UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

  

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May 2022

 

Commission File Number: 001- 39258

 

METEN HOLDING GROUP LTD.

(Translation of registrant’s name into English)

 

3rd Floor, Tower A

Tagen Knowledge & Innovation Center

2nd Shenyun West Road, Nanshan District

Shenzhen, Guangdong Province 518000

People’s Republic of China

(Address of principal executive offices) 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒      Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit   Description
99.1   Press Release -- Meten Holding Group Ltd. Announces Financial Results for Fiscal Year Ended December 31, 2021

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 16, 2022

 

  Meten Holding Group Ltd.
     
  By: /s/ Siguang Peng
  Name:  Siguang Peng
  Title: Chief Executive Officer

 

 

2

 

 

Exhibit 99.1

 

Meten Holding Group Ltd. Announces Financial Results for Fiscal Year Ended December 31, 2021

 

SHENZHEN, China, May 16, 2022 /PRNewswire/ -- Meten Holding Group Ltd. (“Meten Holding Group” or the “Company”) (NASDAQ: METX), an omnichannel training company headquartered in China providing language and workplace training services and actively developing metaverse, blockchain and cryptocurrency mining businesses, today announced its financial results for the fiscal year ended December 31, 2021.

 

   FY2021 
   RMB (million)   YoY (%) 
Gross billings   551.3    (23.6)%
Revenues   729.0    (18.7)%
General adult English Language Training (“ELT”)   176.8    (47.0)%
Online ELT   290.4    0.2%
Overseas training services   151.1    15.7%
Junior ELT   98.0    (24.8)%
Gross Profit   245.3    (15.4)%
Gross Profit Margin   33.6%   1.3 ppts 
Adjusted net loss1   (360.6)   (12.9)%

 

1Non-GAAP measure. For more information about non-GAAP financial measures, please see the section captioned “About Non-GAAP Financial Measures” at the end of this press release.

 

Highlights

 

FY2021 revenue decreased 18.7% year-on-year to RMB729.0 million (US$114.4 million), primarily as a result of the resurgence of COVID-19 and a reduction in the number of offline learning centers.

 

FY2021 gross profit decreased 15.4% year-on-year to RMB245.3 million (US$38.5 million). Gross profit margin increased 1.3 percentage points year-on-year to 33.6%.

 

As of December 31, 2021, Meten Holding Group had 34 learning centers in operation. To optimize the layout of offline centers, the Company closed another 84 offline learning centers by the end of 2021.

 

FY2021 adjusted net loss increased 12.9% year-on-year to RMB360.6 million (US$56.6 million).

 

 

 

 

Alan Peng, Chief Executive Officer of Meten Holding Group commented:

 

“In fiscal year 2021, we significantly reduced the number of offline learning centers to effectively reduce the impact of the resurgence of COVID-19 on our business, improve the utilization of our resources, and prepare for the strategic transformation of our business. Inevitably, our financial and operational performances have been affected by the initiation of business transformation in fiscal year 2021. However, we expect these measures to significantly reduce the Company’s fixed costs, improve profit margins and reduce operating risks in the long term. With an effective resource reallocation, we believe that our offline learning centers’ operation performance and profitability will be significantly improved once the COVID-19 pandemic is under control.

 

We launched a number of new businesses in fiscal year 2021, in addition to the optimization of the existing business. In fiscal year 2021, we actively kept exploring opportunities in the blockchain and cryptocurrency industry and established strategic partnerships with AGM Group Holdings lnc. Meanwhile, the Company is actively seeking opportunities in mine construction, mining, and the manufacturing and sales of mining machines. In addition, the Company has entered into an agreement with industry experts in the cryptocurrency and blockchain industry to establish a joint venture engaging in the research and development, production, and sales of cryptocurrency mining equipment. We believe that all of these partnerships have laid a solid foundation for the steady development of the Company’s new approach in the field of Metaverse, blockchain and cryptocurrency.

 

We remain confident with our progress in our business transformation, and we believe we are well-positioned with multi-growth drivers. Looking forward, we will continue to execute our strategic plan and strive to generate additional revenue and create long-term shareholder value.”

