Abits Group IncABTS财报
Nasdaq · 信息技术 · 金融服务
Universal ABIT Co., Ltd was a computer components manufacturer, based in Taiwan, active since the 1980s. Its core product line were motherboards aimed at the overclocker market. ABIT experienced serious financial problems in 2005. The brand name "ABIT" and other intangible properties, including patents and trademarks, were acquired by Universal Scientific Industrial Co., Ltd. (USI) in May 2006.
What changed in Abits Group Inc's 20-F — 2023 vs 2024
Top changes in Abits Group Inc's 2024 20-F
278 paragraphs added · 98 removed · 75 edited across 4 sections
- Item 3. Legal Proceedings+167 / −73 · 60 edited
- Item 5. Market for Registrant's Common Equity+71 / −9
- Item 4. Mine Safety Disclosures+31 / −11 · 10 edited
- Item 7. Management's Discussion & Analysis+9 / −5 · 5 edited
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
60 edited+107 added−13 removed269 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
60 edited+107 added−13 removed269 unchanged
2023 filing
2024 filing
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.
Such events could have a material adverse effect on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.
Such events could have a material adverse effect on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.
The factors include, but are not limited to: ● continued worldwide growth in the adoption and use of cryptocurrencies as a medium to exchange; ● governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar bitcoin systems; ● changes in consumer demographics and public tastes and preferences; ● the maintenance and development of the open-source software protocol of the network; 9 ● the increased consolidation of contributors to the bitcoin blockchain through mining pools; ● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; ● the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; ● general economic conditions and the regulatory environment relating to cryptocurrencies; and ● negative consumer sentiment and perception of bitcoin specifically and cryptocurrencies generally.
The factors include, but are not limited to: ● continued worldwide growth in the adoption and use of cryptocurrencies as a medium to exchange; ● governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar bitcoin systems; ● changes in consumer demographics and public tastes and preferences; ● the maintenance and development of the open-source software protocol of the network; ● the increased consolidation of contributors to the bitcoin blockchain through mining pools; ● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; ● the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; ● general economic conditions and the regulatory environment relating to cryptocurrencies; and ● negative consumer sentiment and perception of bitcoin specifically and cryptocurrencies generally.
Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from our normal daily operations; ● difficulties in successfully incorporating licensed or acquired technology and rights into our businesses; ● difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; ● difficulties in retaining relationships with customers, employees and suppliers of the acquired business; ● risks of entering markets, including the U.S., in which we have limited or no prior experience; 5 We may not make any investments or acquisitions, or any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits.
Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from our normal daily operations; 7 ● difficulties in successfully incorporating licensed or acquired technology and rights into our businesses; ● difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; ● difficulties in retaining relationships with customers, employees and suppliers of the acquired business; ● risks of entering markets, including the U.S., in which we have limited or no prior experience; We may not make any investments or acquisitions, or any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits.
If we are unable to effectively service our miners, our ability to mine bitcoin will be adversely affected as miners go offline, which would have an adverse effect on our business and the results of our operations. 7 If we cannot maintain our corporate culture as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
If we are unable to effectively service our miners, our ability to mine bitcoin will be adversely affected as miners go offline, which would have an adverse effect on our business and the results of our operations. If we cannot maintain our corporate culture as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
Additionally, the reward for Bitcoin mining will decline over time, with the most recent halving event occurred in May 2020 and next one four years later, which may further contribute to Bitcoin price volatility. Our mining operating costs outpace our mining revenues, which could seriously harm our business or increase our losses.
Additionally, the reward for Bitcoin mining will decline over time, with the most recent halving event occurred in May 2020 and next one four years later, which may further contribute to Bitcoin price volatility. 10 Our mining operating costs outpace our mining revenues, which could seriously harm our business or increase our losses.
As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
As a result, it may be difficult for a shareholder to effect service of process within the United States upon some of these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
A significant disruption in Internet connectivity could disrupt a currency’s network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies and our ability to mine cryptocurrencies. 10 The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain.
A significant disruption in Internet connectivity could disrupt a currency’s network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies and our ability to mine cryptocurrencies. The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain.
Risks Related to Our Ordinary Shares The trading price of our common stock is subject to arbitrary pricing factors that are not necessarily associated with traditional factors that influence stock prices or the value of non-bitcoin assets such as revenue, cash flows, profitability, growth prospects or business activity levels since the value and price, as determined by the investing public, may be influenced by future anticipated adoption or appreciation in value of cryptocurrencies or blockchains generally, factors over which we have little or no influence or control. 21 Other factors which could cause volatility in the market price of our common stock include, but are not limited to: ● actual or anticipated fluctuations in our financial condition and operating results or those of companies perceived to be similar to us; ● actual or anticipated changes in our growth rate relative to our competitors; ● commercial success and market acceptance of blockchain and bitcoin and other cryptocurrencies; ● actions by our competitors, such as new business initiatives, acquisitions and divestitures; ● strategic transactions undertaken by us; ● additions or departures of key personnel; ● prevailing economic conditions; ● disputes concerning our intellectual property or other proprietary rights; ● sales of our common stock by our officers, directors or significant stockholders; ● other actions taken by our stockholders; ● future sales or issuances of equity or debt securities by us; ● business disruptions caused by earthquakes, tornadoes or other natural disasters; ● issuance of new or changed securities analysts’ reports or recommendations regarding us; ● legal proceedings involving our company, our industry or both; ● changes in market valuations of companies similar to ours; ● the prospects of the industry in which we operate; ● speculation or reports by the press or investment community with respect to us or our industry in general; ● the level of short interest in our stock; and ● other risks, uncertainties and factors described in this annual report. 22 In addition, the stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of the issuer.
Risks Related to Our Ordinary Shares The trading price of our ordinary shares is subject to arbitrary pricing factors that are not necessarily associated with traditional factors that influence stock prices or the value of non-bitcoin assets such as revenue, cash flows, profitability, growth prospects or business activity levels since the value and price, as determined by the investing public, may be influenced by future anticipated adoption or appreciation in value of cryptocurrencies or blockchains generally, factors over which we have little or no influence or control. 26 Other factors which could cause volatility in the market price of our ordinary shares include, but are not limited to: ● actual or anticipated fluctuations in our financial condition and operating results or those of companies perceived to be similar to us; ● actual or anticipated changes in our growth rate relative to our competitors; ● commercial success and market acceptance of blockchain and bitcoin and other cryptocurrencies; ● actions by our competitors, such as new business initiatives, acquisitions and divestitures; ● strategic transactions undertaken by us; ● additions or departures of key personnel; ● prevailing economic conditions; ● disputes concerning our intellectual property or other proprietary rights; ● sales of our ordinary shares by our officers, directors or significant stockholders; ● other actions taken by our stockholders; ● future sales or issuances of equity or debt securities by us; ● business disruptions caused by earthquakes, tornadoes or other natural disasters; ● issuance of new or changed securities analysts’ reports or recommendations regarding us; ● legal proceedings involving our company, our industry or both; ● changes in market valuations of companies similar to ours; ● the prospects of the industry in which we operate; ● speculation or reports by the press or investment community with respect to us or our industry in general; ● the level of short interest in our stock; and ● other risks, uncertainties and factors described in this annual report. 27 In addition, the stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of the issuer.
Lower bitcoin prices could result in further tightening of profit margins for professionalized mining operations creating a network effect that may further reduce the price of bitcoin until mining operations with higher operating costs become unprofitable forcing them to reduce mining power or cease mining operations temporarily. 18 If a malicious actor or botnet obtains control of more than 50% of the processing power on a bitcoin network, such actor or botnet could manipulate blockchains to adversely affect us, which would adversely affect an investment in us or our ability to operate.
Lower bitcoin prices could result in further tightening of profit margins for professionalized mining operations creating a network effect that may further reduce the price of bitcoin until mining operations with higher operating costs become unprofitable forcing them to reduce mining power or cease mining operations temporarily. 19 If a malicious actor or botnet obtains control of more than 50% of the processing power on a bitcoin network, such actor or botnet could manipulate blockchains to adversely affect us, which would adversely affect an investment in us or our ability to operate.
Reasons for The Offer and Use of Proceeds Not Applicable for annual reports on Form 20-F. 3D. Risk Factors An investment in our ordinary shares involves a high degree of risk.
Reasons for the Offer and Use of Proceeds Not applicable for annual reports on Form 20-F. 4 3D. Risk Factors An investment in our ordinary shares involves a high degree of risk.
However, under the Investment Company Act a company may be deemed an investment company under section 3(a)(1)(C) thereof if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. 6 If, as a result of our investments and our mining activities, including investments in which we do not have a controlling interest, the investment securities we hold could exceed 40% of our total assets, exclusive of cash items and, accordingly, we could determine that we have become an inadvertent investment company.
