A. Operating Results You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under “Item 3. Key Information — D. Risk Factors” and elsewhere in this annual report. Recent Developments Recent events impacting our business are as follows: 2025 Strategic Acquisition of the 101 MW Site and Gas-fired Power Project in Alberta On February 3, 2025, we signed the agreement for the acquisition of a fully licensed and permitted 101 MW site and gas-fired power project situated on 19 acres of land near Fox Creek, Alberta in an all-cash transaction for approximately $21.7 million. The site has potential to scale to 1 GW of power, reflecting Alberta’s abundant energy resources, supportive regulatory posture and pro-business environment. The 101 MW gas-fired power project includes all permits and licenses required to construct an on-site natural gas power plant, as well as approval for a 99 MW grid interconnection with Alberta Electric System Operator (“AESO”). We will develop and construct the power plant in partnership with a leading Engineering, Procurement and Construction (“EPC”) company and is expected to be energized by the fourth quarter of 2026. 2025 Share Repurchase Program On February 28, 2025, the board of directors of the Company has approved a new share repurchase program to repurchase up to additional US$20.0 million worth of its Class A ordinary shares, effective from February 28, 2025 through February 28, 2026. As of the date of this annual report, we have repurchased 1,056,500 Class A ordinary shares for approximately US$12.0 million under the share repurchase program. 2025 At Market Issuance On January 3, 2025, we entered into an At Market Issuance Sales Agreement (the “2025 At Market Issuance Sales Agreement”; the program under the 2025 At Market Issuance Sales Agreement, the “2025 ATM Program”) with Barclays Capital Inc., Cantor Fitzgerald & Co., A.G.P./Alliance Global Partners, The Benchmark Company, LLC, B. Riley Securities, Inc., BTIG, LLC, Keefe, Bruyette & Woods, Inc., Needham & Company, LLC, Northland Securities, Inc., Rosenblatt Securities Inc., Roth Capital Partners, LLC and StockBlock Securities LLC as sales agents (collectively, the “Sales Agents” for the purposes of this paragraph), pursuant to which we may offer and sell our Class A ordinary shares from time to time through or to the Sales Agents, as agent or principal. It is not possible to predict the actual number of Class A ordinary shares, if any, we will sell under such agreement, or the actual gross proceeds resulting from those sales. The timing and extent of the use of the 2025 ATM Program will be at our discretion. As of the date of this annual report, the 2025 ATM Program has not become effective. The foregoing descriptions of the 2025 At Market Issuance Sales Agreement do not purport to be complete and are qualified in their entirety by the full text of such agreements, which are incorporated herein by reference to Exhibit 4.50 to this annual report. Loan Agreement In April 2025, we entered into a loan agreement with Matrix Finance and Technology Holding Company for a financing facility of up to US$200 million. Loans drawn under the facility bear a variable interest rate equal to 9.0% plus a market-based reference rate. Each drawdown is repayable in fixed monthly installments over a 24-month term and is secured by a pledge of SEALMINER, maintained based on a loan-to-value ratio. As of April 21, 2025, we drew down US$43 million under the facility. 77 Table of Contents Private Placement of 5.25% Convertible Senior Notes due 2029 On November 26, 2024, we issued US$400,000,000 aggregate principal amount of 5.25% convertible senior notes due 2029 (“5.25% Convertible Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), including US$40,000,000 aggregate principal amount of 5.25% Convertible Notes pursuant to the exercise in full by the initial purchasers in that private placement of their option to purchase additional 5.25% Convertible Notes. In connection with the pricing of the 5.25% Convertible Notes, we entered into a privately negotiated zero-strike call option transaction with one of the initial purchasers or its affiliate (the “option counterparty”). Pursuant to the zero-strike call option transaction, we paid a premium equal to approximately US$160.0 million for the right to receive, without further payment, approximately 14.3 million Class A ordinary shares (subject to customary adjustment), with delivery thereof by the option counterparty at expiry, subject to early settlement of the zero-strike call option transaction in whole or in part at the option counterparty’s discretion. Acquisition of FreeChain Business On September 13, 2024, we completed the acquisition (the “FreeChain Acquisition”) of all the issued and outstanding shares of FreeChain Inc., an exempted company with limited liability incorporated under the laws of Cayman Islands (“FreeChain”) from certain individuals and the individuals’ holding companies (collectively, the “FreeChain Sellers”). Pursuant to the agreement, we agreed to acquire 100% shares of FreeChain in exchange for 20 million Class A ordinary shares. Bitdeer Shares issued to certain FreeChain Sellers will vest in equal instalments over a period of five or seven years, subject to the terms and conditions therein. Certain FreeChain Sellers also agreed not to transfer 50% of the issued Bitdeer Shares for a period of six months and the remaining 50% of the issued Bitdeer Shares for a period of 12 months, each following the closing. 2024 Share Repurchase Program On September 6, 2024, our board of directors approved a share repurchase program under which we may repurchase up to US$10.0 million worth of our Class A ordinary shares, effective from September 9, 2024 through September 8, 2025. As of February 27, 2025, we have fully utilized the US$10.0 million share repurchase program approved in September 2024. Offering of 8.50% Convertible Senior Notes due 2029 On August 20, 2024, we issued US$172,500,000 aggregate principal amount of 8.50% convertible senior notes due 2029 (the “8.50% Convertible Notes”), including US$22,500,000 aggregate principal amount of 8.50% Convertible Notes pursuant to the exercise in full by the underwriters in that offering of their over-allotment option to purchase additional 8.50% Convertible Notes. In connection with our private placement of 5.25% Convertible Notes, we entered into privately negotiated transactions with certain holders of our 8.50% Convertible Notes, pursuant to which these holders received approximately US$16.6 million in cash and approximately 9.2 million Class A ordinary shares in exchange for approximately US$74.8 million aggregate principal amount of the 8.50% Convertible Notes. Private Placement On May 30, 2024, we entered into a Subscription Agreement for a private placement (the “Private Placement”) with Tether International Limited, a BVI company (“Tether”), pursuant to which we issued to Tether (i) 18,587,360 Class A ordinary shares, and (ii) a warrant to purchase up to 5,000,000 Class A ordinary shares (the “Warrant”) at an exercise price equivalent to US$10.00 per Class A ordinary share. We received US$100,000,000 in proceeds from the Private Placement, and will receive up to an additional US$50,000,000 if the Warrant is fully exercised. The Warrant is subject to customary anti-dilution provisions reflecting share dividends and splits or other similar transactions, and weighted average anti-dilution protection with respect to the issuance of ordinary shares or ordinary share equivalents for consideration per share less than the initial exercise price of the Warrant. The Warrant will remain exercisable at the election of Tether within 12 months after the closing of the Private Placement on May 30, 2024. 78 Table of Contents Acquisition of Norway Business On April 15, 2024, we completed the acquisition (the “Norway Acquisition”) of all the shares in TROLL HOUSING AS and TYDAL DATA CENTER AS from BRYHNI.COM AS and RENOL INVEST AS (collectively, the “Norway Sellers”). In connection with the completion of the Norway Acquisition, on April 15, 2024, we entered into: (1) a US$15,000,000 secured and freely tradable consideration loan note (the “Note Purchase Agreement”) with a maturity date of five years from April 15, 2024, and with a coupon rate of 6% per annum, accompanied by collateral in the form of a first priority share pledge over the shares in TROLL HOUSING AS and TYDAL DATA CENTER AS; and (2) a call option agreement which granted the Norway Sellers the option to acquire US$15,000,000 worth of Class A ordinary shares at a strike price of US$35.96 per Class A ordinary share. Besides above, the closing consideration for Norway Acquisition also includes (i) US$15,000,000 in cash, and (ii) 417,130 Class A ordinary shares. As of the date of this annual report, we have made full repayment of the outstanding principal balance under the Note Purchase Agreement and the pledged shares in TROLL HOUSING AS and TYDAL DATA CENTER AS have been fully released. 2024 At Market Issuance On March 18, 2024, we entered into an At Market Issuance Sales Agreement (the “2024 At Market Issuance Sales Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co., Needham & Company, LLC, Roth Capital Partners, LLC, StockBlock Securities LLC and Rosenblatt Securities Inc. (collectively, the “Sales Agents” for the purposes of this paragraph), pursuant to which we may offer and sell our Class A ordinary shares from time to time through or to the Sales Agents, as agent or principal. It is not possible to predict the actual number of Class A ordinary shares, if any, we will sell under such agreement, or the actual gross proceeds resulting from those sales. As of the date of this annual report, we offered and sold an aggregate of 29,389,735 Class A ordinary shares under the 2024 At Market Issuance Sales Agreement for a total net proceeds of approximately US$455.0 million. The foregoing descriptions of the 2024 At Market Issuance Sales Agreement do not purport to be complete and are qualified in their entirety by the full text of such agreements, which are incorporated herein by reference to Exhibit 4.32 to this annual report. Committed Equity Financing On August 8, 2023, we entered into the Equity Financing Purchase Agreement and the Equity Financing Registration Rights Agreement with B. Riley Principal Capital II. Pursuant to the Equity Financing Purchase Agreement, we have the right to sell to B. Riley Principal Capital II, up to US$150,000,000 of our Class A ordinary shares, subject to certain limitations and conditions set forth in the Equity Financing Purchase Agreement, from time to time during the term of the Equity Financing Purchase Agreement. Sales of our Class A ordinary shares pursuant to the Equity Financing Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell any securities to B. Riley Principal Capital II under the Equity Financing Purchase Agreement. The per share purchase price for the Class A ordinary shares that we elect to sell to B. Riley Principal Capital II pursuant to the Equity Financing Purchase Agreement, if any, will be determined by reference to the volume weighted average price of our Class A ordinary shares (the “VWAP”) as defined in the Equity Financing Purchase Agreement, less a fixed 3% discount to the VWAP for such Purchase Valuation Period (as defined in the Equity Financing Purchase Agreement). The net proceeds under the Equity Financing Purchase Agreement to the Company will depend on the frequency and prices at which we sell shares of our stock to B. Riley Principal Capital II. See “Item 3. Key Information — D.— Risk Factors — Risks Related to Our Securities — Future sales, or the possibility of future sales of, a substantial number of our ordinary shares may depress the price of such securities.” 79 Table of Contents As of the date of this annual report, we have sold 8,089,181 Class A ordinary shares to B. Riley Principal Capital II under the Equity Financing Purchase Agreement. The Equity Financing Purchase Agreement and the Equity Financing Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. The foregoing descriptions of the Equity Financing Purchase Agreement and the Equity Financing Registration Rights Agreement do not purport to be complete and are qualified in their entirety by the full text of such agreements, which are incorporated herein by reference to Exhibits 4.28 and 4.29, respectively, to this annual report. Business Combination We consummated the Business Combination on April 13, 2023. Our Class A ordinary shares commenced trading on the Nasdaq on April 14, 2023, under the symbol “BTDR.” Key Performance Metrics We regularly review a number of metrics, including the key metrics presented below, to evaluate our business and performance. Hash Rate We believe hash rate is an important metric for assessing the strength of our business. “Hash rate” is a measure of computational power that is being used to mine and process transactions on a PoW blockchain, such as Bitcoin, representing the number of calculations per second that can be performed. Cryptocurrency mining is a competitive process in that only the first miner who solves a particular mining puzzle through numerous calculations can get the mining reward. Accordingly, the more hash rate we possess, as a percentage of the entire network hash rate for a particular cryptocurrency, the higher possibility we have in resolving a block on the network blockchain, and hence a greater chance of success in obtaining cryptocurrency rewards. We calculate and report our hash rate in EH/s. One exahash equals one quintillion hashes per second. As of March 31, 2025, we possessed proprietary hash rate of 12.1 EH/s. Electrical Capacity Electrical capacity is another key metric to evaluate our business and operation given the energy intensive nature of cryptocurrency mining. Cryptocurrency mining is conducted through intensive computations, and the generation of the hash rate used in such computations requires large amounts of electricity. As a result, the growth of our business, such as self-mining and hash rate sales, relies on a sustainable and increasing supply of a significant amount of electricity, which is currently supported by our mining datacenters. As of March 31, 2025, our electrical capacity was 895MW. Electricity Cost As our business operations consume a large amount of electricity and electricity cost in operating mining rigs accounts for a significant portion of our overall cost of revenue, we strive to maintain our leadership position in the global electricity cost curve by building mining datacenters worldwide, where low electricity cost supports stable operations. As such, we see electricity cost a key indicator of our business performance. Our premier mining datacenters allowed us to reach an average electricity cost of our mining datacenters to US$42/MWh for the year ended December 31, 2024. Key Factors Affecting Our Results of Operations The following factors are the principal factors that have affected and will continue to affect our business, financial condition, results of operations and prospects. 