Business Context and Reporting Period
This Form 20-F is a Shell Company Report filed by Bitdeer Technologies Group (the "Company") on April 13, 2023, following the consummation of a business combination with Blue Safari Group Acquisition Corp. (BSGA). The Company, incorporated in the Cayman Islands, is a leading cryptocurrency mining technology company headquartered in Singapore. It operates three primary business lines: proprietary mining, hash rate sharing (Cloud Hash Rate), and hosting services. The report covers the financial position and results of operations of the predecessor entity, Bitdeer Technologies Holding Company, for the fiscal years ended December 31, 2020, 2021, and 2022.
Key Financial Metrics
| Metric (in thousands USD) | 2020 (Restated) | 2021 | 2022 |
|---|---|---|---|
| Total Revenue | 186,387 | 394,661 | 333,342 |
| Net Profit / (Loss) | (55,826) | 82,643 | (60,366) |
| Adjusted EBITDA | 48,654 | 281,795 | 93,218 |
| Cash and Cash Equivalents (Year End) | 44,753 | 372,088 | 231,362 |
| Total Debt (Borrowings) | — | 29,460 | 29,805 |
| Net Cash Used in Operating Activities | (109,176) | (52,466) | (268,037) |
Note: The Company reported negative operating cash flows for all three years due to the classification of cryptocurrency disposal proceeds as investing activities and significant capital expenditures.
Material Changes vs. Prior Period
- Revenue Decline (2022 vs. 2021): Total revenue decreased by 15.6% to $333.3 million in 2022. This was primarily driven by a 67.4% drop in proprietary mining revenue (from $191.7M to $62.4M) due to the decline in Bitcoin prices and a 98.5% drop in mining machine sales revenue.
- Profitability Shift: The Company swung from a net profit of $82.6 million in 2021 to a net loss of $60.4 million in 2022. This was exacerbated by a 63.1% increase in cost of revenue, largely due to a 138.9% increase in electricity costs ($58.4M to $139.5M) associated with datacenter expansion.
- Business Mix Evolution: While proprietary mining revenue fell, hosting revenue grew significantly. General Hosting revenue increased from $18.3 million in 2021 to $99.3 million in 2022, and Membership Hosting generated $26.1 million in 2022 (new revenue stream).
- Restatements: The Company restated its 2020 and 2021 financial statements to correct errors in the presentation of mining machine sales revenue and the classification of cryptocurrency disposal cash flows.
Guidance, Outlook, and Risks
Outlook and Strategy: Management plans to expand electricity capacity from 775MW to approximately 1,524MW by adding datacenters in Bhutan, Ohio, and expanding existing US and Norway facilities. The Company intends to diversify revenue by increasing the weight of hosting and hash rate sharing businesses to mitigate Bitcoin price volatility. It does not anticipate paying dividends in the foreseeable future.
Key Risks and Contingencies:
- Bitcoin Price Volatility: Revenue and profitability are highly correlated with Bitcoin prices. A drop in price reduces mining rewards and can render operations uneconomical.
- Regulatory Uncertainty: The Company faces evolving regulations regarding cryptocurrency mining, securities laws (hash rate sharing), and environmental policies (electricity usage taxes/bans) in the US, Norway, and other jurisdictions.
- Operational Risks: Significant exposure to electricity supply interruptions, power cost increases, and the "halving" event (expected in 2024) which reduces mining rewards.
- Internal Controls: The Company identified a material weakness in internal controls over financial reporting related to the control environment and lack of sufficient accounting personnel, which led to the aforementioned restatements.
Investor Verification Checklist
- Restatement Impact: Verify the specific adjustments made to 2020 and 2021 financials regarding mining machine sales and cash flow classification.
- Electricity Cost Sustainability: Assess the long-term viability of the $50/MWh average electricity cost given global energy market volatility and potential regulatory taxes on mining energy usage.
- Hash Rate Allocation: Monitor the strategic allocation of hash rate between proprietary mining (high risk/reward) and hash rate sharing/hosting (stable cash flow) in response to Bitcoin price movements.
- Debt Maturity: Confirm the repayment or conversion status of the $30 million convertible note maturing in July 2023.
- Internal Control Remediation: Review subsequent filings for progress on remediation of the identified material weakness in internal controls.