Sangrix Inc 20-F for FY2025
Sangrix Inc. (SGRX)
About this 20-F
Sangrix Inc filed this 20-F on October 31, 2025, covering the fiscal year ended June 30, 2025 (FY2025).
Headline figures
Fiscal year ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $39.5K
- down 98.6% from $2.89M a year earlier
- Net loss
- $4.37M
- compared with a net loss of $18.28M a year earlier
- Diluted EPS
- -$0.28
- compared with -$3.34 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission file number:
(Exact name of Registrant as specified in its charter)
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading symbol(s) |
| Name of each exchange on which registered |
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| The |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ | |
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| Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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| International Financial Reporting Standards as issued |
| Other ☐ |
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| by the International Accounting Standards Board ☐ |
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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes
Table of Contents
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 86 | |
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 88 | |
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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 90 | |
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Conventions Used in this Annual Report
Unless otherwise indicated or the context requires otherwise, references in this annual report on Form 20-F to:
| ● | “Bit Origin”, “our company”, the “Company”, “we”, “us”, and “our” are to Bit Origin Ltd (formerly known as China Xiangtai Food Co., Ltd.), an exempted company incorporated in the Cayman Islands with limited liability; |
| ● | “Bit Origin SG” are to Bit Origin Pte. Ltd., a Singapore company and a subsidiary of Bit Origin Ltd; and |
| ● | “China” or the “PRC” are to the People’s Republic of China, excluding Taiwan for the purposes of this annual report only; |
| ● | “Class A Ordinary Shares” are to the Class A ordinary shares, par value $0.000001 per share, of the Company; |
| ● | “Class B Ordinary Shares” are to the Class B ordinary shares, par value $0.000001 per share, of the Company; |
| ● | “RMB” are to the legal currency of China; |
| ● | “SEC” are to the United States Securities and Exchange Commission; |
| ● | “Sonic Auspice” are to Sonic Auspice DC LLC, a Delaware limited liability company and a subsidiary of Bit Origin Ltd; |
| ● | “SonicHash Canada” are to SonicHash Inc., a company organized under the laws of Alberta, Canada, and a subsidiary of Bit Origin Ltd; |
| ● | “SonicHash US” are to SonicHash LLC, a Delaware limited liability company and a subsidiary of Bit Origin Ltd; |
| ● | “U.S. dollars,” “$,” “US$,” and “dollars” are to the legal currency of the United States; |
We have relied on statistics provided by a variety of publicly-available sources regarding the industry we are involved in. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.
We have sought to provide current information in this annual report and believe that the statistics provided in this annual report remain up-to-date and reliable, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this report may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “aim,” “will,” “project,” “target,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to identify such forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements regarding future economic conditions or performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under “Item 3—Key Information—Risk Factors,” “Item 4—Information on the Company,” “Item 5—Operating and Financial Review and Prospects,” and elsewhere in this report, as well as factors which may be identified from time to time in our other filings with the Securities and Exchange Commission (the “SEC”) or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.
The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable for annual reports on Form 20-F.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable for annual reports on Form 20-F.
ITEM 3. KEY INFORMATION
3.A. [Reserved]
3.B. Capitalization and Indebtedness
Not applicable for annual reports on Form 20-F.
3.C. Reasons for the Offer and Use of Proceeds
Not applicable for annual reports on Form 20-F.
3.D. Risk Factors
Summary Risk Factors
You should carefully consider all of the information in this annual report before making an investment in our Class A Ordinary Shares. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings. These risks are discussed more fully under “Item 3. Key Information-3.D. Risk Factors.”
Risks Related to Our Business and Industry
| ● | If we are unable to successfully implement our business plan or other business strategies as implemented in the future, it would affect our financial and business condition and results of operations (see page 9 of this annual report); |
| ● | Our results of operations are expected to be impacted by significant fluctuation of Bitcoin and Dogecoin price (see page 9 of this annual report); |
| ● | The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate (see page 9 of this annual report); |
| ● | Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by banks and other financial institutions, may indirectly adversely affect our business operations, financial condition and results of operations (see page 10 of this annual report); |
| ● | We may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies (see page 11 of this annual report); |
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| ● | The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain (see page 11 of this annual report); |
| ● | There is a lack of liquid markets for cryptocurrencies, and blockchain/Bitcoin-based assets are susceptible to potential manipulation (see page 11 of this annual report); |
| ● | Our Dogecoin may be subject to loss, theft or restriction on access. We have policy to safeguard our crypto assets, however, our business and financial condition may be affected if the policies and procedures surrounding the safeguarding of crypto assets are not effective (see page 11 of this annual report); |
| ● | Regulatory actions in one or more countries could severely affect the right to acquire, own, hold, sell or use certain cryptocurrencies or to exchange them for fiat currency (see page 12 of this annual report); |
| ● | We might require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all (see page 12 of this annual report); |
| ● | Even if we can raise additional funding, we may be required to do so on terms that are dilutive to you. |
| ● | We may pursue additional opportunities to acquire complementary businesses, which could further increase leverage and debt service requirements and could adversely affect our financial situation if we fail to successfully integrate the acquired business (see page 12 of this annual report); |
| ● | Our indebtedness could adversely affect our ability to raise additional capital to fund operations. |
| ● | New lines of business or new products and services may subject us to additional risks (see page 13 of this annual report); |
| ● | Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted (see page 14 of this annual report); |
| ● | We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our share price, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets (see page 14 of this annual report); |
| ● | The recent disruption in the crypto asset markets may harm our reputation (see page 15 of this annual report); |
| ● | Our Cryptocurrency holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents (see page 15 of this annual report); |
| ● | Our board of management have experience in risk management and we have risk management policies in place in light of current crypto asset market conditions. However, if we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected (see page 15 of this annual report); and |
| ● | We may face financing, liquidity, or other risks related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets we use as collateral or the value of our crypto assets used by others as collateral (see page 16 of this annual report). |
Risks Related to Our Corporate Structure
| ● | The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States (see page 16 of this annual report); |
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| ● | You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law (see page 16 of this annual report); |
| ● | Certain judgments obtained against us by our shareholders may not be enforceable (see page 17 of this annual report); |
| ● | The economic substance legislation of the Cayman Islands may adversely impact us or our operations (see page 17 of this annual report); and |
| ● | We may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A Ordinary Shares (see page 17 of this annual report). |
Risks Related to United States Government Regulations
| ● | We are subject to an extensive and rapidly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results and financial condition (see page 18 of this annual report); |
| ● | A particular digital asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if a regulator disagrees with our characterization of a digital asset, we may be subject to regulatory scrutiny, investigations, fines, and penalties, which may adversely affect our business, operating results and financial condition. Furthermore, a determination that Bitcoin or any other digital asset that we own or mine is a “security” may adversely affect the value of Bitcoin and our business (see page 19 of this annual report); |
| ● | If the SEC or another regulatory body considers Bitcoin or Dogecoin to be a security under U.S. securities laws, we may be required to comply with significant SEC registration and/or other requirements (see page 20 of this annual report); |
| ● | If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, we may incur significant compliance costs, which could be substantial or cost-prohibitive. If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations (see page 20 of this annual report); |
| ● | The ongoing evolution of U.S. and foreign regulatory regimes governing digital assets creates uncertainty around whether Bitcoin and other cryptocurrencies will be treated as securities or commodities, which could subject our mining operations to additional regulation and materially and adversely affect our business, financial condition and results of operations (see page 21 of this annual report); |
| ● | Because there has been limited precedent set for financial accounting of Bitcoin and other Bitcoin assets, the determination that we have made for how to account for Bitcoin assets transactions may be subject to change (see page 22 of this annual report); and |
| ● | Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business (see page 22 of this annual report). |
Risks Related to Canadian Government Regulations
| ● | The regulations of Alberta Utilities Commission (“AUC”) may have an adverse impact on our Canadian operations (see page 23 of this annual report). |
Risks Related to Singaporean Government Regulations
| ● | Current and future laws and regulations approved by the Singaporean government may have an adverse impact on our operations in Singapore (see page 23 of this annual report). |
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Risks Related to Our Class A Ordinary Shares
| ● | The dual-class structure of our Class A and Class B Ordinary Shares has the effect of concentrating voting power with the holders of Class B Ordinary Shares, which could limit the ability of holders of Class A Ordinary Shares to influence corporate matters (see page 24 of this annual report); |
| ● | The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies (see page 24 of this annual report); |
| ● | The market price of our Class A Ordinary Shares has recently declined significantly, and our Class A Ordinary Shares could be delisted from the Nasdaq or trading could be suspended (see page 25 of this annual report); |
| ● | In the event that our Class A Ordinary Shares are delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in our Class A Ordinary Shares because they may be considered penny stocks and thus be subject to the penny stock rules (see page 25 of this annual report); |
| ● | We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects (see page 26 of this annual report); |
| ● | As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards (see page 26 of this annual report); |
| ● | We will incur increased costs as a result of being a public company, particularly now that we no longer qualify as an “emerging growth company” (see page 27 of this annual report); |
| ● | The requirements of being a public company may strain our resources and divert management’s attention (see page 27 of this annual report); |
| ● | The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance (see page 27 of this annual report); |
| ● | Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A Ordinary Shares for return on your investment (see page 28 of this annual report); |
| ● | Future issuances or sales, or perceived issuances or sales, of substantial amounts of Class A Ordinary Shares in the public market could materially and adversely affect the prevailing market price of the Class A Ordinary Shares and our ability to raise capital in the future (see page 28 of this annual report); |
| ● | Future financing may cause a dilution in your shareholding or place restrictions on our operations (see page 28 of this annual report); |
| ● | We have material weaknesses in our internal control over financial reporting. If any material weakness persists or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately report its financial results could be adversely affected (see page 29 of this annual report); |
| ● | There can be no assurance that we will not be passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Class A Ordinary Shares to significant adverse United States income tax consequences (see page 29 of this annual report); |
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| ● | Securities analysts may not cover our Class A Ordinary Shares and this may have a negative impact on the market price of our Class A Ordinary Shares (see page 30 of this annual report); and |
| ● | Techniques employed by short sellers may drive down the market price of our Class A Ordinary Shares (see page 30 of this annual report). |
Risks Related to Our Business and Industry
If we are unable to successfully implement our business plan or other business strategies as implemented in the future, it would affect our financial and business condition and results of operations.
In December 2021, we decided to enter the Bitcoin mining business. In December 2023, we temporarily ceased the Bitcoin mining business in the United States due to the high operating costs. In July 2025, we introduced a dedicated Dogecoin treasury program to advance our strategic development. As of this annual report, we have 70,543,745 Dogecoin, and we also had supplier prepayments for 617 Aethir Cloud rendering miners and 134 MicroBT WhatsMiner M60S ASIC miners, which are available for delivery to customers through our sales representative arrangement. We are exploring strategic opportunities to revitalize our crypto mining operations. This includes identifying suitable hosting partners and evaluating the potential for buying and selling mining hardware. There are various risks related to these efforts, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. Our intentions and expectations with regard to the execution of our business plan, and the timing of any related initiatives, are subject to change at any time based on management’s subjective evaluation of our overall business needs. If we are unable to successfully execute our business plan, whether due to failure to realize the anticipated benefits from our business initiatives in the anticipated time frame or otherwise, we may be unable to achieve our financial targets.
Our results of operations are expected to be impacted by significant fluctuation of Bitcoin and Dogecoin price.
The price of Bitcoin and Dogecoin has experienced significant fluctuations over its relatively short existence and may continue to fluctuate significantly in the future. Bitcoin prices ranged from approximately US$30,477 as of June 30, 2023, US$62,678 as of June 30, 2024, and US$107,135.34 as of June 30, 2025 according to Coin Market Cap. Dogecoin prices ranged from approximately US$0.0665 as of June 30, 2023, US$0.1243 as of June 30, 2024, and US$0.1651 as of June 30, 2025 according to Coin Market Cap.
Any future significant reductions in the price of Bitcoin and Dogecoin will likely have a material and adverse effect on our results of operations and financial condition. We cannot assure you that the Bitcoin and Dogecoin price will remain high enough to sustain our operation or that the Bitcoin and Dogecoin price will not decline significantly in the future. Furthermore, fluctuations in the Bitcoin and Dogecoin price can have an immediate impact on the trading price of our Class A Ordinary Shares even before our financial performance is affected, if at all.
Various factors, mostly beyond our control, could impact the Bitcoin and Dogecoin price. For example, the usage of Bitcoins in the retail and commercial marketplace is relatively low in comparison with the usage for speculation, which contributes to Bitcoin’s price volatility.
The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate.
The use of cryptocurrencies to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs crypto assets based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale acceptance of cryptocurrencies as a means of payment has not occurred, and may never occur. The growth of this industry in general, and the use of cryptocurrency, in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably. The factors include, but are not limited to:
| ● | continued worldwide growth in the adoption and use of cryptocurrencies as a medium to exchange; |
| ● | governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar blockchain-based systems; |
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| ● | changes in consumer demographics and public tastes and preferences; |
| ● | the maintenance and development of the open-source software protocol of the network; |
| ● | the increased consolidation of contributors to the blockchain through mining pools; |
| ● | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; |
| ● | the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; |
| ● | general economic conditions and the regulatory environment relating to cryptocurrencies; and |
| ● | negative consumer sentiment and perception of Bitcoin and Dogecoin specifically and cryptocurrencies generally. |
The outcome of these factors could have negative effects on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations as well as potentially negative effect on the value of any Bitcoin, Dogecoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, which would harm investors in our securities.
Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities or that accept cryptocurrencies as payment, including financial institutions of investors in our securities. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by banks and other financial institutions, may indirectly adversely affect our business operations, financial condition and results of operations.
A number of companies that engage in cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action. As of the date hereof, we have not experienced any service disruptions with or have our accounts closed by any banks or other financial institutions. To the extent that such events may happen to us, they could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.
The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial institutions were to close the accounts of businesses engaging in cryptocurrency-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which, if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial institutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect on our ability to continue as a going concern or to pursue our strategy at all, which could have a material adverse effect on our business, prospects or operations and harm investors.
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We may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies.
A disruption of the Internet may affect the use of cryptocurrencies and subsequently the value of our securities. Generally, cryptocurrencies, our business of mining cryptocurrencies and Dogecoin treasury program is dependent upon the Internet. A significant disruption in Internet connectivity could disrupt a currency’s network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies and our ability to mine cryptocurrencies.
The impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain.
Geopolitical crises may motivate large-scale purchases of Bitcoin and Dogecoin and other cryptocurrencies, which could increase the price of Bitcoin and Dogecoin and other cryptocurrencies rapidly. This may increase the likelihood of a subsequent price decrease, as crisis-driven purchasing behavior dissipates, adversely affecting the value of our inventory following such downward adjustment. Such risks are similar to the risks of purchasing commodities in general uncertain times, such as the risk of purchasing, holding or selling gold. Alternatively, as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage investment in cryptocurrencies as investors focus their investment on less volatile asset classes as a means of hedging their investment risk.
As an alternative to fiat currencies that are backed by central governments, cryptocurrencies, which are relatively new, are subject to supply and demand forces. How such supply and demand will be impacted by geopolitical events is largely uncertain but could be harmful to us and investors in our Class A Ordinary Shares. Political or economic crises may motivate large-scale acquisitions or sales of cryptocurrencies either globally or locally. Such events could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or any other cryptocurrencies we mine or otherwise acquire or hold for our own account.
There is a lack of liquid markets for cryptocurrencies, and blockchain-based assets are susceptible to potential manipulation.
Cryptocurrencies that are represented and trade on a ledger-based platform may not necessarily benefit from viable trading markets. Stock exchanges have listing requirements and vet issuers; requiring them to be subjected to rigorous listing standards and rules, and monitor investors transacting on such platform for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies. The laxer a distributed ledger platform is about vetting issuers of Bitcoin and Dogecoin assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of the ledger due to a control event. These factors may decrease liquidity or volume or may otherwise increase volatility of investment securities or other assets trading on a ledger-based system, which may adversely affect us. Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin, Dogecoin, or other cryptocurrencies we mine or otherwise acquire or hold for our own account and harm investors.
Our Dogecoins may be subject to loss, theft or restriction on access. We have policy to safeguard our crypto assets, however, our business and financial condition may be affected if the policies and procedures surrounding the safeguarding of crypto assets are not effective.
There is a risk that some or all of our Dogecoins could be lost, stolen, or otherwise become inaccessible. We store our Dogecoins in both hot and cold wallets with BitGo Trust Company, Inc. (“BitGo Trust”), a regulated institutional digital asset custodian. Hot wallets, which are connected to the Internet, facilitate transactions but are more vulnerable to hacking and other cyber incidents. Cold wallets, which are kept offline, provide greater protection from external attacks but may result in delayed access to assets during market volatility and carry risks of internal error or misappropriation.
BitGo Trust provides SOC-2-certified, multi-signature, hardware-secured custody solutions designed to safeguard digital assets; however, its systems may still be susceptible to defects, operational failures, or cyber-attacks. Any loss, theft, or restriction on access to our Dogecoin assets held with BitGo Trust could materially and adversely affect our business operations, financial condition, and results of operations.
Hackers or malicious actors may also seek to exploit vulnerabilities in the Dogecoin network, third-party exchanges, mining pools, or storage systems. As we may hold a significant amount of Dogecoin, we could become a more attractive target for cyber-attacks or other security threats. The loss or destruction of a private key required to access our wallets could permanently prevent us from accessing our Dogecoin holdings. Because cryptocurrencies are controllable only by the possessor of both the public and private keys associated with the digital wallet, the loss, theft, or compromise of private keys could have an irreversible effect on our ability to access or transfer our Dogecoins.
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Our security infrastructure may also be compromised by human error, insider malfeasance, or sophisticated phishing and social-engineering attacks. The techniques used to obtain unauthorized access to digital-asset systems are constantly evolving and often difficult to detect until after a breach has occurred. If an actual or perceived breach of our security systems occurs, the market perception of our security measures could be harmed, and we could suffer financial losses, reputational damage, and operational disruption. Any such event could materially and adversely affect our business, financial condition, and results of operations.
Regulatory actions in one or more countries could severely affect the right to acquire, own, hold, sell or use certain cryptocurrencies or to exchange them for fiat currency.
One or more countries may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use cryptocurrencies or to exchange them for fiat currency. In some nations, it is illegal to accept payment in Bitcoin and other cryptocurrencies for consumer transactions and banking institutions are barred from accepting deposits of cryptocurrencies. Such restrictions may adversely affect us as the large-scale use of cryptocurrencies as a means of exchange is presently confined to certain regions.
We might require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to acquire Bitcoins or Dogecoins. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A Ordinary Shares. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired.
Even if we can raise additional funding, we may be required to do so on terms that are dilutive to you.
The capital markets have been unpredictable in the recent years. In addition, it is generally difficult for early-stage companies to raise capital under current market conditions. The amount of capital that a company such as ours is able to raise often depends on variables that are beyond our control. As a result, we may not be able to secure financing on terms attractive to us, or at all. If we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs and may be dilutive to our current shareholders. If adequate funds are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued viability will be materially adversely affected.
We may pursue additional opportunities to acquire complementary businesses, which could further increase leverage and debt service requirements and could adversely affect our financial situation if we fail to successfully integrate the acquired business.
As part of our growth strategy, we have been actively seeking opportunities to deploy emerging technologies, including crypto asset mining and blockchain technologies with diversified expansion strategy recently. Although as of the date of this annual report, we do not have any plan to engage in other crypto-related businesses or services, expand the mining operations, or mine crypto assets other than Bitcoin, we may pursue selective acquisitions of complementary businesses in the future. Inherent in any future acquisitions are certain risks such as increasing leverage and debt service requirements and combining company cultures and facilities, which could have a material adverse effect on our operating results, particularly during the period immediately following such acquisitions. Additional debt or equity capital may be required to complete future acquisitions, and there can be no assurance that we will be able to raise the required capital. Furthermore, acquisitions involve a number of risks and challenges, including:
| ● | diversion of management’s attention; |
| ● | potential loss of key employees and customers of the acquired companies; |
| ● | an increase in our expenses and working capital requirements; |
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| ● | failure of the acquired entities to achieve expected results; |
| ● | our failure to successfully integrate any acquired entities into our business; and |
| ● | our inability to achieve expected synergies and/or economies of scale. |
These opportunities may also expose us to successor liability relating to actions involving any acquired entities, their respective management or contingent liabilities incurred prior to our involvement and will expose us to liabilities associated with ongoing operations, in particular to the extent we are unable to adequately and safely manage such acquired operations. These transactions may also be structured in such a manner that would result in our assumption of obligations or liabilities not identified during our pre-acquisition due diligence.
Any of these and other factors could adversely affect our ability to achieve anticipated cash flows at acquired operations or realize other anticipated benefits of acquisitions, which could adversely affect our reputation and have a material adverse effect on us.
Our indebtedness could adversely affect our ability to raise additional capital to fund operations.
We currently have three outstanding secured convertible debentures in an aggregate original principal amount of $16,338,506 (excluding interest accrued thereon).
If we cannot generate sufficient cash flow from operations to service our debt, we may need to, among other things, dispose of some or all of the collateral or issue equity to obtain necessary funds. We do not know whether we will be able to do any of this on a timely basis, on terms satisfactory to us, or at all. Our indebtedness could have important consequences, including:
| ● | our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes may be limited; |
| ● | a portion of our cash flows from operations may be dedicated to the payment of principal and interest on the indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; |
| ● | our ability to adjust to changing market conditions may be limited and may place us at a competitive disadvantage compared to less-leveraged competitors, if such exist; and |
| ● | we may be vulnerable during a downturn in general economic conditions or in our business, or may be unable to carry on capital spending that is important to our growth. |
New lines of business or new products and services may subject us to additional risks.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, any new line of business and/or new service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new services could have a material adverse effect on our business, results of operations and financial condition.
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Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted.
Our business operations depend on the continued services of our senior management, particularly the executive officers named in this annual report. While we have provided different incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management team will not join our competitors or form a competing business. If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may be unable to enforce them at all.
We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our share price, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.
In 2022 and the beginning of 2023, some of the well-known crypto asset market participants, including Celsius Network, Voyager Digital Ltd., Three Arrows Capital and Genesis Global Holdco, LLC, declared bankruptcy. In November 2022, FTX, the third largest digital asset exchange by volume at the time, halted customer withdrawals and shortly thereafter, FTX and its subsidiaries filed for bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. Furthermore, it also revealed potential systemic risks and industry contagion as a significant number of other major market participants were affected by FTX’s bankruptcy – namely, among others, BlockFi Inc., as one of the largest digital assets lending companies.
In response to these events, the digital asset markets, including the market for Bitcoin and Dogecoin specifically, have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital assets markets and in cryptocurrencies. These events have also negatively impacted the liquidity of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital assets markets continues to be negatively impacted by these events, digital asset prices may continue to experience significant volatility and confidence in the digital asset markets may be further undermined. These events are continuing to develop and it is not possible to predict at this time all of the risks that they may pose to us, our service providers or on the digital asset industry as a whole.
We had no direct and material exposure to FTX or any of the above-mentioned cryptocurrency companies. We will not have material assets that may not be recovered or may otherwise be lost or misappropriated due to the bankruptcies. However, the failure or insolvency of large exchanges and key institutions in the cryptocurrency asset industry like FTX may cause the price of Bitcoin and Dogecoin to fall and decrease confidence in the ecosystem, which could adversely affect an investment in us. Such volatility and decrease in Bitcoin price have had a material and adverse effect on our results of operations and financial condition as all our revenue was from Bitcoin mining production during the fiscal year ended June 30, 2024 and 2023. In particular, our production in November 2022 was negatively affected by the strong volatility of the Bitcoin price. As a result, we scaled down our operations to cut down costs. In December 2022, due to high energy price and the Georgia site’s weak condition in general, SonicHash US ceased the operation of the miners in the Georgia site and shipped 1,490 miners that were deployed in the Georgia site to the mining facility in Marion, Indiana and were deployed in January 2023. We ceased the operation of the miners in the Indiana site in September 2023 and moved all the miners to the Wyoming site. In December 2023, we ceased the operations of the miners in the Wyoming site in December 2023 due to the high operating costs in the United States. In addition, in December 2022, we reached an agreement with Your Choice 4 CA, Inc., the host of the mining facility in Marion, Indiana, that the hosting fee is adjusted to equal to the sum of (i) the electricity cost of the mining activities and (ii) 50% of SonicHash US’s profit generated from the Indiana site, i.e., the difference of the market price of the Bitcoins mined from the Indiana site and the electricity cost. The market price of the Bitcoins is the daily Bitcoin closing price available at CoinMarketCap.com as of the day immediately prior to the day that we receive the electricity bill. The new fee structure decreased our cost significantly in December 2022. We are exploring strategic opportunities to revitalize our crypto mining operations. This includes identifying suitable hosting partners and evaluating the potential for buying and selling mining hardware.
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As of the date of this annual report, we hold 70,543,745 Dogecoins. We cannot assure that the Dogecoin price will remain high enough to sustain our operation or that the Dogecoin price will not decline significantly in the future. Fluctuations in the Dogecoin price have had and are expected to continue to have an immediate impact on the trading price of our Class A Ordinary Shares even before our financial performance is affected, if at all. To the extent investors view our Class A Ordinary Shares as linked to the value of our Dogecoin holdings, these potential consequences of a Dogecoin trading venue’s failure could have a material adverse effect on the market value of our Class A Ordinary Shares.
In addition, a perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital asset exchange’s failure could adversely affect an investment in us.
As of the date of this annual report, we are not subject to any legal proceedings or government investigations in the United States or in other jurisdictions. However, in the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation of this type may be expensive to defend and may divert our management’s attention and resources from the operation of our business.
The recent disruption in the crypto asset markets may harm our reputation.
To the extent our counterparties/suppliers view our business as linked to the value of our Dogecoin holdings, they may lose confidence in enter into business with us and may deem our business to be risky. It may be difficult for us to reach the same business terms with such counterparties/suppliers like we did before. For example, our suppliers would require more deposits or advance payments from us.
In addition, additional regulations may subject us to investigation, administrative or regulatory proceedings, and civil or criminal litigations, all of which could harm our reputation and affect our business operation and the value of our Class A Ordinary Shares. If we have difficulties to comply with such additional regulatory and registration requirements, we may have to cease certain or all of our operations. Any such actions could have a material adverse effect on our business, financial condition and results of operations.
Our cryptocurrency holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
We hold cryptocurrency in order to enjoy the potential benefits of the appreciation of the Dogecoin price. We do not currently store cryptocurrency on any trading platform. Historically, the cryptocurrency markets have been characterized by more price volatility, less liquidity, and lower trading volumes compared to sovereign currencies markets, as well as relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, and various other risks inherent in its entirely electronic, virtual form and decentralized network. As a result, our cryptocurrency holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. If the cryptocurrency price decreases when we trade the cryptocurrency for fiat currency, the amount of fiat currency we receive will decrease as well and our results of operation will be negatively impact.
Our board of management has experience in risk management and we have risk management policies in place in light of current crypto asset market conditions. However, if we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected.
Our board of management have experience in risk management and our company have risk management policies in place covering financing, liquidity management, Bitcoin management, supplier management and counter party management. Our board of management is evaluating the risk exposure monthly and constantly adapting to the latest trend of the industry. Specifically, in light of current crypto asset market conditions and to mitigate the effect of Bitcoin price volatility, our risk management policies focus on finding cost-effective hosting sites, raising funds with a low financing cost, and renegotiating with existing site hosts to reduce cost.
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However, the Dogecoin Treasury and related industries are emerging and evolving, which may lead to period-to-period variability and may make it difficult to evaluate our risk exposures. If we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle and make adjustments to our risk management policies, our business, financial condition, or results of operations may be materially and adversely affected.
We may face financing, liquidity, or other risks related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets we use as collateral or the value of our crypto assets used by others as collateral.
As of the date of this annual report, we pledged 40,543,745 of our Dogecoins as collateral for financings and convertible notes. A significant decrease of value of Dogecoins may lead us to receive a margin call from our lender and require us to pledge more Dogecoins or provide other types of collaterals. If we fail to do so, the lender may seize the Dogecoins pledged and result a financial loss for us. In addition, it will limit our ability to obtain additional financing.
Risks Related to Our Corporate Structure
The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.
We are a Cayman Islands exempted company with limited liability. Our corporate affairs are governed by our memorandum and articles of association (as may be amended and restated from time to time) and by the laws of the Cayman Islands. The rights of shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (i) a duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (ii) a duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (iii) directors should not improperly fetter the exercise of future discretion; (iv) a duty to exercise powers fairly as between different classes of shareholders; (v) a duty to exercise independent judgment; and (vi) a duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Our memorandum and articles of association have modified this last obligation by providing that a director shall be at liberty to vote in respect of any contact or transaction in which the director is so interested provided that the nature of the interest of any director in such transaction shall be disclosed by the director at or prior to its consideration and any vote thereon. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its shareholders (made up of two components) and the director’s duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
We are a Cayman Islands exempted company with limited liability. The rights of our shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands (other than decisions of the Privy Council in appeals from the Cayman Islands courts). The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our directors have discretion to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.
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As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.
Certain judgments obtained against us by our shareholders may not be enforceable.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Some of our assets are located outside of the United States. In addition, a majority of our directors and executive officers reside outside of the United States, and most of the assets of these persons are located outside of the United States. As a result, it may be difficult, impractical or impossible for you to effect service of process within the United States upon us or these individuals, or to bring an action against us or against these individuals in the United States in the event that you believe your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets or the assets of our directors and officers outside of the United States.
Any judgment obtained in the federal or state courts of the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands (the “Grand Court”) if (a) the judgment was given by a foreign court of competent jurisdiction, (b) our company either submitted to the jurisdiction of the foreign court or was resident and carrying on business in the jurisdiction and was duly served with process, (c) the judgment was final and conclusive, (d) the judgment was not in respect of taxes, a fine or a penalty or similar fiscal or revenue obligations imposed on our company, and (e) the judgment was not obtained by fraud and is not of a kind the recognition and enforcement of which would be contrary to the principles of natural justice or public policy in the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. It is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands.
The economic substance legislation of the Cayman Islands may adversely impact us or our operations.
The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. With effect from January 1, 2019, the International Tax Co-operation (Economic Substance) Act, (2021 Revision) (the “Substance Act”) came into force in the Cayman Islands introducing certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain “relevant activities,” which, in the case of exempted companies incorporated before January 1, 2019, will apply in respect of financial years commencing July 1, 2019, onwards. As we are a Cayman Islands company, compliance obligations include filing annual notifications for the Company, which needs to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Substance Act. As it is a new regime, it is anticipated that the Substance Act will evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Substance Act. Failure to satisfy these requirements may subject us to penalties under the Substance Act.
We may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A Ordinary Shares.
We may rely on dividends to be paid by our subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends pursuant to its respective policy or make other distributions to us.
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Risks Related to United States Government Regulations
We are subject to an extensive and rapidly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results and financial condition.
Our crypto mining business may be or may become subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which we operate, including those typically applied to financial services and banking, securities, commodities, the exchange, and transfer of digital assets, cross-border and domestic money and cryptocurrency transmission businesses, as well as those governing data privacy, data governance, data protection, cybersecurity, fraud detection, payment services (including payment processing and settlement services), consumer protection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, and related technologies. As a result, they often do not contemplate or address unique issues associated with digital assets, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local jurisdictions. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the relative novelty and evolving nature of our business and the significant uncertainty surrounding the regulation of digital assets requires us to exercise our judgement as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, limitations on our business, reputational harm, and other regulatory consequences, as well as criminal penalties, each of which may be significant and could adversely affect our business, operating results and financial condition.
In addition to existing laws and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, as well as in other countries may adopt new laws and regulations, or new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development and use of digital assets as a whole, digital asset mining operations, and our legal and regulatory status in particular by changing how we operate our business, how our operations are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements or new costs of doing business, or imposing a total ban on certain activities or transactions with respect to digital assets, as has occurred in certain jurisdictions in the past.
If laws or regulations or their respective interpretation change, we may become subject to ongoing examinations, oversight, and reviews by U.S. federal and state regulators, which would have broad discretion to audit and examine our business if we become subject to their oversight. Adverse changes to, or our failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results and financial condition.
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A particular digital asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if a regulator disagrees with our characterization of a digital asset, we may be subject to regulatory scrutiny, investigations, fines, and penalties, which may adversely affect our business, operating results and financial condition. Furthermore, a determination that Bitcoin or any other digital asset that we own or mine is a “security” may adversely affect the value of Bitcoin and our business.
The SEC and its staff have taken the position that certain digital assets fall within the definition of a “security” under the U.S. federal securities laws. The legal test for determining whether any given digital asset is a security, as described below, is a highly complex, fact-driven analysis that may evolve over time, and the outcome is difficult to predict. Our determination that the digital assets we hold are not securities is a risk-based assessment and not a legal standard or one binding on regulators. The SEC generally does not provide advance guidance or confirmation on the status of any particular digital asset as a security. Furthermore, the SEC’s views in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff. Public statements made by senior officials at the SEC indicate that the SEC does not intend to take the position that Bitcoin is a security (as currently offered and sold). However, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital asset. As of the date of this annual report, with the exception of certain centrally issued digital assets that have received “no-action” letters from the SEC staff, Bitcoin and Ethereum, or ETH, are the only digital assets which senior officials at the SEC have publicly stated are unlikely to be considered securities. As a Bitcoin mining company, we do not believe we are an issuer of any “securities” as defined under the federal securities laws. Our internal process for determining whether the digital assets we hold or plan to hold is based upon the public statements of the SEC and existing case law. The digital assets we hold or plan to hold, other than Bitcoin, may have been created by an issuer as an investment contract under the Howey test, SEC v. Howey Co., 328 U.S. 293 (1946), and may be deemed to be securities by the SEC. However, the Company was not the issuer that created these digital assets and is holding them on an interim basis until liquidated. Should the SEC state that Bitcoin, or other digital assets we hold should be deemed to be securities, we may no longer be able to hold any of these digital assets. It will then likely become difficult or impossible for such digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely affecting the trading value of the digital asset is likely to cause substantial volatility and significantly impact its liquidity and market participants’ ability to convert the digital asset into U.S. dollars. Our inability to exchange Bitcoin for fiat or other digital assets (and vice versa) to administer our treasury management objectives may decrease our earnings potential and have an adverse impact on our business and financial condition.
Under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company may fall within the definition of an investment company under section 3(c)(1)(A) thereof if it is or holds itself out as being engaged primarily, or proposes to engage primarily in the business of investing, reinvesting or trading in securities, or under section 3(a)(1)(C) thereof if it is engaged or proposes to engage in business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire “investment securities” (as defined therein) having a value exceeding 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. There is no authoritative law, rule or binding guidance published by the SEC regarding the status of digital assets as “securities” or “investment securities” under the Investment Company Act. Although we believe that we are not engaged in the business of investing, reinvesting, or trading in investment securities, and we do not hold ourselves out as being primarily engaged, or proposing to engage primarily, in the business of investing, reinvesting or trading in securities, to the extent the digital assets which we mine, own, or otherwise acquire may be deemed “securities” or “investment securities” by the SEC or a court of competent jurisdiction, we may meet the definition of an investment company. If we fall within the definition of an investment company under the Investment Company Act, we would be required to register with the SEC. If an investment company fails to register, it likely would have to stop doing almost all business, and its contracts would become voidable. Generally non-U.S. issuers may not register as an investment company without an SEC order.
The classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the mining, sale and trading of such assets. For example, a digital asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in digital assets that are securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.”
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There can be no assurances that we will properly characterize any given digital asset as a security or non-security for purposes of determining which digital assets to mine, hold and trade, or that the SEC, or a court, if the question was presented to it, would agree with our assessment. We could be subject to judicial or administrative sanctions for failing to offer or sell digital assets in compliance with the registration requirements, or for acting as a broker or dealer without appropriate registration. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm. For instance, all transactions in such supported digital asset would have to be registered with the SEC, or conducted in accordance with an exemption from registration, which could severely limit its liquidity, usability and transactability. Further, it could draw negative publicity and a decline in the general acceptance of the digital asset. Also, it may make it difficult for such digital asset to be traded, cleared, and custodied as compared to other digital assets that are not considered to be securities.
If the SEC or another regulatory body considers Bitcoin or Dogecoin to be a security under U.S. securities laws, we may be required to comply with significant SEC registration and/or other requirements.
In general, novel or unique assets such as Bitcoin, Dogecoin, and other digital assets may be classified as securities if they meet the definition of investment contracts under U.S. law. In recent years, the offer and sale of digital assets other than Bitcoin, most notably Kik Interactive Inc.’s Kin tokens and Telegram Group Inc.’s TON tokens, have been deemed to be investment contracts by the SEC. While we believe that Bitcoin and Dogecoin are unlikely to be considered an investment contract, and thus a security under the investment contract definition, we cannot provide any assurances that digital assets that we mine or otherwise acquire or hold for our own account, including Bitcoin and Dogecoin, will never be classified as securities under U.S. law. This would obligate us to comply with registration and other requirements by the SEC and, therefore, cause us to incur significant, non-recurring expenses, thereby materially and adversely impacting an investment in the Company.
If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, we may incur significant compliance costs, which could be substantial or cost-prohibitive. If we become subject to these regulations, our costs in complying with them may have a material negative effect on our business and the results of our operations.
To the extent that our activities cause us to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.
To the extent that our activities cause us to be deemed a “money transmitter” (“MT”) or equivalent designation, under state law in any state in which we operate (currently, Nebraska, Georgia and Texas), we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses, possibly affecting an investment in our securities in a materially adverse manner. Furthermore, the Company and our service providers may not be capable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs. If we are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we may act to leave a particular state or the U.S. completely. Any such action would be expected to materially adversely affect our operations.
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The ongoing evolution of U.S. and foreign regulatory regimes governing digital assets creates uncertainty around whether Bitcoin and other cryptocurrencies will be treated as securities or commodities, which could subject our mining operations to additional regulation and materially and adversely affect our business, financial condition and results of operations.
