash rate has increased from 1.03 EH/s at the beginning of 2016 to 888.36 EH/s by the beginning of 2025, with a CAGR of 111.93%. Subsequently, the Bitcoin Network hash rate peaked over 1000 EH/s in February of 2025.
Our innovative cooling solutions significantly lower energy consumption and operational costs, bolster hash rates, and align with our sustainability goals. The WITBOX series is a crucial part of our ULTIWIT System solutions, which not only optimize cooling but also repurpose waste heat for various heating applications, turning a mining byproduct into a valuable resource.
The WITBOX series is a crucial part of our ULTIWIT System solutions, which not only optimize cooling but also repurpose waste heat for various heating applications, turning a mining byproduct into a valuable resource.
The 2 nd generation of product, ULTIWIT System, was developed in 2023. ULTIWIT System is a series of outdoor infrastructure products, in the form of containerized datacenters.
ULTIWIT System is a series of outdoor infrastructure products, in the form of containerized datacenters.
Larger “tips” are required to incentivize miners to mine larger transactions. When the network congestion eases, the miners then turn their focus upon the remaining transactions.
Due to the 1-megabyte limitation, miners tend to favor smaller transactions that are easier to validate. Larger “tips” are required to incentivize miners to mine larger transactions. When the network congestion eases, the miners then turn their focus upon the remaining transactions.
B. Business Overview We are a sustainable distributed Bitcoin mining operator and a clean-tech company that integrates the bitcoin mining, power and heating industries. We engage in cryptocurrency mining operations, primarily Bitcoin, for our own account, and provide a full suite of specialized services to crypto asset mining customers, including purchase of mining machines, hosting service, and mining pool service.
The Company sustainable distributed clean-tech in heating industries for bitcoin mining, we provide a full suite of specialized services on crypto asset mining for our customers, including the purchase of mining machines, hosting service, and mining pool service.
Our products and solutions can reduce aggregate carbon emissions compared to traditional stand-alone heating and bitcoin mining, while also reducing the mining operation costs by potentially selling the recovered heat. Our Operations and Services Self-mining Operation We engage in cryptocurrency mining operation, primarily Bitcoins, for our own account.
Our products and solutions can reduce aggregate carbon emissions compared to traditional stand-alone heating and bitcoin mining, while also reducing the mining operation costs by potentially selling the recovered heat. Our Operations and Services Sale of Products We sell high-performance crypto asset mining machines, primarily bitcoin mining machines, to our customers.
The SEC also maintains a website at www.sec.gov that contains reports and other information that SAI.TECH Global Corporation files with or furnishes electronically to the SEC. Our principal place of business is located at #01-05, 195 Pearl’s Hill Terrace, Singapore (168976). Our telephone number at this address is (+65) 9656 5641.
The SEC also maintains a website at www.sec.gov that contains reports and other information that SAIHEAT Limited files with or furnishes electronically to the SEC. Our principal place of business is located at c/o #266A South Bridge Road, #02-01 Singapore (058815).Our telephone number at this address is (+65) 9656 5641.
For the fiscal year ended December 31, 2021, 2022, and 2023, we generated $6.96 million, $8.63 million, and $4.80 million in revenue, respectively, from sale of equipment. Hosting Service We provide bitcoin mining machine hosting service, including hosting, logistics, and maintenance service to our customers, through collaboration with third-party datacenter partners.
Hosting Service We provide bitcoin mining machine hosting service based on cloud-computing, including hosting, logistics, and maintenance service to our customers, through collaboration with third-party datacenter partners. For the fiscal year ended December 31, 2022, 2023 and 2024, we generated $1.30 million, $0.37 million and $0.05 million in revenue, respectively, from hosting service.
The 1 st generation SAIHUB CAB has an average thermal efficiency of around 89-90%, providing 60-70°C hot water steadily through the liquid cooling systems integrated with waste heat recovery capability.
The first generation SAIHUB CAB has an average thermal efficiency of around 89-90%, providing 60-70°C hot water steadily through the liquid cooling systems integrated with waste heat recovery capability. Thermal efficiency of the second generation ULTIWIT System can reach up to 97%, while providing up to 55°C hot water supply through its liquid cooling and waste heat recovery interface.
Traditional heating scenarios typically rely on conventional methods such as electricity or natural gas. However, by recovering and re-utilizing chip waste heat, which is essentially free, we can significantly simplify existing heating scenarios and equipment, thereby reducing infrastructure investment. SAI is fostering partnerships with traditional heating equipment companies to offer customers low-cost, integrated solutions.
However, by recovering and re-utilizing chip waste heat, which is essentially free, we can significantly simplify existing heating scenarios and equipment, thereby reducing infrastructure investment. SAI is fostering partnerships with traditional heating equipment companies to offer customers low-cost, integrated solutions. For example, this could include providing an integrated solution for greenhouse construction design, materials, and implementation.
A number of proposed transactions are bundled in a block and be mined and propagated for verification The reward mechanism attracts miners to participate and improve the robustness and security by raising the difficulties for 51% attack. 69 Bitcoin Distribution Bitcoin is finite in its supply of a total number of 21 million, with 19.65 million currently in circulation.
For bitcoin networks, mining is the process of providing a stable settlement mechanism to validate transaction. A number of proposed transactions are bundled in a block and be mined and propagated for verification The reward mechanism attracts miners to participate and improve the robustness and security by raising the difficulties for 51% attack.
Transaction Fees When a user decides to send bitcoin to a recipient, the transaction is first broadcasted to a memory pool before being included in a block.
By the end of 2025, bitcoin is expected to surpass gold’s stock-to-flow ratio, forming a significant monetary store of value. Transaction Fees When a user decides to send bitcoin to a recipient, the transaction is first broadcasted to a memory pool before being included in a block.
Please see Table 3.2 below for a comparison of efficiency levels across various sources of fuel. We have launched several pilot projects in China from 2019 to 2021, with the deployment of SAIHUB CAB, and have deployed ULTIWIT System in our self-mining operation from 2022.
We have launched several pilot projects in China from 2019 to 2021, with the deployment of SAIHUB CAB, and have deployed ULTIWIT System in our mining revenue from 2022.
Self-mining operation, sales of product, hosting service and mining pool service account for 19.19%, 70.87%, 5.40% and 4.56% of our revenue, respectively, for the fiscal year ended December 31, 2023. Since our founding in 2019, we have been committed to developing comprehensive energy-saving bitcoin mining solutions that can optimize the major costs of the operation and promote clean energy transition.
Since our founding in 2019, we have been committed to developing comprehensive energy-saving bitcoin mining solutions that can optimize the major costs of the operation and promote clean energy transition for our clients.
It is compatible with Bitmain S19 Hydro XP bitcoin mining machine with a plug-and-play design to ease the effort of rapid deployment. Fitting 210 units of Bitmain S19 Hydro XP bitcoin mining machines, its maximum IT power reaches 1,110 kW while generating around 50 PH/s of bitcoin mining hash rate, subject to different models installed.
Fitting 210 units of Bitmain S19 Hydro XP bitcoin mining machines, its maximum IT power reaches 1,110 kW while generating around 50 PH/s of bitcoin mining hash rate, subject to different models installed. 63 ULTIWIT System – HEATBOX HEATBOX is a product line that regulates, supplies, and controls recovered computing heat generated from computing servers.
Thus, it is a scarce asset that can potentially serve to hedge various forms of inflation. Compared with high storage and transport costs of gold, bitcoin requires no transport costs and has a transparent and diminishing supply schedule. By 2025, bitcoin is expected to surpass gold’s stock-to-flow ratio, forming a significant monetary store of value.
Bitcoin Distribution Bitcoin is finite in its supply of a total number of 21 million, with 19.80 million currently in circulation. Thus, it is a scarce asset that can potentially serve to hedge various forms of inflation. Compared with high storage and transport costs of gold, bitcoin requires no transport costs and has a transparent and diminishing supply schedule.
The full deployment of the 420 Whatsminer M30s++ miners will increase our total operational hash rate capacity by 43.68 PH/s but will only consume approximately 1.35MW of power, benefited from the advanced power efficiency of 31W/T.
The full deployment of the 420 Whatsminer M30s++ miners will increase our total operational hash rate capacity by 43.68 PH/s but will only consume approximately 1.35MW of power, benefited from the advanced power efficiency of 31W/T. 65 On February 21, 2023, we signed a hosting service contract with our previously contracted data center in La Pechuga, Mexico, to host additional 500 bitcoin mining machines.
In such situations where there are more transactions in the memory pool than there is space on the next block, users compete for miners’ computation power by adding fees (“tips”) onto their transactions in the hope that miners would prioritize their transactions. Due to the 1-megabyte limitation, miners tend to favor smaller transactions that are easier to validate.
Consequently, not all attempted transactions will be verified immediately, and some transactions can take up to a day or longer to verify. 68 In such situations where there are more transactions in the memory pool than there is space on the next block, users compete for miners’ computation power by adding fees (“tips”) onto their transactions in the hope that miners would prioritize their transactions.
HEATBOX is designed for automated control and stable operation, ensuring continuous and efficient heat dissipation for the chip. It dynamically adjusts the control loop system in response to the ever-changing heat consumption demands of various heating scenarios, ensuring consistent performance and reliability.
It dynamically adjusts the control loop system in response to the ever-changing heat consumption demands of various heating scenarios, ensuring consistent performance and reliability. The HEATBOX product line is currently under research and development, and we expect to launch the product line in the third quarter of 2024.
In particular, unpatented trade secrets in the fields of research, development and engineering are an important aspect of our business by ensuring that our technology remains confidential. We also pursue patent protection when we believe we have developed a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings.
In particular, unpatented trade secrets in the fields of research, development and engineering are an important aspect of our business by ensuring that our technology remains confidential.
We collect mining rewards from the mining pool and allocate mining rewards to each pool participants, mainly our hosting clients. For the fiscal year ended December 31, 2021, 2022, and 2023, we generated $7.48 million, $0.68 million, and $0.31 million in revenue, respectively, from mining pool service.
For the fiscal year ended December 31, 2022, 2023 and 2024, we generated $0.68 million, $0.31 million and $0.07 million in revenue, respectively, from mining pool service. Mining Revenue We engage in cryptocurrency mining operation, primarily Bitcoins, for our own account.
A copy of our Business Combination Agreement, and the amendments thereto, is attached as exhibits 4.1 – 4.4 to this Annual Report. 60 SAI.TECH Global Corporation is subject to certain of the informational filing requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
See the section entitled “Explanatory Note” in this Form 20-F for additional information regarding SAIHEAT Limited and the Business Combination Agreement. A copy of our Business Combination Agreement, and the amendments thereto, is attached as exhibits 4.1 – 4.4 to this Annual Report. 59 SAIHEAT Limited is subject to certain of the informational filing requirements of the Exchange Act .
As of December 31, 2023, we own 8 patents in connection with our existing and planned blockchain and cryptocurrency related operations. We expect to rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and expect to license the use of intellectual property rights owned and controlled by others.
We expect to rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and expect to license the use of intellectual property rights owned and controlled by others. In addition, we may in the future develop certain proprietary software applications for purposes of our cryptocurrency mining operation.
For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see “ Risk Factors — Risks Related to Government Regulation Regulatory Framework ”.
For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see “ Risk Factors — Risks Related to Government Regulation Regulatory Framework ”. Recent Developments On-site Project Development Update in the U.S. We expanded our SAI NODE Marietta facility, initiated a scale-up that began in Jan 2024.
The Company engage in cryptocurrency mining operations, primarily Bitcoin, for its own account, and provides a full suite of specialized services to crypto asset mining customers, including purchase of mining machines, hosting service, and mining pool service. The Company was incorporated on February 2, 2021.
The Company sustainable distributed clean-tech in heating industries for bitcoin mining, we provide a full suite of specialized services on crypto asset mining for our customers, including the purchase of mining machines, hosting service, and mining pool service.
The HEATBOX product line is currently under research and development, and we expect to launch the product line in the third quarter of 2024. ULTIWIT System – USERBOX USERBOX is design and product that supports computing heat recovery applications. It offers integrated solutions and products tailored for heating scenarios across various demands and fields.
ULTIWIT System – USERBOX USERBOX is design and product that supports computing heat recovery applications. It offers integrated solutions and products tailored for heating scenarios across various demands and fields. Traditional heating scenarios typically rely on conventional methods such as electricity or natural gas.
We also constructed vertical agricultural block box and fish farming pond pools which will be heated by the hot water generated from SAIHUB CAB cabinets, representing a live demo of our technology and equipment. 66 On February 2, 2023, we purchased 420 Whatsminer M30s++ bitcoin mining machines for $633,360, or approximately $14.50 per terahash for self-mining utility, through our indirect wholly owned subsidiary.
It also installed two SAIHUB-025M cabinets to provide hot water heating services for the entire facility. We also constructed vertical agricultural block box and fish farming pond pools which will be heated by the hot water generated from SAIHUB CAB cabinets, representing a live demo of our technology and equipment.
Together with the 7.68 PH/s hosting hash rate generated from our hosting service located at La Pechuga, Mexico, we possessed a total of 157.75 PH/s of managing hash rate as of the date of this Annual Report.
We possessed a total of 154.53 PH/s of managing hash rate as of the date of this Annual Report.
