MultiMetaVerse Holdings Limited Announces 2023 Unaudited Half Year Financial Results
- Revenue from mobile games increased by 40% due to the launch of Project A in February 2023.
- The company delivered successful animation and entertainment content, with a major game update securing 1.6 million new users and a new series earning a high rating on Bilibili.
- The number of followers on Douyin and Kuaishou increased from 5.3 million to 5.8 million in the first half of 2023.
- The company experienced revenue growth in game cinematic animation production services and brand licensing.
- Total net revenues decreased by 31% compared to the same period in 2022.
- Net loss attributable to shareholders of the Company was US$23.8 million, compared to US$4.8 million for the same period in 2022.
- Adjusted EBITDA was negative US$4.2 million, compared to negative US$1.8 million for the same period in 2022.
- Revenue from merchandise sales decreased by 41% due to a weaker consumer market in China.
- Revenue from animation production services decreased by 49% due to less animation series produced.
- Total operating expenses more than tripled compared to the same period in 2022.
Insights
The financial results of MultiMetaVerse Holdings Limited indicate a notable decline in net revenues by 31% and a substantial increase in net loss to US$23.8 million from US$4.8 million year-over-year. This significant downturn is a red flag for investors and stakeholders, reflecting challenges in consumer demand within the Chinese market, particularly among the young consumer base that the company targets.
The report also highlights a successful launch of a new game update, which could be a potential growth driver, yet the overall financial health of the company seems to be in jeopardy, considering the working capital deficit and the accumulated deficit of US$110.3 million. The increase in operating expenses, mainly due to share-based compensation and transaction costs, has contributed to the company's losses.
While the company's efforts to streamline operations and secure additional funding through a subscription agreement are positive steps, the ability to achieve cost control and budget goals remains uncertain. The liquidity and capital resources section of the report casts doubt on the company's ability to continue as a going concern without successful capital raising efforts.
MultiMetaVerse Holdings Limited's performance must be assessed within the broader context of the Chinese animation and entertainment industry. The industry faces headwinds due to reduced consumer spending, which is reflected in the company's merchandise revenue decline. However, the company's strategic focus on digital content, such as the launch of Project A and the production of Aotu Academy Season 3, aligns with the shift towards online entertainment consumption.
Despite the downturn, the company's growth in social media followers and the positive reception of its new series on Bilibili suggest a strong brand presence and potential for monetization. The increase in mobile game revenue is a positive indicator, yet it is not enough to offset the losses in other segments. The report indicates a need for a strategic pivot or operational efficiency improvements to sustain the business in the long-term.
The financial struggles of MultiMetaVerse Holdings Limited can be partially attributed to macroeconomic factors affecting China's economy, including the consumer demand slowdown. This economic downturn has a direct impact on discretionary spending, particularly in entertainment sectors targeting younger demographics who may be more sensitive to economic shifts.
Furthermore, the company's decision to engage in a business combination and subsequent equity fundraising suggests an attempt to restructure and stabilize its financial position. The success of these measures will depend on both internal management efficiency and the external economic environment. The potential for increased interest rates and tightening credit conditions could further challenge the company's financial stability and growth prospects.
2023 Half Year Highlights:
- Business combination among Model Performance Acquisition Corp., the Company, Model Performance Mini Sub Corp. and MultiMetaVerse Inc. (the "Business Combination"), pursuant to the terms of the merger agreement dated as of August 6, 2021, was consummated on January 4, 2023.
- Total net revenues were
US , representing a decrease of$5.5 million 31% compared to that of the same period in 2022. - Net loss attributable to shareholders of the Company was
US , compared to$23.8 million US for the same period in 2022.$4.8 million - Adjusted EBITDA was negative
US , compared to negative$4.2 million US of net adjusted EBITDA for the same period in 2022.$1.8 million
"Affected by the overall decrease of consumer demand in
2023 Half Year Financial Results
Total net revenues. Total net revenues were
Mobile games. Revenue from mobile games was
Merchandise. Revenue from merchandise sales was
Animation production services. Revenue from rendering of animation production services was
Licensing. Revenue from licensing was
Cost of revenues. Cost of revenues was
Gross profit. Gross profit decreased to
Total operating expenses. Total operating expenses were
Selling expenses. Selling expenses were
General and administrative expenses. General and administrative expenses were
Research and development expenses. Research and development expenses were
Loss from operations. Loss from operations was
Other income/(loss), net. Total other loss was
Net loss. Net loss attributable to MultiMetaVerse Holdings Limited's shareholders was
Adjusted EBITDA. Adjusted EBITDA was negative
Basic and diluted EPS. Basic and diluted net loss per ordinary share were
Cash and cash equivalents. As of June 30, 2023, the Company had cash and cash equivalents of
Liquidity and capital resources. The Group has incurred losses since its inception. As of June 30, 2023, the Group had an accumulated deficit and a working capital deficit of
There can be no assurance that the Group will be successful in achieving its cost control and budget goals, that the Group's future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If the Group is unable to raise sufficient financing or events or circumstances occur such that the Group does not meet its cost control and budget goals, it may have a material adverse effect on the Group's financial position, results of operations, cash flows, and ability to achieve its intended business objectives.
