Core Viewpoint - BTC Digital Ltd. is advancing its strategic partnership with BITMAIN by deploying 2,000 high-performance T21 miners, which will significantly enhance its mining capacity and efficiency in the cryptocurrency market [1][4]. Group 1: Deployment and Technology - The T21 miners, BITMAIN's latest flagship product, offer exceptional computational performance of 190 terahashes per unit and energy efficiency of 3,610 watts per unit [2]. - Upon completion of the deployment, BTC Digital's total hash rate capacity will increase to 600 petahashes, nearly tripling its current capacity [2]. Group 2: Operational Strategy - BTC Digital is streamlining its deployment process through detailed logistics, equipment installation, and network optimization to ensure the new miners are operational within the next 3 to 6 months [3]. - The introduction of the T21 miners is expected to significantly enhance BTC Digital's mining efficiency and competitiveness, thereby increasing Bitcoin output [3]. Group 3: Company Outlook - The CEO of BTC Digital emphasized that the deployment of T21 miners represents a significant milestone, aiming to boost mining capacity and optimize energy efficiency [4]. - The company is committed to technological innovation and strategic scaling to create more opportunities and returns for investors, while exploring partnerships with industry leaders to maintain a competitive edge [4][5].

Core Insights - BTC Digital Ltd. is actively seeking business opportunities in Arkansas, Tennessee, Georgia, and Missouri to expand its Bitcoin mining facilities, aiming to meet growing computational power demands and enhance sustainability commitments [1][2][3] Expansion Strategy - The company is exploring various approaches such as building new facilities, acquiring existing mines, and forming strategic joint ventures to ensure a stable and sustainable energy supply [2][3] - The Southeastern United States is identified as a key region for expansion due to its abundant energy resources and supportive business environment [3] Commitment to Sustainability - The company emphasizes the importance of a stable, reliable, and green energy supply for the future success of Bitcoin mining operations [3] - BTCT plans to prioritize projects that align with renewable energy and low-carbon emission goals to support global energy transition and emission reduction targets [3][4] Value Creation and Economic Impact - BTCT aims to create value for shareholders through technological innovation and economies of scale while addressing the global demand for blockchain computational power [4] - The strategic expansion is expected to contribute to regional economic development by creating jobs and fostering collaboration with local communities [4] Future Outlook - The company plans to accelerate its global strategy implementation and partner with more collaborators to promote sustainable development in the Bitcoin mining industry [5]

Financial Performance - Revenues for the nine months ended September 30, 2023, were $845,000, a significant increase from $2,559,000 in 2024[11] - Gross loss for the three months ended September 30, 2023, was $(651,000), compared to $(603,000) in 2024[11] - Net loss for the nine months ended September 30, 2023, was $(1,007,000), while the net loss for the same period in 2024 was $(571,000)[11] - For the nine months ended September 30, 2023, BTC Digital Ltd. reported a net loss of $2,122,000, which is a slight improvement from the net loss of $2,006,000 for the same period in 2024[17] - The Group's net loss per share for the nine months ended September 30, 2024, was $0.21, a decrease from $0.63 for the same period in 2023[92] Equity and Shareholder Information - Total equity attributable to shareholders of the company increased from $19,442,000 as of December 31, 2023, to $20,431,000 as of September 30, 2024[10] - The company issued 1,199,917 ordinary shares, raising $2,424,000 during the reporting period[14] - The weighted average shares used in calculating net loss per share increased from 1,593,789 in 2023 to 2,695,568 in 2024[11] - As of December 31, 2023, there were 2,097,535 ordinary shares issued and outstanding, which increased to 3,297,452 by September 30, 2024[115] - The Company authorized the issuance of 500,000,000 ordinary shares with a par value of $0.0001 per share as of September 