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What changed in Ebang International Holdings Inc.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ebang International Holdings Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+774 added−919 removedSource: 20-F (2025-04-28) vs 20-F (2024-04-26)

Top changes in Ebang International Holdings Inc.'s 2024 20-F

774 paragraphs added · 919 removed · 479 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

204 edited+91 added−294 removed434 unchanged
Biggest changeThese developments could add uncertainties to our continued listing of our Class A ordinary shares or future offerings of our securities in the U.S. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for a return on your investment 4 ● You may face difficulties in protecting your interests in the Company, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct our operations primarily in emerging markets ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial ● We are a “controlled company” within the meaning of the Nasdaq Rules, and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies ● We are an emerging growth company within the meaning of the Jumpstart Our Business Startups Act (the “JOBS Act”) and may take advantage of certain reduced reporting requirements ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies ● We have in the past incurred and continue to incur losses and negative cash flows from operating activities, and we may not achieve or sustain profitability Risks Relating to Conducting Business in China It is now illegal to engage in digital asset transactions including Bitcoin mining operations in China, which ruling may adversely affect us China has taken a harsh regulatory action to ban cryptocurrency mining operations and to severely restrict the right to acquire, own, hold, sell or use these Bitcoin assets or to exchange them for fiat currency.
Biggest changeIf we fail to obtain or renew any of these approvals, licenses, permits or certifications, it could materially and adversely affect our business and results of operations ● Although the financial statements contained in this annual report was issued by U.S. auditors who are currently inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Class A ordinary shares may be delisted or prohibited from trading ● Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business, results of operations and financial condition ● Our corporate structure may restrict our ability to receive dividends from, and transfer funds to, our PRC operating subsidiaries, which could restrict our ability to act in response to changing market conditions in a timely manner ● Dividends payable to our foreign investors and gains on the sale of our Class A ordinary shares by our foreign investors may become subject to PRC taxation ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for a return on your investment ● You may face difficulties in protecting your interests in the Company, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct our operations primarily in emerging markets ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial ● We are a “controlled company” within the meaning of the Nasdaq Rules, and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies 3 ● We are an emerging growth company within the meaning of the Jumpstart Our Business Startups Act (the “JOBS Act”) and may take advantage of certain reduced reporting requirements ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies ● We have in the past incurred and continue to incur losses and negative cash flows from operating activities, and we may not achieve or sustain profitability Risks Relating to Conducting Business in China There are risks to foreign investors in Chinese companies The Chinese government implements the management systems of pre-establishment national treatment and negative list for foreign investment.
The production of our current products depends on obtaining adequate supplies of these components on a timely basis and at competitive prices. We do not typically maintain large inventory of the components, and rather purchase them on an “as-needed” basis from various third-party component manufacturers that satisfy our quality standards and meet our production requirements.
The production of these current products depends on obtaining adequate supplies of these components on a timely basis and at competitive prices. We do not typically maintain large inventory of the components, and rather purchase them on an “as-needed” basis from various third-party component manufacturers that satisfy our quality standards and meet our production requirements.
Control and Procedures—Internal Control Over Financial Reporting.” If our internal control over financial reporting or our disclosure controls are not effective, we may be unable to issue our financial statements in a timely manner, we may be unable to obtain the required audit or review of our financial statements by our independent registered public accounting firm in a timely manner or we may be otherwise unable to comply with the periodic reporting requirements of the SEC, the listing of our Class A ordinary shares on Nasdaq could be suspended or terminated and our Class A ordinary share price could materially suffer.
Controls and Procedures—Internal Control Over Financial Reporting.” If our internal control over financial reporting or our disclosure controls are not effective, we may be unable to issue our financial statements in a timely manner, we may be unable to obtain the required audit or review of our financial statements by our independent registered public accounting firm in a timely manner or we may be otherwise unable to comply with the periodic reporting requirements of the SEC, the listing of our Class A ordinary shares on Nasdaq could be suspended or terminated and our Class A ordinary share price could materially suffer.
The further growth and development of any digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of digital assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including: ● many digital asset networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets; ● many digital asset networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective digital asset networks; ● several large and prominent networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues.
The further growth and development of any digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of digital assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including: ● many digital asset networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets; 21 ● many digital asset networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective digital asset networks; ● several large and prominent networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues.
The implementation rules under EIT define the term “de facto management bodies” as “establishments that carry out substantial and overall management and control over the production, operation, personnel, accounting, properties, etc. of an enterprise.” The State Administration of Taxation of the PRC ( the “SAT”) promulgated the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (“Circular 82”), on April 22, 2009, as amended on November 8, 2013, provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore incorporated enterprise is located in the PRC.
The implementation rules under EIT Law define the term “de facto management bodies” as “establishments that carry out substantial and overall management and control over the production, operation, personnel, accounting, properties, etc. of an enterprise.” The State Administration of Taxation of the PRC ( the “SAT”) promulgated the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (“Circular 82”), on April 22, 2009, as amended on November 8, 2013, provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore incorporated enterprise is located in the PRC.
Risk Factors—Risks Relating to Conducting Business in China—Our corporate structure may restrict our ability to receive dividends from, and transfer funds to, our PRC operating subsidiaries, which could restrict our ability to act in response to changing market conditions in a timely manner.” 1 Ebang is permitted under PRC laws and regulations as an offshore holding company to provide funding to its PRC subsidiaries in China through shareholder loans or capital contributions, subject to satisfaction of applicable government registration, approval and filing requirements.
Risk Factors—Risks Relating to Conducting Business in China—Our corporate structure may restrict our ability to receive dividends from, and transfer funds to, our PRC operating subsidiaries, which could restrict our ability to act in response to changing market conditions in a timely manner.” Ebang is permitted under PRC laws and regulations as an offshore holding company to provide funding to its PRC subsidiaries in China through shareholder loans or capital contributions, subject to satisfaction of applicable government registration, approval and filing requirements.
However, there are risks associated with such global expansion plans, including: ● high costs of investment to establish a presence in a new market and manage international operations; ● competition in unfamiliar markets; ● foreign currency exchange rate fluctuations; ● regulatory differences and difficulties in ensuring compliance with multi-national legal requirements and multi-national operations; ● changes in economic, legal, political or other local conditions in new markets; ● our limited customer base and limited sales and relationships with international customers; ● competitors in the overseas markets may be more dominant and have stronger ties with customers and greater financial and other resources; 36 ● challenges in managing our international sales channels effectively; ● difficulties in and costs of exporting products overseas while complying with the different commercial, legal and regulatory requirements of the overseas markets in which we offer our products; ● difficulty in ensuring that our customers comply with the sanctions imposed by the Office of Foreign Assets Control (“OFAC”), on various foreign states, organizations and individuals; ● inability to obtain, maintain or enforce intellectual property rights; ● inability to effectively enforce contractual or legal rights or intellectual property rights in certain jurisdictions under which we operate; and ● governmental policies favoring domestic companies in certain foreign markets or trade barriers including export requirements, tariffs, taxes and other restrictions and charges.
However, there are risks associated with such global expansion plans, including: ● high costs of investment to establish a presence in a new market and manage international operations; ● competition in unfamiliar markets; ● foreign currency exchange rate fluctuations; ● regulatory differences and difficulties in ensuring compliance with multi-national legal requirements and multi-national operations; ● changes in economic, legal, political or other local conditions in new markets; ● our limited customer base and limited sales and relationships with international customers; ● competitors in the overseas markets may be more dominant and have stronger ties with customers and greater financial and other resources; ● challenges in managing our international sales channels effectively; ● difficulties in and costs of exporting products overseas while complying with the different commercial, legal and regulatory requirements of the overseas markets in which we offer our products; 26 ● difficulty in ensuring that our customers comply with the sanctions imposed by the Office of Foreign Assets Control (“OFAC”), on various foreign states, organizations and individuals; ● inability to obtain, maintain or enforce intellectual property rights; ● inability to effectively enforce contractual or legal rights or intellectual property rights in certain jurisdictions under which we operate; and ● governmental policies favoring domestic companies in certain foreign markets or trade barriers including export requirements, tariffs, taxes and other restrictions and charges.
The failure to establish and maintain such infrastructure could mean two things; firstly , we may face the risk of failing to obtain the relevant approval and license from applicable regulators, in countries where we intend to obtain such licenses such as Malaysia; and secondly , even in jurisdictions in which we have previously obtained license and approvals, such as in Hong Kong and Australia, we may face penalties imposed by applicable regulators which may include but are not limited to the suspension, revocation, and termination of such licenses and approvals should we breach any regulatory and compliance requirements.
The failure to establish and maintain such infrastructure could mean two things; firstly , we may face the risk of failing to obtain the relevant approval and license from applicable regulators, in countries where we intend to obtain such licenses such as Australia; and secondly , even in jurisdictions in which we have previously obtained license and approvals, such as in Hong Kong and Australia, we may face penalties imposed by applicable regulators which may include but are not limited to the suspension, revocation, and termination of such licenses and approvals should we breach any regulatory and compliance requirements.
In March 2020, this ban was overturned in the Indian Supreme Court, although the Reserve Bank of India is currently challenging this ruling. ● The United Kingdom’s Financial Conduct Authority published final rules in October 2020 banning the sale of derivatives and exchange-traded notes that reference certain types of digital assets, contending that they are “ill-suited” to retail investors citing extreme volatility, valuation challenges and association with financial crime.
In March 2020, this ban was overturned in the Indian Supreme Court, although the Reserve Bank of India is currently challenging this ruling. 20 ● The United Kingdom’s Financial Conduct Authority published final rules in October 2020 banning the sale of derivatives and exchange-traded notes that reference certain types of digital assets, contending that they are “ill-suited” to retail investors citing extreme volatility, valuation challenges and association with financial crime.
In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith. 11 The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (“M&A Rules”) and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China The M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in June 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that shall obtained an approval from the MOFCOM in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise.
In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith. 10 The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (“M&A Rules”) and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China The M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in June 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that shall obtained an approval from the MOFCOM in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise.
The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash. If we were to be or become a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—Material U.S.
The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash. 48 If we were to be or become a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—Material U.S.
Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 58 Our Articles contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares Our Articles contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.
Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” Our Articles contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares Our Articles contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.
Generally non-U.S. issuers may not register as an investment company without an SEC order. 19 Cryptocurrencies and digital assets are recent technological innovations, and the regulatory schemes to which digital assets and their related exchanges may be subject have not been fully explored or developed by foreign jurisdictions.
Generally non-U.S. issuers may not register as an investment company without an SEC order. Cryptocurrencies and digital assets are recent technological innovations, and the regulatory schemes to which digital assets and their related exchanges may be subject have not been fully explored or developed by foreign jurisdictions.
Neither entity has established any subsidiary or branch in the PRC or has committed any business operations in the PRC. For additional information, see “Item 4. Information of the Company – C. Organizational Structure.” Based on the aforementioned Basic Law, our Hong Kong subsidiaries are not subject to the Cybersecurity Measures, the Provisions or the Measures.
Neither entity has established any subsidiary or branch in the PRC or has committed any business operations in the PRC. For additional information, see “Item 4. Information on the Company – C. Organizational Structure.” Based on the aforementioned Basic Law, our Hong Kong subsidiaries are not subject to the Cybersecurity Measures, the Provisions or the Measures.
According to Circular on the Arrangements for the Filing-based Administration of Overseas Securities Offering and Listing by Domestic Companies issued by the CSRC on February 17, 2023, from the implementation date of the Overseas Listing Trial Measures, domestic enterprises subject to the scope of filing that have offered shares or been listed overseas, or have met the following conditions shall be deemed as “existing enterprises”, which are not required to go through the filing immediately but shall be required to do so if they involve in re-financing and other filing matters in the future. 12 Based on the aforementioned criteria, we may be deemed a PRC domestic company and our offshore offerings may be deemed an indirect overseas listing by PRC domestic companies.
According to Circular on the Arrangements for the Filing-based Administration of Overseas Securities Offering and Listing by Domestic Companies issued by the CSRC on February 17, 2023, from the implementation date of the Overseas Listing Trial Measures, domestic enterprises subject to the scope of filing that have offered shares or been listed overseas, or have met the following conditions shall be deemed as “existing enterprises”, which are not required to go through the filing immediately but shall be required to do so if they involve in re-financing and other filing matters in the future. 11 Based on the aforementioned criteria, we may be deemed a PRC domestic company and our offshore offerings may be deemed an indirect overseas listing by PRC domestic companies.
As of the date of this annual report, we are not able to quantify the likelihood or amount of exposure from any of these potential actions. Negative publicity arising from disputes, claims or proceedings may damage our reputation and adversely affect the image of our brands and products.
As of the date of this annual report, we are not able to quantify the likelihood or amount of exposure from any of these potential actions. 39 Negative publicity arising from disputes, claims or proceedings may damage our reputation and adversely affect the image of our brands and products.
Component shortages may also increase our costs of goods sold because we may be required to pay higher prices for components in short supply, or redesign or reconfigure products to accommodate for the substitute components, without being able to pass such cost to our blockchain customers.
Component shortages may also increase our costs of goods sold because we may be required to pay higher prices for components in short supply, or redesign or reconfigure products to accommodate for the substitute components, without being able to pass such cost to our customers.
We face regulatory uncertainties in China that could restrict our ability to grant share incentive awards to our employees or consultants who are PRC citizens Pursuant to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in a Stock Incentive Plan of an Overseas Publicly-Listed Company issued by SAFE on February 15, 2012 (“ Circular 7”), a qualified PRC agent (which could be the PRC subsidiary of the overseas-listed company) is required to file, on behalf of “domestic individuals” (defined as both PRC residents as well as non-PRC residents who reside in China for a continuous period of not less than one year, excluding foreign diplomatic personnel and representatives of international organizations) who are granted shares or share options by the overseas-listed company according to its share incentive plan, an application with SAFE to conduct SAFE registration with respect to such share incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the share purchase or share option exercise.
We face regulatory uncertainties in China that could restrict our ability to grant share incentive awards to our employees or consultants who are PRC citizens Pursuant to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in a Stock Incentive Plan of an Overseas Publicly-Listed Company issued by SAFE on February 15, 2012 (“Circular 7”), a qualified PRC agent (which could be the PRC subsidiary of the overseas-listed company) is required to file, on behalf of “domestic individuals” (defined as both PRC residents as well as non-PRC residents who reside in China for a continuous period of not less than one year, excluding foreign diplomatic personnel and representatives of international organizations) who are granted shares or share options by the overseas-listed company according to its share incentive plan, an application with SAFE to conduct SAFE registration with respect to such share incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the share purchase or share option exercise.
If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our stock. In addition, cryptocurrency asset platforms are relatively new.
