Revenue and Financial Performance - The company generated $1,773,684 from its blockchain and digital asset mining business for the year ended June 30, 2023[434] - The company earned $1,073,269 from its tea shop chain business for the year ended June 30, 2023, compared to $765,094 in 2022 and $358,515 in 2021[440] - Total revenue for the year ended June 30, 2023 was $2,883,418, a 276.9% increase from $765,094 in 2022[447] - Total revenue increased by $2.1 million or 276.9% from $0.8 million in FY2022 to $2.9 million in FY2023, driven by blockchain and digital asset mining revenue of $1.8 million and tea shop chains revenue of $1.1 million[452] - Revenue from continuing operations increased by $0.41 million or 113% from $0.36 million in FY2021 to $0.77 million in FY2022, driven by consolidation of two subsidiaries[471] - Revenue from dark tea products decreased to $1.7 million in 2022 from $5.4 million in 2021, primarily due to COVID-19 pandemic and strict stay-at-home policies[476] Costs and Expenses - The company reported a gross loss of $2,738,312 for the year ended June 30, 2023, compared to a gross profit of $314,784 in 2022[447] - Operating expenses increased by 279.2% to $39,470,964 for the year ended June 30, 2023, compared to $10,408,530 in 2022[447] - Cost of revenues increased by $5.17 million or 1148.4% from $0.45 million in FY2022 to $5.62 million in FY2023, mainly due to $4.99 million in digital asset mining costs[453] - General and administrative expenses increased by $29.1 million or 279.2% from $10.4 million in FY2022 to $39.5 million in FY2023, primarily due to $23.9 million in bad debt expenses and $4.58 million in stock incentive payments[456] - Cost of revenues for continuing operations increased by $0.27 million or 150% to $0.45 million in FY2022, in line with revenue growth[472] - General and administrative expenses for continuing operations increased by $1.6 million or 19% from $8.8 million in FY2021 to $10.4 million in FY2022, mainly due to $1.00 million in share-based compensation expenses[474] Losses and Impairments - The company recorded an impairment loss of $185,290 on digital assets for the year ended June 30, 2023[447] - Net loss from continuing operations was $96,807,155 for the year ended June 30, 2023, a 625.3% increase from $13,347,104 in 2022[447] - The company accrued impairment of $54.1 million for mining equipment deposits in FY2023, compared to $2.6 million in FY2022, due to COVID-19 and economic recession impacts[457] - Net loss for FY2023 was $92.2 million, representing a $66.4 million increase from the $25.8 million net loss in FY2022[468] - Net loss for the year ended June 30, 2022 was $25.8 million, a $17.8 million increase from the net loss of $8.0 million in 2021[479] - Impairment of goodwill for the year ended June 30, 2022 was $9.57 million due to the termination of VIE agreements with 39Pu[477] Cash Flow and Financing - Cash and cash equivalents decreased to $5.37 million as of June 30, 2023 from $12.99 million as of June 30, 2022[494] - Net cash used in operating activities for the year ended June 30, 2023 was $10.0 million, primarily due to net loss from continuing operations of $96.8 million[496] - Net cash used in investing activities for the year ended June 30, 2023 was $10.0 million, mainly due to purchases of property and equipment of $17.2 million[499] - Net cash provided by financing activities for the year ended June 30, 2023 was $7.1 million, raised from a registered direct offering[501] - The company raised $7.1 million from registered direct offerings during the year ended June 30, 2023[494] - The company raised $20.8 million from registered direct offerings and $54.3 million from a private placement during the year ended June 30, 2022[494] - The company repurchased warrants issued in connection with a registered direct offering in July 2021 for $6.4 million[494] Business Operations and Strategy - The company disposed of 51% of its shares in Hunan 39 Pu Tea Co., Ltd. for RMB 8 million, which was reported as a discontinued operation[439] - The company operates two brands, Buoyance Manor and Your Ladyship Tea, and plans to launch a new brand, Meet Honey, focusing on snacks and accessories[440][441] - The company faces competition in the Hunan province from brands such as Maiji, Luosennina, NAYUKI, and Chayanyuese[442] - The company operates as a holding company with no material operations of its own, relying on subsidiaries and consolidated VIE for dividends[508] - PRC subsidiaries may use retained earnings to provide financial support to the consolidated VIE through loans or capital contributions[509] Risks and Uncertainties - No significant trends, uncertainties, or events identified that would materially affect the company's financial performance for the year ended June 30, 2023[503] - The company has no off-balance sheet arrangements, financial guarantees, or derivative contracts tied to its shares[504] - The company is exposed to foreign exchange risk, with a 5% RMB appreciation/depreciation impacting comprehensive income by $2.7 million[627] - The company does not engage in hedging transactions to mitigate interest rate or foreign exchange risks[626][627] - Most of the company's revenues, costs, and assets are denominated in RMB, making it sensitive to RMB-USD exchange rate fluctuations[627] - The RMB exchange rate is influenced by China's political and economic conditions, with potential for significant medium-to-long-term fluctuations[628] Assets and Liabilities - The company held 67.87 bitcoin with a carrying value of $1.77 million and accrued impairment of $185,290 as of June 30, 2023[458] - Total lease payments for the next three years amount to $1,056,687, with a present value of lease liabilities at $998,755[507] - Accumulated other comprehensive income as of June 30, 2023, was $3.9 million[627]
Bit Brother (BETS) - 2023 Q4 - Annual Report