80 Table of Contents Price and volatility of Bitcoin We derive, and expect to continue to derive, a significant portion of revenue from self-mining of cryptocurrency, primarily Bitcoin. Hence, our ability to generate revenue from this business line is directly affected by the market price of Bitcoin. The Bitcoin price may also impact the use of our mining rigs. Our self-mining business breaks even so long as it is economically beneficial for us to continue to operate our mining rigs, and that is essentially when the mining rigs contribute positive cash flow (i.e., when the variable cost to mine one Bitcoin, namely the electricity cost, equals the market price of a Bitcoin, which we refer to as “shutdown Bitcoin price” for our self-mining business). So long as the Bitcoin price is higher than the “shutdown Bitcoin price,” we would continue to operate our mining rigs and such operation would be economically beneficial to us. See the section entitled “Item 3. Key Information — D. Risk Factors — Risks Related to Our Business, Operations, Industry and Financial Condition — Our results of operations have been and are expected to continue to be significantly impacted by Bitcoin price fluctuation.” In addition, the depreciation and impairment potential of our mining rigs may be affected by the volatility of the market prices of Bitcoin and other cryptocurrencies. See the section entitled “— Our ability to procure and/or manufacture mining rigs at a lower cost” below. We also generate revenue from Cloud Hash Rate, which offers hash rate to be utilized by third-party miners. As a result, revenue from this business line is also correlated with Bitcoin price and volatility. The prices of Bitcoin have experienced substantial volatility and have in the past and may in the future be driven by speculation and incomplete information, subject to rapidly changing investor sentiment, and influenced by factors such as technology, macroeconomic conditions, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Further, the value of Bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of Bitcoin as a means of exchange by consumers and merchants. For example, throughout calendar year 2022, a number of companies in the digital assets industry have declared bankruptcy, including cryptocurrency exchanges FTX (including its affiliated hedge fund Alameda Research LLC), crypto hedge fund Three Arrows, crypto miners Compute North and Core Scientific and crypto lenders Celsius Network, Voyager Digital and BlockFi. Such bankruptcies have led, at least in part, to a drop in Bitcoin price. Despite the market volatility, the appreciation potential of Bitcoin remains high due to several factors. Bitcoins are inherently scarce, given they are designed to have a finite supply of 21 million associated with a depreciating rewarding mechanism, termed “halving,” under which the reward for mining Bitcoin transactions is reduced in half every four years. The growing recognition of Bitcoins also attracts large investment into the Bitcoin economy, as evidenced by an increasing installed network hash rate of Bitcoin globally, and increasing adoption of Bitcoin as an investment instrument and a payment method. For example, President Donald Trump established a Strategic Bitcoin Reserve to maintain government-owned Bitcoin as a national reserve asset, alongside a Digital Asset Stockpile for other cryptocurrencies. Further, more countries are establishing clear and robust regulations to create a more stable environment for Bitcoin mining and trading, which may facilitate the demand for Bitcoins and Bitcoin price appreciation. While we have seen clear growth in our self-mining historically, we have limited ability to predict Bitcoin price and its volatility, which we expect to continue to affect our future earnings and cash flows. Our ability to maintain our leadership position in proprietary hash rate A prevailing strategy to profit from proprietary hash rate is mining. The cryptocurrencies mined can be sold at a profit when their market value is high enough to cover the cost of mining rigs, electricity fees and other mining-related expenses. Bitcoins are intentionally designed to be resource-intensive and difficult to mine, rendering hash rate critical in the mining industry. Possessing a higher share of network hash rate translates to a higher likelihood of generating mining awards. 81 Table of Contents We strive to maintain our leadership position in proprietary hash rate. In particular, we have established a business model that allows us to constantly reinforce our market-leading position and outpace our competitors in terms of scaling up our proprietary hash rate. For the years ended December 31, 2022 and 2023, we allocated proprietary hash rate to hash rate sales through our Cloud Hash Rate business, to enable instant cash payback upon customers’ subscription to our hash rate plans. We generated proceeds from hash rate sales under long-term hash rate subscription plans that approximate the purchase cost of mining rigs. We were able to achieve such a premium against mining rig purchase cost as our hash rate subscription plans save hash rate buyers the efforts from complex mining operation and maintenance and have built brand recognition among customers. Therefore, we were able to continuously grow our proprietary hash rate by funding the purchase of additional mining fleets with the instant cash collected from hash rate sales using our existing mining fleets, significantly reducing our payback period to one month, compared to the long payback period associated with cryptocurrency mining activities, which is typically from 6 to 18 months. For the year ended December 31, 2024, we strategically prioritized resources to the development of our proprietary ASIC technology, which temporarily limited our hash rate growth. However, this investment resulted in progress in our ASIC technology roadmap. We intend to continuously scale up our infrastructure and proprietary hash rate in this efficient manner in order to maintain and reinforce our leading position in proprietary hash rate. However, whether we can achieve a premium through this model depends on various factors, such as technology advancements, including our ASIC technology, our ability to continually expanding our mining datacenters, our partnership with semiconductor foundry supplier and our cash and capital limitations, etc. Short-term Bitcoin price fluctuations is another contributing factor as quickly adjusting the pricing of our hash rate subscriptions plans to reflect such price change is difficult, if not impossible. As we continue expanding our infrastructure and hash rate capacity, we remain focused on balancing short-term operational efficiency with long-term growth driven by our ASIC development strategy. Our ability to procure and/or manufacture mining rigs at a lower cost Depreciation of mining rigs remained one of the few largest costs we incurred in our business operations for the years ended December 31, 2022, 2023 and 2024. This depreciation expense is directly influenced by the purchase price of mining rigs. In 2024, we made a strategic decision to invest in proprietary ASIC technology, leading to the development of our SEALMINER series mining rigs. This initiative allows us to manufacture our own mining rigs and use our mining rigs in mining datacenters in North America, Norway and Bhutan, thereby reducing reliance on external suppliers and potentially lowering procurement costs. While we are still open the option to source certain mining rigs from suppliers to complement our self-manufactured mining rigs, our ability to procure mining rigs at favorable prices is subject to factors such as purchase channels, and overall supply and demand dynamics in the mining rig market. Additionally, fluctuations in cryptocurrency market values can impact the demand and pricing for mining rigs. An increase in cryptocurrency prices may lead to higher demand and costs for mining equipment, while a decrease may present opportunities to acquire rigs at lower prices. We may need to reconsider the appropriateness of the current useful life, the residual value and the depreciation method of our mining rigs based on the change in cryptocurrency prices on a yearly or more frequently basis. In addition to the reassessment of depreciation, we may also need to assess whether any indications are present which will result in impairments of our mining rigs. For example, impairments may be necessary if the expected operating profits from the mining rigs show a significant decline from previous forecasts, which may be caused if the market price of Bitcoin drops below the mining rig shut-down price. Our ability to effectively maintain our leadership position in the global electricity cost curve Electricity cost was the largest cost that we incurred in our business operations for the years ended December 31, 2022, 2023 and 2024. Our ability to secure ample power supply with low electricity cost is underpinned by our top-notch global mining datacenters deployment and operation experience and capabilities. We pioneer in deploying and operating mining datacenters globally. Our dedicated global team for mining datacenter construction understands the critical needs of mining as well as the complex and continuously evolving global landscape of electricity supply. They also have extensive connections with local electricity experts and power enterprises around the world, giving us a clear advantage in mining datacenter construction, and hence in electrical capacity and electricity costs among our competitors. We were able to optimize our electricity cost structure and reach an average electricity cost of our mining datacenters to US$42/MWh for the year ended December 31, 2024. Whether our current cost-saving efforts or our forward strategy in this regard is effective for maintaining our leadership position in the global electricity cost curve will affect our ability to control our costs. 82 Table of Contents Our business judgments regarding pricing strategy and resource allocation Our business operations involve constant and important decision-making regarding the pricing of our products and services as well as allocation of mining resources. Our pricing strategy is based on our estimates of market trends. We have to decide the allocation of proprietary hash rate between “self-mining” and “hash rate sharing” as well as the allocation of mining datacenter capacity among “self-mining”, “hash rate sharing” and “hosting”. While allocating more mining resources to “hash rate sharing” and “hosting” services may facilitate cash payback and mining datacenter expansion, we have to forgo Bitcoin’s huge appreciation potential to some extent as we could earn more Bitcoins by allocating the same mining resources to “self-mining”, and vice versa. As we have now developed proprietary ASIC technology and manufacturing capabilities, our decision-making has expanded beyond resource allocation to include ASIC research, design, mining rig production, and infrastructure scalability. We spend great efforts in making decisions in our company’s best interest, taking into account Bitcoin price, network hash rate, the amount of cash we need and our view on the market opportunities for acquiring mining rigs or expanding mining datacenters at low cost, etc. However, we cannot guarantee that our decisions could bring the Company the best results every time, and we anticipate our business judgments will continue to affect the results of our operations. Our ability to upgrade and expand our offerings Crypto-economy is characterized by continuous fluctuations and frequent innovations. Therefore, our future success is dependent on our ability to diversify our income structure to reduce exposure to fluctuations of the price of Bitcoin, the most significant type of cryptocurrency involved in our business operation, and maintain our market-leading position by upgrading and expanding our offerings. We launched Minerplus in January 2021 to improve operational efficiency for our self-mining business and miner customers. In March 2024, we successfully tested our first Bitcoin mining chip which has been integrated into our SEALMINER A1 mining rigs. We plan to install our own SEALMINER A1 mining rigs at our mining datacenters in North America, Norway and Bhutan as part of our plan to expand our hash rate. Building on this success, we have since developed SEALMINER A2 and SEALMINER A2 Pro, which are engineered for enhanced performance and efficiency. Although we have accumulated extensive expertise and know-how in the cryptocurrency industry, we are only at an earlier stage of executing our offering expansion plan. Upgrading existing offerings and commencing new businesses may incur significant costs and experience a prolonged ramp-up period. Although we expect these investments to benefit our business over the long term, we also expect our total operating expenses will increase for the foreseeable future. If any adverse development in such new businesses arises, we may not be able to develop those new businesses as successfully as contemplated, or at all, and our results of operations and prospects may be significantly and negatively affected as a result. Regulatory environment We are a leading cryptocurrency mining service provider with a strong global presence. As of March 31, 2025, we operated six prime mining datacenters in the United States, Norway and Bhutan and had served users across around 100 countries and regions around the globe, and may continue to expand our operations to more countries and regions. Each of our business lines is subject to government regulation in each jurisdiction in which we operate and various jurisdictions may from time to time adopt laws, regulations or directives that affect our businesses. We are subject to regulatory risks with regards to mining, holding, using, or transferring cryptocurrencies, etc., and the uncertainty of the regulatory environment and our ability to anticipate and respond to potential changes in government policies and regulations will have a significant impact on our business operations in countries we operate in and our overall results of operations. Regulations have impacted or could impact, among others, the nature of and scope of offerings we are able to make available, the pricing of offerings on our platform, our relationship with, and incentives, fees and commissions provided to or charged from our business partners, our ability to operate in certain segments of our business. We expect that our ability to manage our relationships with regulators in each of our markets, as well as existing and evolving regulations will continue to impact our results in the future. Key Components of Our Results of Operations Revenue We generate revenue from (i) self-mining, (ii) hash rate sales through Cloud Hash Rate, (iii) Cloud Hosting, (iv) General Hosting, (v) Membership Hosting, (vi) sales of mining rigs and (vii) others, which mainly consist of the provision of technical and human resources service, repairment services of hosted mining rigs, lease of investment properties, the sale of mining rig peripherals, the sale of containerized solution products and the provision of cloud HPC and AI services. Historically, we only accepted cryptocurrency for Cloud Hosting. For lease of investment properties, we only accept fiat currency. For our other products and services available to customers, we accept both fiat currency and cryptocurrencies as payments. 