In March 2022, President Biden signed an executive order directing federal agencies to study cryptocurrencies and consider potential regulatory frameworks, including evaluation of a U.S. central-bank digital currency (CBDC). Since then, federal legislators and regulators have advanced a series of proposals that could redefine how digital assets are classified and supervised. For example, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed in July 2025, established the first U.S. framework for payment stablecoins by requiring that such tokens be fully backed by high-quality liquid assets and treated as payment instruments rather than securities. The Digital Asset Market Clarity Act (CLARITY Act), which passed the U.S. House of Representatives in 2025 but has not yet been enacted, would allocate jurisdiction over digital commodities to the Commodity Futures Trading Commission (CFTC) and over digital securities to the Securities and Exchange Commission (SEC) and would impose registration, customer protection and anti-money-laundering obligations on exchanges and brokers. The CLARITY Act also includes provisions allowing issuers to self-certify that a token is a digital commodity and safe-harbor exemptions for peer-to-peer transactions. These legislative efforts illustrate Congress’ intent to delineate categories of digital assets, but their ultimate scope and effect remain uncertain.
Separately, federal agencies continue to interpret and enforce existing laws. The CFTC currently views Bitcoin and certain other cryptocurrencies as commodities, a position supported by several federal court decisions. The Commodities Exchange Act of 1936 (CEA) does not impose direct obligations on us for mining or exchanging Bitcoin. However, the CEA and related CFTC regulations apply to transactions involving futures, options, swaps or leveraged or margined transactions that do not result in delivery within 28 days. Changes in the CEA, its implementing regulations or interpretations could subject Bitcoin to additional oversight. The CFTC has authority to pursue enforcement actions against persons who engage in market manipulation or deceptive practices in any contract of sale of a commodity in interstate commerce, including spot transactions in Bitcoin. While the CFTC has not yet promulgated rules governing spot Bitcoin transactions, it has pursued enforcement actions in connection with fraud and manipulation. Moreover, state securities regulators continue to bring enforcement actions under state “blue sky” laws and have urged Congress to preserve state antifraud authority even as federal legislation advances. If our mining activities were deemed to constitute an investment contract or pooled investment in derivatives, we could be required to register as a commodity pool operator or otherwise comply with CFTC regulations, which would impose significant compliance costs. We may decide not to pursue such registrations, which could force us to cease certain operations.
The SEC has stated that many digital assets may be securities under existing securities laws and has pursued enforcement actions against token issuers and intermediaries. Senior SEC officials have indicated that Bitcoin is not a security, yet these statements are non-binding and could be revisited. The SEC’s FinHub published a framework for analyzing whether a token is an investment contract, but this framework is not a rule and does not bind courts or the Commission. The SEC’s Spring 2025 regulatory agenda contemplates new rules addressing offers and sales of digital assets, trading on alternative trading systems and custody of digital-asset securities. In early 2024 the SEC approved several spot-Bitcoin exchange-traded products, and in September 2025 it adopted generic listing standards for commodity-based exchange-traded products, signalling a willingness to permit trading of certain digital-asset products. At the same time, the Commission has argued in court that many tokens are unregistered securities and has obtained settlements or judgments accordingly. Should the SEC or a court determine that Bitcoin, Dogecoin or other tokens we mine constitute securities, we could be required to register as an issuer of securities, comply with the reporting and disclosure requirements of the Securities Exchange Act of 1934, and adhere to the Investment Company Act of 1940 and other federal securities laws. We could also face private litigation or governmental enforcement for offers or sales of unregistered securities.
In addition to securities and commodities laws, other regulatory developments create further compliance risks. In October 2023, the Financial Crimes Enforcement Network (FinCEN) proposed a rule identifying convertible virtual-currency mixing as a transaction of primary money-laundering concern and requiring financial institutions to report mixing transactions with foreign counterparties. On August 4 2025, FinCEN issued a notice urging financial institutions to monitor CVC kiosks for scam payments and reminding operators of their Bank Secrecy Act obligations. These actions signal increased AML scrutiny across the crypto ecosystem and could lead to additional compliance obligations for businesses operating mining pools or offering custodial services. Separately, ASU 2023-08 issued by the Financial Accounting Standards Board requires companies to measure certain crypto assets at fair value with changes recognised in earnings, effective for public companies in fiscal years beginning after December 15 2024. Although this accounting guidance does not directly regulate our operations, it may affect how investors perceive volatility in our financial statements.
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The regulatory treatment of Bitcoin and other digital assets may also change based on how they are used. For example, tokens that confer governance rights, pay dividends or represent fractionalized interests in underlying assets may be more likely to be deemed securities. Decentralized finance platforms and staking programs have attracted regulatory attention and could influence how miners are regulated. Because our business involves pooling computational resources to secure the Bitcoin blockchain and sharing rewards among hash-rate contributors, regulators could view our activities as a collective investment vehicle. If regulators or courts classify our mining rewards as distributions of a security or our arrangements as derivative transactions, we may need to register and comply with additional regulatory regimes. Any such classification could require significant changes to our business model, impose additional costs, or subject us to fines and penalties.
Given the dynamic and uncertain regulatory environment, we cannot predict whether Bitcoin or other digital assets we hold or mine will be classified as a security, a commodity, a currency or a new form of regulated financial instrument. We also cannot predict whether any future legislation will preempt state laws or expand federal jurisdiction. Any new regulation—whether issued by the SEC, the CFTC, FinCEN, the IRS or state authorities—could require us to incur substantial compliance costs, limit our ability to mine or hold digital assets, restrict our access to markets, or require us to register as a commodity pool operator or broker-dealer. If we fail to comply with applicable regulations or if regulators determine that our operations violate securities or commodities laws, we could be subject to investigations, enforcement actions, civil or criminal penalties, and private litigation. Such outcomes could have a material adverse effect on our business, financial condition and results of operations.
Because there has been limited precedent set for financial accounting of Bitcoin and other Bitcoin assets, the determination that we have made for how to account for Bitcoin assets transactions may be subject to change.
While there has been limited precedent set for the financial accounting of digital assets and related revenue recognition, on December 13, 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. Under this new guidance, entities are required to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. Besides ASU 2023-08 issued, there has been little official guidance provided by the FASB, the Public Company Accounting Oversight Board (PCAOB) or the SEC, it is unclear how companies may in the future be required to account for Bitcoin, Dogecoin and other digital assets transactions and related revenue recognition. A change in regulatory or financial accounting standards or interpretation by the SEC could result in the necessity to change our accounting methods and restate our financial statements. Such a restatement could adversely affect the accounting for our acquired Dogecoins and more generally negatively impact our business, prospects, financial condition and results of operation. Such circumstances would have a material adverse effect on our ability to continue as a going concern or to pursue our business strategy at all, which would have a material adverse effect on our business, prospects or operations as well as and potentially the value of any cryptocurrencies we hold or expects to acquire for our own account and harm investors.
Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business.
Due to the new and evolving nature of digital assets and the absence of comprehensive legal guidance with respect to digital assets and related transactions, many significant aspects of the U.S. federal income and applicable state, local and non-U.S. tax treatment of transactions involving digital assets, such as the purchase and sale of Bitcoin and Dogecoin and the receipt of staking rewards and other digital asset incentives and rewards products, are uncertain, and it is unclear what guidance may be issued in the future with respect to the tax treatment of digital assets and related transactions.
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Current IRS guidance indicates that for U.S. federal income tax purposes digital assets such as Bitcoins and Dogecoins should be treated and taxed as property, and that transactions involving the payment of Bitcoins and Dogecoins for goods and services should be treated in effect as barter transactions. The IRS has also released guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to taxable income and guidance with respect to the determination of the tax basis of digital currency. However, current IRS guidance does not address other significant aspects of the U.S. federal income tax treatment of digital assets and related transactions. Moreover, although current IRS guidance addresses the treatment of certain forks, there continues to be uncertainty with respect to the timing and amount of income inclusions for various crypto asset transactions, including, but not limited to, staking rewards and other crypto asset incentives and rewards products. While current IRS guidance creates a potential tax reporting requirement for any circumstance where the ownership of a Bitcoin or Dogecoin passes from one person to another, it preserves the right to apply capital gains treatment to those transactions, which is generally favorable for investors in Bitcoin or Dogecoin.
There can be no assurance that the IRS will not alter its existing position with respect to digital assets in the future or that other state, local and non-U.S. taxing authorities or courts will follow the approach of the IRS with respect to the treatment of digital assets such as Bitcoins or Dogecoins for income tax and sales tax purposes. Any such alteration of existing guidance or issuance of new or different guidance may have negative consequences including the imposition of a greater tax burden on investors in Bitcoin or imposing a greater cost on the acquisition and disposition of Bitcoin, generally; in either case potentially having a negative effect on the trading price of Bitcoin or Dogecoin or otherwise negatively impacting our business. In addition, future technological and operational developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for U.S. federal income and applicable state, local and non-U.S. tax purposes.
Risks Related to Canadian Government Regulations
The regulations of Alberta Utilities Commission (“AUC”) may have an adverse impact on our Canadian operations.
The Alberta Utilities Commission (“AUC”) is the Province of Alberta’s electric generation regulatory agency. The AUC regulates and oversees the development of and generation of electricity under the Hydro and Electric Act (the “Act”). The AUC ensures that proposed electric generation activities are in the public interest while considering related environmental and social issues. As such, the AUC must approve all cryptocurrency miners seeking to develop their own electric generation in Alberta, unless their operations are exempt.
The AUC has announced a pause on approvals of new renewable electricity generation projects over one megawatt until Feb. 29, 2024, and that it will review policies and procedures for the development of renewable electricity generation. With the pause expiring on February 27, 2024, the Alberta Government has formally announced the direction its new policy on renewables will take. The Minister of Affordability and Utilities, in a letter to the AUC, directed the AUC to develop policy for the approval of renewable energy developments.
We may in the future lease mining facilities in Canada. If our hosting partner fails to meet the AUC requirements in the future, it may be required to discontinue operations and we may have to look for an alternative site to accommodate our miners. If we are not able to find an alternative with acceptable fees, our result of operation will be adversely impact.
Risks Related to Singaporean Government Regulations
Current and future laws and regulations approved by the Singaporean government may have an adverse impact on our operations in Singapore.
As of the date of this annual report, there are no legislation or prohibitions directly applicable to Bitcoin or cryptocurrency mining as an activity. To the extent that cryptocurrency mining constitutes a regulated product in the future, it may fall under the scope of the Securities and Futures Act 2001, the Commodity Trading Act 1992 or the Payment Services Act 2019. Nevertheless, profits arising from operations that mine cryptocurrencies in exchange for money are subject to income tax.
We are not currently engaging in any active business and is seeking opportunities in crypto asset mining and blockchain technologies in Singapore. Should we participate in the mining or other blockchain technologies in Singapore, we may be subject to additional laws and regulations such as the new Financial Services and Markets Bill passed in April 2022. Such circumstances could have a material adverse effect on the amount of Bitcoin we may be able to mine, the value of Bitcoin and any other cryptocurrencies we may potentially acquire or hold in the future and, consequently, our business, prospects, financial condition and operating results.
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Risks Related to Our Class A Ordinary Shares
The dual-class structure of our Class A and Class B Ordinary Shares has the effect of concentrating voting power with the holders of Class B Ordinary Shares, which could limit the ability of holders of Class A Ordinary Shares to influence corporate matters.
We have two classes of ordinary shares. Each Class A Ordinary Share carries one (1) vote, while each Class B Ordinary Share carries twenty (20) votes. As of the date of this report, 88,610,521 Class A Ordinary Share and 768,000 Class B Ordinary Share are outstanding. Such dual-class structure has the effect of concentrating voting power with the holders of Class B Ordinary Shares, which limits the ability of holders of Class A Ordinary Shares to influence the outcome of important transactions, including a change in control, a merger and future amendments to the memorandum and articles of association of the Company.
Any future issuances of additional Class B Ordinary Shares or securities convertible into Class B Ordinary Shares will have a dilutive effect on our earnings per share, book value per share, and the voting power and interest of holders of Class A Ordinary Shares. In addition, the availability of additional Class B Ordinary Shares for issuance could, under certain circumstances, discourage or make more difficult any efforts to obtain control of the Company. Holders of Class B Ordinary Shares will have considerable influence over matters such as decisions regarding mergers and consolidations, election of directors, amendments to the memorandum and articles of association that are subject to a shareholder vote and other significant corporate actions and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated voting power may have the ultimate effect of delaying, preventing or deterring a change in control of our Company (including a merger or by way of future amendments to the memorandum and articles of association of the Company), could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our Company and might ultimately materially and adversely affect the market price of our Class A Ordinary Shares. This concentrated control may also prevent or discourage unsolicited acquisition proposals or offers for our shares that other shareholders may feel are in their best interest. As a result, such concentrated control may adversely affect the market price of our Class A Ordinary Shares.
Furthermore, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could result in a less active trading market for our Class A Ordinary Shares and also adversely affect the value of our Class A Ordinary Shares.
The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.
As a publicly listed company, we are required to file periodic reports with the Securities and Exchange Commission upon the occurrence of matters that are material to our company and shareholders. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.
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The market price of our Class A Ordinary Shares has recently declined significantly, and our Class A Ordinary Shares could be delisted from the Nasdaq or trading could be suspended.
The listing of our Class A Ordinary Shares on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions for continued listing. On June 14, 2022, we received a written notification from the Nasdaq Stock Market (“Nasdaq”) that we were not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of US$1.00 per share (the “Minimum Bid Price Requirement”), as our ordinary shares failed to maintain the Minimum Bid Price Requirement for 30 consecutive business days from May 2, 2022 to June 13, 2022. We were provided 180 calendar days, or until December 12, 2022, to regain compliance, and on December 13, 2022, Nasdaq granted us an additional 180 calendar day period, or until June 12, 2023. On May 23, 2023, we effected a reverse share split in order to regain compliance, and on June 14, 2023, Nasdaq confirmed that we had regained compliance with the Minimum Bid Price Requirement and closed the matter. On June 27, 2024, we again received a notice from Nasdaq that we were not in compliance with the Minimum Bid Price Requirement, as our ordinary shares had traded below US$1.00 per share for 30 consecutive business days from May 14, 2024 to June 26, 2024, and we were provided until December 26, 2024 to regain compliance. On February 21, 2025, Nasdaq notified us that we remained out of compliance, as the closing bid price of our ordinary shares for the 30 consecutive business days from January 7, 2025 to February 20, 2025 was below US$1.00 per share, and we were afforded until August 20, 2025 to regain compliance. On August 28, 2025, Nasdaq granted us an additional 180 calendar day period, or until February 16, 2026, to regain compliance with the Minimum Bid Price Requirement.
Our Class A Ordinary Shares will continue to be listed and traded on the Nasdaq Capital Market, subject to our compliance with the other listing requirements of the Nasdaq Capital Market. We cannot assure you that we will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing price of our Class A Ordinary Shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If we do not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our Class A Ordinary Shares. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted Class A Ordinary Shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such Class A Ordinary Shares. A suspension or delisting would likely decrease the attractiveness of our Class A Ordinary Shares to investors and cause the trading volume of our Class A Ordinary Shares to decline, which could result in a further decline in the market price of our Class A Ordinary Shares
In the event that our Class A Ordinary Shares are delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in our Class A Ordinary Shares because they may be considered penny stocks and thus be subject to the penny stock rules.
The SEC has adopted a number of rules to regulate “penny stock” that restricts transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity of penny stocks. “Penny stocks” generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on Nasdaq if current price and volume information with respect to transactions in such securities is provided by the exchange or system). The Company’s Class A Ordinary Shares could be considered to be a “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in our Class A Ordinary Shares, which could severely limit the market liquidity of such Class A Ordinary Shares and impede their sale in the secondary market.
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A U.S. broker-dealer selling a penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance with SEC standards relating to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the “penny stock” held in a customer’s account and information with respect to the limited market in “penny stocks”.
The market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.
We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.
As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differs from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.
As a company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We have followed and intend to follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the New York Stock Exchange that listed companies must obtain its shareholders’ approval of all equity compensation plans and any material amendments to such plans. As a result of our reliance on the “foreign private issuer” exemptions, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
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We will incur increased costs as a result of being a public company, particularly now that we no longer qualify as an “emerging growth company.”
We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. We no longer qualify as an “emerging growth company,” and as a result we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
The requirements of being a public company may strain our resources and divert management’s attention.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly now that we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, interim, and current reports with respect to our business and operating results.
As a result of disclosure of information in this annual report and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.
We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.
The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance.
The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our revenue and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
| ● | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; |
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| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and |
| ● | other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Share prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A Ordinary Shares for return on your investment.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A Ordinary Shares as a source for any future dividend income.
Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased the Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment in our Class A Ordinary Shares.
Future issuances or sales, or perceived issuances or sales, of substantial amounts of Class A Ordinary Shares in the public market could materially and adversely affect the prevailing market price of the Class A Ordinary Shares and our ability to raise capital in the future.
The market price of our Class A Ordinary Shares could decline as a result of future sales of substantial amounts of Class A Ordinary Shares or other securities relating to the Class A Ordinary Shares in the public market, including by the Company’s substantial shareholders, or the issuance of new Class A Ordinary Shares by the Company, or the perception that such sales or issuances may occur. Future sales, or perceived sales, of substantial amounts of the Class A Ordinary Shares could also materially and adversely affect our ability to raise capital in the future at a time and at a price favorable to us, and our shareholders will experience dilution in their holdings upon our issuance or sale of additional securities in the future.
Future financing may cause a dilution in your shareholding or place restrictions on our operations.
We may need to raise additional funds in the future to finance further expansion of our capacity and business relating to our existing operations, acquisitions or strategic partnerships. If additional funds are raised through the issuance of new equity or equity-linked securities of the Company other than on a pro rata basis to existing shareholders, the percentage ownership of such shareholders in the Company may be reduced, and such new securities may confer rights and privileges that take priority over those conferred by the Class A Ordinary Shares. Alternatively, if we meet such funding requirements by way of additional debt financing, we may have restrictions placed on us through such debt financing arrangements which may:
| ● | further limit our ability to pay dividends or require us to seek consents for the payment of dividends; |
| ● | increase our vulnerability to general adverse economic and industry conditions; |
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| ● | require us to dedicate a substantial portion of our cash flows from operations to service our debt, thereby reducing the availability of our cash flow to fund capital expenditure, working capital requirements and other general corporate needs; and |
| ● | limit our flexibility in planning for, or reacting to, changes in our business and our industry. |
We have material weaknesses in our internal control over financial reporting. If any material weakness persists or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately report its financial results could be adversely affected.
In connection with the preparation of the financial statement for the Company’s Annual Report on Form 20-F for the year ended June 30, 2025, our management evaluated the effectiveness of our internal control over financial reporting as of June 30, 2025 and determined they were not effective as described in Part II. Item 15. “Controls and Procedures” of this annual report. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness identified relates to insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP. The material weakness, if not remediated timely, may lead to material misstatements in its consolidated financial statements in the future.
To remedy the identified material weakness, we took several measure to improve our internal control over financial reporting, including, among others: (1) recruiting more qualified personnel equipped with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework, (2) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for its accounting and financial reporting personnel, (3) enhancing oversight over and clarifying reporting requirements for, non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with U.S. GAAP and SEC reporting requirements, (4) recruiting more qualified internal control personnel with experience in the requirements of the Sarbanes-Oxley Act and adopting accounting and internal control guidance on U.S. GAAP and SEC reporting, and (5) preparing more detailed guidance and manuals on financial closing policies and procedures to improve the quality and accuracy of period-end financial closing process.
There can be no assurance that any of our efforts we are implementing, or our internal control over financial reporting generally, will remediate any material weakness or avoid future weaknesses or deficiencies. Any failure to remediate the material weakness and any future weaknesses or deficiencies or any failure to implement required new or improved controls or difficulties encountered in their implementation could cause us to fail to meet its reporting obligations or result in material misstatements in its financial statements. If we are unable to remediate its material weaknesses, our management may not be able to conclude that its disclosure controls and procedures or internal control over financial reporting are effective, which could result in investors losing confidence in its reported financial information and may lead to a decline in the share price.
There can be no assurance that we will not be passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Class A Ordinary Shares to significant adverse United States income tax consequences.
We will be a “passive foreign investment company,” or “PFIC,” if, in any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the average quarterly value of our assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income (the “asset test”). Based upon our income and assets, including goodwill, and the value of our Class A Ordinary Shares, we do not believe that we were a PFIC for the taxable years ended June 30, 2025, 2024, and 2023 and do not anticipate becoming a PFIC in the foreseeable future.
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While we do not expect to become a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of our Class A Ordinary Shares, fluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years. The determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. If we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.
If we are a PFIC in any taxable year, a U.S. holder may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the Class A Ordinary Shares and on the receipt of distributions on the Class A Ordinary Shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules and such holder may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. holder holds our Class A Ordinary Shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our Class A Ordinary Shares.
Securities analysts may not cover our Class A Ordinary Shares and this may have a negative impact on the market price of our Class A Ordinary Shares.
The trading market for our Class A Ordinary Shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We do not currently have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverage of us, the trading price for our Class A Ordinary Shares would be negatively impacted. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our Class A Ordinary Shares, changes their opinion of our Class A Ordinary Shares or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Class A Ordinary Shares could decrease and we could lose visibility in the financial markets, which could cause the price and trading volume of our Class A Ordinary Shares to decline.
Techniques employed by short sellers may drive down the market price of our Class A Ordinary Shares.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.
We may in the future be the subject of unfavorable allegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our Class A Ordinary Shares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would expect to strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and the value of any investment in our Class A Ordinary Shares could be greatly reduced or rendered worthless.
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ITEM 4. INFORMATION ON THE COMPANY
4.A. History and development of the company
Corporate History
Bit Origin was incorporated in the Cayman Islands on January 23, 2018.
SonicHash Canada was formed on December 14, 2021 under the laws of Alberta, Canada. It is a subsidiary of Bit Origin Ltd. It is not currently engaging in any active business as of the date of this annual report.
SonicHash US was formed on December 17, 2021 under the laws of Delaware. It is a subsidiary of Bit Origin Ltd. It is engaged in Bitcoin mining in the United States. It was formed to engage in Bitcoin mining in the United States. As of December 31, 2023, SonicHash US temporarily ceased all Bitcoin mining activities.
Sonic Auspice was formed on November 30, 2023 under the laws of Delaware. Bit Origin owns 55% of the membership interest in Sonic Auspice. It does not have any material operation as of the date of this annual report.
Bit Origin SG was formed on June 26, 2025 under the laws of Singapore. It is a subsidiary of Bit Origin Ltd. It is not currently engaging in any active business as of the date of this annual report.
In addition, SonicHash Singapore was formed on December 16, 2021 under the laws of Singapore. It is a subsidiary of Bit Origin Ltd and had never engaged in any active business. On April 18, 2024, the board of directors of the Company approved to wind down SonicHash Singapore. SonicHash Singapore has been officially struck off in September 4, 2024. It did not own any assets or have any employees or business operation at the time of winding down.
On September 13, 2022, the Company amended its memorandum of association to reflect a change in authorized share capital from US$1,500,000 consisting of 150,000,000 shares of US$0.01 each to US$3,000,000 consisting of 300,000,000 shares of US$0.01 each, as approved by the special shareholders meeting on April 27, 2022.
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On May 23, 2023, as approved and authorized by a majority of the shareholders of the Company at an annual meeting of shareholders held on May 18, 2023, the board of directors of the Company approved a reverse share split at a ratio of one-for-thirty (1-for-30) (the “Reverse Share Split”). Upon the opening of the market on May 30, 2023, the Company’s ordinary shares began trading on the Nasdaq Capital Market on a post-Reverse Share Split basis under the current symbol “BTOG”. Every thirty (30) outstanding ordinary shares were combined into and automatically become one post-Reverse Share Split ordinary share. No fractional shares was issued in connection with the Reverse Share Split. Instead, the Company issued one full post-Reverse Share Split ordinary share to any shareholder who would have been entitled to receive a fractional share as a result of the process. The par value of the ordinary shares was increased in proportion to the ratio of the Reverse Share Split to $0.30 per share and the number of authorized ordinary shares was reduced in proportion to the ratio of the Reverse Share Split to 10,000,000 ordinary shares. After the Reverse Share Split, all options, warrants and other convertible securities of the Company outstanding immediately prior to the Reverse Share Split were adjusted by dividing the number of ordinary shares into which the options, warrants and other convertible securities are exercisable or convertible by thirty (30) and multiplying the exercise or conversion price thereof by thirty (30), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. In connection with the Reverse Share Split, the Company amended and restated its memorandum and articles of association to reflect the adjustment of the number of authorized ordinary shares and the par value.
On March 14, 2025, the Company adopted a dual-class share capital structure (the “Dual-Class Share Capital Structure”) pursuant to which (i) all of the issued and outstanding ordinary shares of US$0.30 par value each were re-designated into Class A Ordinary Shares of US$0.30 par value each, each having one (1) vote per share, on a one-for-one basis, (ii) 25,000,000 authorized but unissued Ordinary Shares were re-designated into 25,000,000 Class B Ordinary Shares of US$0.30 par value each, each having twenty (20) votes per share, on a one-for-one basis, and (iii) the remaining authorized but unissued Ordinary Shares were re-designated into Class A Ordinary Shares on a one-for-one basis, provided that at the time of adoption the Company had not less than 25,000,000 authorized but unissued Ordinary Shares. The Company also effected a reduction of the par value of each authorized share (including all issued shares) from US$0.30 to US$0.000001 (the “Share Capital Reduction”), such that following the Share Capital Reduction the authorized share capital of the Company was US$500, divided into 500,000,000 shares of par value US$0.000001 each, comprising 475,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary Shares. Immediately following the effectiveness of the Share Capital Reduction, the Company effected an increase in its authorized share capital (the “Share Capital Increase”) from US$500, divided into 500,000,000 shares of par value US$0.000001 each, to US$15,000, divided into 15,000,000,000 shares of par value US$0.000001 each, comprising 14,250,000,000 Class A Ordinary Shares and 750,000,000 Class B Ordinary Shares, by the creation of 13,775,000,000 new Class A Ordinary Shares and 725,000,000 new Class B Ordinary Shares.
On March 14, 2025, the shareholders of the Company approved a reverse stock split of all of the Company’s authorized shares (including all issued shares), at a ratio of not less than 1-for-2 and not more than 1-for-200, with the final ratio to be determined by the Board of Directors in its sole discretion at any time after approval by the shareholders, and authorize the Board of Directors to implement such reverse stock split at its discretion at any time prior to March 14, 2026.
In May 2025, the Company petitioned the Grand Court of the Cayman Islands (Financial Services Division) under Cause No. FSD 115 of 2025 (DDJ) for a reduction of its authorized share capital. The application sought to reduce the par value of each of the Company’s issued and authorized but unissued ordinary shares from US$0.30 to US$0.000001(the “Capital Reduction”). Following due process and consideration, the Court issued its final order on June 5, 2025, approving the Capital Reduction. The court order was registered by the Cayman Islands General Registry on 28 July 2025. After the Capital Reduction, the authorized share capital of the Company was $500, divided into 500,000,000 shares of par value $0.000001 each, comprising of 475,000,000 Class A Ordinary Shares, par value $0.000001 per share, and 25,000,000 Class B Ordinary Shares, par value $0.000001 per share.
The Company replaced the Fourth Amended and Restated Memorandum and Articles of Association in their entirety with the Fifth Amended and Restated Memorandum and Articles of Association to account for the Capital Reduction. Pursuant to the Fifth Amended and Restated Memorandum and Articles of Association the authorized share capital of the Company is US$15,000 divided into 15,000,000,000 shares of par value $0.000001 each, comprising of 14,250,000,000 Class A Ordinary Shares, par value US$0.000001 per share and 750,000,000 Class B Ordinary Shares, par value US$0.000001 per share. The Fifth Amended and Restated Memorandum and Articles of Association was filed with the General Registry of the Cayman Islands on July 28, 2025.
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Corporate Takeover Information
As of the date of this annual report, there have been no indication of any public takeover offers by third parties in respect of the company’s shares or by the company in respect of other companies’ shares which have occurred during the last and current financial year.
Corporate Information
Our principal executive offices are located at 160 Robinson Road, 12F, SBF Center, Singapore 068914. The telephone number of our principal executive offices is 347-556-4747. Our registered office in the Cayman Islands is provided by McGrath Tonner Corporate Services Limited and located at 5th Floor, Genesis Close, George Town, PO Box 446, Grand Cayman, KYl-1106, Cayman Islands. Our corporate website is http://bitorigin.io/. The information contained in our website is not a part of this annual report.
The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.
Material Licenses and Permits
We and our subsidiaries have obtained all material licenses and approvals required for our operations in the jurisdictions where we operate.
4.B. Business overview
As part of our growth strategy, we have been actively seeking opportunities to deploy emerging technologies, including crypto asset mining and blockchain technologies with diversified expansion strategy. Due to the recent development in the cryptocurrency industry (See “Impact of Recent Developments Regarding Crypto Asset Market” below), we have suspended our mining operations in the United States. As of the date of this annual report, we have launched a Dogecoin treasury strategy and hold 70,543,745 Dogecoin. In addition, Bit Origin Ltd directly enters into the purchase and sale of mining computers to support its treasury and operational activities. As of the date of this annual report, we had supplier prepayments covering 617 Aethir Cloud rendering miners and 134 MicroBT WhatsMiner M60S ASIC miners, which are available for delivery to customers through our sales representative arrangement.
Dogecoin Treasury Strategy
In July 2025, we introduced a dedicated Dogecoin treasury program to advance our strategic development.
Our Doge Treasury Strategy is designed to diversify our balance sheet, enhance liquidity, and align with the evolving landscape of digital finance. By holding DOGE, we aim to increase shareholder value over the long term while embracing a decentralized financial infrastructure.
To support this initiative, we have secured up to $500 million in committed equity and debt financing facilities from institutional investors. These facilities provide flexibility to strategically acquire DOGE in the open market, maintain reserves, and further scale its participation in the blockchain ecosystem.
We believe DOGE’s unique cultural and utility value, widespread retail adoption, and strong liquidity profile make it a compelling digital asset for treasury purposes.
As of the date of this annual report, we hold 70,543,745 Dogecoin.
The price of Dogecoin is highly volatile and subject to rapid fluctuations. In recent periods, the price of Dogecoin has experienced both upward and downward movements, reflecting changes in market sentiment, trading activity, and liquidity conditions across the broader digital-asset markets. The value of Dogecoin may continue to fluctuate significantly in response to factors such as regulatory developments, changes in investor confidence, and volatility in other major cryptocurrencies.
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The Company’s finance department continuously monitors Dogecoin market conditions and periodically submits recommendations to the Chief Executive Officer. The Chief Executive Officer determines whether the prevailing trading price is favorable and whether it is necessary to sell Dogecoin holdings to improve cash flow.
If a sale is approved, the Chief Executive Officer instructs the financial manager to transfer the relevant amount of Dogecoin to BitGo Trust Company, Inc’s trading or liquidity platform and execute the transaction. If the Dogecoin cannot be sold at the approved price within one business day after transfer, the finance department will prepare an updated proposal reflecting the revised price and quantity, subject to further approval by the Chief Executive Officer. When Dogecoin is exchanged for fiat currency, the proceeds are withdrawn immediately from the BitGo account and deposited into the Company’s bank account.
A portion of the Company’s Dogecoin holdings is maintained in control accounts jointly administered with certain investors under specific transaction arrangements. Any sale, transfer, or withdrawal of Dogecoin from such control accounts is subject to prior consultation and agreement between the Company and the relevant investor. If the market price of Dogecoin decreases during the period in which trades are executed, the amount of fiat currency received may be reduced, which could negatively affect the Company’s results of operations and liquidity. See “— Impact of Recent Developments Regarding Crypto Asset Market” below.
The Company holds its Dogecoin in segregated custodial accounts with BitGo Trust Company, Inc. (“Bitgo Trust”), a South Dakota-chartered and regulated trust company that provides qualified custody services for digital assets. Under the custodial agreement, BitGo Trust controls all private keys related to the Company’s Dogecoin and maintains such assets in secure environments in accordance with its internal security and risk-management protocols. Assets are held separately from BitGo Trust’s own property and from the assets of other customers, and all transfers require multi-level internal authorization by the Company. BitGo Trust maintains limited insurance coverage for certain losses related to its custodial services; however, such coverage may not be sufficient to compensate for all potential losses. A portion of the Dogecoin is held in control accounts jointly administered with investors under specific arrangements. The Company’s independent auditor verifies the existence and ownership of these assets, but the Company remains subject to custodial, insurance, operational, and market risks inherent to digital-asset holdings.
Miners
As of June 30, 2023, SonicHash US owned 3,200 high performance Bitcoin miners, including 1,906 units of Koi C16 and 1,294 units of Bitmain Antminer S19j pro, representing a hash power of 304.8PH/s. The age of the miners ranged from 10 months to 18 months. The average age was 12.1 months. The average downtime due to scheduled or unscheduled maintenances during the fiscal year ended June 30, 2023 was 5%.
As of June 30, 2024, SonicHash US did not own any Bitcoin miners.
As of June 30, 2025, Bit Origin had supplier prepayments for 617 Aethir Cloud rendering miners, which are available for delivery to customers through our sales representative arrangement. As of the date of this annual report, we had supplier prepayments for an additional 134 MicroBT WhatsMiner M60S ASIC miners, which are available for delivery to customers through our sales representative arrangement. We are exploring strategic opportunities to revitalize our crypto mining operations. This includes identifying suitable hosting partners and evaluating the potential for buying and selling mining hardware.
During the fiscal years ended June 30, 2024 and 2023, SonicHash US held the mined Bitcoin in order to enjoy the potential benefits of the appreciation of the Bitcoin price. SonicHash US did not store Bitcoin on any trading platform.
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SonicHash US kept the Bitcoins in both cold wallet Ledger Nano X in Singapore, and another secured crypto and Bitcoin wallet, imToken. A cold wallet refers to any cryptocurrency wallet that is not connected to the Internet. A cold wallet is generally more secure than hot wallet, which refers to any cryptocurrency wallet that is connected to the Internet. The management of the Company is responsible to supervise the Bitcoin and the auditor of the Company is responsible to verify the existence for the Bitcoin held in the cold wallet. In addition, hot storage locations allow us to easily manage various blockchains including BTC, ETH and support stablecoins. We did not have any insurance that covers our miners or Bitcoin in the event of loss or fraud. We did not use a third-party custodian to store our Bitcoins. The Chief Executive Officer also maintained control of and had access to the private key. We have policy to safeguard our crypto assets. All the transactions involving the Bitcoins, such as withdrawing, transferring, or selling the Bitcoins from our wallet must be set up by the financial manager, and authorized and executed by the Chief Executive Officer. We also verbally confirm the wallet address with the receiver and perform a trial transaction with 0.01 Bitcoin before any transaction to verify the wallet address of the receiver.
The cost of mining consisted primarily of hosting costs and depreciation expense of our own mining equipment. The hosting costs include installment fees, electricity, internet services and other necessary services to maintain the operation of the mining equipment. The depreciation expenses were the sunk cost to the mining operation, at $17,600/BTC mined. Our breakeven price was around $14,000 per Bitcoin.
During the fiscal year ended June 30, 2024, the Bitcoin price range was between $30,327.94 and $73,083.50. During the fiscal year ended June 30, 2023, the Bitcoin price range was between $16,692.46 and $30,600.18. Our revenue recognition was based on the daily BTC reward and daily BTC lowest price available at CoinMarketCap.com.
Mining Facilities
Prior to December 31, 2023, we operate minging facilities in the United States.
Macon, Georgia
The mining facility in Macon, Georgia was managed by Horizon Mining Ltd. SonicHash US entered into a hosting agreement with Horizon Mining Ltd on May 1, 2022, pursuant to which Horizon Mining Ltd will provide electricity, internet, as well as installation service, loading and unloading service, security service, inventory management service, and other maintenance services to maintain the operation of the mining equipment. The hosting agreement was for a term of one year from execution and could be extended at any time upon agreement of both parties. If either party commits a material breach of the hosting agreement and fails to cure with 30 days after such breach, the non-breaching party can terminate the hosting agreement. The service fee was $295,082 per month, which included all of the electricity and internet costs, the cost of maintenance services to maintain the operation of the mining equipment (not including insurance for loss of power or damage to the hosted mining machines). SonicHash US paid a deposit in the amount of $741,585 pursuant to the hosting agreement and such deposit shall be returned to SonicHash US within seven days after all the mining equipment is removed from the facilities. Either party can extend the agreement with prior notice to the other party. In December 2022, due to high energy price and the Georgia site’s weak condition in general, SonicHash US suspended the operation of the miners in the Georgia site and shipped the 1,490 miners that were deployed in the Georgia site to the mining facility in Marion, Indiana and were deployed in January 2023. The hosting agreement expired on April 30, 2023 and the deposit was not returned.
The aggregate average, mean and range of Bitcoins mined on a monthly basis by the miners located in Macon Georgia during the periods from May 2022 through November 2022 are as follows:
Bitcoin Production |
| Macon, Georgia |
May 2022 |
| 2.33 |
June 2022 |
| 4.84 |
July 2022 |
| 4.54 |
August 2022 |
| 3.74 |
September 2022 |
| 9.63 |
October 2022 |
| 8.26 |
November 2022 |
| 2.33 |
Average |
| 5.10 |
Range |
| 2.33 to 9.63 |
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Marion, Indiana
The mining facility in Marion, Indiana was managed by Your Choice Four CA, Inc. On June 6, 2022, SonicHash US entered into a hosting agreement with Your Choice Four CA, Inc., pursuant to which SonicHash US delivered 1,000 Bitcoin mining equipment to the Your Choice Four CA, Inc.’s facilities in the State of Indiana and Your Choice Four CA, Inc. installed the mining equipment and provide electricity, internet and other maintenance services to maintain the operation of the mining equipment. The hosting agreement was for a term of one year and could be renewed with a four months’ advance notice to Your Choice Four CA, Inc. If either party has material breach of the hosting agreement and fails to cure with 30 days after such breach, the non-breaching party can terminate the hosting agreement. In addition, SonicHash US can terminate the hosting agreement if Your Choice Four CA, Inc. fails to furnish the services during any two-month period or for seven consecutive days excluding downtime caused by scheduled maintenance, demand response curtailment and/or force majeure. SonicHash US has paid a deposit in the amount of $404,914 and such deposit was returned to SonicHash US after deducting certain expenses.