If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our stock. 43 In addition, cryptocurrency asset platforms are relatively new.
Shortages of components could result in reduced production or delays in production, as well as an increase in production costs, which may negatively affect our ability to fulfill orders or make timely shipments to blockchain customers, as well as our customer relationships and profitability.
Shortages of components could result in reduced production or delays in production, as well as an increase in production costs, which may negatively affect our ability to fulfill orders or make timely shipments to our customers, as well as our customer relationships and profitability.
These risks may adversely affect the operation of the cryptocurrency network which would erode user confidence in digital assets, or in the use of technology to conduct financial transactions, which could negatively impact us, including the market perception of the effectiveness of our security measures, the technology infrastructure of our exchange platforms, and the demand for our mining machines. 39 In particular, our cryptocurrency exchange business involves the collection, storage, processing, and transmission of confidential information, customer, employee, service provider, and other personal data, as well as information required to access customer assets.
These risks may adversely affect the operation of the cryptocurrency network which would erode user confidence in digital assets, or in the use of technology to conduct financial transactions, which could negatively impact us, including the market perception of the effectiveness of our security measures, the technology infrastructure of our exchange platforms, and the demand for our mining machines. 34 In particular, our cryptocurrency exchange business involves the collection, storage, processing, and transmission of confidential information, customer, employee, service provider, and other personal data, as well as information required to access customer assets.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate of such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share. Mr.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate of such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share. 50 Mr.
Department of Justice (the “DOJ”), and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China.
The SEC, the U.S. Department of Justice (the “DOJ”), and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China.
PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles (“ SAFE Circular 37”), which replaces the previous SAFE Circular 75.
PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles (“SAFE Circular 37”), which replaces the previous SAFE Circular 75.
We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs. 65
We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
We do not expect to pay dividends in the foreseeable future. All share and price per share information in this annual report has been adjusted to reflect our one-for-thirty reverse stock split of our issued and outstanding ordinary shares, which became effective upon shareholder approval at the Company’s extraordinary general meeting on November 20, 2022 at 8:00 a.m.
We do not expect to pay dividends in the foreseeable future. All share and price per share information in this annual report has been adjusted to reflect our one-for-thirty reverse stock split of our issued and outstanding ordinary shares, which became effective upon shareholder approval at the Company’s extraordinary general meeting on November 20, 2022 at 8:00 a.m. (Singapore Time).
We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies In February 2015, SAT issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises (“ SAT Public Notice 7”).
We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies In February 2015, SAT issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises (“SAT Public Notice 7”).
Any significant deterioration in the relationship between China and any of these countries and region may have a material and adverse effect on our proposed business operations in these jurisdictions.
Any significant deterioration in the relationship between any of these countries and region may have a material and adverse effect on our proposed business operations in these jurisdictions.
As of December 31, 2023, our disclosure controls and procedures were not effective and management determined that we did not maintain effective internal control over financial reporting due to a material weakness. Management is undertaking actions to remediate the material weaknesses, but there is no assurance they will be remediated this year. See “Item 15.
As of December 31, 2024, our disclosure controls and procedures were not effective and management determined that we did not maintain effective internal control over financial reporting due to a material weakness. Management is undertaking actions to remediate the material weaknesses, but there is no assurance they will be remediated this year. See “Item 15.
Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. 10 We face uncertainties as to the reporting and other implications of certain past and future transactions that involve PRC taxable assets, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments.
Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. 9 We face uncertainties as to the reporting and other implications of certain past and future transactions that involve PRC taxable assets, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments.
In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment (“ SAFE Notice 13”). Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE.
In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment (“SAFE Notice 13”). Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE.
As of the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC on such basis. 13 In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us.
As of the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC on such basis. 12 In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us.
Our competitors include companies that may have a larger market share, greater brand recognition, broader international customer base, greater financial resources or other competitive advantages. We anticipate that competition will increase as blockchain and Fintech gain greater acceptance and more players join the market.
Our competitors include companies that may have a larger market share, greater brand recognition, broader international customer base, greater financial resources or other competitive advantages. We anticipate that competition will increase as blockchain, Fintech and renewable energy gain greater acceptance and more players join the market.
In October 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source (“ SAT Bulletin 37”), which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident EIT.
In October 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source (“SAT Bulletin 37”), which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident EIT.
We have limited experience with the operation of such businesses. In some countries the licensing requirements and regulations expressly cover companies engaged in digital currency activities; in others it is not clear whether or how the existing laws and regulations apply to digital currency activities.
We have limited experience with the operation of such businesses. For example, in some countries the licensing requirements and regulations expressly cover companies engaged in digital currency activities; in others it is not clear whether or how the existing laws and regulations apply to digital currency activities.
Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial condition. 63 The industries in which we operate and which we intend to operate in the future are characterized by constant changes.
Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial condition. 54 The industries in which we operate and which we intend to operate in the future are characterized by constant changes.
Moreover, we may not be able to accurately estimate our costs or pass on all or part of any increase in our costs of production, in particular the costs of raw materials, components and parts, to our customers. 38 Shortages in, or rises in the prices of, the components of our mining machines may adversely affect our business Given the long production period to manufacture, assemble, and deliver certain components and products, problems could arise in planning production and managing inventory levels that could seriously interrupt our operations, including the possibility of defective parts, an increase in component costs, delays in delivery schedules, and shortages of components.
Moreover, we may not be able to accurately estimate our costs or pass on all or part of any increase in our costs of production, in particular the costs of raw materials, components and parts, to our customers. 33 Shortages in, or rises in the prices of, the components of our products may adversely affect our business Given the long production period to manufacture, assemble, and deliver certain components and products, problems could arise in planning production and managing inventory levels that could seriously interrupt our operations, including the possibility of defective parts, an increase in component costs, delays in delivery schedules, and shortages of components.
We may not be able to price our products at our desired margins as a result of any decrease in our bargaining power or changes in market conditions We set prices for our mining machines and telecommunication products based on a number of internal and external factors, such as the cost of production, the technological contents of our products, market conditions, and competition that we face.
We may not be able to price our products at our desired margins as a result of any decrease in our bargaining power or changes in market conditions We set prices for our products based on a number of internal and external factors, such as the cost of production, the technological contents of our products, market conditions, and competition that we face.
However, the 2021 Edition Negative List provides that “[f]ields not mentioned in the Negative List for Foreign Investment Access shall be subject to administration under the principle of consistency for domestic and foreign investments.
However, the 2024 Edition Negative List provides that “[f]ields not mentioned in the Negative List for Foreign Investment Access shall be subject to administration under the principle of consistency for domestic and foreign investments.
For example, we recorded write-down for the potentially obsolete, slow-moving inventory and lower of cost or market adjustment of US$2.2 million, US$6.5 million and US$0.3 million in 2021, 2022 and 2023, respectively. If we cannot maintain an appropriate inventory level, we may lose sales and market share to our competitors.
For example, we recorded write-down for the potentially obsolete, slow-moving inventory and lower of cost or market adjustment of US$6.5 million, US$0.3 million and US$0.3 million in 2022, 2023 and 2024, respectively. If we cannot maintain an appropriate inventory level, we may lose sales and market share to our competitors.
Our exposure to credit risk is influenced mainly by the individual characteristics of each customer as well as the industry or country in which the customers operate and is concentrated on a few customers. As of December 31, 2022 and 2023, 20% and 20% of our total accounts receivables were due from one of our customers, respectively.
Our exposure to credit risk is influenced mainly by the individual characteristics of each customer as well as the industry or country in which the customers operate and is concentrated on a few customers. As of December 31, 2023 and 2024, 20% and 27% of our total accounts receivables were due from one of our customers, respectively.
Our company may be subject to filing obligations or taxed if our company is transferor in such transactions and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Public Notice 7 or SAT Bulletin 37, or both.
Our company may be subject to filing obligations or taxes if our company is transferor in such transactions and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Public Notice 7 or SAT Bulletin 37, or both.
Additionally, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we have engaged in any inappropriate activities.
Additionally, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards companies with operations in China in general, including us, regardless of whether we have engaged in any inappropriate activities.
Despite the measures we have taken to ensure the quality of products and services provided by third-party suppliers and service providers, to the extent that there are manufacturing defects beyond our control, or our third-party suppliers and service providers are unable to maintain the efficiency of their production facilities, supply sufficient components or raw materials in a timely manner, or provide satisfactory services to our customers, we may suffer reputational damage, and our brand image, business and results of operations may be materially and adversely affected. 51 We rely on third-party logistics service providers to deliver our products.
Despite the measures we have taken to ensure the quality of products and services provided by third-party suppliers and service providers, to the extent that there are manufacturing defects beyond our control, or our third-party suppliers and service providers are unable to maintain the efficiency of their production facilities, supply sufficient components or raw materials in a timely manner, or provide satisfactory services to our customers, we may suffer reputational damage, and our brand image, business and results of operations may be materially and adversely affected.
(Singapore Time). 2 A. [Reserved] B. Capitalization and indebtedness Not applicable. C. Reasons for the offer and use of proceeds Not applicable. D. Risk factors Our business, financial condition and results of operations could be materially and adversely affected if any of the risks described below occur.
A. [Reserved] B. Capitalization and indebtedness Not applicable. C. Reasons for the offer and use of proceeds Not applicable. D. Risk factors Our business, financial condition and results of operations could be materially and adversely affected if any of the risks described below occur.
The laws and regulations in the PRC may be amended from time to time and changes in those laws and regulations may cause us to incur additional costs in order to comply with the more stringent rules.
Such laws and regulations may be amended from time to time and changes in those laws and regulations may cause us to incur additional costs in order to comply with the more stringent rules.
The relevant provisions of the Negative List for Market Access shall apply to domestic and foreign investors on a unified basis.” In addition, based on the Negative List for Market Access (2022) which became effective on March 12, 2022, “the Catalogue for Guidance on Industrial Restructuring shall be included in the Negative List for Market Access”; and according to the Decision of the State Council on Promulgating and Implementing the “Temporary Provisions on Promoting Industrial Structure Adjustment,” valid from December 2, 2005, “[i]n principle, the ‘Guidance Catalogue for the Industrial Structure Adjustment’ shall apply to various types of enterprises inside China.” “[t]he industries of the eliminated category under the ‘Guidance Catalogue for the Industrial Structure Adjustment’ shall apply to the foreign investment enterprises” and “[i]nvestments are prohibited from being contributed to projects under the eliminated category.” Furthermore, the NDRC released on December 30, 2021 its No. 49 Decree, announcing that the Decision of the National Development and Reform Commission on Amending the Guiding Catalog for Industrial Restructuring (2019 Version) (the “Amended Catalog”).
The relevant provisions of the Negative List for Market Access shall apply to domestic and foreign investors on a unified basis.” In addition, based on the Negative List for Market Access (2022) which became effective on March 12, 2022, “the Catalogue for Guidance on Industrial Restructuring shall be included in the Negative List for Market Access”; and according to the Decision of the State Council on Promulgating and Implementing the “Temporary Provisions on Promoting Industrial Structure Adjustment,” valid from December 2, 2005, “[i]n principle, the ‘Guidance Catalogue for the Industrial Structure Adjustment’ shall apply to various types of enterprises inside China.” “[t]he industries of the eliminated category under the ‘Guidance Catalogue for the Industrial Structure Adjustment’ shall apply to the foreign investment enterprises” and “[i]nvestments are prohibited from being contributed to projects under the eliminated category.” Furthermore, the NDRC released on December 27, 2023 its No. 7 Decree, announcing that the Decision of the National Development and Reform Commission on Amending the Guiding Catalog for Industrial Restructuring (2024 Version) (the “Amended Catalog”).
Their limited operating history and the relative immaturity of the blockchain and Fintech industries make it difficult for us to evaluate their current business and future prospects.
Their limited operating history and the relative immaturity of the blockchain, Fintech and renewable energy industries make it difficult for us to evaluate their current business and future prospects.
In December 2021 and March 2022, we received registration approval from the Australian Transaction Reports and Analysis Centre (the “AUSTRAC”) as a digital currency exchange provider and acquired a company with an AFSL for engaging in financial services in Australia.
In December 2021 and March 2022, we received registration approval from the Australian Transaction Reports and Analysis Centre (the “AUSTRAC”) as a digital currency exchange provider and acquired a company with an Australian Financial Services Licence (“AFSL”) for engaging in financial services in Australia.
With the development of the foreign exchange market and progress toward interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that Renminbi will not appreciate or depreciate significantly in value against Australian dollars, Hong Kong dollars, South Korean won, U.S dollars or Euros in the future.
With the development of the foreign exchange market and progress toward interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that Renminbi will not appreciate or depreciate significantly in value against Australian dollars, Hong Kong dollars or U.S dollars in the future.
In addition, we also intend to increase our export of mining machines to the European Union in the future. However, the worldwide populism trend that calls for protectionism trade policy and potential international trade disputes could cause turbulence in the international markets.
In addition, we also intend to increase our export of products to the European Union in the future. However, the worldwide populism trend that calls for protectionism trade policy and potential international trade disputes could cause turbulence in the international markets.
The value of U.S. dollars against Australian dollars, Hong Kong dollars, Renminbi, South Korean won and Euros fluctuates and is subject to changes resulting from the PRC government’s policies and depends to a large extent on domestic and international economic and political developments, as well as supply and demand in the local market.
The value of U.S. dollars against Australian dollars, Hong Kong dollars and Renminbi fluctuates and is subject to changes resulting from the PRC government’s policies and depends to a large extent on domestic and international economic and political developments, as well as supply and demand in the local market.
We may have to turn to less reputable suppliers if we cannot source adequate components from our regular suppliers. Under such circumstances, the quality of the components may suffer and could cause performance issues in our mining machines.
We may have to turn to less reputable suppliers if we cannot source adequate components from our regular suppliers. Under such circumstances, the quality of the components may suffer and could cause performance issues in our products.
The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our blockchain products business and our Fintech business We currently export our products to various overseas markets, have been operating a cryptocurrency exchange platform and a cross-border payment and foreign exchange platform, and we intend to further develop our business and operations in the future to provide Fintech businesses in overseas jurisdictions, including, but not limited to, Singapore, Hong Kong, Australia, New Zealand, the Bahamas, the United States and Malaysia.
The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our businesses We currently export our products to various overseas markets, have been operating a cryptocurrency exchange platform and a cross-border payment and foreign exchange platform, and we intend to further develop our business and operations in the future to provide Fintech businesses in overseas jurisdictions, including, but not limited to, Hong Kong, Australia and the United States.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future. 9 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles (“ SPVs”), are required to register such investments with SAFE or its local branches.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future. 8 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles (“SPVs”), are required to register such investments with SAFE or its local branches.
