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: ir@ebang.com.cn

Ascent Investor Relations LLCMs. Tina XiaoTel: (917) 609-0333Email: tina.xiao@ascent-ir.com

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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