On June 10, 2022, Sonic Hash US also entered into a service agreement with Ever Best Bit Limited which serves as an advisor and consultant to help the Company to find the data mining host service which meets Company’s requirements. Ever Best Bit Limited facilitated SonicHash US to enter into the hosting agreement with Your Choice Four CA, Inc. SonicHash US agreed to pay Ever Best Bit Limited a service fee of $0.024/kWh, calculated based on the following formula: Total Services Fee: (Electrical Meter Reading + Electrical Meter Reading * 3% Electrical Power Loss) * Electricity Rate $0.024/kWh. The service agreement shall only terminate when the hosting agreement terminates. The term of the service and the termination date is the same as the agreement with Your Choice Four CA, Inc. The agreement with Ever Best Bit Limited will be renewed if the agreement with Your Choice Four CA, Inc. is renewed.
On July 6, 2022, SonicHash US entered into another hosting agreement with Your Choice Four CA, Inc., pursuant to which SonicHash US delivered 700 units of Bitcoin mining equipment to Your Choice Four CA, Inc.’s facilities in the State of Indiana and Your Choice Four CA, Inc. installed the mining equipment and provide electricity, internet and other maintenance services to maintain the operation of the mining equipment. The hosting agreement is for a term of one year and can be renewed with a four months’ advance notice to Your Choice Four CA, Inc. If either party has material breach of the hosting agreement and fails to cure within 30 days after such breach, the non-breaching party can terminate the Hosting Agreement. In addition, SonicHash US can terminate the hosting agreement if Your Choice Four CA, Inc. fails to furnish the services during any two-month period or for 7 consecutive days excluding downtime caused by scheduled maintenance, demand response curtailment and/or force majeure. Pursuant to the hosting agreement, the host shall maintain a minimum service level of at least 90% uptime during any 30-day period, except in the event of maintenance, miner failure, repair, and force majeure. The host shall also be responsible for, repair or reimburse any cosmetic damage or operation deficiency to the miners due to the host’s intentional acts, willful misconduct, gross negligence or omission. SonicHash US has paid a deposit in the amount of $250,286 and such deposit was returned to SonicHash US after deducting certain expenses.
On July 7, 2022, SonicHash US entered into another service agreement with Ever Best Bit Limited, which serves as an advisor and consultant to help the Company to find the data mining host service which meet Company’s requirements. Ever Best Bit Limited facilitated SonicHash US to enter into the hosting agreement with Your Choice Four CA, Inc. SonicHash US agreed to pay Ever Best Bit Limited a service fee of $0.020/kWh, calculated based on the following formula: Total Services Fee: (Electrical Meter Reading + Electrical Meter Reading * 3% Electrical Power Loss) * Electricity Rate $0.020/kWh. The service agreement shall only terminate when the hosting agreement terminates. The term of the service and the termination date is the same as the agreement with Your Choice Four CA, Inc. The agreement with Ever Best Bit Limited will be renewed if the agreement with Your Choice Four CA, Inc. is renewed.
The hosting fee payable to Your Choice Four CA, Inc. is calculated by: (Electrical Meter Reading + Electrical Meter Reading * 3% Electrical Power Loss) * Electricity Rate ($0.060/kW). The service fee payable to Ever Best Bit Limited is calculated by: (Electrical Meter Reading + Electrical Meter Reading * 3% Electrical Power Loss) * Electricity Rate ($0.060/kWh). For example, assuming the miners consumes 10,000 KWH in electricity, the hosting fee payable to Your Choice Four CA, Inc. will be (10000+3%*10000)*$0.06=$618.00 and the service fee payable to Ever Best Bit Limited will be (10000+3%*10000)*$0.024=$247.20. The total fee for the 10,000 KWH electricity consumption will be $618.00+$247.20=$865.20.
In December 2022, we reached an agreement with Your Choice 4 CA, Inc., the host of the mining facility in Marion, Indiana, that the hosting fee is adjusted to equal to the sum of (i) the electricity cost of the mining activities and (ii) 50% of SonicHash US’s profit generated from the Indiana site, i.e., the difference of the market price of the Bitcoins mined from the Indiana site and the electricity cost. The market price of the Bitcoins is the daily Bitcoin closing price available at CoinMarketCap.com as of the day immediately prior to the day that we receive the electricity bill.
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The aggregate average, mean and range of monthly fees paid to Your Choice Four CA, Inc. and Ever Best Bit Limited for the installation of, hosting of and services for the miners located in Indiana during the periods from July 2022 through August 2023 are as follows:
|
| Your Choice Four CA, Inc. |
| Ever Best Bit Limited | ||
| | Fees Paid in US$ | | Fees Paid in US$ | ||
July 2022 | | $ | 31,290.60 | | $ | 12,516.24 |
August 2022 | | $ | 152,058.45 | | $ | 60,823.38 |
September 2022 | | $ | 225,411.77 | | $ | 9,016,471 |
October 2022 | | $ | 210,924.82 | | $ | 84,369.93 |
November 2022 | | $ | 150,215.87 | | $ | 60,086.35 |
December 2022 | | $ | 123,542.52 | | $ | 49,417.01 |
January 2023 | | $ | 401,223.31 | | $ | 133,741.10 |
February 2023 | | $ | 366,943.89 | | $ | 122,314.63 |
March 2023 | | $ | 448,236.36 | | $ | 149,412.12 |
April 2023 | | $ | 504,977.69 | | $ | 168,325.90 |
May 2023 | | $ | 492,175.70 | | $ | 164,058.57 |
June 2023 | | $ | 500,936.08 | | $ | 166,978.69 |
July 2023 | | $ | 453,851.03 | | $ | 151,283.68 |
August 2023 | | $ | 398,464.50 | | $ | 132,821.50 |
Average | | $ | 318,589.47 | | $ | 110,450.99 |
Range | | $ | 31,290.60 to 504,977.69 | | $ | 12,516.24 to 168,325.90 |
The aggregate average, mean and range of Bitcoins mined on a monthly basis by the miners located in Marion, Indiana during the periods from July 2022 through August 2023 are as follows:
Bitcoin Production |
| Marion, Indiana |
July 2022 |
| 3.75 |
August 2022 |
| 18.21 |
September 2022 |
| 16.83 |
October 2022 |
| 16.04 |
November 2022 |
| 6.26 |
December 2022 |
| 12.77 |
January 2023 |
| 30.04 |
February 2023 | | 26.36 |
March 2023 | | 30.04 |
April 2023 | | 26.98 |
May 2023 | | 29.94 |
June 2023 | | 26.66 |
July 2023 | | 22.67 |
August 2023 | | 23.47 |
Average |
| 20.72 |
Range |
| 3.75 to 30.04 |
As of September 30, 2023, SonicHash US ceased its operation in the Indiana facility and moved the miners to the Wyoming facility.
Cheyenne, Wyoming
On June 10, 2022, the Company entered into a subscription agreement with a limited partnership, MineOne Cloud Computing Investment I L.P. (the “Partnership”), pursuant to which the Company invested $3,000,000 in fiat currency in the Partnership as a limited partner and hold a partnership interest and a sharing percentage of 8.8235% in the Partnership. The Company is entitled to receive dividends or other returns in fiat currency.
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The Partnership is a limited partnership registered under the laws of the British Virgin Islands on May 12, 2022. The general partner, MineOne Partners Limited, a British Virgin Islands business company with limited liability, will seek to obtain opportunities for the Partnership to only make debt or equity investments in the portfolio company (as defined in the limited partnership agreement) in accordance with the primary purpose of the Partnership, which is to seek long-term capital appreciation by acquiring, holding, financing, refinancing and disposing of securities in the portfolio company. The general partner shall have the exclusive authority to cause the Partnership to make investments in the portfolio company. The Partnership commenced on May 12, 2022 and shall continue, unless the Partnership is sooner de-registered, until the Partnership’s entire interest in the portfolio company has been disposed of and any ongoing arrangements related thereto (including any escrow arrangement) have been terminated and all proceeds thereof have been distributed. The general partner can by a determination in good faith, terminate or wind up the Partnership if it has determined that there is a substantial likelihood that due to a change in the text, application or interpretation of the provisions of the applicable securities laws, or any other applicable statute, regulation, case law, administrative ruling or other similar authority, the Partnership cannot operate effectively in the manner contemplated herein. The Partnership will also terminated upon the commencement of liquidation, bankruptcy or dissolution proceedings or the withdrawal, or making of a winding up or dissolution order of the General Partner, or the occurrence of any other event that causes the General Partner to cease to be a general partner of the Partnership under the Partnership Act, by the entry of a decree of judicial dissolution, or at such time as there are no limited partners.
As a limited partner, the Company shall not take part in the management of the Partnership or in the management or control of the Partnership’s investment or other activities, transact any business in the Partnership’s name, deal with any person on behalf of the Partnership who or that is not a partner or have the power to sign documents for or otherwise bind the Partnership. Any election, vote, waiver or consent of the limited partners shall be calculated as a percentage of the respective capital commitments of the limited partners entitled to make such election, vote, waiver or consent. The liability of the Company for the debts and obligations of the Partnership is limited to its capital commitment in the amount of $3,000,000. Cash received by the Partnership from the sale or other disposition of, or dividends, interests or other income from or in respect of, a portfolio investment, or otherwise received by the Partnership from any source (other than capital contributions and other payments made by the Partners pursuant to the Partnership Agreement and temporary investment income), in excess of the amount necessary or appropriate for the payment of the Partnership’s expenses, liabilities and other obligations, shall be distributed upon dissolution of the Partnership, apportioned among the partners in proportion to the sharing percentages as of the time of distribution.
The general partner and associated indemnified persons generally will not be liable to the Partnership or the limited partners for any act or omission relating to the Partnership, other than acts or omissions constituting certain disabling conduct, including such person’s conviction of a felony or a willful violation of law by such person in each case having a material adverse effect on the Partnership; actual fraud, willful malfeasance or gross negligence by or of such person; or reckless disregard of duties by such person in the conduct of such person’s office. If the Partnership’s assets are insufficient to meet such liabilities, the Partnership may recall distributions to meet all or any portion of the indemnification or repayment obligations of the Partnership.
Dr. Jiaming Li, the former President of our Company, who resigned on November 27, 2023, was a director at MineOne Partners Limited and resigned from MineOne Partners Limited before joining our Company. We do not believe that the limited partnership was a related party transaction. The terms of the partnership were negotiated at arm’s length.
Based on the amended and restated limited partnership agreement of the Partnership, the primary purpose of the Partnership is to seek long-term capital appreciation by acquiring, holding, financing, refinancing and disposing of securities in the portfolio company. The Company deployed 3,200 miners in a mining site constructed by the Partnership in Cheyenne, Wyoming from September 2023 to December 2023.
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The aggregate average, mean and range of monthly fees paid to MineOne Wyoming Data Center LLC for the installation of, hosting of and services for the miners located in Cheyenne during the periods from September 2023 through December 2023 are as follows:
|
| Fees Paid in US$ | |
September 2023 | | $ | 363,939.78 |
October 2023 | | $ | 477,815.68 |
November 2023 | | $ | 400,240.00 |
December 2023 | | $ | 129,329.68 |
Average | | $ | 342,831.28 |
Range | | $ | 129,329.68 to 477,815.68 |
The aggregate average, mean and range of Bitcoins mined on a monthly basis by the miners located in Cheyenne, Wyoming during the periods from September 2023 through December 2023 are as follows:
Bitcoin Production |
| Cheyenne, Wyoming |
September 2023 |
| 11.11 |
October 2023 |
| 14.33 |
November 2023 |
| 14.34 |
December 2023 |
| 4.88 |
Average |
| 11.16 |
Range |
| 4.88 to 14.34 |
As of December 31, 2023, SonicHash US ceased its operation in the Wyoming facility due to the high operating costs in the United States.
Strategic partnership
On June 7, 2024, Bit Origin entered into a sales representative agreement with NGH Computer Pte. Ltd. (“NGH”), pursuant to which NGH agreed to engage Bit Origin as its non-exclusive representative to market and solicit orders for Aethir Edgar miners, hardware devices for contributing rendering services to Aethir Cloud Depin network. Aethir, a leader in decentralized GPU cloud infrastructure, has successfully closed its fundraising of close to USD150mn according to cryptorank.io. Aethir is an enterprise-grade, artificial intelligence (“AI”) and Gaming-focused GPU-as-a-service provider, which offers a convenient way for users to access high-performance computing resources for machine learning, deep learning, and other data-intensive applications. Aethir’s decentralized cloud computing infrastructure enables GPU providers to connect with enterprise clients who need the raw power of NVIDIA’s H100 chips for sophisticated AI and machine learning tasks. In addition, Aethir’s infrastructure supports cloud gaming clients and has contracts with the world’s largest gaming and telecom companies, taking advantage of its flexibility and coverage across technological and operational expertise.
By becoming a sales representative for Aethir, we aim to leverage our extensive expertise and industry connections to further expand Aethir’s market reach. This partnership aligns with our strategic objectives to innovate and lead in the technology and blockchain sectors. Furthermore, we have announced our intention to acquire certain Aethir devices for strategic self-deployment in Singapore or Malaysia, and we believe this collaboration will significantly enhance our offerings while driving substantial growth and value for both companies.
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Seasonality
Mining machines consume a lot of energy and generate significant heat. They tend to run more efficiently during colder seasons, as fewer cooling methods are needed. Conversely, dry seasons can cause power shortages, potentially disrupting the operations.
Industry Overview
Blockchain
A blockchain is a digital, decentralized, public ledger that exists across a network. Unlike a centralized database, a blockchain ledger typically maintains copies of itself across many computers (“nodes”) in the network so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.
The network organizes transactions by putting them into groups called blocks. Each block contains a defined set of transactions and a link to the previous block in the chain. Adding a new entry or block requires a method of consensus between nodes the block to post to the ledger and become permanent. Beyond digital currencies, blockchain technology supports decentralized applications and smart - contract platforms for finance, supply - chain management and other uses.
Cryptocurrency and the Cryptoeconomy
Cryptocurrencies are digital assets built on blockchain technology and are designed to function as a medium of exchange, store of value or to power decentralized applications. They are not issued or backed by any government or central bank. Transactions occur peer – to - peer and settle via the underlying blockchain network, resulting in little to no fees for direct transfersinvestors.corescientific.com. Users value cryptocurrencies for attributes such as immediate settlement, elimination of counterparty risk, lower transaction costs, universal accessibility and resistance to censorship. Many tokens also provide governance rights or access to services within a given network.
Adoption Trends
Market growth
Daily trading volume for bitcoin expanded from about $1 million in January 2017 to $510 million in December 2023. Despite significant volatility—prices ranged between $16,625 and $44,167 in 2023—the broader cryptoeconomy surpassed $3 trillion in early 2025 due to increased institutional participation and the introduction of regulated products.
Institutional access
On January 10 2024, the U.S. Securities and Exchange Commission approved the listing and trading of several spot - bitcoin exchange - traded products. These products, which began trading the following day, provide regulated exposure to bitcoin and have broadened the asset’s appeal among traditional investors.
Regulation and accounting
In December 2023 the Financial Accounting Standards Board issued ASU 2023 - 08, which requires certain crypto assets to be measured at fair value with changes recognized in earnings. The guidance is effective for fiscal years beginning after December 15 2024; some digital - asset companies have adopted it early.
Energy and environmental proposals
Policy discussions continue around the environmental impact of proof-of-work mining. The White House’s Digital Asset Mining Energy (DAME) excise tax proposal would impose a 30 % tax on electricity costs associated with crypto-mining. Several jurisdictions have also enacted moratoria on new carbon-based mining facilities or offered incentives for miners powered by renewable energy.
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Industry disruptions
High-profile bankruptcies in 2022—such as FTX, Celsius Network, BlockFi and Three Arrows Capital—reduced liquidity and eroded confidence in digital-asset markets. While we were not directly exposed, these events underscore the importance of counterparty risk management and regulatory compliance.
Bitcoin
Bitcoin, introduced in 2009, is the most widely adopted cryptocurrency. It allows peer-to-peer payments without intermediaries and operates through a decentralized network of nodes. Value is determined by supply, demand and market acceptance, and transactions are recorded on a public ledger secured by cryptography. Bitcoin’s price remains volatile; during 2023 it ranged from $16,625 to $44,167, and it traded at $66,925 on March 7 2024. Investors and users cite immediate settlement, fraud deterrence and low transaction fees as key benefits
Bitcoin Mining and Consensus
Bitcoin is secured by a proof-of-work consensus mechanism. Specialized computers (miners) compete to solve cryptographic puzzles to add new blocks of transactions to the blockchain. Successful miners receive a reward in newly issued bitcoin plus transaction fees. A miner’s probability of success increases with its computing power, or hash rate, and many miners join mining pools to share resources and reduce variability in rewards.
Mining Incentives and Halving Events
Bitcoin’s supply schedule is mathematically controlled to limit inflation. Approximately 144 blocks are mined daily, and every 210,000 blocks (roughly every four years) the block reward is halved. The fourth halving occurred on April 20 2024, reducing the reward from 6.25 BTC to 3.125 BTC per block. The next halving is expected in mid-2028 and will reduce the reward to 1.5625 BTC per block. These events increase scarcity but can make mining less profitable unless bitcoin prices rise. In addition to block rewards, miners earn transaction fees; during periods of network congestion users pay higher fees to incentivize miners to prioritize their transactions.
Regulatory and Accounting Landscape
The crypto industry operates under evolving legal and accounting frameworks. ASU 2023-08 requires fair-value measurement for certain crypto assets. Banks and financial institutions may be reluctant to provide services to crypto businesses, which could hinder growth. Coinbase’s 2024 Form 10-K lists several factors that could negatively affect Bitcoin and Ethereum, including block reward halving events, environmental concerns, 51 % attacks, hard forks, scaling limitations and adverse regulatory actions. Energy consumption by proof-of-work mining continues to attract regulatory scrutiny; proposals such as the DAME tax aim to internalize environmental costs.
Impact of Recent Developments Regarding Crypto Asset Market
In 2022 and the beginning of 2023, a number of well-known crypto asset market participants—Celsius Network, Voyager Digital Ltd., Three Arrows Capital and Genesis Global Holdco, LLC among them—entered bankruptcy proceedings. In November 2022, FTX, then one of the largest digital-asset exchanges by volume, halted customer withdrawals and soon filed for bankruptcy. These failures eroded public confidence and exposed systemic risks and contagion in the digital-asset ecosystem: major lenders such as BlockFi Inc. and trading desks that had credit exposure to FTX and Three Arrows faced liquidity crises. We did not have direct or material exposure to FTX or the other bankrupt companies; none of our digital assets were lost or misappropriated. However, the collapse of large exchanges and lending platforms created extreme volatility in the price of Bitcoin and Dogecoin and contributed to the severe downturn in digital-asset markets during late 2022 and 2023. A perceived lack of stability in digital-asset exchanges—whether due to business failure, hacking, government-mandated regulation or fraud—can reduce confidence in crypto networks and result in greater price volatility.
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Following these bankruptcies, the courts and regulators began to unwind the damaged companies. By mid-2024 all of the major U.S. crypto lenders that failed in 2022—Voyager, BlockFi, Celsius and Genesis—had Chapter 11 plans confirmed. Voyager’s plan, approved in March 2023, provided for a wind-down of operations; BlockFi’s plan, approved in October 2023, similarly wound down its business and allowed it to pursue claims against Three Arrows and FTX. Celsius emerged from Chapter 11 in January 2024 and began distributing more than $3 billion in crypto and cash to its creditors. Under its plan, Celsius spun off its bitcoin-mining business into a new company—Ionic Digital, Inc.—that is owned by Celsius’ customers and managed by Hut 8 Corp. Genesis obtained court approval in May 2024 to liquidate and return about $3 billion to customersreuters.com. FTX’s wind-down plan was approved in October 2024; it provides for repayment of 98 % of customers (those owed $50,000 or less) with at least 118 % of their account value as of November 2022. Although some creditors have criticized the plan because asset values have risen dramatically since the filing, the court praised the case as a model for resolving complex crypto bankruptcies. The resolution of these cases has improved market transparency but has not eliminated contagion risk, as many crypto businesses remain interconnected.
In response to the 2022-2023 turmoil, the digital-asset markets experienced significant volatility. Bitcoin prices plunged to around $16,000 in late 2022, rebounded to around $44,000 in early 2024 and then rallied sharply after the U.S. Securities and Exchange Commission approved spot-bitcoin exchange-traded funds in January 2024. By December 2024 Bitcoin had surpassed $100,000, more than doubling during the year. Analysts have predicted that Bitcoin could reach $200,000 in late 2025. This rally, combined with anticipation of the April 2024 halving that reduced block rewards from 6.25 BTC to 3.125 BTC, caused dramatic swings in revenue for bitcoin miners. While price appreciation improved our margins in 2024, the halving increased our unit production cost and makes profitability more sensitive to market prices. Should market liquidity remain fragile or further exchange failures occur, Bitcoin and Dogecoin prices could decline sharply, adversely affecting our results of operations and financial condition.
We derive all of our revenue from Bitcoin mining during the years ended June 30, 2024 and 2023. Volatility in Bitcoin prices has had an immediate impact on our results and on the trading price of our Class A ordinary shares, which investors often view as linked to the value of our Bitcoin holdings. For example, during the fiscal years ended June 30 2024 and 2023, price weakness and the FTX-related market decline forced us to scale back operations to cut costs. In November 2022, strong price volatility negatively affected our production. Subsequently, high energy prices and deteriorating conditions at our Georgia site led us to suspend operations there in December 2022. We transported 1,490 miners from Georgia to our facility in Marion, Indiana, where they were redeployed in January 2023. At the same time, we negotiated a new hosting agreement with our Indiana facility operator that ties fees to electricity costs plus 50% of the profit generated from mining, based on the difference between the market price of mined bitcoins and electricity costs. This structure significantly reduced our operating costs.
Regulatory developments add further uncertainty. The Financial Accounting Standards Board issued guidance in December 2023 (ASU 2023-08) requiring certain crypto assets to be measured at fair value, with changes recognized in earnings. The U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) on May 22 2024. FIT21 seeks to clarify whether a digital asset is a security or a commodity, allocate regulatory authority between the SEC and the CFTC, and extend Bank Secrecy Act compliance obligations to crypto businesses. The bill faces an uncertain future in the Senate, but it signals Congress’ intention to provide a comprehensive framework for the crypto industry. On the international front, the European Union’s Markets in Crypto-Assets (MiCA) Regulation entered into force, with rules for stablecoins effective June 30 2024 and full implementation by December 30 2024. Environmental and tax proposals, such as the White House’s Digital Asset Mining Energy (DAME) excise tax and the proposed Crypto-Asset Environmental Transparency Act, could increase electricity costs or impose greenhouse-gas disclosure requirements on mining operations.
Although we believe Bitcoin is unlikely to be classified as a security under U.S. law, uncertainties remain regarding other digital assets and tax treatment. The Internal Revenue Service currently treats digital assets as property and views certain hard forks as taxable events, but it has not provided guidance on the timing and amount of income recognition for staking rewards and other crypto incentives. Future regulatory or tax changes could impose significant costs on our business. We will continue to monitor regulatory developments and adjust our operations and risk management strategies accordingly.
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Legal Proceedings
Except as disclosed below, there are no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, other than disclosed above, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company that are outside the ordinary course of business or in which an adverse decision could have a material adverse effect.
However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise.
Litigation
In March 2023, the Company and SonicHash US, along with other named entities, were named as defendants in a state court civil lawsuit filed in Cheyenne, Wyoming by BCB Cheyenne LLC (“BCB”) who had contractual relationship with two of the named defendants, MineOne Wyoming Data Center LLC, the other with Terra Crypto, Inc. Defendant alleges these parties breached their respective contracts. For its part, Bit Origin and Sonichash, who had no relationship with BCB, were nevertheless alleged to have intentionally interfered with BCB’s contractual relationships with these other parties. The Company and SonicHash US were also named as what is known as an “alter ego” defendant pursuant to which a party may be found liable if its later discovered it was acting, in essence, as the alter ego of the primary wrongdoer. Prior to the Company discovering it had been named in this Wyoming lawsuit, the case had been dismissed but simultaneously recommenced in the U.S. District Court in Wyoming against the same parties, with substantively the same causes of action. The Company and SonicHash USwere made aware of and appeared in this new federal court litigation denying all material allegations alleged against each of them.
In September 2023, BCB filed an amended complaint to add parties and substitute parties in place of others but leaving the Company and SonicHash USas named defendants accused of intentionally interfering with BCB’s contractual relations. Once again, both companies were also alleged to be alter egos of the primary wrongdoers. In its lawsuit, BCB seeks “no less than $38 million” in compensatory damages. The Company denies any liability to BCB arising out of this lawsuit and is defending this matter vigorously.
The parties mediated this dispute from August 6 to August 8, 2024 and entered into a Settlement Agreement and Mutual Release on October 14, 2024, pursuant to which Bit Origin agreed to pay $13,050 to cover certain litigation cost. On October 14, 2024, the court dismissed the lawsuit, granting full releases to all defendants and officially concluding the matter.
Nasdaq Non-compliance
Nasdaq Listing Rule 5250(c)(1)
On November 20, 2024, the Company received a written notice from Nasdaq notifying the Company that, since the Company has not yet filed its annual report on Form 20-F for the fiscal year ended June 30, 2024, the Company does not comply with Nasdaq Listing Rules for continued listing under Listing Rule 5250(c)(1).
The Company filed the Form 20-F for the fiscal year ended June 30, 2024 on December 26, 2024.
On December 27, 2024, the Company received a letter from Nasdaq notifying the Company that, based on the filing of the Form 20-F make on December 26, 2024, Nasdaq has determined that the Company complies with the Rule5250(c)(1). Accordingly, the matter has been closed.
Nasdaq Listing Rule 5550(b)(1)
On January 3, 2025, the Company received a written notice from Nasdaq Listing Qualifications Department notifying the Company that the Company no longer complies with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on the Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing, and the Company’s Form 20-F for the year ended June 30, 2024 reported stockholders’ equity of $909,583. In accordance with the rules, the Company has 45 calendar days to submit a plan to regain compliance. If the plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the letter to evidence compliance.
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In response, the Company submitted a compliance plan to Nasdaq on February 17, 2025, outlining a series of initiatives intended to restore compliance with Nasdaq Listing Rule 5550(b)(1). Based on its review of the submission, Nasdaq granted the Company an extension through June 30, 2025, to demonstrate compliance.
On July 1, 2025, the Company received a letter from Nasdaq, stating that, based on the Company’s Report on Form 6-K dated June 30, 2025, that the Company’s stockholders’ equity as of May 31, 2025 was approximately $3.6 million and the Company believes it has at least $2.5 million in stockholders’ equity, Nasdaq has determined that the Company complies with Nasdaq Listing Rule 5550(b)(1).
Nasdaq will continue to monitor the Company’s ongoing compliance with the minimum stockholders’ equity requirement and, if at the time of its next periodic report, the Company does not evidence compliance with the minimum stockholders’ equity requirement, the Company may be subject to delisting. At such time, Nasdaq staff will provide written notification to the Company, which may then appeal the Nasdaq staff’s determination to a Hearings Panel.
Nasdaq Listing Rule 5550(a)(2)
On February 21, 2025, the Company received a letter from Nasdaq notifying the Company that the minimum closing bid price per share for its Class A Ordinary Shares was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). The Nasdaq notification letter does not result in the immediate delisting of the Company’s Ordinary Shares, and the shares will continue to trade uninterrupted under the symbol “BTOG.”
Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of one hundred eighty (180) calendar days, or until August 20, 2025 (the “Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement. If at any time during the Compliance Period, the closing bid price per share of the Company ‘s Ordinary Shares is at least $1.00 for a minimum of ten (10) consecutive business days, Nasdaq will provide the Company a written confirmation of compliance.
In the event the Company does not regain compliance by August 20, 2025, the Company may be eligible for an additional 180 calendar day grace period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If Nasdaq determines that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for the additional compliance period, Nasdaq will provide notice that the Ordinary Shares will be subject to delisting. The Company would have the right to appeal a determination to delist its Ordinary Shares to a hearings panel.
On August 28, 2025, the Company received a written notice from Nasdaq (the “August 2025 Notice”) stating that, although the Company had not regained compliance with the minimum bid price requirement by August 20, 2025, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company is eligible for an additional 180 calendar day period, or until February 16, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the closing bid price of the Company’s ordinary shares must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during this 180-day period.
The August 2025 Notice has no immediate impact on the listing of the Company’s ordinary shares, which will continue to be listed and traded on the Nasdaq Capital Market, subject to the Company’s compliance with the other listing requirements of the Nasdaq Capital Market. Although the Company will use all reasonable efforts to achieve compliance with Rule 5550(a)(2), there can be no assurance that the Company will be able to regain compliance with that rule or will otherwise be in compliance with other Nasdaq listing criteria.
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Regulation
U.S. Regulations and Policies Relating to Blockchain and Cryptocurrencies
The laws and regulations applicable to cryptocurrency in the United States continue to evolve rapidly. As digital assets have grown in popularity and market value, regulators at the federal and state levels have intensified their scrutiny of crypto-asset activities. Some governments abroad have deemed digital assets illegal, while others have allowed their use without restriction. In the United States, the landscape remains complex: cryptocurrencies are subject to overlapping and sometimes unclear requirements, and the classification of a particular crypto asset as a security, commodity or something else may vary depending on the facts and circumstances.
A number of federal agencies—FinCEN, the SEC, the CFTC, FINRA, the CFPB, the Department of Justice and Homeland Security, the FBI, the IRS and various state regulators—have examined cryptocurrency networks, users and exchanges. Their focus has been to ensure that digital assets are not used to launder illicit proceeds or fund criminal or terrorist activities and that exchanges and service providers have adequate consumer safeguards. FinCEN does not differentiate between “real” currency and convertible virtual currency for purposes of determining whether a person is engaged in money transmission. Entities that qualify as money services businesses must register with FinCEN and maintain an effective anti-money-laundering program and comply with reporting and record-keeping requirements. In May 2019 FinCEN issued guidance on the application of the Bank Secrecy Act to convertible virtual currencies. In October 2023 the agency proposed a rule that would designate convertible virtual-currency mixing as a transaction of primary money-laundering concern and would require financial institutions to report transactions involving foreign CVC mixers to FinCEN. On August 4 2025, FinCEN issued a notice urging financial institutions to be vigilant in identifying and reporting suspicious activity involving CVC kiosks, citing increased use of kiosks in scam payments and reminding operators of their obligations under the Bank Secrecy Act. These developments illustrate the Treasury Department’s efforts to increase transparency and deter illicit activity in crypto markets.
The SEC continues to evaluate whether digital assets are securities. The Commission has stated that some tokens are investment contracts subject to federal securities laws and has brought enforcement actions against issuers and promoters. Senior SEC staff have indicated that Bitcoin and Ethereum are not securities, yet such statements are not binding and reflect only personal views. A non-binding framework published by the SEC’s FinHub provides guidance on how to analyze whether a crypto asset is a security, but regulatory certainty remains elusive. After the U.S. Court of Appeals for the D.C. Circuit vacated the SEC’s denial of Grayscale’s proposed Bitcoin exchange-traded product (ETP), the Commission approved several spot-Bitcoin ETPs in January 2024 and, later, in September 2025 adopted generic listing standards for commodity-based ETPs, allowing exchanges to list certain crypto ETPs without individual Commission approvals. The SEC’s Spring 2025 regulatory agenda signaled rulemaking initiatives on offers and sales of digital assets, trading on alternative trading systems and custody of digital asset securities. Moreover, on September 5 2025, the SEC and CFTC issued a joint statement under their “Crypto Sprint,” pledging greater cooperation and proposing safe-harbor exemptions for peer-to-peer trading of spot crypto assets. Although these initiatives are not yet codified, they indicate a shift toward harmonizing oversight and fostering innovation while maintaining investor protection.
Federal legislation also progressed in 2025. On July 18 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law. The GENIUS Act is the first U.S. law to establish a comprehensive framework for payment stablecoins: it creates an official category of “payment stablecoins,” requires that they be backed one-to-one by high-quality liquid assets and mandates monthly transparency reports. Only insured depository institutions or comparable entities may issue such stablecoins, and they are regulated as payment instruments rather than securities. At the same time, the Digital Asset Market Clarity Act (CLARITY Act) passed the House of Representatives. The CLARITY Act would distinguish between digital commodities and digital securities, allocate jurisdiction over digital commodities to the CFTC and digital securities to the SEC, require exchanges and brokers dealing in digital assets to register and comply with customer asset-protection and anti-money-laundering obligations, and provide definitional clarity and self-certification procedures for certain issuances. The Act also includes safe-harbor provisions for peer-to-peer transactions and affirms individuals’ rights to self-custody digital assets. The House also passed the Anti-CBDC Surveillance State Act, which would prohibit the Federal Reserve from issuing a central-bank digital currency without explicit congressional authorization. As of the date of this filing, the CLARITY Act and Anti-CBDC Act awaited consideration in the Senate. Collectively, these bills signal Congress’ intent to craft a comprehensive federal framework for digital assets and stablecoins.
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Tax and accounting guidance remains a developing area. The IRS treats cryptocurrencies such as Bitcoin as property, meaning that each transfer of a crypto asset can trigger capital gains or losses. The agency has issued guidance on the tax treatment of hard forks and airdrops, but questions remain regarding the timing and amount of income recognition for staking rewards and other crypto incentives; proposals for de minimis exemptions and other reforms are under discussion. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-08, which requires certain crypto assets to be measured at fair value with changes recognized in net income. Public companies must adopt this guidance for fiscal years beginning after December 15 2024, and other entities for fiscal years beginning after December 15 2025. We believe that fair-value accounting for Bitcoin holdings may reduce the volatility associated with impairment accounting under the prior guidance.
At the state level, regulatory approaches continue to diverge. Some states, such as Wyoming, have enacted crypto-friendly laws that create special-purpose depository institutions and recognize decentralized autonomous organizations. Others have adopted more restrictive measures. New York’s cryptocurrency mining law, enacted in 2022, imposed a two-year moratorium (from November 22 2022 through November 22 2024) on the issuance or renewal of air permits for proof-of-work cryptocurrency mining operations that use behind-the-meter electricity generated from carbon-based fuel. The law directed the Department of Environmental Conservation to prepare a Generic Environmental Impact Statement analyzing the environmental impacts of proof-of-work mining, but advocates noted in October 2024 that the moratorium was set to expire and the environmental study had not been completed. Other states are considering licensure requirements for crypto-asset businesses, energy-use disclosures for mining operations and environmental impact assessments. In addition, both federal and state energy regulators have begun to examine the cumulative load of proof-of-work mining on power grids and its implications for climate goals. Future state legislation could therefore impose further costs or operational constraints on our mining activities.
We continue to believe that Bitcoin itself is unlikely to be classified as a security under U.S. federal law, but uncertainties remain regarding other digital assets. Our mining activities currently do not trigger money transmitter registration requirements under federal or state law, and we are not engaged in the offer or sale of tokens that could be construed as securities. However, new or overlapping regulations, including licensing or registration requirements at the federal or state level, enhanced AML or tax reporting obligations, or environmental restrictions, could increase our compliance costs or impede our operations. We will monitor regulatory developments closely and adjust our business practices as necessary.
Foreign legal and regulatory treatment of Bitcoin
Regulators outside the United States are also adopting more comprehensive crypto frameworks. In the European Union, the Markets in Crypto-Assets Regulation (MiCA) was adopted in June 2023 and is being implemented in phases. Certain provisions, particularly those relating to stablecoins and crypto-asset service providers, became applicable in 2024, but many firms can operate under transitional periods that may last until mid-2026. As of 2025, the EU had granted 53 MiCA licences, including 14 for stablecoin issuers and 39 for crypto-asset service providers, with Germany issuing the most licences. The Digital Operational Resilience Act (DORA), which entered into force on January 17 2025, requires financial institutions—banks, insurers, investment firms and crypto service providers—to enhance cybersecurity, incident reporting and operational resilience. Hong Kong’s Stablecoins Ordinance, effective August 1 2025, mandates that stablecoin issuers obtain a licence from the Hong Kong Monetary Authority, maintain full asset-backed reserves and comply with anti-money-laundering obligations. Singapore’s Financial Institutions (Miscellaneous Amendments) Act 2024, with final provisions effective January 24 2025, expands the Monetary Authority of Singapore’s power to conduct on-site inspections and off-site reviews of entities dealing in crypto-derivatives, even if those entities are not yet licensed. These international regimes, together with Canada’s and other jurisdictions’ approval of exchange-traded Bitcoin products, highlight a trend toward more formal licensing and oversight of digital-asset service providers. We will continue to monitor foreign regulatory developments because conflicting or stringent rules abroad may affect the global market for Bitcoin and influence U.S. policy.
Human Capital Resources
As of June 30, 2025 and the date of this annual report, we had 1 full-time equivalent employee located in the United States and 4 full-time equivalent employees located in Singapore. None of our employees are either represented by a labor union or subject to a collective bargaining agreement. We also engage fitness instructors and fitness content production personnel on an independent contractor basis. Our utilization of independent contractors fluctuates significantly depending on several factors, including the growth of, and demand for new fitness content by, our member base.
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Facilities
Our corporate headquarters are located in Singapore, where we hold a lease that has a monthly rent of S$21,261 (approximately US$ 16,383).
4.C. Organizational structure
Bit Origin was incorporated in the Cayman Islands on January 23, 2018.
The following diagram illustrates our corporate structure:
Direct and indirect subsidiaries
SonicHash Canada was formed on December 14, 2021 under the laws of Alberta, Canada. It is a subsidiary of Bit Origin Ltd. It is not currently engaging in any active business.