Heat-plate liquid cooling directly targets the heat generation sources with a coolant-circulated plate, enhancing the efficiency and reliability of ASIC processors within bitcoin mining machines. On the other hand, immersive cooling submerges mining components in a non-conductive liquid, distributing cooling evenly, reducing overheating risks, and extending hardware lifespan— all while operating quietly.
On the other hand, immersive cooling submerges mining components in a non-conductive liquid, distributing cooling evenly, reducing overheating risks, and extending hardware lifespan— all while operating quietly. 72 Our innovative cooling solutions significantly lower energy consumption and operational costs, bolster hash rates, and align with our sustainability goals.
As of December 31, 2023, based on data sourced from coinbase.com, the trading price of one bitcoin was $42,288.58. By April 10, 2024, the price of one bitcoin increased to $70,588 according to coinmarketcap.com, highlighting the extremely volatile nature of bitcoin. Currently, mining and purchasing from the secondary market are the major ways of acquiring crypto.
By December 2024, the price of one bitcoin increased to over $90,000 according to coinmarketcap.com, highlighting the extremely volatile nature of bitcoin. Currently, mining and purchasing from the secondary market are the major ways of acquiring crypto. Bitcoin Bitcoin is a digital commodity, a type of cryptocurrency, created in January 2009 by a mysterious and pseudonymous person named Satoshi Nakamoto.
Though most mining machines manufacturers are still adapting traditional air-cooling systems, some have been developing liquid cooling systems. 74 We integrate advanced liquid cooling technologies into our WITBOX series, employing both heat-plate and immersive cooling methods to meet diverse operational needs.
We integrate advanced liquid cooling technologies into our WITBOX series, employing both heat-plate and immersive cooling methods to meet diverse operational needs. Heat-plate liquid cooling directly targets the heat generation sources with a coolant-circulated plate, enhancing the efficiency and reliability of ASIC processors within bitcoin mining machines.
Sale of Equipment We sell high-performance crypto asset mining machines, primarily bitcoin mining machines, to our customers. Sale of equipment that we have purchased allows us to capture price opportunities on the crypto asset mining machine market.
Sale of equipment that we have purchased allows us to capture price opportunities on the crypto asset mining machine market. For the fiscal year ended December 31, 2022, 2023, and 2024, we generated $8.63 million, $4.80 million, and $2.50 million in revenue, respectively, from sale of equipment.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the year ended December 2022, the cash outflow mainly reflected net loss of $8.8 million with an add-back of loss on disposal of property and equipment of $1.6 million, share-based payment of $1 million, depreciation and amortization expense of $1.7 million, impairment of long-lived asset of $1 million, partially offset by an increase in accounts payable of $1.1 million.
Biggest changeFor the year ended December 2024, the cash outflow mainly reflected net loss of $5.9 million with an add-back of share-based payment of $3.5 million, depreciation and amortization expense of $1.7 million, ROU amortization of $0.2 million, partially offset by an increase in changes in fair value of crypto assets of $2.0 million, and net changes in our operating assets and liabilities, principally comprising of an increase in Long term assets of $3.0 million, an increase in inventories of $0.7 million, an increase in deposits and prepayments and other current assets of $0.8 million, and a decrease in account receivables of $0.9 million.
There are three levels of inputs that may be used to measure fair value: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. 92 ● Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
There are three levels of inputs that may be used to measure fair value: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional material weaknesses may have been identified. 96 To remediate the material weakness identified in internal control over financial reporting, we have begun, and will continue to : (a) continuing our efforts to set up the internal audit department, and enhance the effectiveness of the internal control system; (b) continuing our efforts to implement necessary review and controls at related levels and all important documents and contracts (including all of its subsidiaries) will be submitted to the office of its Chief Administrative Officer and Chief Financial Officer for retention and review, and (c) hire qualified consultant to assess Sarbanes-Oxley Act compliance readiness, to assess where we can improve our overall internal control over financial reporting function, and to assist us in implementing improvements where necessary.
Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional material weaknesses may have been identified. 90 To remediate the material weakness identified in internal control over financial reporting, we have begun, and will continue to : (a) continuing our efforts to set up the internal audit department, and enhance the effectiveness of the internal control system; (b) continuing our efforts to implement necessary review and controls at related levels and all important documents and contracts (including all of its subsidiaries) will be submitted to the office of its Chief Administrative Officer and Chief Financial Officer for retention and review, and (c) hire qualified consultant to assess Sarbanes-Oxley Act compliance readiness, to assess where we can improve our overall internal control over financial reporting function, and to assist us in implementing improvements where necessary.
In 2023, some mining machines using our pool shut down due to BTC price fluctuations and rapid increase in overall BTC network hash rate, resulting the decrease in our mining pool revenue. Minning revenue. Mining revenue represents mining rewards generated from the company’s self-owned mining machines.
In 2023, some mining machines using our pool shut down due to BTC price fluctuations and rapid increase in overall BTC network hash rate, resulting the decrease in our mining pool revenue. Mining revenue. Mining revenue represents mining rewards generated from the Company’s self-owned mining machines.
The decrease in sales of products revenue was mainly due to fewer customer purchase orders during fiscal year 2023 compared to last year. Hosting service. Hosting service represented the provision of hosting service and daily maintenance of servers to customers.
The decrease in sales of products revenue was mainly due to fewer customer purchase orders during fiscal year 2023 compared to last year. 83 Hosting service. Hosting service represented the provision of hosting service and daily maintenance of servers to customers.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting .
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the Emerging Growth Company’s internal control over financial reporting. B.
Strategically, we focus on deploying our self-developed infrastructure products in our mining operation globally, which are series of containerized datacenters that applies our proprietary liquid cooling and waste heat recovery technologies, reutilize excessive heat generated by bitcoin mining machines and provide steady hot water for agricultural, commercial, residential and industrial large-scale heating applications scenarios.
Strategically, we focus on deploying our self-developed infrastructure products in our mining operation globally, which are series of containerized datacenters that apply our proprietary liquid cooling and waste heat recovery technologies, reutilize excessive heat generated by bitcoin mining machines and provide steady hot water for agricultural, commercial, residential and industrial large-scale heating applications scenarios.
While we anticipate increased scrutiny from regulators in 2024 and beyond regarding bitcoin mining, the impact of these regulations on our operations remains uncertain. As the legal and regulatory environment continues to evolve, we may be subjected to new laws and regulations enforced by agencies such as the SEC, potentially affecting our mining activities.
While we anticipate increased scrutiny from regulators in 2025 and beyond regarding bitcoin mining, the impact of these regulations on our operations remains uncertain. As the legal and regulatory environment continues to evolve, we may be subjected to new laws and regulations enforced by agencies such as the SEC, potentially affecting our mining activities.
Though we have not collected heating service fee in our current operations, we expect to be able to charge heating service fee through providing 24*7 steady hot water when commercial projects are commenced, and thus to effectively subsidize electricity cost on self-mining operations.
Though we have not collected heating service fee in our current operations, we expect to be able to charge heating service fee through providing 24*7 steady hot water when commercial projects are commenced, and thus to effectively subsidize electricity cost on mining revenue.
Management uses this non-GAAP financial measure internally to help understand, manage, and evaluate our business performance and to help make operating decisions. 82 We believe that this non-GAAP financial measure is also useful to investors and analysts in comparing our performance across reporting periods on a consistent basis.
Management uses this non-GAAP financial measure internally to help understand, manage, and evaluate our business performance and to help make operating decisions. 79 We believe that this non-GAAP financial measure is also useful to investors and analysts in comparing our performance across reporting periods on a consistent basis.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Recent Issued or Adopted Accounting Standards The Company continually assesses any new accounting pronouncements to determine their applicability.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Recently Issued or Adopted Accounting Standards The Company continually assesses any new accounting pronouncements to determine their applicability.
The Company evaluates its sales of bitcoin and will record crypto assets sold nearly immediately as operating cash flows and the remainder will be recorded as investing activities. During year ended December 31, 2023, all proceeds from bitcoin sales were classified as investing activities.
The Company evaluates its sales of bitcoin and will record crypto assets sold nearly immediately as operating cash flows and the remainder will be recorded as investing activities. During the year ended December 31, 2024, all proceeds from bitcoin sales were classified as investing activities.
In August 2023, our self-developed SAI US R&D Center, SAI NODE Marietta was successfully powered up, and ULTIWIT System was deployed on-site as part of our self-mining operation and waste heat recovery application.
In August 2023, our self-developed SAI US R&D Center, SAI NODE Marietta was successfully powered up, and ULTIWIT System was deployed on-site as part of our mining revenue and waste heat recovery application.
GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of us and our subsidiaries, of which we are the primary beneficiary, from the dates they were acquired or incorporated. All inter-company transactions and balances have been eliminated upon consolidation. 91 Use of Estimates The preparation of financial statements in conformity with U.S.
Principles of Consolidation The accompanying consolidated financial statements include the accounts of us and our subsidiaries, of which we are the primary beneficiary, from the dates they were acquired or incorporated. All inter-company transactions and balances have been eliminated upon consolidation. 85 Use of Estimates The preparation of financial statements in conformity with U.S.
Considering our review of global bitcoin mining industry and changing regulatory framework in different countries, we are currently focusing on expansion opportunities primarily in North American countries. Factors affecting block rewards and bitcoin transaction fees Block rewards are fixed, and the bitcoin network is designed to periodically reduce them through halving.
Considering our review of global bitcoin mining industry and changing regulatory framework in different countries, we are currently focusing on expansion opportunities primarily in North American and Central Asia countries. 78 Factors Affecting Block Rewards and Bitcoin Transaction Fees Block rewards are fixed, and the bitcoin network is designed to periodically reduce them through halving.
We provide mining pool services under Sai.plus. 93 Mining revenue. We have entered into crypto asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool.
We provide mining pool services under Sai.plus. 87 Mining revenue. We have entered into crypto asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool.
Target institutional investors include entities that are diversifying their portfolios by adopting crypto asset-mining assets, which can be a more economic approach to acquire crypto assets as compared to buying such assets on secondary markets. Starting from 2022, we began to develop our self-mining operations.
Target institutional investors include entities that are diversifying their portfolios by adopting crypto asset-mining assets, which can be a more economic approach to acquire crypto assets as compared to buying such assets on secondary markets. Starting from 2022, we began to develop our mining revenue.
Ability to Acquire Customers Effectively Our ability to increase the hosting clients and sales of crypto asset mining machines largely depends on our ability to attract potential clients through sales and marketing efforts. Presently, we owne d and operate Bitcoin Mining Operations in North American located in Marietta, state of Ohio in the United States.
Ability to Acquire Customers Effectively Our ability to increase the hosting clients and sales of crypto asset mining machines largely depends on our ability to attract potential clients through sales and marketing efforts. Presently, we owned and operate Bitcoin Mining Operations in North American located in Marietta, state of Ohio in the United States.
Thus, our operations are currently not exposed to the fluctuations of the Kazakhstani tenge and the Mexico peso. Our agreements regarding self-mining operations in United States are denominated in U.S. dollars.
Thus, our operations are currently not exposed to the fluctuations of the Kazakhstani tenge and the Mexico peso. Our agreements regarding mining revenue in United States are denominated in U.S. dollars.
December 31, 2023, the Company adopted ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets (ASU 2023-08), which requires entities to measure crypto assets at fair value (the “fair value model”) with changes recognized in income each reporting period.
Since 2023, the Company adopted ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets (ASU 2023-08), which requires entities to measure crypto assets at fair value (the “fair value model”) with changes recognized in income each reporting period.
For the year ended December 31, 2021, and 2022 The following table shows key components of our results of operations for the years ended December 31, 2021, and 2022, in dollars and as a percentage of fluctuations (dollars in thousands).
For the year ended December 31, 2022, and 2023 The following table shows key components of our results of operations for the years ended December 31, 2022, and 2023, in dollars and as a percentage of fluctuations (dollars in thousands).
In connection with the preparation and external audit of our consolidated financial statements, We and our independent registered public accounting firms identified two material weakness in our internal control over financial reporting as of December 31, 2023, 2022 and 2021. As defined in the standards established by the U.S.
In connection with the preparation and external audit of our consolidated financial statements, We and our independent registered public accounting firms identified two material weakness in our internal control over financial reporting as of December 31, 2024 and 2023. As defined in the standards established by the U.S.
The Company is currently evaluating the impact of adopting the standard. 95 In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets this criteria.
The Company is currently evaluating the impact of adopting the standard. In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets these criteria.
Net profit/(loss) As a result of the foregoing, we had net loss of $6.12 million for the year ended December 31, 2023, and net loss of $8.85 million for the year ended December 31, 2022.
Net (loss)/income As a result of the foregoing, we had net loss of $6.12 million for the year ended December 31, 2023, and net loss of $8.85 million for the year ended December 31, 2022.
Although the outcomes of these legal proceedings cannot be predicted, we do not believe these actions, in the aggregate, will have a material adverse impact on our financial position, results of operations or liquidity. We are not aware of any material pending or threatened claims and litigation since January 1, 2021, and through December 31, 2023.
Although the outcomes of these legal proceedings cannot be predicted, we do not believe these actions, in the aggregate, will have a material adverse impact on our financial position, results of operations or liquidity. We are not aware of any material pending or threatened claims and litigation since January 1, 2022, and through December 31, 2024.