 

Operational developments

 

   FY2021 
Student enrollments   64,067    (8.9)%
Course withdrawal rate(1) (%)   16.4%   5.4 ppts 

 

(1)Refers to the amount of refunds issued in a specific period of time as a percentage of the sum of the amount of gross billings and the amount of refunds for such period.

 

   December 31, 2021 
Number of self-operated learning centers   32    (69.5)%*
Number of franchised learning centers   2    (84.6)%*

 

(* Change compared to the previous year end)

 

Continued product innovation

 

The Company continued to invest in product development in fiscal year 2021, leveraging the several recently launched new products across both its offline and online platforms, which include three new language (Japanese, Spanish, Korean and German) products. For fiscal year 2021, the Company’s revenue derived from Japanese, Spanish and Korean language training services was RMB8.0 million (US$1.3 million).

 

2

 

 

Financial results

 

Revenues

 

In fiscal year 2021, revenue amounted to RMB729.0 million (US$114.4 million), a decrease of 18.7% year-on-year from RMB897.0 million in fiscal year 2020, primarily as a result of the resurgence of COVID-19 and a reduction in the number of offline learning centers.

 

For general adult ELT, revenues decreased 47.0% year-on-year, to RMB176.8 million (US$27.7 million) in fiscal year 2021 from RMB333.5 million in fiscal year 2020. For overseas training services, revenues increased 15.7% year-on-year, to RMB151.1 million (US$23.7 million) in fiscal year 2021 from RMB130.6 million in fiscal year 2020.

 

For Junior ELT, revenues decreased to RMB98.0 million (US$15.4 million) in fiscal year 2021 from RMB130.3 million in fiscal year 2020. This decrease in revenues was largely driven by the resurgence of COVID-19 and the closure of offline learning centers.

 

For online ELT, revenues increased 0.2% year-on-year, to RMB290.4 million (US$45.6 million) in fiscal year 2021 from RMB289.7 million in fiscal year 2020.

 

Cost of revenues

 

The Company’s cost of revenues consists primarily of staff costs, property expenses, depreciation and amortization, and teaching material costs.

 

In fiscal year 2021, cost of revenues decreased by 20.3% to RMB483.7 million (US$75.9 million), from RMB607.1 million in fiscal year 2020. This was predominantly due to efforts to optimize costs and a reduction in the number of offline learning centers.

 

Gross profit

 

In fiscal year 2021, gross profit decreased by 15.4% to RMB245.3 million (US$38.5 million), from RMB290.0 million in fiscal year 2020.

 

In fiscal year 2021, gross profit margin increased by 1.3 percentage points to 33.6% from 32.3% in fiscal year 2020.

 

Operating expenses

 

In fiscal year 2021, selling and marketing expenses amounted to RMB250.9 million (US$39.4 million), a decrease of 19.2% from RMB310.4 million in fiscal year 2020, primarily as a result of reduction in the number of offline sales points.

 

In fiscal year 2021, research and development expenses decreased by 42.2% year-on-year to RMB18.4 million (US$2.9 million), from RMB31.9 million in fiscal year 2020.

 

In fiscal year 2021, general and administrative expenses decreased by 2.0% year-on-year to RMB341.5 million (US$53.6 million), from RMB348.4million in fiscal year 2020.

 

3

 

 

Loss from operations

 

In fiscal year 2021, loss from operations was RMB365.4 million (US$57.3 million), compared to loss from operations of RMB400.8 million in fiscal year 2020.

 

Net loss

 

In fiscal year 2021, net loss was RMB386.3 million (US$60.6 million), compared to a net loss of RMB412.8 million in fiscal year 2020.

 

Cash and cash equivalents

 

As of December 31, 2021, Meten Holding Group had RMB168.4 million (US$26.4 million) of cash and cash equivalents, compared to RMB90.1 million as of December 31, 2020.