However, under the Investment Company Act a company may be deemed an investment company under section 3(a)(1)(C) thereof if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. 8 If, as a result of our investments and our mining activities, including investments in which we do not have a controlling interest, the investment securities we hold could exceed 40% of our total assets, exclusive of cash items and, accordingly, we could determine that we have become an inadvertent investment company.
If a corresponding and proportionate increase in the trading price of bitcoin does not follow these anticipated halving events, the revenue we earn from our mining operations would see a corresponding decrease, which would have a material adverse effect on our business and operations. 16 Our future success will depend in large part upon the value of bitcoin; the value of bitcoin may be subject to pricing risk and has historically been subject to wide swings .
If a corresponding and proportionate increase in the trading price of bitcoin does not follow these anticipated halving events, the revenue we earn from our mining operations would see a corresponding decrease, which would have a material adverse effect on our business and operations. 17 Our future success will depend in large part upon the value of bitcoin; the value of bitcoin may be subject to pricing risk and has historically been subject to wide swings .
If we are unable to receive adequate power supply and are forced to reduce our operations due to the availability or cost of electrical power, our business would experience materially negative impacts. 19 If the award of bitcoin rewards, for us primarily bitcoin for solving blocks and transaction fees are not sufficiently high, we may not have an adequate incentive to continue mining and may cease mining operations, which will likely lead to our failure to achieve profitability.
If we are unable to receive adequate power supply and are forced to reduce our operations due to the availability or cost of electrical power, our business would experience materially negative impacts. 20 If the award of bitcoin rewards, for us primarily bitcoin for solving blocks and transaction fees are not sufficiently high, we may not have an adequate incentive to continue mining and may cease mining operations, which will likely lead to our failure to achieve profitability.
As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 24 We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 29 We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors. 12 Our bitcoins may be subject to loss, theft or restriction on access.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors. 13 Our bitcoins may be subject to loss, theft or restriction on access.
Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our systems, criminal acts and similar events. 20 Any interruptions or delays in our service, whether as a result of third-party errors, our errors, natural disasters or security breaches, whether accidental or willful, could harm our operations and/or reputation.
Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our systems, criminal acts and similar events. 21 Any interruptions or delays in our service, whether as a result of third-party errors, our errors, natural disasters or security breaches, whether accidental or willful, could harm our operations and/or reputation.
However, there is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of bitcoin transactions will be effective, or how long they will take to become effective, which could adversely affect an investment in our securities. 14 The price of cryptocurrencies may be affected by the sale of such cryptocurrencies by other vehicles investing in cryptocurrencies or tracking bitcoin markets.
However, there is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of bitcoin transactions will be effective, or how long they will take to become effective, which could adversely affect an investment in our securities. 15 The price of cryptocurrencies may be affected by the sale of such cryptocurrencies by other vehicles investing in cryptocurrencies or tracking bitcoin markets.
Additionally, laws, regulation or other factors may prevent us from benefitting from the new asset even if there is a safe and practical way to custody and secure the new asset. 17 There is a possibility of bitcoin mining algorithms transitioning to proof of stake validation and other mining related risks, which could make us less competitive and ultimately adversely affect our business and the value of our stock.
Additionally, laws, regulation or other factors may prevent us from benefitting from the new asset even if there is a safe and practical way to custody and secure the new asset. 18 There is a possibility of bitcoin mining algorithms transitioning to proof of stake validation and other mining related risks, which could make us less competitive and ultimately adversely affect our business and the value of our stock.
In July 2022, the Company divested its entire interest in Moxian (Hong Kong) Limited, or Moxian HK, with the result that it no longer has any substantial business operations in the PRC, other than certain administrative functions conducted by a wholly owned indirect subsidiary located in Beijing.
In July 2022, the Company divested its entire interest in Moxian (Hong Kong) Limited, or Moxian HK, with the result that it no longer has any substantial business operations in the PRC, other than certain administrative functions supported by a wholly owned indirect subsidiary located in Beijing.
In June 2022, we were conclusively identified by the SEC as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021, which contained the audit report issued by Centurion ZD CPA & Co.
On June 14, 2022, we were conclusively identified by the SEC as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021, which contained the audit report issued by Centurion ZD CPA & Co.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Item 10.E. Taxation — United States Federal Income Taxation — Passive Foreign Investment Company.” 26
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Item 10.E. Taxation — United States Federal Income Taxation — Passive Foreign Investment Company.” 31
This would have a negative impact on our business and operations. 13 Incorrect or fraudulent bitcoin transactions may be irreversible. Bitcoin transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent bitcoin transactions could adversely affect our investments and assets.
This would have a negative impact on our business and operations. 14 Incorrect or fraudulent bitcoin transactions may be irreversible. Bitcoin transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent bitcoin transactions could adversely affect our investments and assets.
Such events could have a material adverse effect on our ability to pursue our new strategy, which could have a material adverse effect on our business and the value of our ordinary shares. 15 Our reliance primarily on a single model of miner may subject our operations to increased risk of mine failure.
Such events could have a material adverse effect on our ability to pursue our new strategy, which could have a material adverse effect on our business and the value of our ordinary shares. 16 Our reliance primarily on a single model of miner may subject our operations to increased risk of mine failure.
Decreased use and demand for bitcoin may adversely affect its value and result in a reduction in the price of bitcoin and the value of our common stock. 11 The decentralized nature of bitcoin systems may lead to slow or inadequate responses to crises, which may negatively affect our business .
Decreased use and demand for bitcoin may adversely affect its value and result in a reduction in the price of bitcoin and the value of our common stock. 12 The decentralized nature of bitcoin systems may lead to slow or inadequate responses to crises, which may negatively affect our business .
Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate, which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities, including trading on the national exchange or “over-the-counter” markets, may be prohibited under the HFCAA.
Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in mainland China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate, which could result in restriction to our access to the U.S. capital markets, and trading of our securities, including trading on the national exchange or “over-the-counter” markets, may be prohibited under the HFCAA.
The selected consolidated statements of operations data and the selected consolidated balance sheets data have been derived from our audited consolidated financial statements, of which that for the year ended December 31, 2023 and December 31. 2022 are included in this annual report.
The selected consolidated statements of operations data and the selected consolidated balance sheets data have been derived from our audited consolidated financial statements, of which that for the year ended December 31, 2024 and December 31. 2023 are included in this annual report.
If analysts who may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, or if analysts fail to cover us or publish reports about us at all, we could lose (or never gain) visibility in the financial markets, which in turn could cause the stock price of our common stock or trading volume to decline.
If analysts who may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, or if analysts fail to cover us or publish reports about us at all, we could lose (or never gain) visibility in the financial markets, which in turn could cause the stock price of our ordinary shares or trading volume to decline.
Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per share of our common stock. The closing bid price of our common stock fell below $1.00 per share for 30 consecutive trading days, so we were not in compliance with Nasdaq’s rules for listing standards.
Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per common share. The closing bid price of our ordinary shares fell below $1.00 per share for 30 consecutive trading days, so we were not in compliance with Nasdaq’s rules for listing standards.
Broad or active public trading market for our ordinary shares may not develop or be sustained. 23 Volatility in our ordinary shares price may subject us to securities litigation.
Broad or active public trading market for our ordinary shares may not develop or be sustained. 28 Volatility in our ordinary shares price may subject us to securities litigation.
These broad market fluctuations may negatively impact the price or liquidity of our common stock. When the price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer.
These broad market fluctuations may negatively impact the price or liquidity of our ordinary shares. When the price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer.
The trading market for our common stock will be influenced by whether industry or securities analysts publish research and reports about us, our business, our market or our competitors and, if any analysts do publish such reports, what they publish in those reports. We may not obtain or maintain analyst coverage in the future.
The trading market for our ordinary shares will be influenced by whether industry or securities analysts publish research and reports about us, our business, our market or our competitors and, if any analysts do publish such reports, what they publish in those reports. We may not obtain or maintain analyst coverage in the future.
In such event, it could become more difficult to dispose of, or obtain accurate price quotations for our common stock and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further.
In such event, it could become more difficult to dispose of, or obtain accurate price quotations for our ordinary shares and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our ordinary shares to decline further.
We may be unable to comply with the applicable continued listing requirements of the Nasdaq Capital Market, which may adversely impact our access to capital markets and may cause us to default certain of our agreements. Our common stock is currently traded on the Nasdaq Capital Market.
We may be unable to comply with the applicable continued listing requirements of the Nasdaq Capital Market, which may adversely impact our access to capital markets and may cause us to default certain of our agreements. Our ordinary shares is currently traded on the Nasdaq Capital Market.
