BTC Digital .(BTCT) - 2021 Q4 - Annual Report

Company Formation and Financing - The company was formed as a holding entity on September 27, 2019, and completed mergers on March 30, 2020, with an investment of US$20 million from Azimut Enterprises Holdings S.r.l.[328] - The company raised US$12 million through PIPE financing concurrent with the mergers on March 30, 2020[328]. - The company’s ordinary shares were listed on the Nasdaq Capital Market under the symbol "METX" on March 30, 2020[330]. Financial Performance - For the fiscal year ended December 31, 2021, the consolidated total revenue was RMB 897,035 thousand, with a net loss of RMB 412,783 thousand[350]. - As of December 31, 2021, total assets amounted to RMB 885,366 thousand, while total liabilities were RMB 848,791 thousand[353]. - The company reported a net cash used in operating activities of RMB 459,303 thousand for the fiscal year ended December 31, 2021[357]. - The total current assets as of December 31, 2021, were RMB 389,738 thousand[353]. User Engagement and Enrollment - As of December 31, 2021, the operating entities had approximately 1.99 million registered users on the "Likeshuo" platform and over 460,000 paying users for online ELT courses[359]. - The cumulative number of student enrollments for online ELT courses since 2014 was approximately 200,000, with over 5.3 million accumulated course hours delivered online[359]. - Total student enrollment decreased from 123,445 in 2019 to 64,067 in 2021, representing a decline of approximately 48%[364]. - The number of paying users for the "Shuangge English" App grew from 9,859 in 2019 to 79,000 in 2021, indicating a significant increase[367]. - The operating entities provided customized overseas study application services to approximately 3,500 students as of December 31, 2021[375]. - The number of student enrollments in overseas training services was approximately 6,967 in 2021, up from 5,527 in 2020[372]. Revenue Streams - Revenue from general adult ELT dropped from RMB 783.99 million in 2019 to RMB 176.8 million in 2021, a decrease of about 77.5%[366]. - Online ELT revenue increased from RMB 260.3 million in 2019 to RMB 290.4 million in 2021, reflecting a growth of approximately 11.6%[377]. - Junior ELT revenue fell from RMB 167.9 million in 2019 to RMB 98.0 million in 2021, a decline of about 41.7%[381]. - The average course fee per student for online ELT was approximately RMB 9,100 for the fiscal year ended December 31, 2021[377]. - The revenue from English language-related services includes franchise fees from franchised learning centers, contributing to overall income[387]. Operational Structure - The operating entities had a team of 664 full-time teachers and staff, including 50 full-time and part-time foreign teachers[360]. - The operating entities have a nationwide offline learning center network of 34 self-operated centers covering 15 cities in China[359]. - The operating entities employed 3,960 part-time teachers, including 2,160 foreign teachers from English-speaking countries as of December 31, 2021[414]. - The operating entities had 31 offline sales points nationwide as of December 31, 2021, aimed at attracting potential customers[412]. Technology and Innovation - The operating entities have made significant investments in developing platforms and systems to support teaching activities, including AI-driven management systems[360]. - The operating entities utilize big data technology to effectively target prospective customers with high demands for English learning[413]. - The operating entities have developed an artificial intelligence-driven integrated teaching management system (EME system) to enhance teaching activities and resource allocation[432]. - The operating entities have developed an intelligent class scheduling system (ICAS) that significantly improves course matching efficiency and accuracy compared to manual scheduling[436]. Regulatory Environment - The company faces risks related to compliance with PRC laws and regulations, which could adversely affect its operations and the value of its ordinary shares[338]. - The regulatory environment for after-school training institutions has tightened, requiring them to obtain proper licenses and adhere to strict operational guidelines[467][468]. - The Double Reduction Opinions issued on July 24, 2021, prohibit new academic after-school training institutions and foreign ownership in such institutions[476]. - The MOE's measures prohibit elementary and secondary school teachers from providing paid training in schools or out-of-school training institutions[480]. Intellectual Property and Compliance - As of the annual report date, the operating entities had registered five patents and 55 trademarks, enhancing their brand recognition in the PRC[439]. - The operating entities have not faced any material intellectual property infringement claims up to the date of the annual report[440]. Market Competition - The ELT market in the PRC is highly competitive, with the operating entities facing competition from both online and offline English language education service providers[425]. Investment and Taxation - The PRC Enterprise Income Tax Law applies a uniform 25% tax rate to both foreign-invested and domestic enterprises, with small and micro enterprises eligible for a reduced rate of 20%[514]. - Dividends from PRC subsidiaries to foreign investors may incur a withholding tax rate of 10%, unless a preferential tax treaty applies[514].