83 Table of Contents Self-Mining We enter into contracts with mining pool operators to provide a service to the mining pool operators to perform hash calculations using our own mining rigs. We consider the mining pool operators as the customers under this type of arrangement and can decide when to start providing services. Our enforceable right to consideration begins when, and continues as long as, we provide hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such a termination. As such, the duration of a contract is less than a day and the contract continuously renews throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. In exchange for providing hash calculation service to the mining pool operators, we are entitled to non-cash compensation, cryptocurrency, from the mining pool operators, which is a variable consideration based on the mining pool operators’ distribution mechanisms, which can differ depending on the specific mining pools. Full-Pay-Per-Share (“FPPS”) and Pay-Per-Share-Plus (“PPS+”) pools pay block rewards and transaction fees, less mining pool fees. For FPPS and PPS+ pools, we are entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. For the periods presented, we primarily participated in Bitcoin mining to generate our self-mining revenues, and the payment mechanisms used by the mining pool operators were primarily FPPS and PPS+. 84 Table of Contents The above non-cash consideration is variable since the amount of block reward earned depends on the amount of hash calculations we perform; the amount of transaction fees depends on the total actual fees paid by the transaction requestor to each block placed in the Bitcoin blockchain under FPPS, and the actual transaction fees paid to the specific blocks a mining pool operator successfully mined over the daily period under PPS+; and the operator fees for the same period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, we have the ability to estimate the variable consideration when we begin to provide hash calculation service with reasonable certainty without the risk of significant revenue reversal. We recognize the non-cash consideration on the same day that control of the contracted service transfers to the mining pool operator and measure the non-cash consideration based on the spot rate of the underlying cryptocurrency determined using the quoted price of such cryptocurrency, as described in Note 2(i) to the consolidated financial statements included elsewhere in this annual report, at midnight UTC, on the date on which we provide the hash calculation service. Although the non-cash consideration the mining pool operators receive from the blockchain networks includes both the block rewards and the transaction fees, the transaction price we receive is an aggregate amount and primarily includes the block rewards. As a result, we do not present disaggregated revenue information on block rewards and transaction fees. Cloud Hash Rate Through Cloud Hash Rate, customers can subscribe to a specified amount of computing power derived from the mining rigs held by us for a period of time through a wide selection of hash rate subscription plans offered by us, differentiated by plan duration and the type of cryptocurrency to be mined. By subscribing to the hash rate subscription plan, the customers are able to direct the computing power provided by us to be connected to a customer-designated mining pool for a period of time. As a result of directing the connection of such computing power to the mining pools, the customers are entitled to the mining rewards, which are directly transferred from mining pools to the customer-designated cryptocurrency wallets. Customers pay a fixed amount for the subscribed hash rate at the commencement of the plans. The revenue related to hash rate subscriptions is amortized ratably throughout the duration of the plan. The customer also needs to separately pay for electricity subscriptions to maintain the mining rigs that produce the subscribed hash rate. The revenue related to electricity subscriptions is recognized ratably throughout the duration of each respective electricity subscription. The price of electricity subscription is fixed at the commencement of each electricity subscription. The hash rate subscription plans are offered under two modes. Under the classic mode, the customer receives all of the mining rewards from the mining pool. Under the accelerator mode, the customer pays a relatively lower computing power subscription fee. In exchange, we are entitled to additional consideration once the customer’s cost is recovered. The additional consideration is determined as a percentage of a customer’s mining profit derived from the subscribed computing power. We accept both cryptocurrency and fiat currency as payments under the Cloud Hash Rate arrangements. Cloud Hosting Through Cloud Hosting, we provide our customers one-stop mining rigs hosting solution that integrates the provision of computing power generated from the specified second-hand mining rigs and the provision of maintenance service, which primarily includes electricity supply and daily maintenance and repair care. We charge our customers an upfront amount at the commencement of the Cloud Hosting arrangements so the customers can secure the procurement of the computing power from the specified mining rigs and the corresponding revenue is recognized ratably over the term of the service, which approximates to the life of the specified mining rigs and is estimated to be two years, and maintenance service fee, based on the consumption of resources, such as electricity, and the corresponding revenue is recognized across each service cycle. The estimated life of these mining rigs is reviewed at least at each financial year-end and adjusted if the expectation of the realization of economic benefits from the specified mining rigs is different from the previous estimate. The Cloud Hosting arrangements are offered under two modes. Under the classic mode, the customer receives all of the mining rewards from the mining pool. Under the accelerator mode, the customer is charged with a lower upfront amount and enjoys a quicker recovery of the costs. In exchange, we are entitled to additional consideration once a customer’s cost is recovered. The additional consideration, which is variable, is determined as a percentage of a customer’s mining profit derived from the computing power of the specified mining rigs and constrained until the mining pool operator finishes the calculation of the mining reward related to the mining activity in a given day. We include such additional consideration in the transaction price and recognizes revenues when we can reasonably calculate the amount and determine it is probable a significant reversal will not occur. We did not generate any revenue from the additional consideration from Cloud Hosting arrangements offered under the “accelerated payback mode” for the years ended December 31, 2022, 2023 and 2024. We historically only accept cryptocurrency as payments for services under the Cloud Hosting arrangements. Under the Cloud Hosting arrangements, our customers’ ability to direct the use of, and to obtain substantially all of the remaining benefits from, the mining rigs is limited while the mining rigs are in our possession. We have determined that we still retain control over the mining rigs and consequently, the mining rigs under the Cloud Hosting arrangements were not derecognized from our book. 85 Table of Contents General Hosting We provide General Hosting services, which is a combined service package including custody of the customers’ mining rigs, electricity and network maintenance and other services, that enable our customers to run blockchain computing operations. The customer is only able to benefit from the General Hosting service as a package. The service fee is charged to our customers monthly on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. In the arrangement with certain customers, we are also entitled to additional variable consideration based on the customers’ mining yield during a period. Revenue from the General Hosting service is recognized across each service cycle. We accept both cryptocurrency and fiat currency as payments for the provision of custody and hosting service. Membership Hosting We offer Membership Hosting services to our large-scale miner customers by entering into a series of contracts, which includes a membership program agreement and a management services agreement. These contracts are signed with the same customer at or near the same time, and they are combined and accounted for as a single contract. Unlike General Hosting where the customer’s access to mining datacenter capacity is subject to the availability of such capacity at the time the request was raised, a customer under Membership Hosting will be designated of certain capacity (i.e., designated capacity) exclusive for use by such customer, by signing a standard membership program agreement. We also provide other program benefits, if available, to customers under Membership Hosting, including, among other things, (i) early, priority and exclusive access to the newly available mining datacenter capacity that is sufficient for large-scale miners, upon a new mining datacenter becomes available and (ii) more favorable pricing terms for our services, such as mining rig management services, than the prevailing price in the local market. We charge an upfront fee for such program benefits. We also provide management services, such as infrastructure, custody, and utility, for the mining rigs of a Membership Hosting customer up to designated capacity, pursuant to a separate management services agreement, and charge management services fee. We also charge additional fee, at our stand-alone selling price, for the subscription of our mining rigs operation service. The management services fee and the mining rigs operation fee, as applicable, are charged to the customer monthly based on the customer’s consumption of resources, such as the amount of electricity used in a period. Our promises offered in the membership program agreement and management services agreement are not separately identifiable and treated as a single performance obligation recognized over a period of time. Revenue associated with the upfront fee for the program benefits is recognized over the program subscription period and revenue associated with the management service is recognized over each distinct service period. The promise to provide the mining rigs operation service, if subscribed to by a customer, is accounted for as a separate performance obligation and the associated revenue is recognized over each distinct service period at their respective stand-alone selling price. We accept both cryptocurrency and fiat currency as payments for the membership hosting arrangements. 86 Table of Contents Sales of Mining Rigs We may engage in the sales of mining rigs on hand from time to time, depending on market conditions, capacity availability in our mining datacenters and the availability of new-generation mining rigs that are more efficient. While not part of our primary business lines, we sell mining rigs on hand when, based on our judgement, selling mining rigs of older models can (i) facilitate cash payback while maintaining a reasonable profit range compared to utilizing them for our own operations and (ii) optimize the efficiency of our mining fleets. Factors we considered include market conditions, capacity availability in our mining datacenters and the availability of new-generation mining rigs that are more efficient. Going forward, we also intend to generate revenue from mining rig sales under our ASIC and mining rig business. We recognize revenue from sales of mining rigs to customers at the point in time when control of the mining rigs is transferred to our customers, which generally occurs upon shipment of the mining rigs as defined in the contract. We accept both cryptocurrency and fiat currency as payments for mining rig purchase. Others We also generate from other operations, mainly including the provision of technical and human resources service, repairment services of hosted mining rigs, lease of investment properties, the sale of mining rig peripherals, the sale of containerized solution products and the provision of Cloud HPC and AI services. The revenue generated from these operations was individually immaterial for all periods under discussion. Cost of Revenue Our cost of revenue consists primarily of (i) electricity expenses incurred for operating our mining rigs in its revenue-generating activities, (ii) depreciation expense from the mining rigs and mining datacenters hosting those mining rigs, (iii) compensation expenses incurred by mining datacenter personnel, and (iv) share-based payment expenses related to mining datacenter personnel. Electricity Cost in Operating Mining Rigs We incur electricity costs when (i) operating mining rigs for cryptocurrency mining, (ii) generating hash rate for sales under Cloud Hash Rate, (iii) operating specified mining rigs for customers under Cloud Hosting and (iv) operating customer-owned mining rigs during the provision of General Hosting and Membership Hosting services. Depreciation of Mining Rigs and Mining Datacenters Depreciation on our mining rigs is calculated using the straight-line method to allocate costs up to residual values over the estimated useful lives of the assets. We review the useful lives and residual values at least at each financial year-end and adjusted, if appropriate, to ensure that the method and rates of depreciation are consistent with the expected pattern of realization of economic benefits from mining rigs. We estimate the useful lives of mining rigs based on historical experience, taking into account anticipated technological changes. If there are significant changes from previously estimated useful lives, the amount of depreciation expenses may change. We estimated the useful lives of our mining rigs to be one to five years. Depreciation of mining datacenters is calculated using the straight-line method based on the estimated useful lives of the assets comprised thereof, such as buildings, machinery, electronic equipment, leasehold improvements and property improvements, and is recorded under depreciation of property, plant, and equipment. The depreciation method, useful lives and residual value of these assets are reviewed at least at each financial year-end and adjusted if appropriate. Compensation Expenses Incurred by Mining Datacenter Personnel The compensation expenses incurred by mining datacenter personnel consists primarily of (i) share- based payment expenses related to mining datacenter personnel as a result of the grant of options under the 2023 Share Incentive Plan and (ii) staff costs, including salaries, wages and other benefits in relation to mining datacenter personnel. 