MaloneBailey, LLP is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination on December 16, 2021 of having been unable to inspect or investigate completely. As of the date of this annual report, we have not been identified by the SEC as a commission-identified issuer under the HFCAA.
MaloneBailey, LLP is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination on December 16, 2021. As of the date of this annual report, we have not been identified by the SEC as a commission-identified issuer under the HFCAA.
Accordingly, our business, prospects, results of operations and financial condition may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
Accordingly, our business, prospects, results of operations and financial condition may be influenced by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review and the draft of Regulations on the Network Data Security, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
Bitcoin’s network, for example, has been, at times, at capacity, which has led to very high transaction fees. Increased fees and decreased settlement speeds could preclude certain use cases for Bitcoin (e.g., micropayments), and can reduce demand for and the market price of Bitcoin, which could adversely affect the market demand for our mining machines.
Bitcoin’s network, for example, has been, at times, at capacity, which has led to very high transaction fees. Increased fees and decreased settlement speeds could preclude certain use cases for Bitcoin (e.g., micropayments), and can reduce demand for and the market price of Bitcoin, which could adversely affect the market demand for our cryptocurrency exchange platform.
Hu, our chairman of the board of directors, chief executive officer and chief financial officer, beneficially owns 100% of our Class B ordinary shares, representing approximately 86.2% of the aggregate voting power of our issued and outstanding share capital as of April 25, 2024.
Hu, our chairman of the board of directors, chief executive officer and chief financial officer, beneficially owns 100% of our Class B ordinary shares, representing approximately 86.2% of the aggregate voting power of our issued and outstanding share capital as of April 28, 2025.
These Class B ordinary shares constituted approximately 23.8% of our total issued and outstanding shares of the Company and 86.2% of the aggregate voting power of the total issued and outstanding shares of the Company as of April 25, 2024. As a result of the dual-class share structure and the concentration of ownership, Mr.
These Class B ordinary shares constituted approximately 23.8% of our total issued and outstanding shares of the Company and 86.2% of the aggregate voting power of the total issued and outstanding shares of the Company as of April 28, 2025. As a result of the dual-class share structure and the concentration of ownership, Mr.
As we enter into the markets in Australia, Singapore, the Bahamas, Hong Kong, New Zealand and the United States, we have retained local regulatory counsel and expect to continue to monitor the local regulations regarding cryptocurrencies, digital assets, and financial service platforms.
As we enter into the markets in Australia, Hong Kong and the United States, we have retained local regulatory counsel and expect to continue to monitor the local regulations regarding cryptocurrencies, digital assets, and financial service platforms.
Any export requirements, tariffs, taxes and other restrictions and charges imposed by the United States on our mining machines could significantly increase our customers’ purchase costs of our mining machines and make our mining machines less competitive in the U.S. market. As a result, our future sales volumes, profitability and results of operations could be adversely affected.
Any export requirements, tariffs, taxes and other restrictions and charges imposed by the United States on our mining machines or renewable energy products could significantly increase our customers’ purchase costs thereof and make such products less competitive in the U.S. market. As a result, our future sales volumes, profitability and results of operations could be adversely affected.
We will continue to incur increased costs as a public company, which could lower our profits or make it more difficult to run a business As a public company, we have incurred significant legal, accounting and other expenses that we did not incur as a private company to ensure that we comply with the various requirements on corporate governance practices imposed by the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq.
We will continue to incur increased costs as a public company, and will incur further costs after we cease to qualify as an “emerging growth company,” which could lower our profits or make it more difficult to run a business As a public company, we have incurred significant legal, accounting and other expenses that we did not incur as a private company to ensure that we comply with the various requirements on corporate governance practices imposed by the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq.
MiCA was formally approved by the European Union’s member states in 2023 and is expected to come into effect in 2024. We therefore expect that regulations governing our current and planned business operations will vary from country to country as well as within countries.
MiCA was formally approved by the European Union’s member states in 2023 and came into effect in mid-2024. We therefore expect that regulations governing our current and planned business operations will vary from country to country as well as within countries.
As of December 31, 2022 and 2023, our net accounts receivable was US$3.3 million and US$0.9 million, respectively, and we recorded allowance for doubtful accounts of US$3.5 million and US$2.1 million, as of the same dates. In addition, we also face concentration of credit risks associated with our business.
As of December 31, 2023 and 2024, our net accounts receivable was US$0.9 million and US$1.6 million, respectively, and we recorded allowance for doubtful accounts of US$2.1 million and US$2.1 million, as of the same dates. In addition, we also face concentration of credit risks associated with our business.
Pursuant to the Special Administrative Measures for Foreign Investment Access (2021 Edition), or the 2021 Edition Negative List, issued by The Ministry of Commerce of the PRC (the “MOFCOM”) and the National Development and Reform Commission (the “NDRC”) on December 27, 2021, which came into effect on January 1, 2022, our business does not fall into the Negative List.
Pursuant to the Special Administrative Measures for Foreign Investment Access (2024 Edition), or the 2021 Edition Negative List, issued by The Ministry of Commerce of the PRC (the “MOFCOM”) and the National Development and Reform Commission (the “NDRC”) on September 26, 2024, which came into effect on January 1, 2024, our business does not fall into the Negative List.
As of December 31, 2022 and 2023, the outstanding balance of prepayments we made to our suppliers amounted to US$1.2 million and US$1.1 million, respectively. The amount of our prepayments may significantly increase as we continue to pursue technological advancement. We are subject to counterparty risk exposure to our suppliers.
As of December 31, 2023 and 2024, the outstanding balance of prepayments we made to our suppliers amounted to US$0.2 million and US$0.07 million, respectively. The amount of our prepayments may significantly increase as we continue to pursue technological advancement. We are subject to counterparty risk exposure to our suppliers.
If there is any delay in delivery, damage to products or any other issue, we may lose customers and sales and our brand image may be tarnished. We face intense industry competition As a blockchain technology and Fintech company, we operate in a highly competitive environment.
If there is any delay in delivery, damage to products or any other issue, we may lose customers and sales and our brand image may be tarnished. We face intense industry competition We operate in a highly competitive environment.
Because we compete in the environment of rapidly-evolving technology advancement and market trends and developments of the IC design industry, we cannot assume that we will be able to pass on any decrease in average selling prices of our products to our suppliers.
Because we compete in the environment of rapidly-evolving technology advancement and market trends and developments of such industries, we cannot assume that we will be able to pass on any decrease in average selling prices of our products to our suppliers.
We had currency translation gains of US$1.0 million in 2021, recognized in other comprehensive gain, and currency transaction loss of US$5.3 million and US$2.3 million in 2022 and 2023, respectively, which is recognized in other comprehensive loss.
We had currency translation gains of US$0.9 million in 2024, recognized in other comprehensive gain, and currency transaction loss of US$5.3 million and US$2.3 million in 2022 and 2023, respectively, which is recognized in other comprehensive loss.
As of the date of this annual report, we have granted 152,370 restricted share after forfeitures awards under the 2020 Plan and we did not grant any awards under the 2021 Plan. We may grant share incentive awards under both or either plan in the future.
As of the date of this annual report, we have granted 107,486 restricted shares (after forfeitures) under the 2020 Plan and we did not grant any awards under the 2021 Plan. We may grant share incentive awards under both or either plan in the future.
U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC.
U.S. public companies that have substantially all of their operations in China (although we are not one) have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC.
We offer credit sales to our major, long-term customers. Dependence on a limited number of major customers will expose us to the risks of substantial losses and may increase our account receivables and extend its turn over days if any of them reduces or even ceases business collaborations with us.
Dependence on a limited number of major customers will expose us to the risks of substantial losses and may increase our account receivables and extend its turn over days if any of them reduces or even ceases business collaborations with us.
If the Bitcoin Network is used to facilitate illicit activities, businesses that facilitate transactions in Bitcoin could be at increased risk of criminal or civil lawsuits, or of having services cut off, which could negatively affect the price of Bitcoin and the profitability of the Company Digital asset networks have in the past been, and may continue to be, used to facilitate illicit activities.
If certain cryptocurrency networks are used to facilitate illicit activities, businesses that facilitate transactions in such cryptocurrency could be at increased risk of criminal or civil lawsuits, or of having services cut off, which could negatively affect the price of the cryptocurrency and the profitability of the Company Digital asset networks have in the past been, and may continue to be, used to facilitate illicit activities.
The average selling prices of certain products may decrease from time to time due to technological advancement and we may not be able to pass onto our suppliers such decreases, which may in turn adversely affect our profitability The IC design industry is characterized by rapid launches of new products, continuous technological advancements and changing market trends and customer preferences, all of which translate to a shorter life cycle and a decrease in the average selling prices of products over time.
The average selling prices of certain products may decrease from time to time due to technological advancement and we may not be able to pass onto our suppliers such decreases, which may in turn adversely affect our profitability The blockchain and the renewable energy industries are characterized by rapid launches of new products, continuous technological advancements and changing market trends and customer preferences, all of which translate to a shorter life cycle and a decrease in the average selling prices of products over time.
We are in the process of obtaining relevant licenses and approvals for our subsidiaries in Singapore, Hong Kong, Australia, New Zealand and Malaysia to engage in additional Fintech businesses and we are at an initial preparatory stage of the construction of regulatory compliant mining farms in North America.
We are in the process of obtaining relevant licenses and approvals for our subsidiaries in Australia to engage in additional Fintech businesses and we are at an initial preparatory stage of the construction of regulatory compliant mining farms in North America.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations, and potentially the value of any Bitcoin or other cryptocurrencies or digital assets that we acquire or hold for our own account, and so could harm investors.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our cryptocurrency exchange business strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account and harm investors.
We are therefore subject to the risk of fluctuations in the exchange rate of U.S. dollars against Australian dollars, Hong Kong dollars, Renminbi, South Korean won and Euros.
We are therefore subject to the risk of fluctuations in the exchange rate of U.S. dollars against Australian dollars, Hong Kong dollars and Renminbi.
In addition to market and industry factors, the price and trading volume for the Class A ordinary shares may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● changes in the operating performance or market valuations of other cryptocurrency related companies; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● fluctuations of exchange rates between Renminbi and the U.S. dollar; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and ● general economic or political conditions in China or elsewhere in the world.
In addition to market and industry factors, the price and trading volume for the Class A ordinary shares may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● changes in the operating performance or market valuations of other companies performing in the industries in which we operate; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● fluctuations of exchange rates between Renminbi and the U.S. dollar; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and ● general economic or political conditions in the jurisdictions in which we operate or elsewhere in the world. 56 Any of these factors may result in large and sudden changes in the volume and price at which the Class A ordinary shares will trade.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeIn general, the following factors are unfavorable for the determination of “beneficial owner” status of an applicant: (1) the applicant is obligated to pay 50% or more of the income, within 12 months from its receipt, to a resident of a third country (region), where the term “obligated” includes agreed obligations and de facto payment for which there is no agreed obligation; (2) the business activities undertaken by the applicant do not constitute substantive business activities, where substantive business activities shall include manufacturing, distribution and management activities of a substantive nature, the determination of whether the business activities undertaken by the applicant are of a substantive nature shall be based on the functions actually performed and the risks borne, and investment holding management activities of a substantive nature undertaken by the applicant may constitute substantive business activities (where the applicant undertakes investment holding management activities which do not constitute substantive business activities, and simultaneously undertakes other business activities, if such other business activities are not sufficiently significant, these shall not constitute substantive business activities); (3) the treaty counterparty country (region) does not levy, or exempts tax on the relevant income, or levies tax but with a very low actual tax rate; (4) in addition to the loan contract based on which interest is derived and paid, there exists other loans or deposit contracts between the creditor and the third party, of which factors such as the amount, interest rate and date of execution are similar; and (5) in addition to the transfer contract for rights to use such as copyright, patent, technology, from which the royalties are derived and paid, there exists other transfer contracts for rights to use or ownership in relation to copyright, patent, technology between the applicant and a third party.
Biggest changeIn general, the following factors are unfavorable for the determination of “beneficial owner” status of an applicant: (1) the applicant is obligated to pay 50% or more of the income, within 12 months from its receipt, to a resident of a third country (region), where the term “obligated” includes agreed obligations and de facto payment for which there is no agreed obligation; (2) the business activities undertaken by the applicant do not constitute substantive business activities, where substantive business activities shall include manufacturing, distribution and management activities of a substantive nature, the determination of whether the business activities undertaken by the applicant are of a substantive nature shall be based on the functions actually performed and the risks borne, and investment holding management activities of a substantive nature undertaken by the applicant may constitute substantive business activities (where the applicant undertakes investment holding management activities which do not constitute substantive business activities, and simultaneously undertakes other business activities, if such other business activities are not sufficiently significant, these shall not constitute substantive business activities); (3) the treaty counterparty country (region) does not levy, or exempts tax on the relevant income, or levies tax but with a very low actual tax rate; (4) in addition to the loan contract based on which interest is derived and paid, there exists other loans or deposit contracts between the creditor and the third party, of which factors such as the amount, interest rate and date of execution are similar; and (5) in addition to the transfer contract for rights to use such as copyright, patent, technology, from which the royalties are derived and paid, there exists other transfer contracts for rights to use or ownership in relation to copyright, patent, technology between the applicant and a third party. 80 Pursuant to the Notice of the SAT on the Relevant Issues Concerning the Implementation of Dividend Clauses in Tax Treaties promulgated by the SAT and effective February 20, 2009, all of the following conditions shall be satisfied before the concession tax rate in a tax treaty can be enjoyed: (1) the tax resident obtaining dividends shall be restricted to the company as provided in the tax treaty; (2) among all the ownership equity interests and voting shares of the PRC resident company, the proportion directly owned by the tax resident complies with the prescribed proportions under the tax treaty; and (3) the proportion of the equity interests of the PRC resident company directly owned by such tax resident complies with, at all times within the twelve months before obtaining the dividends, the proportions specified in the tax treaty.
Our Cryptocurrency Exchange Business Currently in Australia, we have a self-developed cryptocurrency exchange platform operating under the name Ebonex, enabling users to buy, sell, or convert digital assets, which is targeted towards individual retail users and institutional customers. Ebonex is currently registered and enrolled as a digital currency exchange provider with the AUSTRAC to provide such services via the platform.
Our Cryptocurrency Exchange Business In Australia, we have a self-developed cryptocurrency exchange platform operating under the name Ebonex, enabling users to buy, sell, or convert digital assets, which is targeted towards individual retail users and institutional customers. Ebonex is currently registered and enrolled as a digital currency exchange provider with the AUSTRAC to provide such services via the platform.
Backed by our network of established partnerships with banks and regulated financial institutions globally, EbonFX is an ASIC licensed and AUSTRAC regulated business that enables its customers to transact safely and securely with confidence in multiple currencies and 180 countries across the world. In essence, EbonFX provides customer-centric foreign exchange, risk management and cross-border payment services.
