HANGZHOU, China, Sept. 25, 2020 (GLOBE NEWSWIRE) -- Ebang International Holdings Inc. (Nasdaq: EBON, the “Company,” “we” or “our”), a leading application-specific integrated circuit (“ASIC”) chip design company and a leading manufacturer of high-performance Bitcoin mining machines, today announced its unaudited financial results for the first six months of fiscal year 2020.

Operational and Financial Highlights for the First Six Months of Fiscal Year 2020

Total computing power sold in the first six months of 2020 was 0.25 million Thash/s, representing a year-over-year decrease of 86.02% from 1.82 million Thash/s in the same period of 2019.

Total net revenues in the first six months of 2020 were US$11.04 million, representing a 50.60% year-over-year decrease from US$22.35 million in the same period of 2019.

Gross loss in the first six months of 2020 was US$0.97 million, representing a 94.59% year-over-year decrease from US$17.87 million in the same period of 2019.

Net loss in the first six months of 2020 was US$6.96 million compared to US$19.07 million in the same period of 2019.

Mr. Dong Hu, Chairman and Chief Executive Officer of the Company, commented, “The outbreak of the COVID-19 has significantly affected business and manufacturing activities worldwide. Measures to contain COVID-19, such as travel restrictions, mandatory quarantines and suspension of business activities have caused severe disruptions and uncertainties to our business operations and adversely affected our results of operations and financial condition. Our chip suppliers have reduced their production capacity due to the impact of the COVID-19, resulting in our shortage of raw materials during the first six months of 2020. Faced with the turbulent social and industrial environment, we have taken timely and proactive measures to ensure the resilience of our business operations and allow us to deliver solid performance after the market condition resumes normal. In light of this, our management has been actively optimizing our revenue structure based on the productivity ratio and strategically exploring expansion into blockchain-enabled financial services.”

Mr. Hu continued, “With the preparatory work we have initiated in Singapore and Canada, we are at an initial preparatory stage of executing our plan to launch blockchain-enabled financial business by establishing cryptocurrency exchange(s) and online brokerage(s) and by combining the blockchain-enabled financial businesses with the traditional ones to capture the entire value chain of the blockchain industry. Marching into these new fields, we are staying true to our mission in strengthening the technological innovation in our products and services to ensure their competitiveness in the market.”

Unaudited Financial Results for the First Six Months of Fiscal Year 2020

Total net revenues in the first six months of 2020 were US$11.04 million, representing a 50.60% year-over-year decrease from US$22.35 million in the same period of 2019. The year-over-year decrease in total net revenues were mainly due to the combined impact of COVID-19 and Bitcoin halving event, which significantly affect the expected returns on Bitcoin related activities such as mining, and in turn resulted in a much lower demand and average selling price of our Bitcoin mining machines.

Cost of revenues in the first six months of 2020 was US$12.01 million compared to US$40.21 million in the same period of 2019. The year-over-year decrease in cost of revenues were in line with the changes in the Company’s sales and the decrease in inventory write-down.

Gross loss in the first six months of 2020 was US$0.97 million, representing a 94.59% year-over-year decrease from US$17.87 million in the same period of 2019.

Total operating expenses in the first six months of 2020 were US$7.71 million compared to US$9.60 million in the same period of 2019.

  • Selling expenses in the first six months of 2020 were US$0.45 million compared to US$0.49 in the same period of 2019. The year-over-year decrease in selling expenses was mainly caused by reduced salary and bonus expenses relating to selling activities.

  • General and administrative expenses in the first six months of 2020 were US$7.26 million compared to US$9.10 million in the same period of 2019. The year-over-year decrease in general and administrative expenses was mainly caused by a decrease in research and development expenses due to decreased purchase in materials used for research and development purposes in the six months ended June 30, 2020 compared to the same period of 2019.

Loss from operations in the first six months of 2020 was US$8.68 million compared to US$27.47 million in the same period of 2019.

Other income in the first six months of 2020 was US$0.02 million compared to US$0.03 million in the same period of 2019. The year-over-year decrease in other income was mainly caused by the decrease in investment income from wealth management products purchased from the banks in the six months ended June 30, 2020.

Government grants in the first six months of 2020 were US$2.54 million compared to US$6.18 million in the same period of 2019. The year-over-year decrease in government grants was mainly caused by the decrease of tax rewards from government.

Net loss in the first six months of 2020 was US$6.96 million compared to US$19.07 million in the same period of 2019.

Net loss attributable to Ebang International Holdings Inc. in the first six months of 2020 was US$6.21 million compared to US$18.11 million in the same period of 2019.

Basic and diluted net loss per shares in the first six months of 2020 were both US$0.06 compared to US$0.16 in the same period of 2019.

About Ebang International Holdings Inc.

Ebang International Holdings Inc. is a leading application-specific integrated circuit ASIC chip design company and a leading manufacturer of high-performance Bitcoin mining machines. The Company has strong ASIC chip design capability underpinned by nearly a decade of industry experience and expertise in the telecommunications business. The Company is one of the few fabless integrated circuit design companies with the advanced technology to independently design ASIC chips, established access to third-party wafer foundry capacity and a proven in-house capability to produce blockchain products*. The Company was also a leading Bitcoin mining machine producer in the global market in terms of computing power sold in 2019*. For more information, please visit https://ir.ebang.com.cn/.