87 Table of Contents Gross Profit/(Loss) Our gross profit or loss is primarily affected by (i) Bitcoin prices, which have a significant and direct effect on the amount of revenue we recognized from our operations, (ii) depreciation of mining rigs, which is directly related to the mining rig purchases we made, (iii) electricity costs, (iv) staff cost, including salaries, wages and other benefits and (v) share-based payment expenses. Operating Income/(Expenses) Selling Expenses Our selling expenses primarily consist of (i) staff costs, including salaries, wages and other benefits to sales personnel, (ii) promotional expenses, which primarily represent expenses incurred for online and offline marketing activities and other promotional activities to reach more customers, and (iii) share-based payment expenses related to sales personnel. General and Administrative Expenses Our general and administrative expenses primarily consist of (i) staff costs, including salaries, wages and other benefits to general and administrative personnel, (ii) consulting service expenses, (iii) share-based payment expenses related to general and administrative personnel, (iv) insurance expenditure, and (v) travel expenses and office expenses incurred during our daily operation. Research and Development Expenses Our research and development expenses primarily consist of (i) staff costs, including salaries, wages and other benefits to research and development personnel, (ii) share-based payment expenses related to research and development personnel, (iii) one-off incremental development expense, (iv) technical service fee and (v) amortization expenses of intangible assets acquired from the acquisition of FreeChain. We invest significant research and development resources in (i) improving technology related to our Cloud Hash Rate business including hash rate slicing, developing and testing our Bitcoin mining chip and improving our Minerplus features like virus detection and hash rate monitoring and (ii) the research and development of our ASIC and mining rig business. We also spent research and development efforts on utilizing renewable energy and increasing energy efficiency. Other Operating Income/(Expenses) Our other operating income/(expenses) primarily consist of (i) net gains/(losses) on disposal of cryptocurrencies, and (ii) change in fair value of cryptocurrency-settled receivables and payables. Other Net Gains/(Losses) Other net gains/(losses) primarily consist of (i) changes in fair value of financial assets at fair value through profit or loss, (ii) loss on extinguishment of convertible notes and (iii) loss from change in fair value of derivatives liabilities. Results of Operations The following tables summarizes our results of operations, revenue breakdown, and expenses by nature for the years ended December 31, 2024, 2023 and 2022. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any particular period are not necessarily indicative of our future trends. 88 Table of Contents The following table summarizes our results of operations for the years indicated: For the Years Ended December 31 2024 2023 2022 US$ US$ US$ (in thousands) Revenue 349,782 368,554 333,342 Cost of revenue (283,382 ) (290,745 ) (250,090 ) Gross profit 66,400 77,809 83,252 Selling expenses (8,044 ) (8,246 ) (11,683 ) General and administrative expenses (64,317 ) (66,454 ) (93,453 ) Research and development expenses (76,946 ) (29,534 ) (35,430 ) Listing fee - (33,151 ) - Other operating incomes / (expenses) 727 3,791 (3,628 ) Other net gains/(losses) (507,479 ) 3,538 357 Loss from operations (589,659 ) (52,247 ) (60,585 ) Finance income / (expenses) (11,935 ) 1,276 (4,181 ) Loss before taxation (601,594 ) (50,971 ) (64,766 ) Income tax benefits / (expenses) 2,443 (5,685 ) 4,400 Loss for the year (599,151 ) (56,656 ) (60,366 ) The following table sets forth a breakdown of our revenue, for the years indicated. For the Years Ended December 31, 2024 2023 2022 US$ % US$ % US$ % (in thousands, except for percentages) Revenue Self-mining 163,086 46.6 111,683 30.3 62,359 18.7 Cloud Hash Rate 39,768 11.4 67,881 18.4 121,341 36.4 Hash rate subscription 27,470 7.8 40,290 11.0 77,862 23.3 Electricity subscription 12,069 3.5 27,419 7.4 39,525 11.9 Additional consideration from Cloud Hash Rate arrangements offered under accelerator mode 229 0.1 172 0.0 3,954 1.2 Sales of mining rigs 585 0.2 2 0.0 705 0.2 Cloud Hosting arrangements(1) 1,058 0.3 3,248 0.9 12,723 3.8 General Hosting 67,643 19.3 97,321 26.4 99,251 29.8 Membership Hosting 63,981 18.3 79,906 21.7 26,056 7.8 Others(2) 13,661 3.9 8,513 2.3 10,907 3.3 Total revenue 349,782 100.0 368,554 100.0 333,342 100.0 (1) We did not generate any revenue from the additional consideration from Cloud Hosting arrangements offered under “accelerated payback mode” for the years ended December 31, 2024, 2023 and 2022. (2) Others include revenue generated primarily from providing technical and human resources service, repairment services of hosted mining rigs, lease of investment properties, the sale of mining rigs peripherals, the sale of containerized solution product and providing Cloud HPC and AI services. 89 Table of Contents The following table sets forth a breakdown by nature of our cost of revenue, selling, general and administrative, and research and development expenses for the years indicated. For the Years Ended December 31, 2024 2023 2022 US$ % US$ % US$ % (in thousands, except for percentages) Staff costs: salaries, wages and other benefits 63,434 14.7 52,873 13.4 50,132 12.8 Share-based payments 33,968 7.9 45,488 11.5 90,648 23.2 Amortization of intangible assets 8,382 1.9 754 0.2 97 0.0 Depreciation: Mining rigs 19,470 4.5 25,663 6.5 29,281 7.5 Property, plant and equipment 42,120 9.7 39,899 10.1 30,438 7.8 Investment properties 2,717 0.6 2,601 0.7 1,237 0.3 Right-of-use assets 8,407 1.9 6,624 1.7 5,371 1.4 Electricity cost in operating mining rigs 179,765 41.5 180,565 45.7 139,469 35.7 One-off incremental development expense 29,017 6.7 - - - - Cost of mining rigs sold 1,652 0.4 4 0.0 1,002 0.3 Consulting service fee 8,953 2.1 9,757 2.5 6,797 1.7 Advertising expenses 2,998 0.7 1,383 0.4 737 0.2 Office expenses 4,302 1.0 3,987 1.0 3,124 0.8 Research and development technical service fees 5,102 1.2 2,854 0.7 1,313 0.3 Expenses of low-value consumables 2,326 0.5 2,557 0.6 4,025 1.0 Expenses of variable payment lease 197 0.0 224 0.1 639 0.2 Expenses of short-term leases 303 0.1 286 0.1 527 0.1 Research and development material expenses 926 0.2 - - - - Logistic expenses 334 0.1 557 0.1 3,060 0.8 Travel expenses 3,853 0.9 2,843 0.7 3,202 0.8 Insurance fee 2,591 0.6 2,427 0.6 3,446 0.9 Others 11,872 2.8 13,633 3.4 16,111 4.2 Total cost of revenue, selling, general and administrative and research and development expenses 432,689 100 394,979 100.0 390,656 100.0 90 Table of Contents Comparison of Years Ended December 31, 2023 and 2024 Revenue Our revenue decreased by 5.1% from US$368.6 million for the year ended December 31, 2023 to US$349.8 million for the year ended December 31, 2024, primarily driven by (i) a decrease in revenue generated from Cloud Hash Rate, (ii) a decrease in revenue generated from General Hosting, (iii) a decrease in revenue generated from Membership Hosting, partially offset by (i) an increase in revenue generated from self-mining and (ii) an increase in revenue generated from others. • Revenue generated from our self-mining business increased by 46.0% from US$111.7 million for the year ended December 31, 2023 to US$163.1 million for the year ended December 31, 2024. The change was primarily due to higher average price of Bitcoin, the most significant type of cryptocurrency involved in our business operation, offset by less Bitcoin production with the effect of the April 2024 halving and higher global network hashrate. The hash rate used for self-mining, calculated on a twelve-month monthly average basis, was approximately 7.5 EH/s for the year ended December 31, 2024, which increased compared to 5.1 EH/s for the year ended December 31, 2023. We expect to remain flexible in allocating hash rate between self-mining and hash rate sales through Cloud Hash Rate, depending on the market condition. • Revenue generated from Cloud Hash Rate decreased by 41.4% from US$67.9 million for the year ended December 31, 2023 to US$39.8 million for the year ended December 31, 2024, which was primarily due to a decrease in revenue from hash rate subscription and revenue from electricity subscription. Sales price of hash rate subscription is primarily priced with reference to Bitcoin price and overall network hash rate at the time of sales and revenue generated from the subscription is recognized evenly over the duration of the subscription. Revenue from hash rate subscription did not only consist of new sales during the year ended December 31, 2024 but also the amortized revenue from sales before 2024. The decrease in revenue from hash rate subscription was due to (i) the decrease of revenue contributed from the active historical subscription orders along with the gradually expiration of the orders and (ii) the lower average sales unit price of hash rate subscription orders that are effective for the year ended December 31, 2024. The hash rate allocated to Cloud Hash Rate, calculated on a twelve-month monthly average basis, was approximately 1.0 EH/s for the year ended December 31, 2024, which decreased compared to 1.6 EH/s for the year ended December 31, 2023. The decrease in revenue from electricity subscription was attributable to the expiration of long-term Cloud Hashrate contracts over the course of 2024. • Revenue generated from General Hosting decreased by 30.5% from US$97.3 million for the year ended December 31, 2023 to US$67.6 million for the year ended December 31, 2024, which was primarily due to a decrease of the average hosting capacity caused by the expiration of certain hosting customer contracts as well as the removal of older and less efficient machines by other hosting customers following the April 2024 halving as a result of reduced mining economics. • Revenue generated from Membership Hosting decreased by 19.9% from US$79.9 million for the year ended December 31, 2023 to US$64.0 million for the year ended December 31, 2024. Similar to General Hosting, the decline was primarily driven by customers scaling down operations for older and less efficient rigs following the April 2024 halving as a result of reduced mining economics. • Revenue generated from others increased by 60.5% from US$8.5 million for the year ended December 31, 2023 to US$13.7 million for the year ended December 31, 2024, primarily due to an increase in revenue from the Cloud HPC and AI services and lease of investment properties. 91 Table of Contents Cost of Revenue Our cost of revenue decreased from US$290.7 million for the year ended December 31, 2023 to US$283.4 million for the year ended December 31, 2024, primarily driven by (i) a decrease in electricity expenses incurred for operating mining rigs, (ii) a decrease in depreciation of mining rigs, (iii)a decrease in share-based payments expenses incurred by mining datacenter personnel, offset by (i) an increase in depreciation of property, plant and equipment and right-of-use assets, and (ii) an increase in staff costs, including salaries, wages and other benefits to mining datacenter personnel. • Electricity cost in operating mining rigs decreased slightly by 0.4% from US$180.6 million for the year ended December 31, 2023 to US$179.8 million for the year ended December 31, 2024, which was primarily due to the decreased energy consumption related to the reduced hosted mining rigs, partially offset by the slightly higher average electricity price in 2024. • Depreciation of mining rigs decreased by 24.1% from US$25.7 million for the year ended December 31, 2023 to US$19.5 million for the year ended December 31, 2024, primarily due to (i) mining rigs procured prior to 2023 being fully depreciated gradually, (ii) lower depreciation cost attributed by these mining rigs procured in 2023 being depreciated over a longer useful life, and (iii) a decrease in the amount of new mining rigs deployed during 2024 compared to 2023, because we were focused on the research and development of our SEALMINER mining rigs and the launching of mining rigs by ourselves from the second half of the 2024. • Share-based payment expenses attributed to cost of revenue decreased by 49.9% from US$4.7 million for the year ended December 31, 2023 to US$2.4 million for the year ended December 31, 2024, due to a decrease in expense recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2024 as compared to the year ended December 31, 2023. • Depreciation of property, plant and equipment and right-of-use assets attributed to cost of revenue increased by 6.4% from US$44.6 million for the year ended December 31, 2023 to US$47.5 million for the year ended December 31, 2024, primarily as a result of the expansion of our mining datacenters and mining facilities in North America, Norway and Bhutan. • Salaries, wages and other benefits attributed to cost of revenue increased by 4.4% from US$19.7 million for the year ended December 31, 2023 to US$20.6 million for the year ended December 31, 2024, which was due to the increase in employees and in salaries, wages and other benefits to attract and retain quality employees for our mining datacenter operations. Selling Expenses Our selling expenses decreased by 2.4% from US$8.2 million for the year ended December 31, 2023 to US$8.0 million for the year ended December 31, 2024, primarily due to (i) a decrease in staff costs, including salaries, wages and other benefits to sales personnel, and (ii) a decrease in share-based payment expenses recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2024, partially offset by an increase in advertising expenses. General and Administrative Expenses Our general and administrative expenses decreased by 3.2% from US$66.5 million for the year ended December 31, 2023 to US$64.3 million for the year ended December 31, 2024, primarily due to (i) a decrease in share-based payment expenses recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2024, and (ii) a decrease in consulting service fee, partially offset by (i) an increase in staff costs, including salaries, wages and other benefits to general and administrative personnel, and (ii) an increase in traveling expenses. Research and Development Expenses Our research and development expenses increased significantly by 160.5% from US$29.5 million for the year ended December 31, 2023 to US$76.9 million for the year ended December 31, 2024, primarily due to (i) a US$29.0 million one-off incremental development expense related to the SEAL01 and SEAL02 chips for the year ended December 31, 2024 and (ii) an increase in staff costs, including salaries, wages and other benefits to research and development personnel related to our ASIC and mining rig development roadmap, (iii) an increase in share-based payments expenses recognized and amortization expenses of intangible assets related to the acquisition of FreeChain, and (iv) an increase in research and development technical service fees along with our expansion of research and development activities. Listing Fee We recorded listing fee of US$33.2 million for the year ended December 31, 2023 in relation to the Business Combination with Blue Safari Group Acquisition Corp., compared to nil for the year ended December 31, 2024. 