27, 2019[98] Cash Flow and Investments - The company generated a net cash flow of $2,048,000 from operating activities in 2023, increasing to $3,385,000 in 2024[17] - Cash used in investing activities was $3,082,000 in 2023, which increased to $4,292,000 in 2024, indicating a rise in capital expenditures[17] - Financing activities generated a net cash inflow of $1,353,000 in 2023, which decreased to $891,000 in 2024[17] - The Company has a capital commitment totaling $3.83 million as of September 30, 2024, related to the purchase of miners and acquisition of a BTC mining facility[131] Assets and Liabilities - Accumulated deficit as of September 30, 2024, was $(188,605,000), compared to $(186,599,000) as of December 31, 2023[15] - Total liabilities and shareholders' equity as of September 30, 2024, were $25,063,000, up from $24,543,000 as of December 31, 2023[10] - The Group's property and equipment, net, decreased to $11,145,000 as of September 30, 2024, from $12,702,000 as of December 31, 2023, reflecting a decline in asset value[87] - The Group's accounts receivable decreased to $1,692,000 from $5,485,000 as of December 31, 2023, indicating a significant reduction in receivables[82] Operational Highlights - The company is primarily engaged in the bitcoin mining business and also generates revenue through mining machines resale and rental operations[18] - The Group's revenue primarily comes from digital asset mining, where it provides computing power to mining pool operators[58] - The Group generated a total of 1,049 bitcoins from mining services for the nine months ended September 30, 2024, compared to 2,882 bitcoins for the year ended December 31, 2023[84] Expenses and Costs - Operating expenses for the three months ended September 30, 2023, were $(1,793,000), while in 2024, they increased to $(2,239,000)[11] - The company reported a depreciation expense of $2,305,000 in 2023, which is projected to increase to $2,700,000 in 2024[17] - Share-based compensation expenses rose significantly from $138,000 in 2023 to $571,000 in 2024, indicating increased employee compensation costs[17] - The Group recognized share-based compensation expenses of $571,000 for the nine months ended September 30, 2024, up from $138,000 for the same period in 2023[97] Financial Reporting and Compliance - The Company has consolidated the financial results of Shenzhen Meten and Shenzhen Likeshuo in accordance with U.S. GAAP[38] - The Group's consolidated financial statements are presented in US dollars, rounded to the nearest thousands[39] - Digital assets held are accounted for as intangible assets with indefinite useful lives and are assessed for impairment annually[48] - The Group has not recorded any impairment losses for the years ended December 31, 2023, and for the nine months ended September 30, 2024[53] - Deferred income tax assets and liabilities are recognized for future tax consequences attributable to temporary differences[61] Market and Risk Factors - Market risks for the three months ended September 30, 2024, remain consistent with the previous annual report disclosures[188] - The outstanding loan balance secured by BTC collateral increased from 125,000 USDT as of December 31, 2023, to 544,000 USDT as of September 30, 2024[91]

```markdown PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for H1 2024 detail stable assets, a widened net loss, and positive operating cash flow [Unaudited Consolidated Balance Sheets](index=4&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets slightly increased to **$24.66 million** as of June 30, 2024, driven by equipment prepayments Consolidated Balance Sheet Highlights (in thousands of US$) | Account | As of June 30, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | 9,675 | 8,944 | | Total non-current assets | 14,986 | 15,599 | | **Total assets** | **24,661** | **24,543** | | **Liabilities & Equity** | | | | Total current liabilities | 5,069 | 5,101 | | **Total liabilities** | **5,069** | **5,101** | | **Total shareholders' equity** | **19,592** | **19,442** | - Prepayments for equipment significantly increased from **$2.29 million** to **$7.46 million**, indicating future expansion of mining capacity[80](index=80&type=chunk) - Digital assets (BTC) held by the company increased in value from **$436 thousand** to **$815 thousand**[81](index=81&type=chunk) [Unaudited