Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 31

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 31
---
. As of December 31, 2024, 6,512,781 restricted shares had been granted under
the 2022 Share Incentive Plan, with 10,919 restricted shares forfeited. We may continue to grant share-based compensation in the
future pursuant to the 2022 Share Incentive Plan or other share incentive plans that we adopt from time to time. We are required to account
for share-based compensation expenses in accordance with the applicable accounting standards. The Financial Accounting Standards
Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation generally requires a company to recognize,
as an expense, the fair value of share options and other equity incentives to employees based on the fair value of equity awards on the
date of the grant, with the compensation expense recognized over the period in which the recipient is required to provide service in exchange
for the equity award. As a result, we could incur significant compensation charges and our results of operations could be adversely affected.
In 2024, we recognized a share-based compensation expense of US$26.1 million. With additional equity incentives granted to employees,
directors or consultants in the future, we will incur additional share-based compensation expense and our results of operations will be
further adversely affected. Moreover, such grants could also have dilutive impact on our existing shareholders.

If we fail to implement and maintain an
effective system of internal controls to remediate our material weakness over financial reporting, we may be unable to accurately report
our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our ordinary
shares may be materially and adversely affected.

As defined in the standards
established by the U. S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the annual or interim financial statements will not be prevented or detected on a timely basis.

In the course of preparing
our consolidated financial statements, we identified one material weakness in our internal control over financial reporting. 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. Prior to preparing for the Business Combination, neither we nor our independent registered public
accounting firm had undertaken a comprehensive assessment of our internal control for purposes of identifying and reporting the material
weakness and other control deficiencies in our