Ebang International Reports Financial Results for Fiscal Year 2022


HANGZHOU, China, April 28, 2023 (GLOBE NEWSWIRE) -- Ebang International Holdings Inc. (Nasdaq: EBON, the “Company,” “we” or “our”), a global blockchain technology and Fintech company, today announced its financial results for the fiscal year ended December 31, 2022.

Operational and Financial Highlights for Fiscal Year 2022

Total computing power sold in fiscal year 2022 was 0.41 million Thash/s, representing a year-over-year decrease of 72.27% from 1.47 million Thash/s in fiscal year 2021.

Total net revenues in fiscal year 2022 were US$32.33 million, representing a 37.17% year-over-year decrease from US$51.45 million in fiscal year 2021.

Gross profit in fiscal year 2022 was US$15.41 million compared to the gross profit of US$29.22 million in fiscal year 2021.

Net loss in fiscal year 2022 was US$45.76 million compared to net income of US$2.77 million in fiscal year 2021.

Mr. Dong Hu, Chairman, and Chief Executive Officer of the Company, commented, “In the past year, we have been committed to expanding our global Fintech business. While our cryptocurrency exchange, cross-border payment and foreign exchange business are in their infancy due to the well-publicized industry volatility and the macroeconomic environment, we continue to believe in the future prospects of blockchain technology and Fintech industry generally. As these business lines develop beyond their infancy, we expect to distinguish ourselves from other industry participants by prioritizing the expansion of our business within a sound regulatory system, providing quality online trading services to our customers, and striving to improve the protection mechanism for safety, reliability and compliance. We are confident in the various opportunities and challenges ahead, and at the same time, as always, we adhere to Fintech as our core driver to continuously launch diversified products and services.”

Financial Results for Fiscal Year 2022

Total net revenues in fiscal year 2022 were US$32.33 million, compared to US$51.45 million in fiscal year 2021. The year-over-year decrease in total net revenues was primarily due to, among others, Bitcoin price’s continued decrease and large cryptocurrency exchange platforms declaring bankruptcy in 2022, which led to investors being increasingly cautious in investment. Our chip suppliers also reduced their production capacity due to the impact of COVID-19, resulting in our inability to produce at full capacity, insufficient inventory and inability to meet the market demand. With limited raw materials, we optimized our hardware structure to ensure our products’ competitiveness.

Cost of revenues in fiscal year 2022 was US$16.92 million, compared to US$22.23 million in fiscal year 2021. The year-over-year decrease in cost of revenues was a result of a decrease in sales. Our cost of revenues for fiscal year 2022 primarily consists of impairment charge on write-downs for the potentially obsolete, slow-moving inventory and lower of cost or market, and VAT recoverable impairment of $4.5 million recorded in 2022 which was mainly associated with the disposal of Wuhai Ebang Information Technology Co., Ltd.

Gross profit in fiscal year 2022 was US$15.41 million, compared to the gross profit of US$29.22 million in fiscal year 2021.

Total operating expenses in the fiscal year 2022 were US$63.41 million compared to US$27.19 million in fiscal year 2021.

  • Selling expenses in fiscal year 2022 were US$1.96 million compared to US$1.42 million in fiscal year 2021. The year-over-year increase in selling expenses was mainly due to increased advertising and marketing expenses occurred in relation to development of our Fintech businesses.
  • General and administrative expenses in fiscal year 2022 were US$61.45 million compared to US$25.77 million in fiscal year 2021. The year-over-year increase in general and administrative expenses was mainly due to increases in amortization expenses and impairment losses relating to intangible assets and employee stock ownership plan related expenses.

Gain from disposal of subsidiaries in fiscal year 2022 was US$0.006 million compared to nil in fiscal year 2021. The year-over-year increase in gain from disposal of subsidiaries was primarily due to the disposal of Ebang Hongling and Wuhai Ebang during 2022.

Loss from operations in fiscal year 2022 was US$47.99 million compared to income from operations of US$2.03 million in fiscal year 2021.