92 Table of Contents Other Operating Income We generated other operating income of US$3.8 million for the year ended December 31, 2023 and US$0.7 million for the year ended December 31, 2024, respectively. This change was primarily driven by the loss on change in fair value of cryptocurrency-settled receivables and payables, and partially offset by the increase of net gain on disposal of cryptocurrencies. Other Net Gains/(Losses) We recorded other net gain of US$3.5 million for the year ended December 31, 2023, primarily due to the net gains on the changes in fair value of financial assets at fair value through profit or loss. We recorded other net loss of US$507.5 million for the year ended December 31, 2024, primarily due to (i) a US$498.2 million loss on fair value changes of the derivative liabilities in connection with the convertible notes issued in August and November and the Tether warrants, (ii) a US$8.2 million loss on extinguishment of convertible notes issued in August, (iii) a US$3.2 million loss on change in fair value of holdback share issued in connection with the FreeChain Acquisition, partially offset by the net gains on the changes in fair value of financial assets at fair value through profit or loss. Loss from Operations As a result of the foregoing, we recorded a loss from operations of US$52.2 million and US$589.7 million for the years ended December 31, 2023 and 2024, respectively. Income Tax Benefits/(Expenses) We recorded income tax expenses of US$5.7 million and income tax benefits of US$2.4 million for the years ended December 31, 2023 and 2024, respectively. Net Loss As a result of the foregoing, we incurred a net loss of US$56.7 million and US$599.2 million for the years ended December 31, 2023 and 2024, respectively. Comparison of Years Ended December 31, 2022 and 2023 Revenue Our revenue increased by 10.6% from US$333.3 million for the year ended December 31, 2022 to US$368.6 million for the year ended December 31, 2023, primarily driven by the increase of revenue generated from our self-mining and Membership Hosting, which began to generate revenue in the second half of 2022. • Revenue generated from our self-mining business increased by 79.1% from US$62.4 million for the year ended December 31, 2022 to US$111.7 million for the year ended December 31, 2023. The change was mainly driven by (i) the increased self-mining hash rate from the operation of Gedu mining datacenter which started in the second half of 2023 and resulted in more Bitcoin production, and (ii) the appreciation of Bitcoin price in the last quarter of 2023. The hash rate used for self-mining, calculated on a twelve-month monthly average basis, was approximately 5.1EH/s for the year ended December 31, 2023, which increased compared to 2.4EH/s for the year ended December 31, 2022. We expect to remain flexible in allocating hash rate between self-mining and hash rate sales through Cloud Hash Rate, depending on the market condition. • Revenue generated from Cloud Hash Rate decreased by 44.1% from US$121.3 million for the year ended December 31, 2022 to US$67.9 million for the year ended December 31, 2023, which was mainly attributable to a decrease in revenue from (i) hash rate subscription, (ii) electricity subscription, and (iii) additional consideration from acceleration plan arrangements. Sales price of hash rate subscription is primarily priced with reference to Bitcoin price and overall network hash rate at the time of sales and revenue generated from the subscription is recognized evenly over the duration of the subscription. As a result, revenue from hash rate subscription for the year ended December 31, 2023 did not only consist of new sales during the year ended December 31, 2023 but also the amortized revenue from sales before 2023. With the gradual expiration of the hash rate subscription, we have also slightly decreased hash rate allocated to Cloud Hash Rate, calculated on a twelve-month monthly average basis, from 1.8EH/s for the year ended December 31, 2022 to 1.6EH/s for the year ended December 31, 2023. The decrease in revenue from electricity subscription was attributable to the decrease of active hash rate subscription orders. The decrease in revenue from additional consideration from Cloud Hash Rate arrangements offered under accelerator mode was due to the expiration of our existing revenue sharing arrangements subscribed in the prior year and a delay in reaching the condition for revenue sharing due to generally longer subscription periods and lower-than-expected mining rewards. 93 Table of Contents • Revenue generated from Cloud Hosting decreased by 74.5% from US$12.7 million for the year ended December 31, 2022 to US$3.2 million for the year ended December 31, 2023, which was primarily attributable to the decrease in capacity allocated for Cloud Hosting and completion of most orders of Cloud Hosting by the end of 2022. • Revenue generated from General Hosting decreased by 1.9% from US$99.3 million for the year ended December 31, 2022 to US$97.3 million for the year ended December 31, 2023, primarily because of a slight decrease in the capacity of General Hosting. • Revenue generated from Membership Hosting increased significantly by 206.7% from US$26.1 million for the year ended December 31, 2022 to US$79.9 million for the year ended December 31, 2023, which was because our mining datacenter in North America began to deliver capacity in the second half of 2022. Cost of Revenue Our cost of revenue increased by 16.3% from US$250.1 million for the year ended December 31, 2022 to US$290.7 million for the year ended December 31, 2023, primarily driven by an increase in electricity expenses incurred for operating our mining rigs, compensation expenses incurred by mining datacenter personnel and depreciation of property, plant and equipment, partially offset by a decrease in (i) depreciation of mining rigs, and (ii) share-based payments incurred by mining datacenter personnel. • Electricity cost in operating mining rigs increased by 29.5% from US$139.5 million for the year ended December 31, 2022 to US$180.6 million for the year ended December 31, 2023, which was attributed to the increased overall energy consumption related to the expansion of our mining datacenter operations in North America, Norway and Bhutan since second half of 2022, partially offset by the average lower electricity price in 2023. • Depreciation of mining rigs decreased by 12.4% from US$29.3 million for the year ended December 31, 2022 to US$25.7 million for the year ended December 31, 2023, primarily due to mining rigs procured prior to 2022 being fully depreciated gradually and our procurement of mining rigs of newer models in 2023 being depreciated over a longer useful life. • Depreciation of property, plant and equipment attributed to cost of revenue increased by 29.7% from US$30.0 million for the year ended December 31, 2022 to US$39.0 million for the year ended December 31, 2023, primarily as a result of the expansion of our mining datacenters and mining facilities in North America, Norway and Bhutan. • Salaries, wages and other benefits attributed to cost of revenue increased by 10.6% from US$17.8 million for the year ended December 31, 2022 to US$19.7 million for the year ended December 31, 2023, which was due to the increase in employees and in salaries, wages and other benefits to attract and retain quality employees as a result of the expansion of our mining datacenter operations in North America, Norway and Bhutan. • Share-based payment expenses attributed to cost of revenue decreased by 53.0% from US$10.1 million for the year ended December 31,2022 to US$4.7 million for the year ended December 31, 2023, as a result of the decrease in the new grant of share awards to mining datacenter personnel in the year ended December 31, 2023 and the decrease in expense recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2023. 94 Table of Contents Selling Expenses Our selling expenses decreased by 29.4% from US$11.7 million for the year ended December 31, 2022 to US$8.2 million for the year ended December 31, 2023, primarily due to the decrease in share-based payment expenses, as a result of (i) a decrease in the new grant of share awards to sales personnel in the year ended December 31, 2023 and (ii) the decrease in expense recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2023, partially offset by the increase in marketing and advertising expenses. General and Administrative Expenses Our general and administrative expenses decreased by 28.9% from US$93.5 million for the year ended December 31, 2022 to US$66.5 million for the year ended December 31, 2023, primarily due to (i) the decrease in share-based payment expenses, as a result of the decrease in the new grant of share awards to general and administrative personnel in the year ended December 31, 2023 and the decrease in expense recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2023 and (ii) the decrease in staff costs, including wages, bonuses and other benefits to general and administrative personnel, partially offset by the increase in consulting service fee. Research and Development Expenses Our research and development expenses decreased by 16.6% from US$35.4 million for the year ended December 31, 2022 to US$29.5 million for the year ended December 31, 2023, primarily attributable to the decrease in share-based payment expenses as a result of the decrease in the new grant of share awards to research and development personnel in the year ended December 31, 2023 and the decrease in expense recognized according to graded vesting schedules for outstanding share awards for the year ended December 31, 2023 partially offset by (i) the increase in staff costs, including wages, bonuses and other benefits to research and development personnel, and (ii) the increase in research and development technical service fees. Listing Fee We recorded listing fee of US$33.2 million for the year ended December 31, 2023 in relation to the Business Combination, compared to nil for the year ended December 31, 2022. Other Operating Income/(Expenses) We incurred other operating expenses of US$3.6 million and generated other operating income of US$3.8 million for the years ended December 31, 2022 and 2023, respectively. This change was primarily driven by the net gain on disposal of cryptocurrencies and the change in fair value of cryptocurrency-settled receivables and payables, partially offset by the loss on disposal of mining rigs. Other Net Gain We recorded other net gain of US$0.36 million for the year ended December 31, 2022, which primarily included (i) net gains on disposal of property, plant and equipment and intangible assets of US$0.66 million and (ii) other gains of US$0.5 million, which mainly included return of wealth management product and other minor gains from disposal of investments in unlisted debt instruments, partially offset by the loss of US$0.8 million which mainly included the fair value change of investments in unlisted equity and debt instruments. We recorded other net gain of US$3.5 million for the year ended December 31, 2023, which primarily included (i) net gains on the changes in fair value of financial asset at fair value through profit or loss of US$3.5 million and (ii) gain on convertible debt modification of US$0.5 million. 95 Table of Contents Profit/(Loss) from Operations As a result of the foregoing, we recorded a loss from operations of US$60.6 million for the year ended December 31, 2022 and US$52.2 million for the year ended December 31, 2023. Income Tax Benefit/(Expenses) We recorded income tax benefit of US$4.4 million and income tax expenses of US$5.7 million for the years ended December 31, 2022 and 2023. Net Profit/(Loss) As a result of the foregoing, we incurred a net loss of US$60.4 million for the year ended December 31, 2022 and a net loss of US$56.7 million for the year ended December 31, 2023. Non-IFRS Financial Measures In evaluating our business, we consider and use non-IFRS measures, adjusted EBITDA and adjusted profit/(loss), as supplemental measures to review and assess our operating performance. We revised definition of our previously reported non-IFRS adjusted EBITDA and adjusted profit/(loss) and recast the prior period for comparability. This revision, which resulted in a US$3.3 million revision for the year ended December 31, 2023, reflects non-cash fair value changes in cryptocurrency-settled receivables and payables as they do not represent normal operating expenses or income necessary to operate our business. We define adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted to exclude the listing fee and share- based payment expenses under IFRS 2, changes in fair value of derivative liabilities, loss on extinguishment of debt, changes in fair value of holdback shares for acquisition of FreeChain, and changes in fair value of cryptocurrency-settled receivables and payables, and define adjusted profit/(loss) as profit/(loss) adjusted to exclude the listing fee and share-based payment expenses under IFRS 2, changes in fair value of derivative liabilities, loss on extinguishment of debt, changes in fair value of holdback shares for acquisition of FreeChain, and changes in fair value of cryptocurrency-settled receivables and payables. We present these non-IFRS financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-IFRS measures facilitate investors’ assessment of our operating performance. These measures are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider these measures in isolation from, or as a substitute analysis for, our profit/(loss) for the periods, as determined in accordance with IFRS. We compensate for these limitations by reconciling these non-IFRS financial measures to the nearest IFRS performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. 