Consolidated Statements of Operations Loss](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20LOSS) H1 2024 revenues decreased **31.6%** to **$5.0 million**, resulting in a widened net loss and a gross loss Statement of Operations Summary (in thousands of US$) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenues | 4,979 | 7,284 | | Gross loss | (342) | (110) | | Loss from operations | (1,697) | (1,099) | | **Net loss** | **(1,435)** | **(1,115)** | | **Net loss per share (Basic)** | **(0.56)** | **(0.91)** | Quarterly Statement of Operations Summary (in thousands of US$) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenues | 2,329 | 6,377 | | Gross loss | (214) | 233 (Profit) | | **Net loss** | **(704)** | **(135)** | [Unaudited Consolidated Statements of Cash Flows](index=9&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) H1 2024 saw net cash from operations at **$3.7 million**, offset by **$4.3 million** used in investing activities Cash Flow Summary (in thousands of US$) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | 3,669 | 2,411 | | Net cash used in investing activities | (4,282) | (1,827) | | Net cash from/(used in) financing activities | 857 | (417) | | **Net increase in cash** | **244** | **167** | | **Cash at end of period** | **287** | **215** | - The primary use of cash in investing activities was for the purchase of property and equipment, amounting to **$4.0 million** in H1 2024[21](index=21&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail the company's transformation to bitcoin mining, key accounting policies, capital commitments, and loans - The company changed its name to "BTC Digital Ltd." on August 11, 2023, and is now primarily engaged in the bitcoin mining business, as well as mining machine resale and rental[23](index=23&type=chunk) - Digital assets are treated as indefinite-lived intangible assets, tested for impairment when the carrying amount exceeds fair value. Revenue from mining is recognized when the company receives confirmation of the consideration from the mining pool[50](index=50&type=chunk)[61](index=61&type=chunk) - As of June 30, 2024, the company had an outstanding collateralized loan of **510,000 USDT**, with **11.62 BTC** pledged as collateral[94](index=94&type=chunk) - The company has capital expenditure commitments of **$4.29 million** as of June 30, 2024, for purchasing miners and acquiring a BTC mining facility[123](index=123&type=chunk) [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A covers bitcoin mining operations, H1 2024 revenue decline, increased net loss, and liquidity - As of June 30, 2024, the company owned **2,021** mining machines with a total hash rate of **213PH/S**, operating at a facility in New Tazewell, Tennessee[128](index=128&type=chunk) - In the first six months of 2024, the company mined **16.45 bitcoins**, generating **$0.94 million** in revenue[128](index=128&type=chunk) - The company uses a diversified strategy to mitigate bitcoin price volatility, including reselling mining machines when prices are high and renting them out when prices are lower[129](index=129&type=chunk) [Results of Operations: Three Months Ended June 30, 2024 vs 2023](index=31&type=section&id=Results%20of%20Operations%20-%20Three%20Months) Q2 2024 total revenue decreased **63.5%** to **$2.3 million** due to lower machine resale and mining Q2 Revenue Breakdown (in thousands of US$) | Revenue Source | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Bitcoin mining | 267 | 892 | | Mining machines resale | 1,707 | 5,485 | | Miner rental and other | 355 | - | | **Total** | **2,329** | **6,377** | - The decrease in mining revenue was attributed to using more machines for rentals, delays in deploying new machines, and the Bitcoin halving event[133](index=133&type=chunk) - General and administrative expenses increased by **34.7%** to **$0.4 million**, primarily due to an increase in employees and office expenses for business development[138](index=138&type=chunk) [Results of Operations: Six Months Ended June 30, 2024 vs 2023](index=33&type=section&id=Results%20of%20Operations%20-%20Six%20Months) H1 2024 total revenue decreased **31.6%** to **$5.0 million**, primarily from machine resale H1 Revenue Breakdown (in thousands of US$) | Revenue Source | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Bitcoin mining | 939 | 1,342 | | Mining machines resale | 3,435 | 5,485 | | Miner rental and other | 605 | 457 | | **Total** | **4,979** | **7,284** | - General and administrative expenses increased by **59.1%**, primarily due to a **$0.57 million** rise in expenses related to the Employee Stock Option Plan[147](index=147&type=chunk) - The company realized a gain on the exchange of digital assets of **$256 thousand** in H1 2024, compared to a gain of **$34 thousand** in H1 2023[141](index=141&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show H1 2024 Adjusted Net Loss of **$864 thousand** and Adjusted EBITDA of **$932 thousand** Reconciliation of Net Loss to Adjusted Net Loss (in thousands of US$) | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net loss | (1,435) | (1,115) | | Add: Share-based compensation | 571 | 138 | | **Adjusted net loss** | **(864)** | **(977)** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands of US$) | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net loss | (1,435) | (1,115) | | Adjustments (Interest, Tax, D&A) | 1,796 | 1,723 | | EBITDA | 361 | 608 | | Add: Share-based compensation | 571 | 138 | | **Adjusted EBITDA** | **932** | **746** | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, cash was **$287 thousand**, with positive operating cash flow offset by investing - Cash and cash equivalents stood at **$287,000** as of June 30, 2024, up from **$43,000** at the end of 2023[164](index=164&type=chunk) - Capital expenditures were **$4.0 million** for the six months ended June 30, 2024, a significant increase from **$1.8 million** in the same period of 2023[172](index=172&type=chunk) - The company may require additional cash resources for future investments or acquisitions and may seek to sell equity or debt securities if needed[165](index=165&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) Market risk disclosures for Q2 2024 do not materially differ from the 2023 Annual Report on Form 10-K - There have been no material changes in the company's market risk disclosures since the 2023 Annual Report[178](index=178&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO confirm effective disclosure controls and procedures with no material changes to internal controls - The CEO and CFO have certified that the company's disclosure controls and procedures were effective as of the end of the quarter[179](index=179&type=chunk) - No material changes to internal controls over financial reporting occurred during the second quarter of 2024[179](index=179&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material litigation, arbitration, or administrative proceedings - The company is not currently involved in any material legal proceedings[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On June 28, 2024, the company agreed to acquire a Bitcoin mining facility for **$1.99 million** - The company agreed to acquire a Bitcoin mining facility for **$1.99 million** on June 28, 2024[182](index=182&type=chunk) [Other Items (Risk Factors, Defaults, Mine Safety, Other Info)](index=40&type=section&id=Other%20Items) No new risk factors, defaults, or Rule 10b5-1 trading plan changes were reported for the quarter - No new risk factors are reported for the quarter[182](index=182&type=chunk) - No directors or officers adopted or terminated a Rule 10b5-1 trading plan in Q2 2024[182](index=182&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed, including CEO and CFO certifications and Inline XBRL data files - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer, along with XBRL data[183](index=183&type=chunk) ```

Revenue and Profitability - For the three months ended March 31, 2024, the company generated total revenues of US$2.65 million, a 192.2% increase from US$0.9 million for the same period in 2023[134]. - The company mined a total of 12.407 bitcoins during the same period, generating US$0.7 million in revenue from bitcoin mining[129]. - The resale of mining machines contributed US$1.728 million to total revenues, accounting for 65.2% of the revenue for the three months ended March 31, 2024[135]. - The gross loss for the three months ended March 31, 2024, was US$0.128 million, improving from a gross loss of US$0.343 million in the same period in 2023[137]. - The net loss for the three months ended March 31, 2024, was US$0.731 million, a decrease from a net loss of