Interest income in fiscal year 2022 was US$4.36 million compared to US$1.78 million in fiscal year 2021. The year-over-year increase in interest income was primarily due to the interest income from our investments in term deposit and financing products in 2022.

Other income in fiscal year 2022 was US$1.03 million compared to US$0.13 million in fiscal year 2021. The year-over-year increase in interest income was primarily due to the liability waived before the deregistration of a subsidiary.

Government grants in fiscal year 2022 were US$0.08 million compared to US$0.44 million in fiscal year 2021. 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 2022 was US$45.76 million compared to net income of US$2.77 million in fiscal year 2021.

Net loss attributable to Ebang International Holdings Inc. in fiscal year 2022 was US$43.89 million compared to net income attributable to Ebang International Holdings Inc. of US$4.43 million in fiscal year 2021.

Basic and diluted net loss per share in fiscal year 2022 was US$7.03 compared to basic and diluted net earnings per share of US$0.75 in fiscal year 2021.

Cash and cash equivalents were US$251.29 million as of December 31, 2022, compared with US$239.87 million as of December 31, 2021.

About Ebang International Holdings Inc.

Ebang International Holdings Inc. is a global blockchain technology and Fintech company with strong application-specific integrated circuit (ASIC) chip design capability. With years of industry experience and expertise, it has become a global Bitcoin mining machine producer. Based on its deep understanding of the Fintech industry and compliance with laws and regulations in various jurisdictions, it has launched professional, convenient and innovative Fintech service platforms. It strives to expand into the upstream and downstream markets of the blockchain and Fintech industry value chain to achieve diversified products and services. For more information, please visit https://ir.ebang.com/.

Forward-Looking Statements

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 intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 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 include, but are not limited to, statements regarding our future operating results and financial position, our business strategy and plans, expectations relating to our industry, the regulatory environment, market conditions, trends and growth, expectations relating to customer behaviors and preferences, our market position and potential market opportunities, and our objectives for future operations. 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. These risks and uncertainties include our ability to successfully execute our business and growth strategy and maintain future profitability, market acceptance of our products and services, our ability to further penetrate our existing customer base and expand our customer base, our ability to develop new products and services, our ability to expand internationally, the success of any acquisitions or investments that we make, the efforts of increased competition in our markets, our ability to stay in compliance with applicable laws and regulations, market conditions across the blockchain, Fintech and general market, political and economic conditions. 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: ir@ebang.com

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

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

 December 31,
2022
  December 31,
2021
 
ASSETS     
Current assets:     
Cash and cash equivalents$251,294,952  $239,872,316 
Restricted cash, current 29,039   171,156 
Short-term investments 5,835,377   35,443,246 
Accounts receivable, net 3,334,727   9,872,746 
Advances to suppliers 1,178,168   1,057,096 
Inventories, net 440,064   7,137,538 
Prepayments 281,611   283,776 
Other current assets, net 6,711,422   4,994,271 
Total current assets 269,105,360   298,832,145 
        
Non-current assets:       
Property, plant and equipment, net 36,549,278   33,329,610 
Intangible assets, net 6,890,738   22,512,208 
Operating lease right-of-use assets 5,343,608   2,132,247 
Operating lease right-of-use assets - related parties 519,140   1,136,775 
Restricted cash, non-current 903,125   883,130 
Goodwill 2,299,628   - 
VAT recoverable 21,132,898   26,332,231 
Other assets 1,421,309   705,825 
Total non-current assets 75,059,724   87,032,026 
        
Total assets$344,165,084  $385,864,171 
        
LIABILITIES AND EQUITY       
Current liabilities:       
Accounts payable$1,456,577  $3,387,836 
Accrued liabilities and other payables 11,519,091   8,975,988 
Operating lease liabilities, current 1,217,604   851,936 
Operating lease liabilities - related parties, current 283,567   595,424 
Advances from customers 1,010,852   894,174 
Total current liabilities 15,487,691   14,705,358 
        
Non-current liabilities:       
Operating lease liabilities – related party, non-current -   288,563 
Deferred tax liabilities 1,133,539   178,582 
Operating lease liabilities, non-current 5,755,973   1,712,303 
Total non-current liabilities 6,889,512   2,179,448 
        