As a company with less than $6.78 million in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.
As a company with less than $5.54 million in revenue for our last fiscal year, we qualify as an “Emerging Growth Company” pursuant to the JOBS Act. An Emerging Growth Company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.
For the year ended December 31, Change 2022 2023 Amount % Revenues Sales of products $ 8,626 $ 4,802 $ (3,824 ) (44 ) Hosting service 1,303 366 (937 ) (72 ) Mining pool 676 309 (367 ) (54 ) Mining 33 1,300 1,267 3839 Total revenues 10,638 6,776 (3,862 ) (36 ) Cost of revenues Sales of products 7,748 4,290 (3,458 ) (45 ) Cost of services 1,054 328 (726 ) (69 ) Mining pool 676 308 (368 ) (54 ) Mining 20 1,392 1,372 6860 Total cost of revenues 9,498 6,319 (3,180 ) (33 ) Gross (loss)/profit 1,140 457 (682 ) (60 ) Sales and marketing expenses 1,098 1,134 36 3 General and administrative expenses 6,080 5,703 (377 ) (6 ) Research and development expenses 476 853 377 79 Impairment of long-lived assets 951 138 (813 ) (85 ) Total operating expenses 8,605 7,828 (777 ) (9 ) Profit (Loss) from operations (7,465 ) (7,371 ) 94 (1 ) Other income(expense), net (1,380 ) 1,251 2,631 (191 ) Profit(loss) before income tax expense (8,845 ) (6,120 ) 2,725 (31 ) Income tax expenses — — — 0 Net Profit (Loss) (8,845 ) (6,120 ) 2,725 (31 ) Foreign currency translation gain (544 ) (56 ) 488 (90 ) Total comprehensive loss $ (9,389 ) $ (6,176 ) $ 3,213 (34 ) 83 Revenues Sales of products.
For the year ended December 31, Change 2022 2023 Amount % Revenues Sales of products $ 8,626 $ 4,802 $ (3,824 ) (44 ) Hosting service 1,303 366 (937 ) (72 ) Mining pool 676 308 (368 ) (54 ) Mining revenue 33 1,300 1,267 3839 Total revenues 10,638 6,776 (3,862 ) (36 ) Cost of revenues Sales of products 7,748 4,290 (3,458 ) (45 ) Hosting service 1,054 329 (725 ) (69 ) Mining pool 676 308 (368 ) (54 ) Mining revenue 20 1,392 1,372 6860 Total cost of revenues 9,498 6,319 (3,179 ) (33 ) Gross (loss)/profit 1,140 457 (683 ) (60 ) Selling and marketing expenses 1,098 1,134 36 3 General and administrative expenses 6,080 5,703 (377 ) (6 ) Research and development expenses 476 853 377 79 Impairment of long-lived assets 951 138 (813 ) (85 ) Total operating expenses 8,605 7,828 (777 ) (9 ) Profit (Loss) from operations (7,465 ) (7,371 ) 94 (1 ) Other income(expense), net (1,380 ) 1,251 2,631 (191 ) Profit(loss) before income tax expense (8,845 ) (6,120 ) 2,725 (31 ) Income tax expenses — — — 0 Net Profit (Loss) (8,845 ) (6,120 ) 2,725 (31 ) Foreign currency translation gain (544 ) (56 ) 488 (90 ) Total comprehensive loss $ (9,389 ) $ (6,176 ) $ 3,213 (34 ) Revenues Sales of products.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 31, 2023, 2022, and 2021 were increases of 0.2%, 2%, and 3.13%, respectively. According to US Inflation Calculator, the annual inflation rate of the United States for 2023, 2022 and 2021 were 3.4%, 6.5%, and 7%, respectively.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 31, 2024, 2023, and 2022 were increases of 0.5%, 0.2%, and 2%, respectively. According to US Inflation Calculator, the annual inflation rate of the United States for 2024, 2023 and 2022 were 3%, 3.4%, and 6.5%, respectively.
Customer Concentration Risk For the year ended December 31, 2023, three customers accounted for 33%, 23% and 17% of our total revenues. For the year ended December 31, 2022, four customers accounted for 28%, 28%, 20% and 12% of our total revenues.
Customer Concentration Risk For the year ended December 31, 2024, two customers accounted for 20% and 16% of our total revenues. For the year ended December 31, 2023, three customers accounted for 33%, 23% and 17% of our total revenues. For the year ended December 31, 2022, four customers accounted for 28%, 28%, 20% and 12% of our total revenues.
Cost of revenues Cost of revenues primarily included the cost for the purchase of high-performance crypto asset mining machines and the direct costs incurred for the provision of hosting service and mining rewards allocated to each provider of pool participant in exchange for their computing power contributed to the mining pool.
Cost of revenues Cost of revenues primarily included the cost for the purchase of high-performance crypto asset mining machines and outdoor computing infrastructure container , energy and the direct costs incurred for the provision of hosting service and mining rewards allocated to each provider of pool participant in exchange for their computing power contributed to the mining pool.
As of December 31, 2022, and December 31, 2023, all of our cash and cash equivalents were held by major financial institutions located in Mainland China, United States, Singapore and Hong Kong. We believe that these financial institutions are of high credit quality.
As of December 31, 2023, and December 31, 2024, all of our cash and cash equivalents were held by major financial institutions located in Mainland China, United States and Singapore. We believe that these financial institutions are of high credit quality.
The next halving for the bitcoin blockchain is anticipated to occur in April 2024 at block 840,000. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million and the theoretical supply of new bitcoin is exhausted, which is expected to occur around 2140.
The next halving for the bitcoin blockchain is anticipated to occur in April 2028 at block 1,050,000. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million and the theoretical supply of new bitcoin is exhausted, which is expected to occur around 2140.
We are also constructing vertical agricultural Greenhouse and fish farming pond pools which will be heated by the hot water generated from Bitcoin Mining. Our products and solutions can reduce aggregate carbon emissions compared to traditional stand-alone heating and bitcoin mining while also reducing the mining operation costs by potentially selling the waste heat.
We also constructed vertical agricultural Greenhouse and fish farming pond pools which were heated by the hot water generated from Bitcoin Mining. Our products and solutions can reduce aggregate carbon emissions compared to traditional stand-alone heating and bitcoin mining while also reducing the mining operation costs by potentially selling the waste heat.
Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including their acceptance as a means of exchange by consumers and producers, scarcity, and market demand. As of December 31, 2023, we held 65.98 bitcoins, which does not represent a significant increase compared to 3.05 bitcoins as of December 31, 2022.
Bitcoin (as well as other cryptocurrencies) may have value based on various factors, including their acceptance as a means of exchange by consumers and producers, scarcity, and market demand. As of December 31, 2024, we held 66.89 bitcoins, which does not represent a significant increase compared to 65.98 bitcoins as of December 31, 2023.
No other customer accounted for more than 10% of our revenues for the years ended December 31, 2023, 2022 and 2021. 90 As of December 31, 2023, three customers accounted for 63%, 25% and 11% of the total balance of our accounts receivable.
No other customer accounted for more than 10% of our revenues for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, one customer accounted for 100% of the total balance of our accounts receivable. As of December 31, 2023, three customers accounted for 63%, 25% and 11% of the total balance of our accounts receivable.
The following is a reconciliation of our non-GAAP net (loss) income for the years ended December 31, 2023, 2022 and 2021 respectively, which excludes the impact of (i) share-based compensation expense, (ii) loss from disposal of property and equipment, (iii) depreciation of fixed assets and amortization of intangible assets (dollars in thousands): For the year ended December 31, 2021 2022 2023 Reconciliation of non-GAAP net (loss) income: Net (loss) income $ (16,704 ) $ (8,845 ) $ (6,120 ) Share-based Compensation Expense 14,457 1,060 2,641 Loss from disposal of property and equipment — 718 402 Depreciation and amortization expenses — 1,662 1,347 Non-GAAP net (loss) income $ (2,247 ) $ (5,405 ) $ (1,730 ) Results of Operations For the year ended December 31, 2022, and 2023 The following table shows key components of our results of operations for the years ended December 31, 2022, and 2023, in dollars and as a percentage of fluctuations (dollars in thousands).
The following is a reconciliation of our non-GAAP net (loss) income for the years ended December 31, 2024, 2023 and 2022 respectively, which excludes the impact of (i) share-based compensation expense, (ii) loss from disposal of property and equipment, (iii) depreciation of fixed assets and amortization of intangible assets (dollars in thousands): For the year ended December 31, 2022 2023 2024 Reconciliation of non-GAAP net (loss) income: Net (loss) income $ (8,845 ) $ (6,120 ) $ (5,886 ) Share-based Compensation Expense 1,060 2,641 3,458 Loss from disposal of property and equipment 718 402 2 Depreciation and amortization expenses 1,662 1,347 1,655 Non-GAAP net (loss) income $ (5,405 ) $ (1,730 ) $ (771 ) Results of Operations For the year ended December 31, 2023 and 2024 The following table shows key components of our results of operations for the years ended December 31, 2023, and 2024, in dollars and as a percentage of fluctuations (dollars in thousands).
Foreign currency exchange net losses of $0.06 million, and $0.54 million, foreign currency exchange net gain of $0.06 million were recognized in 2023, 2022, and 2021, respectively. Inflation risk Inflation has not materially affected our results of operations in the past.
Foreign currency exchange net losses of $0.03 million, $0.06 million, and $0.54 million were recognized in 2024, 2023, and 2022, respectively. 94 Inflation risk Inflation has not materially affected our results of operations in the past.
When necessary, we may seek loans from financial institutions to obtain short-term funding to meet any liquidity needs. Foreign Currency Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the RMB.
Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we may seek loans from financial institutions to obtain short-term funding to meet any liquidity needs. Foreign Currency Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the RMB.
Cash outflow for the year ended December 31, 2023 mainly reflected the purchase of property and equipment of $5 million for our new mining site in Marietta Ohio. 88 Net cash used in investing activities for the year ended December 31, 2022 was $6.4 million, as compared to $4.0 million for the year ended December 31, 2021.
Cash outflow mainly reflected the purchase of property and equipment of $0.7 million for mining equipment in Marietta Ohio. Net cash used in investing activities for the year ended December 31, 2023 was $4.9 million, as compared to $6.4 million for the year ended December 31, 2022.
The bitcoin blockchain has undergone halving three times since its inception as follows: (1) on November 28, 2012, at block 210,000; (2) on July 9, 2016 at block 420,000; (3) on May 11, 2020 at block 630,000, when the reward was reduced to its current level of 6.25 bitcoin per block.
The bitcoin blockchain has undergone halving four times since its inception as follows: (1) on November 28, 2012, at block 210,000; (2) on July 9, 2016 at block 420,000; (3) on May 11, 2020 at block 630,000; (4) on April 19, 2024 at block 840,000, when the reward was reduced to its current level of 3.125 bitcoin per block.
Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $4.9 million, as compared to $6.4 million for the year ended December 31, 2022.
Net cash used in operating activities for the year ended December 31, 2023 was $3.1 million, as compared to $4.9 million used in operating activities for the year ended December, 2022.
As of the date of this Annual Report, our self-mining operation consist of one datacenter, which consist of 712 bitcoin mining machines, in Marietta, Ohio, the United States (“SAI NODE Marietta”) with a hash rate of approximately 106.39 PH/s, and a group of 420 bitcoin mining machines hosted at our datacenter partner in La Pechuga, Mexico (“Mexico Operation”) with a hash rate of approximately 43.68 PH/s.
As of the date of this Annual Report, our mining revenue consist of one data-center, which consist of 734 bitcoin mining machines, in Marietta, Ohio, the United States (“SAI NODE Marietta”) with a hash rate of approximately 110.85 PH/s, and a group of 420 bitcoin mining machines hosted at our datacenter partner in La Pechuga, Mexico (“Mexico Operation”) with a hash rate of approximately 43.68 PH/s.
Liquidity and Capital Resources For the year ended December 31, 2023, we had a net loss of $6.1 million and net cash outflow in operating activities of $3.1 million.
Liquidity and Capital Resources For the year ended December 31, 2024, we had a net loss of $5.9 million and net cash outflow in operating activities of $5.6 million.
Interest on non-payment of income taxes under requirement by tax law and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes.
An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. 88 Interest on non-payment of income taxes under requirement by tax law and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes.
Our impairment of long-lived assets in 2023 is due to impairment of mining equipment. Due to the decrease in BTC price, increasing electricity cost and high market volatility in 2022, the management shut down most of the miners and reviewed the impairment of miners and equipment.
Due to the decrease in BTC price, increasing electricity cost and high market volatility in 2022, the management shut down most of the miners and reviewed the impairment of miners and equipment.
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: As of December 31, 2022 As of December 31, 2023 Balance sheet items, except for equity accounts 6.9646 7.0827 For the Year Ended December 31, 2021 2022 2023 Items in the consolidated statements of operations and comprehensive (loss)/income, and cash flows 6.4000 6.7190 7.0422 No representation is intended to imply that the RMB amounts could have been, or could be, realized or settled into US$ at that rate stated above, or at any other rate.
