Financial Performance - Total revenue for 2022 was 863,000,a23670,000 in 2021[15] - Cryptocurrency mining revenue increased to 783,000in2022from664,000 in 2021, reflecting a 18% growth[15] - Total cost of revenue for 2022 was 1,381,000,comparedto703,000 in 2021, resulting in a gross loss of 517,000[15]−Totaloperatingexpensesfor2022were5,368,000, a significant increase from 13,274,000in2021[15]−Thenetlossattributabletoholdersofordinarysharesfor2022was5,635,000, compared to 21,666,000in2021,indicatingareductioninlosses[15]AssetandLiabilityChanges−Totalcurrentassetsincreasedto7,516,000 in 2022 from 1,742,000in2021,showingasubstantialgrowth[17]−Totalassetsroseto18,893,000 in 2022, up from 9,020,000in2021,indicatingstrongassetgrowth[17]−Totalliabilitiesincreasedto2,064,000 in 2022 from 1,372,000in2021,reflectingariseinfinancialobligations[17]RegulatoryandComplianceIssues−Thecompanyrestatedfinancialstatementsfor2021duetochangesinimpairmenttestingmethodsforcryptocurrencies[16]−ThecompanyissubjecttochanginglawsandregulationsinChina,whichmayincreaseoperatingcostsandcompliancerisks[23]−ThePRCgovernmentextensivelyregulatestheinternetindustry,whichcouldnegativelyimpactthecompany′soperationsinChina[86]−Newlawsandregulationsmayrequireadditionallicensesforthecompany′sChinasubsidiaries,andfailuretocomplycouldresultinpenalties[86]−TheinterpretationofexistingPRClawscreatessubstantialuncertaintiesregardingthelegalityofforeigninvestmentsininternetbusinessesinChina[87]BusinessOperationsandStrategy−Theblockchaintechnicalservicesbusinessdidnotgenerateanyrevenuein2022duetothecessationofoperationsandlossofthetechnicalteam[32]−ThecompanycommencedcryptocurrencyminingoperationsintheU.S.inDecember2022,expandingitsbusinessline[28]−Thecompanyisactivelyexploringacquisitionprospectstoenhanceitsmarketcoverageandcapabilities,butmayfaceoperationalandfinancialrisksindoingso[43]−ThecompanyhasshifteditsbusinessfocusoutsideofthePRCduetoadverseregulatorychangesaffectingcryptocurrencytransactions[46]−ThecompanyplanstodevelopacryptocurrencyminingbusinessthroughitssubsidiaryGoldenNationLtd.in2022[164]CompetitionandMarketChallenges−Thecompanyfacesintensecompetitionintheblockchainindustryandmustadapttochangingcustomerrequirementsandemergingindustrystandards[1]−ThecompetitivelandscapeincludesmajorplayerslikeUniswapandHuobi,necessitatingcontinuousinnovationfromthecompanytomaintainitsmarketposition[210]−Thereisaglobalshortageofhigh−endcomputercomponentsnecessaryforcryptocurrencymining,whichcouldhinderthecompany′sabilitytocompeteeffectively[70]RisksandUncertainties−Thecompanyhaslimitedinsurancecoverage,whichcouldresultinlossesfromliabilityclaimsorbusinessinterruptions[1]−Thecompanyissubjecttosignificantrisksrelatedtothereliabilityandsecurityofblockchaintechnology,whichcouldadverselyaffectitsoperations[35]−Thecompanyfacesrisksfromnaturaldisastersandhealthepidemics,whichcouldsignificantlydisruptoperationsandaffectoverallbusinessperformance[85]−Thecompanyhasexperiencedreputationaldamageduetothedetentionofformerofficers,whichmayimpactitsabilitytomaintainexistingcustomers[51]ShareholderandMarketCompliance−ThecompanyregainedcompliancewithNasdaq′sminimumbidrequirementonJune5,2020,aftertheclosingbidpriceofitsADSswasatleast1.00 for ten consecutive business days[136] - The company received a deficiency notice from Nasdaq on May 13, 2022, for failing to file Form 20-F, but regained compliance on June 22, 2022[138] - The company is subject to additional scrutiny under the "Holding Foreign Companies Accountable Act," which could affect the trading of its shares if auditors are not inspected by the PCAOB[124] Future Plans and Developments - The company plans to develop online and traditional brokerage services through its new U.S. subsidiary, Chaince Securities, Inc.[186] - The company aims to obtain a "BitLicense" from the New York State Department of Financial Services for digital currency-related activities, although no assurances can be provided[179] - The company is pursuing recovery of seized digital assets, which it believes were wrongfully impounded by the Public Security Bureau[186]