96 Table of Contents The following table presents a reconciliation of profit/(loss) for the relevant period to adjusted EBITDA and adjusted profit, for the years ended December 31, 2024, 2023 and 2022. For the Years Ended December 31 2024 2023 2022 US$ US$ US$ (in thousands) Adjusted EBITDA Loss for the year (599,151 ) (56,656 ) (60,366 ) Add: Depreciation and amortization 81,096 75,541 66,424 Income tax (benefits)/expenses (2,443 ) 5,685 (4,400 ) Interest (income)/expenses, net 10,050 (2,872 ) 912 Listing fee - 33,151 - Share-based payment expenses 33,968 45,488 90,648 Changes in fair value of derivative liabilities 498,167 - - Loss on extinguishment of convertible senior notes 8,172 - - Changes in fair value of holdback shares for issued in connection with the FreeChain Acquisition 3,186 - - Changes in fair value of cryptocurrency-settled receivables and payables 6,362 (3,305 ) - Adjusted EBITDA 39,407 97,032 93,218 Adjusted Profit/(loss) Loss for the year (599,151 ) (56,656 ) (60,366 ) Add: Listing fee - 33,151 - Share-based payment expenses 33,968 45,488 90,648 Changes in fair value of derivative liabilities 498,167 - - Loss on extinguishment of convertible senior notes 8,172 - - Changes in fair value of holdback shares issued in connection with the FreeChain Acquisition 3,186 - - Changes in fair value of cryptocurrency-settled receivables and payables 6,362 (3,305 ) - Adjusted profit/(loss) (49,296) 18,678 30,282 Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of US$476.3 million and fiat currency investment of US$1.0 million in an unlisted debt instrument, redeemable on demand. Since our separation from Bitmain, we have financed our operations primarily with cash flow from disposal of cryptocurrencies earned from principal business operations and issuance of convertible notes and Class A ordinary shares. We believe that our cash, short-term investment and anticipated proceeds from disposal of cryptocurrencies in connection with our principal business will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next 18 months from the date of this annual report. Our cash and cash equivalents increased to US$476.3 million as of December 31, 2024 from US$144.7 million as of December 31, 2023, primarily from our financing activities for the year ended December 31, 2024. Our cash and cash equivalents decreased to US$144.7 million as of December 31, 2023 from US$231.4 million as of December 31, 2022, primarily attributable to the construction and purchase of mining fleets for our mining datacenter in Gedu, Bhutan and deposit paid to electricity suppliers. Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our purchase of plant, property and equipment, lease obligations, and borrowings. Other than those as discussed below, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024. 97 Table of Contents Purchase of property, plant and equipment, investment properties and intangible assets. Purchase of property, plant and equipment, investment properties and intangible assets primarily consist of the purchase of machinery, equipment and other expenditure associated with mining datacenter construction and operations. The total cash outflow for the purchase of property, plant and equipment, investment properties and intangible assets were US$63.2 million, US$63.3 million and US$119.5 million for the years ended December 31, 2022, 2023 and 2024. As of December 31, 2024, we had commitments that are scheduled to be paid within 12 months for the construction of mining datacenters of approximately US$46.5 million, of which approximately US$1.6 million was recognized in payables as of December 31, 2024. Lease obligations. We occupy most of our office premises and certain mining datacenters under lease arrangements, which generally have an initial lease term between 13 months to 30 years. Lease contracts are typically made for fixed periods but may have extension options. Any extension options in these leases have not been included in the lease liabilities unless we are reasonably certain to exercise the extension option. Periods after termination options are only included in the lease term if the lease is reasonably certain not to be terminated. The total cash outflow for leases, including the capital element of lease rentals paid and interests paid on leases for the years ended December 31, 2022, 2023 and 2024 was approximately US$6.3 million, US$7.8 million and US$13.1 million, respectively. As of December 31, 2024, lease liabilities mature based on contractual undiscounted payments within 12 months and over 12 months were US$8.7million and US$91.6 million, respectively. Borrowings. Our borrowings as of December 31, 2024 represented a commitment of US$208.1 million relating to (i) Promissory note of US$14.9 million, which is in connection with the issuance of the Bitdeer Convertible Note, a US$30 million convertible note, on July 23, 2021, bearing an annual interest rate of 8%, which will mature on July 23, 2023. On July 22, 2023, we amended the Bitdeer Convertible Note, pursuant to which we have repaid US$7 million in principal (and interest accrued thereon from July 1, 2023) of the then outstanding notes, and extended the maturity of the Bitdeer Convertible Note to July 21, 2025, by when we will pay the remainder of the notes. During the year ended December 31, 2024, an additional US$8 million of the Bitdeer Convertible Note was converted into Class A ordinary shares, (ii) Balance of US$32.5 million relates to August 2024 convertible senior notes, which represents the issuance of US$172.5 million aggregate principal amount of the 8.5% Convertible Senior Notes due 2029 and (iii) Balance of US$160.7 million relates to November 2024 convertible senior notes, which represents the issuance of US$400.0 million aggregate principal amount of the 5.25% Convertible Senior Notes due 2029. For additional information regarding (i) the 2025 At Market Issuance Sales Agreement dated January 3, 2025, (ii) the US$400,000,000 aggregate principal amount of 5.25% convertible senior notes due 2029 issued on November 26, 2024, (iii) the US$172,500,000 aggregate principal amount of 8.5% convertible senior notes due 2029 issued on August 20, 2024, (iv) the Private Placement on May 30, 2024, (v) 2024 At Market Issuance Sales Agreement dated March 18, 2024, and (vi) Equity Financing Purchase Agreement dated August 8, 2023, see “––Recent Developments.” We intend to fund our existing and future material cash requirements primarily with our cash, short-term investment and anticipated proceeds from disposal of cryptocurrencies in connection with our principal business, which is classified as an investing activity. However, our future capital requirements will depend on many factors, including market acceptance of cryptocurrency, our growth, our ability to scale up our infrastructure and hash rate, our ability to effectively control costs, our ability to attract and retain customers, the continuing market acceptance of our offerings, expansion of sales and marketing activities and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. In the event that additional financing is required from outside sources, there is a possibility we may not be able to raise it on term acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operations and financial condition could be adversely affected. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. 98 Table of Contents Cash Flows The following table presents our consolidated statements of cash flows for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, 2024 2023 2022 US$ US$ US$ (in thousands) Net cash used in operating activities (622,073 ) (271,787 ) (268,037 ) Net cash generated from investing activities 112,700 199,854 133,793 Net cash generated from/ (used in) financing activities 844,267 (13,493 ) (3,884 ) Net increase / (decrease) in cash and cash equivalents 334,894 (85,426 ) (138,128 ) Cash and cash equivalents at the beginning of the year 144,729 231,362 372,088 Effect of movements in exchange rates on cash and cash equivalents held (3,353 ) (1,207 ) (2,598 ) Cash and cash equivalents at the end of the year 476,270 144,729 231,362 Operating Activities Net cash used in operating activities was US$622.1 million for the year ended December 31, 2024. The difference between our net loss of US$599.2 million and the net cash used in operating activities was primarily attributable to (i) adjustments for revenue recognized on acceptance of cryptocurrencies of US$324.5 million, (ii) changes in prepayments and other assets of US$219.2 million primarily associated with advanced payments to inventories procurement for our SEALMINERs mass volume production, and (iii) changes in inventories of US$81.2 million related to our manufacturing of SEALMINER, partially offset by (i) an adjustment for depreciation and amortization of US$81.1 million primarily relating to the depreciation of mining rigs used in our principal business operations and property, plant and equipment used in connection with our mining datacenters during this period, (ii) an adjustment for share-based payment expenses of US$34.0 million for the issuance of options pursuant to our share incentive plans and (iii) change in fair value of derivative liabilities of US$498.2 million. Net cash used in operating activities was US$271.8 million for the year ended December 31, 2023. The difference between our net loss of US$56.7 million and the net cash used in operating activities was primarily attributable to (i) adjustments for revenue recognized on acceptance of cryptocurrencies of US$342.3 million, (ii) changes in prepayments and other assets of US$49.2 million primarily associated with deposits and prepayments made to suppliers following the expansion of our business during this period, and (iii) changes in other payables and accruals of US$5.1 million, partially offset by (i) an adjustment for depreciation and amortization of US$75.5 million primarily relating to the depreciation of mining rigs used in our principal business operations and property, plant and equipment used in connection with the expansion of our mining datacenters during this period, (ii) an adjustment for share-based payment expenses of US$45.5 million for the issuance of options pursuant to our share incentive plans and (iii) an adjustment for listing fee of US$33.2 million. Net cash used in operating activities was US$268.0 million for the year ended December 31, 2022. The difference between our net loss of US$60.4 million and the net cash used in operating activities was primarily attributable to (i) adjustments for revenues recognized on acceptance of cryptocurrencies of US$305.0 million, (ii) changes in prepayments and other assets of US$21.9 million primarily associated with deposits and prepayments made to suppliers following the expansion of our business during this period, (iii) changes in deferred revenue of US$9.2 million primarily associated with the recognition of revenue, (iv) income tax prepaid of US$20.0 million, and (v) an adjustment for income tax benefit of US$4.4 million, partially offset by (i) an adjustment for share-based payment expenses of US$90.6 million for the issuance of options following the adoption of our 2021 Share Incentive Plan in July 2021, and (ii) an adjustment for depreciation and amortization of US$66.4 million primarily relating to the depreciation of mining rigs used in our principal business operations and property, plant and equipment used in connection with the expansion of our mining datacenters during this period. 99 Table of Contents Investing Activities Net cash generated from investing activities was US$112.7 million for the year ended December 31, 2024, primarily attributable to proceeds from disposal of cryptocurrencies of US$248.4 million, partially offset by (i) purchase of property, plant and equipment, investment properties and intangible assets of US$119.5 million, (ii) purchase of mining rigs of US$7.7 million and (iii) cash paid for business combinations, net of cash acquired of US$6.1 million. Net cash generated from investing activities was US$199.9 million for the year ended December 31, 2023, primarily attributable to proceeds from disposal of cryptocurrencies of US$299.1 million and proceeds from disposal of financial assets at fair value through profit or loss US$31.1 million, partially offset by (i) purchase of property, plant and equipment, investment properties and intangible assets of US$63.3 million, (ii) purchase of mining rigs of US$63.0 million and (iii) purchase of financial assets at fair value through profit or loss of US$4.4 million. Net cash generated from investing activities was US$133.8 million for the year ended December 31, 2022, primarily attributable to proceeds from disposal of cryptocurrencies of US$561.0 million, partially offset by (i) purchase of cryptocurrencies of US$286.0 million for investment (lending and purchase of wealth management product) purposes, (ii) purchase of property, plant and equipment and intangible assets of US$63.2 million, (iii) net fiat currency investment cash outflow of US$30.8 million in unlisted debt instruments, redeemable on demand, (iv) investment in unlisted equity instruments of US$29.5 million and (v) cash paid for asset acquisition, net of cash acquired of US$26.7 million. Financing Activities Net cash generated from financing activities was US$844.3 million for the year ended December 31, 2024, which was primarily attributable to (i) proceeds from issuance of ordinary shares and warrants, net of transaction costs, of approximately US$485.1 million and (ii) proceeds from convertible senior notes, net of transaction costs, of US$554.2 million, offset by (i) purchase of zero-strike call option of US$160.0 million in connection with the