Although we regained compliance, there can be no assurance we will continue to meet the minimum bid price requirements or any other requirements in the future, in which case our common stock could be delisted.
Although we regained compliance, there can be no assurance we will continue to meet the minimum bid price requirements or any other requirements in the future, in which case our ordinary shares could be delisted.
Notwithstanding the foregoing, in the future, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, or if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations to the PCAOB for inspection or investigation, our investors may be deprived of the benefits of such inspection.
Notwithstanding the foregoing, in the future, if the PCAOB determines that it is unable to inspect or investigate our auditor completely, or if there is any regulatory change or step taken by any regulators that does not permit our auditor to provide audit documentations to the PCAOB for inspection or investigation, our investors would be deprived of the benefits of such inspection.
Accordingly, our shareholders may not have access to certain information they may deem important. 25 If we are classified as a passive foreign investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
Accordingly, our shareholders may not have access to certain information they may deem important. 30 I f we are classified as a passive foreign investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
However, should the PCAOB fails to have complete access in the future, the PCAOB will consider the need to issue a new determination. Our current auditor, Audit Alliance LLP, is based in the Republic of Singapore and has been inspected by the PCAOB on a regular basis.
However, should the PCAOB fails to have complete access in the future, the PCAOB will consider the need to issue a new determination. Our current auditor, Audit Alliance LLP, is based in the Republic of Singapore and gives complete access to the PCAOB on a regular basis.
In the event that our common stock is delisted from Nasdaq and is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the OTC.
In the event that our ordinary shares are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our ordinary shares could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the OTC.
The difficulty that many businesses that provide bitcoin and/or derivatives on other bitcoin-related activities have and may continue to have in finding banks and financial institutions willing to provide them services may be decreasing the usefulness of cryptocurrencies as a payment system and harming public perception of cryptocurrencies, and could decrease their usefulness and harm their public perception in the future.
The difficulty that many businesses that provide bitcoin and/or derivatives on other bitcoin-related activities have and may continue to have in finding banks and financial institutions willing to provide them services may be decreasing the usefulness of cryptocurrencies as a payment system and harming public perception of cryptocurrencies, and could decrease their usefulness and harm their public perception in the future. 11 The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial institutions were to close the accounts of businesses engaging in bitcoin and/or other bitcoin-related activities.
We expect to continue to incur losses for the foreseeable future, and these losses could increase as we continue to work to develop our business. We were previously engaged in the business of mobile payments which we ceased operation in June 2018.
We are not profitable and have incurred losses since our inception. We expect to continue to incur losses for the foreseeable future, and these losses could increase as we continue to work to develop our business. We were previously engaged in the business of mobile payments which we ceased operation in June 2018.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits. As a result, our business and results of operations may be materially and adversely affected.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.
On August 26, 2022, the PCAOB signed a Statement of Protocol (SOP) Agreement with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong to establish a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act.
On August 26, 2022, the PCAOB signed a Statement of Protocol (SOP) Agreement with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong establishing a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong.
ITEM 3. KEY INFORMATION Our Corporate Structure Abits Group Inc, or Abits Group, is not a PRC operating company but a British Virgin Islands holding company (“the Company”) resulting from a merger with its U.S. domiciled parent holding company in August 2021.
ITEM 3. KEY INFORMATION Our Corporate Structure Abits Group Inc, or Abits, is a British Virgin Islands holding company (the “Company”) resulting from a merger with its U.S. domiciled parent holding company in August 2021.
Risks Related to Bitcoin Mining ● Our results of operations are expected to vary with Bitcoin price volatility. ● Our mining operating costs outpace our mining revenues, which could seriously harm our business or increase our losses. ● We have an evolving business model which is subject to various uncertainties. ● Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations. ● The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate. ● Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in bitcoin-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. ● We may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies. ● Acceptance and/or widespread use of bitcoin is uncertain. ● The decentralized nature of bitcoin systems may lead to slow or inadequate responses to crises, which may negatively affect our business. ● Our bitcoins may be subject to loss, theft or restriction on access. ● There is a lack of liquid markets, and possible manipulation of blockchain/bitcoin-based assets. ● Incorrect or fraudulent bitcoin transactions may be irreversible. ● Our reliance primarily on a single model of miner may subject our operations to increased risk of mine failure. ● Our future success will depend in large part upon the value of bitcoin; the value of bitcoin may be subject to pricing risk and has historically been subject to wide swings. ● Cryptocurrencies, including those maintained by or for us, may be exposed to cybersecurity threats and hacks. 3 ● We are subject to risks associated with our need for significant electrical power.
As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all. ● We have a history of operating losses, and we may not be able to achieve or sustain profitability; we have recently shifted our bitcoin mining business, and we may not be successful in this business. ● Our results of operation may fluctuate significantly and may not fully reflect the underlying performance of our business. ● We may acquire other businesses, form joint ventures or acquire other companies or businesses that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense; notwithstanding the foregoing, our growth may depend on our success in uncovering and completing such transactions. ● From time to time, we may evaluate and potentially consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results. 5 Risks Related to Bitcoin Mining ● Our results of operations are expected to vary with Bitcoin price volatility. ● Our mining operating costs outpace our mining revenues, which could seriously harm our business or increase our losses. ● We have an evolving business model which is subject to various uncertainties. ● Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations. ● The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate. ● Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in bitcoin-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. ● We may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies. ● Acceptance and/or widespread use of bitcoin is uncertain. ● The decentralized nature of bitcoin systems may lead to slow or inadequate responses to crises, which may negatively affect our business. ● Our bitcoins may be subject to loss, theft or restriction on access. ● There is a lack of liquid markets, and possible manipulation of blockchain/bitcoin-based assets. ● Incorrect or fraudulent bitcoin transactions may be irreversible. ● Our reliance primarily on a single model of miner may subject our operations to increased risk of mine failure. ● Our future success will depend in large part upon the value of bitcoin; the value of bitcoin may be subject to pricing risk and has historically been subject to wide swings. ● Cryptocurrencies, including those maintained by or for us, may be exposed to cybersecurity threats and hacks. ● We are subject to risks associated with our need for significant electrical power.
Effective June 30, 2022, we appointed Audit Alliance LLP (“Audit Alliance”) as our independent registered public accounting firm for the fiscal year ending December 31, 2022 and accepted the resignation of Centurion, effective on the same date.
Effective June 30, 2022, we appointed Audit Alliance LLP (“Audit Alliance”) as our independent registered public accounting firm for the fiscal year ended December 31, 2022 and accepted the resignation of Centurion, effective on the same date. Audit Alliance was not among the registered public accounting firms listed on the determination list issued by the PCAOB.
To reflect that change, the Company changed its name to Abits Group Inc as it now solely operates in the bitcoin mining industry, with principal operations in the United States through its wholly-owned subsidiary, Abit USA Inc.
To reflect that change, the Company changed its name to Abits Group Inc as it now solely operates in the bitcoin mining industry, with principal operations in the United States through its wholly-owned subsidiary, Abit USA, Inc. 1 As of the date of this report, we have the following wholly-owned subsidiaries: Subsidiary Jurisdiction of incorporation Abit Hong Kong Limited Hong Kong Abit USA, Inc.
All of our directors and officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States.
A majority of our directors and executive officers are nationals or residents of countries other than the United States and all or a substantial portion of such individuals’ assets are located outside the United States. Other than our CEO and director, Mr.
We have a history of operating losses, and we may not be able to achieve or sustain profitability; we have recently begun to conduct our bitcoin mining operations, and we may not be successful in this business. We are not profitable and have incurred losses since our inception.
We may need additional financing and such access may be limited or at unacceptable terms. 6 We have a history of operating losses, and we may not be able to achieve or sustain profitability; we have recently begun to conduct our bitcoin mining operations, and we may not be successful in this business.
Factors that may cause fluctuations in our quarterly financial results include: ● the amount and timing of operating expenses related to our new business operations and infrastructure; ● fluctuations in the price of bitcoin; and ● general economic, industry and market conditions. 4 We may acquire other businesses, form joint ventures or acquire other companies or businesses that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense; notwithstanding the foregoing, our growth may depend on our success in uncovering and completing such transactions.
We may acquire other businesses, form joint ventures or acquire other companies or businesses that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense; notwithstanding the foregoing, our growth may depend on our success in uncovering and completing such transactions.
Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021, which found that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations.
Pursuant to the HFCAA, on December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions, and identified the registered public accounting firms in mainland China and Hong Kong that were subject to such determinations.
