Ebang International Reports Financial Results for Fiscal Year 2020

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HANGZHOU, China, April 30, 2021 (GLOBE NEWSWIRE) — Ebang International Holdings Inc. (Nasdaq: EBON, the “Company,” “we” or “our”), a blockchain technology company in the global market, today announced its financial results for the fiscal year ended December 31, 2020.

Operational and Financial Highlights for Fiscal Year 2020

Total computing power sold in fiscal year 2020 was 0.50 million TH/s, representing a year-over-year decrease of 91.64% from 5.97 million TH/s in fiscal year 2019.

Total net revenues in fiscal year 2020 were US$19.00 million representing an 82.57% year-over-year decrease from US$109.06 million in fiscal year 2019.

Gross loss in fiscal year 2020 was US$2.90 million representing a 90.51% year-over-year decrease from US$30.56 million in fiscal year 2019.

Net loss in fiscal year 2020 was US$32.11 million compared to US$41.07 million in fiscal year 2019.

Mr. Dong Hu, Chairman and Chief Executive Officer of the Company, commented, “The negative impact and unprecedented challenges caused by COVID-19 on businesses around the world is well documented, and we are not immune to them. Our chip suppliers have reduced their production capacity, resulting in our shortage of raw materials during the fiscal year of 2020. To ensure the resilience of our business operations and deliver solid performance after the market condition resumes normal, we have been actively optimizing our revenue structure based on the productivity ratio and strategically exploring expansion into blockchain-enabled financial services. For example, we positioned our overseas expansion by establishing subsidiaries globally and acquiring relevant licenses or authorizations for our cryptocurrency exchange business.”

Continued Hu, “We are committed to our mission in strengthening the technological innovation in our products and services to ensure their competitiveness in the global cryptocurrency market. As previously noted, in 2021, we will increase investments in high performance ASIC chips and mining machines. Our abundant cash reserve allows us to expand the revenue sources from our current business and optimize the development of our blockchain industry chain. We believe our current businesses have solid potential and we are working hard to deliver results going forward that will demonstrate sequential improvement in operating and financial metrics.”

Financial Results for Fiscal Year 2020

Total net revenues in fiscal year 2020 were US$19.00 million representing an 82.57% year-over-year decrease from US$109.06 million in fiscal year 2019. The year-over-year decrease in total net revenues was primarily due to the combined impact of COVID-19 such as travel restrictions, mandatory quarantines and suspension of business activities, which have caused severe disruptions and uncertainties to the Company’s business operations and adversely affected the Company’s results of operations and financial condition. For instance, the Company’s chip suppliers have reduced their production capacity due to the impact of the COVID-19, resulting in the Company’s shortage of raw materials during the first half of 2020. And together with the Bitcoin halving event, which significantly affected the expected returns on Bitcoin related activities such as mining, and in turn resulted in a much lower demand and average selling price of the Company’s Bitcoin mining machines.

Cost of revenues in fiscal year 2020 was US$21.90 million compared to US$139.62 million in fiscal year 2019. The year-over-year decrease in cost of revenues was in line with the changes in the Company’s sales and the decrease in inventory write-down.

Gross loss in fiscal year 2020 were US$2.90 million representing a 90.51% year-over-year decrease from US$30.56 million in fiscal year 2019.

Total operating expenses in fiscal year 2020 were US$23.75 million compared to US$20.08 million in fiscal year 2019.

  • Selling expenses in fiscal year 2020 were US$0.93 million compared to US$1.21 million in fiscal year 2019. The year-over-year decrease in selling expenses was in line with the decrease in the Company’s sales as well as reduced salary and bonus expenses relating to selling activities.
  • General and administrative expenses in fiscal year 2020 were US$22.82 million compared to US$18.87 million in fiscal year 2019. The year-over-year increase in general and administrative expenses was primarily due to increase in professional fee related to the IPO process.

Loss from operations in fiscal year 2020 was US$26.65 million compared to US$50.65 million in fiscal year 2019.