SonicHash US was formed on December 17, 2021 under the laws of Delaware. It is a wholly-owned subsidiary of Bit Origin. It was formed to engage in Bitcoin mining in the United States. As of December 31, 2023, the Company temporarily ceased all Bitcoin mining activities.
Sonic Auspice was formed on November 30, 2023 under the laws of Delaware. Bit Origin owns 55% of the membership interest in Sonic Auspice. It does not have any material operation as of the date of this annual report.
In addition, SonicHash Singapore was formed on December 16, 2021 under the laws of Singapore. It was a wholly-owned subsidiary of Bit Origin and had never engaged in any active business. On April 18, 2024, the board of directors of the Company approved to wind down SonicHash Singapore. SonicHash Singapore has been officially struck off in September 4, 2024. It did not own any assets or have any employees or business operation at the time of winding down.
Bit Origin SG was formed on June 26, 2025 under the laws of Singapore. It is a subsidiary of Bit Origin Ltd. It is not currently engaging in any active business as of the date of this annual report.
4.D. Property, plants and equipment
As of June 30, 2025 and the date of this annual report, our principal executive offices are located at 160 Robinson Road, 12F, SBF Center, Singapore 068914.
For detailed description of the miners we own, see “Item 4. Information of the Company - 4.B Business Overview - Miners.”
For detailed description of the mining facilities and the agreements between the host service providers and SonicHash US, see “Item 4. Information of the Company - 4.B Business Overview - Mining Facilities.”
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this annual report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this annual report, particularly in “Risk Factors.” All amounts included in the fiscal years ended June 30, 2025, 2024 and 2023 (“Annual Financial Statements”) are derived from our audited consolidated financial statements included elsewhere in this annual report. These Annual Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.
Overview
We were engaged in the cryptocurrency related operations and management. We used specialized computers, known as miners, to generate Bitcoins, a digital asset (also known as a cryptocurrency). The miners use ASIC chips. These chips enable the miners to apply greater computational power, or “hash rate”, to provide transaction verification services (known as solving a block) which helps support the Bitcoin blockchain. For every block added, the Bitcoin blockchain awards a Bitcoin award equal to a set number of Bitcoins per block. Miners with a greater hash rate have a higher chance of solving a block and receiving a Bitcoin award.
The Bitcoin mining business started generating revenue in May 2022. In December 2023, we temporarily suspended the Bitcoin mining operations due to the high operating costs in the United States. Starting from June 2024, we started to purchase and sale of cryptocurrency mining equipment to support our treasury and operational activities. In 2025, we entered into several sales agreements to sell a total 295 units of Aethir Edge miners.
In July and August 2025, we acquired a total of 70,543,745 Dogecoin (“DOGE”) under our digital asset treasury initiative and have become the first US-listed company with DOGE as its core asset. We are actively building an ecosystem centered around DOGE, encompassing payment solutions, a computing power network, and cultural asset applications. We believe this ecosystem, once established, can generate diverse revenue streams, including miner services, micro-payment systems, and Web3 product incubation. These ‘infrastructure-type earnings’ can provide stable cash flow during market downturns, further cushioning the financial impact of DOGE price volatility.
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Summary of Cryptocurrency Mining Results
The following table presents additional information about our cryptocurrency mining activities of Bitcoin (“BTC”) in coins and amounts during the years ended June 30, 2025, 2024 and 2023:
|
| Quantities (in coins) |
| Cryptocurrencies | |
| | BTC | | Amounts | |
Balance on July 1, 2022 |
| 7.17 | | $ | 141,888 |
Revenue recognized from cryptocurrencies mined |
| 272.38 | |
| 6,261,091 |
Hosting fees settled in cryptocurrencies |
| (22.14) | |
| (428,839) |
Proceeds from sale of cryptocurrencies |
| (175.09) | |
| (4,384,562) |
Realized gain on sale/exchange of cryptocurrencies |
| — | |
| 676,015 |
Impairment loss of cryptocurrencies |
| — | |
| (181,263) |
Balance on June 30, 2023 | | 82.32 | | $ | 2,084,330 |
Revenue recognized from cryptocurrencies mined | | 95.62 | | | 2,888,482 |
Hosting fees settled in cryptocurrencies | | (7.60) | | | (212,344) |
Proceeds from sale of cryptocurrencies | | (165.87) | | | (4,668,828) |
Realized gain on sale/exchange of cryptocurrencies | | — | | | 94,149 |
Impairment loss of cryptocurrencies | | — | | | (7,102) |
Balance on June 30, 2024 | | 4.47 | | $ | 178,687 |
Revenue recognized from cryptocurrencies mined | | — | | | — |
Hosting fees settled in cryptocurrencies | | (4.47) | | | (426,250) |
Proceeds from sale of cryptocurrencies | | — | | | — |
Realized gain on sale/exchange of cryptocurrencies | | — | | | 247,563 |
Impairment loss of cryptocurrencies | | — | | | — |
Balance on June 30, 2025 |
| — | * | $ | — |
Results of Operations
The tables in the following discussion summarize our consolidated statements of operations for the periods indicated. This information should be read together with our consolidated financial statements included elsewhere in this press release. The operating results in any period are not necessarily of the results that may be expected for any future period.
Revenues
Total cryptocurrency mining revenue for the years ended June 30, 2025, 2024 and 2023 was approximately nil, $2.9 million and $6.3 million, respectively. Total cryptocurrency miner sales net revenue for the years ended June 30, 2025, 2024 and 2023 was approximately $39,000, nil and nil, respectively.
We started Bitcoin mining in May 2022, and we were awarded a total of 95.62 coins during the year ended June 30, 2024 at an average Bitcoin value of $30,208 and were awarded a total of 272.38 coins during the year ended June 30, 2023 at an average Bitcoin value of $22,987.
We started cryptocurrency miner sales in June 2024. We sold 295 units of Aethir Edge Miners and recognized agency income of approximately $39,000 for the sales during the year ended June 30, 2025.
Cost of revenues and expenses
Cost of revenues for cryptocurrency mining for the years ended June 30, 2025, 2024 and 2023 was approximately nil, $3.8 million and $10.8 million, respectively. Cost of revenues consists primarily of all-in-one production costs of mining operations, and depreciation expense of our own mining equipment recorded during the years ended June 30, 2025, 2024 and 2023. We signed hosting agreement with hosting partners, and the hosting partners will install the mining equipment and provide elective power, internet services and other necessary services to maintain the operation of the mining equipment. All the related operating fees are included in the all-in-one monthly fees charged by the hosting partners.
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Gross Profit (Loss)
The gross profit (loss) for the years ended June 30, 2025, 2024 and 2023 was approximately $39,000, ($0.9) million and ($4.6) million, respectively. The gross profit for the year ended June 30, 2025 was from the cryptocurrency miner sales net revenue.
General and Administrative Expenses
General and administrative expenses decreased by approximately $0.7 million, or 19.2%, from approximately $3.8 million for the year ended June 30, 2024 to approximately $3.1 million for the year ended June 30, 2025. The decrease in general and administrative expenses was primarily due to a decrease in salary expenses of approximately $0.9 million and audit fees of approximately $0.2 million in the year of 2025. The decrease was mainly offset by an increase in legal professional fees of approximately $0.4 million.
General and administrative expenses increased by approximately $0.9 million, or 30.9%, from approximately $2.9 million for the year ended June 30, 2023 to approximately $3.8 million for the year ended June 30, 2024. The increase in general and administrative expenses was primarily due to an increase in consulting and legal professional fees of approximately $1.5 million due to our equity-related transactions in the year of 2024. The increase was mainly offset by a decrease in rental expenses of approximately $0.5 million, and a decrease in travel and advertising expenses of approximately $0.1 million.
(Recovery of) Provision for Credit Losses
During the year ended June 30, 2025, we made approximately $66,000 recovery of credit losses for loans receivable and approximately $14,000 provision for credit losses for other receivables.
During the year ended June 30, 2024, we made approximately $1.1 million provision for credit losses and doubtful accounts for other receivables, prepayments, loans receivables and the GST tax receivable.
During the year ended June 30, 2023, we made approximately $2.6 million provision for credit losses for other receivables and approximately $0.7 million provision for credit losses for security deposits.
Impairment Loss of Cryptocurrencies
Compared with the BTC market price on June 30, 2025, 2024 and 2023, we recognized approximately nil, $7,000 and $0.2 million of impairment loss during the years ended June 30, 2025, 2024 and 2023.
Impairment Loss of Long-lived assets
We recorded approximately nil, $6.5 million and $16.7 million of impairment loss during the years ended June 30, 2025, 2024 and 2023 for our cryptocurrency mining equipment.
Impairment Loss of Long-term investment
We recorded approximately nil, $2.4 million and $0.6 million of impairment loss during the years ended June 30, 2025, 2024 and 2023 for our long-term investment.
Share Based Compensation Expenses
We incurred nil share compensation expense during the year ended June 30, 2025.
We incurred approximately $73,000 to pay for CEO, president, and head of HR share based compensation expenses during the year ended June 30, 2024.
We incurred approximately $67,000 to pay for CEO, president, and head of HR share based compensation expenses during the year ended June 30, 2023.
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Loss from Operations
The loss from operations for the year ended June 30, 2025 was approximately $3.0 million, a decrease of approximately $11.8 million, or 79.8%, from approximately $14.8 million for the year ended June 30, 2024. The decrease was primarily due to the decrease of gross loss, provision for credit losses and impairment losses as the reasons that we mentioned above.
The loss from operations for the year ended June 30, 2024 was approximately $14.8 million, a decrease of approximately $13.5 million, or 47.6%, from approximately $28.3 million for the year ended June 30, 2023. The decrease was primarily due to the decrease of gross loss and impairment loss as the reasons that we mentioned above.
Other Income (Expenses), Net
Our other income (expense), net, consists of interest income, interest expense, other finance expense, other income (expense), and loss on warrants settlement. Our total other expenses, net was approximately $1.4 million during the year ended June 30, 2025, a decrease of approximately $2.1 million, or 60.0%, as compared to our other income, net of approximately $3.4 million during the year ended June 30, 2024. The decrease was mainly due to the decrease of the loss on warrants settlement of approximately $1.9 million and offset by the increase of realized gain on sale/exchange of cryptocurrencies of approximately $0.2 million for the year ended June 30, 2025.
Our other income (expense), net, consists of interest income, interest expense, other finance expense, other income (expense), and loss on warrants settlement. Our total other expenses, net was approximately $3.4 million during the year ended June 30, 2024, an increase of approximately $3.5 million, or 4006.7%, as compared to our other income, net of approximately $88,000 during the year ended June 30, 2023. The increase was mainly due to the loss on warrants settlement of approximately $1.9 million, the increase of interest expense of approximately $0.3 million and the increase of amortization expenses of convertible debenture issuance costs and discounts of approximately $0.8 million for the year ended June 30, 2024.
Provision for Income Taxes
We did not have any taxable income during the years ended June 30, 2025, 2024 and 2023.
Net Loss
Our net loss was approximately $4.4 million for the year ended June 30, 2025, decreased by approximately $13.9 million, or 76.1%, from a net loss of approximately $18.3 million for the year ended June 30, 2024. Such change was the result of the combination of the changes as discussed above.
Our net loss was approximately $18.3 million for the year ended June 30, 2024, decreased by approximately $9.9 million, or 35.2%, from a net loss of approximately $28.2 million for the year ended June 30, 2023. Such change was the result of the combination of the changes as discussed above.
The following tables reconcile our non-GAAP net income to the most directly comparable financial measures calculated in accordance with U.S. GAAP, which are net loss (income) attributable to our ordinary shareholders.
| | For the Year ended June 30, | | |||||||||
| | | | | | | | | | | Percentage |
|
|
| 2025 |
| 2024 |
| Change |
| Change |
| |||
Reconciliation of net loss to non-GAAP net loss |
| |
|
| |
|
| |
|
|
| |
Net loss | | $ | (6,533,987) | | $ | (17,531,647) | | $ | 10,997,660 | | (62.7) | % |
Share based compensation expense | |
| — | | | 73,230 | | | (73,230) | | (100.0) | % |
Non-GAAP net loss | | $ | (6,533,987) | | $ | (17,458,417) | | $ | 10,924,430 | | (62.6) | % |
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Our non-GAAP net loss decreased by approximately $10.9 million, or 62.6%, to non-GAAP net loss of approximately $6.5 million for the years ended June 30, 2025, from non-GAAP net loss of approximately $17.4 million for the years ended June 30, 2024. Such change was primarily attributable to the increase of gross profit and decrease in provision for credit losses and impairment loss as discussed above.
| | For the Years ended June 30, | | |||||||||
| | | | | | | | | | | Percentage |
|
|
| 2024 |
| 2023 |
| Change |
| Change |
| |||
Reconciliation of net loss to non-GAAP net loss |
| |
|
| |
|
| |
|
|
| |
Net loss | | $ | (17,531,647) | | $ | (28,216,352) |
| $ | 10,684,705 |
| (37.9) | % |
Share compensation expense | |
| 73,230 | |
| 67,271 |
| | 5,959 |
| 8.9 | % |
Non-GAAP net loss | | $ | (17,458,417) | | $ | (28,149,081) | | $ | 10,690,664 |
| (38.0) | % |
Our non-GAAP net loss decreased by approximately $10.7 million, or 38.0%, to non-GAAP net loss of approximately $17.4 million for the year ended June 30, 2024, from non-GAAP net loss of approximately $28.1 million for the year ended June 30, 2023. Such change was primarily attributable to the decrease in gross loss and impairment loss as discussed above.
5.B. Liquidity and Capital Resources
For the fiscal years ended June 30, 2025, 2024 and 2023
As of June 30, 2025, we had working capital of approximately $3.2 million. We have been constantly evaluating partnerships to diversify into other blockchain-related activities or products. Currently, we are actively building an ecosystem centered around DOGE, encompassing payment solutions, a computing power network, and cultural asset applications. We will use equity and debt financing to finance our working capital requirements and capital expenditures when necessary. Based on the above considerations, management is of the opinion that we have sufficient funds to meet our working capital requirements for the next twelve months from the date of this report.
The following summarizes the key components of our cash flows for the years ended June 30, 2025, 2024 and 2023.
| | For the Year Ended June 30, | |||||||
|
| 2025 |
| 2024 |
| 2023 | |||
Net cash used in operating activities | | $ | (2,290,607) | | $ | (7,929,234) | | $ | (6,761,587) |
Net cash provided by investing activities | |
| 1,545,888 | |
| 1,023,256 | |
| 4,269,529 |
Net cash (used in) provided by financing activities | | | (608,712) | | | 8,298,774 | | | 2,490,527 |
Change in cash and cash equivalents | | $ | (1,353,431) | | $ | 1,392,796 | | $ | (1,531) |
Operating activities
Cash used in operating activities was approximately $2.3 million for the year ended June 30, 2025, which was mainly due to the net loss of approximately $4.4 million, the increase of prepayments of approximately $0.5 million for miner advances. The net cash used in operating activities was mainly offset by the change of cryptocurrencies of approximately $0.4 million, the non-cash items of amortization of convertible debenture issuance costs and discounts of approximately $1.2 million and the interest expense of convertible debenture of approximately $0.7 million, and the decrease of other receivables of approximately $0.7 million.
Cash used in operating was approximately $7.9 million for the year ended June 30, 2024, which was mainly due to the net loss of approximately $18.3 million, the change of cryptocurrencies of approximately $2.7 million, the increase of other receivables of approximately $3.0 million, and the decrease of accounts payable of approximately $0.7 million for miner setup fees. The net cash used in operating activities was mainly offset by the non-cash items of impairment losses of approximately $8.9 million, loss on warrants settlement of approximately $1.9 million, and the increase of other payables and accrued liabilities of approximately $1.3 million.
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Cash used in operating activities was approximately $6.8 million for the year ended June 30, 2023, which was mainly due to the net loss of approximately $28.2 million, realized gain on sale/exchange of cryptocurrencies of approximately $0.7 million, the change of cryptocurrencies of approximately $5.8 million, the decrease of security deposits of approximately $0.2 million, and the decrease of prepayments of approximately $0.3 million for miner setup fees. The net cash used in operating activities was mainly offset by the non-cash items of the depreciation expense of approximately $5.4 million, the provision for credit losses of approximately $3.3 million, and the impairment losses of approximately $17.5 million. The net cash used in operating activities was also offset by the decrease of other receivables of approximately $1.0 million, and the increase in accounts payables of approximately $0.7 million.
Investing activities
Cash provided by investing activities was approximately $1.5 million for the year ended June 30, 2025, which was due to the increase of approximately $1.5 million repayments from loans to third parties.
Cash provided by investing activities was approximately $1.0 million for the year ended June 30, 2024, which was due to approximately $4.7 million proceeds received from sale of cryptocurrencies and offset by approximately $3.6 million loans to third parties.
Cash provided by investing activities was approximately $4.3 million for the year ended June 30, 2023, which was due to approximately $4.4 million proceeds received from sale of cryptocurrencies and offset by approximately $0.1 million spent on purchases of mining equipment.
Financing activities
Cash used in financing activities was approximately $0.6 million for the year ended June 30, 2025, which was due to the payments of convertible debenture interest expense.
Cash provided by financing activities was approximately $8.3 million for the year ended June 30, 2024, which was mainly due to the proceeds from issuance of ordinary shares of approximately $4.0 million, the proceeds from convertible debenture, net of issuance costs of approximately $6.1 million, and the proceeds from exercises of warrants of approximately $1.2 million. Cash provided by financing activities was mainly offset by the repayments to the convertible debenture of $1.6 million.
Cash provided by financing activities was approximately $2.5 million for the year ended June 30, 2023, which was mainly due to the repayments from other receivables – related parties of approximately $0.4 million, the proceeds from third party loans of approximately $0.8 million, and the proceeds from convertible debenture, net of issuance costs of approximately $1.8 million. Cash provided by financing activities was mainly offset by the repayments to the convertible debenture of $0.3 million.
5.C. Research and Development
We currently do not have any research and development expenses.
5.D. Trend Information
Other than as disclosed elsewhere in this annual report and below, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Contingencies
From time to time, we are a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from, lease disputes, commercial disputes, worker compensation complaints, default on guaranteeing third party lease obligations, and default on loans. We first determine whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss, the loss will be accrued. We disclose a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated.
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5.E. Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. While our significant accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, we believe that there were no critical accounting policies that affect the preparation of financial statements. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting estimates involve the most significant estimates and judgments used in the preparation of our financial statements:
Allowance for credit losses
Allowance for credit losses represents management’s best estimate of probable losses inherent in the portfolio. On July 1, 2023, we adopted ASC 326, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.
Under ASU 2016-13, we have exposure to credit losses for financial assets, which are other receivables and loans receivable. We considered various factors, including nature, historical collection experience, the age of the accounts receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. We have adopted loss rate method to calculate the credit loss and considered the reverent factors of the historical and future conditions of us to make reasonable estimation of the risk rate. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment.
Fair value of warrants
We estimated the fair value of warrants issued with the convertible debentures based upon using the Black-Scholes Options Pricing Model with the following inputs:
Share price |
| $ | 0.27 | |
Exercise price | | $ | 1.20 | |
Expected terms (in years) | |
| 7 | |
Expected volatility | |
| 109 | % |
Annual rate of quarterly dividends | |
| — | % |
Risk free interest rate | |
| 1.52 | % |
Share price |
| $ | 4.15 | |
Exercise price | | $ | 15.00 | |
Expected terms (in years) | |
| 10 | |
Expected volatility | |
| 175 | % |
Annual rate of quarterly dividends | |
| — | % |
Risk free interest rate | |
| 1.72 | % |
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Fair value of share-based compensations
Share-based awards are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the straight-line basis, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.
At each date of measurement, we review internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by us, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. We are required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period.
Valuation of deferred tax and uncertain tax position
Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Valuation allowance is provided against deferred tax assets when we determine that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. We consider positive and negative evidence to determine whether some portion or all of the deferred tax assets will more-likely-than-not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates we are using to manage the underlying businesses.
We believe that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates. To the extent that there are material differences between these estimates and the actual results, future financial statements will be affected.
Quantitative and Qualitative Disclosures about Market Risks
Cryptocurrency Risk
The price of DOGE has experienced significant fluctuations over its relatively short existence and may continue to fluctuate significantly in the future. DOGE prices ranged from approximately $0.065 per coin as of June 30, 2022; $0.067 per coin as of June 30, 2023; $0.123 per coin as of June 30, 2024; to $0.170 per coin as of June 30, 2025, according to Coin Market Cap.
We expect our results of operations will be affected by the DOGE price as DOGE has become our core asset as of the issuance date of this report. Any future significant reduction in the price of DOGE will likely have a material and adverse effect on our results of operations and financial condition. We cannot assure you that the DOGE price will remain high enough to sustain our operation or that the DOGE price will not decline significantly in the future. Furthermore, fluctuations in the DOGE price can have an immediate impact on the trading price of our ordinary shares even before our financial performance is affected, if at all.
Various factors, mostly beyond our control, could impact the DOGE price. DOGE was born from an internet meme, and its value is intrinsically linked to its viral nature. A trending hashtag, a viral TikTok video, or a coordinated push on Reddit can generate massive, but often short-lived, price spikes. Unlike a stock, which can be valued on revenue and profits, or even Bitcoin which is often framed as “digital gold,” DOGE lacks a clear, fundamental investment thesis. This makes its price almost purely a function of sentiment and speculation, which are inherently unstable. Unlike Bitcoin which has a fixed cap, DOGE does not have a fixed cap for supply in the whole market which suppress long-term price growth and contribute to downward pressure during bear markets. Additionally, DOGE’s price heavily correlates with Bitcoin and the overall crypto market. When Bitcoin and Ethereum rise, DOGE tends to rise even more in percentage terms. When the broader market falls, DOGE often falls harder.
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Liquidity Risk
We are also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions and third parties to obtain short-term funding to meet the liquidity shortage.
Inflation Risk
We are also exposed to inflation risk factors which could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of revenue if the market prices of our cryptocurrencies do not increase with such increased costs.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A. Directors and Management
The following table provides information regarding our executive officers and directors as of the date of this annual report.
Name |
| Age |
| Position(s) |
Jinghai Jiang | | 46 | | Chairman of the Board, Chief Executive Officer, Chief Operating Officer |
Mei Yeung | | 36 | | Independent Director, Chair of the Audit Committee, and a member of the Compensation Committee and the Nominating Committee of the Company |
Xiaping Cao | | 49 | | Independent Director, Chair of the Nominating Committee and the Compensation Committee |
Siyuan Zhuang | | 41 | | Independent Director, member of the Audit Committee, the Compensation Committee and the Nominating Committee of the Company |
The business address of each of the officers and directors is 160 Robinson Road, 12F, SBF Center, Singapore 068914.
The following paragraphs set forth information regarding the current ages, positions, and business experience of the nominees.
Jinghai Jiang, Chairman of the Board, Chief Executive Officer, Chief Operating Officer, age 46
Mr. Jinghai Jiang has been our Chief Operating Officer since December 13, 2021. Mr. Jiang has been involved in blockchain technology since 2016, when he founded Haiyuan Culture Development Limited and Qisuan Technology Limited to research and apply blockchain technology. Mr. Jiang also created the online community “Big Cabbage Blockchain” and has published multiple white papers to teach blockchain technology and the cryptocurrency business. Furthermore, Mr. Jiang has invested in over ten data centers whose combined capacity totals 1030MW. Mr. Jinghai Jiang graduated with a degree in Industrial Automation from Wuxi Radio and Television University in 2000. On April 10, 2024, Jinghai Jiang, was appointed as the Chief Executive Officer and Chairman of the Board.
Mei Yeung, Independent Director, age 36
Ms. Mei Yeung is a detail-oriented and highly motivated finance and accounting professional with over 12 years of experience in the field. Throughout her career, Ms. Yeung has held various roles in finance, where she has demonstrated proficiency in cross-functional finance and accounting management, as well as overseeing financial reviews, reporting, and internal controls. Over the past five years, Ms. Mei Yeung has garnered extensive experience in the finance sector with prominent real estate investment companies based in Florida, USA, with a robust background in financial management and a keen understanding of the real estate market dynamics. Ms. Yeung earned her Bachelor of Business Administration degree in Finance from Florida International University in August 2012, and subsequently pursued her Master of Science degree in Finance from the University of Miami in August 2016.
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Xiaping Cao, Director, age 49
Dr. Xiaping Cao has years of experience in domestic and overseas teaching, research and management, and has gained a high international reputation in finance and fintech industry. Dr. Cao is a professor of Finance at Hang Seng University of Hong Kong. Previously, Dr. Cao served as Dean of Asia Private Equity College at Singapore Management University, Visiting Professor of Innovation and Entrepreneurship Center at Nanyang Technological University, Director of Massachusetts Institute of Technology REAP Guangzhou Center, President of Southern Institute of Financial Technology, committee member of Major Administrative Decision-making Advisory Committee at People’s Government of Guangdong Province, and committee member of Guangzhou Equity Exchange.
Dr. Xiaping Cao currently also serves as the associate editor of international renowned economic journal Economic Modelling and Frontier in Artificial Intelligence. Dr. Cao has been invited to serve as the featured chief editor of Pacific Basin Finance Journal, a well-known international financial Journal. Dr. Cao has published many papers as the first author in top international financial and management journals, including Journal of Financial Economics, Journal of Corporate Finance, Journal of Banking and Finance, Journal of Quantitative and Financial Analysis, and Management Science. In addition, he is working as an adviser to the Securities Investor Association, initiated by Singapore Exchange (SGX).
Dr. Cao received his PhD Degree in Finance from Boston College in 2008, under the supervision of Professor Josh Lerner from Harvard Business School, a well-known scholar in venture capital and private equity.
Siyuan Zhuang, Independent Director, age 41
Mr. Siyuan Zhuang is a seasoned and driven entrepreneur boasting nearly two decades of invaluable experience in business development and leadership. For the past 5 years, Mr. Zhuang has venture into the realms of AI and Web3 technology by co-founding HongKong Qisuan Technology Limited. In August 2023, Mr. Zhuang launched TradeGpt, a financial forecasting model, through HongKong. Prior to his foray into AI and Web3, Mr. Zhuang made significant strides in the realms of marketing strategy consulting and strategic planning, particularly within the dynamic startup ecosystem of China.
Family Relationships
None.
6.B. Compensation
Employment Agreements with Executive Officers
Our employment agreements with our officers generally provide for employment for a specific term and pay annual salary, health insurance, pension insurance, and paid vacation and family leave time. The agreement may be terminated by either party as permitted by law. In the event of a breach or termination of the agreement by our company, we may be obligated to pay the employee twice the ordinary statutory rate. In the event of a breach or termination causing loss to our company by the employee, the employee may be required to indemnify us against loss. We have executed employment agreement with Jinghai Jiang. We have executed Director Offers with Xiaping Cao, Mei Yeung and Siyuan Zhuang.
Jinghai Jiang
We entered into an employment agreement with Jinghai Jiang for the position of Chief Operating Officer. The employment agreement is effective until April 9, 2027, with an annual compensation of $50,000.
Xiaping Cao
We entered into a Director Offer Letter, effective on March 22, 2022, with Mr. Cao pursuant to which Mr. Cao shall receive an annual compensation of $10,000.
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Mei Yeung
We entered into a Director Offer Letter, effective on April 10, 2024, with Ms. Yeung pursuant to which Ms. Yeung shall receive an annual compensation of $24,000.
Siyuan Zhuang
We entered into a Director Offer Letter, effective on March 21, 2024, with Mr. Zhuang pursuant to which Mr. Zhuang shall receive an annual compensation of $10,000.
Compensation of Directors and Executive Officers
For the year ended June 30, 2025, 2024 and 2023, we paid an aggregate of $50,000, $643,982 and $875,008 to our executive officers and employee directors, respectively, which is the total amount of base salary plus bonus, in cash to our executive officers and employee directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation Recovery Policy
On December 1, 2023, our board of directors adopted an executive compensation recovery policy (the “Compensation Recovery Policy”), providing for the recovery of certain incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate any of its financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Adoption of the Compensation Recovery Policy was mandated by new Nasdaq listing standards introduced pursuant to Exchange Act Rule 10D-1. The Compensation Recovery Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002 which permits the SEC to order the disgorgement of bonuses and incentive-based compensation earned by a registrant issuer’s chief executive officer and chief financial officer in the year following the filing of any financial statement that the issuer is required to restate because of misconduct, and the reimbursement of those funds to the issuer. A copy of the Compensation Recovery Policy has been incorporated by reference herewith as Exhibit 97.1.
6.C. Board Practices
Board of Directors and Board Committees
Our board of directors currently consists of four directors, three of whom are independent as such term is defined by the Nasdaq Capital Market.
The directors will be re-elected at our annual general meeting of shareholders on an annual basis.
A director may vote in respect of any contract or transaction in which he is interested, provided, however that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in which he is so interested and may vote on such motion.
Board Committees
We established three committees under the board of directors: an audit committee, a compensation committee and a nominating committee. We have adopted a charter for each of the three committees.
Each committee’s members and functions are described below.
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Audit Committee. Our audit committee consisted of Ms. Mei Yeung, Mr. Siyuan Zhuang and Mr. Xiaping Cao. Ms. Mei Yeung is the chairman of our audit committee. The Company believes that each of the members of the audit committee is “independent” and that Mei Yeung qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market listing standards. The primary responsibility of the audit committee is to make such examinations as are necessary to monitor the corporate financial reporting and external audits of the Company and its subsidiaries; to provide to the board of directors the results of its examinations and recommendations derived therefrom; to outline to the board of directors improvements made, or to be made, in internal accounting controls; to nominate an independent auditor; and to provide to the board of directors such additional information and materials as it may deem necessary to make the board of directors aware of significant financial matters requiring the board of directors attention. In carrying out its responsibility, the audit committee will be responsible for, among other things:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Compensation Committee. Our compensation committee consists of Mr. Xiaping Cao, Mr. Siyuan Zhuang and Ms. Mei Yeung. Mr. Xiaping Cao is the chairman of our compensation committee. The compensation committee will assist the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our CEO may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:
| ● | reviewing and approving, or recommending to the board of directors for its approval, the compensation for our CEO and other executive officers; |
| ● | reviewing and recommending to the shareholders for determination with respect to the compensation of our directors; |
| ● | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
| ● | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
Nominating Committee. Our nominating committee consists of Ms. Mei Yeung, Mr. Siyuan Zhuang and Mr. Xiaping Cao. Mr. Xiaping Cao is the chairperson of our nominating committee. All members of the nominating committee are independent, as such term is defined by the Nasdaq Capital Market listing standards. The nominating committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board of directors and its committees. The nominating committee will be responsible for, among other things:
| ● | selecting and recommending to the board nominees for election by the shareholders or appointment by the board of directors; |
| ● | reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
59
| ● | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board of directors; and |
| ● | advising the board of directors periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board of directors on all matters of corporate governance and on any remedial action to be taken. |
Copy of our committee charters are also available on the Company’s website at http://bitorigin.io/ and in print upon request.
Duties of Directors
Under Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our company may have the right to seek damages if a duty owed by our directors is breached.
Interested Transactions
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board of directors or otherwise contained in the minutes of a meeting or a written resolution of the board of directors or any committee of the board of directors that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.
Remuneration and Borrowing
All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified. The directors may receive such remuneration as determined by a general meeting of the Company from time to time. Each director is entitled to be repaid or prepaid all traveling, hotel and incidental expenses properly incurred in going to attending and returning from meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the business of the Company. The compensation committee will assist the directors in reviewing the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.
Terms of Directors and Officers
Our officers are elected by and serve at the discretion of the board of directors. Each director is not subject to a term of office and holds office until such time as his successor takes office or until the earlier of his death, resignation or removal from office by ordinary resolution or the affirmative vote of a simple majority of the other directors present and voting at a board meeting. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be of unsound mind; (iii) resigns by notice in writing to our company; (iv) is prohibited by law from being a director; or (v) is removed from office pursuant to any other provisions of the Memorandum and Articles of Association.
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Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
6.D. Employees
We have five employees as of the date of this annual report. The following table sets forth a breakdown of our employees by function as of the date of this annual report:
|
| Number of |
Department | | Employees |
Management |
| 1 |
Marketing |
| 1 |
Administrative |
| 3 |
Total |
| 5 |
Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes.
6.E. Share Ownership
The following table sets forth information with respect to beneficial ownership of our ordinary shares as of the date of this annual report by:
| ● | Each person who is known by us to beneficially own more than 5% of our outstanding ordinary shares; |
| ● | Each of our director, director nominees and named executive officers; and |
| ● | All directors and named executive officers as a group. |
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Our company is authorized to issue 15,000,000,000 Class A Ordinary Shares of $0.000001 par value per share. The number and percentage of Class A Ordinary Shares beneficially owned are based on 88,610,521 Class A Ordinary Shares issued and outstanding as of the date of this annual report. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our Class A Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person has voting or investment power with respect to securities. In computing the number of Class A Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Class A Ordinary Shares shown as beneficially owned by them.
| | Amount of | | Percentage of |
| Amount of | | Percentage of | | | |
| | Class A | | Class A | | Class B | | Class B | | | |
| | Ordinary | | Ordinary | | Ordinary | | Ordinary | | Percentage of | |
| | Shares | | Shares | | Shares | | Shares | | Total | |
| | Beneficially | | Beneficially |
| Beneficially | | Beneficially | | voting | |
Principal Shareholders |
| Owned |
| Owned |
| Owned |
| Owned |
| power | |
Directors and Named Executive Officers: |
| |
|
| | | | | | | |
Jinghai Jiang, Chairman of the Board and Chief Executive Officer |
| — |
| — | | 768,000 | | 100 | % | 14.77 | % |
Xiaping Cao, Director |
| — |
| — | | | | | | | |
Siyuan Zhuang, Director |
| — |
| — | | | | | | | |
Mei Yeung, Director |
| — |
| — | | | | | | | |
All directors and executive officers as a group (4 persons) |
| — |
| — | | 768,000 | | 100 | % | 14.77 | % |
|
| |
| | | | | | | | |
5% Beneficial Owner |
| |
| | | | | | | | |
Fan Zhang |
| |
| | | | | | | | |
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
Please refer to “Item 6. Directors, Senior Management and Employees — 6.E. Share Ownership.” The company’s major shareholders do have different voting rights than the other shareholders.
7.B. Related Party Transactions
Terms of Directors and Officers
See “Item 6. Directors, Senior Management and Employees—6.C. Board Practices—Terms of Directors and Officers.”
Employment Agreements and Indemnification Agreements
See “Item 6. Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements with Executive Officers.”
Other Related Party Transactions
During the years ended June 30, 2025, 2024 and 2023, other than disclosed below, we did not have any other related party transactions.
For the years ended June 2024 and 2023, we had the following related party transactions with Intellectual International Capital LLC (“IIC”). IIC was considered a related party of the Company by virtue of the involvement of the Company’s former president, Dr. Jiaming Li, who concurrently served as a senior manager of IIC and was therefore able to exercise significant influence over both entities. Following Dr. Jianming Li’s resignation in November 2023, transactions and balances between the Group and IIC up to November 2023 were regarded as related-party transactions.
|
|
|
| For the year ended |
| For the year ended |
| For the year ended | ||
| | | | June 30, | | June 30, | | June 30, | ||
Name of related party | | Related party | | 2025 | | 2024 | | 2023 | ||
Receipt on behalf of Group |
| Intellectual International Capital LLC | | $ | — | | $ | 3,393,027 |
| 1,205,110 |
Payment on behalf of Group |
| Intellectual International Capital LLC | |
| — | |
| (2,812,692) |
| (1,056,897) |
7.C. Interests of Experts and Counsel
Not applicable.
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ITEM 8. FINANCIAL INFORMATION
8.A. Consolidated Statements and Other Financial Information
Please refer to “Item 18. Financial Statements.”
Legal and Administrative Proceedings
Please refer to “Item 4. Information on the Company – Legal Proceedings.”
Dividend Policy
We have never declared or paid any cash dividends on our Class A Ordinary Shares. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the board of directors may deem relevant.
Under our memorandum and articles of association and the Cayman Islands Companies Act, we may only pay dividends (A) out of profits, (B) out of our share premium account, provided that we are able to pay our debts as they fall due in the ordinary course of business immediately after the dividend payment. The Company may by ordinary resolution or by resolution of the directors declare dividends, but no dividend shall exceed the amount recommended by the directors.
8.B. Significant Changes
We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.
ITEM 9. THE OFFER AND LISTING
9.A. Offer and listing details
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “BTOG.”
9.B. Plan of distribution
Not applicable for annual reports on Form 20-F.
9.C. Markets
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “BTOG.”
9.D. Selling shareholders
Not applicable for annual reports on Form 20-F.
9.E. Dilution
Not applicable for annual reports on Form 20-F.
9.F. Expenses of the issue
Not applicable for annual reports on Form 20-F.
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ITEM 10. ADDITIONAL INFORMATION
10.A. Share capital
Private Placements
October 2022 Convertible Notes and Warrants Offering
On October 21, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which the Company sold a senior secured convertible note (the “October 2022 Note”) in the original principal amount of $2,100,000 and warrants to initially purchase up to 5,108,275 ordinary shares (subject to adjustment thereunder) of the company (the “October 2022 Warrants”), at a purchase price of $1,974,000.
On October 21, 2022, the Company completed the sale of the October 2022 Note and the October 2022 Warrants. The gross proceeds were $1,974,000, prior to deducting transaction fees and estimated expenses.
The October 2022 Note is convertible at an initial conversion price equal to $0.33 per ordinary share (subject to adjustment thereunder), which is 115% of the average VWAP of the five trading days immediately prior to closing, and include anti-dilution adjustments in the event any ordinary shares or other equity or equity equivalent securities payable in ordinary shares are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), in each case, at a price less than the exercise price then in effect, which automatically decreases the conversion price of the October 2022 Note upon the occurrence of such event; provided, that the conversion price may not be less than $0.06 per ordinary shares (subject to adjustment thereunder), which is 20% of the closing bid price of the trading day immediately prior to closing. The holder of the October 2022 Note have the right to convert all or a portion of the October 2022 Note at any time after the six month anniversary of the date of issuance and prior to the maturity date, which is two years from the date of issuance.