Summary Consolidated Statements of Operations: Year ended December 31 2023 2022 2021 Revenue 1,681,533 161,428 219,330 Loss from operations (11,013,871 ) (19,260,227 ) 2,866,140 126,290 Loss before taxation 12,585,250 21,520,114 2,739,850 Summary Consolidated Balance Sheet Data: The following table presents our summary consolidated balance sheet data as of December 31, 2023 and December 31, 2022.
Summary Consolidated Statements of Operations: Year ended December 31 2024 2023 2022 Revenue 6,711,225 1,681,533 161,428 Profit /(Loss) from operations 3,375,406 1,226,065 (19,260,227 ) Loss before taxation (798,293 ) (12,585,250 ) (21,520,114 ) Summary Consolidated Balance Sheet Data: The following table presents our summary consolidated balance sheet data as of December 31, 2024 and December 31, 2023.
If we fail to manage our liquidity and cash flows, it will seriously affect our financial condition and results of operations. We may need additional financing and such access may be limited or at unacceptable terms.
If we fail to manage our liquidity and cash flows, it will seriously affect our financial condition and results of operations.
Our corporate affairs are governed by our memorandum and articles of association and by the Companies Law (2016 Revision) and common law of the British Virgin Islands.
Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and by the BVI Business Companies Act, as revised, and common law of the British Virgin Islands.
December 31 December 31 2023 2022 Cash and cash equivalents 884,199 2,505,286 Digital assets 1,194,157 7,087,747 Property, equipment and vehicles 9,465,567 12,553,408 Other assets 774,345 2,384,976 Total assets 12,318,268 24,531,417 Total liabilities (1,005,608 ) (613,455 ) Stockholders’ equity 11,312,660 23,917,962 2 3B. Capitalization and Indebtedness Not Applicable for annual reports on Form 20-F. 3C.
December 31 December 31 2024 2023 Cash and cash equivalents 1,118,929 884,199 Digital assets 257,753 1,194,157 Property, equipment and vehicles 9,435,908 9,465,567 Other assets 558,707 774,345 Total assets 11,371,297 12,318,268 Total liabilities (990,347 ) (1,005,608 ) Shareholders’ equity 10,380,950 11,312,660 B. Capitalization and Indebtedness Not applicable for annual reports on Form 20-F. C.
Any failure to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation and teamwork and effectively focus on and pursue our corporate objectives.
Any failure to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation and teamwork and effectively focus on and pursue our corporate objectives. 9 Risks related to Bitcoin Mining Our results of operations are expected to vary with Bitcoin price volatility The price of Bitcoin has experienced significant fluctuations over its relatively short existence and may continue to fluctuate significantly in the future.
These exemptions and practices may afford less protection to our shareholders than they would enjoy if we were a U.S. domestic issuer. Selected Financial Data The following table presents the selected consolidated financial information of our Company as of December 31, 2023, December 31, 2022 and December 31, 2021.
These exemptions and practices may afford less protection to our shareholders than they would enjoy if we were a U.S. domestic issuer. Permissions Required from the PRC Authorities We conduct substantially all of our business operations in the United States through our U.S. subsidiaries.
Because of the Company’s past history in operating in China, it could be subject to investigative action by the Chinese authorities but as of the date of this report, the Company has not received any formal notification of such action.
As of the date of this report, the Company has not received any notification or has any knowledge of such action.
The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial institutions were to close the accounts of businesses engaging in bitcoin and/or other bitcoin-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure.
This could occur as a result of compliance risk, cost, government regulation or public pressure.
Removed
Whilst the Company acknowledges that such risks exist at any time, it also believes that repeating them in great depth serves no purpose and can preclude a proper reading of this report. 1 The Holding Foreign Companies Accountable Act Our ordinary shares may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the PCAOB is unable to inspect our auditors for two consecutive years.
Added
As a holding company with no material operations of its own, the Company conducts its operations in the United States through its subsidiaries, Abit USA, Inc. and Abits Inc.
Removed
Pursuant to the HFCAA enacted in December 2020 and related legislation, if the SEC determines that a company has filed an audit report issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC is required to prohibit such company’s securities from being traded on a national securities exchange or in the over the counter trading market in the U.S.
Added
Delaware Abits Inc. Delaware Beijing Bitmatrix Technology Co. Ltd.
Removed
As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all. ● We have a history of operating losses, and we may not be able to achieve or sustain profitability; we have recently shifted our bitcoin mining business, and we may not be successful in this business. ● Our results of operation may fluctuate significantly and may not fully reflect the underlying performance of our business. ● We may acquire other businesses, form joint ventures or acquire other companies or businesses that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense; notwithstanding the foregoing, our growth may depend on our success in uncovering and completing such transactions. ● From time to time, we may evaluate and potentially consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results.
Added
China The Holding Foreign Companies Accountable Act Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act (“HFCAA”), as amended by the Consolidated Appropriations Act, 2023, and related regulations if the PCAOB determines that it cannot inspect or investigate completely our auditor for a period of two consecutive years, and that as a result an exchange may determine to delist our securities.
Removed
If the PRC government determines that the historical contractual arrangements with the former PRC subsidiaries structure did not comply with PRC regulation, or if these regulations change or are interpreted differently in the future, our shares may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former subsidiaries.
Added
As part of a continued regulatory focus in the U.S. on access to audit and other information protected by national law, in June 2019, a bipartisan group of lawmakers introduced bills in the U.S.
Removed
In order to streamline our corporate structure and considering the changing regulatory environment, we had completed the divestment of Moxian HK and its PRC subsidiaries to Jiantao Liu, a resident of China for a cash consideration of HKD 1,000. Accordingly, all contractual arrangements involving the PRC subsidiaries were effectively terminated.
Added
Congress that would require the SEC to maintain a list of issuers for which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. On May 20, 2020, the U.S. Senate passed the HFCAA. The HFCAA was approved by the U.S. House of Representatives on December 2, 2020.
Removed
Although we completed the divestment in July 2022, the PRC government could find any one of our previous agreements non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, and such changes may be retroactively applied to our historical contractual arrangements, we could be subject to severe penalties and require a potential restatement of our financial statements included elsewhere in this annual report.
Added
On December 18, 2020, the HFCAA was signed into law by the U.S. President. 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.
Removed
As a result, our shares may decline in value or become worthless.
Added
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of the disclosure and documentation requirements of the HFCAA. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) and on December 29, 2022, the Consolidated Appropriations Act was signed into law by the U.S.
Removed
There remain substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules which may be relevant to our former PRC subsidiaries’ and our former operations in China, including potential future actions by the PRC government which may retroactively affect the enforceability and legality of our historical operations involving the former PRC subsidiaries.
Added
President, which contained a provision identical to the AHFCAA and amended the HFCAA by requiring 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, thus reducing the time before an issuer’s securities may be prohibited from trading or delisted.
Removed
Although we divested all of the equity in Moxian HK and its PRC subsidiaries in July 2022 and we no longer have substantial operations in China, we may be subject to potential future actions by the PRC government which may retroactively affect the enforceability and legality of our historical operations involving the former PRC subsidiaries.
Added
On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.
Removed
If the PRC government finds such agreements non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, and such changes may be retroactively applied to our historical contractual arrangements, we could be subject to severe penalties.
Added
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
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Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
10 edited+21 added−1 removed32 unchanged
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
10 edited+21 added−1 removed32 unchanged
2023 filing
2024 filing
On November 11, 2021, the Board approved to issue 5,000,000 Preferred Shares to Bridgeforrest (BVI) Inc., a holding company owned by Conglin (Forrest) Deng , the Chief Executive Officer and an Executive Director of the Company, for gross proceeds of $5,000,000. The shares were issued on December 1, 2021.
On November 11, 2021, the Board approved to issue 333,333 Preferred Shares to Bridgeforrest (BVI) Inc., a holding company owned by Conglin (Forrest) Deng , the Chief Executive Officer and an Executive Director of the Company, for gross proceeds of $5,000,000. The shares were issued on December 1, 2021.
However, advances and improvements to the technology are ongoing and may be available in quantities in the market in the near future which may affect our perceived position. 29 Halving Further affecting the industry, and particularly for the bitcoin blockchain, the cryptocurrency reward for solving a block is subject to periodic incremental halving.
However, advances and improvements to the technology are ongoing and may be available in quantities in the market in the near future which may affect our perceived position. 34 Halving Further affecting the industry, and particularly for the bitcoin blockchain, the cryptocurrency reward for solving a block is subject to periodic incremental halving.
Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention. 30 Property, Plant and Equipment Effective July 2022, the Company no longer has any substantial business operations in China.
Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention. 36 Property, Plant and Equipment Effective July 2022, the Company no longer has substantial business operations in China.
