GlobeNewswire Inc | Sep 25, 2020 04:15PM EDT

September 25, 2020

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 Companys 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 Companys 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 Companys 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 Companys control, which may cause the Companys 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 Companys 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 LLCMs. Tina XiaoTel: (917) 609-0333Email: tina.xiao@ascent-ir.com

EBANG INTERNATIONAL HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS(Stated in US dollars)

June30, December31, 2020 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 - 23,016 37,266 related partyRestricted 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 - 4,864,697 debt issuance costsOperating lease liabilities, current 687,107 793,521 Operating lease liabilities ? related party, 32,732 37,266 currentIncome 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 - 14,330 shares issued and outstanding as of December31, 2019Class A common share, HKD0.001 par value,333,374,217 shares authorized, 84,409,554 10,822 - shares issued and outstanding as of June 30,2020Class B common share, HKD0.001 par value,46,625,783 shares authorized, 46,625,783 5,978 - shares issued and outstanding as of June 30,2020Additional 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. 10,702,858 17,979,359 shareholder?s equity 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 ANDCOMPREHENSIVE LOSS(Stated in US dollars)

For the six For the six months ended months ended June 30, June 30, 2020 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 (751,104 ) (959,154 )non-controlling interestNet loss attributable to Ebang $ (6,212,287 ) $ (18,111,841 )International Holdings Inc. Comprehensive loss Net loss $ (6,963,391 ) $ (19,070,995 )Other comprehensive loss: Foreign currency translation (1,189,594 ) 536,529 adjustment Total comprehensive loss (8,152,985 ) (18,534,466 )Less: comprehensive loss attributable (125,380 ) - to non-controllinginterestComprehensive loss attributable to $ (7,276,501 ) $ (17,575,312 )Ebang International Holdings Inc. Net loss per common shareattributable to Ebang International Holdings Inc.Basic $ (0.06 ) $ (0.16 )Diluted $ (0.06 ) $ (0.16 ) Weighted average common shares outstandingBasic 111,876,848 111,771,000 Diluted 111,876,848 111,771,000