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United States securities and exchange commission logo
March 28, 2022
Linghui Kong
Chief Executive Officer
Bitdeer Technologies Group
08 Kallang Avenue
Aperia Tower 1, #09-03/04
Singapore 339509
Re: Bitdeer
Technologies Group
Amendment No. 2 to
Draft Registration Statement on Form F-4
Submitted March 7,
2022
CIK No. 0001899123
Dear Mr. Kong:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
February 23, 2022 letter.
Linghui Kong
FirstName LastNameLinghui
Bitdeer Technologies Group Kong
Comapany
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Amendment No. 2 to Draft Registration Statement on Form F-4
Questions and Answers about the Proposals
What are the U.S. federal income tax consequences..., page 20
1. We note your response to prior comment 2 and are unable to agree. The
vote of all
Bitdeer shareholders may not be necessary to approve the business
combination, yet the
transaction has been structured to issue the shares in a registered
transaction pursuant to
Rule 145. Therefore, an investment decision is imputed to all Bitdeer
shareholders, and
unless the tax consequences to those shareholders is not material or
the disclosure
indicates that the transaction is expected to be taxable for Bitdeer
shareholders, an opinion
of counsel is required by Item 601(b)(8) of Regulation S-K.
Risk Factors
If BSGA's security holders exercise their registration rights..., page 81
2. We note nominal price per shares paid by the initial shareholders for
their shares.
Highlight the possibility of significant sales by the initial
shareholders following
registration of their resales even if the trading price for the
company is considerably lower
than the current trading price of the company's shares further
exacerbating the ability of
the company's stock to trade at a premium to its current market price.
Appraisal Rights, page 141
3. We note your response to prior comment 6 but also note that your
disclosure focuses on
the technical requirements for exercising appraisal rights. Your
disclosure continues to
notify shareholders that their appraisal rights "are available to the
holders of the BSGA
Ordinary Shares in connection with the First Merger but not with other
transaction (sic) in
the Business Combination." The primary purpose of this disclosure is
to advise
shareholders on how to properly exercise their appraisal rights, so
unless there is practical
reason to distinguish between actions to be taken with respect to the
First Merger and the
other steps of the Business Combination, highlighting that appraisal
rights are
only available in connection with the First Merger may be confusing to
BSGA
shareholders. Please advise or revise.
Information Related to Bitdeer
Our Cryptocurrencies
Cryptocurrencies and Protocols Involved in Our Business, page 187
4. Please further break-out the digital assets that constitute the
"Others" category in your
tabular disclosure.
Linghui Kong
FirstName LastNameLinghui
Bitdeer Technologies Group Kong
Comapany
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Policies and Procedures Related to Our Cryptocurrencies, page 187
5. Please further break-out the digital assets that constitute the
"Others" category in your
tabular disclosure.
6. We note your response to prior comment 9; however, you have added the
term
"stablecoin" to your revised definition of "USDC" on page 9. Further
explain your use of
this term or remove it from the definition.
7. Although you state that you did not leverage your cryptocurrencies to
generate additional
income through lending prior to June 30, 2021, you appear to have
embarked on such a
strategy since that date. Expand your MD&A discussion to address your
present and
future income generating activities tied to cryptocurrency lending,
and your policy for
determining whether to leverage your crypto asset holdings.
8. Explain your "short-term wealth management product" entered into with
the Matrixport
Group and discuss the purpose of this arrangement.
9. Explain how your $30 million USDC loan to Matrixport Group generated
investment
income.
Bitdeer Technologies Holding Company and Subsidiaries
Notes to the Unaudited Condensed Combined and Consolidated Financial Statements
Note 3. Changes in Significant Accounting Policies
b. Cryptocurrency lending, page F-35
10. Please refer to prior comment 11. In your response you state that you
believe IFRS 9
supports your accounting for the lending arrangement. Noting that this
guidance applies
to contracts to buy or sell a non-financial item that can be settled
net in cash or another
financial instrument, or by exchanging financial instruments, please
clarify for us why you
believe this guidance is applicable to the lending of crypto assets.
11. Please refer to prior comment 11. If your lending arrangements are not
within the scope
of IFRS 9, please tell us how you considered the guidance in IFRS 15.
Please tell us how
you considered if the borrower has obtained control, as defined in
paragraph 33 of IFRS
15, of the crypto assets that you lend and, to the extent the borrower
must return the crypto
asset, how you considered paragraphs B64 to B76 of IFRS 15.
Notes to the Combined Financial Statements
Note 2. Summary of Significant Accounting Policies
h. Cryptocurrencies, page F-62
12. We note your statement in your response to prior comment 12 that
"Bitdeer
identifies impairment of cryptocurrencies at an individual asset level
and records
impairment measured as the difference between the cost (defined as the
carrying amount
of an individual asset) and the recoverable amount according to
paragraph 8 of IAS 36."