The October 2022 Note has an interest of the greater of (i) twelve percent (12% per annum) and (ii) the sum of (A) the Prime Rate (as defined therein) in effect as of such date of determination and (B) six (6%) per annum; provided, that if such Interest is being paid in ordinary shares, such Interest shall recalculated in connection with such issuance of ordinary shares at a deemed rate of the greater of (i) fifteen percent (15% per annum) and (ii) the sum of (A) the Prime Rate in effect as of such date of determination and (B) nine (9%) per annum. If an event of default continues, such interest rate shall be adjusted on each trading day in which an event of default is continuing to the sum of (x) the interest rate then in effect on such date of determination and (y) five percent (5.0%) per annum. The interest shall be paid in ordinary shares as long as there is no equity condition failure; provide that the Company may, at its option, pay interest in cash or in a combination of cash and ordinary shares.
The Company may redeem the October 2022 Note in whole, and not in part, at its option, at any time prior to the maturity date, for a cash purchase price of the aggregate principal amount of any October 2022 Note to be redeemed plus accrued and unpaid interest thereon at a 6% premium (or 12% premium if the redemption occurs six months after the date of issuance of the October 2022 Note). If an event default occurs, any holder of the October 2022 Note may require the Company to redeem all or any portion of the October 2022 Note at a 25% premium to the greater of (i) the aggregate principal amount of October 2022 Note to be redeemed, and (ii) the equity value of our ordinary shares underlying the October 2022 Note calculated using the greatest closing sale price of our ordinary shares on any trading day immediately preceding such event of default and the date of such redemption.
The October 2022 Note includes restrictive covenants that, subject to specified exceptions, limit the ability of the Company and its subsidiaries to (a) incur debt or issue preferred shares or disqualified stock; (b) make (i) dividends and distributions, (ii) redemptions and repurchases of equity, (iii) investments and (iv) prepayments, redemptions and repurchases of subordinated debt; (c) incurring liens; (d) making asset sales; and (e) entering into transactions with affiliates. In addition, the Company is required to maintain minimum unrestricted cash and cash equivalents of $600,000.
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The October 2022 Note also includes customary events of default after which the holder of the October 2022 Note may accelerate the maturity of the October 2022 Note to become due and payable immediately; provided, however, that the October 2022 Note will be automatically accelerated upon certain events of bankruptcy, insolvency and reorganization involving the Company or any of its subsidiaries. Such events of default include: (i) failure to file the registration statement that registers the ordinary shares underlying the October 2022 Note and October 2022 Warrants within 30 days from closing or failure to cause such registration statement effective within 120 days from closing, (ii) the lapse in effectiveness of such registration statement for 5 consecutive days or for more than an aggregate of 10 days in any 365-day period, with certain exceptions, (iii) the suspension or threatened suspension from trading for 5 consecutive trading days, (iv) failure to cure a conversion failure or a delivery failure within 5 trading days, (v) failure to reserve the adequate number of our ordinary shares, for 10 consecutive days, (vi) failure to pay any amount of principal, interest, late charges or other amounts when due under the October 2022 Note or any other transaction document, with certain exceptions, (vii) failure to remove any restrictive legend on the ordinary shares issued upon conversion of the October 2022 Note and such failure remains uncured for at least 5 days, (vii) any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of indebtedness, (ix) certain events of bankruptcy, insolvency and reorganization involving the Company, (x) a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay, (xi) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $250,000, (xii) breach of any representations and warranties or covenants of any transaction documents, (xiii) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the equity conditions are satisfied, (B) there has been no equity conditions failure, or (C) as to whether any event of default has occurred, (xiv) any material adverse effect, (xv) any material provision of any transaction document ceases to be valid and binding on or enforceable against the Company or any guarantor subsidiary or the Company, and (xvi) any material damage to the collateral, which causes the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any subsidiary for more than 15 consecutive days.
The October 2022 Warrants have a seven-year term and an initial exercise price of $1.20 per share (subject to adjustment thereunder), and include anti-dilution adjustments in the event any ordinary shares or other equity or equity equivalent securities payable in ordinary shares are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), in each case, at a price less than the exercise price then in effect, which automatically decreases the exercise price of the October 2022 Warrants upon the occurrence of such event, and increases the number of ordinary shares issuable upon exercise of the October 2022 Warrants, such that the aggregate exercise price of all October 2022 Warrants remains the same before and after any such dilutive event. The October 2022 Warrants also provide for cashless exercise if the October 2022 Warrants are not registered within 12 months after the closing.
The Company also entered into a registration rights agreement, dated October 21, 2022, with the investor, which provides, subject to certain limitations, the investor with certain registration rights for the ordinary shares issuable upon conversion of the October 2022 Note and exercise of the October 2022 Warrants. The registration rights agreement requires the Company to prepare and file a registration statement with the SEC within 30 days after the closing to register the resale of the shares underlying the October 2022 Note and the October 2022 Warrants and cause such registration statement to be effective within 120 days after the closing.
The Company also entered into a security and pledge agreement, dated October 21, 2022, with the investor and SonicHash US. The security and pledge agreement granted a security interest in favor of the collateral agent (as such term is defined in the security and pledge agreement) for the benefit of the investor in all personal property and assets, with certain exceptions, of the Company and SonicHash US and to perform the Company’s obligations under the securities purchase agreement, the October 2022 Note, the registration rights agreement, the security and pledge agreement and the other transaction documents.
SonicHash US also entered into a guaranty dated October 21, 2022, with the investor, pursuant to which the Guarantor Subsidiary agrees to guaranty the Company’s obligations under the securities purchase agreement, the October 2022 Note, registration rights agreement, the security and pledge agreement and the other transaction documents.
In May 2023, the Company effected the one-for-thirty (1-for-30) Reverse Share Split.
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Pursuant to the terms of the October 2022 Notes and October 2022 Warrants, respectively, in the event of a reverse stock split, if the then conversion price and/or exercise price are higher than the Event Market Price (as defined in the October 2022 Note), which is the quotient determined by dividing (x) the sum of the VWAP (as defined in the October 2022 Note) of the ordinary shares for each of the five trading days with the lowest VWAP of the ordinary shares during the fifteen consecutive trading day period ending and including the trading day immediately preceding the sixteenth trading day after such date of the reverse stock split, divided by (y) five, the conversion price shall be reduced to such Event Market Price, subject to the floor price, as adjusted based on any stock splits, and the exercise price shall be reduced to such Event Market Price. In addition, pursuant to the October 2022 Warrants, the number of ordinary shares underlying such October 2022 Warrants (the “October 2022 Warrant Shares”) shall be adjusted proportionally so that the aggregate exercise price payable by the holder for the adjusted number of October 2022 Warrant Shares shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.
As a result, the conversion price of the October 2022 Note was adjusted to $1.80 per share. The exercise price of the October 2022 Warrants was adjusted to $1.3552 per share and the October 2022 Warrant Shares were adjusted to 4,523,333 ordinary shares.
As of the date of this annual report, the holder has converted principal in the amount of $1,200,000 and accrued interest into 680,183 ordinary shares. The Company has paid principal in the amount of $900,000 and accrued interest to the holder. Therefore, the October 2022 Note has been retired.
November 2023 Shares Offering
On November 7, 2023 and November 9, 2023, the Company entered into securities purchase agreements with investors for the sale of 2,812,833 ordinary shares for gross proceeds of $3,994,222, pursuant to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, subject to the satisfaction of customary closing conditions. The price per share equals $1.42, which is 95% of the average daily closing trading price of the ordinary shares of the Company for a period of 20 consecutive trading days before November 3, 2023.
December 2023 Convertible Notes and Warrants Offering
On December 7, 2023, the Company entered into the securities purchase agreement with an accredited investor pursuant to which the Company sold a note (the “December 2023 Note”) in the original principal amount of $6,740,000 and the warrants (the “December 2023 Warrants”) to initially purchase 1,070,719 ordinary shares of the Company, at a purchase price of $6,127,334.
On December 29, 2023, the Company completed the sale of the December 2023 Note and the December 2023 Warrants. The gross proceeds were $6,127,334, prior to deducting transaction fees and estimated expenses.
Subject to satisfaction (or waiver) of certain conditions, the investor has the right, but not the obligation, to require the Company to sell to the investor, such Additional Notes, in the same form of the December 2023 Note, up to the original principal amount of $18,000,000 at such additional closings. The investor may elect to effect such additional closings on or prior to the second anniversary of the earlier of (x) the first date on which this registration statement has been declared effective, or (y) the first date on which the securities registrable pursuant to the Registration Rights Agreement entered into on December 29, 2023 are eligible to be resold by the investor pursuant to Rule 144.
The Company also entered into a security and pledge agreement, dated December 29, 2023, with the investor, Sonic Auspice and SonicHash US. The security and pledge agreement granted a security interest in favor of the collateral agent (as such term is defined in the security and pledge agreement ) for the benefit of the investor in all personal property and assets, whether now owned or thereafter acquired (including all crypto assets), with certain exceptions, of the Company and Sonic Auspice and SonicHash US and to perform the Company’s obligations under the securities purchase agreement, the December 2023 Notes, the security and pledge agreement and the other transaction documents.
Sonic Auspice and SonicHash US also entered into a guaranty dated December 29, 2023, with the investor, pursuant to which Sonic Auspice and SonicHash US agree to guaranty the Company’s obligations under the securities purchase agreement, the December 2023 Notes, the security and pledge agreement and the other transaction documents.
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The December 2023 Note is convertible at an initial conversion price equal to $15.00 per ordinary share (, and includes anti-dilution adjustments in the event any ordinary shares or other equity or equity equivalent securities payable in ordinary shares are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), in each case, at a price less than the exercise price then in effect, which automatically decreases the conversion price upon the occurrence of such event; provided, that the conversion price may not be less than $0.7186 per ordinary shares. The holder of the December 2023 Note has the right to convert all or a portion of the December 2023 Note at any time after the date of issuance and prior to the maturity date, which is thirty-six month anniversary from the date of issuance.
The December 2023 Note has an interest of the greater of (i) thirteen and a half percent (13.5%) per annum and (ii) the sum of (A) the Prime Rate (as defined in the Note) in effect as of such date of determination and (B) five percent (5%) per annum; provided, that if such interest is being paid in ordinary shares, such interest shall recalculated in connection with such issuance of ordinary shares at a deemed rate of the greater of (i) sixteen percent (16%) per annum and (ii) the sum of (A) the Prime Rate in effect as of such date of determination and (B) seven and a half percent (7.5%) per annum. If an event of default continues, such interest rate shall be adjusted on each trading day in which an event of default is continuing to the sum of (x) the interest rate then in effect on such date of determination and (y) five percent (5.0%) per annum. The interest shall be paid in ordinary shares as long as there is no equity condition failure; provide that the Company may, at its option, pay interest in cash or in a combination of cash and ordinary shares.
The Company may redeem the December 2023 Note in whole, and not in part, at its option, at any time prior to the maturity date, for a cash purchase price of the aggregate principal amount of the December 2023 Note to be redeemed plus accrued and unpaid interest and late charges thereon (the “December 2023 Note Conversion Amount”) thereon at a redemption premium of 8% (or 15% if the redemption occurs six months after the date of issuance of the December 2023 Note) of the December 2023 Note Conversion Amount. If an event of default occurs, any holder of the December 2023 Note may require the Company to redeem all or any portion of the December 2023 Note at a redemption premium of 25% to the greater of (i) the December 2023 Note Conversion Amount, and (ii) the equity value of our ordinary shares underlying the December 2023 Note calculated using the greatest closing sale price of our ordinary shares on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date of such redemption.
The December 2023 Note includes restrictive covenants that, subject to specified exceptions, limit the ability of the Company and its subsidiaries to (a) incur debt or issue preferred shares or disqualified stock; (b) make (i) dividends and distributions, (ii) redemptions and repurchases of equity, (iii) investments and (iv) prepayments, redemptions and repurchases of subordinated debt; (c) incur liens; (d) make asset sales; and (e) enter into transactions with affiliates. In addition, the Company is required to maintain minimum unrestricted cash and cash equivalents of $600,000.
The December 2023 Note also includes customary events of default after which the holder of the December 2023 Note may accelerate the maturity of the December 2023 Note to become due and payable immediately; provided, however, that the December 2023 Note will be automatically accelerated upon certain events of bankruptcy, insolvency and reorganization involving the Company or any of its subsidiaries. Such events of default include: (i) failure to file the registration statement that registers the ordinary shares underlying the December 2023 Note and December 2023 Warrants within 50 days from closing or failure to cause such registration statement effective within 155 days from closing, (ii) the lapse in effectiveness of such registration statement for five consecutive days or for more than an aggregate of ten days in any 365-day period, with certain exceptions, (iii) the suspension or threatened suspension from trading for five consecutive trading days, (iv) failure to cure a conversion failure or a delivery failure within five trading days, (v) failure to reserve the adequate number of our ordinary shares, for ten consecutive days, (vi) failure to pay any amount of principal, interest, late charges or other amounts when due under the December 2023 Note or any other transaction document, with certain exceptions, (vii) failure to remove any restrictive legend on the ordinary shares issued upon conversion of the December 2023 Note and such failure remains uncured for at least five days, (vii) any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of indebtedness, (ix) certain events of bankruptcy, insolvency and reorganization involving the Company, (x) a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay, (xi) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $250,000, (xii) breach of any representations and warranties or covenants of any transaction documents, (xiii) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the equity conditions are satisfied, (B) there has been no equity conditions failure, or (C) as to whether any event of default has occurred, (xiv) any material adverse effect, (xv) any material provision of any transaction document ceases to be valid and binding on or enforceable against the Company or any Guarantor Subsidiaries or the Company, and (xvi) any material damage to the collateral, which causes the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any subsidiaries for more than 15 consecutive days.
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The December 2023 Warrants have a ten-year and six month term and an initial exercise price of $15.00 per share (subject to reset and adjustment thereunder), and include anti-dilution adjustments in the event any ordinary shares or other equity or equity equivalent securities payable in ordinary shares are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), in each case, at a price less than the exercise price then in effect, which automatically decreases the exercise price of the December 2023 Warrants upon the occurrence of such event, and increases the number of ordinary shares issuable upon exercise of the December 2023 Warrants, such that the aggregate exercise price of all December 2023 Warrants remains the same before and after any such dilutive event. The December 2023 Warrants also provide for cashless exercise if the December 2023 Warrants are not registered within 12 months after the closing. In addition, on September 30, 2024 (the “Reset Date”), if the VWAP of the ordinary shares on any trading day during the ten (10) trading day period ending, and including, the trading day immediately prior to the Reset Date (as adjusted for share splits, share dividends, share combinations, recapitalizations and similar events during such measuring period) (the “ Reset Price”) is less than the exercise price then in effect, the exercise price shall be automatically reduced to the Reset Price.
May 2024 Convertible Notes Exchange Offering
On May 31, 2024, the Company entered into an exchange agreement with the holder of the October 2022 Warrants, pursuant to which the Company will issue a senior secured convertible note in the principal amount of $2,000,000 (the “May 2024 Exchange Note”) in exchange for the cancellation of 500,000 of the October 2022 Warrants. In addition, the Company agreed that the amortization amount due on each of the initial six (6) amortization dates to the holder shall be accelerated and paid by the Company, without any prepayment penalty.
On May 31, 2024, we completed the issuance of the May 2024 Exchange Note. We didn’t received any proceeds from the transaction.
The Company also entered into a security and pledge agreement, dated May 31, 2024, with the holder and Sonic Auspice and SonicHash US. The security and pledge agreement granted a security interest in favor of the collateral agent (as such term is defined in the security and pledge agreement) for the benefit of the holder in all personal property and assets, whether now owned or thereafter acquired (including all crypto assets), with certain exceptions, of the Company and Sonic Auspice and SonicHash US and to perform the Company’s obligations under the exchange agreement, the May 2024 Exchange Note, the security and pledge agreement and the other transaction documents.
The Guarantor Subsidiaries also entered into a guaranty dated May 31, 2024 with the holder, pursuant to which Sonic Auspice and SonicHash US agree to guaranty the Company’s obligations under the exchange agreement, the May 2024 Exchange Note, the security and pledge agreement and the other transaction documents.
The May 2024 Exchange Note is convertible at a conversion price equal to the greater of (x) $0.76 and (y) 95% of (A) the lowest VWAP of the ordinary shares on any trading day during the five (5) trading day period immediately prior to the applicable conversion date. The holder of the May 2024 Exchange Note will have the right to convert all or a portion of the May 2024 Exchange Note at any time after the date of issuance and prior to the maturity date, which is the twenty-four month anniversary from the date of issuance.
The May 2024 Exchange Note has an interest of ten percent (10%) per annum. If an event of default continues, such interest rate shall be adjusted on each trading day in which an event of default is continuing to the sum of (x) the interest rate then in effect on such date of determination and (y) five percent (5.0%) per annum.
The Company may redeem the May 2024 Exchange Note in whole, and not in part, at its option, at any time prior to the maturity date, for a cash purchase price of the aggregate principal amount of the May 2024 Exchange Note to be redeemed plus accrued and unpaid interest and late charges thereon (the “May 2024 Exchange Note Conversion Amount”) at a redemption premium of 8% (or 15% if the redemption occurs six months after the date of issuance of the May 2024 Exchange Note) of the May 2024 Exchange Note Conversion Amount. If an event default occurs, any holder of the May 2024 Exchange Note may require the Company to redeem all or any portion of the May 2024 Exchange Note at a redemption premium of 25% of the greater of (i) the May 2024 Exchange Note Conversion Amount, and (ii) the equity value of our common stock underlying the May 2024 Exchange Note calculated using the greatest closing sale price of our common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date of such redemption.
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The May 2024 Exchange Note includes restrictive covenants that, subject to specified exceptions, limit the ability of the Company and its subsidiaries to (a) incur debt or issue preferred shares or disqualified stock; (b) make (i) dividends and distributions, (ii) redemptions and repurchases of equity, (iii) investments and (iv) prepayments, redemptions and repurchases of subordinated debt; (c) incurring liens; (d) making asset sales; and (e) entering into transactions with affiliates.
The May 2024 Exchange Note also includes customary events of default after which the holder of the May 2024 Exchange Note may accelerate the maturity of the May 2024 Exchange Note to become due and payable immediately; provided, however, that the May 2024 Exchange Note will be automatically accelerated upon certain events of bankruptcy, insolvency and reorganization involving the Company or any of its subsidiaries. Such events of default include: (i) failure to file the registration statement that registers the ordinary shares underlying the May 2024 Exchange Note and Warrants within 50 days from closing or failure to cause such registration statement effective within 155 days from closing, (ii) the lapse in effectiveness of such registration statement for 5 consecutive days or for more than an aggregate of 10 days in any 365-day period, with certain exceptions, (iii) the suspension or threatened suspension from trading for 5 consecutive trading days, (iv) failure to cure a conversion failure or a delivery failure within 5 trading days, (v) failure to reserve the adequate number of our ordinary shares, for 10 consecutive days, (vi) failure to pay any amount of principal, interest, late charges or other amounts when due under the May 2024 Exchange Note or any other transaction document, with certain exceptions, (vii) failure to remove any restrictive legend on the ordinary shares issued upon conversion of the May 2024 Exchange Note and such failure remains uncured for at least 5 days, (vii) any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of indebtedness, (ix) certain events of bankruptcy, insolvency and reorganization involving the Company, (x) a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay, (xi) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for borrowed money of at least $250,000, (xii) breach of any representations and warranties or covenants of any transaction documents, (xiii) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the equity conditions are satisfied, (B) there has been no equity conditions failure, or (C) as to whether any event of default has occurred, (xiv) any material adverse effect, (xv) any material provision of any transaction document ceases to be valid and binding on or enforceable against the Company or any guarantor subsidiary or the Company, and (xvi) any material damage to the collateral, which causes the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any subsidiary for more than 15 consecutive days.
In March 2025, the holder partially exercised the December 2023 Warrants on an alternative cashless basis, and the Company issued 7,914,108 Class A Ordinary Shares. In February and March 2025, the Holder partially converted the principal and interest of the December 2023 Note, and the Company issued 9,477,901 Class A Ordinary Shares.
During the period from December 2024 to February 2025, the holder partially converted the principal and interest of the May 2024 Exchange Note, and the Company issued 2,814,173 Class A ordinary shares.
Additionally, as a result of the Company’s failure to make the amortization payment under the December 2023 Note in 2025, which constituted an event of default under both the December 2023 Note and the May 2024 Exchange Note, the Company was required to make redemption payments (including the redemption premium) in the amount of $19,002,067 and $2,935,862.50 under the December 2023 Note and the May 2024 Exchange Note, respectively. The holder elected to convert the redemption payments into Class A Ordinary Shares, and as a result, the Company issued 30,306,157 Class A Ordinary Shares.
As of date of this report, both the December 2023 Note and the May 2024 Exchange Note have been retired.
July 2025 Convertible Notes Offering
On July 13, 2025, the Company entered into a securities purchase agreement with the buyers mentioned in the schedule thereto, pursuant to which the Company agreed to sell up to (i) an aggregate principal amount of $100,000,000 in Senior Secured Convertible Notes, convertible into Class A Ordinary Shares of the Company. The securities purchase agreement contains representations and warranties of the Company and the buyers which are typical for transactions of this type. In addition, the securities purchase agreement contains customary covenants on the Company’s part that are typical for transactions of this type, as well as the following additional covenants.
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The securities purchase agreement also obligates the Company to indemnify the buyers for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by the Company or any subsidiary in any of the Transaction Documents (as defined in the securities purchase agreement ), (ii) any breach of any covenant, agreement or obligation of the Company or any subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any subsidiary) or which otherwise involves such indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the securities, (C) any disclosure properly made by such buyer, or (D) the status of such buyer or holder of the securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to securities purchase agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief).
In connection with this offering, the Company also entered into the following agreements: (i) registration rights agreement, (ii) guaranty, and (iii) security and pledge agreement. The securities purchase agreement contains customary representations, warranties, and covenants of the Company and the buyers.
Pursuant to the securities purchase agreement, the Company has issued (i) a Series A-1 Senior Secured Convertible Note (the “Series A-1 Senior Secured Convertible Note”) in the principal amount of Ten Million Dollars ($10,000,000) maturing on July 16, 2029, with a conversion price of $0.32, subject to adjustment as provided therein; and (ii) a Series B-1 Senior Secured Convertible Note (the “Series B-1 Senior Secured Convertible Note”, collectively with the Series A-1 Senior Secured Convertible Note, the “July 2025 Notes”) in the principal amount of Five Million Dollars ($5,000,000) maturing on July 16, 2029, with a conversion price of $0.30, subject to adjustment as provided therein.
The Series A-1 Senior Secured Convertible Note and the Series B-1 Senior Secured Convertible Note were issued on July 16, 2025, subject to the satisfaction of customary closing conditions.
Pursuant to the securities purchase agreement, on July 31, 2025 at the first Additional Closing, the Company issued a Series C-1 Senior Secured Convertible Note (the “Series C-1 Senior Secured Convertible Note”, and together with the Series A-1 Senior Secured Convertible Note and Series B-1 Senior Secured Convertible Note, the “July 2025 Notes ”) in the principal amount of One Million Three Hundred Thirty Eight Thousand Five Hundred and Six Dollars ($1,338,506) maturing on July 31, 2029, with a conversion price of $0.395, subject to adjustment as provided therein.
The July 2025 Notes are senior secured obligations of the Company and are secured by all personal property and assets of the Company, pursuant to a security agreement.
The July 2025 Notes also contain certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, restrictions on redemption and cash dividends, restrictions on the transfer of assets and changes in the nature of business. The July 2025 Notes also contain standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the July 2025 Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the July 2025 Notes), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company.
Additionally, on July 16, 2025, pursuant to the July 2025 Notes, the Company entered into a security and pledge agreement by and between the Company and the lead buyer, in its capacity as collateral agent, pursuant to which the Company granted to the lead buyer, for the ratable benefit of the lead buyer and the other buyers, a valid, perfected and enforceable security interest in all personal property and assets of the Company and its subsidiaries, which assets include substantially all of the assets of the Company’s in certain of the Company’s subsidiaries.
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On July 16, 2025, the Company also entered into a registration rights agreement with the buyers, which provides, subject to certain limitations, the buyer with certain registration rights for the ordinary shares issuable upon conversion of the July 2025 Notes. The registration rights agreement requires the Company to prepare and file a registration statement with the SEC within 45 days after the issuance of the July 2025 Notes to register the resale of the shares underlying the July 2025 Notes and cause such registration statement to be effective within 150 days after the issuance of the July 2025 Notes. In the event that the Company fails to file the registration statement by the prescribed deadline or such registration statement is not declared effective by the prescribed deadline or the Company fails to maintain the effectiveness of such registration statement, then the Company shall pay to each holder of registrable securities relating to such registration statement an amount in cash equal to two percent (2%) of such investor’s original principal amount stated in such investor’s July 2025 Note on July 16, 2025.
On July 16, 2025, all of the Company’s subsidiaries entered into a subsidiary guaranty, pursuant to which the Company’s subsidiaries agreed to guaranty the Company’s obligations under the securities purchase agreement, the July 2025 Notes, and other transaction documents.
Entry into this offering, and the related agreements and documents, was approved by the Company’s board of directors on July 13, 2025.
The Convertible Notes and Class A Ordinary Shares issuable upon conversion and exercise of the July 2025 Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. Each Buyer acquired the securities for investment and acknowledged that it is an accredited investor as defined by Rule 501 under the Securities Act. The Convertible Notes and Common Shares may not be offered or sold in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act.
July 2025 Equity Purchase Facility Agreement
On July 13, 2025, the Company also entered into the equity purchase facility agreement (the “EPFA”) with an unrelated third-party accredited investor (the “Investor”), pursuant to which the Investor committed to purchase, subject to certain conditions and limitations, up to $400,000,000 (the “Commitment Amount”) in newly issued ordinary shares (collectively, the “Advance Shares”). The EPFA will terminate automatically on the earlier of August 1, 2028 or the date on which the Investor has paid the full Commitment Amount for Advance Shares under the EPFA, and may be terminated by the Company upon five Trading Days’ (as defined in the EPFA) prior written notice to the Investor.
Upon the terms and subject to the conditions of the EPFA, at any time until the EPFA is terminated, the Company, in its sole discretion, has the right, but not the obligation, to issue and sell to the Investor, and the Investor must subscribe for and purchase from the Company, Advance Shares by the delivery to the Investor of Advance Notices (as defined below), on the following terms:
(i) The Company must, in its sole discretion, select the number of Advance Shares, not to exceed the Maximum Advance Amount (as defined below), it desires to issue and sell to the Investor in each Advance Notice and the time it desires to deliver each written notice to the Investor setting forth the number of Advance Shares that the Company desires to issue and sell to the Investor (the “Advance Notice”).
(ii) There is no mandatory minimum issuance and sale of Advance Shares by the Company to the Investor and there is no non-usage fee for not utilizing the Commitment Amount or any part thereof.
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“Maximum Advance Amount” means the Accelerated Purchase Maximum Advance Amount, Regular Purchase Maximum Advance Amount or Extended Purchase Maximum Advance Amount, as applicable, provided, however, the Maximum Advance Amount shall not exceed the limitations set forth in the EPFA:
(i) “Accelerated Purchase Maximum Advance Amount” in respect of each Advance Notice with an Accelerated Purchase Pricing Period (as defined in the EPFA), an amount of Common Shares equal to the lower of (i) four hundred percent (400%) of the median daily trading volume of the Common Shares (the “Daily Traded Amount”) on the principal market on which the Company’s securities are listed (the “Principal Market”) during the five (5) consecutive Trading Days (as defined in the EPFA) immediately preceding an Advance Notice Date (as defined in the EPFA), and (ii) such number of Common Shares equal to $2,500,000 as of the date of each Advance Notice (determined based on the last closing price of the Common Shares on the Principal Market prior to delivery of such Advance Notice), or such other amount of Common Shares as agreed upon by the Company and the Investor in writing, which may be made via e-mail;
(ii) “Regular Purchase Maximum Advance Amount” in respect of each Advance Notice with a Regular Purchase Pricing Period (as defined in the EPFA), an amount of Common Shares equal to the lower of (i) one hundred percent (100%) the median Daily Traded Amount during the five (5) consecutive Trading Days immediately preceding an Advance Notice Date, and (ii) such number of Common Shares equal to $1,000,000 as of the date of each Advance Notice (determined based on the last closing price of the Common Shares on the Principal Market prior to delivery of such Advance Notice); and
(iii) “Extended Purchase Maximum Advance Amount” in respect of each Advance Notice with an Extended Purchase Pricing Period (as defined in the EPFA), an amount of Common Shares equal to the lower of (i) four hundred percent (400%) of the median Daily Traded Amount during the five (5) consecutive Trading Days immediately preceding an Advance Notice Date, and (ii) such number of Common Shares equal to $2,500,000 as of the date of each Advance Notice (determined based on the last closing price of the Common Shares on the Principal Market prior to delivery of such Advance Notice), or such other amount of Common Shares as agreed upon by the Parties in writing, which may be made via e-mail.
The price per Advance Share will be obtained as follows:
(i) For an Advance Notice selecting an Accelerated Purchase Pricing Period or Extended Purchase Pricing Period, the applicable Market Price multiplied by ninety five percent (95%); and
(ii) For an Advance Notice selecting a Regular Purchase Pricing Period, the applicable Regular Purchase Market Price (as defined in the EPFA) multiplied by ninety three percent (93%).
Pursuant to the terms of the EPFA, if required by the applicable rules of the Principal Market, the Company is required to hold a special meeting of shareholders (the “Shareholder Meeting”), no later than sixty (60) calendar days following the date such approval is required by the applicable rules of the Principal Market, to seek approval of the issuance of Advance Shares under the EPFA equal to and in excess of 20% of the total outstanding Common Shares (such approval, the “Shareholder Approval”). Until Shareholder Approval is obtained, the total cumulative number of Common Shares that may be issued to the Investor will be limited to 19.99% of the number of Common Shares issued and outstanding as of July 13, 2025 (the “Exchange Cap”) pursuant to the requirements of the Nasdaq Stock Market LLC or other applicable rules of the Principal Market. The Exchange Cap will be calculated based on the number of Common Shares issued and outstanding as of July 13, 2025, which number shall be reduced, on a share-for-share basis, by the number of Common Shares issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by such agreement under the applicable rules of the Principal Market.
The EPFA contains customary representations, warranties, agreements and conditions, indemnification rights and obligations of the parties. Among other things, the Investor represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act).
The offers and sales of the Shares issuable under the EPFA will be made in a private placement in reliance on an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and applicable state securities laws. The Company plans to file with the SEC a registration statement relating to the resale of the Advance Shares issuable under the EPFA. The Company cannot draw on the EPFA, and the Advance Shares may not be sold nor may offers to buy be accepted, prior to the time that the registration statement covering the resale of the Advance Shares is declared effective by the SEC.
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On July 13, 2025, the Company also entered into a registration rights agreement with the Investor with respect to the resale of the Advance Shares issuable pursuant to the EPFA (the “EPFA Registration Rights Agreement”).
If the registration statement covering the Registrable Securities (as defined in the EPFA Registration Rights Agreement) is not filed or declared effective by certain days set forth in the EPFA Registration Rights Agreement (among other things, the “Event Date”), on each such Event Date and on each monthly anniversary of such Event Date thereafter (if not cured by such date) or any pro rata portion thereof, until the applicable Event Date is cured or sixty (60) calendar days after the applicable Event Date, whichever comes first, the Company shall pay to the Investor an amount in cash, as partial liquidated damages, equal to the product of one percent (1.0%) multiplied by the total purchase price of each outstanding Advance Notice (other than the purchase price for any Advance Shares purchased by the Investor prior to the occurrence of the Event); provided, that the maximum aggregate amount payable thereunder shall not exceed 3% of such amount.
Commencing on the 30th calendar day following July 13, 2025, if at any time there is not an effective registration statement covering the Registrable Securities, and the Company proposes to register the offer and sale of any Common Shares under the Securities Act(other than a registration (i) pursuant to a registration statement on Form S-8 ((or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a registration statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one or more shareholders of the Company and the form of registration statement to be used may be used for any registration of Registrable Securities, the Company shall give prompt written notice (in any event no later than five days prior to the filing of such registration statement) to the holders of Registrable Securities of its intention to effect such a registration and, shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities; provided that, the Company shall not be required to register any Registrable Securities that have been sold or may be sold without any restrictions pursuant to Rule 144 under the Securities Act, as determined by the counsel to the Company.
August 2025 Securities Purchase Agreements
On August 6, 2025, the Company entered into the securities purchase agreements with certain investors relating to the issuance and sale of 20,000,000 Class A Ordinary Shares (the “Purchased Shares) for a total purchase price of $6,000,000. The purchasers had elected to pay the purchase price in Dogecoin (“DOGE”), and the amount of DOGE to be paid shall equal (a) the purchase price, divided by (b) the spot exchange rate for DOGE as published by Coinbase.com at 5:56 a.m. (New York City time) on August 6, 2025 (the “DOGE Amount”).
The Company received 30 million DOGE and issued the Purchased Shares on August 11, 2025. The Purchased Shares were issued in a private placement exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, Regulation D promulgated thereunder and/or Regulation S promulgated thereunder.
If during the three (3) month period following the Closing Date, the Company effects any share split, share dividend, share combination, recapitalization, or similar transaction involving the Company’s Class A Ordinary Shares (each, a “Share Combination Event”), and the average Volume-Weighted Average Price (the “VWAP”) of the Class A Ordinary Shares for the five (5) lowest trading days during the fifteen (15) consecutive trading days following the Share Combination Event Date (the “Event Market Price”) is less than the product of (i) $0.30 multiplied by (ii) a fraction of which the numerator shall be the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and of which the denominator shall be the total number of Class A Ordinary Shares outstanding immediately after such event (the “Adjusted Purchase Price”), the Company shall issue to the Purchasers warrants (the “Warrants”), to purchase a number of Class A Ordinary Shares equal to (a) the number of Purchased Shares, multiplied by (b) a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately after the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately before such event. The exercise price of the Warrants shall be equal to the greater of (i) the Event Market Price or (ii) the product of (x) $0.24, multiplied by (y) a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately after such event. The Company shall not be obligated to issue any Warrants if the Event Market Price is equal to or greater than the Adjusted Purchase Price. The Warrants can only be exercised for cash and are non-transferable. The Purchasers shall not sell, assign, transfer, pledge, encumber or otherwise dispose of the Warrants or any rights hereunder to any third party without the prior written consent of the Company, which may be granted or withheld in the sole discretion of the Company.
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If any Purchaser does not sell or exercise, as applicable, all of the Purchased Shares and Warrants within twelve (12) months following the Closing Date, such Purchaser may elect to redeem a portion of the original DOGE Amount (the “Redemption Option”) by providing written notice to the Company within fifteen (15) Business Days after such anniversary. The redeemable amount of DOGE shall be calculated based on the ratio of unsold Class A Ordinary Shares and unexercised Warrants to the total Purchased Shares and Warrants, using the formula: Redeemable DOGE = DOGE Amount × (the unsold Purchased Shares + unexercised Warrants) / (Purchased Shares + Total Warrants). However, the Redemption Option is not available if, on the 12-month anniversary (or if such a day is not a trading day, the trading day immediately following such day), the Company’s closing bid price equals or exceeds 175% of the higher of (i) the Event Market Price or (ii) the product of $0.24 multiplied by a fraction, the numerator of which is the total number of Class A Ordinary Shares outstanding immediately before the Share Combination Event and the denominator of which is the total number of Class A Ordinary Shares outstanding immediately after such event. The Purchasers must also provide brokerage or custodial account statements verifying its holdings and dispositions of the originally issued Purchased Shares (excluding any market purchases) within fifteen (15) business days after the 12-month anniversary. The Purchasers shall surrender for cancellation, and the Company shall cause the cancellation of, the unsold Purchased Shares and the unexercised Warrants to be canceled upon exercise of the Redemption Option.
In connection with the Offering, certain shareholders of the Company provided a waiver to the Company with respect to (i) entering into the securities purchase agreement and (ii) registration of the Purchased Shares and shares underlying the Warrants.
Issuance pursuant to Service or Purchase Agreement
Asset Purchase Agreement
On August 15, 2022, the Company entered into an asset purchase agreement with a seller, pursuant to which the Company purchased 622 units of cryptocurrency mining equipment from the seller for a total purchase price of $3,110,000, payable in the form of 8,685,574 ordinary shares (289,520 ordinary shares after Reverse Share Split) of the Company, valued at $0.36 per share ($107.42 after Reverse Share Split). The seller agreed to deliver the miners to a hosting facility located in Macon, Georgia within 15 days from the date of the asset purchase agreement. On August 22, 2022, the Company issued 8,685,574 ordinary shares (289,520 ordinary shares after Reverse Share Split) to the seller in reliance upon the exemption from securities registration afforded by the provisions of Regulation S as promulgated by the U.S. Securities and Exchange Commission under the Securities Act. The Company made the determination based upon the factors that the seller is not a “U.S. Person” as that term is defined in Rule 902(k) of Regulation S under the Securities Act, that the seller was acquiring the shares for its own respective account and not as nominees or agents, and not with a view to the resale or distribution thereof, and that the seller understood that the shares may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.
10.B. Memorandum and articles of association
The following are summaries of the material provisions of our memorandum and articles of association and the Cayman Islands Companies Act, insofar as they relate to the material terms of our Class A Ordinary Shares. Copies of our memorandum and articles of association are filed as exhibits to this annual report. As a convenience to potential investors, we provide the below description of Cayman Islands law and our Articles of Association.
