MMTEC(MTC) - 2021 Q4 - Annual Report

Revenue Performance - Total net revenues for the year ended December 31, 2021, were $653,036, a decrease of 12.0$742,125 in 2020[150] - Revenue from market data services increased to $107,184, representing 16.4$73,524 or 9.9% in 2020[151] - Commissions revenue decreased to $390,569, accounting for 59.8$643,145 or 86.7% in 2020[151] Profitability - Gross profit for 2021 was $511,734, with a gross margin of 78.4$734,720 and a margin of 99.0% in 2020[154] - Loss from operations for 2021 was $6,483,184, an increase of 103.6$3,184,151 in 2020[171] - Net loss for the year ended December 31, 2021, was $7,050,755, or$0.29 per share, compared to a net loss of $3,181,596, or$0.16 per share in 2020[173] - Comprehensive loss for the year ended December 31, 2021, was $7,005,640, compared to$3,063,909 for 2020, reflecting an increase in losses[176] Operating Expenses - Operating expenses increased to $2,083,019 for 2021, up from$1,744,395 in 2020, primarily due to increased payroll and related benefits[159] - Payroll and related benefits surged to $2,446,019, an increase of 138.7$1,024,565 in 2020, reflecting business expansion[157] - Selling and marketing expenses rose to $303,079, an increase of 24.1$244,163 in 2020, driven by an increase in selling staff[156] - Research and development expenses for 2021 were $744,422, compared to$410,840 in 2020 and $737,329 in 2019, indicating a significant increase of 81$9,780,000, or 685.8%, from $1,426,000 as of December 31, 2020, to$11,206,000 as of December 31, 2021, primarily due to a registered direct offering and private placement[179] - Working capital increased by $11,125,079, reaching$12,720,191 as of December 31, 2021, a 697.4% increase from $1,595,112 as of December 31, 2020[185] - Net cash used in operating activities for the year ended December 31, 2021, was$4,096,506, reflecting a net loss of approximately $7,051,000[188] - Net cash flow provided by financing activities was$16,471,560 for the year ended December 31, 2021, compared to $37,250 in 2020 and$6,438,216 in 2019[192] - The company raised approximately $15,910,000 from a registered direct offering of 4,300,000 common shares at$3.70 per share on February 22, 2021[197] - The company entered into a private placement on December 20, 2021, raising $2,000,000 by selling 5,000,000 common shares at$0.40 per share[198] Assets and Liabilities - Total current assets increased from $2,253,141 as of December 31, 2020, to$13,848,423 as of December 31, 2021, a 514.6% increase[185] - Total current liabilities increased from $658,029 as of December 31, 2020, to$1,128,232 as of December 31, 2021, a 71.5% increase[185] - As of December 31, 2021, the company had cash and cash equivalents of $11,206,220, a substantial increase from$1,425,926 in 2020[302] - The company had no short-term or long-term borrowings as of December 31, 2021, following the full forgiveness of a $41,250 loan from the Paycheck Protection Program in January 2021[301] Currency and Economic Factors - The RMB appreciated by 2.4% in fiscal year 2020 and depreciated by 2.3% in fiscal 2021, impacting the company's financial results reported in U.S. dollars[304] - The company has not been exposed to material risks due to changes in interest rates, but future interest income may fall short of expectations[301] - Inflationary factors may adversely affect operating results, although the company does not believe inflation has materially impacted its financial position to date[303] - The company has no exposure to commodity price risk[305] - There has been no default of any indebtedness nor any arrearage in the payment of dividends[306] - The company is not aware of any trends or uncertainties that could materially affect its net revenues or profitability[200] - The company’s functional currency is RMB, while financial statements are presented in U.S. dollars, complicating the impact of currency fluctuations on reported results[304]