About MultiMetaVerse Holdings Limited
MultiMetaVerse Holdings Limited (NASDAQ: MMV) is an animation and entertainment company dedicated to providing a high-quality, immersive entertainment experience through original, user-generated, and professional user-generated content. MMV commenced animation production in 2015 under its signature Aotu World brand, which has attracted a broad following with its inspiring storyline and unique graphic style, particularly among younger audiences in
For more information, please visit https://www.multi-metaverse.com/.
Use of Non-GAAP Financial Measures
The Company uses adjusted net loss and adjusted EBITDA, which are non-GAAP financial measures, in evaluating its financial results and for financial and operational decision-making purposes. Adjusted net loss represents net income excluding share-based compensation expenses, impairment loss and transaction costs, and such adjustment has no impact on income tax expense.
The Company believes that adjusted net loss and adjusted EBITDA help identify the underlying trends of its business that could otherwise be distorted by the effect of certain expenses that the Company includes in the net loss. The Company believes that adjusted net loss and adjusted EBITDA provide useful information about its financial results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision- making.
Adjusted net loss and adjusted EBITDA should not be considered in isolation or construed as an alternative to net loss or any other measure of performance or as an indicator of the Company's operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net loss and adjusted EBITDA presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the data of the Company. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results."
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
For investor and media inquiries, please contact:
MultiMetaVerse Holdings Limited
Investor Relations
E-mail: ir@multi-metaverse.com
MULTIMETAVERSE HOLDINGS LIMITED | ||||||||
Unaudited Condensed Consolidated Statements of Operations | ||||||||
(In | ||||||||
For the six months ended | ||||||||
2023 | 2022 | |||||||
(Unaudited) | (Unaudited) | |||||||
Net revenue | ||||||||
Services | $ | 4,144,850 | $ | 5,627,619 | ||||
Products | 1,366,514 | 2,322,014 | ||||||
Total net revenue | 5,511,364 | 7,949,633 | ||||||
Cost of revenue | ||||||||
Services | (2,380,746) | (2,977,575) | ||||||
Products | (746,714) | (1,277,005) | ||||||
Total cost of revenue | (3,127,460) | (4,254,580) | ||||||
Gross profit | 2,383,904 | 3,695,053 | ||||||
Operating expenses: | ||||||||
Selling expenses | (1,107,041) | (470,275) | ||||||
General and administrative expenses | (21,686,637) | (4,458,951) | ||||||
Research and development expenses | (3,060,104) | (3,396,193) | ||||||
Total operating expenses | (25,853,782) | (8,325,419) | ||||||
Loss from operations | (23,469,878) | (4,630,366) | ||||||
Other income/(loss): | ||||||||
Interest income | 580 | 702 | ||||||
Interest expense | (595,111) | (262,246) | ||||||
Foreign currency exchange gain, net | 8,045 | 2,536 | ||||||
Other income, net | 92,659 | 42,011 | ||||||
Total other income/(loss) | (493,827) | (216,997) | ||||||
Loss before income tax expense | (23,963,705) | (4,847,363) | ||||||
Income tax expense | - | - | ||||||
Net loss | $ | (23,963,705) | $ | (4,847,363) | ||||
Net loss attributable to non-controlling interest | (161,171) | (88,652) | ||||||
Net loss attributable to MultiMetaVerse Holdings Limited's shareholders | (23,802,534) | (4,758,711) | ||||||
Other comprehensive income/(loss) | ||||||||
Foreign currency translation gain/(loss), net of nil income taxes | 855,918 | 516,767 | ||||||