The latest equipment in our fleet of miners, the Bitmain S19 XP performs with a maximum hashrate of 100 TH/s per unit and is on the cutting edge of available mining equipment.
The latest equipment in our fleet of miners, the Bitmain S19 XP performs with a maximum hashrate of 64 TH/s per unit and is on the cutting edge of available mining equipment.
On December 28, 2021, in a Special Meeting, the shareholders approved the issue of up to 20 million new ordinary shares of the Company, at a price of $2.50 per share to certain non-US based accredited investors.
On December 28, 2021, in a Special Meeting, the shareholders approved the issue of up to 1.33 million new ordinary shares of the Company, at a price of $37.50 per share to certain non-US based accredited investors.
On October 25, 2021, the Board approved to re-designate 50,000,000 of its authorized but unissued ordinary shares of par value of $0.001 each (the “Ordinary Shares”) as 50,000,000 preferred shares of par value of $0.00101 each (the “Preferred Shares”) and amend its Memorandum and Articles of Association, among other things, to specify the rights attaching to the preferred shares.
On October 25, 2021, the Board approved to re-designate 3,333,333 of its authorized but unissued ordinary shares of par value of $0.015 each (the “Ordinary Shares”) as 3,333,333 preferred shares of par value of $0.01515 each (the “Preferred Shares”) and amend its Memorandum and Articles of Association, among other things, to specify the rights attaching to the preferred shares.
On February 11, 2022, the Company completed this private placement and issued 16,000,000 new shares, raising $40 million, which it will use in bitcoin mining in order to diversify its business operations. Our predecessor company, Moxian, Inc (“Moxian”) was incorporated in the State of Nevada, United States of America, on October 12, 2010.
On February 11, 2022, the Company completed this private placement and issued 1,066,666 new shares, raising $40 million, which it has used in bitcoin mining in order to diversify its business operations. Our predecessor company, Moxian, Inc (“Moxian”) was incorporated in the State of Nevada, United States, on October 12, 2010.
Delaware April 27, 2022 Bitcoin Mining 27 Organization Chart The following diagram illustrates our corporate structure, as of the date of this report: Abits Group Inc 28 Business Overview Bitcoin Mining Operations of bitcoin mining In view of the widespread adoption of blockchain technology and bitcoin worldwide, the Company determined to enter the bitcoin mining industry, which is the production of bitcoin.
Delaware, United States November 22, 2023 Bitcoin Mining 32 Organization Chart The following diagram illustrates our corporate structure, as of the date of this report: Abits Group Inc 33 Business Overview Bitcoin Mining Operations of bitcoin mining In view of the widespread adoption of blockchain technology and bitcoin worldwide, the Company determined to enter the bitcoin mining industry, which is the production of bitcoin.
On October 28, 2021, the Company filed its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated M&A”) with the British Virgin Islands Registrar of Corporate Affairs. The Company is authorized to issue 150,000,000 Ordinary Shares and 50,000,000 Preferred Shares pursuant to the Amended and Restated M&A.
On October 28, 2021, the Company filed its Amended and Restated Memorandum and Articles of Association with the British Virgin Islands Registrar of Corporate Affairs. Under the then effective memorandum and articles, the Company was authorized to issue 10,000,000 Ordinary Shares and 3,333,333 Preferred Shares.
As of December 31, 2023, the subsidiaries of the Company are as follows: Name of Company Jurisdiction of Incorporation Date of Incorporation Principal Activity Abit Hong Kong Limited Hong Kong SAR May 8, 2019 Investment Holding Beijing Bitmatrix Technology Co. Ltd Peoples’ Republic of China December 20, 2019 In-house Support Services Abit USA, Inc.
As of the date of this report, the subsidiaries of the Company are as follows: Name of Company Country of Incorporation Date of Incorporation Principal Activity Abit Hong Kong Limited Hong Kong SAR May 8, 2019 Investment Holding Beijing Bitmatrix Technology Co.
Removed
The bitcoin industry is a highly competitive and evolving industry and new competitors and/or emerging technologies could enter the market and affect our competitiveness in the future. Legal Proceedings We are currently not a party to any material legal or administrative proceedings.
Added
On February 13, 2025, the Board of Directors approved to change the maximum number of shares the Company is authorized to issue from 200,000,000 shares comprising: (i) 150,000,000 ordinary shares of par value US$0.001 each, and (ii) 50,000,000 preferred shares of par value $0.00101 each, to an unlimited number of ordinary shares of no par value each and an unlimited number of preferred shares of no par value each (collectively, the “Changes of Authorized Shares”), and to amend and restate the Company’s memorandum and articles of association, as amended, to reflect the Changes of Authorized Shares (the “Amended and Restated Memorandum and Articles”).
Added
On February 17, 2025, the Amended and Restated Memorandum and Articles became effective upon filing with the Registrar of Corporate Affairs of the British Virgin Islands. On February 13, 2025, the Board of Directors approved to effect a share consolidation (the “Reverse Split”) of the Company’s authorized and issued ordinary shares and preferred shares at the ratio of one-for-fifteen.
Added
The Reverse Split of the ordinary shares was reflected on the NASDAQ Capital Market and in the marketplace at the open of business on March 10, 2025 (the “Effective Date”). Prior to the Effective Date, there were 35,554,677 ordinary shares and 5,000,000 preferred shares outstanding.
Added
As a result of the Reverse Split, 2,370,139 ordinary shares and 333,333 preferred shares are outstanding. The Company redeemed at market value the resulting fractional shares.
Added
Ltd Peoples’ Republic of China December 20, 2019 In-house Support Services Abit USA, Inc Delaware, United States April 26, 2022 Bitcoin Mining Abits Inc.
Added
The bitcoin industry is a highly competitive and evolving industry and new competitors and/or emerging technologies could enter the market and affect our competitiveness in the future. 35 R ecent Developments Hosting Agreements On December 20, 2024, Abit USA entered into a hosting agreement with 4545 S Mendenhall LLC (the “Mendenhall Hosting Agreement”) for the provision of electricity power, network services, facility maintenance and technical support of mining equipment installed at our new mining facility located in Memphis, Tenneessee.
Added
The Mendenhall Hosting Agreement has an initial term of two years and may be terminated after one year by either party with 60 days advance written notice to the other party. Pursuant to the Hosting Agreement, Abit USA would pay an initial deposit of $275,940 to the service provider.
Added
It would pay a hosting fee consisting of energy cost, service reimbursement and a profit share equaling to 25% of the net profit for a hosted period. On March 5, 2025, Abit USA entered into Amendment #1 to Hosting Agreement with 4545 S Mendenhall LLC (the “Amended Hosting Agreement”).
Added
The Amended Hosting Agreement provides for an updated commencement date of the hosting services and an increased power capacity. It amended the initial deposit to $285,600 and the profit share to 33.5% of the net profit, among other things.
Added
Asset Purchase Agreement On March 7, 2025, Abit USA entered into a sales and purchase agreement with Bitmain Technologies Delaware Limited, an unrelated third party (the “Supplier”). Pursuant to the agreement, Abit USA purchased certain HASH super computing servers from the Supplier for an aggregate purchase price of $3,214,800.00 for its cryptocurrency mining operations.
Added
The deployment of these new Antminer S19XP machines is expected to be completed in April 2025, effectively doubling Abit USA’s mining capacity.
Added
Loan Agreement On March 17, 2025, Abit USA entered into a loan agreement (the “Loan Agreement”) with Jizhez Holdings Limited, a Hong Kong company and an unrelated third party (the “Lender”), pursuant to which Abit USA would borrow from the Lender a loan in the original principal amount of $3,000,000.00 (the “Loan”).
Added
Abit USA will use the proceeds from the Loan to acquire certain assets for its bitcoin mining operations pursuant to an asset purchase agreement (referenced below). The Loan bears interest at a simple rate of 12.0% per annum and has a term of twenty-four months from the date of the Loan proceeds are delivered by the Lender.
Added
Abit USA may prepay all or a portion of the Loan at any time. Pursuant to the Loan Agreement, Abit USA is required to repay the Loan in twenty-four equal monthly installments, with each installment payment amount being $155,000.00. The Loan is secured by certain assets of Abit USA, including land, building and other assets located in Duff, Tennessee.
Added
In the event of a default by Abit USA, the remaining unpaid balance of the Loan would be immediately due and payable, and the Lender has the right to take possession of and sell the collateral and exercise any other remedies available under applicable law. The Loan closed on March 17, 2025.
Added
Nasdaq Listing On April 12, 2024, the Company received a notice from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) stating that the bid price of our ordinary shares for the prior 30 consecutive trading days had closed below the minimum $1.00 per share required for continued listing under Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement” or “Listing Rule”).