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: As of December 31, 2023 As of December 31, 2024 Balance sheet items, except for equity accounts 7.0827 7.1884 For the Year Ended December 31, 2022 2023 2024 Items in the consolidated statements of operations and comprehensive (loss)/income, and cash flows 6.7190 7.0422 7.1205 No representation is intended to imply that the RMB amounts could have been, or could be, realized or settled into US$ at that rate stated above, or at any other rate. 86 Fair Value of Financial Instruments Our financial instruments primarily consist of cash and cash equivalents, accounts receivable and amount due from related parties.
Our net loss were $6.12 million, $8.85 million, and $ 16.68 million for the years ended December 31, 2023 ,2022 and 2021, respectively. Major Factors Affecting Our Results of Operations Our revenue comprises a combination of sales of high-performance crypto asset mining machines, hosting service fee, block rewards and income from our mining pool.
Our net loss was $5.89 million, $6.12 million, and $ 8.85 million for the years ended December 31, 2024, 2023 and 2022, respectively. 77 Major Factors Affecting Our Results of Operations Our revenue comprises a combination of sales of high-performance crypto asset mining machines and outdoor computing infrastructure container , hosting service fee, block rewards and income from our mining pool.
The voluntary change in accounting principle has been reflected in the Consolidated Financial Statements. Crypto assets generated from the crypto assets mining business and the mining pool business as well as the crypto assets distributed to mining pool participants are included within operating activities in the accompanying consolidated statements of cash flows.
Crypto assets generated from the crypto assets mining business and the mining pool business as well as the crypto assets distributed to mining pool participants are included within operating activities in the accompanying consolidated statements of cash flows.
Salary and benefits expenses increased by $0.1 million, from $0.13 million for the year ended December 31, 2022 to $0.23 million for the year ended December 31, 2023.
Research and development expenses increased by $0.38 million, or 79%, from $0.48 million for the year ended December 31, 2022, to $0.85 million for the year ended December 31, 2023. Salary and benefits expenses increased by $0.1 million, from $0.13 million for the year ended December 31, 2022 to $0.23 million for the year ended December 31, 2023.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this registration statement.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this registration statement. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.
The increase is mainly attributable to share-based compensation expenses that increased by $0.3 million, from $0.1 million for the year ended December 31, 2022 to $0.4 million for the year ended December 31, 2023 as we granted shares incentive plans to attract newly joined technical experts. 84 Impairment of long-lived assets The impairment of long-lived assets decreased by $0.81 million in 2023, or 85%, from $0.95 million for the year ended December 31, 2022 to $0.14 million for the year ended December 31, 2023.
The increase is mainly attributable to share-based compensation expenses that increased by $0.3 million, from $0.1 million for the year ended December 31, 2022 to $0.4 million for the year ended December 31, 2023 as we granted shares incentive plans to attract newly joined technical experts.
During the year ended December 31, 2023, the Company recognized a gain on crypto assets of $840 thousand under the new fair value model.
During the year ended December 31, 2024, the Company recognized a gain on crypto assets of $2.3 million under the new fair value model.
We continuously explore clean and cost-effective power supplies and build up readily accessible infrastructure to operate the mining machines for our hosting clients and for self-owned mining machines.
We continuously explore clean and cost-effective power supplies and build up readily accessible infrastructure to operate the mining machines for our hosting clients and for self-owned mining machines. Currently, we are actively investigating the potential of utilizing SMR technology to power mining operations.
Research and development expenses Our research and development expenses mainly represented the cost related to our new product research and development. Research and development expenses increased by $0.38 million, or 79%, from $0.48 million for the year ended December 31, 2022, to $0.85 million for the year ended December 31, 2023.
Research and development expenses Our research and development expenses mainly represented the cost related to our new product research and development. Research and development expenses decreased by $0.21 million, or 25%, from $0.85 million for the year ended December 31, 2023, to $0.64 million for the year ended December 31, 2024.
For the year ended December 31, 2023, 2022 and 2021, we did not have any material interest or penalties associated with tax positions. We did not have any significant unrecognized uncertain tax positions as of December 31, 2022 and 2023. We do not expect that our assessment regarding unrecognized tax positions will materially change over the next 12 months.
We did not have any significant unrecognized uncertain tax positions as of December 31, 2023 and 2024. We do not expect that our assessment regarding unrecognized tax positions will materially change over the next 12 months.
The Company expects that its future bitcoin holdings will generally increase but will fluctuate from time to time, both in number of bitcoins held and fair value in US dollars, depending upon operating and market conditions.
As a result, the fair market value of the Company’s bitcoin holdings on December 31, 2024, was approximately $6.3 million. The Company expects that its future bitcoin holdings will generally increase but will fluctuate from time to time, both in number of bitcoins held and fair value in US dollars, depending upon operating and market conditions.
However, we will continue to be dependent on access to distributions of cash from our other subsidiaries. 87 Cash Generating Ability Our cash flows were summarized below (in thousands): For the year ended December 31, 2021 For the year ended December 31, 2022 For the year ended December 31, 2023 Net cash used in operating activities $ (983 ) $ (4,933 ) $ (3,125 ) Net cash used in investing activities (3,970 ) (6,424 ) (4,897 ) Net cash provided by financing activities 8,191 18,533 9 Effect of exchange rate changes on cash and cash equivalents (61 ) (438 ) (26 ) Net increase in cash and cash equivalents $ 3,177 $ 6,738 $ (8,039 ) Cash and cash equivalents at the beginning of the period $ 1,300 $ 4,477 $ 11,215 Cash and cash equivalents at the end of the period $ 4,477 $ 11,215 $ 3,176 Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $3.1 million, as compared to $5 million used in operating activities for the year ended December, 2022.
Cash Generating Ability Our cash flows were summarized below (in thousands): For the year ended December 31, 2022 For the year ended December 31, 2023 For the year ended December 31, 2024 Net cash used in operating activities $ (4,933 ) $ (3,125 ) $ (5,554 ) Net cash used in investing activities (6,424 ) (4,897 ) 1,347 Net cash provided by financing activities 18,533 9 2,115 Effect of exchange rate changes on cash and cash equivalents (438 ) (26 ) (5 ) Net increase in cash and cash equivalents $ 6,738 $ (8,039 ) $ (2,097 ) Cash and cash equivalents at the beginning of the period $ 4,477 $ 11,215 $ 3,176 Cash and cash equivalents at the end of the period $ 11,215 $ 3,176 $ 1,079 91 Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $5.6 million, as compared to $3.1 million used in operating activities for the year ended December, 2023.
The amendments in this ASU require the measurement and recognition of expected credit losses for financial assets held at amortized cost. The amendments in this ASU replace the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses.
The amendments in this ASU replace the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses.
The decrease was mainly attributable to a decrease of $0.74 million depreciation and amortization expenses and a decrease of $0.34 million salary and benefits expenses as we tightened our expense controls. The increase on one hand, is due to share-based payment expense, which is $1.93 million and $0.79 million, respectively, for the year ended December 31, 2023 and 2022.
The increase was mainly attributable to share-based payment expense, which is $3.15 million and $1.93 million, respectively, for the year ended December 31, 2024 and 2023 and partly offset by a decrease of $0.27 million depreciation and amortization expenses and a decrease of $0.48 million salary and benefits expenses as we tightened our expense controls.
Our capital expenditures have been used primarily to purchase of electronic equipment and mining site investment. We estimate that our capital expenditures will increase moderately in the following two or three years to support the expected growth of its business. We anticipate funding our future capital expenditures primarily with net cash flows from operating activities and financing activities.
Our capital expenditures have been used primarily to purchase of mining machines and mining site investment. We estimate that our capital expenditures will increase moderately in the following two or three years to support the expected growth of its business.
Currently the block rewards are fixed at 6.25 bitcoin per block, and it is estimated that it will halve again to 3.125 bitcoin in April 2024. 81 Market Price of Bitcoin Our business is heavily dependent on the spot price of bitcoin.
After the halving event of April 2024, the current rewards are fixed at 3.125 bitcoin per block plus transaction fees, and it is estimated that it will halve again to 1.5625 bitcoin in 2028. Market Price of Bitcoin Our business is heavily dependent on the spot price of bitcoin.
Below is a table setting forth all our contractual obligations as of December 31, 2023, which consists of operating lease obligations for our operation in United States, Kazakhstan and office lease: Payment Due by Period Total Less than 1 year More than 1 year Contractual Obligations Operating lease obligations $ 809,650 $ 274,408 $ 535,241 Total $ 809,650 $ 274,408 $ 535,241 89 Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Below is a table setting forth all our contractual obligations as of December 31, 2024, which consists of operating lease obligations for our operation in United States and office lease and purchase contract: Payment Due by Period Total Less than 1 year More than 1 year Contractual Obligations $ 2,148,183 $ 1,841,300 $ 306,883 Operating lease obligations $ 567,752 $ 81,997 $ 485,755 Total $ 809,650 $ 275,235 $ 534,414 Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
As of December 31, 2023, our consolidated current assets exceeded our consolidated current liabilities by $11.6 million, we had cash and cash equivalents of $3.2 million, crypto assets and stablecoins assets of $6.8 million, and accumulated deficit of $31.4million.
As of December 31, 2024, our consolidated current assets exceeded our consolidated current liabilities by $7.2 million, we had cash and cash equivalents of $1.0 million, crypto assets and stablecoins assets of $6.9 million, and accumulated deficit of $37.2 million.
The sales of crypto assets are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in gain or loss of disposal of crypto assets in the consolidated statements of operations and comprehensive (loss)/income. 94 Income Taxes We follow the guidance of ASC Topic 740 “Income taxes” and use liability method to account for income taxes.
The sales of crypto assets are included within investing activities in the accompanying consolidated statements of cash flows and any realized gains or losses from such sales are included in gain or loss of disposal of crypto assets in the consolidated statements of operations and comprehensive (loss)/income.
As a result of the adoption, the Company recorded a cumulative effect adjustment to its Accumulated deficit balance of approximately $0.08 million as of January 1, 2023, as a result of recognizing its Bitcoin held as of January 1, 2023, at fair value.
As a result of the adoption, the Company recorded a cumulative effect adjustment to its Accumulated deficit balance of approximately $0.08 million as of January 1, 2023, as a result of recognizing its Bitcoin held as of January 1, 2023, at fair value. 89 On November 27, 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.
The Company allocates mining rewards to each pool participant, mainly our hosting clients, net of the pool operator fees based on the sharing mechanism predetermined and records as cost of mining pool revenue.
Mining pool service income represents revenues from the Company’s self-owned Sai.plus mining pool which was started in 2021, representing mining rewards from Sai.plus mining pool. The Company allocates mining rewards to each pool participant, mainly our hosting clients, net of the pool operator fees based on the sharing mechanism predetermined and records as cost of mining pool revenue.
Effective January 1, 2023, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in the Consolidated Statement of Operations and Comprehensive Income (Loss) each reporting period.
Under ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which requires entities to measure crypto assets at fair value with changes recognized in the Consolidated Statement of Operations and Comprehensive Income (Loss) each reporting period.
When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine any required changes to its Consolidated Financial Statements. In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”).
When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine any required changes to its Consolidated Financial Statements. In November 2024, the Financial Accounting Standards Board(“FASB”) issued Update ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses (“ASU 2024-03”).
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 79 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled “Business” and our consolidated financial statements and the related notes included elsewhere in this registration statement.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 76 A. Operating Results The following discussion of our financial condition and results of operations in conjunction with the section entitled “Business” and our consolidated financial statements and the related notes included elsewhere in this Annual Report.. This discussion contains forward-looking statements that involve risks and uncertainties.
The hosting service revenue decreased by $1.3 million, or 50%, from $2.6 million for the year ended December 31, 2021 to $1.3 million for the year ended December 31, 2022. Our hosting facilities are mainly based in PRC in 2021, and Kazakhstan in 2022.
The hosting service revenue decreased by $0.3 million, or 86%, from $0.4 million for the year ended December 31, 2023 to $0.05 million for the year ended December 31, 2024. Our hosting facilities are mainly based in Mexico in 2024.
The new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted. The adoption of this standard did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”.
The adoption of this standard did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The amendments in this ASU require the measurement and recognition of expected credit losses for financial assets held at amortized cost.
The increase mainly due to the increase in 2022 headcount. Impairment of long-lived assets The impairment of long-lived assets increased $0.82 million in 2022, or 604%, from $0.14 million for the year ended December 31, 2021 to $0.95 million for the year ended December 31, 2022.
Impairment of long-lived assets The impairment of long-lived assets decreased by $0.81 million in 2023, or 85%, from $0.95 million for the year ended December 31, 2022 to $0.14 million for the year ended December 31, 2023. Our impairment of long-lived assets in 2023 is due to impairment of mining equipment.
We expect our future revenue will include bitcoin transaction fee, earned for verifying transactions in support of the blockchain, resales of waste heat from our products and operations to be deployed and any technology-related types of charge based on our intellectual property. 80 Factors affecting our sales of digital mining machines and hosting service fee Availability of Secure and Sustainable Power Supply Following the ban on crypto asset mining by the Chinese government in May 2021, the bitcoin mining industry has come to realize that the availability of secure and sustainable power supply has been the paramount factor in conducting bitcoin mining operations.