Backed by our network of established partnerships with banks and regulated financial institutions globally, EbonFX is an ASIC licensed and AUSTRAC regulated business that enables its customers to transact safely and securely with confidence in multiple currencies and 180 countries across the world. 60 In essence, EbonFX provides customer-centric foreign exchange, risk management and cross-border payment services.
In August 2016, we acquired 51.05% of the equity interest in Hangzhou Dewang through our capital injection in Hangzhou Dewang. In March 2018, Zhejiang Ebang was delisted from the NEEQ in preparation for the reorganization. On May 17, 2018, we incorporated Ebang International, our holding company, as an exempted company with limited liability in the Cayman Islands.
In August 2016, we acquired 51.05% of the equity interest in Hangzhou Dewang through our capital injection in Hangzhou Dewang. In March 2018, Zhejiang Ebang was delisted from the NEEQ in preparation for the reorganization. 57 On May 17, 2018, we incorporated Ebang International, our holding company, as an exempted company with limited liability in the Cayman Islands.
While the outcome of the final report is yet to be released to the public, the review’s terms of reference require the Board to, among other matters, consider whether or not any changes to Australia’s taxation laws and/or their administration are warranted in the context of digital assets and transactions for both for retail and wholesale investors.
While the outcome of the final report is yet to be released to the public, the review’s terms of reference require the Board to, among other matters, consider whether any changes to Australia’s taxation laws and/or their administration are warranted in the context of digital assets and transactions for both for retail and wholesale investors.
United States state taxing authorities may adopt similar views on the taxability of cryptocurrencies and other digital assets. Even considering the foregoing, regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our businesses, or when they will be effective.
United States state taxing authorities may adopt similar views on the taxability of cryptocurrencies and other digital assets. 89 Even considering the foregoing, regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our businesses, or when they will be effective.
The EAR also control the “re-export” of products manufactured in foreign countries which incorporate more than a de minimis amount of U.S. content or which are based on certain U.S. -origin technologies. Finally, the EAR also prohibit the export of any item that will be used in any prohibited end-use. 94 C.
The EAR also control the “re-export” of products manufactured in foreign countries which incorporate more than a de minimis amount of U.S. content or which are based on certain U.S. -origin technologies. Finally, the EAR also prohibit the export of any item that will be used in any prohibited end-use. C.
STATS ChipPAC is controlled by Jiangsu Changjiang Electronics Technology Co., Ltd. and its various subsidiaries, which along with PTI are among the largest OSAT companies in the world. Assembly Plant We have in-house capabilities to produce our blockchain and telecommunications products at our production facilities.
STATS ChipPAC is controlled by Jiangsu Changjiang Electronics Technology Co., Ltd. and its various subsidiaries, which along with PTI are among the largest OSAT companies in the world. 65 Assembly Plant We have in-house capabilities to produce our blockchain and telecommunications products at our production facilities.
Sanctions for violations of these regulations include civil and criminal penalties - criminal sanctions are often imposed on both corporate defendants and officers, directors and employees of the corporation in their personal capacities. Export Administration Regulations In the United States, the principal program for the federal regulation of exports is under the U.S. Export Administration Regulations (the “EAR”).
Sanctions for violations of these regulations include civil and criminal penalties - criminal sanctions are often imposed on both corporate defendants and officers, directors and employees of the corporation in their personal capacities. 90 Export Administration Regulations In the United States, the principal program for the federal regulation of exports is under the U.S. Export Administration Regulations (the “EAR”).
ASO is tasked with, among other things, providing guidance on Australian sanctions laws, and works with other government agencies to monitor compliance with sanctions legislation. Australia adopts both the United Nations Security Council (UNSC) sanctions regimes and the Australian autonomous sanctions regimes as a matter of international law as well as a matter of Australian foreign policy.
ASO is tasked with, among other things, providing guidance on Australian sanctions laws, and works with other government agencies to monitor compliance with sanctions legislation. Australia adopts both the United Nations Security Council sanctions regimes and the Australian autonomous sanctions regimes as a matter of international law as well as a matter of Australian foreign policy.
However, we believe that with our experience in the blockchain and Fintech industries, as well as continuous research and development, technology enhancements as well as the expansion of our marketing and operation activities, we will further enhance our position in the market and achieve revenue growth in the near future.
However, we believe that with our experience in the blockchain and Fintech industries, as well as continuous research and development, technology enhancements as well as the expansion of our marketing and operation activities, we will further enhance our position in the market and can achieve revenue growth in the near future.
The local Quality and Technology Supervision Bureaus and various Entry and Exit Inspection and Quarantine Offices are responsible for the supervision, management and enforcement of mandatory product certification activities in their relevant local areas. 76 The National Copyright Administration of the PRC is in charge of the management of software copyright registration.
The local Quality and Technology Supervision Bureaus and various Entry and Exit Inspection and Quarantine Offices are responsible for the supervision, management and enforcement of mandatory product certification activities in their relevant local areas. The National Copyright Administration of the PRC is in charge of the management of software copyright registration.
Additionally, we must have adequate risk management systems in place. ASIC requires all AFS Licensees to have their compliance arrangements in relation to these obligations audited on an annual basis. ASIC initiatives concerning crypto assets The Australian government has publicly stated that it is committed to ensuring consumers can buy, sell, and store crypto assets using Australian CASSP.
Additionally, we must have adequate risk management systems in place. ASIC requires all AFS Licensees to have their compliance arrangements in relation to these obligations audited on an annual basis. 83 ASIC initiatives concerning digital assets The Australian government has publicly stated that it is committed to ensuring consumers can buy, sell, and store crypto assets using Australian CASSP.
AUSTRAC also regulates certain business activities in the financial, bullion, gambling, remittance and digital currency exchange service sectors. These business activities are called designated services and have been identified because they pose a risk for money laundering and terrorism financing. Presently, Australia’s cryptocurrency regulations under the AML/CTF Act, and AML/CTF Rules require digital currency exchanges (DCE) to register with AUSTRAC.
AUSTRAC also regulates certain business activities in the financial, bullion, gambling, remittance and digital currency exchange service sectors. These business activities are called designated services and have been identified because they pose a risk for money laundering and terrorism financing. Presently, Australia’s cryptocurrency regulations under the AML/CTF Act, and AML/CTF Rules require digital currency exchanges (“DCE”) to register with AUSTRAC.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Businesses— The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our blockchain products business and our Fintech business.” 92 Under Section 5 of the Federal Trade Commission Act of 1914, which currently prohibits “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce,” the FTC is authorized to “prevent persons, partnerships, or corporations, except banks [and certain other entities] from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.” Based upon a new “Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act” issued on November 10, 2022, the FTC may now use Section 5 of the FTC Act to regulate “conduct that tends to cause potential harm similar to an antitrust violation, but that may or may not be covered by the literal language of the antitrust laws or that may or may not fall into a ‘gap’ in those laws.” In response, the FTC has been increasing its scrutiny of the digital assets sector, and has initiated various investigations into certain acts and practices of entities participating in the digital assets sector.
Risk Factors—Risks Relating to Our Business— The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our businesses.” Under Section 5 of the Federal Trade Commission Act of 1914, which currently prohibits “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce,” the FTC is authorized to “prevent persons, partnerships, or corporations, except banks [and certain other entities] from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.” Based upon a new “Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act” issued on November 10, 2022, the FTC may now use Section 5 of the FTC Act to regulate “conduct that tends to cause potential harm similar to an antitrust violation, but that may or may not be covered by the literal language of the antitrust laws or that may or may not fall into a ‘gap’ in those laws.” In response, the FTC has been increasing its scrutiny of the digital assets sector, and has initiated various investigations into certain acts and practices of entities participating in the digital assets sector.
While there have been no recent changes to the laws governing foreign exchange contracts, NCP products have received some attention in relation to crypto assets. An NCP is described as an arrangement through which a party makes payments, or causes payments to be made, other than by the physical delivery of Australian or foreign currency.
While there have been no recent changes to the laws governing foreign exchange contracts, NCP products have received some attention in relation to digital assets. An NCP is described as an arrangement through which a party makes payments, or causes payments to be made, other than by the physical delivery of Australian or foreign currency.
Penalties for breaching sanctions laws include up to 10 years imprisonment and substantial fines. Australia extended its autonomous sanctions in relation to Russia in 2022 and 2023.
Penalties for breaching sanctions laws include up to 10 years imprisonment and substantial fines. Australia extended its autonomous sanctions to Russia in 2022 and 2023.
These measures include requiring product testing at various stages of production and utilizing our proprietary software to record and report the quality testing results. Production Facilities We operate one production facility in Hangzhou, Zhejiang, which houses three surface mount technology (“SMT”) production lines and three general assembly lines as of December 31, 2023.
These measures include requiring product testing at various stages of production and utilizing our proprietary software to record and report the quality testing results. Production Facilities We operate one production facility in Hangzhou, Zhejiang, which houses three surface mount technology (“SMT”) production lines and three general assembly lines as of December 31, 2024.
In August 2017, the State Council issued the Guidance on Further Expanding and Upgrading Information Consumption Potential for Sustained Release of Domestic Demand, which highlights and encourages the use of open source code to develop personalized software and the launch of trial applications using new technologies such as blockchain and artificial intelligence.
On August 13, 2017, the State Council issued the Guidance on Further Expanding and Upgrading Information Consumption Potential for Sustained Release of Domestic Demand, which highlights and encourages the use of open source code to develop personalized software and the launch of trial applications using new technologies such as blockchain and artificial intelligence.
Breach of the Work Safety Law of the PRC will incur various penalties, according to the specific circumstances. 79 Laws and Regulations Relating to Product Quality Pursuant to the Product Quality Law of the PRC (2018 Version), issued and promulgated on February 22, 1993, last amended on and effective December 29, 2018, producers shall be responsible for the quality of their products.
Breach of the Work Safety Law of the PRC will incur various penalties, according to the specific circumstances. 74 Laws and Regulations Relating to Product Quality Pursuant to the Product Quality Law of the PRC (2018 Version), issued and promulgated on February 22, 1993, last amended on and effective December 29, 2018, producers shall be responsible for the quality of their products.
These leased properties are used for research and development, sales and other offices. Our lease agreements mainly have a term of one to four years. Owned Properties As of December 31, 2023, we owned properties in two locations in China with a total GFA of approximately 66,091.36 sq.m.
These leased properties are used for research and development, sales and other offices. Our lease agreements mainly have a term of one to four years. Owned Properties As of December 31, 2024, we owned properties in two locations in China with a total GFA of approximately 66,091.36 sq.m.
The lack of comprehensive binding guidance from the ATO is in part due to crypto assets encompassing a broad range of tokens and other “things” with different rights, entitlement and obligations. As such, without a specific crypto regime, it is challenging for the ATO to administer the law in a consistent and sensible way.
The lack of comprehensive binding guidance from the ATO is in part due to digital assets encompassing a broad range of tokens and other “things” with different rights, entitlement and obligations. As such, without a specific digital regime, it is challenging for the ATO to administer the law in a consistent and sensible way.
Broadly, a financial product is a facility through which a person makes a financial investment, manages a financial risk, or makes non-cash payments. With regards to the ASIC Act, it prohibits engagement in misleading or deceptive conduct in the course of operating a crypto asset business whether a financial product is involved or not.
Broadly, a financial product is a facility through which a person makes a financial investment, manages a financial risk, or makes non-cash payments. With regards to the ASIC Act, it prohibits engagement in misleading or deceptive conduct in the course of operating a digital asset business whether a financial product is involved or not.
Some of the key benefits of using EbonFX for cross-border payment include its simplicity and intuitiveness, its 24/7 availability, access to competitive FX rates in real-time, access to support from professionals, as well as FX risk management for our corporate clients.
Some of the key benefits of using EbonFX for cross-border payments include its simplicity and intuitiveness, its 24/7 availability, access to competitive FX rates in real-time, access to support from professionals, as well as FX risk management for our corporate clients.
Our aim is to establish global cryptocurrency exchange platforms, offering services compliant with the laws and regulations of each country and region in which we operate. 69 Our cryptocurrency exchange business is in the early stages of operation and has only had a short history.
Our aim is to establish global cryptocurrency exchange platforms, offering services compliant with the laws and regulations of each country and region in which we operate. Our cryptocurrency exchange business is in the early stages of operation and has only has a short history.
ASIC and the Corporations Act and the ASIC Act ASIC is the government regulator for, among other things, corporations, financial markets, and the financial services industry of Australia, and administers the Corporations Act and the Australian Securities and Investments Commission Act 2001 (ASIC Act) as they relate to the industries it supervises.
ASIC and the Corporations Act and the ASIC Act ASIC is the government regulator for, among other things, corporations, financial markets, and the financial services industry of Australia, and administers the Corporations Act and the Australian Securities and Investments Commission Act 2001 (“ASIC Act”) as they relate to the industries it supervises.
Examples include stored value cards, electronic cash and direct debit services. An intermediary that arranges for the issue of an NCP facility may need to hold an AFS Licence or be an authorized representative of an AFS licensee.
Examples include stored value cards, electronic cash and direct debit services. An intermediary that arranges for the issue of an NCP facility may need to hold an AFSL or be an authorized representative of an AFS licensee.
We believe our outstanding technical expertise and production experience in IC development chain enables us to continuously introduce ICs of higher performance and power efficiency for application in both the blockchain and telecommunications fields.
We believe our outstanding technical expertise and production experience in the IC development chain enables us to continuously introduce ICs of higher performance and power efficiency for application in the blockchain fields.
Within our research and development team, we have a specialized ASIC chip design team focused on designing ASIC chips for the development of cutting-edge mining machine products and for other blockchain research and development projects that utilize ASIC chips.
On blockchain, we have a specialized ASIC chip design team focused on designing ASIC chips for the development of cutting-edge mining machine products and for other blockchain research and development projects that utilize ASIC chips.
Pursuant to the Notice on Enterprise Income Tax Policies for Further Encouraging the Development of Software and Integrated Circuit Industries, IC production enterprises with an IC production line below 0.8 micrometer (inclusive), after accreditation, shall be entitled to a tax concession period beginning in the profit-making year that is prior to December 31, 2017, for which EIT shall be exempted for the first and second years and be reduced by 50% in the third to fifth years.
Pursuant to the Notice on Enterprise Income Tax Policies for Further Encouraging the Development of Software and Integrated Circuit Industries and Announcement on Enterprise Income Tax Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry, IC production enterprises with an IC production line below 0.8 micrometer (inclusive), after accreditation, shall be entitled to a tax concession period beginning in the profit-making year that is prior to December 31, 2017, for which EIT shall be exempted for the first and second years and be reduced by 50% in the third to fifth years.
