Ebang International Reports Financial Results for Fiscal Year 2023
Ebang International Holdings Inc. (Nasdaq: EBON) reported its financial results for the fiscal year 2023, with total net revenues decreasing by 85.0% to US$4.9 million, gross loss of US$16.7 million, and a net loss of US$38.0 million. Despite challenges, the company saw revenue growth in cryptocurrency exchange and payment businesses. The financials were impacted by bankruptcy of virtual currency banks, fraud incidents, and absence of one-time revenue from court mediations in 2022.
- Total net revenues decreased by 85.0% to US$4.9 million in fiscal year 2023.
- Gross loss was US$16.7 million, compared to a gross profit of US$15.4 million in 2022.
- Net loss for 2023 was US$38.0 million, lower than US$45.8 million in 2022.
- Revenue from cryptocurrency exchange and payment businesses grew by approximately 36% in 2023.
- Challenges included bankruptcy of virtual currency banks and fraud incidents affecting market sentiment.
- The absence of one-time revenue from court mediations in 2022 impacted the financial results for 2023.
- Cost of revenues increased by 27.4% to US$21.6 million in 2023.
- Operating expenses decreased by 41.7% to US$36.9 million in 2023.
- Impairment of intangible assets and goodwill, with a gain from disposal of subsidiaries.
- Net loss attributable to Ebang International Holdings Inc. was US$36.8 million in 2023.
- Basic and diluted net loss per share was US$5.86 in 2023.
- Total net revenues declined significantly, raising concerns about revenue generation.
- Gross loss of US$16.7 million indicates operational challenges and inefficiencies.
- Net loss of US$38.0 million reflects financial struggles and potential instability.
- Cost of revenues increase may impact profit margins and financial health.
- Impairment charges on intangible assets and goodwill signal potential financial risks.
- Decrease in operating expenses could be a result of cost-cutting measures, impacting business operations.
- Overall financial performance raises concerns about the company's future sustainability and growth prospects.
Insights
Reviewing the financial health of Ebang International Holdings Inc., a few key metrics raise concerns. Despite the marginal improvement in net loss year-over-year, with a decrease from
Additionally, the
The decline in revenue can be attributed to broader market trends, such as the bankruptcy of virtual currency banks and exposure of fraud incidents, which have led to a cautious approach towards cryptocurrency-related products and services. Ebang's acknowledgment of these industry headwinds shows an external dependence that could dictate its performance. The company's pivot towards increasing revenue from cryptocurrency exchange and cross-border payment businesses, which grew by
Investors should note the company's intention to streamline costs and enhance capital utilization, as these strategies can potentially improve the operational efficiency and financial standing in the long term. The market reaction to these results could be mixed as investors weigh the company's pivot to align with financial technology trends against the significant decrease in revenues and ongoing losses.
Ebang's performance must be evaluated within the context of the broader blockchain and cryptocurrency sector. The fiscal year 2023 was challenging for the industry, with multiple high-profile setbacks contributing to negative sentiment. The company's pursuit of innovation within the Fintech space indicates a forward-looking approach, aiming to leverage spot Bitcoin ETFs and other emerging financial products. However, the approval and listing of such products do not guarantee market success, as the sector remains highly sensitive to regulatory changes and market sentiment.
The strategic shift towards Fintech services, while potentially promising, must be approached with caution. Investors must be aware of the regulatory environment, which is increasingly stringent. Ebang's commitment to compliance mechanisms should be seen as a positive step towards aligning with international regulatory standards, potentially reducing future legal and operational risks.
SINGAPORE, April 26, 2024 (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, 2023.
Operational and Financial Highlights for Fiscal Year 2023
Total net revenues in the 2023 fiscal year decreased by
Gross loss in the 2023 fiscal year was US
Net loss in the 2023 fiscal year was US
Mr. Dong Hu, Chairman, and Chief Executive Officer of the Company, commented, “Opportunities and challenges have coexisted since 2023; however, the approval and listing of spot Bitcoin ETFs have given us a glimpse of a promising future for the cryptocurrency market. The strengthening of Fintech regulatory systems and regimes has made our commitment to compliance mechanisms unwavering. Despite the fluctuations in the industry and the impact of the macroeconomic environment, we remain true to our original aspiration, and strive to develop and improve our global Fintech businesses. As for the 2023 fiscal year, our revenue generated from our cryptocurrency exchange and cross-border payment and foreign exchange businesses increased by approximately
Financial Results for Fiscal Year 2023
Total net revenues in the 2023 fiscal year decreased by
Cost of revenues in the 2023 fiscal year increased by
Gross loss in the 2023 fiscal year was US
Total operating expenses in the 2023 fiscal year decreased by
- Selling expenses in the 2023 fiscal year decreased by
3.2% to US$1.9 million , from US$2.0 million in the 2022 fiscal year, mainly due to decreased advertising and marketing expenses related to our Fintech businesses. - General and administrative expenses in the 2023 fiscal year decreased by
28.7% to US$29.0 million , from US$40.7 million in the 2022 fiscal year, primarily due to decreases in amortization expenses and stock-based compensation expenses. - Impairment of intangible assets in the 2023 fiscal year was US
$3.7 million . The US$3.7 million was related to an impairment loss charge on a financial license in the 2023 fiscal year. - Impairment of goodwill in the 2023 fiscal year was US
$2.3 million . The Company didn’t have impairment of goodwill in the 2022 fiscal year. Impairment of goodwill in the 2023 fiscal year represents the impairment loss charged on goodwill generated from a business acquisition that closed in March 2022 as a result of the annual goodwill impairment review.