Linghui Kong
FirstName LastNameLinghui
Bitdeer Technologies Group Kong
Comapany
March NameBitdeer Technologies Group
28, 2022
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Please explain why you identify impairment at an individual asset
level and then use the
weighted average cost method to measure impairment. Please provide the
IFRS citations
or guidance that supports your statement that the "first-in-first-out
( FIFO ) or weighted
average formula to determine the carrying amount of the cryptocurrency
to derecognize is
a policy election allowed under IFRS." Clarify why you are not using
the carrying
amount of an item for measuring impairment. In addition, confirm that
upon sale of
a crypto asset you derecognize that asset at its carrying amount and
do not use FIFO or
weighted average formula to determine the carrying amount.
13. Please clarify your statement that "the receipt of cryptocurrencies is
included in the
operating activities" as it implies that such amounts are included as
cash inflows to net
cash flows from operating activities. Revise this statement to explain
that the receipts of
cryptocurrencies are being added back to operating activities since
they represent a non-
cash adjustment. Further, please tell us why including the disposals
of cryptocurrencies in
the investing activities is proper when the receipt of
cryptocurrencies is presented as
revenue. Please provide us an accounting analysis with citation to
authoritative literature
supporting your accounting treatment.
l. Mining machines, page F-64
14. We note your response to prior comment 14 indicating that the mining
machines are
Bitdeer s revenue-earning equipment, which would appear to meet the
definition of
property, plant and equipment in IAS 16. Furthermore, you indicate in
your January 24,
2022 response to comment 39 that mining machines are not held for sale
in the ordinary
course of business. Paragraph 68 of IAS 16 is clear that gains from
the sale of property,
plant, and equipment should not be classified as revenue. Please
revise accordingly.
o. Revenue recognition, page F-65
15. You indicate in response to prior comment 16 that Bitdeer s
performance obligation under
your Cloud Hash Rate offering is to provide the specified amount of
computing power to
the customers and the customers obtain control over the computing
power. Please provide
a fulsome analysis of why you believe the customer obtains control
over the computing
power given that Bitdeer has a substantive right to substitute the
hash rate provided to the
customer (i.e., to provide hash rate from different mining machines)
throughout the period
of use, as noted from your January 24, 2022 response to prior comment
43 and as defined
in paragraph 33 of IFRS 15. Your analysis should include your
consideration of the fact
you are combining and integrating the computing power assigned to your
customers and
you control these combined inputs to provide the integrated computing
power to the
mining pool operator.
16. Please refer to your response to prior comment 16 regarding your Cloud
Hash Rate
offering. Please clarify why you believe principal/agent
considerations are not applicable,
specifically referring to how you considered B34 of IFRS 15. In this
regard, we note
various terms in your service agreement such as your classic and
acceleration mode plans
Linghui Kong
Bitdeer Technologies Group
March 28, 2022
Page 5
that provide the customer a net mining output or to recover
electricity fees before
receiving a mining output when Bitdeer establishes the electricity
fee, the fact that the user
can only connect with mining pools that cooperate with Bitdeer, and,
as noted in your
response to prior comment 18, that the additional rewards that mining
pools agree to pay
are paid to Bitdeer.
17. Tell us whether the mining pool operator have separate contracts with
each of your Cloud
Hash Rate customers. Please clarify whether your Cloud Hash Rate
and/or Cloud Hosting
customers participate in a distinct mining pool without other
third-party mining pool
customers.
18. Please revise to disclose why you do not disaggregate revenues earned
from proprietary
mining between mining rewards and transaction verification fees as
noted from your
January 24, 2022 response to prior comment 45.
19. We note your response to prior comment 22 regarding Cloud Hosting
arrangements.
Please further explain how the customer has the ability to direct the
use of the mining
machine while in your possession. Clarify the enforceable rights and
obligations under
your Cloud Hosting arrangements, and provide us with a representative
contract with your
customers. Indicate whether you have an explicit or implicit
repurchase right or
obligation since you sell the mining machines on behalf of your
customers. Explain how
it is determined to sell a mining machine. Tell us if customers ever
take physical
possession of the mining machines and remove them from your data
centers for their own
use or disposition. Also explain how and when consideration for the
arrangement is
transferred. Provide us with your comprehensive accounting analysis of
how you
determine if the customer obtains control of the mining machine under
paragraphs 38,
BC64 to BC76, and B79 to B82 of IFRS 15.
20. Based on your response to prior comment 22, you appear to indicate that
the Cloud
FirstName LastNameLinghui Kong
Hosting arrangements convey the right to control the use of an
identified asset for a period
Comapany NameBitdeer
of time in exchangeTechnologies Group Please tell us whether these
arrangements are or
for consideration.
March contain
28, 2022a Page
lease 5under IFRS 16 and provide us with your accounting
analysis.
FirstName LastName
Linghui Kong
FirstName LastNameLinghui
Bitdeer Technologies Group Kong
Comapany
March NameBitdeer Technologies Group
28, 2022
March6 28, 2022 Page 6
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FirstName LastName
You may contact Melissa Walsh, Senior Staff Accountant, at (202)
551-3224 or Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Priscilla Dao, Staff
Attorney, at (202) 551-5997 or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Will Cai