 

Outlook

 

The launch of the new businesses marks a strategic transformation of the Company. Currently, the Company’s cryptocurrency and Metaverse education businesses are in operation and are just beginning to generate revenue. The Company expects to develop and become a Metaverse technology company in the next one to two years with the deployment of its transformation strategies.

 

Exchange Rate

 

The Company’s business is primarily conducted in China and all of the revenues are denominated in Renminbi (“RMB”). This announcement contains translations of certain RMB amounts into U.S. dollars (“USD” or “US$”) at specified rates solely for the convenience of the readers. Unless otherwise noted, all translations from RMB to USD for fiscal year 2021 are made at the rate of RMB6.3726 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2021, respectively. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2021, as the case may be, or at any other rate.

 

About Non-GAAP Financial Measures

 

Meten Holding Group’s consolidated financial results are presented in accordance with GAAP. However, to provide meaningful supplemental information regarding its performance, Meten Holding Group adopts the following measures which are defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission:

 

EBITDA: calculated by subtracting net interest income/loss and adding back income tax expense and non-cash expense of depreciation and amortization to a firm’s net income/(loss).

 

Adjusted EBITDA: calculated by removing certain one-off, irregular and/or non-recurring items from EBITDA such as offering expenses and share-based compensation expenses.

 

Adjusted net (loss)/income: calculated by adding back certain one-off, irregular and/or non-recurring items to net income/loss such as offering expenses and share-based compensation expenses.

 

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

 

4

 

 

About Meten Holding Group Ltd.

 

Meten Holding Group Ltd., formerly known as Meten EdtechX Education Group Ltd., is an omnichannel training company headquartered in China providing language and workplace training services. In addition to its training services, Meten Holding Group actively develops metaverse, blockchain and cryptocurrency mining businesses to align with its future business development strategy. Meten Holding Group is committed to developing blockchain related businesses in North America, including cryptocurrency mining, mining farm construction, and mining pool and data center operation. Meten Holding Group actively explores metaverse business, such as Metaverse vocational education courses, with its competitive advantages and technology.

 

For more information, please visit: https://investor.metenedu-edtechx.com.

 

Safe Harbor Statement

 

This announcement contains forward-looking statements that involve risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the future development of and the Company’s ability to succeed in its new line of business in cryptocurrency and blockchain industry; the continuing impact of the COVID-19 pandemic and the emergence of new variants; our ability to attract students without a significant decrease in course fees; our ability to continue to hire, train and retain qualified teachers; our ability to maintain and enhance our brands; our ability to effectively and efficiently manage the expansion of our school network and successfully execute our growth strategy; the outcome of ongoing, or any future, litigation or arbitration, including those relating to copyright and other intellectual property rights; competition in the English language training sector in China; changes in our revenues and certain cost or expense items as a percentage of our revenues; the expected growth of the Chinese English language training and private education market; Chinese governmental policies relating to private educational services and providers of such services; health epidemics and other outbreaks in China; and general economic conditions in China. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

 

For investor and media inquiries, please contact:

 

Ascent Investor Relations LLC
Tina Xiao
+1 917-609-0333
tina.xiao@ascent-ir.com

 

5

 

 

METEN HOLDING GROUP LTD

CONSOLIDATED BALANCE SHEETS

(In thousands of RMB, except share data and per share data, or otherwise noted)

 

   As of December 31, 
   2020   2021 
   RMB’000   RMB’000   US$’000 
           Unaudited 
           (Note 3(c)) 
ASSETS            
Current assets            
Cash and cash equivalents   90,115    168,404    26,426 
Contract assets   6,194    5,323    835 
Accounts receivable, net   27,013    44,291    6,950 
Other contract costs   47,125    32,241    5,059 
Prepayments and other current assets   50,658    117,735    18,475 
Amounts due from related parties   7,934    7,265    1,140 
Prepaid income tax   14,460    14,479    2,272 
                