Factors Affecting Our Sales of Equipment and Hosting Service Fee Availability of Secure and Sustainable Power Supply Following the ban on crypto asset mining by the Chinese government in May 2021, the bitcoin mining industry has come to realize that the availability of secure and sustainable power supply has been the paramount factor in conducting bitcoin mining operations.
Quantitative and Qualitative Disclosures about Market Risk Credit Risk Our credit risk arises from cash and cash equivalents, accounts receivable, other receivables in deposits, prepayments and other current assets, net and amount due from related parties, stablecoin asset.
Based on substantially all of our operations in foreign subsidiaries, including United States, our ability to pay future dividends will be primarily dependent on receiving distributions of funds from our subsidiaries. 93 Quantitative and Qualitative Disclosures about Market Risk Credit Risk Our credit risk arises from cash and cash equivalents, accounts receivable, other receivables in deposits, prepayments and other current assets, net and amount due from related parties, stablecoin asset.
For the year ended December 31, 2021, the cash inflow reflected the proceeds from issuance of preferred shares of $8.1 million. Capital Expenditures We made capital expenditures of $5 million, $1.9 million and $4.0 million for the year ended December 31, 2023, 2022 and 2021, respectively.
In 2024, the cash inflow reflected short-term borrowings from the third party. In 2022 we completed the Business Combination and received $18.5 million. Capital Expenditures We made capital expenditures of $1.3 million, $5.0 million and $1.9 million for the year ended December 31, 2024, 2023 and 2022, respectively.
Sales of products represents the sales of high-performance crypto asset mining machines to end customers. The revenue of sales of products was $6.9 million and $8.6 million for the years ended December 31, 2021, and 2022, respectively, increasing by $1.7 million, or 24%.
Sales of equipment represents the sales of high-performance crypto asset mining machines and outdoor computing infrastructure container to end customers. The revenue of sales of equipment was $4.8 million and $2.5 million for the years ended December 31, 2023, and 2024, respectively, decreased by $2.3 million, or 48%.
Although we have not been materially affected by inflation in the past, we may be affected if jurisdictions where we conduct our business experiences higher rates of inflation in the future. Critical Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S.
Critical Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Liquidity Risk We are exposed to liquidity risk, which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures.
No other customer accounted for more than 10% of our accounts receivable as of December 31, 2024 and 2023. Liquidity Risk We are exposed to liquidity risk, which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs.
General and administrative expenses increased by $3.70 million, or 155%, from $2.38 million for the year ended December 31, 2021, to $6.08 million for the year ended December 31, 2022.
General and administrative expenses increased by $0.27 million, or 5%, from $5.7 million for the year ended December 31, 2023, to $5.97 million for the year ended December 31, 2024.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was $0.009 million, as compared to $18.5 million for the year ended December 31, 2022. In 2022 we completed the de-spac and received $18.5 million.
Cash outflow for the year ended December 31, 2023 mainly reflected the purchase of property and equipment of $5 million for our new mining site in Marietta Ohio. Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $2.1 million, as compared to $0.009 million for the year ended December 31, 2023.

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Biggest changeDuring September 2014 to September 2015, he initiated his career at Oracle as a software engineer, where he was involved in developing AIoT cloud service. Mr. Ge holds a bachelor’s degree from Illinois Wesleyan University and a master’s degree in computer science from Carnegie Mellon University. Yao Shi serves as our independent director and the audit chairman.
Biggest changeGe holds a bachelor’s degree from Illinois Wesleyan University and a master’s degree in computer science from Carnegie Mellon University. Heung Ming Henry Wong serves as our independent director and the chairman of audit committee. Mr. Wong’s career spans executive and directorial roles in Nasdaq-listed companies, focusing on financial leadership, corporate governance, and strategic oversight across industries.
The maximum grant date fair value of all compensation granted or paid, as applicable, to any individual for service as a non-employee director with respect to any calendar year is (i) US$750,000 total in value or (ii) in the event such non-employee director is first appointed or elected to the Board during such calendar year, US$1,000,000 in total value.
The maximum grant date fair value of all compensation granted or paid, as applicable, to any individual for service as a non-employee director with respect to any calendar year is (i) US$750,000 total in value or (ii) in the event such non-employee director is first appointed or elected to the Board during such calendar year, US$1,000,000 in total value.
Share Reserves Subject to adjustment as described in the plan, the maximum number of Class A Ordinary Shares that may be delivered in satisfaction of awards under the SAI Incentive Plan (the “Share Reserve”) is an initial 1,812,663 Class A Ordinary Shares, and subject to such adjustments in the plan, the then-applicable Share Reserve number will automatically increase (but not decrease) on January 1 st of each year commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (i) three percent (3%) of the total number of Ordinary Shares of SAI outstanding on December 31 st of the preceding year and (ii) such fewer number of Class A Ordinary Shares that the Board or any Committee may determine prior to January 1 st of a given year; provided, if the effective date of the SAI Incentive Plan is after January 1, 2022, then the initial automatic increase shall occur on January 1, 2023 and the increases shall end on (and including) January 1, 2032.
Share Reserves Subject to adjustment as described in the 2021 plan, the maximum number of Class A Ordinary Shares that may be delivered in satisfaction of awards under the 2021 Incentive Plan (the “Share Reserve”) is an initial 1,812,663 Class A Ordinary Shares, and subject to such adjustments in the plan, the then-applicable Share Reserve number will automatically increase (but not decrease) on January 1 st of each year commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (i) three percent (3%) of the total number of Ordinary Shares of SAI outstanding on December 31 st of the preceding year and (ii) such fewer number of Class A Ordinary Shares that the Board or any Committee may determine prior to January 1 st of a given year; provided, if the effective date of the SAI Incentive Plan is after January 1, 2022, then the initial automatic increase shall occur on January 1, 2023 and the increases shall end on (and including) January 1, 2032.
Share Reserves Subject to adjustment as described in the plan, the maximum number of Class A Ordinary Shares that may be delivered in satisfaction of awards under the 2023 SAI Incentive Plan (the “2023 Share Reserve”) is an initial 1,376,792 Class A Ordinary Shares, and subject to such adjustments in the plan, the then-applicable 2023 Share Reserve number will automatically increase (but not decrease) on January 1 st of each year commencing on January 1, 2024 and ending on (and including) January 1, 2033, in an amount equal to six percent (6%) of the total number of Capital Shares (on a fully-diluted basis) outstanding on December 31st of the preceding year; provided, however that the Board or any Committee may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of Ordinary Shares. 102 In connection with an entity’s merger or consolidation with SAI or SAI’s acquisition of an entity’s property or stock, the Board may grant awards in substitution for any options or other share or share-based awards granted before the merger or consolidation by the acquired entity or its affiliate.
Share Reserves Subject to adjustment as described in the plan, the maximum number of Class A Ordinary Shares that may be delivered in satisfaction of awards under the 2023 SAI Incentive Plan (the “2023 Share Reserve”) is an initial 1,376,792 Class A Ordinary Shares, and subject to such adjustments in the plan, the then-applicable 2023 Share Reserve number will automatically increase (but not decrease) on January 1 st of each year commencing on January 1, 2024 and ending on (and including) January 1, 2033, in an amount equal to six percent (6%) of the total number of Capital Shares (on a fully-diluted basis) outstanding on December 31st of the preceding year; provided, however that the Board or any Committee may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of Ordinary Shares. 100 In connection with an entity’s merger or consolidation with SAI or SAI’s acquisition of an entity’s property or stock, the Board may grant awards in substitution for any options or other share or share-based awards granted before the merger or consolidation by the acquired entity or its affiliate.
Each person agrees that he or she will: (a) Engage in honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (b) Produce full, fair, accurate, timely and understandable disclosure in reports and documents that we file with or submit to the Securities and Exchange Commission and in other public communications we make; (c) Comply with applicable governmental laws, rules and regulations; (d) Promptly report any violations of this Code of Business Ethics to our Chief Legal Officer or Audit Committee; (e) Adhere to the Code of Business Ethics, including fair process by which to determine violations; and (f) Protect the Company’s legitimate business interests, including its assets and corporate opportunities. 106 Corporate Governance Guidelines Our board of directors has adopted corporate governance guidelines in accordance with the corporate governance rules of Nasdaq that serve as a flexible framework within which our board of directors and its committees operate.
Each person agrees that he or she will: (a) Engage in honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (b) Produce full, fair, accurate, timely and understandable disclosure in reports and documents that we file with or submit to the Securities and Exchange Commission and in other public communications we make; (c) Comply with applicable governmental laws, rules and regulations; (d) Promptly report any violations of this Code of Business Ethics to our Chief Legal Officer or Audit Committee; (e) Adhere to the Code of Business Ethics, including fair process by which to determine violations; and (f) Protect the Company’s legitimate business interests, including its assets and corporate opportunities. 107 Corporate Governance Guidelines Our board of directors has adopted corporate governance guidelines in accordance with the corporate governance rules of Nasdaq that serve as a flexible framework within which our board of directors and its committees operate.
Board Practices Board of Directors Our board of directors is composed of 5 members. The board of directors is divided into three classes of directors. At each annual general meeting of the Company’s shareholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.
Board Practices Board of Directors Our board of directors is composed of five (5) members. The board of directors is divided into three classes of directors. At each annual general meeting of the Company’s shareholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.
Our compensation committee is appointed by the Board of Directors of SAI.TECH Global Corporation to assist the Board in overseeing the Company’s employee compensation policies and practices, The following responsibilities are set forth as a guide for fulfilling the Committee’s purposes in such manner as the Committee determines is appropriate: (a) Establish and review the objectives of the Company’s management compensation programs and its basic compensation policies; (b) Review and approve corporate goals and objectives relevant to the compensation of the CEO and other executive officers, including annual and long-term performance goals and objectives; (c) Review and approve, subject to such further action of the Board as the Board shall determine, any employment, compensation, benefit or severance agreement with any executive officer; (d) Evaluate the performance of the CEO and other executive officers against corporate goals and objectives including the annual performance objectives; (e) Determine and approve the compensation level for other members of senior management of the Company as the Committee or the Board may from time to time determine to be appropriate; (f) Review at least annually the compensation of other employees as the Committee determines to be appropriate; 104 (g) Review on a periodic basis the Company’s management compensation programs, and recommend to the Board any appropriate modifications or new plans, programs or policies; (h) Review, approve and recommend to the Board the adoption of any equity-based compensation plan for employees of or consultants to the Company and any modification of any such plan; (i) Administer the Company’s equity-based compensation plans for employees of and consultants to the Company as provided by the terms of such plans, including authorizing all awards made pursuant to such plans; (j) Review, approve and recommend to the Board the adoption of any non-equity-based incentive compensation plan for employees of or consultants to the Company and any material modification of any such plan and review at least annually the awards made pursuant to such plans; (k) Review, approve and recommend to the Board the adoption of any employee retirement plan, and other material employee benefit plan, and any material modification of any such plan; (l) Review (a) the Company’s compensation policies and practices for executives, management employees and employees generally to assess whether such policies and practices could lead to excessive risk taking behavior and (b) the manner in which any risks arising out of the Company’s compensation policies and practices are monitored and mitigated and adjustments necessary to address changes in the Company’s risk profile; (m) With respect to any compensation consultant who has been engaged to make determinations or recommendations on the amount or form of executive or director compensation: (a) annually, or from time to time as the Committee deems appropriate, assess whether the work of any such compensation consultant (whether retained by the compensation committee or management) has raised any conflicts of interest; and (b) review the engagement and the nature of any additional services provided by such compensation consultant to the Committee or to management, as well as all remuneration provided to such consultant; (n) Annually, or from time to time as the Committee deems appropriate and prior to retention of any advisers to the Committee, assess the independence of compensation consultants, legal and other advisers to the Committee, taking into consideration all relevant factors the Committee deems appropriate to such adviser’s independence, including factors specified in the listing standards of Nasdaq; (o) Review the form and amount of director compensation at least annually, and make recommendations thereon to the Board; (p) Oversee and monitor other compensation related policies and practices of the Company, including: (i) compliance by management with rules regarding equity-based compensation plans for employees and consultants pursuant to the terms of such plans, and the guidelines for issuance of awards as the Board or Committee may establish; and (ii) the Company’s recoupment policy and procedures; (q) Oversee stockholder communications relating to executive compensation and review and make recommendations with respect to stockholder proposals related to compensation matters; and (r) Undertake such other responsibilities or tasks as the Board may delegate or assign to the Committee from time to time.