Gain from disposal of subsidiaries in the 2023 fiscal year was US
Loss from operations in the 2023 fiscal year was US
Interest income in the 2023 fiscal year was US
Other income in the 2023 fiscal year was US
Net loss in the 2023 fiscal year was US
Net loss attributable to Ebang International Holdings Inc. in the 2023 fiscal year was US
Basic and diluted net loss per share in the 2023 fiscal year was US
Cash and cash equivalents were US
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 industries value chain to achieve diversified products and services, and to explore future opportunities. 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 Investors Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
| EBANG INTERNATIONAL HOLDINGS INC. | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Stated in US dollars) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 241,634,262 | $ | 251,294,952 | |||
| Restricted cash, current | 88,614 | 29,039 | |||||
| Short-term investments | 496,122 | 5,835,377 | |||||
| Accounts receivable, net | 946,514 | 3,334,727 | |||||
| Advances to suppliers | 1,071,137 | 1,178,168 | |||||
| Inventories, net | 198,846 | 440,064 | |||||
| Prepayments | 304,453 | 281,611 | |||||
| Other current assets, net | 5,691,679 | 6,711,422 | |||||
| Total current assets | 250,431,627 | 269,105,360 | |||||
| Non-current assets: | |||||||
| Property, plant and equipment, net | 33,151,061 | 36,549,278 | |||||
| Intangible assets, net | 2,329,777 | 6,890,738 | |||||
| Operating lease right-of-use assets | 6,119,535 | 5,343,608 | |||||
| Operating lease right-of-use assets - related parties | 31,197 | 519,140 | |||||
| Restricted cash, non-current | 1,197,286 | 903,125 | |||||
| Goodwill | - | 2,299,628 | |||||
| VAT recoverable | 4,061,079 | 21,132,898 | |||||
| Other assets | 918,086 | 1,421,309 | |||||
| Total non-current assets | 47,808,021 | 75,059,724 | |||||
| Total assets | $ | 298,239,648 | $ | 344,165,084 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 292,570 | $ | 1,456,577 | |||
| Accrued liabilities and other payables | 9,804,848 | 11,519,091 | |||||
| Operating lease liabilities, current | 1,764,259 | 1,217,604 | |||||
| Operating lease liabilities - related parties, current | 28,849 | 283,567 | |||||
| Advances from customers | 69,361 | 1,010,852 | |||||
| Total current liabilities | 11,959,887 | 15,487,691 | |||||
| Non-current liabilities: | |||||||
| Operating lease liabilities, non-current | 4,880,844 | 5,755,973 | |||||
| Operating lease liabilities – related party, non-current | 2,348 | - | |||||
| Deferred tax liabilities | 74,225 | 1,133,539 | |||||
| Total non-current liabilities | 4,957,417 | 6,889,512 | |||||
| Total liabilities | 16,917,304 | 22,377,203 | |||||
| Equity: | |||||||
| Class A ordinary share, HKD0.03 par value, 11,112,474 shares authorized, 4,989,746 and 4,725,019 shares issued, 4,726,424 and 4,700,852 shares outstanding as of December 31, 2023 and 2022, respectively(1) (2) | 18,178 | 18,080 | |||||
| Class B ordinary share, HKD0.03 par value, 1,554,192 shares authorized, issued and outstanding as of December 31, 2023 and 2022, respectively(1) | 5,978 | 5,978 | |||||
| Additional paid-in capital | 397,467,795 | 397,620,927 | |||||
| Statutory reserves | 11,079,649 | 11,079,649 | |||||
| Accumulated deficit | (114,840,665 | ) | (78,068,522 | ) | |||
| Accumulated other comprehensive loss | (13,887,088 | ) | (11,724,531 | ) | |||
| Total Ebang International Holdings Inc. shareholders’ equity | 279,843,847 | 318,931,581 | |||||
| Non-controlling interest | 1,478,497 | 2,856,300 | |||||
| Total equity | 281,322,344 | 321,787,881 | |||||
| Total liabilities and equity | $ | 298,239,648 | $ | 344,165,084 | |||
| (1) | Retrospectively adjusted for the effect of the Reverse Stock Split effected on November 20, 2022. |