Interest income in fiscal year 2020 was US$0.82 million compared to US$0.22 million in fiscal year 2019. The year-over-year increase in interest income was primarily due to the increase in the interest income from our investments in bonds after our IPO in 2020 and there was no bond investment in 2019.

Government grants in fiscal year 2020 were US$4.01 million compared to US$6.30 million in fiscal year 2019. The year-over-year decrease in government grants was primarily due to the decrease of non-recurring rebates from local government.

Net loss in fiscal year 2020 was US$32.11 million compared to US$41.07 million in fiscal year 2019.

Net loss attributable to Ebang International Holdings Inc. in fiscal year 2020 was US$30.67 million compared to US$42.40 million in fiscal year 2019.

Basic and diluted net loss per shares in fiscal year 2020 were both US$0.25 compared to US$0.38 in fiscal year 2019.

Cash and cash equivalents were US$13.67 million as of December 31, 2020, compared with US$3.46 million as of December 31, 2019.

About Ebang International Holdings Inc.

Ebang International Holdings Inc. is a blockchain technology company with strong application-specific integrated circuit (ASIC) chip design capability. With years of industry experience and expertise in ASIC chip design, it has become a leading bitcoin mining machine producer in the global market with steady access to wafer foundry capacity. With its licensed or registered entities in various jurisdictions, the Company seeks to launch a professional, convenient and innovative digital asset financial service platform to expand into the upstream and the downstream of blockchain and cryptocurrency industry value chain. For more information, please visit https://ir.ebang.com.cn/.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s development plans and business outlook, which can be identified by terminology such as “may,” “will,” “expects,” “anticipates,” “aims,” “potential,” “future,” “intends,” “plans,” “believes,” “estimates,” “continue,” “likely to” and other similar expressions. Such statements are not historical facts, and are based upon the Company’s current beliefs, plans and expectations, and the current market and operating conditions. Forward-looking statements involve inherent known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, which may cause the Company’s actual results, performance and achievements to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. These forward-looking statements are made only as of the date indicated, and the Company undertakes no obligation to update or revise the information contained in any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

Investor Relations Contact

For investor and media inquiries, please contact:

Ebang International Holdings Inc.
Email: [email protected]

Ascent Investor Relations LLC
Ms. Tina Xiao
Tel: (917) 609-0333
Email: [email protected]

EBANG INTERNATIONAL HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(Stated in US dollars)

  December 31,
2020
   December 31,
2019
 
ASSETS     
Current assets:     
Cash and cash equivalents$13,669,439  $3,464,262 
Restricted cash, current 406,857   2,270,588 
Debt investments 40,835,000    
Accounts receivable, net 7,205,113   8,128,178 
Notes receivable 765,967    
Advances to suppliers 221,186   1,062,049 
Inventories, net 3,845,091   13,088,542 
Prepayments 522,808   591,031 
Other current assets, net 1,128,599   224,452 
Total current assets 68,600,060   28,829,102 
        
Non-current assets:       
Property, plant and equipment, net 29,123,243   13,224,761 
Intangible assets, net 23,077,435   3,784,153 
Operating lease right-of-use assets 898,335   1,280,076 
Operating lease right-of-use assets – related party 17,701   37,266 
Restricted cash, non-current 47,455   43,317 
Deferred tax assets    8,542,715 
VAT recoverable 21,897,063   21,954,169 
Other assets 538,934   4,915,487 
Total non-current assets 75,600,166   53,781,944 
        
Total assets$144,200,226  $82,611,046 
        
LIABILITIES AND EQUITY       
Current liabilities:       
Accounts payable$2,762,187  $11,832,003 
Notes payable 1,087,673    
Accrued liabilities and other payables 21,921,614   13,739,041 
Loans due within one year, less unamortized debt issuance costs 765,967   4,864,697 
Operating lease liabilities, current 659,807   793,521 
Operating lease liabilities – related party, current 17,701   37,266 
Income taxes payable 556,137   521,648 
Due to related party 5,652,833   6,242,824 
Advances from customers 832,842   1,015,675 
Total current liabilities 34,256,761   39,046,675 
        