Our compensation committee is appointed by the Board of Directors of SAIHEAT Limited to assist the Board in overseeing the Company’s employee compensation policies and practices, The following responsibilities are set forth as a guide for fulfilling the Committee’s purposes in such manner as the Committee determines is appropriate: (a) Establish and review the objectives of the Company’s management compensation programs and its basic compensation policies; (b) Review and approve corporate goals and objectives relevant to the compensation of the CEO and other executive officers, including annual and long-term performance goals and objectives; (c) Review and approve, subject to such further action of the Board as the Board shall determine, any employment, compensation, benefit or severance agreement with any executive officer; (d) Evaluate the performance of the CEO and other executive officers against corporate goals and objectives including the annual performance objectives; (e) Determine and approve the compensation level for other members of senior management of the Company as the Committee or the Board may from time to time determine to be appropriate; (f) Review at least annually the compensation of other employees as the Committee determines to be appropriate; 105 (g) Review on a periodic basis the Company’s management compensation program, and recommend to the Board any appropriate modifications or new plans, programs or policies; (h) Review, approve and recommend to the Board the adoption of any equity-based compensation plan for employees of or consultants to the Company and any modification of any such plan; (i) Administer the Company’s equity-based compensation plans for employees of and consultants to the Company as provided by the terms of such plans, including authorizing all awards made pursuant to such plans; (j) Review, approve and recommend to the Board the adoption of any non-equity-based incentive compensation plan for employees of or consultants to the Company and any material modification of any such plan and review at least annually the awards made pursuant to such plans; (k) Review, approve and recommend to the Board the adoption of any employee retirement plan, and other material employee benefit plan, and any material modification of any such plan; (l) Review (a) the Company’s compensation policies and practices for executives, management employees and employees generally to assess whether such policies and practices could lead to excessive risk taking behavior and (b) the manner in which any risks arising out of the Company’s compensation policies and practices are monitored and mitigated and adjustments necessary to address changes in the Company’s risk profile; (m) With respect to any compensation consultant who has been engaged to make determinations or recommendations on the amount or form of executive or director compensation: (a) annually, or from time to time as the Committee deems appropriate, assess whether the work of any such compensation consultant (whether retained by the compensation committee or management) has raised any conflicts of interest; and (b) review the engagement and the nature of any additional services provided by such compensation consultant to the Committee or to management, as well as all remuneration provided to such consultant; (n) Annually, or from time to time as the Committee deems appropriate and prior to retention of any advisers to the Committee, assess the independence of compensation consultants, legal and other advisers to the Committee, taking into consideration all relevant factors the Committee deems appropriate to such adviser’s independence, including factors specified in the listing standards of Nasdaq; (o) Review the form and amount of director compensation at least annually, and make recommendations thereon to the Board; (p) Oversee and monitor other compensation related policies and practices of the Company, including: (i) compliance by management with rules regarding equity-based compensation plans for employees and consultants pursuant to the terms of such plans, and the guidelines for issuance of awards as the Board or Committee may establish; and (ii) the Company’s recoupment policy and procedures; (q) Oversee stockholder communications relating to executive compensation and review and make recommendations with respect to stockholder proposals related to compensation matters; and (r) Undertake such other responsibilities or tasks as the Board may delegate or assign to the Committee from time to time.
With an in-depth understanding of energy and computing, he published his first book Computing: The Future of Computing and Energy at 2021; and his second book Energism is published in 2022.
With an in-depth understanding of energy and computing, he published his first book Computing: The Future of Computing and Energy in 2021; and his second book Energism is published in 2022.
We do not have a standing risk management committee, but rather administer this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. 103 Committees of the Board of Directors We currently have five directors, including three independent directors, on our board of directors.
We do not have a standing risk management committee, but rather administer this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. 104 Committees of the Board of Directors We currently have five directors, including three independent directors, on our board of directors.
Eligibility Employees of SAI and its affiliates, members of the Board, consultants and other non-employee service providers of SAI and its affiliates are eligible to receive awards under the SAI Incentive Plan. 99 Awards The SAI Incentive Plan provides for the grant of various types of awards, including options, (ii) share appreciation rights, (iii) restricted share awards, (iv) restricted share unit awards, and (v) other awards.
Eligibility Employees of SAI and its affiliates, members of the Board, consultants and other non-employee service providers of SAI and its affiliates are eligible to receive awards under the SAI Incentive Plan. 97 Awards The SAI Incentive Plan provides for the grant of various types of awards, including options, (ii) share appreciation rights, (iii) restricted share awards, (iv) restricted share unit awards, and (v) other awards.
Any additional Class A Ordinary Shares credited to the RSU award by reason of any dividend equivalents will be subject to all of the same terms and conditions of the underlying RSU award. Dividend equivalents distributed under the Plan will not be counted against the shares available for issuance under the SAI Incentive Plan. 100 ● Other Awards.
Any additional Class A Ordinary Shares credited to the RSU award by reason of any dividend equivalents will be subject to all of the same terms and conditions of the underlying RSU award. Dividend equivalents distributed under the Plan will not be counted against the shares available for issuance under the SAI Incentive Plan. 98 ● Other Awards.
In addition, a participant may be required to repay to SAI certain previously paid compensation, whether provided under the SAI Incentive Plan or an award agreement or otherwise, in accordance with SAI claw-back policies. 101 Plan Termination The Board may suspend or terminate the SAI Incentive Plan at any time.
In addition, a participant may be required to repay to SAI certain previously paid compensation, whether provided under the SAI Incentive Plan or an award agreement or otherwise, in accordance with SAI claw-back policies. 99 Plan Termination The Board may suspend or terminate the SAI Incentive Plan at any time.
The SAI Incentive Plan will initially be administered by the board of directors of SAI unless and until the board delegates administration of the plan to a committee. 98 Administration Our Board will (i) determine from time to time (a) which of the persons eligible under the plan will be granted awards; (b) when and how each award will be granted; (c) what type or combination of types of award will be granted; (d) the provisions of each award granted (which need not be identical or comparable), including the time or times when a person will be permitted to exercise or otherwise receive an issuance of Class A Ordinary Shares or other payment pursuant to an award; (e) the number of Class A Ordinary Shares or cash equivalent with respect to which an award will be granted to each such person; and (f) the fair market value applicable to an award; (ii) construe and interpret the SAI Incentive Plan and awards granted under it, and to establish, amend and revoke rules and regulations for administration of the plan and awards; (iii) settle all controversies regarding the SAI Incentive Plan and awards granted under it; (iv) amend the SAI Incentive Plan in any respect the Board deems necessary or advisable; and (v) exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the plan or awards.
Administration Our Board will (i) determine from time to time (a) which of the persons eligible under the plan will be granted awards; (b) when and how each award will be granted; (c) what type or combination of types of award will be granted; (d) the provisions of each award granted (which need not be identical or comparable), including the time or times when a person will be permitted to exercise or otherwise receive an issuance of Class A Ordinary Shares or other payment pursuant to an award; (e) the number of Class A Ordinary Shares or cash equivalent with respect to which an award will be granted to each such person; and (f) the fair market value applicable to an award; (ii) construe and interpret the SAI Incentive Plan and awards granted under it, and to establish, amend and revoke rules and regulations for administration of the plan and awards; (iii) settle all controversies regarding the SAI Incentive Plan and awards granted under it; (iv) amend the SAI Incentive Plan in any respect the Board deems necessary or advisable; and (v) exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the plan or awards.
A copy of our corporate governance guidelines is posted on our website. D. Employees Our ability to maintain a trained management team and other employees is critical to the success of our business. We had a total of 9, 27 and 28 employees as of December 31, 2020, 2021 and 2022 respectively.
A copy of our corporate governance guidelines is posted on our website. D. Employees Our ability to maintain a trained management team and other employees is critical to the success of our business. We had a total of 28, 37 and 34 employees as of December 31, 2022, 2023 and 2024, respectively.
The table below sets forth the number of employees categorized by function as of December 31, 2023. Function Number of employees General management and Administration 24 Sales, Marketing and Operating 8 Technology and Product Development 5 Total 37 The remuneration package of our employees includes salary, bonus, stock options and other cash benefits.
The table below sets forth the number of our employees categorized by function as of December 31, 2024. Function Number of employees General management and Administration 19 Sales, Marketing and Operating 4 Technology and Product Development 11 Total 34 The remuneration package of our employees includes salary, bonus, stock options and other cash benefits.
We have not experienced any material labor disputes or disputes with the labor department of the PRC government since our inception. E. Share Ownership See “ Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders ” of this Annual Report.
We have not experienced any material labor disputes or disputes with the labor department of the PRC government since our inception. E. Share Ownership See “ Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders ” of this Annual Report. F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not Applicable.
Arthur made the list of Forbes China 30 under 30 at 2021 and is one of the founding members of Forbes Global Alliance (FGA) — a subsidiary of Forbes Media Group, and a membership-based platform for entrepreneurs and company executives. Arthur received EMBA from Shanghai Jiao Tong University.
Arthur made the list of Forbes China 30 under 30 in 2021 and is one of the founding members of Forbes Global Alliance (FGA) — a subsidiary of Forbes Media Group, and a membership-based platform for entrepreneurs and company executives. Arthur received EMBA from Shanghai Jiao Tong University. Directors Hao Ge serves as a non-executive director. Mr.
Jinlong Zhu is the chairman of our nominating and corporate governance committee. 105 The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become members of the Board of Directors of SAI.TECH Global Corporation consistent with criteria approved by the Board, to recommend that the Board select the director nominees for the next annual meeting of shareholders, to review and recommend proposed changes to the Company’s Corporate Governance Guidelines, as applicable, and to oversee the evaluation of the Board.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Tianshi Yang, Heung Ming Wong, Haotian Li, Tianshi Yang is the chairman of our nominating and corporate governance committee. 106 The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become members of the Board of Directors of SAIHEAT Limited consistent with criteria approved by the Board, to recommend that the Board select the director nominees for the next annual meeting of shareholders, to review and recommend proposed changes to the Company’s Corporate Governance Guidelines, as applicable, and to oversee the evaluation of the Board.
Director Independence Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that each of Yao Shi, Yusen Chen, Jinlong Zhu qualify as independent as defined under the listing rules of Nasdaq.
Director Independence Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that each of Tianshi Yang, Heung Ming Henry Wong, Haotian Li qualify as independent as defined under the listing rules of Nasdaq.
Compensation Committee Yusen Chen, Yao Shi and Jinlong Zhu serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we have three members of the compensation committee, all of whom must be independent. Yusen Chen, Yao Shi and Jinlong Zhu is deemed to be independent by our board of directors.
Compensation Committee Tianshi Yang, Heung Ming Henry Wong and Haotian Li serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we have three members of the compensation committee, all of whom must be independent. Tianshi Yang, Heung Ming Henry Wong and Haotian Li are deemed to be independent by our board of directors.
The terms of our Class I directors, Class II directors, and Class III directors will expire as follows: (1) 2026, (2) 2024, and (3) 2025. ● the Class I directors includes Risheng Li; ● the Class II directors includes Yusen Chen and Yao Shi; and ● the Class III directors includes Hao Ge and Jinlong Zhu.
The terms of our Class I directors, Class II directors, and Class III directors will expire as follows: (1) 2026, (2) 2024, and (3) 2025. ● the Class I directors includes Risheng Li; ● the Class II directors includes Heung Ming Henry Wong mand Haotian Li. ● the Class III directors includes Tianshi Yang and Hao Ge.
Yusen Chen serves as chair of the compensation committee.
Haotian Li serves as chair of the compensation committee.
All of the members of the Audit Committee currently satisfy the independence requirements and other established criteria of Nasdaq. The Audit Committee is appointed by the Board of Directors of SAI.TECH Global Corporation to assist the Board in its oversight of the accounting and financial reporting processes of the Company and the Company’s compliance with legal and regulatory requirements.
The Audit Committee is appointed by the Board of Directors of SAIHEAT Limited to assist the Board in its oversight of the accounting and financial reporting processes of the Company and the Company’s compliance with legal and regulatory requirements.
B. Compensation 2021 Equity Incentive Plan Our board of directors and shareholders approved the adoption of the SAI Incentive Plan, effective as of April 29, 2022. The SAI Incentive Plan provides for the grant of various types of awards, including options, (ii) share appreciation rights, (iii) restricted share awards, (iv) restricted share unit awards, and (v) other awards.
The SAI Incentive Plan provides for the grant of various types of awards, including options, (ii) share appreciation rights, (iii) restricted share awards, (iv) restricted share unit awards, and (v) other awards.
Directors and Executive Officers Age Position/Title Arthur Lee 30 Chief Executive Officer/Executive Director Ian Chow 44 Chief Financial Officer Hao Ge 33 Non-executive Director Yao Shi (2)(5)(6) 53 Independent Director Yusen Chen (1)(4)(6) 32 Independent Director Jinlong Zhu (3)(4)(5) 42 Independent Director (1) Chairman of Compensation Committee (2) Chairman of the Audit Committee (3) Chairman of Nominating & Corporate Governance Committee (4) Member of the Audit Committee (5) Member of the Compensation Committee (6) Member of the Nominating & Corporate Governance Committee Executive Officers Arthur Lee (also referred to as Risheng Li) is our Founder and serves as our Chief Executive Officer and a member of the board of directors of SAI.TECH Global Corporation.
Directors and Executive Officers Age Position/Title Arthur Lee 31 Chief Executive Officer/Executive Director Hao Ge 34 Non-executive Director Heung Ming Henry Wong (2)(4)(5)(6) 56 Independent Director Haotian Li (1)(4)(5)(6) 32 Independent Director Tianshi Yang (3)(4)(5)(6) 35 Independent Director (1) Chairman of Compensation Committee (2) Chairman of the Audit Committee (3) Chairman of Nominating & Corporate Governance Committee (4) Member of the Audit Committee (5) Member of the Compensation Committee (6) Member of the Nominating & Corporate Governance Committee 95 Executive Officers Arthur Lee (also referred to as Risheng Li) is our Founder and serves as our Chief Executive Officer and a member of the board of directors of SAIHEAT Limited.