Added
We had a period of 180 calendar days, or until October 9, 2024, to regain compliance. On October 10, 2024, we received notification that Nasdaq has granted the Company an additional 180 calendar day period, or until April 7, 2025, to regain compliance with the Minimum Bid Price Requirement.
Added
The notification indicated that, in accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we were eligible for the additional grace period because we met the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement and our written notice to Nasdaq of our intentions to cure the deficiency by effecting a reverse stock split, if necessary.
Added
On December 10, 2024, at the Company’s annual meeting of shareholders, shareholder approved a share consolidation of the Company’s authorized and issued ordinary shares at a ratio ranging from any whole number between one-for-six and one-for-fifteen, with the exact ratio within such range to be determined by the Board of Directors in its discretion and an amendment and restatement to the Company’s memorandum and articles of association giving effect to the share consolidation.
Added
On February 13, 2025, the Board of Directors approved to effect a consolidation of the Company’s authorized and issued ordinary shares and preferred shares at the ratio of one-for-fifteen (the “Reverse Split”). The Reverse Split became effective on the Nasdaq Capital Market on March 10, 2025.
Added
All share and per share amounts have been restated for all periods presented to reflect the Reverse Split. On March 24, we received notification from Nasdaq that we had regained compliance with the Listing Rule. Legal Proceedings We are currently not a party to any material legal or administrative proceedings.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
0 edited+71 added−9 removed0 unchanged
2023 filing
2024 filing
Removed
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS Operating review Bitcoin prices began to recover in early January 2023, vindicating the Company’s decision to place a large order for advanced state-of-the-art machines, the Bitmain Antminer S19XP in the third quarter of the previous year.
Added
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS Review of Operations Our mining facility in Duff, Tennessee was completed in late August 2023 at a total cost of $3.34 million which includes the cost of the land.
Removed
The search for a suitable site intensified and in April, the Company bought a piece of land for $1.2 million in Duff, near the city of La Follette in Tennessee. Construction of the new mining center began in May 2023 and was completed by September 2023 at a total cost of $6.5 million.
Added
Comprising an office building, a water reservoir, the mining rigs and ancillary equipment, it occupies a total acreage of approximately 1.86 acres, with its electricity of up to 10 MW from the La Follette Utility Board and its water from Clear-fork Utility District both, under long-term agreements which ensure stability of supply.
Removed
The fiscal year 2023, therefore, only saw three months of operation, beginning in the first days of October with production output increasing month-by-month. However, bearing in mind the relative short period of operations, any direct comparison between the two financial years must be tempered with caution.
Added
During the year, minor improvement works were carried out at the site, including enlarging the water reservoir to improve rainfall capture and related piping works. This was an initiative to reduce electric consumption with hydro power as a substitute in certain tasks, which is not only cheaper but more environmentally friendly with reduced noise levels.
Removed
There was a total output of 43.93 bitcoins for the 2023 fiscal year, registering a revenue of approximately $1.68 million for the year. Direct cost of revenue comprising depreciation and electricity costs totaled $0.89 million while other operating overheads, primarily the remuneration of key site executives amounted to $0.17 million resulting in a profit of approximately $0.62 million.
Added
Our mining equipment comprised mainly a fleet of the highly regarded Bitmain Antminer S19XP (1,370 units) and enabled us to produce a hash rate of 500 pH/sec by the first quarter of 2025. Additions to the year included 190 units of Antminer S19XP and 315 units of Antminer T21 at a total cost of $1.65 million.
Removed
However, this profit was offset by the write-off of the remaining equipment imported from China of $7.37 million, as the performance of these machines was unexpectedly poor given its power consumption.
Added
We operate mostly at off-peak hours with the support of three technicians working on shifts and a site manager. Our contracted electricity is at about $0.04 per KWH and our water at about $0.07 per gallon. These rates were generally maintained throughout the year.
Removed
Other administrative and general overheads topped approximately $1.47 million which was comparable with $1.67 million of the 2022 fiscal year, bringing the loss before taxation of $12.59 million, an improvement of about 42%.
Added
During the year, we also acquired a new piece of land in Wisconsin of about $687,000 but this project is stalled as of this time of writing because of rezoning approvals. With the Duff operation now running smoothly and operating at its optimum level, we began to evaluate other suitable sites to upscale our operations.
Removed
Financial review Cash and cash equivalents dwindled to approximately $0.88 million and the Company had to resort to a sale of 32.82 bitcoins to supplement its operating cash. Digital assets fell to $1.2 million as a result of this sale, with a mix of digital assets as some suppliers accepted payment in USDC and USDT.
Added
In March 2025, we signed a Hosting Agreement with a local Memphis utility board with a power supply of an initial 12 MW, expandable to 22 MW. This project should come on stream in the second quarter of 2025 and should make a significant contribution to our earnings.
Removed
Prospects The halving of rewards in April meant that the immediate prospects of all miners look dim. Much will depend on bitcoin prices as previous halvings saw a substantial rise in bitcoin prices in the period after the significant halving event.
Added
Financial Review 2024 represents the first full-year operations for the Company, a significant milestone as the Duff site only operated in the last quarter of 2023. Figures for the two months in the following review are not therefore strictly comparable.
Removed
In January 2024, the Securities and Exchange Commission approved the listing and trading of spot bitcoin exchange-traded product shares on U.S. stock exchanges and this has brought in a influx of funds from institutional investors, a favorable factor. Nonetheless, the prospects of continued profitability for bitcoin miners appear uncertain.
Added
Revenue rose to $6.71 million, against $1.68 million in 2023, suggesting a 300% increase but in reality it only indicates that our operations went smoothly throughout the year. This income includes a maiden contribution of $140,705 from hosting activities as we seek to maximize the capacity of our electricity supply from the local utility board.
Added
Mining output comprises 100.55 bitcoins (“BTC”) against 43.93 BTC in the previous year and the revenue is further buoyed by a strong performance of the BTC price during the year.
Added
BTC prices rose from about the $40,000 level per coin to close the year at about $90,000 and there was a period from about April to October when prices were sustained at the $60,000 range. Cost of revenue was $3.34 million, of which electricity was the main component with water and site manpower costs comprising the balance.
Added
We operate mostly at off peak hours and also use hydro-power wherever feasible such as in the cooling of the machines.
Added
To that end, we dug a deeper well during the year to increase our water reservoir for higher storage during rainfall periods. 37 Profit from operations, excluding amortization of mining equipment and depreciation of the the site property, registered at $3.38 million (2023: $1.23 million) reflecting a gross margin of 50.3%, which we consider to be quite commendable.
Added
General and administrative overheads increased by 41.93% to $2.09 million because of the impact of a full year’s costs and we also we engaged additional resources to search for other sites. Other major items include professional fees of $0.37 million and finance expenses of $31,729 but generally, we maintain all fixed costs as low as practicable.
Added
Amortization of equipment was $2.59 million (2023: $0.44 million) reflecting the higher usage in 2024 whereas the depreciation of our property was $2.63 million (2023: $ 4.97 million). We began the year with an inventory of 16.41 bitcoins and produced 100.55 bitcoins during the year.
Added
The halving of miner rewards in late April saw a drop of over 40% in our output from May onwards, which is inline with expectations.
Added
Our long-term strategy is to build a stockpile of bitcoins over time but as and when required, we may convert to other digital assets such as USDT and USDC for payments to industry suppliers although most other enterprises still prefer USD. We ended the year with $1.1 million (2023:$ 0.88 million) in cash reserves but depleted our treasury of bitcoins.
Added
Digital assets, including USDT and USDC, had only a balance of $257,753 at December 31, 2024 (2023: $1,194,157). Other major assets in the Balance Sheet are generally comparable: Property, plant and equipment ($9.44 million) against $9.47 million in 2023 and other payable and accruals ($0.99 million) against $ 1.01 million in 2023.
Added
In March 2025, we incurred debt for the first time in our $3 million from an unrelated third party which carries simple interest at 12% per annul and repayable in equal monthly repayments over a period of two years. This loan was to fund our acquisition of 2,850 units of Antminer S19XP for the new project in Memphis.
Added
Prospects We see 2025 as a difficult year with the reverberations from the US tariffs yet to work their way into the world markets. With our Memphis project coming on stream in the second quarter, we remain hopeful that the additional earnings will have a significant impact on our bottom line. I TEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6A.
Added
DIRECTORS AND SENIOR MANAGEMENT Our directors and executive officers are as follows; Name Age Position Conglin Deng 41 Chief Executive Officer and Director Wanhong Tan 71 Chief Financial Officer Khuat Leok Choong, Lionel 63 Independent Director and Audit Chair(1)(2)(3) Tao Xu 38 Independent Director (1)(2)(3) Chuan Zhan 55 Independent Director (1)(2)(3) Yanyan Sun 38 Executive Director (1) Member of Audit Committee (2) Member of Compensation Committee (3) Member of the Corporate Governance and Nominating Committee Below is a summary of the experience of each of our directors and executive officers.