Total current assets   243,499    389,738    61,157 
                
Non-current assets               
Restricted cash   10,358    8,840    1,387 
Other contract costs   9,316    11,149    1,750 
Equity method investments   24,552    24,403    3,829 
Property and equipment, net   146,891    85,803    13,464 
Operating lease right-of-use assets   322,559    105,551    16,563 
Intangible assets, net   19,337    14,675    2,303 
Deferred tax assets   6,997    25,991    4,079 
Goodwill   274,567    192,962    30,280 
Long-term prepayments and other non-current assets   40,754    26,254    4,122 
                
Total non-current assets   855,331    495,628    77,777 
                
Total assets   1,098,830    885,366    138,934 

 

6

 

 

METEN HOLDING GROUP LTD

CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands of RMB, except share data and per share data, or otherwise noted)

 

   As of December 31, 
   2020   2021 
   RMB’000   RMB’000   US$’000 
           Unaudited 
           (Note 3(c)) 
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities            
Accounts payable (including amounts of variable interest entities (“VIEs”) without recourse to the Company of RMB 9,762 and RMB 15,881 as of December 31, 2020 and 2021, respectively)   17,013    16,164    2,536 
Bank loans (including amounts of VIEs without recourse to the Company of RMB 133,900 and RMB 6,000 as of December 31, 2020 and 2021, respectively )   133,900    6,000    942 
Deferred revenue  (including amounts of VIEs without recourse to the Company of RMB 341,934 and RMB 213,006 as of December 31, 2020 and 2021, respectively)   341,934    213,006    33,425 
Salary and welfare payable  (including amounts of VIEs without recourse to the Company of RMB 65,927 and RMB 26,075 as of December 31, 2020 and 2021, respectively)   67,609    27,404    4,300 
Financial liabilities from contracts with customers  (including amounts of VIEs without recourse to the Company of RMB 384,561 and RMB 337,932  as of December 31, 2020 and 2021, respectively)   384,561    337,932    53,029 
Accrued expenses and other payables (including amounts of VIEs without recourse to the Company of RMB 43,009 and RMB 7,733 as of December 31, 2020 and 2021, respectively)   46,030    36,575    5,739 
Income taxes payable (including amounts of VIEs without recourse to the Company of RMB 267 and RMB 195 as of December 31, 2020 and 2021, respectively)   267    195    31 
Amounts due to related parties (including amounts of VIEs without recourse to the Company of RMB159,739 and RMB 685,287 as of December 31, 2020 and 2021, respectively)   50,192    41,758    6,553 
Current operating lease liabilities  (including amounts of VIEs without recourse to the Company of RMB 131,151 and RMB 35,817 as of December 31, 2020 and 2021, respectively)   131,151    35,817    5,620 
Total current liabilities   1,172,657    714,851    112,175 

 

7

 

 

METEN HOLDING GROUP LTD

CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands of RMB, except share data and per share data, or otherwise noted)

 

   As of December 31, 
   2020   2021 
   RMB’000   RMB’000   US$’000 
           Unaudited 
           (Note 3(c)) 
Non-current liabilities            
Deferred revenue (including amounts of VIEs without recourse to the Company of RMB 46,927 and RMB 35,546 as of December 31, 2020 and 2021, respectively)   46,927    35,546    5,578 
Deferred tax liabilities (including amounts of VIEs without recourse to the Company of RMB 7,661 and RMB 4,433 as of December 31, 2020 and 2021, respectively)   7,661    4,433    696 
Operating lease liabilities (including amounts of VIEs without recourse to the Company of RMB 200,409 and RMB 59,824 as of December 31, 2020 and 2021, respectively)   200,409    59,824    9,388 
Non-current tax payable (including amounts of VIEs without recourse to the Company of RMB 33,718 and RMB 34,137 as of December 31, 2020 and 2021, respectively)   33,718    34,137    5,357 
                
Total non-current liabilities   288,715    133,940    21,019 
                
Total liabilities   1,461,372    848,791    133,194 

 

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METEN HOLDING GROUP LTD

CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands of RMB, except share data and per share data, or otherwise noted)

 