Ian holds a master’s degree from Jiangxi University of Finance and Economics. 97 Directors Hao Ge serves as a non-executive director. Mr. Ge was the co-founder of KuaiYouHuYu, a mobile gaming company since April 2018. He also serves as the investment advisor to Zhencheng Capital, a venture capital firm specializing in early-stage technology investments since May 2016.
Ge was the co-founder of KuaiYouHuYu, a mobile gaming company since April 2018. He also serves as the investment advisor to Zhencheng Capital, a venture capital firm specializing in early-stage technology investments since May 2016. Prior to that, he was the CEO of Shanqian Technology from November 2015 to December 2016, a company providing electronic signature management systems.
Employment Agreements We have entered into written employment agreements with our executive officers and certain directors describing their terms of employment. Insurance and Indemnification To the extent permitted under Cayman law, we are empowered to indemnify our directors against any liability they incur by reason of their directorship.
None of our directors has an employment agreement with us that provides for benefits upon termination of service as a director. Insurance and Indemnification To the extent permitted under Cayman law, we are empowered to indemnify our directors against any liability they incur by reason of their directorship.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth the names, ages, and positions of our directors and executive officers as of the date of this Annual Report.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth certain information relating to our directors and executive officers as of the date of this Annual Report. The business address of each of our directors and executive officers is c/o #266A South Bridge Road, #02-01 Singapore (058815).
The terms of each award granted under the plan will be set out in an award agreement. Non-Executive Director Compensation Our board of directors expects to adopt a non-employee director compensation policy in the near future. Members of our board of directors who are not employees will be eligible for awards pursuant to such policy.
The terms of each award granted under the plan will be set out in an award agreement. Eligibility Employees of SAI and its affiliates, members of the Board, consultants and other non-employee service providers of SAI and its affiliates are eligible to receive awards under the SAI Incentive Plan.
Prior to that, he was the CEO of Shanqian Technology from November 2015 to December 2016, a company providing electronic signature management systems. After that, he was the CEO of RenCaiYi, a company providing human resources SaaS management system, from January 2017 to December 2018.
After that, he was the CEO of RenCaiYi, a company providing human resources SaaS management system, from January 2017 to December 2018. During September 2014 to September 2015, he initiated his career at Oracle as a software engineer, where he was involved in developing AIoT cloud service. Mr.
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Ian Chow (also referred to as Ian Zou or Jian Zou) serves as our Chief Financial Officer. He served as a partner of BDO China LLP from March 2015 to August 2021, providing auditing and assurance service for public companies listed on China and the U.S. capital market.
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He currently serves as Chief Financial Officer and Director at Aimei Health Technology Co., Ltd. (Nasdaq: AFJK) since April 2023, while concurrently acting as an Independent Non-Executive Director for E-Home Household Service Holding Ltd (Nasdaq: EJH) since March 2023.
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Prior to that, from October 2010 to October 2012, Ian served as investment director at China Equity Group and was in charge of due diligence, risk control, and portfolio management.
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He has held key governance roles in Nasdaq-listed companies, including Independent Non-Executive Director at Ostin Technology Group Co., Ltd (Nasdaq: OST) since April 2022 and at Meihua International Medical Technologies Co., Ltd. (Nasdaq: MHUA) from February to June 2022. Previously, he was the Chief Financial Officer of Meten EdtechX Education Group Ltd.
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Previously, he worked as the Chief Financial Officer of Shandong Haiwang Chemical Co., Ltd from October 2010 to October 2012, and as the senior manager of Bernstein & Pinchuk LLP from May 2008 to October 2010.
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(Nasdaq: METX) from June 2020 to March 2021 and has served as a Director of TD Holdings, Inc. (Nasdaq: GLG) since April 2021. Mr.
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Ian started his professional career in PwC Accountants as an auditor in 2003, and engaged in auditing, financial due diligence, corporate M&A advisory service in IPOs, private equity transactions and cross-border M&A transactions. He is a member of the American Institute of Certified Public Accountants, the Chinese Institute of Certified Public Accountants, and Certified Financial Analysts.
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Wong holds a Bachelor’s degree in Accountancy from the City University of Hong Kong (1993) and a Master’s degree in Electronic Commerce from the Open University of Hong Kong (2003), complemented by professional affiliations as a fellow member of the ACCA and HKICPA, and a member of the Hong Kong Institute of Certified Internal Auditors.
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He is currently the CFO and vice president of ZhiHuaZhiGuo Group Co. Ltd. Prior to that, Mr. Shi served as the CFO of Suxuantang Pharmaceutical Co., Ltd, a NASDAQ-listed company from March 2017 to March 2020. Previously, he served as CFO and Chief Manager of Guotaijiahe Insurance Co. Ltd from July 2006 to March 2017. Mr.
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Haotian Li serves as our independent director and the chairman of compensation committee. Currently, he is the CAIO and co-founder of Deconvolute AI, Inc. (2024–present), a software/AI company delivering integrated computational chemistry and AI-driven drug discovery solutions for the biotech and pharma industries. Prior to that, he co-founded and served as CTO of Redesign Science Inc.
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Shi was the CFO of Amway China North China Branch from November 1996 to June 2009. Mr. Shi holds an MBA from Victoria University and a bachelor’s degree from Changchun University of Science and Technology. Yusen Chen serves as our independent director and chair of the compensation committee. Mr.
Added
(2019–2024), a biotech firm providing molecular modeling for early-stage drug discovery in collaboration with pharmaceutical partners. Mr. Haotian Li holds a Master of Philosophy in Computational Chemistry from New York University (2015–2019), he earned a BS in Physics from Zhejiang University (2011–2015) along with a visiting scholar stint at Brown University (2013).
Removed
Chen is currently serving as the founder and CEO of Hangzhou Jiao Gei Mao Ba Technology. Previously, he served as the co-founder and CEO of Beijing Chaitin Technology from 2016 to July 2021. In October 2019, Chaitin Technology was fully acquired by Alibaba Cloud Computing Co. Ltd., a subsidiary of the Alibaba Group. Prior to that, Mr.
Added
Tianshi Yang serves as our independent director and the chairman of Nominating & Corporate Governance Committee. Mr. Tianshi Yang has more than 12 years of experience in finance as well as management experience in four Nasdaq listed companies.
Removed
Chen was featured in the Forbes 30 under 30 Asia: Enterprise Technology list in 2017. Mr. Chen was a keynote speaker at the U.S. Black Hat Conference in 2015. He holds a bachelor’s degree from Zhejiang University and was a visiting scholar at Northwestern University.
Added
He has been serving as the CSO of Suncar Technology Group (Nasdaq: SDA) since September, 2023, a company engaged as China’s largest car insurance platform. From June 2021 to September 2023, Mr. Yang has served as the CFO of TD Holdings, Inc. (NASDAQ: GLG), a company engaged in commodity trading business and supply chain service business in China.
Removed
Jinlong Zhu serves as our independent director and chair of the nominating and corporate governance committee. Dr. Zhu is currently serving as a tenured associate professor at Southern University of Science and Technology, where he leads a project of solid-electrolyte battery materials supported by the Shenzhen Science and Technology Program. Dr.
Added
From March 2020 to May 2021, Mr. Yang served as the head of investor relation in Aesthetic Medical International Holdings Group Limited (NASDAQ: AIH), a company that provides aesthetic medical service. From January 2019 to February 2020, Mr. Yang served as the financial director of Meten International Education Group Ltd.
Removed
Zhu was formerly a staff scientist in HPSTAR (Center for High-Pressure Science &Technology Advanced Research) from November 2016 to June 2019. Prior to that, Dr. Zhu has had three years of post-doctorate experience at LANSCE (Los Alamos National Lab) since August 2010. Dr.
Added
(NASDAQ: METX), an English language training service provider. 96 Family Relationships There are no familial relationships among our directors and executive officers. B. Compensation For the year ended December 31, 2024, we and our subsidiaries paid aggregate cash compensation of US$0.34 million to our directors and executive officers as a group.
Removed
Zhu also has two years of post-doctorate experience and one year experience as a research associate at HPSEC (High-Pressure Size Exclusion Chromatography); which is supported by the U.S.
Added
This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
Removed
DOE (United States Department of Energy) and National Nuclear Security Administration at the University of Nevada Las Vegas, where he worked on functional materials, nature clathrates, and battery materials by using large facilities, like neutron source, and synchrotron radiation. He received funding in connection with an ARPA-E project (Advanced Research Projects Agency-Energy — a project supported by the U.S.
Added
We do not pay or set aside any amounts for pension, retirement or other benefits for our officers and directors. 2021 Equity Incentive Plan Our board of directors and shareholders approved the adoption of the SAI Incentive Plan, effective as of April 29, 2022.
Removed
DOE and in which Professor Goodenough is a team member) and as a Nobel Prize winner. Dr. Zhu holds a Ph.D. degree in physics: Condensed Matter Physics from the Institute of Physics CAS. Dr. Zhu holds a bachelor’s degree in engineering and Materials Science from Zhejiang University. Family Relationships There are no familial relationships among our directors and executive officers.
Added
The SAI Incentive Plan will initially be administered by the board of directors of SAI unless and until the board delegates administration of the plan to a committee.
Removed
Audit Committee Our audit committee consists of Yao Shi, Yusen Chen and Jinlong Zhu. Yao Shi is the chairman of our audit committee. Yao Shi satisfies the criteria of an audit committee financial expert as set forth under the applicable rules of the SEC.
Added
Awards The SAI Incentive Plan provides for the grant of various types of awards, including options, (ii) share appreciation rights, (iii) restricted share awards, (iv) restricted share unit awards, and (v) other awards.
Removed
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Yao Shi, Yusen Chen and Jinlong Zhu.
Added
Certain awards under the SAI Incentive Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards.
Added
All awards under the SAI Incentive Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations.
Added
Awards, other than cash awards, generally will be settled in Class A Ordinary Shares, but the Board (or committee thereof) may provide for cash settlement of any award. A brief description of each award type follows. ● Share Options and Share Appreciation Rights (“SARs”).
Added
Share options will provide for the purchase of Class A Ordinary Shares in the future at an exercise price set on the grant date.
Added
U.S. tax-qualified “incentive stock options” (“ISOs”), by contrast to non-qualified share options, may provide tax deferral beyond exercise and favorable capital gains tax treatment to U.S. taxpayers holding the incentive share options if certain holding period and other requirements of the Code are satisfied.
Added
SARs will entitle their holder, upon exercise, to receive from SAIH an amount equal to the appreciation of the Class A Ordinary Shares subject to the award between the grant date and the exercise date.
Added
The exercise price per Class A Ordinary Share subject to each share option or SAR will be set by the Board or its committee, provided that, except with respect to certain substitute options granted in connection with a corporate transaction, (i) no option or SAR may be granted to a U.S. participant with an exercise or strike price per Class A Ordinary Share below fair market value on the date of grant, without compliance with Section 409A of the Code or the participant’s consent, (ii) the exercise or strike price of each option or SAR granted to a participant outside of the U.S. shall comply with applicable law, and (iii) an option or SAR may be granted with an exercise or strike price lower than fair market value if such option or SAR is granted pursuant to an assumption or substitution for an option or share appreciation right granted by another company.
Added
In the case of ISOs granted to certain significant shareholders, such price will not be less than 110% of the fair market value of a Class A Ordinary Share on the date the option is granted (or the date the option is modified, extended or renewed for purposes of Section 424(h) of the Code).
Added
No share option or SAR will be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the applicable award agreement (or five years in the case of ISOs granted to certain significant shareholders). 101 To exercise a share option or SAR, a participant must provide notice of exercise in accordance with the procedures specified in the applicable award agreement or otherwise provided by SAI and pay the exercise price of the share options by any method of payment permitted by the Board.
Added
Except as explicitly provided otherwise in a participant’s award agreement or other written agreement between a participant and SAI, if a participant’s continuous service with SAI or its affiliate is terminated for “cause,” the participant’s options and SARs (whether vested or unvested) will terminate and be forfeited immediately.
Added
In the event of any other termination of service, the participant would have a period following termination of service to exercise his or her vested award (but not later than the expiration date for the award), and any unvested portion would be forfeited without consideration as of the employment termination date. ● Restricted Shares. Our Board may award Restricted shares.
Added
Restricted shares are an award of nontransferable Class A Ordinary Shares that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price.
Added
Unless otherwise determined by the Board, a participant will have voting and other rights as a shareholder of SAI with respect to any Class A Ordinary Shares subject to a restricted share award.
Added
Dividends paid on restricted shares may be subject to the same vesting and forfeiture restrictions as apply to the Class A Ordinary Shares subject to the restricted share award to which they relate.
Added
Any restricted shares subject to performance-based vesting conditions shall provide that any dividends paid on restricted shares will be subject to the same vesting and forfeiture restrictions as apply to the Class A Ordinary Shares subject to the restricted share award to which they relate. ● Restricted Share Units (“RSUs”). Our Board may award RSUs.
Added
RSUs are contractual promises to deliver in the future Class A Ordinary Shares, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the award agreement. RSUs remain forfeitable unless and until specified conditions are met.
Added
Dividend equivalents may be credited in respect of the Class A Ordinary Shares underlying the RSU award, as determined by the Board (or a committee thereof) and contained in the RSU award agreement.