Added
Mr. Conglin Deng was appointed Chief Executive Officer of the Company effective September 20, 2021 and has served as a director of the Company since August 9, 2021. Mr. Deng has been the sole director of the Company’s U.S. subsidiaries, Abit USA, Inc. and Abits Inc, since their formations in 2022 and 2023, respectively.
Added
He has previously served as the General Manager of Beijing Jiuteng Investment Limited since 2016, where he was responsible for managing its blockchain and bitcoin mining related investments. Prior to this engagement as the CEO of the Company, he was a co-founder of a company involved in the operation of online games and games publishing. Mr.
Added
Deng studied at the Beijing Foreign Studies University and graduated in 2007 with a major in English. Mr. Wanhong Tan has served as our Chief Financial Officer since July 25, 2016. Mr. Tan trained with Grant Thornton in Liverpool, UK and was admitted as an Associate of the Institute of Chartered Accountants (England and Wales) in 1980.
Added
He started his career with KPMG Kuala Lumpur in 1981 and in July that year, was promoted to be the Resident Manager of the Penang Office. In 1983, Mr. Tan joined a listed client as the Group Financial Controller before leaving for Sime Darby, Malaysia’s largest Asian-based conglomerate in 1986 as the Group Chief Accountant.
Added
He had a successful career with Sime Darby, holding various senior positions over a span of 18 years but left in 2004 following a reorganization of the group. In 2007, Mr. Tan joined Hong Leong Asia, Singapore on a specific assignment in China which he completed in 2009.
Added
He then took the post of Head of Investor Relations with 361 Degrees International, a Mainland sportswear group listed on the Stock Exchange of Hong Kong. where he stayed for a further six years. 38 Mr.
Added
Lionel Choong Khuat Leok, was appointed to the Board of the predecessor company on May 11, 2018 and reappointed as a director of the company as one of its first directors on August 9, 2021. He has over 33 years of working experience in accounting, auditing, internal control, corporate finance and corporate governance.
Added
He started his working career with BDO Binder Hamlyn (“BDO”) in London in 1984 where he was later promoted as the supervisor and manager for the banking and financial services team which managed various projects in structured finance as well as consultation projects for BDO’s client’s initial public offerings. During his term with BDO, Mr.
Added
Choong gained the Institute of Chartered Accountants in England and Wales (ICAEW) Certification as a certified accountant. Mr. Choong is the Chief Financial Officer and board member of Logiq Inc., (OTCQX: LGIQ) since July 17, 2015. Mr. Choong was the Vice Chairman, Audit Committee Chair and an independent non-executive director of Emerson Radio Corp. Inc.
Added
(NYSE: MSN) from November 2013 to June 2017. Between April 2009 and June 2015, he was the acting Chief Financial Officer of Global Regency Ltd., 2015 and remains as its consultant. Mr.
Added
Choong is a director and consultant for Willsing Company Ltd., a position he has held since August 2004 and Board Advisor to Really Sports Co., Ltd., a position he has held since June 2013. Mr. Choong has a wide range of experience in a variety of senior financial positions with companies in China, Hong Kong SAR, and London, UK.
Added
His experience encompasses building businesses, restructuring insolvency, corporate finance, and initial public offerings in a number of vertical markets, including branded apparel, consumer and lifestyle, consumer products, pharmaceuticals, and logistics. From June 2008 to May 2011, Mr. Choong was acting Chief Financial Officer of Sinobiomed, Inc. (predecessor company of Logiq, Inc.). Mr.
Added
Choong is a fellow member of the Institute of Chartered Accountants in England and Wales and holds a corporate finance diploma from this Institute. He is also a CPA and practicing member of the Hong Kong Institute of Certified Public Accountants and a member of the Hong Kong Securities Institute. Mr.
Added
Choong holds a Bachelor of Arts in Accountancy from London Guildhall University, UK, and a Master of Business Administration from the Hong Kong University of Science and Technology and the Kellogg School of Management at US Northwestern University. Based on Mr.
Added
Choong’s professional work experience, previous directorships, and education, the Board believes that he is qualified to serve as an independent non-executive director and Audit Committee Chair of the Company. Mr. Tao Xu was appointed to the Board on October 11, 2021. He graduated from Shandong Lin Yi College in 2008 with a Bachelor’s degree in electrical and mechanical engineering.
Added
From March 2018 to December 2019, he had served as the Operations Director of Beijing Qinlin Interactive Limited, a company engaged in the promotion and distribution of online games. Since January 2020, Mr. Xu has been the General Manager of Beijing Jiu Shi Jiu Technology Services Co.
Added
Ltd., a provider of bitcoin mining operations and technical services, including the operation, maintenance and trading of bitcoin mining machines. In that role, he is responsible for the company’s bitcoin mining operations and overall business development. Mr. Chuan Zhan was appointed to the Board on November 30, 2021.
Added
He graduated from Changchun Institute of Technology with a Bachelor’s degree in Water Supply and Drainage, followed by a Research Fellowship and a Master’s Degree in Economics from the Hohai University in Nanjing, China in 1998. Mr.
Added
Zhan is a well-known investor in China, having successfully invested in a number of start-ups and public companies in the sectors of new technologies and renewable energies. Since 2014, he has been the Investment Director at Shenzhen Guojin Investment Co. Ltd and the Founding Member of IFC Capital Limited, a private equity firm.
Added
He was also previously a Visiting Professor of Economics at Nanjing University in China. Ms. Yanyan Sun has served as a director since December 10, 2024. Ms. Sun has served as Assistant to the CEO in addition to her roles at the Company’s wholly-owned subsidiary responsible for personnel and administration aspects of the Company’s operations since March 2021. Ms.
Added
Sun took the primary role in the successful roll out of the Company’s human resources management system. From July 2016 to February 2021, Ms. Sun was a human resources specialist at Beijing Muyou Interactive Technology Co., Ltd where she was responsible for the recruitment, new employee onboard training and other employment related matters. From October 2014 to July 2016, Ms.
Added
Sun was a human resources staff member at Huizhong Fortune focused on the development of HR management systems for recruitment, training, performance review, leave and other employment matters. From December 2007 to September 2014, Ms. Sun was a retail banking associate with the Bank of Beijing. Ms.
Added
Sun received her Bachelor of Law degree from Beijing Technology and Business University in 2009. Ms. Sun was elected as a director because of her in-depth knowledge of our organization and extensive experience in corporate human resources management. 39 6B.
Added
COMPENSATION The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered to us for the years ended December 31, 2024 and December 31, 2023.
Added
Name and Principal Position Fiscal Year Salary ($) Fees ($) Total ($) Conglin Deng 2024 120,000 - 120,000 Chief Executive Officer (1) 2023 120,000 120,000 Wanhong Tan 2024 120,000 - 120,000 Chief Financial Officer 2023 120,000 - 120,000 Khuat Leok Choong, Lionel 2024 9,000 9,000 Independent Director and Audit Committee Chair 2023 9,000 9,000 Tao Xu 2024 5,000 5,000 Independent Director 2023 5,000 5,000 Chuan Zhan 2024 5.000 5,000 Independent Director 2023 5,000 5,000 Yanyan sun 2024 1,794 1,794 Executive Director (1) Conglin Deng was appointed as our Chief Executive Officer, effective on September 21, 2021.
Added
Employment Agreement with Mr. Conglin Deng Mr. Deng has an Employment Agreement with the Company as the Chief Executive Officer for a term of three years, commencing from September 20, 2021. He is entitled to an annual base salary of $120,000 and an annual bonus determined at the sole discretion of the Board of Directors. In addition, Mr.
Added
Deng is awarded 600,000 restricted stock units (“RSUs”) to purchase an equal number of ordinary shares of the Company, subject to the Company’s Omnibus Equity Incentive Plan. The RSUs will vest in equal installments over thirty-six (36) months of the Employment Agreement. Employment Agreement with Mr. Wanhong Tan Mr.
Added
Tan has an Employment Agreement with the Company as the Chief Financial Officer for a term of three years, commencing from January 1, 2022. He is entitled to an annual base salary of $120,000 and an annual bonus determined at the sole discretion of the Board of Directors. In addition, Mr.
Added
Tan is awarded 180,000 restricted stock units (“RSUs”) to purchase an equal number of ordinary shares of the Company, subject to the Company’s Omnibus Equity Incentive Plan. The RSUs will vest in equal installments over thirty-six (36) months of the Employment Agreement. 40 6C.