Total liabilities 22,377,203   16,884,806 
        
Equity:       
Class A ordinary share, HKD0.03 par value, 11,112,474 shares authorized, 4,700,852 and 4,640,318 shares issued and outstanding as of December 31, 2022 and 2021, respectively(1) 18,080   17,848 
Class B ordinary share, HKD0.03 par value, 1,554,192 shares authorized, issued and outstanding as of December 31, 2022 and 2021, respectively(1) 5,978   5,978 
Additional paid-in capital 397,620,927   393,717,189 
Statutory reserves 11,079,649   11,079,649 
Accumulated deficit (78,068,522)  (34,180,280)
Accumulated other comprehensive loss (11,724,531)  (6,897,005)
Total Ebang International Holdings Inc. shareholders’ equity 318,931,581   363,743,379 
        
Non-controlling interest 2,856,300   5,235,986 
        
Total equity 321,787,881   368,979,365 
        
Total liabilities and equity$344,165,084  $385,864,171 


(1)Retrospectively adjusted for the effect of the Reverse Stock Split effected on November 20, 2022. See Note 12.
  

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

 For the year ended
December 31,
2022
  For the year ended
December 31,
2021
  For the year ended
December 31,
2020
 
Product revenue$29,537,224  $48,323,022  $9,677,278 
Service revenue 2,790,895   3,127,225   9,327,023 
Total revenues 32,328,119   51,450,247   19,004,301 
Cost of revenues 16,915,795   22,227,055   21,903,644 
Gross profit (loss) 15,412,324   29,223,192   (2,899,343)
            
Operating expenses:           
Selling expenses 1,956,120   1,418,586   925,373 
General and administrative expenses 61,450,444   25,774,237   22,822,085 
Total operating expenses 63,406,564   27,192,823   23,747,458 
            
Gain on disposal of subsidiaries (5,941)  -   - 
Income (loss) from operations (47,988,299)  2,030,369   (26,646,801)
            
Other income (expenses):           
Interest income 4,362,832   1,779,672   824,435 
Interest expenses -   (4,383)  (728,346)
Other income 1,033,622   133,477   81,733 
Loss from investment (509,496)  (3,656,520)  - 
Exchange gain (loss) (2,161,264)  1,780,087   (288,346)
Government grants 81,911   434,604   4,006,567 
Other expenses (649,476)  (108,328)  (108,624)
Total other income 2,158,129   358,609   3,787,419 
            
Income (loss) before income taxes provision (benefit) (45,830,170)  2,388,978   (22,859,382)
            
Income taxes provision (benefit) (72,933)  (378,843)  9,251,542 
            
Net income (loss) (45,757,237)  2,767,821   (32,110,924)
Less: net loss attributable to non-controlling interest (1,868,995)  (1,663,120)  (1,435,504)
Net income (loss) attributable to Ebang International Holdings Inc.$(43,888,242) $4,430,941  $(30,675,420)
            
Comprehensive income (loss)           
Net income (loss)$(45,757,237) $2,767,821  $(32,110,924)
Other comprehensive income (loss):           
Foreign currency translation adjustment (5,338,217)  953,073   1,960,109 
            
Total comprehensive income (loss) (51,095,454)  3,720,894   (30,150,815)
Less: comprehensive loss attributable to non-controlling interest (2,379,686)  (1,461,374)  (893,905)
Comprehensive income (loss) attributable to Ebang International Holdings Inc.$(48,715,768) $5,182,268  $(29,256,910)
            
Net income (loss) per ordinary share attributable to Ebang International Holdings Inc.           
Basic(1)$(7.03) $0.75  $(7.55)
Diluted(1)$(7.03) $0.75  $(7.55)
            
Weighted average ordinary shares outstanding           
Basic(1) 6,247,333   5,923,845   4,064,708 
Diluted(1) 6,247,333   5,928,858   4,064,708 


(1)Retrospectively adjusted for the effect of the Reverse Stock Split effected on November 20, 2022. See Note 12.