BTC Digital .(US:BTCT)2023-03-14 16:00Financial 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]