Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 142

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 5
Chunk 142
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 driven by the increase in
Bitcoin prices during 2023. We calculated impairment on digital assets whenever the carrying value of our digital assets exceeds the fair
value of the digital assets on a daily basis.

Impairment loss on mining equipment

In 2022, our operating performance
was adversely affected by the challenging business climate, which included a decrease in the price of Bitcoin and a resulting decrease
in the market price of miners. Furthermore, both primary and secondary market prices for ASIC miners of the type used by us in our business
operations experienced significant declines from previous levels. As a result, we recognized an impairment loss on mining equipment of
US$11.9 million in 2022, and no such impairment loss was recognized in 2023.

Realized fair value gain on digital asset borrowings

We recorded US$4.2 million
realized gain for the fair value changes of digital asset borrowings for 2022 due to the changes in the Bitcoin spot price between the
day of receiving and day of repaying the Bitcoins borrowed. We did not record similar gain or losses for 2023, as we did not have such
digital asset borrowings during that period.

Realized gain on sales of digital assets

Realized gain on sales of
digital assets increased significantly from US$4.9 million in 2022 to US$18.2 million in 2023, primarily due to a 50% year-over-year
increase in the amount of BTC sold in 2023 and an increase in the difference between the selling price and the carrying value of Bitcoin
sold in 2023 driven by the increase in Bitcoin price during the second half of 2023 when the sales were made.

  Liquidity and Capital Resources  
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To date, we have financed
our operations primarily through cash generated from operations and equity and debt financing. We continue to have access to several sources
of liquidity to supplement cash flow from operations, including private debt and equity capital markets, secured borrowing, equipment
financing and digital asset-based financing. In the near term, we expect to continue to ramp up investing activities as it expands
our miner fleets, integrates the upstream mining facility resources and scales up our operations. Proceed from the Business Combination
fortifies our balance sheet.

As of December 31, 2024, excluding
restricted cash, we held cash and cash equivalents of US$38.2 million, 97.3% of which were held at commercial