The existing regulatory framework for crypto assets is comprised of several aspects of Australian laws, including the Corporations Act 2001 (Corporations Act) , Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) , and the Competition and Consumer Act 2010 . Crypto assets that are a financial product or designated service, are within the scope of the Corporations Act.
The existing regulatory framework for digital assets is comprised of several aspects of Australian laws, including the Corporations Act 2001 (the “Corporations Act”), Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), and the Competition and Consumer Act 2010. Digital assets that are a financial product or designated service, are within the scope of the Corporations Act.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Business—Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition” and “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition” and “Item 3. Key Information—D.
Based on INFO 225, Australian laws apply where the crypto asset is promoted or sold in Australia, including from offshore.
Based on INFO 225, Australian laws apply where the digital asset is promoted or sold in Australia, including from offshore.
ASIC requires providers to hold an Australian Financial Services License (AFSL) before engaging in financial services (in relation to financial products) in Australia. We hold an AFSL that authorizes us to deal in and provide general financial product advice in relation to products including foreign exchange contracts ( e.g. FX Forward and Options Contracts), and non-cash payment products (NCP).
ASIC requires providers to hold an AFSL before engaging in financial services (in relation to financial products) in Australia. We hold an AFSL that authorizes us to deal in and provide general financial product advice in relation to products including foreign exchange contracts (e.g. FX forward and options contracts), and non-cash payment products (“NCP”).
In addition, IC production enterprises with an IC production line below 0.25 micrometer or an investment of over RMB8 billion, after accreditation, shall be entitled to a reduced EIT tax rate at 15%, and, for those with an operation period of over 15 years, the tax concession period shall be deemed to start from the profit-making year prior to December 31, 2017, for which EIT shall be exempted in the first to fifth years and be reduced by 50% in the sixth to tenth years.
In addition, IC production enterprises with an IC production line below 0.25 micrometer or an investment of over RMB8 billion, for those with an operation period of over 15 years, the tax concession period shall be deemed to start from the profit-making year prior to December 31, 2017, for which EIT shall be exempted in the first to fifth years and be reduced by 50% in the sixth to tenth years.
(2) On December 16, 2020, an affiliate controlled by Dong Hu, our chairman of the board of directors, chief executive officer and chief financial officer, acquired 0.0036% of the equity interests in Zhejiang Ebang. (3) On November 22, 2023, an affiliate controlled by Mr.
(2) On December 16, 2020, an affiliate controlled by Dong Hu, our chairman of the board of directors, chief executive officer and chief financial officer, acquired 0.0036% of the equity interests in Zhejiang Ebang. (3) On June 9, 2023, an affiliate controlled by Mr.
We then closely partner with industry-leading third-party suppliers to fabricate, test and package the IC products we design. Leveraging our long-established experience and know-how in producing telecommunications products, we have also established in-house production capabilities to conduct PCB assembly and system assembly for both mining machines and a wide range of telecommunications products.
We then closely partner with industry-leading third-party suppliers to fabricate, test and package the IC products we design. Leveraging our long-established experience and know-how in producing telecommunications products, we have also established in-house production capabilities to conduct PCB assembly and system assembly for mining machines.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Businesses—The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our blockchain products business and our Fintech business,” “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our businesses,” “Item 3. Key Information—D.
We have integrated robust anti-money laundering and counter-terrorism financing (“AML/CTF”), KYC, Know Your Transaction (“KYT”) measures, and utilizes industry benchmark third-party asset custody services in Ebonex to ensure that user assets are secure and meets relevant regulatory and compliance requirements.
We have integrated robust anti-money laundering and counter-terrorism financing (“AML/CTF”), KYC, Know Your Transaction (“KYT”) measures, and utilize industry benchmark third-party asset custody services in Ebonex to ensure that user assets are secure and comply with relevant regulatory and compliance requirements.
Our expenses to date to implement our new business plans, including establishing in Canada, Australia, Singapore, Hong Kong, the Bahamas, New Zealand, the United States and Malaysia, have been mainly on server rentals, application development, regulatory compliance, talent acquisition and offices rentals to set up blockchain and Fintech businesses in the abovementioned countries and regions.
Our expenses to date to implement our new business plans, including establishing in Australia, Singapore, Hong Kong and the United States, have been mainly on server rentals, application development, regulatory compliance, talent acquisition and offices rentals to set up blockchain, Fintech and renewable energy businesses in the abovementioned countries and regions.
Currently, there is no clear and comprehensive policy that directly regulates crypto assets or Crypto Asset Secondary Service Providers (CASSP) in Australia.
Currently, there is no clear and comprehensive policy that directly regulates digital assets or Crypto Asset Secondary Service Providers (“CASSP”) in Australia.
The following table sets forth the GFA of all properties owned by us: Location Approximate GFA (sq.m.) Wuhan, Hubei (research and development center) 390.68 Hangzhou, Zhejiang (Linping District) 65,700.68 Total 66,091.36 We believe that we have adequate facilities, through a combination of leased and owned properties, to accommodate our business operations and future expansion plans. ITEM 4A.
The following table sets forth the GFA of all properties owned by us: Location Approximate GFA (sq.m.) Wuhan, Hubei 390.68 Hangzhou, Zhejiang (Linping District) 65,700.68 Total 66,091.36 We believe that we have adequate facilities, through a combination of leased and owned properties, to accommodate our business operations and future expansion plans. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Laws and Regulations Relating to Taxation Enterprise Income Tax Pursuant to the EIT Law promulgated on March 16, 2007, amended on and effective December 29, 2018, and the Regulation on Implementation of the Enterprise Income Tax Law of the PRC, or the EIT Implementation Rules, issued on December 6, 2007 and amended on and effective April 23, 2019, EIT shall be applicable at a uniform rate of 25% to all resident or non-resident enterprises.
Laws and Regulations Relating to Taxation Enterprise Income Tax Pursuant to the EIT Law promulgated on March 16, 2007, amended on and effective December 29, 2018, and the Regulation on Implementation of the Enterprise Income Tax Law of the PRC, or the EIT Implementation Rules, issued on December 6, 2007, amended on December 6, 2024, and effective on January 20, 2025, EIT shall be applicable at a uniform rate of 25% to all resident or non-resident enterprises.
However, whether or not a transaction involving a crypto asset is an NCP facility depends on the rights and obligations associated with the asset. According to ASIC’s Information Sheet (INFO 225), if the asset provides the holder with a right to use the asset to make a payment, it is likely to be an NCP facility.
However, whether or not a transaction involving a digital asset is an NCP facility depends on the rights and obligations associated with the asset. According to ASIC’s Information Sheet (“INFO 225”), if the asset provides the holder with a right to use the asset to make a payment, it is likely to be an NCP facility.
We consider research and development capability as a crucial factor to our success and our ability to develop innovative and competitive products to meet the technological requirements of customers. As of December 31, 2023, our research and development team comprised of 130 employees, or approximately 42.9% of our total number of employees.
We consider research and development capability as a crucial factor to our success and our ability to develop innovative and competitive products to meet the technological requirements of customers. As of December 31, 2024, our research and development team comprised 93 employees, or approximately 42.7% of our total number of employees.
These options products are a type of derivatives product which gives the buyer of the contract the right (but not the obligation) to buy or sell a currency at a pre-agreed exchange rate on a predetermined date in the future. Our Telecommunications Business We entered the telecommunications business in 2010.
These options products are a type of derivatives product which gives the buyer of the contract the right (but not the obligation) to buy or sell a currency at a pre-agreed exchange rate on a predetermined date in the future.
SMT production lines are responsible for PCB assembly, which is a key process for both our mining machine and telecommunications products. The maximum output volume of our in-house production facilities is largely dictated by the production capacity of our SMT production lines in Hangzhou.
SMT production lines are responsible for PCB assembly, which is a key process for both our mining machine and telecommunications products. The maximum output volume of our in-house production facilities is largely dictated by the production capacity of our SMT production lines in Hangzhou and is also influenced by our development strategy and business layout.
Our principal subsidiaries consist of the following entities (in chronological order based on their dates of incorporation): ● Zhejiang Ebang, our majority-owned subsidiary and an onshore holding company established in the PRC on January 21, 2010, principally for holding our businesses in the design, manufacture and sale of telecommunications and blockchain processing equipment; ● Ebang IT, our majority-owned subsidiary and an operating entity established in the PRC on August 11, 2010, principally for the design, manufacture and sale of telecommunications and blockchain processing equipment; ● Hangzhou Dewang, our majority-owned subsidiary and an operating entity established in the PRC on December 31, 2015, principally for the design and manufacture of blockchain chips; ● HK Ebang Communications, formerly known as Hong Kong Bite Co., Ltd., our wholly-owned subsidiary and an operating entity established in Hong Kong on February 12, 2016, principally for the trading of blockchain chips; ● Ebonex Australia, our wholly-owned subsidiary and an operating entity established in Australia on April 22, 2021, principally for operating the cryptocurrency exchange platform Ebonex; and ● Compass Global, which became our wholly-owned subsidiary in Australia through acquisition on March 21, 2022, principally for the cross-border payment and foreign exchange business. 95 The chart below summarizes our corporate structure and identifies the principal subsidiaries described above as of the date of this annual report: (1) The remaining 48.95% equity interests are owned by Huzhou Meiman Investment Management LLP, an unaffiliated third party.
Our principal subsidiaries consist of the following entities (in chronological order based on their dates of incorporation): ● Zhejiang Ebang, our majority-owned subsidiary and an onshore holding company established in the PRC on January 21, 2010, principally for holding our businesses in the design, manufacture and sale of telecommunications and blockchain processing equipment; ● Hangzhou Dewang, our majority-owned subsidiary and an operating entity established in the PRC on December 31, 2015, principally for the design and manufacture of blockchain chips; ● HK Ebang Communications, formerly known as Hong Kong Bite Co., Ltd., our wholly-owned subsidiary and an operating entity established in Hong Kong on February 12, 2016, principally for the trading of blockchain chips; ● Ebonex Australia, our wholly-owned subsidiary and an operating entity established in Australia on April 22, 2021, principally for operating the cryptocurrency exchange platform Ebonex; ● Ebonfx Australia, formerly known as Compass Global Holdings Pty Ltd, which became our wholly-owned subsidiary in Australia through an acquisition on March 21, 2022, principally for the cross-border payment and foreign exchange business; ● Redback Operations, which became our wholly-owned subsidiary in Australia through an acquisition on November 8, 2024, principally for solar and battery storage solution; and ● Luceo Australia, which became our wholly-owned subsidiary in Australia through an acquisition on November 8, 2024, principally for SaaS data visualization and analytics solution. 91 The chart below summarizes our corporate structure and identifies the principal subsidiaries described above as of the date of this annual report: (1) The remaining 48.95% equity interests are owned by Huzhou Meiman Investment Management LLP, an unaffiliated third party.
Our highly skilled research and development team excels in monitoring and assessing user needs, market trends, and industry advancements, guiding the direction of our projects and product roadmaps while identifying growth opportunities and potential challenges in the rapidly evolving Fintech landscape.
Our highly skilled research and development team excels in monitoring and assessing user needs, market trends, and industry advancements, guiding the direction of our projects and product roadmaps while identifying growth opportunities and potential challenges in the rapidly evolving industries in which we operate.
On this basis, our institutional clients through our over-the-counter (“OTC”) desk are able to get personalized customer experience, as well as immediate settlement into fiat or cryptocurrency, along with class-leading trading spreads. As for the cross-border payment and foreign exchange business, clients can access competitive foreign exchange rates, fees and services in the market through the EbonFX platform.
Our institutional clients, through our over-the-counter (“OTC”) desk, receive a personalized customer experience, as well as immediate settlement into fiat or cryptocurrency, along with class-leading trading spreads. For the cross-border payment and foreign exchange business, clients can access competitive foreign exchange rates, fees and services in the market through the EbonFX platform.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Businesses—If we are unable to manage our growth or execute our strategies effectively, our business, results of operations and financial condition may be materially and adversely affected” and “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—If we are unable to manage our growth or execute our strategies effectively, our business, results of operations and financial condition may be materially and adversely affected,” “Item 3. Key Information—D.
The quality control staff inspects semi-finished products at various stages of the production process to ensure their compliance with our internal quality control standards and measures. This helps us detect defects during the production process and take steps to rectify those defects, where appropriate.
We have our own on-site quality control staff to inspect each stage of the production process. The quality control staff inspects semi-finished products at various stages of the production process to ensure their compliance with our internal quality control standards and measures. This helps us detect defects during the production process and take steps to rectify those defects, where appropriate.
As of the date of this annual report, we have registered 67 patents, 10 IC layout designs and 68 software copyrights, with an additional 42 patent applications in the PRC and overseas pending.
As of the date of this annual report, we have registered 100 patents, 10 IC layout designs and 70 software copyrights, with an additional 33 patent applications in the PRC and overseas pending.
These sanctions measures are aimed at restrictions on exports and commercial activities, including providing and dealing with assets of designated persons or entities, and restrictions on certain imports including arms material, energy products such as oil, and certain luxury goods; and travel bans on designated persons etc.
These sanctions measures are aimed at restrictions on exports and commercial activities, including providing and dealing with assets of designated persons or entities, and restrictions on certain imports including arms material, energy products such as oil, and certain luxury goods; and travel bans on designated persons etc. Sanctions Permits may be issued however, subject to certain criteria.
Generally, we either require prepayment in full or offer alternate payment plans for customers to prepay a certain percentage with the remainder to be settled after delivery of the products, and we have extended credit sales to certain customers since 2018.
Generally, we either require prepayment in full or offer alternate payment plans for customers to prepay a certain percentage with the remainder to be settled after delivery of the products, and we have extended credit sales to certain customers since 2018. Research and Development We have historically and continue to place strong emphasis on research and development.
Our fiber-optic communication access devices are mainly used in telecommunication rooms and data center rooms. We collaborate with operators to provide professional and reliable fiber-optic private network communication services to enterprise clients and data center customers to meet the growing demand for high-density fiber optic interconnection communication networks in urban areas.
We collaborate with operators to provide professional and reliable fiber-optic private network communication services to enterprise clients and data center customers to meet the growing demand for high-density fiber optic interconnection communication networks in urban areas.
Business Overview—Quality Control.” We outsource some of our production to third-party subcontractors in order to meet additional capacity needs. We currently maintain a working relationship with approximately four to five third-party subcontractors for PCB and general system assembly.
For more information, see “Item 4. Information on the Company—B. Business Overview—Quality Control.” We outsource some of our production to third-party subcontractors in order to meet additional capacity needs. We currently maintain a working relationship with approximately four to five third-party subcontractors for PCB and general system assembly.