Added
At the sole discretion of the Board or committee, dividend equivalents may be converted into additional Class A Ordinary Shares covered by the RSU award in such manner as determined by the Board or committee.
Added
Any additional Class A Ordinary Shares credited to the RSU award by reason of any dividend equivalents will be subject to all of the same terms and conditions of the underlying RSU award. Dividend equivalents distributed under the Plan will not be counted against the shares available for issuance under the SAIH Incentive Plan. ● Other Awards.
Added
Our Board may award other share, appreciation or cash-based awards under the SAI Incentive Plan, either alone or in addition to the awards described above.
Added
Such other awards may include awards that may vest or may be exercised or cash awards that may vest or become earned and paid contingent on the attainment during a performance period of performance goals or other criteria as the Board (or a committee thereof) may determine.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

13 edited+3 added−11 removed21 unchanged
Biggest changeClass A Ordinary Shares % of Class Class B Ordinary Shares % of Class Voting Power Executive Officers and Directors (1) : Risheng Li (2) — — 9,630,634 100 % 86.6 % Yao Shi — — — — — Yusen Chen — — — — — Jinlong Zhu — — — — — Ian Chow — — — — — Hao Ge — — — — — All directors and executive officers as a group (6 individuals) — — 9,630,634 100 % 86.6 % Five Percent or More Holders: Tao Huang (3) 1,310,542 8.76 % — — 1.2 % * Less than 1%.
Biggest changeClass A Ordinary Shares % of Class Class B Ordinary Shares % of Class Voting Power** Executive Officers and Directors (1) : Risheng Li ( 2) — — 642,043 100 % 85.9 % Hao Ge — — — — — Heung Ming Henry Wong — — — — — Haotian Li — — — — — Tianshi Yang — — — — — All directors and executive officers as a group (6 individuals) — — 642,043 100 % 86.6 % Five Percent or More Holders: Energy Science Artist Holding Limited (2) — — 642,043 100 % 86.6 % Tao Huang (3) 87,369 5.15 % — — 1.2 % * Less than 1%. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all our Class A Ordinary Shares and Class B Ordinary Shares as a single class.
The Sponsor may not transfer, assign or sell the remaining 50% of TradeUP Class B Ordinary Shares until six months after the Closing. 108 Upon the effective date of Business Combination, all TradeUP Class B Ordinary shares were effectively converted into Class A Ordinary Shares, subject to lock-up agreement described below as “TradeUP Lock-Up Agreement” .
The Sponsor may not transfer, assign or sell the remaining 50% of TradeUP Class B Ordinary Shares until six months after the Closing. Upon the effective date of Business Combination, all TradeUP Class B Ordinary shares were effectively converted into Class A Ordinary Shares, subject to lock-up agreement described below as “TradeUP Lock-Up Agreement” .
The foregoing summary of the Indemnity Agreements does not purport to be complete and is subject to and qualified in its entirety by reference to the form of Indemnity Agreement, a copy of which is filed as Exhibit 4.13 of this Report and is incorporated herein by reference. 111 Policies and Procedures for Related Person Transactions Effective upon the closing date, the board of directors of SAI adopted a written related person transaction policy that set forth the following policies and procedures for the review and approval or ratification of related person transactions.
The foregoing summary of the Indemnity Agreements does not purport to be complete and is subject to and qualified in its entirety by reference to the form of Indemnity Agreement, a copy of which is filed as Exhibit 4.13 of this Report and is incorporated herein by reference. 112 Policies and Procedures for Related Person Transactions Effective upon the closing date, the board of directors of SAI adopted a written related person transaction policy that set forth the following policies and procedures for the review and approval or ratification of related person transactions.
Major Shareholders The following table shows the beneficial ownership of the Company’s Ordinary Shares as of the date of this Annual Report by: ● each person known to us who will beneficially own more than 5% of the common shares and Ordinary Shares; ● each of our executive officers and directors; and ● all of the executive officers and directors of as a group. 107 The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security.
Major Shareholders The following table shows the beneficial ownership of the Company’s Ordinary Shares as of the date of this Annual Report by: ● each person known to us who will beneficially own more than 5% of the common shares and Ordinary Shares; ● each of our executive officers and directors; and ● all of the executive officers and directors of as a group. 108 The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security.
Currently, members of TradeUP’s management team who remained with TradeUP (currently SAI) may be paid consulting, management or other fees from us with any and all amounts being fully disclosed to shareholders, to the extent then known.
Currently, members of TradeUP’s management team who remained with TradeUP (currently SAIH) may be paid consulting, management or other fees from us with any and all amounts being fully disclosed to shareholders, to the extent then known.
Dahan Bao — — — Sale of subsidiar y Energy Science Artist Holding Limited — — — Related Person Transactions Policy Following the Business Combination Indemnification Agreements On the Closing Date, the Company entered into indemnity agreements with each of its directors and officers (the “Indemnity Agreements”), undertaking to indemnify them to the fullest extent permitted by law on the terms set forth therein.
Related Person Transactions Policy Following the Business Combination Indemnification Agreements On the Closing Date, the Company entered into indemnity agreements with each of its directors and officers (the “Indemnity Agreements”), undertaking to indemnify them to the fullest extent permitted by law on the terms set forth therein.
As of October 29, 2023, the restrictions on transfers, as specified in the SAI Shareholder Lock-Up Agreement, expired. 110 Other Relationships Except as otherwise disclosed in this Annual Report, no compensation of any kind, including finder’s and consulting fees, were paid by TradeUP to the Sponsor, TradeUP’s directors, officers or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination.
Other Relationships Except as otherwise disclosed in this Annual Report, no compensation of any kind, including finder’s and consulting fees, were paid by TradeUP to the Sponsor, TradeUP’s directors, officers or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination.
This loan was non-interest bearing, unsecured and was due at the earlier of (1) June 30, 2021 or (2) the closing of the TradeUP IPO. The outstanding balance under the loan was repaid at the closing of the TradeUP IPO on May 3, 2021.
This loan was non-interest bearing, unsecured and was due at the earlier of (1) June 30, 2021 or (2) the closing of the TradeUP IPO.
Working Capital Loans In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, or an affiliate of the Sponsor or certain of TradeUP’s directors and officers may, but are not obligated to, lend TradeUP funds as may be required.
The outstanding balance under the loan was repaid at the closing of the TradeUP IPO on May 3, 2021. 110 Working Capital Loans In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, or an affiliate of the Sponsor or certain of TradeUP’s directors and officers may, but are not obligated to, lend TradeUP funds as may be required.
The percentages of shares beneficially owned is computed, respectively, on the bases of 14,960,566 Class A Ordinary Shares and 9,630,634 Class B Ordinary Shares currently outstanding and does not include 2,244,493 Class A Ordinary Shares issuable upon the exercise of the IPO Warrants.
The percentages of shares beneficially owned is computed, respectively, on the bases of 1,110,907 Class A Ordinary Shares and 642,043 Class B Ordinary Shares currently outstanding and does not include 2,244,493 Class A Ordinary Shares issuable upon the exercise of the IPO Warrants.
Under the SAI Support Agreement, the Old SAI shareholders, among other things, agreed to: (1) appear at any meeting of Old SAI shareholders for purposes of determining a quorum; (2) vote their respective Ordinary Shares in favor of the Business Combination Agreement and the transactions contemplated thereby, including the merger; (3) not to transfer their respective TradeUP Class A Ordinary Shares prior to the termination of the SAI Support Agreement; and (4) waive dissenter’s rights under Section 238 of the Companies Act. 109 New Registration Rights Agreement In connection with the Business Combination, concurrently with Closing, Old SAI, the Sponsor and certain Old SAI shareholders entered into the New Registration Rights Agreement.
Under the SAI Support Agreement, the Old SAI shareholders, among other things, agreed to: (1) appear at any meeting of Old SAI shareholders for purposes of determining a quorum; (2) vote their respective Ordinary Shares in favor of the Business Combination Agreement and the transactions contemplated thereby, including the merger; (3) not to transfer their respective TradeUP Class A Ordinary Shares prior to the termination of the SAI Support Agreement; and (4) waive dissenter’s rights under Section 238 of the Companies Act. 111 SAI Shareholder Lock-Up Agreement The SAI Shareholder Lock-Up Agreement contains certain restrictions on transfer with respect to the Class A Ordinary Shares received by SAI shareholders pursuant to the Business Combination Agreement other than SAI shareholders subject to the SAI Affiliate Lock-Up Agreement.
As of April 29, 2023, the restrictions on transfers, as specified in the SAI Affiliate Lock-Up Agreement, expired.
Such restrictions began at Closing and end on the six-month anniversary of Closing. As of October 29, 2023, the restrictions on transfers, as specified in the SAI Shareholder Lock-Up Agreement, expired.
(1) The business address of the directors and executive officers of SAI is #01-05 Pearl’s Hill Terrace Singapore, 168976. (2) Represents shares beneficially owned indirectly by Risheng Li, and owned directly by Energy Science Artist Holding Limited. (3) The address of Tao Huang is No.1 Lanqing Road, Haidian District, Beijing, China, 100097. B.
Our Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. (1) The business address of the directors and executive officers of SAIH is c/o #266A South Bridge Road, #02-01 Singapore (058815). (2) Represents shares beneficially owned indirectly by Risheng Li, and owned directly by Energy Science Artist Holding Limited.
Removed
Pursuant to the New Registration Rights Agreement, among other things, subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, SAI is required, as soon as practicable, but in any event within 30 days after Closing, to file a registration statement to permit the public resale of all the registrable securities held by any party to the New Registration Rights Agreement from time to time and holders of registrable securities under the New Registration Rights Agreement may demand SAI facilitate a registered offering of such securities.
Added
Each Class A Ordinary Share is entitled to one vote per share and each Class B Ordinary Share is entitled to ten votes per share on all matters submitted. Our Class B Ordinary Shares are convertible at any time at the option of the holder thereof into Class A Ordinary Shares on a one-for-one basis.
Removed
The New Registration Rights Agreement also (1) provided the holders of registrable securities with “piggy-back” registration rights, subject to certain requirements and customary conditions and (2) terminated the Registration Rights Agreement.
Added
(3) The address of Tao Huang is c/o No.1 Lanqing Road, Haidian District, Beijing, China, 100097. To our knowledge and based on our review of our shareholders list as of April 21, 2025, 902,036 of our outstanding Class A Ordinary Shares were held by seven record holders in the United States.
Removed
Lock-Up Agreements At Closing, (1) the TradeUP initial shareholders entered into the TradeUP Lock-Up Agreement, (2) the SAI Founder and management of Old SAI, and certain other Old SAI shareholders, entered into the SAI Affiliate Lock-Up Agreement and (3) the other Old SAI shareholders entered into the SAI Shareholder Lock-Up Agreement.
Added
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. 109 B.
Removed
Immediately following the consummation of the Business Combination, approximately 22,564,287 Ordinary Shares (including both Class A and Class B Ordinary Shares), or approximately 83.3% of the outstanding Ordinary Shares, were subject to the lock-up arrangements described below.
Removed
TradeUP Lock-Up Agreement The TradeUP Lock-Up Agreement contains certain restrictions on transfers with respect to any Class A Ordinary Shares held by the TradeUP initial shareholders immediately after Closing.
Removed
Such restrictions began at Closing and end on the first anniversary of Closing, with such Ordinary Shares being subject to earlier release on the date on which the volume weighted average trading price of Class A Ordinary Shares exceeds $14.00 per share (with respect to 50% of such Class A Ordinary Shares) and $17.50 per share (with respect to the remaining 50% of such Class A Ordinary Shares) for any 20 trading days within any 30-trading day period commencing on the date that is 180 days after Closing.
Removed
As of April 29, 2023, the restrictions on transfers, as specified in the TradeUP Lock-Up Agreement, expired. SAI Affiliate Lock-Up Agreement The SAI Affiliate Lock-Up Agreement contains certain restrictions on transfer with respect any Class A Ordinary Shares received pursuant to the Business Combination Agreement.
Removed
Such restrictions began at Closing and end on the first anniversary of the closing, with such Class A Ordinary Shares being subject to earlier release on the date on which the volume weighted average trading price of Class A Ordinary Shares exceeds $14.00 per share (with respect to 50% of such Class A Ordinary Shares) and $17.50 per share (with respect to the remaining 50% of such Class A Ordinary Shares) for any 20 trading days within any 30-trading day period commencing on the date that is 180 days after Closing.
Removed
SAI Shareholder Lock-Up Agreement The SAI Shareholder Lock-Up Agreement contains certain restrictions on transfer with respect to the Class A Ordinary Shares received by SAI shareholders pursuant to the Business Combination Agreement other than SAI shareholders subject to the SAI Affiliate Lock-Up Agreement. Such restrictions began at Closing and end on the six-month anniversary of Closing.
Removed
SAI Related Party Transactions The related party transactions summarized by different natures are as follows: For the year ended December 31, 2021 2022 2023 US$ US$ US$ Settlement of advance to related parties for daily operation Mr. Risheng Li 235 — — Mr. Liedong Wang 415 — — Mr. Dahan Bao 30 — — Repayment from related parties Mr.
Removed
Risheng Li 36 — — Mr. Liedong Wang 14 — — Mr.

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