General
Each Class A Ordinary Share in the Company confers upon the shareholder:
| ● | the right to one (1) vote at a meeting of shareholders or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
Each Class B Ordinary Share in the Company confers upon the shareholder:
| ● | the right to twenty (20) votes at a meeting of shareholders or on any resolution of shareholders; |
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| ● | no rights to receive dividends, unless otherwise determined by the board of directors; and |
| ● | the same right as the holders of Class A Ordinary Shares to share equally in the distribution of the surplus assets of the Company upon liquidation. |
All of our issued Class A and Class B Ordinary Shares are fully paid and non-assessable. Certificates representing the shares are issued in registered form.
Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one-for-one basis at the option of the holder. The conversion ratio is subject to adjustment to reflect any share split, subdivision, consolidation, capitalization, reclassification, recapitalization, or similar event that affects either class of shares. Class A Ordinary Shares are not convertible into Class B Ordinary Shares.
Voting Together as a Single Class. Except as otherwise provided by law or our Articles, holders of Class A and Class B Ordinary Shares vote together as a single class on all matters submitted to a shareholder vote.
Except as described above, the Class A Ordinary Shares and Class B Ordinary Shares rank pari passu and have the same rights, preferences, privileges and restrictions.
Listing
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “BTOG.” The Class B Ordinary Shares are not listed or traded on any exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares and Class A Ordinary Shares is Securities Transfer Corporation.
Dividends and Distributions
The holders of our Class A Ordinary Shares are entitled to such dividends or other distributions as may be recommended by the board and authorized by shareholders subject to the Cayman Islands Companies Act and our memorandum and articles of association. Holders of Class B Ordinary Shares do not have dividend rights. Holders of Class A Ordinary Shares and Class B Ordinary Shares are entitled to the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
Shareholders’ voting rights
Any action required or permitted to be taken by shareholders must be taken at a duly called annual or special meeting of shareholders entitled to vote on such action and may be effected by a resolution of shareholders consented to in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a corporation, by its duly authorized representative) will have one vote per Class A Ordinary Share and twenty votes per Class B Ordinary Share held.
Ordinary resolution requires to be passed by a simple majority of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting, or a written resolution signed by all shareholders entitled to vote at a general meeting.
Special resolution requires to be passed by a majority of at least two-thirds of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given, or a written resolution signed by all shareholders entitled to vote at a general meeting and otherwise in accordance with our memorandum and articles of association and the Cayman Islands Companies Act.
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Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of Cayman Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in Cayman Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.
The Company may by ordinary resolution or by resolution of the directors at any time, and from time to time, appoint a person as an additional director or persons as additional directors. The Company may by ordinary resolution or by resolution of the directors remove a director before the expiration of his period of office, and may by ordinary resolution or by resolution of the directors appoint another person in his stead.
Our memorandum and articles of association provides that the remuneration of the directors shall from time to time be determined by the Company in general meeting or by resolution of the directors or any committee of the directors. The directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the directors, or any committee of the directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the directors from time to time, or a combination partly of one such method and partly the other.
Meetings of shareholders
Any of our directors may convene a meeting of shareholders whenever they think fit. We must provide at least seven days’ written notice (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) of all meetings of shareholders, stating the time, place of the general meeting and, in the case of special business, the general nature of that business to shareholders whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors must convene a general meeting upon the written request of one or more shareholders holding at least 10% of our shares.
No business may be transacted at any general meeting unless a quorum is present at the time the meeting proceeds to business. One or more shareholders holding in the aggregate not less than one-third of the total issue share capital of the Company present in person or by proxy and entitled to vote shall be a quorum. If, within half an hour from the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may transact the business for which the meeting was called. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.
A corporation that is a shareholder shall be deemed for the purpose of our articles of association to be present at a general meeting in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting, by a resolution of the directors or by one or more shareholders present in person or by a proxy who together hold not less than fifteen per cent of the paid up capital of the Company entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
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Meeting of directors
The management of our company is entrusted to our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside Cayman Islands as the directors determine to be necessary or desirable. A director must be given not less than 5 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if at least two directors are present. If there is a sole director, that director shall be a quorum. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
Protection of minority shareholders
We would normally expect Cayman Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of minority shareholders (such as the right to vote and pre-emptive rights), and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new shares under either Cayman Islands law or our memorandum and articles of association.
Transfer of Class A Ordinary Shares and Class B Ordinary Shares
Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Ordinary Shares and Class B Ordinary Shares by written instrument of transfer signed by the transferor and containing the name of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Class A Ordinary Shares and Class B Ordinary Shares without giving any reason.
Winding Up
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the paid up capital at the commencement of the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid up capital, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Cayman Islands Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not), and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
The liquidator may also vest the whole or any part of these assets in trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.
Calls on and forfeiture of Class A Ordinary Shares and Class B Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A Ordinary Shares and Class B Ordinary Shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The Class A Ordinary Shares and Class B Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture.
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Repurchase of Class A Ordinary Shares and Class B Ordinary Shares
We are empowered by the Cayman Islands Companies Act to purchase our own shares, subject to certain restrictions and requirements. Our directors may only exercise this power on our behalf, subject to the Cayman Islands Companies Act, our memorandum and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the SEC, or by any other recognized stock exchange on which our securities are listed. Under the Cayman Islands Companies Act, the repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital (including share premium account and capital redemption reserve). If the repurchase proceeds are paid out of our company’s capital, our company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Islands Companies Act no such share may be repurchased (1) unless it is fully paid up, (2) if such repurchase would result in there being no shares outstanding, or (3) if the company is being wound up and: (a) the terms of the repurchase provided for it to take place after the commencement of the winding up; or (b) during the period beginning on the date when the repurchase was to have taken place and ending with the commencement of the shares were to have been repurchased. In addition, under the Cayman Islands Companies Act, our company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares).
Subject to the provisions of the Cayman Islands Companies Act and our memorandum and articles of association, the Company may purchase its own Shares, including any redeemable shares, provided that the manner of purchase has first been authorized by ordinary resolution or by resolution of the directors and may make payment therefor or for any redemption of shares in any manner authorized by the Cayman Islands Companies Act, including out of capital.
Modifications of rights
All or any of the special rights attached to any class of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by not less than three-fourths of such shareholders of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of shareholders in the requisite majorities:
| ● | amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue; |
| ● | Divide our authorized and issued shares into a larger number of shares; and |
| ● | combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Holders of our Class A Ordinary Shares and Class B Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
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Issuance of additional Class A Ordinary Shares and Class B Ordinary Shares
Our memorandum and articles of association authorizes our board of directors to issue additional Class A Ordinary Shares and Class B Ordinary Shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
10.C. Material contracts
We have not entered into any material contracts other than in the ordinary course of business and otherwise described elsewhere in this annual report.
10.D. Exchange controls
The Cayman Islands and the United States currently have no exchange control regulations or currency restrictions.
10.E. Taxation
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax.
No stamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share.
United States Federal Income Tax Considerations
The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition of our Class A Ordinary Shares by a U.S. holder (as defined below) that holds our Class A Ordinary Shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the “Code”). This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations and may be changed, possibly with retroactive effect. No ruling has been sought from the IRS with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (for example, banks or other financial institutions, insurance companies, broker-dealers, pension plans, cooperatives, traders in securities that have elected the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment companies, real estate investment trusts, and tax-exempt organizations (including private foundations)), holders who are not U.S. holders, holders who own (directly, indirectly, or constructively) 10% or more of our voting shares, holders who will hold their Class A Ordinary Shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, or investors that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not discuss any non-United States, alternative minimum tax, state, or local tax considerations, or the Medicare tax on net investment income. Each U.S. holder is urged to consult its tax advisors regarding the United States federal, state, local, and non-United States income and other tax considerations with respect to the ownership and disposition of our Class A Ordinary Shares.
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General
For purposes of this discussion, a “U.S. holder” is a beneficial owner of our Class A Ordinary Shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under applicable United States Treasury regulations.
If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our Class A Ordinary Shares and partners in such partnerships are urged to consult their tax advisors as to the particular United States federal income tax consequences of an investment in our Class A Ordinary Shares.
Passive Foreign Investment Company Considerations
A non-United States corporation, such as our company, will be a “passive foreign investment company,” or “PFIC,” for United States federal income tax purposes, if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the average quarterly value of its assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and the company’s unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.
Although we do not believe that we were a PFIC for the taxable year ended June 30, 2023, 2022 and 2021 and do not anticipate becoming a PFIC in the foreseeable future, the determination of whether we are or will become a PFIC will depend in part upon the value of our goodwill and other unbooked intangibles (which will depend upon the market value of our Class A Ordinary Shares from time-to-time, which may be volatile). In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization. Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may be or become a PFIC for the current or future taxable years. It is also possible that the IRS may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or one or more future taxable years.
The determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. Because our PFIC status for any taxable year is a factual determination that can be made only after the close of a taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year. If we are a PFIC for any year during which a U.S. holder held our Class A Ordinary Shares, we generally would continue to be treated as a PFIC for all succeeding years during which such U.S. holder held our Class A Ordinary Shares.
The discussion below under “Dividends” and “Sale or Other Disposition of Class A Ordinary Shares” is written on the basis that we will not be or become a PFIC for United States federal income tax purposes. The United States federal income tax rules that apply if we are a PFIC for the current taxable year or any subsequent taxable year are generally discussed below under “Passive Foreign Investment Company Rules.”
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Dividends
Subject to the PFIC rules discussed below, any cash distributions (including the amount of any tax withheld) paid on our Class A Ordinary Shares out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. holder as dividend income on the day actually or constructively received by the U.S. holder. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be reported as a “dividend” for United States federal income tax purposes. A non-corporate recipient of dividend income will generally be subject to tax on dividend income from a “qualified foreign corporation” at a reduced United States federal tax rate rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met.
A non-United States corporation (other than a corporation that is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (b) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the United States. In the event we are deemed to be a resident enterprise under the PRC Enterprise Income Tax Law, we may be eligible for the benefits of the United States-PRC income tax treaty (which the U.S. Treasury Department has determined is satisfactory for this purpose) and in that case we would be treated as a qualified foreign corporation with respect to dividends paid on our Class A Ordinary Shares. Each non-corporate U.S. holder is advised to consult its tax advisors regarding the availability of the reduced tax rate applicable to qualified dividend income for any dividends we pay with respect to our Class A Ordinary Shares. Dividends received on the Class A Ordinary Shares will not be eligible for the dividends received deduction allowed to corporations.
Dividends will generally be treated as income from foreign sources for United States foreign tax credit purposes and will generally constitute passive category income. In the event that we are deemed to be a PRC “resident enterprise” under the Enterprise Income Tax Law, a U.S. holder may be subject to PRC withholding taxes on dividends paid on our Class A Ordinary Shares. In that case, a U.S. holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on Class A Ordinary Shares. A U.S. holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which such U.S. holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. U.S. holders are advised to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
Sale or Other Disposition of Class A Ordinary Shares
Subject to the PFIC rules discussed below, a U.S. holder will generally recognize capital gain or loss upon the sale or other disposition of Class A Ordinary Shares in an amount equal to the difference between the amount realized upon the disposition and the U.S. holder’s adjusted tax basis in such Class A Ordinary Shares. Any capital gain or loss will be long-term if the Class A Ordinary Shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. Long-term capital gain of non-corporate U.S. holders is generally eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations. In the event that we are treated as a PRC “resident enterprise” under the Enterprise Income Tax Law and gain from the disposition of the Class A Ordinary Shares is subject to tax in the PRC, a U.S. holder that is eligible for the benefits of the income tax treaty between the United States and the PRC may elect to treat the gain as PRC source income. U.S. holders are advised to consult its tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of our Class A Ordinary Shares including the availability of the foreign tax credit under their particular circumstances and the election to treat any gain as PRC source.
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Passive Foreign Investment Company Rules
If we are a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares, and unless the U.S. holder makes a mark-to-market election (as described below), the U.S. holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, for subsequent taxable years, on (i) any excess distribution that we make to the U.S. holder (which generally means any distribution paid during a taxable year to a U.S. holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. holder’s holding period for the Class A Ordinary Shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, of Class A Ordinary Shares. Under the PFIC rules:
| ● | such excess distribution and/or gain will be allocated ratably over the U.S. holder’s holding period for the Class A Ordinary Shares; |
| ● | such amount allocated to the current taxable year and any taxable years in the U.S. holder’s holding period prior to the first taxable year in which we are a PFIC, or pre-PFIC year, will be taxable as ordinary income; |
| ● | such amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for that year; and |
| ● | an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
If we are a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares and any of our non-United States subsidiaries is also a PFIC, such U.S. holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. holders are advised to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.
As an alternative to the foregoing rules, a U.S. holder of “marketable stock” in a PFIC may make a mark-to-market election. Since our Class A Ordinary Shares are listed on the Nasdaq, a U.S. holder holds Class A Ordinary Shares will be eligible to make a mark-to-market election if we are or were to become a PFIC. If a mark-to-market election is made, the U.S. holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of Class A Ordinary Shares held at the end of the taxable year over the adjusted tax basis of such Class A Ordinary Shares and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the Class A Ordinary Shares over the fair market value of such Class A Ordinary Shares held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. holder’s adjusted tax basis in the Class A Ordinary Shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. holder makes an effective mark-to-market election, in each year that we are a PFIC any gain recognized upon the sale or other disposition of the Class A Ordinary Shares will be treated as ordinary income and loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If a U.S. holder makes a mark-to-market election it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the Class A Ordinary Shares are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the election.
If a U.S. holder makes a mark-to-market election in respect of a PFIC and such corporation ceases to be a PFIC, the U.S. holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not a PFIC.
Because a mark-to-market election cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. holder who makes a mark-to-market election with respect to our Class A Ordinary Shares may continue to be subject to the general PFIC rules with respect to such U.S. holder’s indirect interest in any of our non-United States subsidiaries if any of them is a PFIC.
We do not intend to provide information necessary for U.S. holders to make qualified electing fund elections, which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.
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As discussed above under “Dividends,” dividends that we pay on our Class A Ordinary Shares will not be eligible for the reduced tax rate that applies to qualified dividend income if we are a PFIC for the taxable year in which the dividend is paid or the preceding taxable year. In addition, if a U.S. holder owns our Class A Ordinary Shares during any taxable year that we are a PFIC, such holder would generally be required to file an annual IRS Form 8621. Each U.S. holder is advised to consult its tax advisors regarding the potential tax consequences to such holder if we are or become a PFIC, including the possibility of making a mark-to-market election.
Information Reporting
Certain U.S. holders may be required to report information to the IRS relating to an interest in “specified foreign financial assets,” including shares issued by a non-United States corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds US$50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a United States financial institution). These rules also impose penalties if a U.S. holder is required to submit such information to the IRS and fails to do so.
In addition, U.S. holders may be subject to information reporting to the IRS with respect to dividends on and proceeds from the sale or other disposition of our Class A Ordinary Shares. Each U.S. holder is advised to consult with its tax advisor regarding the application of the United States information reporting rules to their particular circumstances.
10.F. Dividends and paying agents
Not applicable for annual reports on Form 20-F.
10.G. Statement by experts
Not applicable for annual reports on Form 20-F.
10.H. Documents on display
We are subject to the information requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.
10.I. Subsidiary Information
Not applicable.
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See “Item 5. Operating and Financial Review and Prospects – Quantitative and Qualitative Disclosures about Market Risk”
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A. Debt Securities
Not applicable.
12.B. Warrants and Rights
Not applicable.
12.C. Other Securities
Not applicable.
12.D. American Depositary Shares
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
We do not have any material defaults in the payment of principal, interest, or any installments under a sinking or purchase fund.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF PROCEEDS
14.A. – 14.D. Material Modifications to the Rights of Security Holders
There have been no material modifications to the rights of our security holders.
14.E. Use of Proceeds
Private Placements
Securities Purchase Agreement dated October 21, 2022
On October 21, 2022, the Company entered into certain securities purchase agreement with an accredited investor pursuant to which the Company sold a senior secured convertible note in the original principal amount of $2,100,000 and warrants to purchase up to 5,108,275 ordinary shares (170,276 ordinary shares after Reverse Share Split) of the company, at a purchase price of $1,974,000. We used the proceeds for working capital and general corporate purposes.
Securities Purchase Agreements dated November 7, 2023 and November 9, 2023
On November 28, 2023, we completed the initial closing and issued 950,705 ordinary shares. On December 14, 2023, the we completed the second closing and issued a total of 1,094,128 ordinary shares. On February 9, 2024, we completed the third and final closing and issued a total of 768,000 ordinary shares and received in total gross proceeds of $3,994,222. We used the proceeds for working capital and general corporate purposes.
Securities Purchase Agreement dated December 7, 2023
On December 29, 2023, we completed the sale to the buyer of the December 2023 Note and December 2023 Warrants to purchase 1,070,719 warrant shares pursuant to the securities purchase agreement. We received gross proceeds from the sale of $6,127,334. We used the proceeds for marketing and investor relations purposes and general corporate purposes.
Securities Purchase Agreement dated July 16, 2025
On July 16, 2025, we issued a Series A-1 Senior Secured Convertible Note in the principal amount of $10,000,000, convertible into Class A ordinary shares at $0.32 per share, and a Series B-1 Senior Secured Convertible Note in the principal amount of $5,000,000, convertible into Class A ordinary shares at $0.30 per share, pursuant to the securities purchase agreement dated July 13, 2025. On July 31, 2025, we issued a Series C-1 Senior Secured Convertible Note in the principal amount of One Million Three Hundred Thirty Eight Thousand Five Hundred and Six Dollars ($1,338,506). We received gross proceeds of $16,338,506. We used the proceeds to acquire over 40 million Dogecoin (“DOGE”) to advance our treasury strategy and for general corporate purposes.
Securities Purchase Agreement dated August 11, 2025
On August 11, 2025, we completed the sale of 20,000,000 Class A ordinary shares at $0.30 per share to certain investors pursuant to securities purchase agreements dated August 6, 2025. The purchase price of $6,000,000 was paid in Dogecoin, and we received 30,000,000 DOGE. We intend to hold on to the DOGE to advance our treasury strategy.
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ITEM 15. CONTROLS AND PROCEDURES
| (a) | Evaluation of Disclosure Controls and Procedures. |
As of June 30, 2025, the end of the fiscal year covered by this report, our management, under the supervision and with the participation of our Chief Executive Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective.
| (b) | Management’s annual report on internal control over financial reporting. |
The annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.
In connection with the preparation of the financial statement for the Company’s Annual Report on Form 20-F for the year ended June 30, 2025, our management evaluated the effectiveness of our internal control over financial reporting as of June 30, 2025 and determined they were not effective. The material weakness identified relates to insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP. The material weakness, if not remediated timely, may lead to material misstatements in its consolidated financial statements in the future.
To remedy the identified material weakness, we took several measure to improve our internal control over financial reporting, including, among others: (1) recruiting more qualified personnel equipped with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework, (2) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for its accounting and financial reporting personnel, (3) enhancing oversight over and clarifying reporting requirements for, non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with U.S. GAAP and SEC reporting requirements, (4) recruiting more qualified internal control personnel with experience in the requirements of the Sarbanes-Oxley Act and adopting accounting and internal control guidance on U.S. GAAP and SEC reporting, and (5) preparing more detailed guidance and manuals on financial closing policies and procedures to improve the quality and accuracy of period-end financial closing process.
| (c) | Attestation report of the registered public accounting firm. |
Not applicable.
| (d) | Changes in internal control over financial reporting. |
There were no changes in our internal controls over financial reporting occurred during the twelve months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Company’s board of directors has determined that Ms. Mei Yeung qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market standards. The Company’s board of directors has also determined that members of the Audit Committee are all “independent” in accordance with the applicable Nasdaq Capital Market standards.
ITEM 16B. CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, officers, employees and advisors. The Code of Business Conduct and Ethics is attached as an exhibit to this annual report. Copy of the Code of Business Conduct and Ethics is also available on our website at https://bitorigin.io/.
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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Effective on March 4, 2025, the Company dismissed its independent registered auditor, WWC, P.C., which action was approved and ratified by the Company’s Board of Directors on March 4, 2025.
On March 4, 2025, the Board of Directors of the Company and the Audit Committee of the Company approved and ratified the appointment of HTL International, LLC as its new independent registered public accounting firm to audit the Company’s financial statements, effective March 4, 2025.
Fees Paid To Independent Registered Public Accounting Firm
Audit Fees
HTL International, LLC’s fee for the fiscal year ended June 30, 2025 was $180,000.
WWC, P.C.’s fee for the fiscal years ended June 30, 2024 and 2023 was $208,000 and $200,000, respectively.
Audit-Related Fees
There was no audit-related service fees incurred from HTL International, LLC for the fiscal year ended June 30, 2025.
There was no audit-related service fees incurred from WWC, P.C. for the fiscal years ended June 30, 2024 and 2023.
Tax Fees
There was no tax service fees incurred from HTL International, LLC for the fiscal year ended June 30, 2025.
There was no tax service fees incurred from WWC, P.C. for the fiscal years ended June 30, 2024 and 2023.
All Other Fees
There were no other services fees incurred from HTL International, LLC in fiscal year ended June 30, 2025.
There were no other services fees incurred from WWC, P.C. in fiscal years ended June 30, 2024 and 2023.
Audit Committee Pre-Approval Policies
HTL International, LLC’s engagement by the Company to render audit or non-audit services was approved and ratified by the Company’s audit committee. All services rendered by HTL International, LLC have been so approved and ratified.
WWC, P.C.C’s engagement by the Company to render audit or non-audit services was approved and ratified by the Company’s audit committee. All services rendered by WWC, P.C. have been so approved and ratified.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended June 30, 2025.
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
(1) Previous Independent Registered Public Accounting Firm
| (i) | Effective on March 4, 2025, the Company dismissed its independent registered auditor, WWC, P.C., which action was approved and ratified by the Company’s Board of Directors on March 4, 2025. |
| (ii) | The report of WWC, P.C. on the financial statements of the Company for the fiscal year ended June 30, 2024 and related consolidated statements of income and comprehensive loss, changes in equity and cash flows for each of the two years in the period ended June 30, 2024, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. |
| (iii) | The decision to change the independent registered public accounting firm was approved by the Board of Directors of the Company. |
| (iv) | During the Company’s most recent fiscal year ended June 30, 2024 and through March 4, 2025, the date of dismissal, (a) there were no disagreements with WWC, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of WWC, P.C., would have caused it to make reference thereto in its reports on the financial statements for such years and (b) there were no “reportable events” as described in Item 16F of Form 20-F, except for the material weakness related to the Company’s internal control over financing reporting, including insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP, which has been disclosed in the Company’s annual report on Form 20-F. |
| (v) | The Company provided WWC, P.C. with a copy of this Current Report and has requested that it furnish the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether it agrees with the above statements. A copy of such letter is attached as Exhibit 16.1 to this Report of Foreign Private Issuer on Form 6-K. |
(2) New Independent Registered Public Accounting Firm
On March 4, 2025, the Board of Directors of the Company and the Audit Committee of the Company approved and ratified the appointment of HTL International, LLC as its new independent registered public accounting firm to audit the Company’s financial statements, effective March 4, 2025. During the two most recent fiscal years ended June 30, 2024 and 2023 and any subsequent interim periods through the date hereof prior to the engagement of HTL International, LLC, neither the Company, nor someone on its behalf, has consulted HTL International, LLC regarding:
| (i) | either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or |
| (ii) | any matter that was either the subject of a disagreement as defined in Item 16F (a)(1)(iv) of Form 20-F or a reportable event as described in Item 16F (a)(1)(v) of Form 20-F. |
ITEM 16G. CORPORATE GOVERNANCE
As a company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards.
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We elected to follow home country practice exemption and be exempt from the requirements to obtain shareholder approval for (1) the issuance of securities when a share option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended under Rule 5635(c) of the Nasdaq Rules, (2) the issuance of 20% or more of its outstanding Class A Ordinary Shares under Rule 5635(d) of the Nasdaq Rules. Subject to Nasdaq Rules, we may also opt to rely on additional home country practice exemptions in the future.
Our shareholders may be afforded less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. See “Item 3. Key Information-D. Risk Factors-Risks Related to Our Class A Ordinary Shares -As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.”
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
ITEM 16K. CYBERSECURITY
Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards. We monitor and test our safeguards and regularly conduct training for our employees on these safeguards in collaboration with the administrative department and management. We are committed to promoting a company-wide culture of cybersecurity risk management.
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PART III
ITEM 17. FINANCIAL STATEMENTS
See Item 18.
ITEM 18. FINANCIAL STATEMENTS
Our consolidated financial statements are included at the end of this annual report, beginning with page F-1.
ITEM 19. EXHIBITS
Exhibit No. |
| Description of Exhibit | |
| |||
1.1 | | ||
2.1 | | ||
2.2 | | ||
2.3 | | ||
2.4 | | ||
2.5 | | ||
2.6 | | ||
2.7 | | ||
2.8 | | ||
2.9 | | ||
2.10 | | ||
2.11 | | ||
2.12 | | ||
2.13 | | ||
2.14 | | ||
2.15* | | ||
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4.1* | | Employment Agreement between the Company and Jinghai Jiang, dated April 10, 2024 | |
4.2 | | ||
4.3 | | ||
4.4 | | ||
4.5 | | ||
4.6 | | ||
4.7 | | ||
4.8 | | ||
4.9 | | ||
4.10 | | ||
4.11 | | ||
4.12 | | ||
4.13 | | ||
4.14 | | ||
4.15 | | ||
4.16 | | ||
4.17 | | ||
4.18 | | ||
4.19 | | ||
4.20 | | ||
4.21 | | ||
4.22 | | ||
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4.23 | | ||
4.24 | | ||
4.25 | | ||
4.26 | | ||
4.27 | | ||
8.1* | | ||
11.1 | | ||
12.1* | | Certification of Chief Principal Executive Officer Required by Rule 13a-14(a) | |
12.2* | | Certification of Principal Chief Financial Officer Required by Rule 13a-14(a) | |
13.1** | | ||
13.2** | | ||
15.1* | | ||
15.2* | | ||
97.1 | | ||
101.INS* | | XBRL Instance Document. | |
101.SCH* | | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | | XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
* | Filed with this annual report on Form 20-F |
** | Furnished with this annual report on Form 20-F |
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| BIT ORIGIN LTD | ||
|
|
| |
| By: | /s/ Jinghai Jiang | |
|
| Name: | Jinghai Jiang |
|
| Title: | Chief Executive Officer and Chairman of the Board |
Date: October 31, 2025
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BIT ORIGIN LTD
TABLE OF CONTENTS
Consolidated Financial Statements | |
| |
Reports of Independent Registered Public Accounting Firm (PCAOB ID: | F-2 |
| |
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1171) | F-4 |
| |
F-5 | |
| |
F-6 | |
| |
F-7 | |
| |
Consolidated Statements of Cash Flows for the years ended June 30, 2025, 2024 and 2023 | F-8 |
| |
F-9 – F-29 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Bit Origin Ltd
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Bit Origin Ltd and its subsidiaries (the “Company”) as of June 30, 2025, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for the year ended June 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we do not provide a separate opinion on this matter or on the accounts or disclosures to which it relates.
Evaluation of the Company’s ability to continue as a going concern
As described in Note 1 to the consolidated financial statements, the Company prepared its consolidated financial statements on a going concern basis, and management has concluded that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due for the next twelve months from the date of issuance of the consolidated financial statements. For the years ended June 30, 2025, 2024 and 2023, the Company incurred net losses of $4,369,906, $18,284,958 and $28,216,352, respectively, with net cash used in operating activities of $2,290,607, $7,929,234 and $6,761,587, respectively. As of June 30, 2025 and 2024, accumulated deficit amounted to $88,265,410 and $81,731,423, respectively. As of June 30, 2025, the Company only had a cash balance of $55,639. These adverse conditions and events, before consideration of management’s plans, raised substantial doubt about the Company’s ability to continue as a going concern. Management’s plans to mitigate the adverse conditions and events include a business plan with forecasted cash flows covering the next twelve months from the date of issuance of the consolidated financial statements and the consummation of an external financing project.
F-2
The principal consideration for our determination that performing procedures relating to the Company’s going concern assessment is a critical audit matter is the significant judgment by management when preparing the business plan with forecasted cash flows and the consummation of an external financing project included in the going concern assessment, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s business plan with forecasted cash flows and the consummation of an external financing project.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following:
| ● | We tested management’s process for preparing the business plan with forecasted cash flows and the consummation of an external financing project included in the going concern assessment; testing the completeness, accuracy, and relevance of underlying data used; and evaluating the reasonableness of the assumptions included in the forecasted cash flows used by management in their business plan. Evaluating the forecasted cash flows involved evaluating whether the underlying assumptions were reasonable considering (i) the Company’s current and past performance, and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit; We reviewed the documentation for subsequent debt and equity financing transactions to confirm the material terms, evaluate associated contingencies, and corroborate the receipt of funds for completed issuances; and |
| ● | We assessed the adequacy of the Company’s going concern disclosures included in Note 1 to the consolidated financial statements. |
/s/ | |
| |
We have served as the Company’s auditor since 2025. | |
| |
| |
| |
October 31, 2025 | |
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: | The Board of Directors and Shareholders of |
| Bit Origin Ltd |
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Bit Origin Ltd and its subsidiaries (the “Company”) as of June 30, 2024, and the related consolidated statements of operations and comprehensive income/(loss), changes in shareholders’ equity, and cash flows in each of the years for the two-year period ended June 30, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024, and the results of its operations and its cash flows in each of the years for the two-year period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred substantial losses and generated significant net cash outflows from operating activities during the year ended June 30, 2024, as well as had temporarily ceased its business operations during the current year. These circumstances give rise to substantial doubt that the Company will continue as a going concern. Management’s plan regarding these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of our management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WWC, P.C.
Certified Public Accountants
PCAOB ID:
We have served as the Company’s auditor from May 8, 2021 through March 4, 2025
December 26, 2024
F-4
BIT ORIGIN LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
| June 30, | | June 30, | ||
|
| 2025 |
| 2024 | ||
ASSETS | | | | | | |
CURRENT ASSETS | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Cryptocurrencies | |
| — | |
| |
Other receivables, net | |
| | |
| |
Prepayments, net | |
| | |
| |
Loans receivable, net | | | | | | |
Total current assets | |
| | |
| |
| | | | | | |
Total assets | | $ | | | $ | |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
CURRENT LIABILITIES | | | | | | |
Convertible debentures | | $ | — | | $ | |
Other payables and accrued liabilities | | | | | | |
Total current liabilities | | | | | | |
| | | | | | |
NONCURRENT LIABILITIES | | | | | | |
Convertible debentures | | | — | | | |
Total noncurrent liabilities | | | — | | | |
| | | | | | |
Total liabilities | | | | | | |
| | | | | | |
COMMITMENTS AND CONTINGENCIES (Note 13) | | | | | | |
| | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | |
Ordinary share (par value $ | | | — | | | |
Class A ordinary share (par value $ | | | | | | — |
Class B ordinary share (par value $ | | | | | | — |
Additional paid-in capital | | | | | | |
Accumulated deficit | | | ( | | | ( |
Total Bit Origin Ltd shareholders’ equity | | | | | | |
| | | | | | |
NONCONTROLLING INTERESTS | | | ( | | | ( |
| | | | | | |
Total equity | | | | | | |
| | | | | | |
Total liabilities and shareholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
BIT ORIGIN LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| | For the Year Ended June 30, | |||||||
|
| 2025 |
| 2024 |
| 2023 | |||
REVENUES | | | | | | | | | |
Cryptocurrencies mining revenue | | $ | — | | $ | | | $ | |
Cryptocurrency miner sales net revenue | | | | | | — | | | — |
Total revenues | |
| | |
| | |
| |
| | | | | | | | | |
COST OF REVENUES | |
|
| |
|
| |
|
|
Cost of cryptocurrencies mining revenue | | | — | | | | | | |
Total cost of revenues | |
| — | |
| | |
| |
| | | | | | | | | |
GROSS PROFIT (LOSS) | |
| | |
| ( | |
| ( |
| | | | | | | | | |
OPERATING EXPENSES: | |
|
| |
|
| |
| |
General and administrative | |
| | |
| | |
| |
(Recovery of) provision for credit losses | | | ( | | | | | | |
Impairment loss of cryptocurrencies | | | — | | | | | | |
Impairment loss of miners | | | — | | | | | | |
Impairment loss of long-term investment | | | — | | | | | | |
Share based compensation expense | | | — | | | | | | |
Total operating expenses | |
| | |
| | |
| |
| | | | | | | | | |
LOSS FROM OPERATIONS | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
OTHER INCOME (EXPENSES) | |
|
| |
|
| |
|
|
Realized gains on sale/exchange of cryptocurrencies | |
| | |
| | |
| |
Interest expense | |
| ( | |
| ( | |
| ( |
Other finance expenses | |
| ( | |
| ( | |
| ( |
Loss on warrants settlement | | | — | | | ( | | | — |
Total other (expenses) income, net | |
| ( | |
| ( | |
| |
| | | | | | | | | |
LOSS BEFORE INCOME TAXES | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
Provision for income taxes | | | — | | | — | | | — |
| | | | | | | | | |
NET LOSS | |
| ( | |
| ( | |
| ( |
| | | | | | | | | |
LESS: Net income (loss) attributable to noncontrolling interests | | | | | | ( | | | — |
Deemed dividend attributable to down round feature of warrants | | | | | | — | | | — |
| | | | | | | | | |
NET LOSS ATTRIBUTABLE TO BIT ORIGIN LTD | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES* | |
| | |
| | |
| |
Basic and diluted | |
| | |
| | | | |
| | | | | | | | | |
LOSS PER SHARE - BASIC AND DILUTED* | | $ | ( | | $ | ( | | $ | ( |
*
The accompanying notes are an integral part of these consolidated financial statements.
F-6
BIT ORIGIN LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| | | | | |
| | | | |
| | | | | | Additional |
| | | | | | | | ||
|
| Ordinary shares |
| Class A ordinary shares |
| Class B ordinary shares | | paid-in |
| Accumulated | | Noncontrolling | | | | ||||||||||||
|
| Share |
| Amount |
| Share |
| Amount |
| Share |
| Amount |
| capital |
| deficit |
| interests |
| Total | |||||||
BALANCE, June 30, 2022* |
| | | $ | | | | | $ | — | | | | $ | | | $ | | | $ | ( | | $ | — | | $ | |
Issuance of ordinary shares for equipment purchase |
| | |
| | | | |
| — | | | |
| | | | | |
| | |
| — | |
| |
Issuance of ordinary shares for compensation | | | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Warrants issued with convertible debenture | | — | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Additional ordinary shares of round-up adjustment for reverse share split | | | | | | | | | | — | | | | | | | | ( | | | | | | — | | | |
Net loss | | — | | | | | | | | — | | | | | | | | — | | | ( | | | — | | | ( |
BALANCE, June 30, 2023* |
| | |
| | | | |
| — | | | |
| | | | | |
| ( | |
| — | |
| |
Sales of ordinary shares | | | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Issuance of ordinary shares for compensation |
| | |
| | | | |
| — | | | |
| | | | | |
| | |
| — | |
| |
Conversion of convertible debenture into ordinary shares | | | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Warrants issued with convertible debenture | | — | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Exercise of warrants | | | | | | | | | | — | | | | | | | | | | | | | | — | | | |
Exchange of warrants for convertible debenture | | — | | | | | | | | — | | | | | | | | ( | | | | | | — | | | ( |
Noncontrolling interests acquired | | — | | | | | | | | — | | | | | | | | — | | | | | | | | | |
Net loss | | — | | | | | | | | — | | | | | | | | — | | | ( | | | ( | | | ( |
BALANCE, June 30, 2024 |
| | | | | | | | | — | | | | | | | | | | | ( | | | ( | | | |
Re-designation of authorized ordinary shares | | ( | | | ( | | | | | | | | | | | | | — | | | | | | — | | | |
Exercise of warrants | | — | | | | | | | | | | | | | | | | ( | | | | | | — | | | |
Conversion of convertible debentures into ordinary shares |
| — | |
| | | | |
| | | | |
| | | | ( | |
| | |
| — | |
| |
Deemed dividend attributable to down round feature of warrants |
| — | |
| | | | |
| — | | | |
| | | | | |
| ( | |
| — | |
| |
Net (loss) income |
| — | |
| | | | |
| — | | | |
| | | | — | |
| ( | |
| | |
| ( |
BALANCE, June 30, 2025 |
| — | | $ | | | | | $ | | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
*Giving retroactive effect to the -for-30 reverse share split effected on May 23, 2023
The accompanying notes are an integral part of these consolidated financial statements.