The Australian Sanctions Office (ASO) The following is a brief summary of the sanctions regime imposed by the Australian Government. This summary does not intend to set out the laws and regulations relating to Australia’s sanctions regime in their entirety. ASO is the Australian Government’s sanctions regulator which operates under Australia’s Department of Foreign Affairs and Trade (DFAT).
This summary does not intend to set out the laws and regulations relating to Australia’s sanctions regime in their entirety. ASO is the Australian government’s sanctions regulator which operates under Australia’s Department of Foreign Affairs and Trade.
Failure to do so may trigger legal action from ASIC against those issuers without a required AFSL or authorization. Currently, whether a crypto asset is considered a financial product depends on its use, which is principally defined in section 763A of the Corporations Act.
Failure to do so may trigger legal action from ASIC against those issuers without a required AFSL or authorization. Australia’s financial services regulatory regime is technology neutral. Therefore whether a digital asset is considered a financial product depends on its use, which is principally defined in section 763A of the Corporations Act.
Property, plants and equipment We currently occupy properties in certain locations in China, including (1) research and development bases in Shanghai, Suzhou and Wuhan, (2) one production facility in Hangzhou and (3) sales offices in Hangzhou, Shijiazhuang, Changsha, Guangzhou, Taizhou, Beijing and Shenyang.
Property, plants and equipment We currently occupy properties in certain locations in China, including (1) research and development bases in Hangzhou and Wuhan, (2) one production facility in Hangzhou and (3) sales offices in Hangzhou and Beijing.
Pursuant to the Notice by the State Administration of Foreign Exchange of Further Deepening Reform and Promoting Cross-border Trade and Investment Facilitation promulgated on and effective December 4, 2023, the capital funds and foreign exchange receipts under the account of foreign debts of a non-financial enterprise and RMB funds obtained from foreign exchange settlement thereof shall be used under the principles of veracity and self-use, and shall not be directly or indirectly used for expenditures prohibited by any law or regulation of the state; unless otherwise expressly prescribed, shall not be directly or indirectly used for investment in securities or other wealth management investment (except for wealth management products with risk ratings of not higher than Grade II and structured deposits); shall not be used for granting loans to non-affiliated enterprises (except that it is explicitly permitted in the business scope or in four regions, namely Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone, Guangzhou Nansha New Area of the China (Guangdong) Pilot Free Trade Zone, Yangpu Economic Development Zone of the China (Hainan) Pilot Free Trade Zone, and Beilun District of Ningbo City, Zhejiang Province); and shall not be used to purchase residential properties that are not for self-use (except for enterprises engaged in real estate development or lease).
In addition, the capital funds and foreign exchange receipts under the account of foreign debts of a non-financial enterprise and RMB funds obtained from foreign exchange settlement thereof shall be used under the principles of veracity and self-use, and shall not be directly or indirectly used for expenditures prohibited by any law or regulation of the state; unless otherwise expressly prescribed, shall not be directly or indirectly used for investment in securities or other wealth management investment (except for wealth management products with risk ratings of not higher than Grade II and structured deposits); shall not be used for granting loans to non-affiliated enterprises (except that it is explicitly permitted in the business scope or in four regions, namely Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone, Guangzhou Nansha New Area of the China (Guangdong) Pilot Free Trade Zone, Yangpu Economic Development Zone of the China (Hainan) Pilot Free Trade Zone, and Beilun District of Ningbo City, Zhejiang Province); and shall not be used to purchase residential properties that are not for self-use (except for enterprises engaged in real estate development or lease). 76 Foreign Investment In March 2019, the Standing Committee of the National People’s Congress of the PRC passed the Foreign Investment Law of the People’s Republic of China, or the Foreign Investment Law.
Subject to the foregoing paragraph, we do not carry any business interruption insurance in relation to our operations. We are also committed to ensuring that we comply with legally mandated insurances in the jurisdictions in which we operate.
Subject to the foregoing paragraph, we do not carry any business interruption insurance in relation to our operations. We are also committed to ensuring that we comply with legally mandated insurances in the jurisdictions in which we operate. We believe that our insurance coverage is adequate and is in line with industry practice.
Furthermore, to safeguard the legal rights and interests of workers, the way to calculate compensation for the probation period and for damages shall be subject to the provisions of the law. 86 Social Security and Housing Provident Fund As required under the Social Insurance Law of the PRC promulgated on October 28, 2010, and amended on and effective December 29, 2018, the Regulation on Work-Related Injury Insurance promulgated on April 27, 2003, amended on December 20, 2010 and effective January 1, 2011, the Provisional Measures on Insurance for Maternity of Employees promulgated on and effective December 14, 1994 and implemented on January 1, 1995, and the Regulation on Administration of Housing Provident Funds promulgated on April 3, 1994 and last amended on and effective March 24, 2019, employers and employees within the PRC shall pay for social insurance fees and housing provident funds in compliance with applicable PRC laws.
Social Security and Housing Provident Fund As required under the Social Insurance Law of the PRC promulgated on October 28, 2010, and amended on and effective December 29, 2018, the Regulation on Work-Related Injury Insurance promulgated on April 27, 2003, amended on December 20, 2010 and effective January 1, 2011, the Provisional Measures on Insurance for Maternity of Employees promulgated on and effective December 14, 1994 and implemented on January 1, 1995, and the Regulation on Administration of Housing Provident Funds promulgated on April 3, 1994 and last amended on and effective March 24, 2019, employers and employees within the PRC shall pay for social insurance fees and housing provident funds in compliance with applicable PRC laws.
Sanctions Permits may be issued however, subject to certain criteria. 91 Regulatory Overview of United States The following sets forth a description of certain laws, regulations and government policies relating to cryptocurrencies and cryptocurrency mining in the United States, which we consider a key market for our overseas business.
Regulatory Overview of United States The following sets forth a description of certain laws, regulations and government policies relating to cryptocurrencies and cryptocurrency mining in the United States, which we consider a key market for our overseas business.
In any other case, the tax charged shall not exceed 10% of the distributed dividends. 85 Pursuant to the Announcement on Issues Relating to “Beneficial Owner” in Tax Treaties promulgated by the SAT on February 3, 2018 and came effective April 1, 2018, a “beneficial owner” shall mean a person who has ownership and control over the income, and the rights and property from which the income is derived.
Pursuant to the Announcement on Issues Relating to “Beneficial Owner” in Tax Treaties promulgated by the SAT on February 3, 2018 and came effective April 1, 2018, a “beneficial owner” shall mean a person who has ownership and control over the income, and the rights and property from which the income is derived.
Registration certification documents issued by the competent software registration authority serve as the prima facie proof of such registration. 87 IC Layout Designs Pursuant to the Regulation on the Protection of Integrated Circuit Layout Designs promulgated on April 2, 2001 and implemented on October 1, 2001, and the Protection of Integrated Circuit Layout Designs Regulations Implementing Rules promulgated on September 18, 2001 and effective October 1, 2001, layout design proprietary right holders enjoy the following proprietary rights: to duplicate the whole or any part of the protected layout designs that is original; to make commercial use of the protected layout designs, ICs containing such layout designs, or items containing such ICs.
IC Layout Designs Pursuant to the Regulation on the Protection of Integrated Circuit Layout Designs promulgated on April 2, 2001 and implemented on October 1, 2001, and the Protection of Integrated Circuit Layout Designs Regulations Implementing Rules promulgated on September 18, 2001 and effective October 1, 2001, layout design proprietary right holders enjoy the following proprietary rights: to duplicate the whole or any part of the protected layout designs that is original; to make commercial use of the protected layout designs, ICs containing such layout designs, or items containing such ICs.
We generally enter into framework agreement with the major telecommunications service providers in China with a credit period up to one year. We typically require payments to be made in installments upon delivery of the products.
We generally enter into framework agreement with the major telecommunications service providers in China with a credit period up to one year. We typically require payments to be made in installments upon delivery of the products. We encourage our sales representatives to negotiate shorter credit periods to reduce our credit risk.
Laws and Regulations Relating to Environmental Protection Pursuant to the Environmental Protection Law of the PRC issued on December 26, 1989, amended on April 24, 2014 and effective January 1, 2015, entities that cause environmental pollution and other public nuisances shall adopt effective measures to prevent the pollution of and hazards caused to the environment.
Filing will be administered for enterprises conducting overseas investments in other circumstances. 77 Laws and Regulations Relating to Environmental Protection Pursuant to the Environmental Protection Law of the PRC issued on December 26, 1989, amended on April 24, 2014 and effective January 1, 2015, entities that cause environmental pollution and other public nuisances shall adopt effective measures to prevent the pollution of and hazards caused to the environment.
For more information on our expansion plan and the related properties, see “—Owned Properties.” Leased Properties The total gross floor area (“GFA”) of our leased properties is approximately 9,263 square meters (“sq.m.”), out of which, approximately 1,522 sq.m. are leased outside of China primarily in Singapore, Hong Kong, Australia, the Bahamas and Malaysia.
For more information on our expansion plan and the related properties, see “—Owned Properties.” 92 Leased Properties The total gross floor area (“GFA”) of our leased properties is approximately 4837.16 square meters (“sq.m.”), out of which, approximately 2079.16 sq.m. are leased outside of China primarily in Singapore, Hong Kong, Australia and the United States.
As we enter into the markets in Australia, Singapore, Hong Kong, the Bahamas, New Zealand, the United States and Malaysia, we expect to continue to monitor the local regulations regarding Fintech service platforms and retain local regulatory counsels. See “Item 3. Key Information—D.
As we enter into the markets in Australia, Hong Kong, Singapore and the United States, we expect to continue to monitor the local regulations regarding Fintech service platforms and renewable energy businesses, and retain local regulatory counsel. 59 See “Item 3. Key Information—D.
Crypto assets that are not financial products are considered consumer products subject to the Australian Consumer Law administered by the Australian Competition and Consumer Commission (ACCC). Government bodies and laws on foreign exchange and crypto assets and exchanges ASIC and AUSTRAC are the two (2) primary regulators of foreign exchange contracts, remittance activities, and crypto assets and exchanges.
Digital assets that are not financial products are considered consumer products subject to the Australian Consumer Law administered by the Australian Competition and Consumer Commission (“ACCC”). Government bodies and laws on foreign exchange and digital assets and exchanges ASIC and AUSTRAC are the two (2) primary regulators of our Fintech businesses.
We are also in the process of obtaining additional and/or relevant licenses and approvals for our subsidiaries in Singapore, Hong Kong, Australia, New Zealand and Malaysia. If and once obtained, the licenses will allow us to operate additional Fintech businesses in such countries and regions.
We are also in the process of obtaining additional and/or relevant licenses and approvals for our subsidiaries in Australia. If and once obtained, the licenses will allow us to operate additional Fintech businesses in Australia.
Our customers typically are charged high margins and fees by their banks for their foreign currency transactions, hence our value proposition is to provide a better, more cost-effective payment solution for businesses and individuals operating across borders. 68 Our Blockchain Products Business Our blockchain products business consists primarily of Bitcoin mining machine sales.
Our customers typically are charged high margins and fees by their banks for their foreign currency transactions; hence our value proposition is to provide a better, more cost-effective payment solution for businesses and individuals operating across borders.
As of the date of this annual report, we have been operating a self-developed proprietary cryptocurrency exchange platform, Ebonex, and a self-developed proprietary cross-border payment and foreign exchange platform, EbonFX, targeting qualified investors subject to compliance with applicable laws in the jurisdictions in which EbonFX operates.
As of the date of this annual report, we have been operating a self-developed proprietary cryptocurrency exchange platform, Ebonex, and a self-developed proprietary cross-border payment and foreign exchange platform, EbonFX, targeting qualified investors subject to compliance with applicable laws in the jurisdictions in which we operate, and have commenced our renewable energy business through the acquisition of Redback Technologies in Australia.
As of the date of this annual report, we have been operating a cryptocurrency exchange platform and a cross-border payment and foreign exchange platform outside the PRC; received the MSB License in Canada; received registration approval as a digital currency exchange provider; acquired a company with an AFSL and received registration approval as an independent remittance dealer in Australia; received the MSO License, Type 4 and 9 licenses, TCSP license and registration approval as a Trust Company in Hong Kong; and received registration as a Digital Asset Business and a Firm Dealing in Securities as Agent or Principal, Arranging Deals, Managing Securities and Advising on Securities in the Bahamas.
As of the date of this annual report, we have been operating a cryptocurrency exchange platform and a cross-border payment and foreign exchange platform outside the PRC; received registration approval as a digital currency exchange provider, acquired a company with an AFSL, received registration approval as an independent remittance dealer in Australia; received the MSO License, Type 4 and 9 licenses, TCSP license and registration approval as a Trust Company in Hong Kong.
For the cryptocurrency exchange business, our retail customers are able to access a world class trading platform with low trading fees, along with a safe environment that ensures their digital assets are held securely.
Our Fintech businesses Our Fintech businesses are primarily composed of our cryptocurrency exchange and cross-border payment and foreign exchange. For the cryptocurrency exchange business, our retail customers are able to access a world class trading platform with low trading fees, along with a safe environment that ensures their digital assets are held securely.
An arrangement is also likely to be an NCP if, for example, a person offers an arrangement where payments can be made using a crypto asset but fiat currency is sent to recipients. 88 Australian Financial Services License (AFSL) As an AFS Licensee engaged in financial services in Australia, in particular, advising and dealing in foreign exchange contracts and NCP products, we are subject to general obligations under the Corporations Act, including providing financial services efficiently, honestly and fairly; having in place adequate arrangements for the management of conflicts of interest; complying with our license conditions and financial services laws; having adequate human, financial and technological resources; maintaining a dispute resolution system for retail clients; and ensuring that our representatives are adequately trained and competent.
AFSL As an AFS Licensee engaged in financial services in Australia, in particular, advising and dealing in foreign exchange contracts and NCP products, we are subject to general obligations under the Corporations Act, including providing financial services efficiently, honestly and fairly; having in place adequate arrangements for the management of conflicts of interest; complying with our license conditions and financial services laws; having adequate human, financial and technological resources; maintaining a dispute resolution system for retail clients; and ensuring that our representatives are adequately trained and competent.
The State Administration of Work Safety and its local bureaus are responsible for the supervision and management of work safety activities.
The Ministry of Emergency Management of the PRC and its local bureaus are responsible for the supervision and management of work safety activities.
Pursuant to the Announcement on Prevention of Risks from Offering and Financing of Cryptocurrencies promulgated by seven PRC governmental authorities including the PBOC on September 4, 2017, illegal activities in offering and financing of cryptocurrencies, including initial coin offerings (ICOs), are forbidden in the PRC because such activities may be considered to constitute illegal offering of securities or illegal fundraising.