Non-current liabilities:       
Long-term loans – related party    17,632,000 
Deferred tax liabilities 872    
Operating lease liabilities, non-current 118,827   361,747 
Total non-current liabilities 119,699   17,993,747 
        
Total liabilities 34,376,460   57,040,422 
        
Equity:       
Ordinary share, HKD0.001 par value, 380,000,000 shares authorized, nil
and 111,771,000 shares issued and outstanding at December 31, 2020 and
2019, respectively
    14,330 
Class A ordinary share, HKD0.001 par value, 333,374,217 shares
authorized, 89,009,554 and nil shares issued and outstanding as of
December 31, 2020 and 2019, respectively
 11,411    
Class B ordinary share, HKD0.001 par value, 46,625,783 shares
authorized, 46,625,783 and nil shares issued and outstanding as of
December 31, 2020 and 2019, respectively
 5,978    
Additional paid-in capital 138,288,921   23,888,023 
Statutory reserves 11,049,847   11,049,847 
Accumulated deficit (38,581,419)  (7,905,999)
Accumulated other comprehensive loss (7,648,332)  (9,066,842)
Total Ebang International Holdings Inc. shareholders’ equity 103,126,406   17,979,359 
        
Non-controlling interest 6,697,360   7,591,265 
        
Total equity 109,823,766   25,570,624 
        
Total liabilities and equity$144,200,226  $82,611,046 
 
 

EBANG INTERNATIONAL HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in US dollars)

  For the year ended
December 31,

2020
   For the year ended
December 31,

2019
   For the year ended
December 31,

2018
 
Product revenue$9,677,278  $93,255,813  $310,856,407 
Service revenue 9,327,023   15,804,253   8,185,386 
Total revenues 19,004,301   109,060,066   319,041,793 
Cost of revenues 21,903,644   139,623,799   294,596,001 
Gross profit (loss) (2,899,343)  (30,563,733)  24,445,792 
            
Operating expenses:           
Selling expenses 925,373   1,213,294   4,095,835 
General and administrative expenses 22,822,085   18,870,794   51,410,864 
Total operating expenses 23,747,458   20,084,088   55,506,699 
            
Loss from operations (26,646,801)  (50,647,821)  (31,060,907)
            
Other income (expenses):           
Interest income 824,435   217,200   453,991 
Interest expenses (728,346)  (2,041,491)  (921,047)
Other income 81,733   84,992   1,139,514 
Exchange gain (loss) (288,346)  5,693,798   (403,544)
Government grants 4,006,567   6,298,893   798,680 
VAT refund    9,138   27,368,030 
Other expenses (108,624)  (287,530)  (8,289,391)
Total other income 3,787,419   9,975,000   20,146,233 
            
Loss before income taxes provision (22,859,382)  (40,672,821)  (10,914,674)
            
Income taxes provision 9,251,542   400,311   899,586 
            
Net Loss (32,110,924)  (41,073,132)  (11,814,260)
Less: net income (loss) attributable to non-controlling interest (1,435,504)  1,330,237   494,234 
Net loss attributable to Ebang International Holdings Inc.$(30,675,420) $(42,403,369) $(12,308,494)
            
Comprehensive loss           
Net loss$(32,110,924) $(41,073,132) $(11,814,260)
Other comprehensive income (loss):           
Foreign currency translation adjustment 1,960,109   (1,188,488)  (11,363,682)
            
Total comprehensive loss (30,150,815)  (42,261,620)  (23,177,942)
Less: comprehensive income (loss) attributable to non-
controlling interest
 (893,905)  1,330,237   494,234 
Comprehensive loss attributable to Ebang
International Holdings Inc.
$(29,256,910) $(43,591,857) $(23,672,176)
            
Net loss per ordinary share attributable to Ebang
International Holdings Inc.
           
Basic$(0.25) $(0.38) $(0.36)
Diluted$(0.25) $(0.38) $(0.36)
            
Weighted average ordinary shares outstanding           
Basic 121,941,226   111,771,000   33,808,506 
Diluted 121,941,226   111,771,000   33,808,506 

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