 *According to an industry report prepared by Frost & Sullivan in 2019

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. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement. 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: ir@ebang.com.cn

Ascent Investor Relations LLC
Ms. Tina Xiao
Tel: (917) 609-0333
Email: tina.xiao@ascent-ir.com

EBANG INTERNATIONAL HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in US dollars)
 
  June 30,
2020
  December 31,
2019
 
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $1,089,933  $3,464,262 
Restricted cash, current  824,291   2,270,588 
Accounts receivable, net  7,546,319   8,128,178 
Bank acceptance notes from customers  707,394   - 
Advances to suppliers  1,191,368   1,062,049 
Inventories, net  8,822,464   13,088,542 
VAT recoverables  19,859,583   21,954,169 
Prepayments  8,493,421   13,272,775 
Other current assets, net  219,270   224,452 
Total current assets  48,754,043   63,465,015 
         
Non-current assets:        
Property, plant and equipment, net  20,904,153   13,224,761 
Intangible assets, net  3,418,247   3,784,153 
Operating lease right-of-use assets  1,125,288   1,280,076 
Operating lease right-of-use assets - related party  23,016   37,266 
Restricted cash, non-current  21,182   43,317 
Other assets  830,338   776,458 
Total non-current assets  26,322,224   19,146,031 
         
Total assets $75,076,267  $82,611,046 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $7,173,801  $11,832,003 
Bank acceptance notes to vendors  1,431,765   - 
Accrued liabilities and other payables  14,346,108   13,739,041 
Loans due within one year, less unamortized debt issuance costs  -   4,864,697 
Operating lease liabilities, current  687,107   793,521 
Operating lease liabilities – related party, current  32,732   37,266 
Income taxes payable  841,725   521,648 
Due to related parties  6,908,102   6,242,824 
Advances from customers  1,662,352   1,015,675 
Total current liabilities  33,083,692   39,046,675 
         
Non-current liabilities:        
Long-term loans – related party  24,113,700   17,632,000 
Operating lease liabilities, non-current  461,236   361,747 
         
Total non-current liabilities  24,574,936   17,993,747 
         
Total liabilities  57,658,628   57,040,422 
         
Shareholders’ equity:        
Common share, HKD0.001 par value, 380,000,000 shares authorized, 111,771,000 shares issued and outstanding as of December 31, 2019  -   14,330 
Class A common share, HKD0.001 par value, 333,374,217 shares authorized, 84,409,554 shares issued and outstanding as of June 30, 2020  10,822   - 
Class B common share, HKD0.001 par value, 46,625,783 shares authorized, 46,625,783 shares issued and outstanding as of June 30, 2020  5,978   - 
Additional paid-in capital  115,570,313   23,888,023 
Subscription receivable  (91,684,760)  - 
Statutory reserves  11,483,844   11,049,847 
Accumulated deficit  (14,552,283)  (7,905,999)
Accumulated other comprehensive loss  (10,131,056)  (9,066,842)
Total Ebang International Holdings Inc. shareholder’s equity  10,702,858   17,979,359 
         
Non-controlling interest  6,714,781   7,591,265 
         
Total shareholders’ equity  17,417,639   25,570,624 
         
Total liabilities and shareholders’ equity $75,076,267  $82,611,046 
         


 

EBANG INTERNATIONAL HOLDINGS INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in US dollars)
 
  For the six
months ended
June 30,
2020
  For the six
months ended
June 30,
2019
 
       
Product revenue $4,954,499  $15,111,199 
Service revenue  6,087,856   7,240,536 
Total revenues  11,042,355   22,351,735 
Cost of revenues  12,009,303   40,219,588 
Gross loss  (966,948)  (17,867,853)
         
Operating expenses:        
Selling expenses  452,608   494,792 
General and administrative expenses  7,257,855   9,102,696 
Total operating expenses  7,710,463   9,597,488 
         
Loss from operations  (8,677,411)  (27,465,341)
         
Other income (expenses):        
Interest income  12,714   32,111 
Interest expenses  (579,486)  (1,315,770)
Other income  16,080   29,240 
Exchange gain  474,488   3,986,019 
Government grants  2,541,708   6,184,035 
VAT refund  -   9,306 
Other expenses  (16,436)  (101,999)
Total other income  2,449,068   8,822,942 
         
Loss before income taxes provision  (6,228,343)  (18,642,399)
         
Income taxes provision  735,048   428,596 
         
Net loss  (6,963,391)  (19,070,995)
Less: net income attributable to non-controlling interest  (751,104)  (959,154)
Net loss attributable to Ebang International Holdings Inc. $(6,212,287) $(18,111,841)
         
Comprehensive loss        
Net loss $(6,963,391) $(19,070,995)
Other comprehensive loss:        
Foreign currency translation adjustment  (1,189,594)  536,529 
         
Total comprehensive loss  (8,152,985)  (18,534,466)
Less: comprehensive loss attributable to non-controlling interest  (125,380)  - 
Comprehensive loss attributable to Ebang International Holdings Inc. $(7,276,501) $(17,575,312)
         
Net loss per common share attributable to Ebang International Holdings Inc.        
Basic $(0.06) $(0.16)
Diluted $(0.06) $(0.16)
         
Weighted average common shares outstanding        
Basic  111,876,848   111,771,000 
Diluted  111,876,848   111,771,000