US$0.98 million for the same period in 2023[141]. - Adjusted EBITDA for the three months ended March 31, 2024, was US$0.708 million, compared to an adjusted EBITDA of negative US$0.111 million for the same period in 2023[147]. Expenses and Costs - The total cost of revenues increased by 122.2% to US$2.778 million for the three months ended March 31, 2024, compared to US$1.25 million in the same period in 2023[136]. - General and administrative expenses rose by 71.3% to US$0.906 million for the three months ended March 31, 2024, primarily due to increased expenses related to the Employee Stock Option Plan[139]. Cash Flow and Investments - Net cash generated from operating activities was US$6.2 million for the three months ended March 31, 2023, compared to US$0.2 million for the same period in 2024[161][162]. - The company reported a net cash used in investing activities of US$2.3 million for the three months ended March 31, 2023, and US$0.8 million for the same period in 2024[163]. - Net cash flow used in financing activities was US$0.3 million for the three months ended March 31, 2023, while it generated US$0.7 million for the same period in 2024[164]. - Capital expenditures amounted to US$2.3 million in Q1 2023 and US$0.6 million in Q1 2024, indicating a decrease in investment[165]. - The company plans to continue capital expenditures to support expected business growth, relying on cash generated from operating and financing activities[165]. Assets and Liabilities - Cash and cash equivalents at the end of the period were US$3.6 million for March 31, 2023, and decreased to US$0.032 million by March 31, 2024[159]. - The company noted a decrease in accounts receivable of US$8.9 million in Q1 2023, primarily due to the collection of receivables from mining machines resale[161]. - An increase in prepayments and other current assets was reported at US$1.8 million for Q1 2023 and US$3.8 million for Q1 2024[161][162]. Future Outlook - The company plans to continue investing in research and development to enhance mining efficiency and expand service offerings[131]. - No significant trends or uncertainties were disclosed that could materially affect the company's financial condition or operating results[166].

Mining Operations - As of December 31, 2023, the company owned a total of 2,021 mining machines, with 1,801 (89.1%) operational, achieving a total hash rate of 213 PH/S[20] - For the fiscal year ended December 31, 2023, the company mined a total of 99.7607 bitcoins, generating revenue of approximately US$2.9 million[20] - The company's network hash rate increased to 213 PH/S as of December 31, 2023, up from 140 PH/S in 2022[84] - The company sold 815 bitcoin mining machines in the fiscal year ended December 31, 2023, generating revenue of US$5.5 million, which accounted for 60.5% of total revenue[86] - The company generated US$0.3 million in revenue from mining machines rental business in the fiscal year ended December 31, 2023, representing 2.8% of total revenue[90] - The total electricity fees paid for bitcoin mining operations were US$2.2 million in 2023, down from US$2.9 million in 2022, with costs per kilowatt hour remaining at US$0.08[100] Financial Performance - For the fiscal year ended December 31, 2023, 31.8% of total revenue was generated from bitcoin mining, 60.5% from mining machines resale, and 7.7% from other mining-related businesses[58] - In the fiscal year ended December 31, 2023, the company mined a total of 99.7607 bitcoins, generating revenue of US$2.9 million, with an average selling price of US$27,078 per bitcoin[84] Business Strategy - The company has launched a mining machines resale and rental business to mitigate risks associated with bitcoin price fluctuations[21] - The company has a diversified revenue stream strategy to mitigate risks associated with bitcoin price fluctuations[60] - The company plans to continue investing in research and development to enhance mining efficiency and diversify revenue streams[22] - The company plans to launch additional crypto asset management services, including crypto wallets and custody solutions, between 2024 and 2025[67] Research and Development - The company plans to expand its research and development team and upgrade facilities in 2024, currently having five members in the R&D team[66] - The company aims to design and develop a