| (2) | As of December 31, 2023 and 2022, 263,322 and 24,167 (725,000 before the Reverse Stock Split) shares reserved for future issuance upon the vesting of RSAs granted under the 2020 Plan were considered issued but not outstanding, respectively. |
| EBANG INTERNATIONAL HOLDINGS INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
| (Stated in US dollars) | |||||||||||
| For the year ended December 31, 2023 | For the year ended December 31, 2022 | For the year ended December 31, 2021 | |||||||||
| Product revenue | $ | 782,349 | $ | 29,537,224 | $ | 48,323,022 | |||||
| Service revenue | 4,072,832 | 2,790,895 | 3,127,225 | ||||||||
| Total revenues | 4,855,181 | 32,328,119 | 51,450,247 | ||||||||
| Cost of revenues | 21,558,986 | 16,915,795 | 22,227,055 | ||||||||
| Gross profit (loss) | (16,703,805 | ) | 15,412,324 | 29,223,192 | |||||||
| Operating expenses: | |||||||||||
| Selling expenses | 1,893,607 | 1,956,120 | 1,418,586 | ||||||||
| General and administrative expenses | 29,041,432 | 40,712,314 | 25,774,237 | ||||||||
| Impairment of intangible assets | 3,708,247 | 20,738,130 | - | ||||||||
| Impairment of goodwill | 2,299,628 | - | - | ||||||||
| Total operating expenses | 36,942,914 | 63,406,564 | 27,192,823 | ||||||||
| Gain on disposal of subsidiaries | (7,524 | ) | (5,941 | ) | - | ||||||
| Income (loss) from operations | (53,639,195 | ) | (47,988,299 | ) | 2,030,369 | ||||||
| Other income (expenses): | |||||||||||
| Interest income | 11,941,453 | 4,362,832 | 1,779,672 | ||||||||
| Interest expenses | - | - | (4,383 | ) | |||||||
| Other income | 1,131,178 | 1,033,622 | 133,477 | ||||||||
| Gain (loss) from investment | 356,996 | (509,496 | ) | (3,656,520 | ) | ||||||
| Net gain on disposal of cryptocurrencies | 744,803 | - | - | ||||||||
| Exchange gain (loss) | 456,647 | (2,161,264 | ) | 1,780,087 | |||||||
| Government grants | 62,600 | 81,911 | 434,604 | ||||||||
| Other expenses | (119,531 | ) | (649,476 | ) | (108,328 | ) | |||||
| Total other income | 14,574,146 | 2,158,129 | 358,609 | ||||||||
| Income (loss) before income taxes benefit | (39,065,049 | ) | (45,830,170 | ) | 2,388,978 | ||||||
| Income taxes benefit | (1,031,461 | ) | (72,933 | ) | (378,843 | ) | |||||
| Net income (loss) | (38,033,588 | ) | (45,757,237 | ) | 2,767,821 | ||||||
| Less: net loss attributable to non-controlling interest | (1,261,445 | ) | (1,868,995 | ) | (1,663,120 | ) | |||||
| Net income (loss) attributable to Ebang International Holdings Inc. | $ | (36,772,143 | ) | $ | (43,888,242 | ) | $ | 4,430,941 | |||
| Comprehensive income (loss) | |||||||||||
| Net income (loss) | $ | (38,033,588 | ) | $ | (45,757,237 | ) | $ | 2,767,821 | |||
| Other comprehensive income (loss): | |||||||||||
| Foreign currency translation adjustment | (2,278,915 | ) | (5,338,217 | ) | 953,073 | ||||||
| Total comprehensive income (loss) | (40,312,503 | ) | (51,095,454 | ) | 3,720,894 | ||||||
| Less: comprehensive loss attributable to non-controlling interest | (1,377,803 | ) | (2,379,686 | ) | (1,461,374 | ) | |||||
| Comprehensive income (loss) attributable to Ebang International Holdings Inc. | $ | (38,934,700 | ) | $ | (48,715,768 | ) | $ | 5,182,268 | |||
| Net income (loss) per ordinary share attributable to Ebang International Holdings Inc. | |||||||||||
| Basic(1) | $ | (5.86 | ) | $ | (7.03 | ) | $ | 0.75 | |||
| Diluted(1) | $ | (5.86 | ) | $ | (7.03 | ) | $ | 0.75 | |||
| Weighted average ordinary shares outstanding | |||||||||||
| Basic(1) | 6,275,118 | 6,247,333 | 5,923,845 | ||||||||
| Diluted(1) | 6,275,118 | 6,247,333 | 5,928,858 | ||||||||
| (1) | Retrospectively adjusted for the effect of the Reverse Stock Split effected on November 20, 2022. |
FAQ
What was the total net revenue for Ebang International in fiscal year 2023?
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How did the net loss in 2023 compare to 2022?
What factors contributed to the decrease in total net revenues for 2023?
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