convertible senior notes issued in November, (ii) payment in connection with the extinguishment of convertible senior notes issued in August of US$14.9 million, and (iii) payment related to the senior secured notes issued for the Norway acquisition of US$15.0 million. Net cash used in financing activities was US$13.5 million for the year ended December 31, 2023, which was primarily attributable to (i) net payment related to the Business Combination of US$7.7 million, (ii) payments of convertible debt redemption of US$7.0 million and (iii) capital element of lease rentals paid of US$5.2 million, offset by proceeds from issuance of ordinary shares, net of transaction costs, of approximately US$9.5 million. Net cash used in financing activities was US$3.9 million for the year ended December 31, 2022, which was entirely attributable to capital element of lease rentals paid. Recent Accounting Pronouncements As from January 1, 2024, we adopted the following recently issued or amended standards. These new standards are not expected to have any significant impact on our financial statements: Standard/Interpretation Application Date of Standard Application Date for our group Amendments to IAS 1, Classification of Liabilities as Current or Non-current and Disclosure of Accounting Policies January 1, 2024 January 1, 2024 Amendments to IAS 1, Classification of Debt with Covenants January 1, 2024 January 1, 2024 Amendments to IFRS 16, Subsequent Measurement of Sale and Leaseback Transactions by a Seller-lessee January 1, 2024 January 1, 2024 Amendments to IAS 7 and IFRS 7, Supplier Finance Arrangements January 1, 2024 January 1, 2024 100 Table of Contents The following standards apply to the preparation of sustainability reports and are effective for annual reporting periods beginning on or after January 1, 2024. The authority of the Company’s jurisdiction has not yet mandated these standards; however, the Company is continuing to review the impact of the standards on its financial reporting. • IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information • IFRS S2, Climate-related Disclosures Up to the date of issue of these financial statements, the IASB has issued a number of amendments, which are not yet effective for the year ended December 31, 2024 and which have not been adopted in these financial statements. We are in the process of making an assessment of what the impact of these new and amended standards and interpretations would be in the period of initial application. So far, we have concluded that the adoption of them is unlikely to have a significant impact on our financial position. Standard/Interpretation Application Date for our group Amendments to IAS 21, Lack of Exchangeability January 1, 2025 Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financial Instruments January 1, 2026 Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7, Annual improvements to IFRS Accounting Standards Volume 11 January 1, 2026 Amendments to IFRS 9 and IFRS 7, Contracts referencing Nature-dependent Electricity January 1, 2026 IFRS 18 Presentation and Disclosure in Financial Statements January 1, 2027 IFRS 19 Subsidiaries without Public Accountability: Disclosures January 1, 2027 Critical Accounting Policies and Significant Judgments and Estimates We prepare our consolidated financial statements for the years ended December 31, 2022, 2023 and 2024 in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). In preparing the financial statements, our management has made judgments and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, profit and loss. Estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. We make estimates and assumptions concerning the future. The resulting accounting estimates may not be equal to the related actual results. The judgments and estimates that have a significant risk of causing a material adjustment to the carry amounts of assets and liabilities within the next financial year, which we consider to be critical, is outlined below. Fair value of identified intangible assets acquired in connection with the FreeChain acquisition The fair value of identified intangible assets acquired from business combinations is determined by the use of valuation models and unobservable inputs that are subject to significant estimates and assumptions. These estimates and assumptions can include, among others, the cash flows that an asset is expected to generate in the future and discount rates. The judgments and estimates used are disclosed in the Note 6(c). Other estimates and assumptions utilized in the preparation of our consolidated financial statements are: income taxes, share-based payments, fair value of financial instruments, assessment of the asset acquisition, identified intangible assets acquired in connection with the Norway Acquisition, and impairment of indefinite-lived intangible assets and goodwill. Our use of judgments and estimates are disclosed in the Note 3 and the related accounting policies are disclosed in Note 2. When reviewing our financial statements, you should consider our selection of critical accounting policies, our significant judgments and other uncertainties affecting our applications of those policies and the sensitivity of reported results to changes of such policies, judgments and uncertainties. You should read the descriptions of these significant judgments and estimates in conjunction with other disclosures included in this annual report. We believe that the following are the critical accounting policies. Cryptocurrencies Cryptocurrencies includes USD Coin (“USDC”) and cryptocurrencies other than USDC held in our cryptocurrency wallets.We classify the cryptocurrencies as current assets based on the intention to actively utilize or convert them within the normal operating cycle. 101 Table of Contents USDC USDC is accounted for as a financial instrument as one USDC can be redeemed for one U.S. dollar on demand from the issuer. USDC, classified as a debt investment, is measured at fair value through profit or loss. Cryptocurrencies other than USDC Cryptocurrencies other than USDC are, by their nature, identifiable non-monetary assets that lack physical substance. Future economic benefits attributable to these cryptocurrencies are expected to flow to us because these cryptocurrencies can be exchanged for fiat currencies. Furthermore, the cost of our cryptocurrencies other than USDC can be measured using the quoted price of such cryptocurrencies at the time the fair value is being measured, which we consider to be predominantly a Level 1 fair value input under IFRS 13 Fair Value Measurement fair value hierarchy. We account for the cryptocurrencies other than USDC as intangible assets with indefinite useful lives in our consolidated statements of financial position because, at the time of assessment, there is no foreseeable limit to the period over which such assets are expected to generate cash flows. We further adopt the cost model to account for cryptocurrencies other than USDC and review their useful life and impairment at each reporting date in accordance with IAS 38 Intangible Assets. We account for cryptocurrencies other than USDC at cost. Gains or losses arising from the disposal of cryptocurrencies other than USDC are determined as the difference between the net disposal proceeds and the carrying amount of the assets. We recognize realized gains or losses on the date of the disposal using the first-in-first-out method of accounting. 102 Table of Contents We present the revenue recognized on the acceptance of cryptocurrencies, which is a non-cash item, as an adjustment to remove the non-cash item for the cash flows from operating activities and the disposals of cryptocurrencies received in revenue arrangements are presented as cash flows from investing activities in the consolidated statements of cash flows. The purchases and disposals of cryptocurrencies associated with investment or lending transactions are presented as investing activities in the consolidated statements of cash flows. Revenue recognition Our revenues are derived principally from the cloud hash rate arrangements, the self-mining arrangements, the cloud hosting arrangements, the sales of mining rigs, the general hosting arrangements and the membership hosting arrangements. Revenue is recognized when control over goods or services is transferred to the customer, at the amount of promised consideration to which we are expected to be entitled. Revenue excludes value-added tax (“VAT”) or other sales taxes and is after deduction of trade discount, if any. Revenue is recognized applying the following five steps: i) Identify the contract with a customer; ii) Identify the performance obligations in the contract; iii) Determine the transaction price; iv) Allocate the transaction price to the performance obligations in the contract; and v) Recognize revenue when (or as) we satisfy a performance obligation. 103 Table of Contents For arrangements priced at fiat currency, we recognize revenue based on the contract price. For arrangement priced at cryptocurrency, we recognize revenue based on the spot price of the cryptocurrency to fiat currency on the date when it is earned. When another party is involved in providing services to a customer, we are the principal if we control the specified services before those services are transferred to the customer. The primary sources of our revenues are recognized as follows: Cloud Hash Rate We enter into Cloud Hash Rate arrangements with our customers by offering hash rate subscription plans to provide computing power in a specified quantity, measured by computing power per second, or hash rate, derived from the mining rigs held by us, for a specified period of time. The customer also needs to pay for electricity subscriptions, which are billed separately, to maintain the mining rigs that produce the subscribed hash rate over the contract period. We connect such computing power to a customer-designated mining pool under the instructions of the customer to simplify the customer’s mining experiences. As a result of directing the connection of such computing power to the mining pools, the customers are entitled to the mining rewards, which are directly transferred from mining pools to the customer-designated cryptocurrency wallets. We offer a number of different hash rate subscription plans by plan duration and type of cryptocurrency to be mined. We offer electricity subscriptions in short durations and a customer needs to purchase electricity subscriptions multiple times to cover the duration of the hash rate subscription plan. The price of the electricity subscription is fixed at the commencement of each electricity subscription period but subject to adjustment from period to period. Both cryptocurrency and fiat currency are accepted as payments under the Cloud Hash Rate arrangements. Furthermore, the hash rate subscription plans are offered under two modes. Under the classic mode, the customer receives all of the mining rewards from the mining pool. Under the accelerator mode, the customer pays a relatively lower computing power subscription fee. In exchange, we are entitled to additional consideration once the customer’s cost is recovered. We offer two promises under the Cloud Hash Rate arrangement. One is to provide a specified quantity of computing power during a period of time and the other is to provide maintenance services for computing power generation for a period of time. The two promises are highly interrelated and are not separately identifiable because the customers expect to receive the computing power as a combined output from the hash rate subscription plan and the electricity subscription plan. The two promises provide a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer, over a period of time. As a result, the promises are treated as a single performance obligation satisfied over time. The transaction price of the performance obligation includes the subscription prices for the hash rate subscription plans and the electricity subscription plans. As the price for the electricity subscription plans may change each electricity subscription period, we allocate the variable consideration to each electricity subscription period. The control of the computing power has been transferred to the customers simultaneously as the customers consume the benefits from the computing power. The revenue is recognized over time where the consideration related to the hash rate subscription is recognized evenly over the contract term and the electricity subscription is allocated to and recognized evenly over each electricity subscription period. For plans under the accelerator mode, besides the aforementioned subscription prices, the transaction price also includes the additional consideration once the customer’s cost is recovered. The additional consideration, which is variable, is determined as a percentage of a customer’s mining profit derived from the subscribed computing power and constrained until the mining pool operator finishes the calculation of the mining reward related to the mining activity in a given day. We include such additional consideration in the transaction price and recognizes the revenue when we can reasonably calculate the amount and determine it is probable a significant reversal will not occur. 