F-7
BIT ORIGIN LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| For the Year ended June 30, | |||||||
|
| 2025 |
| 2024 |
| 2023 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
| |
|
| |
|
| |
|
Net loss | | $ | ( | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | |
| | |
| |
Depreciation | |
| — | |
| | |
| |
(Recovery of) provision for credit losses | | | ( | | | | | | |
Realized gain on sale/exchange of cryptocurrencies | | | ( | | | ( | | | ( |
Impairment loss of cryptocurrencies | | | — | | | | | | |
Impairment loss of long-lived assets | | | — | | | | | | |
Impairment loss of long-term investment | | | — | | | | | | |
Share based compensation expense | | | — | | | | | | |
Amortization of convertible debenture issuance costs and discounts | | | | | | | | | |
Interest expense of convertible debenture | | | | | | | | | |
Interest expense of third party loans | | | — | | | | | | |
Loss on warrants settlement | | | — | | | | | | — |
Changes in operating assets and liabilities | | | | | | | | | |
Cryptocurrencies - mining, net of mining pool operating fees | | | | | | ( | | | ( |
Other receivables | |
| | |
| ( | |
| |
Prepayments | |
| ( | |
| | |
| ( |
Security deposits | |
| — | |
| | |
| ( |
Accounts payable | | | — | | | ( | | | |
Other payables and accrued liabilities | | | ( | | | | | | |
Net cash used in operating activities | | | ( | | | ( | | | ( |
| | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
Proceeds from sale of cryptocurrencies | | | — | | | | | | |
Purchases of plant and equipment | |
| — | |
| — | |
| ( |
Loan to third parties | |
| — | |
| ( | |
| — |
Repayments from loans to third parties | | | | | | — | | | — |
Proceeds from investment of subsidiaries’ noncontrolling interests | | | — | | | | | | — |
Net cash provided by investing activities | |
| | |
| | |
| |
| | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
| | |
| |
Repayments from other receivables - related parties, net | |
| — | |
| — | |
| |
Proceeds from issuance of ordinary shares through private offerings | |
| — | |
| | |
| — |
Proceeds from third party loans | | | — | | | — | | | |
Repayments to third party loans | | | — | | | ( | | | — |
Payments of convertible debenture interest expense | | | ( | | | ( | | | ( |
Payments of third party loans interest expense | | | — | | | ( | | | ( |
Proceeds from convertible debentures, net of issuance costs | |
| — | |
| | |
| |
Repayments of convertible debenture | | | — | | | ( | | | ( |
Proceeds from exercise of warrants | | | — | | | | | | — |
Net cash (used in) provided by financing activities | |
| ( | |
| | |
| |
| | | | | | | | | |
CHANGES IN CASH AND CASH EQUIVALENTS | |
| ( | |
| | |
| ( |
| | | | | | | | | |
CASH AND CASH EQUIVALENTS, beginning of year | |
| | |
| | |
| |
| | | | | | | | | |
CASH AND CASH EQUIVALENTS, end of year | | $ | | | $ | | | $ | |
| | | | | | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | |
| | |
| |
Cash paid for income tax | | $ | — | | $ | — | | $ | — |
Cash paid for interest | | $ | | | $ | | | $ | |
| | | | | | | | | |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |
| | |
| | |
| |
Conversion of convertible debenture remaining principals into ordinary shares | | $ | | | $ | — | | $ | — |
Conversion of convertible debenture into ordinary shares | | $ | | | $ | — | | $ | — |
Exchange of warrants for convertible debenture | | $ | — | | $ | | | $ | — |
Deemed dividend attributable to down round feature of warrants | | $ | | | $ | — | | $ | — |
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Note 1 – Nature of business and organization
Organization
Bit Origin Ltd (“Bit Origin” or the “Company”) is a company incorporated on January 23, 2018 under the laws of the Cayman Islands. Bit Origin holds all of the outstanding share capital of the following entities: SonicHash Inc, (“SonicHash Canada”), SonicHash Pte. Ltd (“SonicHash Singapore”), SonicHash LLC (“SonicHash US”) and Bit Origin Pte. Ltd. (“Bit Origin Singapore”), and holds
On December 14, 2021, the Company formed SonicHash Canada, a company incorporated under the laws of Alberta, Canada. On December 16, 2021, the Company formed SonicHash Singapore, a company incorporated under the laws of Singapore, which was struck off on September 4, 2024. On December 17, 2021, the Company formed SonicHash US under the laws of the State of Delaware. Sonic Auspice was formed by a third party under the laws of the State of Delaware on November 30, 2023. The Company purchased
Business overview
The Company and its subsidiaries (“the Group”) is focused on the cryptocurrency related operations and management. The Group started Bitcoin mining business in May 2022. In December 2023, the Group temporarily suspended the Bitcoin mining operations due to the high operating costs in the United States (“U.S.”). Starting from June 2024, Bit Origin directly enters into the purchase and sale of mining computers under a sales representative arrangement to support its treasury and operational activities. In July 2025, the Group introduced a dedicated Dogecoin treasury program to advance its strategic development.
Consolidation scope
The accompanying consolidated financial statements reflect the activities of Bit Origin and each of the following entities as of June 30, 2025:
Name |
| Background |
| Ownership |
SonicHash Canada | | · A Canada company. | | |
SonicHash US | | · A U.S. company of the State of Delaware | | |
| | . It operates the Bitcoin mining business | | |
Sonic Auspice | | · A U.S. company of the State of Delaware | | |
| | . It was established to explore potential mining site operation opportunities but has not commenced any business operations but has undertaken limited financing and investment activities to third parties as of the date of this report | | |
Bit Origin Singapore | | · A Singapore company | | |
| | · It was established to engage in venture capital investment activities in the cryptocurrency industry but has not commenced any business operations as of the date of this report | |
Liquidity and going concern
In assessing the Group’s liquidity, management monitors and analyzes the cash on-hand and its operating expenditure commitments. The Group’s primary liquidity needs are to meet its working capital requirements and operating expenses obligations for the next twelve months from the issuance date of these financial statements.
F-9
For the years ended June 30, 2025, 2024 and 2023, the Group incurred net losses of $
To address these conditions, management has developed and executed the following measures.
| ● | In July 2025, the Company issued |
| ● | Management is focused on optimizing the Group’s cost structure by streamlining the corporate hierarchy and overall business processes. This strategic focus on operational efficiencies is expected to result in a sustainable reduction in operating expenses, thereby increasing its liquidity period. |
| ● | Management is actively building an ecosystem centered around Dogecoin (“DOGE”) encompassing payment solutions and Web3 applications. The Group intends to revitalize its crypto mining operations through identification of suitable third party hosting partners, which minimizes operating costs and generates immediate mining revenue. |
Management believes that the successful execution of these plans, particularly the recent successful financing, and substantial commitment under the EPFA, provides the necessary liquidity to meet its obligations and fund operations for at least one year from the date these financial statements are issued. Accordingly, based on the successful implementation of these mitigating plans and subsequent receipt of capital, management has concluded that the substantial doubt about the Group’s ability to continue as a going concern has been alleviated.
Note 2 – Summary of significant accounting policies
Basis of presentation
The accompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operation results.
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation.
F-10
Use of estimates and assumptions
In presenting the consolidated financial statements in accordance with U.S. GAAP, management make estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgement and available information. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Group to revise its estimates. The Group bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates are used when accounting for items and matters including determinations of the useful lives and impairment of long-lived assets, allowances for credit losses and doubtful accounts, determination of fair value of financial instruments, and realization of deferred tax assets and uncertain tax position.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and time deposits placed with banks or other financial institutions and have original maturities of less than three months.
Cryptocurrencies
Cryptocurrencies (Bitcoins) are included in current assets in the accompanying consolidated balance sheets. Cryptocurrencies purchased are recorded at cost. Cryptocurrencies awarded to the Group through its mining activities are accounted for in connection with the Group’s revenue recognition policy disclosed below.
Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the intraday low quoted price of the cryptocurrency at the time its fair value is being measured. In testing for impairment, the Group has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Group concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. For the years ended June 30, 2025, 2024 and 2023,
Other receivables, net
Other receivables include advances to third parties or employees and interests receivable. Management regularly reviews the adequacy of the allowance for credit losses on an ongoing basis and considers factors such as the aging of receivables and changes in payment trends, creditworthiness, current economic trend as well as other supportable forward-looking factors. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. During the years ended June 30, 2025, 2024 and 2023, $
Loans receivable, net
Loans receivable are recorded at the cash amount disbursed to originate the loans, net of allowance that estimated on a regular basis based on an assessment of historical collection experience, adjusted for loan balance aging, credit quality and specific risk characteristics of the borrowers and prevailing economic conditions. The Group continues to evaluate the reasonableness of the allowance policy and update if necessary. During the year ended June 30, 2025, $
F-11
Allowance for credit losses
Allowance for credit losses represents management’s best estimate of probable losses inherent in the portfolio. Commencing July 1, 2023, the Group adopted Accounting Standard Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset.
Under Accounting Standard Update (“ASU”) 2016-13, the Group has exposure to credit losses for financial assets, which are other receivables and loans receivable. The Group considered various factors, including nature, historical collection experience, the age of the receivable balances, credit quality and specific risk characteristics of its customers, current economic conditions, forward-looking information including economic, regulatory, technological, environmental factors (such as industry prospects, GDP, employment, etc.), reversion period, and qualitative and quantitative adjustments to develop an estimate of credit losses. The Group has adopted loss rate method to calculate the credit loss and considered the reverent factors of the historical and future conditions of the Group to make reasonable estimation of the risk rate.
Financial assets are presented net of the allowance for credit losses in the consolidated balance sheets. The measurement of the allowance for credit losses is recognized through current expected credit loss expense. Current expected credit loss expense is included as a component of general and administrative expenses in the consolidated statements of operations. Write-offs are recorded in the period in which the asset is deemed to be uncollectible.
Prepayments, net
Prepayments are cash advanced to service providers for future services. This amount is refundable and bears no interest. During the years ended June 30, 2025, 2024 and 2023,
Plant and equipment, net
Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of five years for cryptocurrency mining equipment.
All cryptocurrency mining equipment was fully impaired and disposed of in prior years, and no plant and equipment were held or in use as of June 30, 2025. Depreciation expense was
Long term investment, net
The Group’s long-term investment represented an equity investment without a readily determinable fair value and was accounted for using the measurement alternative under ASC Topic 321, Investments — Equity Securities. Under this approach, the investment was carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments, if any.
At each reporting date, the Group assesses whether events or changes in circumstances indicate that the investment is impaired. If qualitative factors indicate that the fair value of the investment is less than its carrying amount, the Group estimates the fair value of the investment. When the fair value is determined to be less than the carrying amount, an impairment loss is recognized in earnings equal to the difference between the two amounts.
F-12
Impairment for long-lived assets
Long-lived assets, including plant and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Group assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Group would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. During the years ended June 30, 2025, 2024 and 2023,
Fair value measurement
The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Group.
ASC 820-10-20 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The accounting standards establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Long-term convertible debenture on the balance sheets is at carrying value, which approximates fair value as the third party was lending the money to us at the market rate.
Related parties
A party is considered to be related to the Group if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Group. Related parties also include principal owners of the Group, its management, members of the immediate families of principal owners of the Group and its management and other parties with which the Group may deal if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Convertible debentures and derivatives
The Group adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20), effective for the year ended June 30, 2025. The Group accounts for its convertible debentures and notes primarily under ASC 470, Debt.
Under the amended guidance, convertible instruments are accounted for as a single liability instrument measured at amortized cost. This simplified approach eliminates the requirement under previous guidance to separately account for beneficial conversion features (“BCF”) or cash conversion features (“CCF”) in equity.
F-13
An exception to this single-instrument approach applies if an embedded conversion feature is required to be bifurcated from the host debt instrument and accounted for separately as a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). This is required when the conversion feature’s economic characteristics are not considered clearly and closely related to the host debt, the feature meets the definition of a derivative, and it does not qualify for a scope exception from derivative accounting. If bifurcation is required, the embedded derivative is recognized as a liability and measured at fair value, with subsequent changes in fair value reported in earnings. The portion of the proceeds allocated to the derivative creates a debt discount, which is amortized to interest expense over the term of the debt.
For instruments accounted for as a single liability, debt issuance costs are recorded as a direct deduction from the carrying amount and are amortized to interest expense over the term of the debt using the effective interest method. Upon conversion into shares in accordance with the original contractual terms, the carrying amount of the debt is reclassified to equity, and no gain or loss is recognized in the income statement.
Warrants
The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815.
The assessment considers whether the warrants are freestanding financial instruments, meeting the definition of a liability under ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. This includes determining whether the warrants are indexed to the Group’s own ordinary share and whether the warrant holders could potentially require net cash settlement in a circumstance outside of the Group’s control. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and is reassessed at each subsequent reporting date while the warrants are outstanding.
Warrants that meet all of the criteria for equity classification are recorded as a component of equity at fair value at the time of issuance and not subsequently remeasured. Warrants that do not meet the criteria for equity classification are recorded as liabilities, measured at fair value at issuance and subsequently remeasured to fair value at each reporting period, with changes in fair value recognized in earnings.
The Group recognizes on a prospective basis the value of the effect of the down round feature in the warrants when the feature is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature will be treated as a deemed dividend and a reduction to income available to ordinary shareholders in the basic earnings per share (“EPS”) calculation.
Revenue recognition
The Group recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: (i) identifies the contract with the customer, (ii) identifies the performance obligations in the contract, (iii) determines the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the contract, and (v) recognizes revenue when (or as) the Group satisfies the performance obligation.
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.
F-14
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
| ● | Variable consideration |
| ● | Constraining estimates of variable consideration |
| ● | The existence of a significant financing component in the contract |
| ● | Noncash consideration |
| ● | Consideration payable to a customer |
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Cryptocurrency mining:
The Group entered into cryptocurrency mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Group’s enforceable right to compensation only begins when the Group provides computing power to the mining pool operator. In exchange for providing computing power, the Group is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less cryptocurrency transaction fees to the mining pool operator which are recorded net with revenues), for successfully adding a block to the blockchain. The Group’s fractional share is based on the proportion of computing power the Group contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.
Providing computing power in cryptocurrency transaction verification services is an output of the Group’s ordinary activities. The provision of computing power is the only performance obligation in the Group’s contracts with third party pool operators. The transaction consideration the Group receives, if any, is noncash consideration, which the Group measures at fair value on the date received, which is not materially different than the fair value at contract inception. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the Group successfully places a block (by being the first to solve an algorithm) and the Group receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.
Fair value of the cryptocurrency award received is determined using the intraday low quoted price of the related cryptocurrency at the time of receipt. All of the Group’s cryptocurrency are populated cryptocurrencies which are actively traded on the major trading platforms such as coinmarketcap.com. In December 2023, the Group temporarily suspended the cryptocurrency mining operations due to the high operating costs in the United States.
Cryptocurrency miner sales:
The Group earns revenue by facilitating a third party supplier to sell cryptocurrency mining equipment. The transaction price is fixed, agreed upon with the customer at contract inception, and payable in full prior to delivery, with no significant financing components. The Group recognizes revenue at a point in time when control of the equipment transfers to the customer from the supplier, which occurs upon delivery to the customer’s designated pick-up location and acceptance per the sales contract terms.
The Group acts as an agent in these transactions, as it does not control the equipment before transfer. This determination reflects that: (1) the Group is not primarily responsible for fulfilling the promise to provide the equipment (a third-party supplier bears this obligation), and (2) the Group does not bear inventory risk before or after the sale. As an agent, the Group’s performance obligation is to arrange for the equipment’s provision to the customer. Revenue is thus recognized on a net basis, representing the fee or commission earned, calculated as the difference between amounts charged to the customer and amounts remitted to the supplier. No significant variable consideration (e.g., discounts or returns) or capitalized contract costs are present as the consideration is received full prior to delivery.
F-15
Cost of revenues
Cost of revenues consists primarily of the direct costs associated with running the cryptocurrency mining business, such as utilities, maintenance labor costs, shipping fees, plant remodeling fees and other service charges. The Group signed hosting agreement with hosting partners, and the hosting partners will install the mining equipment and provide elective power, internet services and other necessary services to maintain the operation of the mining equipment. All the related operating fees are included in the all-in-one monthly fees charged by the hosting partner to the Group. Depreciation of cryptocurrency mining equipment is calculated separately and also recorded as a component of cost of revenues for cryptocurrency mining. In December 2023, the Group temporarily suspended the Bitcoin mining operations due to the high operating costs in the United States.
Share-based compensation
Share-based compensation expense consists of the Group’s restricted stock units (“RSUs”) expense. RSUs granted to employees are measured based on the grant-date fair value. In general, a portion of the Group’s RSUs vests at the time of signing the employment agreement and the remaining vests over a service period of
Income taxes
The Group accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
(Loss) earnings per share
Basic (loss) earnings per share are computed by dividing (loss) income available to ordinary shareholders by the weighted average ordinary shares outstanding during the period. Diluted (loss) earnings per share take into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. Ordinary shares equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted (loss) earnings per share. Dilution is computed by applying the treasury share method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during the period.
F-16
Segment reporting
ASC 280, Segment Reporting, (“ASC 280”), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, the chief operating decision maker (“CODM”) has been identified as the Group’s Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. As a whole, the Group has
Recent accounting pronouncements
New accounting pronouncements adopted
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. The amendment in this Update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred shares. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company adopted ASU 2020-06 on July 1, 2024, and retrospectively apply to all periods presented in the consolidated financial statement. The adoption of this ASU did not have a material effect on the Group’s consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments. These requirements include: (i) disclosure of significant expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); (ii) disclosure of an amount for other segment items (equal to the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment and a description of their composition; (iii) annual disclosure of a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods; (iv) clarification that, if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report those additional measures of segment profit or loss; (v) disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources; and (vi) requiring a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU, and all existing segment disclosures in Topic 280. The Company adopted ASU 2023-07 on July 1, 2024, and retrospectively apply to all periods presented in the consolidated financial statement. The adoption of this ASU did not have a material effect on the Group’s consolidated financial statements and related disclosures.
New accounting pronouncements yet to be adopted
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Group is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
F-17
In December 2023, the FASB issued ASU 2023-08, Intangibles – “Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets” (ASU 2023-08”), which requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The amendments also require that an entity provide disclosures about significant holdings, contractual sale restrictions, and changes during the reporting period. The objectives of the amendments are to provide investors and other capital allocators with more decision-useful information that better reflects the underlying economics of crypto assets within the scope and an entity’s financial position while reducing cost and complexity associated with applying cost-less-impairment accounting. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If amendments are adopted in an interim period, they must be adopted as of the beginning of the fiscal year that includes that interim period. The amendments in this ASU require a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments. The Group is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
On January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 (disaggregation of income statement expenses) for non-calendar year-end entities. The clarification ensures that initial adoption is required in an annual reporting period (rather than unintentionally in an interim period) for entities with non-calendar year ends. The amendments align with the effective dates stated in ASU 2024-03 (annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027) and early adoption is permitted. The Company is currently evaluating the potential impact of ASU 2024-03 (as clarified by ASU 2025-01) on its consolidated financial statements and related disclosures.
In March 2025, the FASB issued ASU 2025-02, “Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122” (“ASU 2025-02”), which rescinds the embedded SEC guidance in Topic S-99-1 of ASC 450 related to obligations to safeguard crypto assets under SAB 121. The amendments require entities with obligations to safeguard crypto assets to assess whether a contingent liability exists under ASC 450-20, “Loss Contingencies.” This guidance is effective for annual periods beginning after December 15, 2024, including interim periods, with early adoption permitted. The Group is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
Except as mentioned above, the Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Group’s consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.
F-18
Note 3 – Cryptocurrencies
The following table presents additional information about our cryptocurrency mining activities of Bitcoin (“BTC”) in coins and amounts during the years ended June 30, 2025, 2024 and 2023:
| | Quantities (in coins) | | Cryptocurrencies | |
|
| BTC |
| Amounts | |
Balance on July 1, 2022 |
| | | $ | |
Revenue recognized from cryptocurrencies mined |
| | |
| |
Hosting fees settled in cryptocurrencies |
| ( | |
| ( |
Proceeds from sale of cryptocurrencies | | ( | | | ( |
Realized gain on sale/exchange of cryptocurrencies | | — | | | |
Impairment loss of cryptocurrencies | | — | | | ( |
Balance on June 30, 2023 | | | | $ | |
Revenue recognized from cryptocurrencies mined | | | | | |
Hosting fees settled in cryptocurrencies | | ( | | | ( |
Proceeds from sale of cryptocurrencies |
| ( | |
| ( |
Realized gain on sale/exchange of cryptocurrencies |
| — | |
| |
Impairment loss of cryptocurrencies |
| — | |
| ( |
Balance on June 30, 2024 |
| | | $ | |
Revenue recognized from cryptocurrencies mined | | — | | | — |
Service fees settled in cryptocurrencies | | ( | | | ( |
Proceeds from sale of cryptocurrencies | | — | | | — |
Realized gain on sale/exchange of cryptocurrencies | | — | | | |
Impairment loss of cryptocurrencies | | — | | | — |
Balance on June 30, 2025 |
| — | | $ | — |
Note 4 – Other receivables, net
Other receivables, net consist of the following:
| | June 30, | | June 30, | ||
|
| 2025 |
| 2024 | ||
Advances to third parties[1] or employees | | $ | | | $ | |
Interest receivables | | | | | | |
Receivable due from buyer of disposed entities | |
| — | |
| |
Total other receivables | | | | | | |
Less: allowance for credit losses | | | ( | | | ( |
Total other receivables, net | | $ | | | $ | |
[1] Non-trade advances to third parties are short term in nature and are due on demand with no interest bearing. These advances were refundable and made in relation to establishing relationship for potential service providers of cryptocurrency operations.
Movements of allowance for credit losses are as follows:
|
| For the year ended |
| For the year ended |
| For the year ended | |||
| | June 30, | | June 30, | | June 30, | |||
| | 2025 | | 2024 | | 2023 | |||
Beginning balance | | $ | | | $ | | | $ | — |
Addition | |
| | |
| | |
| |
Write-off | |
| ( | |
| — | |
| — |
Ending balance | | $ | | | $ | | | $ | |
F-19
Note 5 – Loans receivable, net
Outstanding balances on loans receivable consist of the following as of June 30, 2025 and 2024:
| | | |
| |
|
| June 30, |
| June 30, | ||
Third party | | Maturity | | Interest rate | | Collateral/Guarantee | | 2025 | | 2024 | ||
A | | December 15, 2024 (Fully repaid in October and December 2024, respectively) | | % | None | | $ | — |
| $ | | |
A | | January 5, 2026 | | % | None | |
| |
|
| | |
A | | April 30, 2025 (Extended to April 30, 2026 on April 30, 2025) | | % | None | | | |
| | | |
B | | October 28, 2024 (Fully repaid in October 2024) | | % | None | | | — | | | | |
Loans receivable from third parties | | | | | | | | | |
| | |
Allowance for credit losses | | | | | | | | | ( | | | ( |
Loans receivable, net | | | | | | | | $ | | | $ | |
Movements of allowance for credit losses are as follows:
|
| For the year ended |
| For the year ended |
| For the year ended | |||
| | June 30, | | June 30, | | June 30, | |||
| | 2025 | | 2024 | | 2023 | |||
Beginning balance | | $ | | | $ | — | | $ | — |
(Recovery) addition | |
| ( | |
| | |
| — |
Ending balance | | $ | | | $ | | | $ | — |
Interest income of the above loans receivable for the years ended June 30, 2025, 2024 and 2023 amounted to , $
Note 6 – Long-term investment, net
|
| June 30, |
| June 30, | ||
| | 2025 | | 2024 | ||
Cost of long-term investment | | $ | — | | $ | |
Less: impairment loss | |
| — | |
| ( |
Long-term investment, net | | $ | — | | $ | — |
The Company previously held an investment in MineOne Cloud Computing Investment I L.P. (the “Partnership”), for which it subscribed $
The investment was fully impaired as of June 30, 2024, due to prolonged adverse market conditions and the decline in the fair value of the underlying mining assets.
During the fiscal year ended June 30, 2025, the Partnership resolved to apply for strike-off from the Register of Limited Partnerships, on the basis that it had ceased business operations and had no remaining assets or liabilities. The Company accordingly derecognized the investment during the year. As the investment had been fully impaired, no gain or loss was recognized upon derecognition.
F-20
Note 7 – Related party transactions and balances
As of and for the year ended June 30, 2025, the Group did not have any related-party transactions or outstanding balances with parties meeting the definition of related parties under ASC 850-10-20.
Relationship with Intellectual International Capital LLC (“IIC”)
IIC was considered a related party of the Company by virtue of the involvement of the Company’s former president, Dr. Jiaming Li, who concurrently served as a senior manager of IIC and was therefore able to exercise significant influence over both entities. Following Dr. Jianming Li’s resignation in November 2023, transactions and balances between the Group and IIC up to November 2023 were regarded as related-party transactions.
Related party balances
There were
Related party transactions
|
| |
| For the year ended |
| For the year ended |
| For the year ended | ||
| | | | June 30, | | June 30, | | June 30, | ||
Name of related party | | Related party | | 2025 | | 2024 | | 2023 | ||
Receipt on behalf of Group | | Intellectual International Capital LLC | | $ | — | | $ | | | |
Payment on behalf of Group |
| Intellectual International Capital LLC | |
| — | |
| ( |
| ( |
Except for the transactions and balances described above, the Group had no other related-party transactions or outstanding balances with related parties.
Note 8 – Taxes
Income tax
Cayman Islands
Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders,
Canada
SonicHash Canada is incorporated in Canada and is subject to both federal and provincial income taxes for its business operation in Canada. The applicable tax rate is
United States
SonicHash US and Sonic Auspice are incorporated in the U.S. and are only subject to federal income taxes but no state income taxes as they did not conduct any business operation in Delaware. The applicable tax rate is
F-21
Singapore
SonicHash Singapore and Bit Origin Singapore are incorporated in Singapore and are subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. SonicHash Singapore was struck off on September 4, 2024 and had
Loss before provision for income taxes consisted of:
|
| For the year |
| For the year |
| For the year | |||
| | ended | | ended | | ended | |||
| | June 30, 2025 | | June 30, 2024 | | June 30, 2023 | |||
Cayman | | $ | ( | | $ | ( | | $ | ( |
United States | |
| ( | |
| ( | |
| ( |
Canada | | | ( | | | ( | | | ( |
Singapore | | | — | | | ( | | | ( |
| | $ | ( | | $ | ( | | $ | ( |
The following table reconciles to the Group’s effective tax rate for the years ended June 30, 2025, 2024 and 2023:
|
| For the year | | For the year | | For the year | |
| | ended | | ended | | ended | |
| | June 30, |
| June 30, |
| June 30, | |
| | 2025 | | 2024 | | 2023 |
|
Federal statutory tax rate | | | % | | % | | % |
Weighted state statutory tax rate |
| | % | | % | | % |
Change in valuation allowance |
| ( | % | ( | % | ( | % |
Effective tax rate |
| — | % | — | % | — | % |
Significant components of deferred tax assets were as follows:
|
| June 30, |
| June 30, | ||
| | 2025 | | 2024 | ||
Deferred tax assets | | | | | | |
Net operating loss carryforward in the U.S. | |
| | |
| |
Net operating loss carryforward in Canada | | | | | | |
Net operating loss carryforward in Singapore | | | — | | | |
Valuation allowance | | | ( | | | ( |
Total net deferred tax assets | | $ | — | | $ | — |
As of June 30, 2025 and 2024, the Group’s net operating loss carry forward was approximately $
Uncertain tax positions
The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2025 and 2024, the Group did
F-22
Note 9 – Concentration of risks
Credit risk
Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash. In the U.S., the insurance coverage of each bank is $
The Group is also exposed to risk from its other receivables and loans receivable. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.
Note 10 – Convertible debentures
Convertible Debenture issued on October 21, 2022
On October 21, 2022, the Company entered into a Securities Purchase Agreement with the Investor pursuant to which the Company sold a Convertible Debenture (the “2022 Debenture”) in the original principal amount of $
Share price |
| $ | | |
Exercise price | | $ | | |
Expected terms (in years) | |
| | |
Expected volatility | |
| | % |
Annual rate of quarterly dividends | |
| — | % |
Risk free interest rate | |
| | % |
The fair value measurement of the convertible debentures is categorized as Level 2 under the Fair Value Hierarchy. The Company estimated the fair value of the 2022 Debenture over the payment term using the effective interest rate method, which is estimated to be $
The 2022 Debenture was convertible at an initial conversion price equal to $
The 2022 Debenture has a variable interest rate with a minimum of
In addition to a total of $
F-23
Convertible Debenture issued on December 29, 2023
On December 29, 2023, the Company entered into a Securities Purchase Agreement with the Investor pursuant to which the Company sold a Convertible Debenture (the “2023 Debenture”) in the original principal amount of $
Share price |
| $ |
| |
Exercise price | | $ | | |
Expected terms (in years) | |
| | |
Expected volatility | |
| | % |
Annual rate of quarterly dividends | |
| — | % |
Risk free interest rate | |
| | % |
The fair value measurement of the convertible debentures is categorized as Level 2 under the Fair Value Hierarchy. The Company estimated the fair value of the 2023 Debenture over the payment term using the effective interest rate method, which is estimated to be $
The 2023 Debenture is convertible at an initial conversion price equal to $
The 2023 Debenture has a variable interest rate with a minimum of
A total of $
Convertible Debenture issued on May 31, 2024
On May 31, 2024, the Company entered into an Exchange Agreement with the holder of the warrant, pursuant to which the Company will issue a senior secured convertible note in the principal amount of $
The fair value measurement of the cancelled warrants embedded with the Convertible Debenture issued on October 21, 2022 is categorized as Level 2 under the Fair Value Hierarchy. The Company estimated the fair value of the warrants using the Black-Scholes Options Pricing Model, which is estimated to be $
The Exchange Note is convertible at a conversion price equal to the greater of (x) $
The Exchange Note matures on May 31, 2026 and has an interest of ten percent (
F-24
Conversion of 2023 Debenture and Exchange Note
During the year ended June 30, 2025, the holder exercised its right to convert the entire outstanding obligations under the 2023 Debenture and Exchange Note in accordance with the pre-existing alternate conversion terms included in the original agreement. The Company issued a total of
The summary of all the convertible debentures activity is as follow:
|
| June 30, |
| June 30, | ||
| | 2025 | | 2024 | ||
Principal balance | | $ | | | $ | |
Less: conversions into ordinary shares | | | ( | | | ( |
Less: repayments in cash | | | ( | | | ( |
Remaining balance | | | — | | | |
Less: debentures discount and debts issuance cost | |
| — | |
| ( |
Total | | $ | — | | $ | |
Less: non-current | | | — | | | ( |
Total current | | $ | — | | $ | |
During the years ended June 30, 2025, 2024 and 2023, the Company made
Note 11 – Equity
Change of authorized shares
The Company had a share capital of $
On May 23, 2023, the Board of Directors of the Company approved a reverse share split of the Company’s outstanding ordinary shares at a ratio of one-for-thirty (-for-30) (the “Reverse Share Split”). The par value of the ordinary shares was increased in proportion to the ratio of the Reverse Share Split to $
On February 6, 2024, the Company was approved to increase the authorized ordinary shares from
On March 14, 2025, the shareholders of the Company adopted resolutions approving the following proposals to adopt a dual-class share capital structure at the annual general meeting of shareholders.
| (i) | All of the issued and outstanding ordinary shares of $ |
| (ii) |
F-25
| (iii) | the remaining authorized but unissued Ordinary Shares into Class A Ordinary Shares on a one for |
On July 25, 2025, the registration of reducing the par value of each issued and authorized share of the Company from $
Direct offerings and private placements
On November 7, 2023 and November 9, 2023, the Company entered into securities purchase agreements with investors for the sale of
Restricted shares issued for compensation
The Company granted RSUs to several management team members during the fiscal years of 2024 and 2023.
The summary of RSUs is as follows giving retroactive effect to the 1-to-30 Reverse Share Split effected on May 23, 2023:
| | | | | |
|
|
|
| Weighted | |
| | | | Average | |
| | | | Grant Date | |
| | | | Fair Value | |
| | Shares | | Per Share | |
Unvested as of June 30, 2022 |
| | | $ | |
Granted |
| | | $ | |
Forfeited |
| — | | $ | — |
Vested |
| ( | | $ | |
Unvested as of June 30, 2023 |
| | | $ | |
Granted |
| | | $ | |
Forfeited |
| ( | | $ | |
Vested |
| ( | | $ | |
Unvested as of June 30, 2024 |
| | | $ | |
F-26
Warrants
The summary of warrant activity is as follows giving retroactive effect to the 1-to-30 Reverse Share Split effected on May 23, 2023:
|
| |
| |
| Weighted |
| Average | |
| | | | | | Average | | Remaining | |
| | Warrants | | Exercisable | | Exercise | | Contractual | |
| | Outstanding | | Shares |
| Price |
| Life | |
June 30, 2022 |
| |
| | | $ | |
| |
Granted/Acquired | | | | | | $ | | | |
Forfeited | | | | | | $ | | | |
Exercised | | | | | | $ | | | |
June 30, 2023 | | | | | | $ | | | |
Granted/Acquired | | | | | | $ | | | |
Cancellation (see Note 10) | | ( | | ( | | $ | | | |
Exercised | | ( | | ( | | $ | | | |
June 30, 2024 | | | | | | $ | | | |
Granted/Acquired | | | | | | $ | | | |
Adjustment on down round feature* | | | | | | $ | | | |
Forfeited | | ( | | ( | | $ | | | |
Exercised | | ( | | ( | | $ | | | |
June 30, 2025 |
| |
| | | $ | |
| |
* The warrants contain a down round feature that provides for an adjustment to the exercise price and the number of warrant shares issuable upon exercise if the Company issues additional equity shares at a price lower than the current exercise price. During the year ended June 30, 2025, this down round feature was triggered, resulting in an adjustment of the exercise price to $
Note 12 – Segment reporting
The Group’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the Company has determined that it has only
F-27
The following table presents major accounts of operating results of the Group’s segment for the years ended June 30, 2025, 2024 and 2023.
| | For the Year Ended June 30, | |||||||
|
| 2025 |
| 2024 |
| 2023 | |||
Revenues | | $ | | | $ | | | $ | |
Cost of revenues | |
| — | |
| ( | |
| ( |
Segment gross profit (loss) | |
| | |
| ( | |
| ( |
Salaries and benefits expenses | |
| ( | |
| ( | |
| ( |
Professional services expenses | |
| ( | |
| ( | |
| ( |
Impairment losses | |
| — | |
| ( | |
| ( |
Recovery of (provision for) credit losses | |
| | |
| ( | |
| ( |
Other operating expenses | |
| ( | |
| ( | |
| ( |
Total operating expenses | |
| ( | |
| ( | |
| ( |
Segment operating loss | |
| ( | |
| ( | |
| ( |
Other (expenses) income, net | |
| ( | |
| ( | |
| |
Segment net loss | | $ | ( | | $ | ( | | $ | ( |
Note 13 – Commitments and contingencies
Commitments
As of June 30, 2025, the Group had no material commitments that are required to be disclosed.
Litigation contingencies
In March 2023, Bit Origin and SonicHash US, along with other named entities, were named as defendants in a state court civil lawsuit filed in Cheyenne, Wyoming by BCB Cheyenne LLC (“BCB” or “Plaintiff”) who had contractual relationship with two of the named defendants, MineOne Wyoming Data Center LLC, the other with Terra Crypto, Inc. Defendant alleges these parties breached their respective contracts. For its part, Bit Origin and SonicHash US, who had no relationship with BCB, were nevertheless alleged to have intentionally interfered with BCB’s contractual relationships with these other parties. Both Bit Origin and SonicHash US were also named as what is known as an “alter ego” defendant pursuant to which a party may be found liable if its later discovered it was acting, in essence, as the alter ego of the primary wrongdoer. Prior to the Group discovering it had been named in this Wyoming lawsuit, the case had been dismissed but simultaneously recommenced in the U.S. District Court in Wyoming against the same parties, with substantively the same causes of action. Bit Origin and SonicHash US were made aware of and appeared in this new federal court litigation denying all material allegations alleged against each of them.
In September 2023, BCB filed an amended complaint to add parties and substitute parties in place of others but leaving Bit Origin and Sonichash US as named defendants accused of intentionally interfering with BCB’s contractual relations. Once again, both companies were also alleged to be alter egos of the primary wrongdoers. In its lawsuit, BCB seeks “no less than $
The parties mediated this dispute from August 6 to August 8, 2024 and entered into a Settlement Agreement and Mutual Release on October 14, 2024, pursuant to which BTOG agreed to pay $
On October 14, 2024, the court dismissed the lawsuit, granting full releases to all defendants and officially concluding the matter.
F-28
Note 14 – Subsequent events
Down round and exercise of warrants
Subsequent to June 30, 2025, in July 2025, pre-existing down round features in the Company’s outstanding warrants were triggered. In accordance with these provisions, the exercise price of the warrants associated with the 2022 Debenture and 2023 Debenture was adjusted to $
Issuance of senior secured convertible notes
On July 13, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain buyers (the “Buyers”) for the sale of Senior Secured Convertible Notes convertible into Class A Ordinary Shares. The Purchase Agreement contains customary representations, warranties, and events of default. In connection with the agreement, the Company completed initial closings, issuing
Issuance of Class A Ordinary Shares
On July 13, 2025, the Company entered into an EPFA with an accredited investor, committing the investor to purchase up to $
Strategic asset acquisition
On July 21, 2025, the Company purchased approximately
The Group has evaluated all events and transactions that occurred after June 30, 2025 up through October 31, 2025, except for those disclosed above, there were no other subsequent events occurred that would require recognition or disclosure in the consolidated financial statements.
F-29
Exhibit 2.15
DESCRIPTION OF SECURITIES
A summary of the material provisions governing our securities registered pursuant to Section 12(b) of the Exchange Act of 1934, as amended (the “Exchange Act”) is provided below. This summary is not complete and should be read together with our second amended and restated memorandum and articles of association (the “Articles”), a copy of which is filed with the U.S. Securities Exchange and Commission (the “SEC”). References herein to “we,” “us,” “our,” “BTOG” and the “Company” are to Bit Origin Ltd.
We are a Cayman Islands exempted company and our affairs are governed by our Articles and the Companies Act of the Cayman Islands, which we refer to as the Companies Act below (each as amended or modified from time to time). As of the date of the annual report of which this Description of Securities forms a part, we have the following series of securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class |
| Trading |
| Name of Each Exchange On Which |
Class A Ordinary shares, par value $0.000001 per | | BTOG | | The Nasdaq Stock Market LLC |
As provided in the Articles, our authorized share capital consists of 15,000,000,000 ordinary shares, par value $0.000001 per share, comprising of 14,250,000,000 Class A Ordinary Shares, par value US$0.000001 per share (the “Class A Ordinary Shares”) and 750,000,000 Class B Ordinary Shares, par value US$0.000001 per share (the “Class B Ordinary Shares”).
Ordinary Shares
General
Each Class A Ordinary Share in the Company confers upon the shareholder:
| ● | the right to one (1) vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
Each Class B Ordinary Share in the Company confers upon the shareholder:
| ● | the right to twenty (20) votes at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | no rights to receive dividends, unless otherwise determined by the board of directors; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
All of our issued Class A and Class B Ordinary Shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form.
Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one-for-one basis at the option of the holder. The conversion ratio is subject to adjustment to reflect any share split, subdivision, consolidation, capitalization, reclassification, recapitalization, or similar event that affects either class of shares. Class A Ordinary Shares are not convertible into Class B Ordinary Shares.