proprietary model of ASIC mining machines dedicated to bitcoin mining[66] - The company has participated in the design and development of mining infrastructure, including high voltage power supply and liquid-cooling systems[66] - The company has a research and development team of five full-time individuals focused on innovation and complementary services to bitcoin mining operations[95] Corporate Actions - On June 7, 2023, the company entered into an asset transfer agreement to acquire 200 Bitcoin mining machines for an aggregate value of US$880,000[30] - The company issued 4,549,069 ordinary shares in connection with the acquisition of mining machines, reflecting a retroactive 20-to-1 share consolidation[31] - On August 1, 2023, the company entered into subscription agreements to issue 4,000,000 ordinary shares for an aggregate purchase price of US$1.0 million[32] - The company received gross proceeds of approximately US$1,014,286 from the issuance of 303,497 ordinary shares under subscription agreements on January 5, 2024[34] - The company completed a share consolidation, reducing its issued shares from 500 million to 25 million, effective August 23, 2023[35] - The company changed its name from "Meten Holding Group Ltd." to "BTC Digital Ltd." effective August 18, 2023[36] - The company entered into an asset purchase agreement on January 2, 2024, to acquire 2,000 units of T21 Miners for US$5,320,000, with expected delivery in the first half of 2024[102] Compliance and Regulation - The company has established a compliance team to ensure adherence to cryptocurrency laws and regulations, led by the CEO[61] - The company is aware of the evolving regulatory environment for blockchain and cryptocurrency, particularly regarding potential increased regulation of bitcoin mining[104][106] - The SEC approved a series of spot Bitcoin exchange-traded funds in January 2024, which have received billions of dollars in inflows[108] Operational Challenges - The company faced competition in securing low-cost renewable power and operational efficiency, impacting its market position[68] - The company identified material weaknesses in its internal control over financial reporting as of December 31, 2023, due to insufficient finance personnel and lack of proper approval mechanisms[354][355] - The company plans to enhance its internal controls by obtaining additional resources and conducting regular training on U.S. GAAP for its financial staff[355] - The company has not maintained any commercial insurance, exposing it to potential losses that could materially impact its operations[101] Workforce - As of December 31, 2023, the company had a total of 20 full-time employees, a decrease from 1,229 in 2021 and 16 in 2022[97][98] - The company has not experienced any significant labor disputes and maintains a good working relationship with its employees[99] Future Outlook - The next bitcoin halving event is expected to occur in 2024, reducing the reward for mining a block from 6.25 to 3.125 bitcoins[50] - The company intends to switch a portion of its bitcoin storage to cold wallets for enhanced security in the future[82] - The company intends to expand its energy-saving efforts and develop products that provide greater energy efficiency in the future[100]

Core Viewpoint - BTC Digital Ltd. has launched Ethereum (ETH) staking services, marking a significant expansion beyond its Bitcoin mining operations and aiming to diversify income sources through participation in Ethereum's validator rewards program [1][2]. Group 1: Company Expansion - The launch of ETH staking services represents a major milestone for BTC Digital, expanding its operations in the cryptocurrency landscape [2]. - The collaboration with Matrixport Technologies Ltd. provides secure asset custody for clients, enhancing the reliability of ETH staking services [1]. Group 2: Strategic Objectives - BTC Digital aims to create additional revenue streams through diversification into Ethereum staking while maintaining its commitment to Bitcoin mining [1][2]. - The company believes that Bitcoin mining and ETH staking are complementary business areas that will enhance overall profitability and returns [2]. Group 3: Financial Goals - By participating in Ethereum's validator rewards program, BTC Digital hopes to increase its overall profitability and return on investment [1].