104 Table of Contents Self-mining We enter into contracts with mining pool operators to provide a service to the mining pool operators to perform hash calculations using our own mining rigs. We consider the mining pool operators as the customers under this type of arrangement and can decide when to start providing services. Our enforceable right to consideration begins when, and continues as long as, we provide hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such a termination. As such, the duration of a contract is less than a day and the contract continuously renews throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. In exchange for providing hash calculation service to the mining pool operators, we are entitled to non-cash compensation, cryptocurrency, from the mining pool operators, which is a variable consideration based on the mining pool operators’ distribution mechanisms, which can differ depending on the specific mining pools. Full-Pay-Per-Share (“FPPS”) and Pay-Per-Share-Plus (“PPS+”) pools pay block rewards and transaction fees, less mining pool fees. For FPPS and PPS+ pools, we are entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. For the periods presented, we primarily participated in Bitcoin mining to generate our self-mining revenues, and the payment mechanisms used by the mining pool operators were primarily FPPS and PPS+. FPPS Mining Pools We mainly participate in mining pools that use the FPPS payment mechanism. We are entitled to compensation once we begin to perform hash calculations for the mining pool operator in accordance with the operator’s specifications over a 24-hour period beginning mid-night UTC and ending at 23:59:59 UTC on a daily basis. The non-cash consideration that we are entitled to for providing hash calculations to the mining pool operator under the FPPS payment mechanism is made up of block rewards and transaction fees less pool operator fees determined as follows: • The non-cash consideration referred as the block reward is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that we provide to the pool operator as a percent of the Bitcoin network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin network block rewards expected to be generated for the same daily period. • The non-cash consideration referred as the transaction fees is based on the share of total actual fees paid by the transaction requestor to each block placed in the Bitcoin blockchain over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin network during the daily 24-hour period as a percent of the total block rewards the Bitcoin network actually generated during the same 24-hour period, multiplied by the block rewards we earned for the same 24-hour period. • The gross non-cash compensation, consisting of the block reward and transaction fees, earned by us is reduced by the mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generates revenue in accordance with the pool operator’s payout formula during the same daily period as discussed above. PPS+ Mining Pool We also participate in one PPS+ mining pool that provides non-cash consideration determined in a manner similar to the FPPS mining pools except the amount of transaction fees from the PPS+ mining pool operator is determined based on the share of actual transaction fees paid to the specific blocks the mining pool successfully mined in the Bitcoin blockchain in a daily 24-hour period in accordance with the operator’s specifications. The transaction fees are determined using the following formula: the hash calculations that we provide to the pool operator as a percent of the total relevant hash calculations performed by the mining pool operator under PPS+, multiplied by actual transaction fees paid to the specific blocks a mining pool operator successfully mined under PPS+ in the Bitcoin blockchain. The above non-cash consideration is variable since the amount of block reward earned depends on the amount of hash calculations we performs; the amount of transaction fees depends on the total actual fees paid by the transaction requestor to each block placed in the Bitcoin Blockchain under FPPS, and the actual transaction fees paid to the specific blocks a mining pool operator successfully mined over the daily period under PPS+; and the operator fees for the same period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, we have the ability to estimate the variable consideration when we begin to provide hash calculation service with reasonable certainty without the risk of significant revenue reversal. We recognize the non-cash consideration on the same day that control of the contracted service transfers to the mining pool operator and measures the non-cash consideration based on the spot rate of the underlying cryptocurrency determined using the quoted price of such cryptocurrency, at midnight UTC, on the date on which we provide the hash calculation service. Although the non-cash consideration the mining pool operators receive from the blockchain networks includes both the block rewards and the transaction fees, the transaction price we receive is an aggregate amount and primarily includes the block rewards. As a result, we do not present disaggregated revenue information on block rewards. Cloud Hosting We provide our customers, through subscription of Cloud Hosting orders, one-stop mining rigs hosting solution which integrates the provision of computing power generated from specified second-hand mining rigs and the provision of maintenance service, primarily including electricity supply and daily maintenance and repair care. We charge the customer an upfront fixed amount at the commencement of the Cloud Hosting arrangement for the customer to secure the procurement of the computing power from the specified mining rigs, as well as the variable fees for the provision of maintenance service based on the consumption of resources such as electricity throughout the duration of the service. We historically only accept cryptocurrency as payments for services under the Cloud Hosting arrangement. The Cloud Hosting arrangements are offered under two modes. Under the classic mode, the customer receives all of the mining rewards from the mining pool. Under the accelerator mode, the customer is charged with a lower upfront amount and enjoys a quicker recovery of the costs. In exchange, we are entitled to additional consideration once a customer’s cost is recovered. Two promises are offered under the Cloud Hosting arrangements. One is to provide the computing power generated from the specified mining rigs and the other is to perform maintenance services over the life of the mining rigs. The two promises are not separately identifiable because the customer expects to receive a steady operation of the mining rigs specified in the Cloud Hosting order, which is a combined output of the provision of computing power from the specified mining rigs and the provision of maintenance service of the specified mining rigs. The two promises provide a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer, over a period of time. As a result, the promises are treated as a single performance obligation satisfied over time. The transaction price of the performance obligation includes an upfront fee paid upon placement of the Cloud Hosting order and periodical maintenance fees. The periodical maintenance fee is variable in each maintenance period based on the electricity consumption. We allocate the variable consideration to each distinct maintenance service period. The revenue is recognized over time where the fixed upfront fee is recognized evenly over the contract term and the periodical maintenance fee is recognized over each respective service period. The contract term approximates to the life of the specified mining rigs and is estimated to be two years. The estimated life of these mining rigs is reviewed at least at each financial year-end and adjusted if the expectation of the realization of economic benefits from the specified mining rigs is different from the previous estimate. 105 Table of Contents For plans under the accelerator mode, besides the aforementioned fees, the transaction price also includes the additional consideration once the customer’s cost is recovered. The additional consideration, which is variable, is determined as a percentage of a customer’s mining profit derived from the computing power of the specified mining rigs and constrained until the mining pool operator finishes the calculation of the mining reward related to the mining activity in a given day. We include such additional consideration in the transaction price and recognizes revenues when we can reasonably calculate the amount and determine it is probable a significant reversal will not occur. For all the periods presented, no revenue was generated from the additional consideration from Cloud Hosting arrangements offered under the accelerator mode. Sale of Mining Rigs We recognize revenue from sales of mining rigs to customers at the point in time when control of the mining rigs is transferred to the customer, which generally occurs upon shipment of the mining rigs as defined in the revenue contract. Sale of mining rigs is the sole performance obligation in this type of arrangement. We accept both cryptocurrency and fiat currency as payments for sales of mining rigs. General Hosting We provide general hosting services, which is a combined service package including custody of the customers’ mining rigs, electricity and network maintenance and other services, that enable customers to run blockchain computing operations. The customer is only able to benefit from the hosting service as a package and we have a single performance obligation. The hosting service fee is charged to the customer based on the customer’s consumption of resources, such as the amount of electricity used in a period. In the arrangement with certain customers, we are also entitled to additional variable consideration based on the customer’s mining yield during a period. Revenue from the general hosting service is recognized across each service cycle. We accept both cryptocurrency and fiat currency as payments for the hosting services. Membership Hosting We offer our large-scale miner customers membership hosting services by entering into a series of contracts, which includes a membership program agreement and a management services agreement. These contracts are signed with the same customer at or near the same time, and they are combined and accounted for as a single contract. Pursuant to the membership program agreement, a customer subscribing the program is entitled to the program benefit of receiving maintenance services within a predetermined capacity measured by energy consumption (i.e., Kilowatts, or KW) (the “hosting capacity”). We provide such designated capacity in a leased mining datacenter and the program subscription period ends when we no longer operate the mining datacenter. In addition, we also agree to provide other program benefits to the customer when such benefits are readily available to the customer during the program term, including, among other things, (i) early, priority and exclusive access to the newly available hosting capacity that is sufficient for large-scale miners, upon a new mining datacenter becomes available and (ii) more favorable pricing terms for our services, such as mining rigs management services, than the prevailing price in the local market. We charge an upfront fee for the program benefits subscribed. Pursuant to the management services agreement, we provide management services for the customer’s mining rigs up to the capacity subscribed in the membership program agreement. In exchange for the management services fee, we promise to deliver a package of services to provide an infrastructure for the mining rigs, such as a premise for the custody of mining rigs, and network and utility to support the operation of the mining rigs. Unlike the general hosting service where we include in our service package to host or operate the customer’s mining rigs under the customer’s instructions so that the mining rigs keep running and remain connected to the customer designated mining pools (the “mining rigs operation service”), under the management services agreement, a customer has the discretion to subscribe to the mining rigs operation service or choose to operate the mining rigs using the customer’s own personnel. We charge additional fee, at its stand-alone selling price, for the subscription of our mining rigs operation service. The management services fee and the mining rigs operation fee, as applicable, are charged to the customer monthly based on the customer’s consumption of resources, such as the amount of electricity used in a period. 106 Table of Contents Our promise associated with the membership program agreement is to stand ready to provide services, and our promise associated with the management services agreement is to provide an infrastructure for the mining rigs through the set of services provided under the management services agreement. The two promises are not separately identifiable because the customer expects to receive mining rigs management services for the mining rigs up to the designated capacity, which is a combined output of the program benefit and management services provided by us as a package. The two promises provide a series of distinct services that have the same pattern of transfer to the customer over a period of time. As a result, the promises are treated as a single performance obligation satisfied over time. Revenue associated with the upfront fee for the program benefits is recognized over the program subscription period and revenue associated with the management services is recognized over each distinct service period. The promise to provide the mining rigs operation service, if subscribed to by a customer, is accounted for as a separate performance obligation and the associated revenue is recognized over each distinct service period at their respective stand-alone selling price. We accept both cryptocurrency and fiat currency as payments for the membership hosting arrangements. The contract term approximates the lease term of the mining datacenter and is estimated to be 13 years. The estimated lease term is adjusted when there is an indication that we are reasonably certain to renew or terminate the lease. Business combinations Business combinations are accounted for under IFRS 3 using the acquisition method as of the acquisition date, which is the date on which we obtain control of the acquiree. Under the acquisition method, we allocate the excess of the consideration transferred over the fair value of identifiable net assets acquired to goodwill. A bargain purchase gain will be recognized under the circumstance where the consideration transferred is less than the identified net assets acquired. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of assets transferred by us, liabilities incurred by us to the former owners of the acquiree and the equity interest issued by us in exchange for control of the acquiree. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognized in other net gains / (losses). Acquisition-related costs are recognized in profit or loss as incurred. Identifiable assets acquired and liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. SEC Filing Status Based on our public float as of June 30, 2024, we became a large accelerated filer, and lost emerging growth company status as of December 31, 2024. As of December 31, 2024, we are required to adopt new or revised accounting standards when they are applicable to public companies that are not emerging growth companies and are required to comply with the auditor attestation of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. Holding Company Structure Bitdeer Technologies Group is an exempted company with limited liability incorporated in the Cayman Islands on December 8, 2021 with no material operations of its own. We currently conduct our operations primarily through our subsidiaries. As a result, our ability to pay dividends primarily depends upon dividends paid by our subsidiaries. If our existing subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.