Voting Together as a Single Class. Except as otherwise provided by law or our Articles, holders of Class A and Class B Ordinary Shares vote together as a single class on all matters submitted to a shareholder vote.
Except as described above, the Class A Ordinary Shares and Class B Ordinary Shares rank pari passu and have the same rights, preferences, privileges and restrictions.
Listing
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “BTOG.” The Class B Ordinary Shares are not listed or traded on any exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares and Class B Ordinary Shares is Securities Transfer Corporation.
Dividends and Distributions
The holders of our Class A Ordinary Shares are entitled to such dividends or other distributions as may be recommended by the board and authorized by shareholders subject to the Cayman Islands Companies Act and our memorandum and articles of association. Holders of Class B Ordinary Shares do not have dividend rights. Holders of Class A Ordinary Shares and Class B Ordinary Shares are entitled to the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
Shareholders’ voting rights
Any action required or permitted to be taken by the shareholders must be taken at a duly called annual or special meeting of the shareholders entitled to vote on such action and may be effected by a resolution of shareholders consented to in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a corporation, by its duly authorized representative) will have one vote per Class A Ordinary Share and twenty votes per Class B Ordinary Share held.
Ordinary resolution requires to be passed by a simple majority of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting, or a written resolution signed by all shareholders entitled to vote at a general meeting.
Special resolution requires to be passed by a majority of at least two-thirds of the votes of such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given, or a written resolution signed by all shareholders entitled to vote at a general meeting and otherwise in accordance with our memorandum and articles of association and the Cayman Islands Companies Act.
Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of Cayman Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in Cayman Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.
The Company may by ordinary resolution or by resolution of the directors at any time, and from time to time, appoint a person as an additional director or persons as additional directors. The Company may by ordinary resolution or by resolution of the directors remove a director before the expiration of his period of office, and may by ordinary resolution or by resolution of the directors appoint another person in his stead.
Our memorandum and articles of association provides that the remuneration of the directors shall from time to time be determined by the Company in general meeting or by resolution of the directors or any committee of the directors. The directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by
them in going to, attending and returning from meetings of the directors, or any committee of the directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the directors from time to time, or a combination partly of one such method and partly the other.
Meetings of shareholders
Any of our directors may convene a meeting of shareholders whenever they think fit. We must provide at least seven days’ written notice (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) of all meetings of shareholders, stating the time, place of the general meeting and, in the case of special business, the general nature of that business to shareholders whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors must convene a general meeting upon the written request of one or more shareholders holding at least 10% of our shares.
No business may be transacted at any general meeting unless a quorum is present at the time the meeting proceeds to business. One or more shareholders holding in the aggregate not less than one-third of the total issue share capital of the Company present in person or by proxy and entitled to vote shall be a quorum. If, within half an hour from the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may transact the business for which the meeting was called. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.
A corporation that is a shareholder shall be deemed for the purpose of our articles of association to be present at a general meeting in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting, by a resolution of the directors or by one or more shareholders present in person or by a proxy who together hold not less than fifteen per cent of the paid up capital of the Company entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
Meeting of directors
The management of our company is entrusted to our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside Cayman Islands as the directors determine to be necessary or desirable. A director must be given not less than 5 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if at least two directors are present. If there is a sole director, that director shall be a quorum. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
Protection of minority shareholders
We would normally expect Cayman Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of minority shareholders (such as the
right to vote and pre-emptive rights), and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new shares under either Cayman Islands law or our memorandum and articles of association.
Transfer of Class A Ordinary Shares and Class B Ordinary Shares
Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A Ordinary Shares and Class B Ordinary Shares by written instrument of transfer signed by the transferor and containing the name of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Class A Ordinary Shares and Class B Ordinary Shares without giving any reason.
Winding Up
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the paid up capital at the commencement of the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid up capital, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Cayman Islands Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not), and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
The liquidator may also vest the whole or any part of these assets in trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.
Calls on and forfeiture of Class A Ordinary Shares and Class B Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A Ordinary Shares and Class B Ordinary Shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The Class A Ordinary Shares and Class B Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture.
Repurchase of Class A Ordinary Shares and Class B Ordinary Shares
We are empowered by the Cayman Islands Companies Act to purchase our own shares, subject to certain restrictions and requirements. Our directors may only exercise this power on our behalf, subject to the Cayman Islands Companies Act, our memorandum and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the SEC, or by any other recognized stock exchange on which our securities are listed. Under the Cayman Islands Companies Act, the repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital (including share premium account and capital redemption reserve). If the repurchase proceeds are paid out of our company’s capital, our company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Islands Companies Act no such share may be repurchased (1) unless it is fully paid up, (2) if such repurchase would result in there being no shares outstanding, or (3) if the company is being wound up and: (a) the terms of the repurchase provided for it to take place after the commencement of the
winding up; or (b) during the period beginning on the date when the repurchase was to have taken place and ending with the commencement of the shares were to have been repurchased. In addition, under the Cayman Islands Companies Act, our company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares).
Subject to the provisions of the Cayman Islands Companies Act and our memorandum and articles of association, the Company may purchase its own Shares, including any redeemable shares, provided that the manner of purchase has first been authorized by ordinary resolution or by resolution of the directors and may make payment therefor or for any redemption of shares in any manner authorized by the Cayman Islands Companies Act, including out of capital.
Modifications of rights
All or any of the special rights attached to any class of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by not less than three-fourths of such shareholders of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of shareholders in the requisite majorities:
| ● | amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue; |
| ● | Divide our authorized and issued shares into a larger number of shares; and |
| ● | combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Holders of our Class A Ordinary Shares and Class B Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Issuance of additional Class A Ordinary Shares and Class B Ordinary Shares
Our memorandum and articles of association authorizes our board of directors to issue additional Class A Ordinary Shares and Class B Ordinary Shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.
Comparison of Cayman Islands Corporate Law and U.S. Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions
of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements
In certain circumstances the Cayman Islands Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of 66 2/3 % in value) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association.
A shareholder has the right to vote on a merger or consolidation regardless of whether the shares that he holds otherwise give him voting rights. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company.
The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the director of the Cayman Islands company is required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands company, the director of the Cayman Islands company is further required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides for a right of dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c)
a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree on the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; (e) if the company and the shareholder fail to agree on a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not be available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedure of which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
| ● | we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with; |
| ● | the shareholders have been fairly represented at the meeting in question; |
| ● | the arrangement is such that a business person would reasonably approve; and |
| ● | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.” |
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Squeeze-out Provisions
When a takeover offer is made and accepted by holders of 90% of the shares to whom the offer is made within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits
Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
| ● | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
| ● | the act complained of, although not beyond the scope of the authority, could be affected if duly authorized by more than the number of votes which have actually been obtained; or |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Indemnification of Directors and Executive Officers and Limitation of Liability
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.
Our Articles permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty or fraud of such directors or officers.
This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, our offer letters to our independent directors and our employment agreements with our executive officers provide such persons with additional indemnification beyond that provided in our Articles.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties
Under Delaware General Corporation Law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he or she owes the following duties to the company: a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so), and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have
moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
Shareholder Action by Written Consent
Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent in its certificate of incorporation. Our amended and restated articles of association provide that shareholders may not approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
Shareholder Proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual general meeting, provided it complies with the notice provisions in the governing documents. An extraordinary general meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
Cayman Islands law does not provide shareholders any right to put proposals before a general meeting or requisition a general meeting. However, these rights may be provided in articles of association. Our amended and restated articles of association allow our shareholders holding not less than 10% of all voting power of our share capital in issue to requisition a general meeting. Other than this right to requisition a general meeting, our current articles of association do not provide our shareholders other rights to put a proposal before a meeting. As an exempted Cayman Islands company, we are not obliged by law to call annual general meetings.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our amended and restated articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any fewer protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our amended and restated articles of association, directors may be removed with or without cause, by an ordinary resolution as a matter of Cayman Islands law (which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company).
Transactions with Interested Shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute in its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an
interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Act and our amended and restated articles of association, our company may be wound up, liquidated or dissolved by a special resolution of our shareholders.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our amended and restated articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our Articles may only be amended with a special resolution of our shareholders.
Anti-Money Laundering-Cayman Islands
If any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Securities Convertible or Exercisable into Class A Ordinary Shares
Warrants Issued Pursuant to Certain Securities Purchase Agreement dated December 7, 2023
On December 7, 2023, the Company entered into the securities purchase agreement with an accredited investor pursuant to which the Company sold a note (the “December 2023 Note”) in the original principal amount of $6,740,000 and the warrants (the “December 2023 Warrants”) to initially purchase 1,070,719 ordinary shares of the Company, at a purchase price of $6,127,334.
On December 29, 2023, the Company completed the issuance of December 2023 Warrants. The gross proceeds were $6,127,334, prior to deducting transaction fees and estimated expenses. The December 2023 Note has retired.
The December 2023 Warrants have a ten-year and six month term and an initial exercise price of $15.00 per share (subject to reset and adjustment thereunder), and include anti-dilution adjustments in the event any ordinary shares or other equity or equity equivalent securities payable in ordinary shares are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), in each case, at a price less than the exercise price then in effect, which automatically decreases the exercise price of the December 2023 Warrants upon the occurrence of such event, and increases the number of ordinary shares issuable upon exercise of the December 2023 Warrants, such that the aggregate exercise price of all December 2023 Warrants remains the same before and after any such dilutive event. The December 2023 Warrants also provide for cashless exercise if the December 2023 Warrants are not registered within 12 months after the closing. In addition, on September 30, 2024 (the “Reset Date”), if the VWAP of the ordinary shares on any trading day during the ten (10) trading day period ending, and including, the trading day immediately prior to the Reset Date (as adjusted for share splits, share dividends, share combinations, recapitalizations and similar events during such measuring period) (the “ Reset Price”) is less than the exercise price then in effect, the exercise price shall be automatically reduced to the Reset Price.
Warrants Issued Pursuant To Securities Purchase Agreement Dated November 22, 2021
On November 22, 2021, the Company entered into a securities purchase agreement (the “2021 Securities Purchase Agreement”) with certain non-affiliated investors pursuant to which the Company agreed to sell 17,175,412 ordinary shares, par value $0.01 per share, in a registered direct offering and warrants to purchase up to 17,175,412 ordinary shares (572,514 ordinary shares after Reverse Share Split) (the “2021 Investor Warrants”) in a concurrent private placement, for gross proceeds of approximately $16.5 million (the “November 2021 Offering”). The purchase price for each ordinary share and the corresponding 2021 Investor Warrant was US$0.96. The 2021 Investor Warrants became exercisable on January 23, 2022, which is 60 days from the date of issuance, and will expire on November 24, 2026. The 2021 Investor Warrants have an exercise price of $1.008 per share (US$30.24 after Reverse Share Split), which is 105% of the purchase price. Each 2021 Investor Warrant is subject to anti-dilution provisions to reflect share dividends and splits or other similar transactions, as described in the 2021 Investor Warrants.
The 17,175,412 ordinary shares (572,514 ordinary shares after Reverse Share Split) were issued to the purchasers in a registered direct offering and registered under the Securities Act, pursuant to a prospectus supplement filed with the SEC on November 23, 2021 to the Company’s currently effective registration statement on Form F-3 (File No. 333-238700), which was initially filed with the SEC on May 26, 2020 and declared effective by the SEC on July 7, 2020. The 2021 Investor Warrants were issued to the purchasers in a concurrent private placement pursuant to an exemption from the registration requirements of the Securities Act provided in Regulation S promulgated thereunder.
The Company has filed and agreed to maintain with the SEC a registration statement that registers the 2021 Investor Warrants within 45 calendar days from the closing of the Offering and to use commercially reasonable efforts to cause such registration statement to become effective within 75 calendar days following the closing of the November 2021 Offering.
The November 2021 Offering was conducted pursuant to a placement agency agreement, dated November 22, 2021, between the Company and Univest Securities, LLC. Univest Securities, LLC agreed to use its “reasonable
best efforts” to solicit offers to purchase the shares and the 2021 Investor Warrants. The Company agreed to pay Univest Securities, LLC a total cash fee equal to five point five percent (5.5%) of the aggregate gross proceeds raised in the November 2021 Offering. The Company also agreed to reimburse Univest Securities, LLC for all travel and other out-of-pocket expenses, including the reasonable fees, costs and disbursements of its legal fees which shall be limited to, in the aggregate, US $75,000. The Company further agreed that, in addition to the accountable expenses, it would pay Univest Securities, LLC a non-accountable expense allowance equal to one percent (1%) of the aggregate gross proceeds raised in the November 2021 Offering.
Additionally, the Company issued to Univest Securities, LLC warrants for the purchase of 858,771 ordinary shares (28,626 ordinary shares after Reverse Share Split) (equal to 5% of the aggregate number of ordinary shares sold to in the November 2021 Offering), with an exercise price of $0.96 per share (US$28.80 after Reverse Share Split) (equal to 100% of the offering price in the November 2021 Offering). Such warrants were first exercisable on May 24, 2022, which is six months after the closing of the November 2021 Offering and will expire on November 24, 2026.
Furthermore, the Company granted Univest Securities, LLC a right of first refusal, for a period of twelve months from the closing of the November 2021 Offering, to provide investment banking services to the Company on an exclusive basis in all matters for which investment banking services are sought by the Company (such right, the “Right of First Refusal”), which right is exercisable in the placement agent’s sole discretion. For these purposes, investment banking services shall include, without limitation, (a) acting as lead manager for any underwritten public offering; (b) acting as exclusive placement agent, initial purchaser or financial advisor in connection with any private offering of securities of the Company; and (c) acting as financial advisor in connection with any sale or other transfer by the Company, directly or indirectly, of a majority or controlling portion of its capital stock or assets to another entity, any purchase or other transfer by another entity, directly or indirectly, of a majority or controlling portion of the capital stock or assets of the Company, and any merger or consolidation of the Company with another entity. The Right of First Refusal may be terminated by the Company for “cause,” which shall mean a material breach by the placement agent of the terms of its engagement letter with the Company or a material failure by the placement agent to provide the services as contemplated by such engagement letter.
The November 2021 Offering closed on November 24, 2021. The Company used the proceeds from the November 2021 Offering to purchase mining equipment and for working capital and general business purposes.
The Company agreed in the 2021 Securities Purchase Agreement that it would not issue any ordinary shares or ordinary share equivalents for 60 days following the closing of the November 2021 Offering subject to certain exceptions. The Company also agreed that it will not issue any ordinary shares or ordinary share equivalents involve in a variable rate transaction (as defined in the 2021 Securities Purchase Agreement) until no purchaser holds any of the 2021 Investor Warrants.
Concurrently with the execution of the 2021 Securities Purchase Agreement, the officers and directors of the Company and shareholders of the Company holding 10% or more of the Company’s ordinary shares entered into lock-up agreements, pursuant to which they have agreed, among other things, not to sell or dispose of any ordinary shares which are or will be beneficially owned by them for ninety (90) days following the closing of the November 2021 Offering.
Warrants Issued Pursuant To Securities Purchase Agreement Dated January 30, 2022
The Company entered into a certain securities purchase agreement dated January 28, 2022, as amended on January 30, 2022 (the “2022 Securities Purchase Agreement”) with certain non-affiliated investors pursuant to which the Company agreed to sell 18,124,400 ordinary shares (604,147 ordinary shares after Reverse Share Split), in a registered direct offering, and warrants to purchase up to 18,124,400 ordinary shares (604,147 ordinary shares after Reverse Share Split) (the “2022 Investor Warrants”) in a concurrent private placement, for gross proceeds of US$16,130,716 million (the “January 2022 Offering”). The purchase price for each Share and the corresponding Warrant was US$0.89. The 2022 Investor Warrants are exercisable 60 days from the date of issuance and have an exercise price of US$1.008 per share (US$30.24 after Reverse Share Split). The 2022 Investor Warrants will expire five years from the date of issuance. Each 2022 Investor Warrant is subject to anti-dilution provisions to reflect share dividends and splits or other similar transactions, as described in the Warrants.
The 18,124,400 ordinary shares (604,147 ordinary shares after Reverse Share Split) were issued to the purchasers in a registered direct offering and registered under the Securities Act, pursuant to a prospectus supplement filed with the SEC on November 23, 2021 to the Company’s currently effective registration statement on Form F-3 (File No. 333-238700), which was initially filed with the SEC on May 26, 2020 and declared effective by the SEC on July 7, 2020. The 2022 Investor Warrants were issued to the purchasers in a concurrent private placement pursuant to an exemption from the registration requirements of the Securities Act provided in Regulation S promulgated thereunder.
The Company agreed in the 2022 Securities Purchase Agreement that it would not issue any ordinary shares or ordinary share equivalents for sixty (60) days following the closing of the January 2022 Offering subject to certain exceptions. The Company also agreed that it will not issue any ordinary shares or ordinary share equivalents involve in a Variable Rate Transaction (as defined in the Purchase Agreement) until no purchaser holds any of the 2022 Investors Warrants.
The Company has agreed to file and maintain with the SEC a registration statement to register the Warrants within 45 calendar days from the closing of the January 2022 Offering and to use commercially reasonable efforts to cause such registration statement to become effective within 75 calendar days following the closing of the January 2022 Offering.
The January 2022 Offering was conducted pursuant to a placement agency agreement, dated January 28, 2022, as amended on January 30, 2022, between the Company and Univest Securities, LLC as the placement agent. Univest Securities, LLC has agreed to use its “reasonable best efforts” to solicit offers to purchase the shares and the 2022 Investor Warrants. Univest Securities, LLC has no obligation to purchase any of the shares or the 2022 Investor Warrants or to arrange for the purchase or sale of any specific number or dollar amount of Shares or 2022 Investor Warrants. The Company has agreed to pay Univest Securities, LLC a total cash fee equal to five point five percent (5.5%) of the aggregate gross proceeds raised in the January 2022 Offering. The Company has also agreed to reimburse Univest Securities, LLC for all travel and other out-of-pocket expenses, including the reasonable fees, costs and disbursements of its legal fees which shall be limited to, in the aggregate, US$75,000. The Company further agrees that, in addition to the expenses payable to Univest Securities, LLC, it shall pay Univest Securities, LLC a non-accountable expense allowance equal to one percent (1%) of the aggregate gross proceeds raised in the January 2022 Offering.
Additionally, the Company issued to the Univest Securities, LLC warrants (for the purchase of 906,220 ordinary shares (30,207 ordinary shares after Reverse Share Split) (equal to 5% of the aggregate number of shares sold to the purchasers in this offering), with an exercise price of US$0.89 per share (US$26.70 after Reverse Share Split) (equal to 100% of the share offering price in the January 2022 Offering). Such warrants have a term of five years from the commencement of sales of the January 2022 Offering and are first exercisable six months after the closing of the January 2022 Offering.
Furthermore, the Company granted Univest Securities, LLC a right of first refusal, for a period of twelve months from the closing of the January 2022 Offering, to provide investment banking services to the Company on an exclusive basis in all matters for which investment banking services are sought by the Company (such right, the “Right of First Refusal”), which right is exercisable in the placement agent’s sole discretion. For these purposes, investment banking services shall include, without limitation, (a) acting as lead manager for any underwritten public offering; (b) acting as exclusive placement agent, initial purchaser or financial advisor in connection with any private offering of securities of the Company; and (c) acting as financial advisor in connection with any sale or other transfer by the Company, directly or indirectly, of a majority or controlling portion of its capital stock or assets to another entity, any purchase or other transfer by another entity, directly or indirectly, of a majority or controlling portion of the capital stock or assets of the Company, and any merger or consolidation of the Company with another entity. The Right of First Refusal may be terminated by the Company for “cause,” which shall mean a material breach by the placement agent of the terms of its engagement letter with the Company or a material failure by the placement agent to provide the services as contemplated by such engagement letter.
The January 2022 Offering closed on February 2, 2022. The Company used the proceeds from the January 2022 Offering to purchase mining equipment and for working capital and general business purposes.
The Company agreed in the 2022 Securities Purchase Agreement that it would not issue any ordinary shares or ordinary share equivalents for 60 days following the closing of the January 2022 Offering subject to certain exceptions. The Company also agreed that it will not issue any ordinary shares or ordinary share equivalents involve in a variable rate transaction (as defined in the 2022 Securities Purchase Agreement) until no purchaser holds any of the 2022 Investor Warrants.
Concurrently with the execution of the 2022 Securities Purchase Agreement, the officers and directors of the Company and shareholders of the Company holding 10% or more of the Company’s ordinary shares entered into lock-up agreements, pursuant to which they have agreed, among other things, not to sell or dispose of any ordinary shares which are or will be beneficially owned by them for ninety (90) days following the closing of the January 2022 Offering.
Warrants Issued Pursuant To Certain Underwriting Agreement Dated June 3, 2022
The Company entered into an underwriting agreement dated June 3, 2022 with Univest Securities, LLC, as the underwriter, pursuant to which the Company agreed to sell 9,803,922 ordinary shares (326,798 ordinary shares after Reverse Share Split) on a firm commitment basis, for gross proceeds of approximately $5 million (the “June 2022 Offering”). The purchase price for each share was US$0.51.
The shares are registered under the Securities Act, pursuant to a prospectus supplement to the Company’s currently effective registration statement on Form F-3 (File No. 333-238700), which was initially filed with the SEC on May 26, 2020 and declared effective by the SEC on July 7, 2020. The Company filed the prospectus supplement for the Offering on June 7, 2022.
The Company agreed in the underwriting agreement that it would not issue any ordinary shares or ordinary share equivalents for ninety (90) days following the closing of the June 2022 Offering subject to certain exceptions.
The Company also agreed that it will not issue any ordinary shares or ordinary share equivalents in a Variable Rate Transaction (as defined in the underwriting agreement).
Pursuant to the underwriting agreement, the Company has agreed to grant the underwriter a discount equal to six and a half percent (6.5%) of the gross proceeds of the Offering. The Company also agreed to reimburse the underwriter for its out-of-pocket accountable expenses relating to the Offering in an amount not to exceed an aggregate of US$75,000, and to pay to the underwriter a non-accountable expense allowance equal to one percent (1%) of the gross proceeds of the Offering. Additionally, the Company has agreed to issue to the underwriter warrants to purchase up to a total of 490,196 ordinary shares (16,340 ordinary shares after Reverse Share Split) (equal to five percent (5%) of the ordinary shares sold in this offering) (or 563,726 ordinary shares (18,791 ordinary shares after Reverse Share Split) if the underwriter exercises the overallotment option in full) for an aggregate purchase price of US$100 (the “Underwriter’s Warrants”). Such Underwriter’s Warrants will be exercisable at US$0.51 per share (US$15.30 after Reverse Share Split), which is equal to the public offering price for the ordinary shares in this offering. Such Underwriter’s Warrants will be exercisable six months from the date of issuance and will expire five (5) years from the commencement of sales of this offering, subject to certain adjustments.
Concurrently with the execution of the underwriting agreement, the officers and directors of the Company and shareholders of the Company holding 5% or more of the Company’s ordinary shares entered into lock-up agreements pursuant to which they have agreed, among other things, not to sell or dispose of any ordinary shares which are or will be beneficially owned by them for ninety (90) days from the date of such lock up agreement.
The June 2022 Offering closed on June 7, 2022.
In addition, pursuant to the underwriting agreement, the Company granted the underwriter a 45-day option to purchase an additional 1,470,588 ordinary shares (49,020 ordinary shares after Reverse Share Split), representing up to 15% of the number of the shares sold in the Offering, solely to cover over-allotments, if any. On June 27, 2022, the underwriter fully exercised the Over-allotment Option, and on June 29, 2022, the Company closed the offering of the Option Shares, for aggregate gross proceeds of approximately $5.75 million less applicable underwriting discounts
and other offering fees and expenses. In connection with such closing and pursuant to the underwriting agreement, the Company issued to the Underwriter warrants to purchase up to 73,530 ordinary shares (2,451 ordinary shares after Reverse Share Split), representing 5% of the ordinary shares issued and sold in the over-allotments, at an initial exercise price of $0.51 per share (US$15.30 after Reverse Share Split), subject to certain adjustments.
The Company used the net proceeds from the June 2022 Offering for working capital and general business purposes.
Exhibit 4.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the “AGREEMENT”) is made and entered into on April 10, 2024 by and between Jinghai Jiang, a Chinese citizen under ID *** (the “Employee”) and Bit Origin Ltd, a Cayman Islands company (the “COMPANY”).
WHEREAS, the Company and the Employee desire to enter into this Agreement to memorialize the terms and conditions of the Employee’s employment with the Company starting on the date hereof.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and representations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Article I.Employment; Responsibilities; Compensation
Section 1.01Employment. Subject to ARTICLE III, the Company hereby agrees to employ the Employee and the Employee hereby agrees to be employed by the Company, in accordance with this Agreement, for the period commencing on April 10, 2024 and ending on April 9, 2027 (“INITIAL TERM”). the Initial Term shall automatically be extended one additional year unless either party gives written notice to the other party 60 days prior to expiration of the Initial Term that it or she, as applicable, does not wish to extend this Agreement. The Employee’s continued employment after the expiration of the Initial Term shall be in accordance with and governed by this Agreement, unless modified by the parties to this Agreement in writing. For purposes of this Agreement the Initial Term and any extended term shall be referred to as the “TERM”.
Section 1.02Responsibilities; Loyalty
(a)Subject to the terms of this Agreement, the Employee is employed in the position of Chief Executive Officer, Chief Operating Officer, Chairman of the Board and director of the Company, and shall perform the functions and responsibilities of that position. Additional or different duties may be assigned by the Company from time to time. The Employee’s position, job descriptions, duties and responsibilities maybe modified from time to time in the sole discretion of the Company.
(b)The Employee shall devote the whole of the Employee’s professional time, attention and energies to the performance of the Employee’s work. The Employee agrees to comply with all policies of the Company, if any, in effect from time to time, and to comply with all laws, rules and regulations, including those applicable to the Company.
Section 1.03Compensation and Benefits. As consideration for the services and covenants described in this Agreement, the Company agrees to compensate the Employee in the following manner:
(a)Base Salary. Commencing in April 2024 and for three consecutive fiscal years during the Employee’s employment with the Company, the Company shall pay annual Base Salary of US$ 50,000 to the Employee from the first year, as will be increased by 6% from the next year. Annual Base Salary may also be increased from time to time by action of the Board of Directors of the Company (or any committees or delegees thereof) (the “BOARD”). Termination of the employment shall forfeit the rights to such annual Base Salary. The Compensation shall also be subject to the approval of Company’s Board of Directors and/or Compensation Committees.
(b)Over-time Allowance. The Employee is eligible to receive the overtime rates of 200% where the Employee works in excess of the ordinary hours of work (8 hours per day)
(c)Vacation. Five (5) working days in the first year and will be increased by one (1) day from the next year during the Initial Term. The Employee may not carry over any unused vacation from prior years. All the unused vacation will be reimbursed based on Base Salary.
(d)Sick Leave. Absence due to personal illness, excluding pregnancy, shall be allowed up to ten (10) working days per calenda year, and shall not be accumulative from year to year. The Employee shall provide the corresponding medical records for the out-patient treatment / hospitalization to apply for sick leave.
(e)Other statutory holidays. The Company shall comply other holidays in accordance with the relevant laws and regulations of the location where the employee is located.
(f)Benefit.
(i)The Company shall pay a signing bonus totaling US$ 2,000 to the Employee to procure work laptop/desktop and essential stationery. In the event of Termination of Employment as defined in Article III during the Term, the employee shall promptly pay back the signing bonus of US$ 2,000 to the Company.
(ii)The Company reserves to itself, or its designated administrators, exclusive authority and discretion to determine all issues of eligibility, interpretation and administration of any Company benefit plan or policy. The Company’s employee benefits, and policies related thereto, are subject to termination, modification or limitation at the Company’s sole discretion.
(g)Payment of all compensation to the Employee shall be made in accordance with the terms of this Agreement, applicable state or federal law, and applicable Company policies in effect from time to time, including normal payroll practices, and shall be subject to all applicable withholdings and taxes.
Section 1.04Business Expenses. The Company shall reimburse the Employee for all business expenses that are reasonable and necessary and incurred by the Employee while performing his duties under this Agreement, upon presentation of expense statements, receipts and/or vouchers or such other information and documentation as the Company may reasonably require.
Article II.Confidential Information; Post-Employment Obligations; Company Property
Section 2.01Company Property. As used in this Article II, the term the “Company” refers to the Company and each of its direct and indirect subsidiaries. All written materials, records, data and other documents relating to Company business, products or services prepared or possessed by the Employee during the Employee’s employment by the Company are the Company’s property. All information, ideas, concepts, improvements, discoveries and inventions that are conceived, made, developed or acquired by the Employee individually or in conjunction with others during the Employee’s employment (whether during business hours and whether on Company’s premises or otherwise) that relate to Company business, products or services are the Company’s sole and exclusive property. All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps and all other documents, data or materials of any type embodying such information, ideas, concepts, improvements, discoveries and inventions are Company property. At the termination of the Employee’s employment with the Company for any reason, the Employee shall return all of the Company’s documents, data or other Company property to the Company.
Section 2.02Confidential Information; Non-Disclosure.
(a)The Employee acknowledges that the business of the Company is highly competitive and that the Company will provide the Employee with access to Confidential Information. the Employee acknowledges that this Confidential Information constitutes a valuable, special and unique asset used by the Company in its business to obtain a competitive advantage over competitors. The Employee further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company in maintaining its competitive position. The Employee agrees that the Employee will not, at any time during or after the Employee’s employment with the Company, make any unauthorized disclosure of any Confidential Information of the Company, or make any use thereof, except in the carrying out of the Employee’s employment responsibilities to the Company. The Employee also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Company’s Confidential Information.
(b)For purposes hereof, “CONFIDENTIAL INFORMATION” includes all non-public information regarding the Company’s business operations and methods, existing and proposed investments and investment strategies, seismic, well-log and other geologic and oil and gas operating and exploratory data, financial performance, compensation arrangements and amounts (whether relating to the Company or to any of its employees), contractual relationships, business partners and relationships (including customers and suppliers), strategies, business plans and other confidential information that is used in the operation, technology and business dealings of the Company, regardless of the medium in which any of the foregoing information is contained, so long as such information is actually confidential and proprietary to the Company.
Section 2.03Non-Solicitation of the Employees. For a period of six (6) months following the Termination Date, The Employee will not, either directly or indirectly, call on, solicit or induce any other the Employee or officer of the Company or its affiliates with whom the Employee had contact, knowledge of, or association with in the course of employment with the Company to terminate his employment, and will not assist any other person or entity in such a solicitation; PROVIDED, HOWEVER, that with respect to soliciting any the Employee or officer whose employment was terminated by the Company
or its affiliates, or general solicitations for employment not targeted at current officers or employees of the Company or its affiliates, the foregoing restriction shall not apply.
Article III.Termination of Employment
Section 3.01Termination of Employment.
(a)General: The rights of the Employee upon termination will be governed by this ARTICLE III.
(b)Definitions: For purposes hereof:
(i)“CAUSE” shall include (A) continued failure by the Employee to perform substantially the Employee’s duties and responsibilities (other than a failure resulting from Permanent Disability) that is materially injurious to the Company and that remains uncorrected for 10 days after receipt of appropriate written notice from the Board; (B) engagement in willful, reckless or grossly negligent misconduct that is materially injurious to Company or any of its affiliates, monetarily or otherwise; (C) except as provided by (D), the indictment of the Employee with a crime involving moral turpitude or a felony; (D) the indictment of the Employee for an act of criminal fraud, misappropriation or personal dishonesty; or (E) a material breach by the Employee of any provision of this Agreement that is materially injurious to the Company and that remains uncorrected for 10 days following written notice of such breach by the Company to the Employee identifying the provision of this Agreement that Company determined has been breached. For purposes of (C) and (D), if the criminal charge is subsequently dismissed with prejudice or the Employee is acquitted at trial or on appeal then the Employee will be deemed to have been terminated without Cause.
(ii)“CHANGE OF CONTROL” means the occurrence of any one or more of the following events that occurs after the Effective Date:
1)Any “person” (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “EXCHANGE ACT”)) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors; or
2)The consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) a liquidation or dissolution of the Company.
(iii)“GOOD REASON” shall mean one or more of the following conditions arising not more than six months before the Employee’s termination date without the Employee’s consent: (A) a material breach by the Company of any provision of this Agreement; (B) assignment by the Board or a duly authorized committee thereof to the Employee of any duties that materially and adversely alter the nature or status of the Employee’s position, job descriptions, duties, title or responsibilities from those of a President and Chief Executive Officer, or eligibility for Company compensation plans; (C) requirement by the Company for the Employee to relocate to a primary place of business which is more than [50] miles away from the Employee’s primary place of business as of the Effective Date of this Agreement; or (D) a material reduction in the Employee’s Base Salary in effect at the relevant time. Notwithstanding anything herein to the contrary, Good Reason will exist only if the Employee provides notice to the Company of the existence of the condition otherwise constituting Good Reason within 90 days of the initial existence of the condition, and the Company fails to remedy the condition on or before the 30th day following its receipt of such notice.
(iv)“PERMANENT DISABILITY” shall mean the Employee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. The Employee will be deemed permanently disabled if determined to be totally disabled by the Social Security Administration or if determined to be disabled in accordance with a disability insurance program that applies a definition of disability that complies with the requirements of this paragraph.
(c)If the Employee’s employment is terminated under any of the foregoing circumstances, all future compensation to which the Employee is otherwise entitled and all future benefits for which the Employee is eligible, other than those already earned but which is unpaid, shall cease and terminate as of the date of termination, except as specifically provided in this ARTICLE III.
Article IV.Miscellaneous
Section 4.01Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail (return receipt requested) or sent by overnight delivery service, or electronic mail, or facsimile transmission.
Section 4.02Severability and Reformation. If any one or more of the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions shall remain in full force and effect, and the invalid, void or unenforceable provisions shall be deemed severable. Moreover, if any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be reformed by limiting and reducing it to the minimum extent necessary, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.
Section 4.03Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and legal representatives of the Employee and the permitted assigns and
successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by the Employee (except by will or by operation of the laws of intestate succession) or by the Company, except that the Company may assign this Agreement to any successor (whether by merger, purchase or otherwise), if such successor expressly agrees to assume the obligations of the Company hereunder.
Section 4.04Amendment. This Agreement may be amended only by writing signed by the Employee and by the Company.
Section 4.05GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO RULES RELATING TO CONFLICTS OF LAW.
Section 4.06Jurisdiction. Each of the parties hereto hereby irrevocably consents and submits to the exclusive jurisdiction of the state and federal courts located in NEW YORK in connection with any proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and waives any objection to venue in NEW YORK. In addition, each of the parties hereto hereby waives trial by jury in connection with any claim or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
Section 4.07Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes in all respects any prior or other agreement or understanding, written or oral, between the Company or any affiliate of the Company and the Employee with respect to such subject matter, including the Employment Agreement.
Section 4.08Counterparts; No Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which will be deemed an original. For purposes of determining whether a party has signed this Agreement or any document contemplated hereby or any amendment or waiver hereof, only a handwritten signature on a paper document or a facsimile transmission of a handwritten original signature will constitute a signature, notwithstanding any law relating to or enabling the creation, execution or delivery of any contract or signature by electronic means.
Section 4.09Construction. The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement. The language in all parts of this Agreement shall be in all cases construed in accordance to its fair meaning and not strictly for or against the Company or the Employee. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.”
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above:
|
| Bit Origin Ltd |
| | |
| | /s/ Jinghai Jiang |
| | Name: Jinghai Jiang |
| | Title: CEO |
| | |
| | The Employee |
| | |
| | /s/ Jinghai Jiang |
| | Jinghai Jiang |
Exhibit 8.1
Bit Origin Ltd
Subsidiaries of the Registrant
Subsidiary |
| Jurisdiction of Incorporation |
SonicHash, Inc. | | Alberta, Canada |
Sonic Auspice DC LLC | | Delaware, United States |
SonicHash, LLC. | | Delaware, United States |
Bit Origin Pte. Ltd | | Singapore |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of Bit Origin Ltd (the “Company”), certify that:
1. | I have reviewed this annual report on Form 20-F for the fiscal year ended June 30, 2025 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Dated: October 31, 2025
By: | /s/ Jinghai Jiang | |
Name: | Jinghai Jiang | |
Title: | Chief Executive Officer | |
Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of Bit Origin Ltd (the “Company”), certify that:
1. | I have reviewed this annual report on Form 20-F for the fiscal year ended June 30, 2025 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Dated: October 31, 2025
By: | /s/ Jinghai Jiang | |
| Name: Jinghai Jiang | |
| Title: Chief Executive Officer | |
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive Officer of Bit Origin Ltd (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
a. | the Company’s annual report on Form 20-F for the fiscal year ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
b. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Dated: October 31, 2025
By: | /s/ Jinghai Jiang | |
| Name: Jinghai Jiang | |
| Title: Chief Executive Officer | |
Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Jinghai Jiang, Chief Executive of Bit Origin Ltd (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
a. | the Company’s annual report on Form 20-F for the fiscal year ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
b. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Dated: October 31, 2025
By: | /s/ Jinghai Jiang | |
| Name: Jinghai Jiang | |
| Title: Chief Executive Officer | |
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-268501, 333-275602, and 333-281518) of our report dated October 31, 2025, relating to the consolidated financial statements of Bit Origin Ltd (the “Company”), as of and for the year ended June 30, 2025, appearing in this Annual Report on Form 20-F of the Company.
/s/ HTL International, LLC
Houston, Texas
October 31, 2025
Exhibit 15.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (File Numbers: 333-281518, 333-275602 and 333-268501), under the Securities Act of 1933 of our report dated December 26, 2024 with respect to the consolidated balance sheet of Bit Origin Ltd and its subsidiaries as of June 30, 2024, and the related consolidated statements of operations and comprehensive income/(loss), changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2024, and the related notes included in the Annual Report on Form 20-F, filed with the Securities and Exchange Commission.
| /s/ WWC, P.C. |
San Mateo, California | WWC, P.C. |
October 31, 2025 | Certified Public Accountants |
| PCAOB ID: 1171 |