   As of December 31, 
   2020   2021 
   RMB’000   RMB’000   US$’000 
           Unaudited 
           (Note 3(c)) 
Shareholders’ equity            
Ordinary shares (US$0.003 par value; 16,666,667 shares authorized; 1,895,819 and  11,371,444 shares issued outstanding as of December 31, 2020 and 2021) *   37    217    34 
Subscriptions receivable   -    -    - 
Additional paid-in capital   557,535    1,342,769    210,710 
Accumulated deficit   (936,247)   (1,320,546)   (207,222)
                
Total equity (deficit) attributable to shareholders of the Company   (378,675)   22,440    3,522 
Non-controlling interests   16,133    14,135    2,218 
                
Total equity (deficit)   (362,542)   36,575    5,740 
                
Commitments and contingencies   -    -    - 
                
Total liabilities and shareholders’ deficit   1,098,830    885,366    138,934 

 

9

 

 

METEN HOLDING GROUP LTD

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(In thousands of RMB, except share data and per share data, or otherwise noted)

 

   Years ended December 31, 
   2019   2020   2021 
   RMB’000   RMB’000   RMB’000   US$’000 
               Unaudited 
               (Note 3(c)) 
Revenues   1,447,899    897,035    728,996    114,395 
Cost of revenues   (755,356)   (607,077)   (483,701)   (75,903)
Gross profit   692,543    289,958    245,295    38,492 
Operating expenses:                    
Selling and marketing expenses   (437,986)   (310,433)   (250,850)   (39,364)
General and administrative expenses   (449,903)   (348,435)   (341,455)   (53,582)
Research and development expenses   (32,333)   (31,878)   (18,413)   (2,889)
Loss from operations   (227,679)   (400,788)   (365,423)   (57,343)
Other income (expenses):                    
Interest income   1,633    448    340    53 
Interest expenses   (2,453)   (6,101)   (2,400)   (377)
Foreign currency exchange loss, net   (19)   (382)   (9,678)   (1,519)
Gains/(losses) on disposal and closure of subsidiaries and branches   583    (31,884)   (37,829)   (5,936)
Gains on Short-term investments   -    495    -    - 
Government grants   5,773    28,124    7,969    1,251 
Equity in income/(loss) on equity method investments   2,658    (1,532)   (149)   (23)
Others, net   4,044    4,640    634    99 
Loss before income tax   (215,460)   (406,980)   (406,536)   (63,795)
Income tax credit/(expense)   (9,608)   (5,803)   20,239    3,176 
Net loss   (225,068)   (412,783)   (386,297)   (60,619)
Less: Net loss attributable to non-controlling interests   (5,664)   (1,798)   (1,998)   (314)
Net loss attributable to shareholders of the Company   (219,404)   (410,985)   (384,299)   (60,305)
Less: Accretion of Redeemable Owners’ Investment   -    -    -    - 
Net loss available to shareholders of the Company   (219,404)   (410,985)   (384,299)   (60,305)
                     
Net loss   (225,068)   (412,783)   (386,297)   (60,619)
                     
Comprehensive loss   (225,068)   (412,783)   (386,297)   (60,619)
Net loss per share                    
- Basic   (136.02)   (221.51)   (28.19)   (4.42)
- Diluted   (136.02)   (187.26)   (31.92)   (5.01)
Weighted average shares used in calculating net loss per share                    
- Basic   1,613,054    1,855,382    13,634,847    13,634,847 
- Diluted   1,613,054    2,194,735    12,040,040    12,040,040 

 

Adjusted net income represents net income/(loss) before share-based compensation and offering expenses. The table below sets forth a reconciliation of our adjusted net income for the periods indicated:

 

   For the Year Ended December 31, 
   2017   2018   2019   2020   2021 
   RMB   RMB   RMB   RMB   RMB   US$ 
   (in thousands)     
Net (loss)/income   40,342    53,445    (225,068)   (412,783)   (386,297)   (60,619)
Add:                              
Share-based compensation expenses   7,886    7,648    96,661    52,256    23,334    3,662 
Offering expenses       14,766    28,123             
Warrant financing                  41,118    2,404    377 
Adjusted net (loss)/income   48,228    75,859    (100,284)   (319,409)   (360,559)   (56,579)

 

 

10