Financial Performance - For the fiscal year ended December 31, 2022, Meten Holding Group Ltd. reported revenue of RMB 399,443,000, a decrease from RMB 728,996,000 in 2021, representing a decline of approximately 45%[221] - The net income for Meten Holding Group Ltd. in 2022 was RMB 6,670,000, compared to a net loss of RMB 60,748,000 in 2021, indicating a significant turnaround[223] - As of December 31, 2022, the consolidated total comprehensive loss for Meten Holding Group Ltd. was RMB 35,850,000, an improvement from RMB 386,297,000 in 2021[223] - For the fiscal year ended December 31, 2022, Meten Holding Group Ltd. generated revenue of US$2.4 million from mining a total of 84.9638 bitcoins[230] - In the fiscal year ended December 31, 2022, 20.2% of total revenue was generated from bitcoin mining, 74.5% from mining machines resale, and 5.3% from mining machines rental[235] Cash Flow and Transfers - The company transferred cash to its subsidiaries amounting to $5.8 million for the fiscal year ended December 31, 2022, down from $97.7 million in 2021[217] - The total cash transferred from subsidiaries to the former VIEs was $12.3 million in 2022, a decrease from $81.4 million in 2021[217] - For the year ended December 31, 2022, net cash used in operating activities was RMB 214,127 thousand, while net cash provided by financing activities was RMB 53,463 thousand[228] Share Capital and Compliance - The authorized share capital of the company was increased to $1,500,000 divided into 500,000,000 ordinary shares on June 28, 2022[216] - Meten Holding Group Ltd. underwent a share consolidation on May 4, 2022, with a ratio of 30-to-1 to regain compliance with Nasdaq listing requirements[215] - The company was notified by Nasdaq on September 16, 2022, regarding non-compliance with the minimum bid price requirement, with a deadline to regain compliance by March 15, 2023[214] Mining Operations - As of December 31, 2022, Meten Holding Group Ltd. owned a total of 1,754 mining machines, with 1,482 (84.5%) currently under operation[230] - The company plans to deploy approximately 1,000 new mining machines by the end of 2023 to enhance its operational capacity[236] - The company participated in two mining pools, BTC.com and F2Pool, mining 77.3922 and 7.5716 bitcoins respectively in the fiscal year ended December 31, 2022[271] - The electricity cost per bitcoin mined in 2022 was US$2.9 million[274] - The total electricity fees paid for bitcoin mining operations increased to US$2.9 million in the fiscal year ended December 31, 2022, with a cost of US$0.08 per kWh[284] Revenue Sources - The company sold 944 bitcoin mining machines in the fiscal year ended December 31, 2022, generating revenue of US$8.82 million, which accounted for 74.5% of total revenue[276] - The gross margin from mining machine sales in 2022 was 39.3%[276] - In October and November 2022, 1,200 mining machines were rented out, representing 68.4% of the total fleet, generating US$0.62 million in revenue, which accounted for 5.3% of total revenue for the fiscal year ended December 31, 2022[279] Research and Development - The company intends to increase its research and development efforts, aiming to expand its R&D team and upgrade facilities in 2023[245] - The research and development team consists of five full-time employees, focusing on developing a proprietary model of ASIC mining machines, expected to launch by October 2023[280] Employee and Operational Changes - As of December 31, 2022, the company had 16 full-time employees, a decrease from 1,229 in 2021 and 3,721 in 2020[293] - The total number of full-time teachers decreased from 998 as of December 31, 2020, to 279 as of November 22, 2022, with 254 teaching at offline learning centers and 25 for online courses[357] Education Services and User Engagement - The former VIEs had approximately 2.09 million registered users on the "Likeshuo" platform, with over 485,000 paying users as of November 22, 2022[302] - The former VIEs generated all their revenue from operations in the PRC, with total student enrollments decreasing from 70,310 in 2020 to 42,259 in 2022[306] - The "Likeshuo" platform had approximately 2.09 million registered users and over 485,000 paying users as of November 22, 2022[319] Marketing and Customer Acquisition - The company relies on word-of-mouth referrals for marketing, with all clients in the fiscal year ended December 31, 2022, acquired through existing client referrals[281] - The company faced significant sales and marketing expenses to increase student enrollment and strengthen brand recognition[401] Regulatory and Compliance Measures - The company has established a compliance team to ensure adherence to cryptocurrency laws and regulations, led by its CEO[239] - The former VIEs' operations are influenced by regulatory changes in the education industry in China[393]

Meten Holding Group Ltd. (METX) Q3 2021 Earnings Conference Call November 22, 2021 8:00 AM ET Company Participants Jason Zhao - Chairman Alan Peng - CEO Conference Call Participants Operator Good morning, ladies and gentlemen and welcome to Meten HoldingS Group's Third Quarter and Nine Months of 2021 Earnings Conference Call. Joining us today are the company’s Chairman of the Board, Mr. Jason Zhao; the company’s Chief Executive Officer, Mr. Alan Peng; and the company’s Financial Vice President, Mr. [indisce ...