Added
BOARD COMMITTEES Our Board of Directors has established standing committees in connection with the discharge of its responsibilities. These committees include an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our Board of Directors has adopted written charters for each of these committees. All our three independent directors are members of the board committees.
Added
Our Board of Directors may establish other committees as it deems necessary or appropriate from time to time. Audit Committee Khuat Leok Choong, Lionel, Tao Xu and Chuan Zhang currently serve on the Audit Committee, which is chaired by Khuat Leok Choong, Lionel.
Added
The Audit Committee will be responsible for, among other matters: ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; ● discussing with our independent registered public accounting firm the independence of its members from its management; ● reviewing with our independent registered public accounting firm the scope and results of their audit; ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; ● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; ● coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures; ● establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and ● reviewing and approving related-party transactions.
Added
Our Board of Directors has affirmatively determined that each of the members of the Audit Committee meets the definition of “independent director” for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and NASDAQ rules.
Added
In addition, our Board of Directors has determined that Lionel Choong qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. 41 Compensation Committee Tao Xu, Chuan Zhan and Khuat Leok Choong, Lionel currently serve on the Compensation Committee, which is chaired by Tao Xu.
Added
The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the board of directors to approve the compensation of our CEO and other executive officers and directors; ● reviewing key employee compensation goals, policies, plans and programs; ● administering incentive and equity-based compensation; ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and ● appointing and overseeing any compensation consultants or advisors.
Added
Corporate Governance and Nominating Committee Chuan Zhan, Tao Xu and Khuat Leok Choong, Lionel; currently serve on the Corporate Governance and Nominating Committee, which is chaired by Chuan Zhan.
Added
The Corporate Governance and Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management.
Added
Board of Directors All directors hold office until the next annual meeting of shareholders or until their successors have been duly elected and qualified. Directors are elected at the annual meetings to serve for a one-year term. Executive Officers are elected by, and serve at the discretion of, the Board of Directors.
Added
As a smaller reporting company under the NASDAQ rules, we are only required to maintain a board of directors comprised of at least 50% independent directors, and an audit committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange Act of 1934.
Added
We have complied with these requirements in all aspects. 42 Director Independence The Board of Directors has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the Board of Directors determined that each of Khuat Leok Choong, Lionel, Tao Xu and Chuan Zhan are independent within the meaning of the NASDAQ rules.
Added
In making this determination, our Board of Directors considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our Board of Directors deemed relevant in determining their independence.
Added
As required under applicable NASDAQ rules, we anticipate that our independent directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive session without the presence of non-independent directors and management.
Added
Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.
Added
Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Added
Board Oversight The Board of Directors will oversee a company-wide approach to risk management. Our Board of Directors will determine the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks.
Added
While our Board of Directors will have ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas. Specifically, our Compensation Committee will be responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers.
Added
Our Audit Committee will oversee management of enterprise risks and financial risks, as well as potential conflicts of interests. Our Board of Directors will be responsible for overseeing the management of risks associated with the independence of our Board of Directors.
Added
Code of Business Conduct and Ethics On November 14, 2023, in connection with the Company’s name change, our Board of Directors adopted a Code of Business Conduct and Ethics of Abits Group Inc that applies to our directors, officers and employees.
Added
We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to any of our executive officers. 43 6D.
Added
EMPLOYEES As of the date of this Report, the Company has a total of 11 full time employees, of which 4 are involved in Finance and Administration and the rest in the bit coin mining business.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
5 edited+4 added−0 removed2 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
5 edited+4 added−0 removed2 unchanged
2023 filing
2024 filing
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS The following table sets forth information with respect to beneficial ownership of our ordinary shares as of March 31, 2024 by: ● Each person who is known by us to beneficially own more than 5% of our outstanding ordinary shares; ● Each of our director, director nominees and named executive officers; and ● All directors and named executive officers as a group.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS The following table sets forth information with respect to beneficial ownership of our ordinary shares as of March 31, 2025 by: ● Each person who is known by us to beneficially own more than 5% of our outstanding ordinary shares; ● Each of our director, director nominees and named executive officers; and ● All directors and named executive officers as a group.
For purposes of the table below, we deem shares subject to options, warrants or other exercisable or convertible securities that are exercisable or convertible currently or within 60 days of March 31, 2024, to be outstanding and to be beneficially owned by the person holding the options, warrants or other currently exercisable or convertible securities for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
For purposes of the table below, we deem shares subject to options, warrants or other exercisable or convertible securities that are exercisable or convertible currently or within 60 days of March 31, 2025 , to be outstanding and to be beneficially owned by the person holding the options, warrants or other currently exercisable or convertible securities for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
(2) Mr. Deng is the sole shareholder of Bridgeforrest (BVI) Inc, which holds 5,000,000 preferred shares of the Company. Each preferred share carries six ordinary votes at meetings of shareholders and as a result, Mr. Deng owns has approximately 45.7% of the outstanding voting power. His address is Unit 17-1008, Sanlitun Service Apartments, Chaoyang District, Beijing, China.
Bridgeforrest (BVI) Inc. also holds 333,333 preferred shares of the Company. Each preferred share carries six votes at meetings of shareholders and as a result, Mr. Deng owns approximately 55.3% of the total outstanding voting power of all shares of the Company. His address is Unit 17-1008, Sanlitun Service Apartments, Chaoyang District, Beijing, China. (3) Ms.
Percentage of Number of Shares Ordinary Shares Beneficially Beneficially Percentage of Name of Beneficial Owner Owned Owned (1) Voting Power Directors and Executive Officers: Conglin Deng, CEO and Director (2) - - 45.7 % Wanhong Tan, CFO - - - Khuat Leok Choong, Lionel, Director - - - Tai Xu, Director - - - Chuan Zhan, Director - - - Panpan Wang, Director * * All directors and executive officers as a group (six individuals) * 45.7 % 5% Beneficial Owners: Danqing Sun (3) 1,852,000 5.2 % 2.8 % (1) The percentage of shares beneficially owned is based on 35,554,677 ordinary shares outstanding as of March 31, 2024.
Number of Ordinary Shares Percentage of Ordinary Shares Percentage Beneficially Beneficially of Voting Name of Beneficial Owner Owned Owned (1) Power Directors and Executive Officers: Conglin Deng, CEO and Director (2) 418,740 17.7 % 55.3 % Wanhong Tan, CFO - - - Khuat Leok Choong, Lionel, Director 2,400 * * Tai Xu, Director - - - Chuan Zhan, Director - - - Yanyan Sun, Director (3) 2,753 * * All directors and executive officers as a group (six individuals) 423,893 17.9 % 55.5 % 5% Shareholder: Futu Trustee Limited (4) 373,333 15.8 % 8.5 % Danqing Sun (5) 121,333 5.1 % 2.8 % Yunxia Li (6) 120,000 5.1 % 2.7 % Bridgeforrest (BVI) Inc (7) 8,866 0.4 % 46.0 % * Less than 1%.
(3) Address is 16 Xinjian Road, Xinhe Village, Wenling City, Zhejiang Province, China. 37 Related Party Transactions Interests of Experts and Counsel Not applicable for annual reports on Form 20-F.
(6) Address is B5-11B, Hujialou Jiedao, Shengshiyipin, Chaoyang District, Beijing, China. (7) Address is Floor 4, Banco Popular Building, Road Town, Tortola VG1110, British Virgin Islands . 44 Related Party Transactions Interests of Experts and Counsel Not applicable for annual reports on Form 20-F.
Added
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares (given retroactive effect of the reverse stock split effected on March 10, 2025).
Added
The percentage of ordinary shares beneficially owned and the percentage of voting power are based on 2,370,139 ordinary shares outstanding and 333,333 preferred shares outstanding as of March 31, 2025 . Each common share is entitled to one vote and each preferred share is entitled to six votes at meetings of shareholders or on any resolutions of shareholders. (2) Mr.
Added
Conglin Deng may be deemed to beneficially own 418,740 ordinary shares , consisting of 36,541 shares directly owned by Mr. Deng, 373,333 shares owned by a trust which Mr. Deng may be deemed to beneficially own, and 8,866 shares owned through Bridgeforrest (BVI) Inc, of which Mr. Deng is the sole shareholder.
Added
Yanyan Sun acquired the ordinary shares through open market transactions. Ms. Sun’s address is Room 602, Unit 2, Building 10, Second District, FaTou Xili, Chaoyang District, Beijing. (4) Address is 34/F, United Centre, No. 95 Queensway, Admiralty, Hong Kong. (5) Address is 16 Xinjian Road, Xinhe Village, Wenling City, Zhejiang Province, China.