Total comprehensive loss | $ | (23,107,787) | $ | (4,330,596) | ||||
Total comprehensive income/(loss) attributable to non-controlling interest | (19,447) | 69,534 | ||||||
Total comprehensive loss attributable to MultiMetaVerse Holdings Limited's | (23,088,340) | (4,400,130) | ||||||
Loss per ordinary share attributable to MultiMetaVerse Holdings Limited's | ||||||||
Basic and Diluted* | (0.72) | (0.16) | ||||||
Weighted average number of ordinary shares outstanding | ||||||||
Basic and Diluted* | 32,962,468 | 30,000,000 | ||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||
(In | ||||||||
As of | ||||||||
June 30, | December | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,809,910 | $ | 625,184 | ||||
Accounts receivable, net | 410,530 | 787,480 | ||||||
Amounts due from related parties | 388,451 | 151,826 | ||||||
Inventories, net | 629,941 | 820,181 | ||||||
Prepayments and other current assets | 1,501,589 | 3,135,906 | ||||||
Total current assets | $ | 4,740,421 | $ | 5,520,577 | ||||
Non-current assets: | ||||||||
Property and equipment, net | 140,379 | 197,578 | ||||||
Intangible assets, net | 39,210 | 104,866 | ||||||
Long-term investment | 460,000 | 460,000 | ||||||
Right-of-use assets | 260,290 | 645,090 | ||||||
Total non-current assets | 899,879 | 1,407,534 | ||||||
TOTAL ASSETS | $ | 5,640,300 | $ | 6,928,111 | ||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 2,589,087 | $ | 116,424 | ||||
Accounts payable | 1,000,874 | 1,093,465 | ||||||
Amounts due to related parties, current portion | 604,477 | 483,536 | ||||||
Deferred revenue, current portion | 164,851 | 194,668 | ||||||
Operating lease liabilities, current portion | 283,054 | 555,869 | ||||||
Accrued liabilities and other current liabilities | 2,046,105 | 1,927,414 | ||||||
Total current liabilities | 6,688,448 | 4,371,376 | ||||||
Non-current liabilities: | ||||||||
Amounts due to related parties, non-current portion | 23,493,287 | 19,401,144 | ||||||
Deferred revenue, non-current portion | 455,351 | 560,796 | ||||||
Operating lease liabilities, non-current portion | 71,946 | - | ||||||
Warrant liability | 16,375 | - | ||||||
Total non-current liabilities | 24,036,959 | 19,961,940 | ||||||
TOTAL LIABILITIES | $ | 30,725,407 | $ | 24,333,316 | ||||
Shareholders' equity | ||||||||
Class A Ordinary shares*(no par value; 100,000,000 Class A Ordinary Shares | $ | - | $ | - | ||||
Additional paid-in capital | 89,680,745 | 74,252,860 | ||||||
Accumulated deficit | (110,289,827) | (86,487,293) | ||||||
Accumulated other comprehensive loss | (2,674,133) | (3,365,595) | ||||||
MultiMetaVerse Holdings Limited shareholders' deficit | (23,283,215) | (15,600,028) | ||||||
Non-controlling interests | (1,801,892) | (1,805,177) | ||||||
Total shareholders' deficit | (25,085,107) | (17,405,205) | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ | 5,640,300 | $ | 6,928,111 | ||||
Unaudited Reconciliations of GAAP and Non-GAAP Results | ||||||||
(In | ||||||||
For the six months ended | ||||||||
2023 | 2022 | |||||||
(Unaudited) | (Unaudited) | |||||||
Non-GAAP Financial Measures | ||||||||
Net Loss | $ | (23,963,705) | $ | (4,847,363) | ||||
Adjustments: | ||||||||
Share-based compensation | 15,095,968 | 2,264,394 | ||||||
Transaction costs | 3,956,703 | 352,590 | ||||||
Adjusted net loss | $ | (4,911,034) | $ | (2,230,379) | ||||
Adjustments: | ||||||||
Interest expense | 595,111 | 262,246 | ||||||
Depreciation and amortization of property and equipment and intangible assets | 120,626 | 127,821 | ||||||
Adjusted EBITDA | $ | (4,195,297) | $ | (1,840,312) | ||||
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SOURCE MultiMetaVerse Holdings Limited
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