This circular also provides that financial institutions and payment institutions shall not engage in businesses related to Bitcoin. 72 Pursuant to the Announcement on Prevention of Risks from Offering and Financing of Cryptocurrencies promulgated by seven PRC governmental authorities including the PBOC on September 4, 2017, illegal activities in offering and financing of cryptocurrencies, including initial coin offerings (ICOs), are forbidden in the PRC because such activities may be considered to constitute illegal offering of securities or illegal fundraising.
Therefore, the foreign investment enterprises are prohibited from virtual currency activities and our Bitcoin mining business are banned in China as well. 82 Outbound Investment Pursuant to the Measures for Administration of Overseas Investment of Enterprises promulgated by the NDRC on December 26, 2017 and effective March 1, 2018, investors shall perform procedures such as overseas investment project approval and filing, report relevant information, and cooperate in supervision and inspections when they conduct overseas investments.
Outbound Investment Pursuant to the Measures for Administration of Overseas Investment of Enterprises promulgated by the NDRC on December 26, 2017 and effective March 1, 2018, investors shall perform procedures such as overseas investment project approval and filing, report relevant information, and cooperate in supervision and inspections when they conduct overseas investments.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

78 edited+73 added−110 removed64 unchanged
Biggest changeNet cash used in operating activities for 2021 was US$15.8 million, which primarily reflected our net income of US$2.8 million, as mainly adjusted for (1) depreciation and amortization expenses of US$6.3 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$2.2 million, (3) impairment of property plant and equipment adjustments of US$3.1 million, and (4) changes in working capital.
Biggest changeAdjustment for changes in working capital primarily consisted of (i) a decrease of US$1.7 million in net prepayments and other current assets, (ii) a decrease of US$0.05 million in net accounts receivable, (iii) an increase of US$0.2 million in net inventories, (iv) a decrease of US$0.5 million in other assets; (v) an increase of US$0.4 million in other non-current liability, and (vi) a decrease of US$3.4 million in accrued liabilities and other payables. 108 Net cash used in operating activities for 2023 was US$11.5 million, which primarily reflected our net loss of US$38.0 million, as mainly adjusted for (1) depreciation and amortization expenses of US$3.5 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$0.3 million, (3) impairment of VAT recoverable adjustments of US$16.7 million, (4) provision of credit loss of US$1.0 million, (5) gain on foreign currency transactions of US$0.5 million, (6) gain on disposal of cryptocurrencies of US$0.7 million, (7) non-cash lease expenses of US$1.8 million, (8) impairment of intangible assets of US$3.7 million, (9) impairment of goodwill of US$2.3 million, (10) loss from cybersecurity event of US$2.3 million, (11) deferred income taxes of US$1.0 million, and (12) changes in working capital.
Net cash provided by operating activities for 2022 was US$8.2 million, which primarily reflected our net loss of US$45.8 million, as mainly adjusted for (1) depreciation and amortization expenses of US$10.7 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$6.5 million, (3) impairment of intangible assets adjustments of US$20.7 million, (4) impairment of VAT recoverable adjustments of US$4.5 million, (5) provision for credit loss of US$3.8 million, (6) share-based compensation of US$3.9 million, (7) loss on foreign currency transactions of US$2.2 million, and (8) changes in working capital.
Net cash provided by operating activities for 2022 was US$5.2 million, which primarily reflected our net loss of US$45.8 million, as mainly adjusted for (1) depreciation and amortization expenses of US$10.7 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$6.5 million, (3) impairment of intangible assets adjustments of US$20.7 million, (4) impairment of VAT recoverable adjustments of US$4.5 million, (5) provision for credit loss of US$3.8 million, (6) share-based compensation of US$3.9 million, (7) loss on foreign currency transactions of US$2.2 million, and (8) changes in working capital.
If our operations at these jurisdictions or our execution of business plan proves incorrect, we may incur additional expenses or losses. Any restrictions imposed by a foreign government could force us to restructure operations, perhaps significantly, which could result in significant costs and inefficiencies that harm our profitability, or even cause us to cease operations in the applicable jurisdiction.
If our operations at these jurisdictions or our execution of business plan proves incorrect, we may incur additional expenses or losses. 96 Any restrictions imposed by a foreign government could force us to restructure operations, perhaps significantly, which could result in significant costs and inefficiencies that harm our profitability, or even cause us to cease operations in the applicable jurisdiction.
As a result of the foregoing, our loss from operations increased by 11.8% to US$53.6 million in 2023, compared to loss from operations of US$48.0 million in 2022. Interest income. Our interest income increased by 173.8% to US$11.9 million in 2023, from US$4.4 million in 2022, primarily due to utilizing more funds in the purchase of fixed deposits in 2023.
As a result of the foregoing, our loss from operations decreased by 11.8% to US$53.6 million in 2023, compared to loss from operations of US$48.0 million in 2022. Interest income. Our interest income increased by 173.8% to US$11.9 million in 2023, from US$4.4 million in 2022, primarily due to utilizing more funds in the purchase of fixed deposits in 2023.
In addition, payments of dividend by these subsidiaries to their shareholders are not subject to withholding tax in the BVI. 106 Australia Our subsidiaries incorporated in Australia are subject to Australian Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Australia tax laws.
In addition, payments of dividend by these subsidiaries to their shareholders are not subject to withholding tax in the BVI. Australia Our subsidiaries incorporated in Australia are subject to Australian Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Australia tax laws.
Gain from disposal of subsidiaries. Our gain from disposal of subsidiaries increased by 33.3% to US$0.008 million in 2023, from USD$0.006 million in 2022. The US$0.008 million in 2023 was related to disposal of EBONEX PTE. LTD., and the US$0.006 million in 2022 was related to disposal of Hangzhou Ebang Hongling Technology Co., Ltd.
Gain from disposal of subsidiaries. Our gain from disposal of subsidiaries increased by 33.3% to US$0.008 million in 2023, from US$0.006 million in 2022. The US$0.008 million in 2023 was related to the disposal of EBONEX PTE. LTD., and the US$0.006 million in 2022 was related to the disposal of Hangzhou Ebang Hongling Technology Co., Ltd.
Trend information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Research and development expenses primarily include (1) production and procurement expenses for producing prototypes and procuring tools for IC chip design; (2) technical expenses, primarily comprising outsourcing research and development expenses relating to development of certain non-core technologies for our mining machines and telecommunications products, such as wafer fabrication and packaging and testing for ASIC chips, design of user interface, management and structural module and secondary development of certain modules and software development; (3) salaries and benefits of our research and development staff; and (4) depreciation and amortization of non-patent technology.
Research and development expenses primarily include (1) production and procurement expenses for producing prototypes and procuring tools for IC chip design; (2) technical expenses, primarily comprising outsourcing research and development expenses relating to development of certain non-core technologies for our mining machines and telecommunications products, such as wafer fabrication and packaging and testing for ASIC chips, design of user interface, management and structural module and secondary development of certain modules and software development; (3) salaries and benefits of our research and development staff; and (4) depreciation and amortization of technologies.
Our total operating expenses decreased by 41.7% to US$36.9 million in 2023, from US$63.4 million in 2022, primarily due to decreases in both selling expenses and general and administrative expenses. ● Selling expenses.
Our total operating expenses decreased by 41.7% to US$36.9 million in 2023, from US$63.4 million in 2022, primarily due to decreases in both selling expenses and general and administrative expenses. 106 ● Selling expenses.
As a result of the foregoing, we recorded a gross loss of US$16.7 million in 2023, compared to a gross profit US$15.4 million in 2022. 108 Operating expenses.
As a result of the foregoing, we recorded a gross loss of US$16.7 million in 2023, compared to a gross profit of US$15.4 million in 2022. Operating expenses.
Risk Factors—Risks Relating to Conducting Business in China —We may be subject to EIT on our worldwide income if our company or any of our subsidiaries were considered a PRC “resident enterprise” under the PRC Enterprise Income Tax Law, or the EIT Law.” 107 Results of Operations The following table sets forth our selected consolidated profit or loss data in absolute amount, for the periods indicated.
Risk Factors—Risks Relating to Conducting Business in China —We may be subject to EIT on our worldwide income if our company or any of our subsidiaries were considered a PRC “resident enterprise” under the PRC Enterprise Income Tax Law (the “EIT Law”).” Results of Operations The following table sets forth our selected consolidated profit or loss data in absolute amount, for the periods indicated.
We are constantly researching and developing mining machine chip design, mining machine overall design, while being committed to developing Fintech business based on our strategic development layout. Through unremitting efforts, we have been operating a self-developed proprietary cryptocurrency exchange platform Ebonex.
We are constantly researching and developing mining machine chip design, mining machine overall design, renewable energy product design, while being committed to developing Fintech business based on our strategic development layout. Through unremitting efforts, we have been operating a self-developed proprietary cryptocurrency exchange platform Ebonex.
Net cash provided by investing activities for 2022 was US$6.6 million, mainly attributable to (i) collections from short-term investment of US$55.1 million, (ii) cash paid for short-term investment of US$28.6 million, (iii) cash paid for the purchases of property, plant and equipment and intangible assets of US$14.1 million, and (iv) cash paid for business combination net of cash acquired of US$5.9 million.
Net cash provided by investing activities for 2022 was US$5.8 million, mainly attributable to (i) collections from short-term investment of US$55.1 million, (ii) cash paid for short-term investment of US$28.6 million, (iii) cash paid for the purchases of property, plant and equipment and intangible assets of US$14.1 million, (iv) cash paid for business combination net of cash acquired of US$5.9 million, and (v) prepayment of property, plant and equipment of US$0.9 million.
We plan to fund our future capital expenditures with our existing cash balance and proceeds from our public offerings. We will continue to make capital expenditures to meet the expected growth of our business, including for construction of production facilities and procurement of photomask, mold and various intellectual properties. C. Research and development, patents and licenses, etc. See “Item 4.
We plan to fund our future capital expenditures with our existing cash balance and proceeds from our public offerings. We will continue to make capital expenditures to meet the expected growth of our business, including for construction of production facilities and procurement of photomask, mold and various intellectual properties. 109 C. Research and development, patents and licenses, etc.
Adjustment for changes in working capital primarily consisted of (i) a decrease of US$14.3 million in net prepayments and other current assets, (ii) a decrease of US$2.9 million in net accounts receivable, and (iii) a decrease of US$14.1 million in accrued liabilities and other payables.
Adjustment for changes in working capital primarily consisted of (i) a decrease of US$10.4 million in net prepayments and other current assets, (ii) a decrease of US$2.9 million in net accounts receivable, and (iii) a decrease of US$14.1 million in accrued liabilities and other payables.
Investing Activities Net cash provided by investing activities for 2023 was US$2.8 million, mainly attributable to (i) collections from short-term investment of US$5.7 million, (ii) proceeds from disposal of crypto assets of US$7.2 million, (iii) cash paid for purchase of crypto assets of US$9.2 million, and (iv) cash paid for the purchases of property, plant and equipment and intangible assets of US$1 million.
Net cash provided by investing activities for 2023 was US$2.6 million, mainly attributable to (i) collections from short-term investment of US$5.7 million, (ii) proceeds from disposal of crypto assets of US$7.2 million, (iii) cash paid for purchase of crypto assets of US$9.2 million, and (iv) cash paid for the purchases of property, plant and equipment of US$1.0 million.
We have recorded impairment of goodwill of US$2.3 million, nil, and nil for the year ended December 31, 2023, 2022 and 2021, respectively. Taxation Cayman Islands Under the current laws of the Cayman Islands, Ebang International is not subject to tax on income or capital gain.
We have recorded impairment of goodwill of nil, US$2.3 million, and nil for the years ended December 31, 2024, 2023 and 2022, respectively. Taxation Cayman Islands Under the current laws of the Cayman Islands, Ebang International is not subject to tax on income or capital gain.
Since 2021 and throughout 2022, the prospects of trade wars, raw material/chip sanctions and the spread of COVID-19 variants contributed to volatility in the markets. In 2023, the cryptocurrency market presented both opportunities and risks, with many variables including evolving regulation and fraud incidents.
During 2022, the prospects of trade wars, raw material/chip sanctions and the spread of COVID-19 variants contributed to volatility in the markets. In 2023, the cryptocurrency market presented both opportunities and risks, with many variables including evolving regulation and fraud incidents.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Businesses —The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our blockchain products business and our Fintech business,” “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—The current regulatory environment in foreign markets, and any adverse changes in those environments, could have material adverse impacts on our businesses,” “Item 3. Key Information—D.
Our expenses to date to implement our new business plans, including establishing in Canada, Australia, Singapore, Hong Kong, the Bahamas, New Zealand, the United States and Malaysia, have been mainly on server rentals, application development, regulatory compliance, talent acquisition and offices rentals to set up blockchain and Fintech businesses in the abovementioned countries and regions.
Our expenses to date to implement our new business plans, including establishing in Australia, Singapore, Hong Kong and the United States, have been mainly on server rentals, application development, regulatory compliance, talent acquisition and offices rentals to set up blockchain, Fintech and renewable energy businesses in the abovementioned countries and regions.
Liquidity and capital resources Our primary source of liquidity historically has been cash generated from our business operations, bank loans, equity contributions from our shareholders and borrowings, which have historically been sufficient to meet our working capital and capital expenditure requirements. As of December 31, 2023 and 2022, our cash and cash equivalents were US$241.6 million and US$251.3 million.
Liquidity and capital resources Our primary source of liquidity historically has been cash generated from our business operations, bank loans, equity contributions from our shareholders and borrowings, which have historically been sufficient to meet our working capital and capital expenditure requirements. As of December 31, 2024 and 2023, our cash and cash equivalents were US$213.8 million and US$241.6 million, respectively.
Information on the Company—B. Business Overview— Research and Development” and “—Intellectual Property.” D.
See “Item 4. Information on the Company—B. Business Overview— Research and Development” and “—Intellectual Property.” D.
Risk Factors—Risks Relating to Our Fintech and Blockchain Product Businesses—If we are unable to manage our growth or execute our strategies effectively, our business, results of operations and financial condition may be materially and adversely affected” and “Item 3. Key Information—D.
Risk Factors—Risks Relating to Our Business—If we are unable to manage our growth or execute our strategies effectively, our business, results of operations and financial condition may be materially and adversely affected,” “Item 3. Key Information—D.
Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. For the years ended December 31, 2023, 2022 and 2021, Zhejiang Ebang, Hangzhou Dewang, and Ebang IT were qualified as HNTE and entitled to a preferential income tax rate of 15%.
Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. For the year ended December 31, 2024, Zhejiang Ebang and Redback Shanghai were qualified as HNTE and entitled to a preferential income tax rate of 15%.
As a result of the foregoing, our net loss decreased to US$38.0 million in 2023, from a net loss of US$45.8 million in 2022. 109 Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues .
As a result of the foregoing, our net loss decreased to US$20.9 million in 2024, from a net loss of US$38.0 million in 2023. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues .
As we enter into the markets in Australia, Singapore, Hong Kong, the Bahamas, New Zealand, the United States and Malaysia, we expect to continue to monitor the local regulations regarding Fintech service platforms and retain local regulatory counsels. See “Item 3. Key Information—D.
As we enter into the markets in Australia, Hong Kong, Singapore and the United States, we expect to continue to monitor the local regulations regarding Fintech service platforms and renewable energy businesses, and retain local regulatory counsel. See “Item 3. Key Information—D.
We are also in the process of obtaining additional and/or relevant licenses and approvals for our subsidiaries in Singapore, Hong Kong, Australia, New Zealand and Malaysia. If and once obtained, the licenses will allow us to operate additional Fintech businesses in such countries and regions.
We are also in the process of obtaining additional and/or relevant licenses and approvals for our subsidiaries in Australia. If and once obtained, the licenses will allow us to operate additional Fintech businesses in Australia.
Hong Kong Our subsidiaries incorporated in Hong Kong, primarily HK Ebang Communications, HongKong Ebang Technology Co., Limited (“HK Ebang Technology”), HongKong Ebang Information Co., Limited (“HK Ebang Information”), HK Ebang Digital, Ebang Digital Asset Management Limited (“Ebang Digital Asset Management”), Ebang Digital Asset Custody Limited (“Ebang Digital Asset Custody”), Ebang Trust and Ebang Financial Services Limited (“Ebang Financial Services”) are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws.
Thus the applicable tax rate is 25% for the Company on assessable profits arising in or derived from Australia. 102 Hong Kong Our subsidiaries incorporated in Hong Kong, primarily HK Ebang Communications, HongKong Ebang Technology Co., Limited (“HK Ebang Technology”), HongKong Ebang Information Co., Limited (“HK Ebang Information”), HK Ebang Digital, Ebang Digital Asset Management Limited (“Ebang Digital Asset Management”), Ebang Digital Asset Custody Limited (“Ebang Digital Asset Custody”), Ebang Trust, Hong Kong Yixing Universal Co., Limited and Ebang Financial Services Limited (“Ebang Financial Services”) are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws.
However, with the layout of our overseas development strategy, after launching our Fintech business, our overseas market share has slightly rebounded in 2022 and increased significantly in 2023, accounting for 75.8% of all revenue in 2023.
However, with the layout of our overseas development strategy, after launching our Fintech business and completing a new acquisition on November 8, 2024, our overseas market share has slightly rebounded in 2022 and increased significantly in 2023 and 2024, accounting for 75.8% and 74.2% of all revenue in 2023 and 2024, respectively.
In order to coordinate the development of our global payment business, we launched our independently developed cross-border payment and foreign exchange platform EbonFX to provide qualified customers with cross-border payment and foreign exchange services.
Service - Cross-border payment and foreign exchange services Revenue from our cross-border payment and foreign exchange services include service transaction fee charges when we provide customers with the payment and exchange service. 98 In order to coordinate the development of our global payment business, we launched our independently developed cross-border payment and foreign exchange platform EbonFX to provide qualified customers with cross-border payment and foreign exchange services.
The following table sets forth our gross profit/loss by category for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ US$ US$ (in thousands) Product sales – Bitcoin mining machines and related accessories 24,481 19,457 (16,738 ) Product sales – Telecommunications 2,062 (2,433 ) (831 ) Service - Cryptocurrency exchange services - 28 303 Service – Management and maintenance services 2,680 (2,763 ) (189 ) Service - Cross-border payment and foreign exchange services - 1,123 751 Total 29,223 15,412 (16,704 ) 105 Operating Expenses The following table sets forth our operating expenses, both in absolute amount and as a percentage of the total operating expenses, for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in thousands, except percentages) Selling expenses 1,419 5.2 1,956 3.1 1,894 5.1 General and administrative expenses (1) 25,774 94.8 40,712 64.2 29,041 78.6 Impairment of intangible assets - - 20,738 32.7 3,708 10.0 Impairment of goodwill - - - - 2,300 6.3 Total operating expenses 27,193 100.0 63,406 100.0 36,943 100.0 (1) Includes research and development expenses and other general and administrative expenses.
The following table sets forth our gross profit/loss by category for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ US$ US$ (in thousands) Service - Cryptocurrency exchange services 28 303 623 Service - Cross-border payment and foreign exchange services 1,123 751 665 Service – Rental services 262 Product sales - Solar and battery storage products and related accessories - - 140 Product sales - Telecommunications (2,433 ) (831 ) (432 ) Product sales - Bitcoin mining machines and related accessories 19,457 (16,738 ) 0 Others (2,763 ) (189 ) (68 ) Total 15,412 (16,704 ) 1,190 Operating Expenses The following table sets forth our operating expenses, both in absolute amount and as a percentage of the total operating expenses, for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except percentages) Selling expenses 1,956 3.1 1,894 5.1 1,107 3.5 General and administrative expenses (1) 40,712 64.2 29,041 78.6 30,456 96.5 Impairment of intangible assets 20,738 32.7 3,708 10.0 - - Impairment of goodwill - - 2,300 6.3 - - Total operating expenses 63,406 100.0 36,943 100.0 31,563 100.0 (1) Includes research and development expenses and other general and administrative expenses.
As existing competitors may introduce new technologies or provide more competitive offerings and more companies may enter the market to compete with us, competition may intensify in the future and consequently our competitiveness and market share may be affected. 99 Regulatory environment We sell mining machines to customers in China and overseas markets.
As existing competitors may introduce new technologies or provide more competitive offerings and more companies may enter the market to compete with us, competition may intensify in the future and consequently our competitiveness and market share may be affected.
As of the date of this annual report, we have been operating a self-developed proprietary cryptocurrency exchange platform Ebonex and a self-developed proprietary cross-border payment and foreign exchange platform, EbonFX, targeting qualified investors subject to compliance with applicable laws in the jurisdictions EbonFX operates.
As of the date of this annual report, we have been operating a self-developed proprietary cryptocurrency exchange platform, Ebonex, and a self-developed proprietary cross-border payment and foreign exchange platform, EbonFX, targeting qualified investors subject to compliance with applicable laws in the jurisdictions in which we operate, and have commenced our renewable energy business through the acquisition of Redback Technologies in Australia.
Selling expenses Selling expenses include (1) sales service costs incurred from provision of customer services; (2) traveling costs of our sales and marketing staff and transportation costs for delivery of blockchain and telecommunications products; (3) salaries and benefits of our sales and marketing staff; and (4) other costs, such as conference costs and lease payments for our sales offices.
Operating and financial review and prospects — Key Components of Results of Operations—Operating Expenses—General and Administrative Expenses” for details. 101 Selling expenses Selling expenses include (1) sales service costs incurred from provision of customer services; (2) traveling costs of our sales and marketing staff and transportation costs for delivery of blockchain and telecommunications products; (3) salaries and benefits of our sales and marketing staff; and (4) other costs, such as conference costs and lease payments for our sales offices.
However, in during such years, the majority of our sales revenue has been generated from litigation recoveries, resulting in a gross profit margin that does not match the industry level. Refer to our discussion on revenues above.
However, during such years, the majority of our sales revenue has been generated from litigation recoveries, resulting in a gross profit margin that does not match the industry level. Refer to our discussion on revenues above. In 2024, the cryptocurrency market experienced a volatile pullback from a bull market peak, reaching a historic high within the year.
Our exchange loss was US$2.2 million in 2022, compared to the exchange gain with the amount of US$1.8 million in 2021, primarily due to the currency fluctuation on our foreign currency denominated assets and liabilities. Government grants .
Our exchange loss was US$2.2 million in 2024, compared to the exchange gain of US$0.5 million in 2023, primarily due to the currency fluctuation on our foreign currency denominated assets and liabilities. Government grants .
Particularly, a significant fluctuation in Bitcoin price in a short period of time could significantly reverse the trend of average selling price of Bitcoin mining machines in certain periods of time.
Particularly, a significant fluctuation in Bitcoin price in a short period of time could significantly reverse the trend of average selling price of Bitcoin mining machines in certain periods of time. The significant decline in Bitcoin prices through 2022, and the high price fluctuation in 2023, significantly affected the selling price of our Bitcoin mining machines.
Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors.” 97 A. Operating results Overview As a global blockchain technology and Fintech company, we have strong ASIC chip design capability.
Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors.” A.
As a result of the foregoing, our net loss decreased to US$45.8 million in 2022, from a net income of US$2.8 million in 2021. 110 B.
As a result of the foregoing, our net loss decreased to US$38.0 million in 2023, from a net loss of US$45.8 million in 2022. 107 B.
As of the date of this annual report, we have received the MSB License from the Financial Transactions and Reports Analysis Centre of Canada, which allows us to engage in foreign exchange dealing, money transferring and dealing in virtual currencies in Canada; received registration approval from AUSTRAC as digital currency exchange provider, which allows us to provide cryptocurrency exchange services in Australia; acquired a company with an AFSL for engaging in financial services in Australia; received registration approval as an independent remittance dealer on the AUSTRAC Remittance Sector Register, which allows us to provide remittance services in Australia; received the TCSP license and registration approval as a Trust Company from the Company Registry in Hong Kong, which allows us to carry on a trust or company service business; received the MSO license from the Customs and Excise Department in Hong Kong, which allows us to operate money changing and remittance services; received the Type 4 and 9 licenses from the Securities and Futures Commission in Hong Kong, which allows us to carry on advising on securities and asset management service; and registered as a Digital Asset Business and a Firm Dealing in Securities as Agent or Principal, Arranging Deals, Managing Securities and Advising on Securities from the Securities Commission of the Bahamas, which allows us to carry on digital asset business activities and securities activities in and from the Commonwealth of the Bahamas.
We have also received registration approval from AUSTRAC as a digital currency exchange provider, which allows us to provide cryptocurrency exchange services in Australia; acquired a company with an AFSL for engaging in financial services in Australia; received registration approval as an independent remittance dealer on the AUSTRAC Remittance Sector Register, which allows us to provide remittance services in Australia; received the TCSP license and registration approval as a Trust Company from the Company Registry in Hong Kong, which allows us to carry on a trust or company service business; received the MSO license from the Customs and Excise Department in Hong Kong, which allows us to operate money changing and remittance services; and received the Type 4 and 9 licenses from the Securities and Futures Commission in Hong Kong, which allows us to carry on advising on securities and asset management service.
Years Ended December 31, 2021 2022 2023 US$ US$ US$ (in thousands) Revenues 51,450 32,328 4,855 Product sale - Bitcoin mining machines and related accessories 39,756 25,800 266 Product sale - Telecommunications 8,567 3,737 516 Service - Cryptocurrency exchange services - 70 1,044 Service - Management and maintenance 3,127 86 392 Service - Cross-border payment and foreign exchange services - 2,635 2,637 Cost of revenues (22,227 ) (16,916 ) (21,559 ) Gross profit (loss) 29,223 15,412 (16,704 ) Operating expenses: Selling expenses 1,419 1,956 1,894 General and administrative expenses 25,774 40,712 29,041 Impairment of intangible assets - 20,738 3,708 Impairment of goodwill - - 2,300 Total operating expenses 27,193 63,406 36,943 Gain on disposal of subsidiaries - (6 ) (8 ) Income (Loss) from operations 2,030 (47,988 ) (53,639 ) Other income (expenses): Interest income 1,780 4,362 11,941 Interest expenses (4 ) - - Other income 133 1,034 1,131 Gain (Loss) from investment (3,657 ) (510 ) 357 Net gain on disposal of cryptocurrency assets - - 745 Exchange gain (loss) 1,780 (2,161 ) 457 Government grants 435 82 63 Other expenses (108 ) (649 ) (120 ) Total other income 359 2,158 14,574 Income (loss) before income taxes provision (benefit) 2,389 (45,830 ) (39,065 ) Income taxes benefit (379 ) (73 ) (1,031 ) Net income (loss) 2,768 (45,757 ) (38,034 ) Less: net loss attributable to non-controlling interest (1,663 ) (1,869 ) (1,261 ) Net income (loss) attributable to Ebang International Holdings Inc. 4,431 (43,888 ) (36,773 ) Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues .
Years Ended December 31, 2022 2023 2024 US$ US$ US$ (in thousands) Revenues 32,328 4,855 5,869 Service - Cryptocurrency exchange services 70 1,044 1,291 Service - Cross-border payment and foreign exchange services 2,635 2,637 2,307 Product sales - Solar and battery storage products and related accessories - - 571 Product sale - Telecommunications products 3,737 516 501 Product sale - Bitcoin mining machines and related accessories 25,800 266 - Service- Rental Income - - 718 Others 86 392 481 Cost of revenues (16,916 ) (21,559 ) (4,679 ) Gross profit (loss) 15,412 (16,704 ) 1,190 Operating expenses: Selling expenses 1,956 1,894 1,107 General and administrative expenses 40,712 29,041 30,456 Impairment of intangible assets 20,738 3,708 - Impairment of goodwill - 2,300 - Total operating expenses 63,406 36,943 31,563 Gain on disposal of subsidiaries (6 ) (8 ) - Loss from operations (47,988 ) (53,639 ) (30,373 ) Other income (expenses): Interest income 4,362 11,941 11,372 Other income 1,034 1,131 328 (Loss) gain from investment (510 ) 357 383 Net gain (loss) on disposal of cryptocurrencies - 745 (375 ) Exchange (loss) gain (2,161 ) 457 (2,170 ) Government grants 82 63 52 Other expenses (649 ) (120 ) (126 ) Total other income 2,158 14,574 9,464 Loss before income taxes benefit (45,830 ) (39,065 ) (20,909 ) Income taxes benefit (73 ) (1,031 ) (43 ) Net loss (45,757 ) (38,034 ) (20,866 ) Less: net loss attributable to non-controlling interest (1,869 ) (1,261 ) (615 ) Net loss attributable to Ebang International Holdings Inc.
Cost of Revenues Cost of revenues for our mining machines and telecommunications products represents costs and expenses directly attributable to the manufacture of our products sold and delivered, which primarily comprises of costs of (1) raw materials, components and parts including wafers; (2) production overhead, including mainly packaging and testing costs, subcontracting cost, amortization and depreciation of intangible assets, production equipment and utilities; and (3) direct labor, including cost to our production staff and outsourced production workers. 104 Cost of revenues for mining machine hosting services provided by us primarily consists of space leasing fees, infrastructure and equipment related expense, utility expenses and salaries paid to related staff.
Cost of revenues for our solar and battery storage products, mining machines and telecommunications products represents costs and expenses directly attributable to the manufacture of our products sold and delivered, which primarily comprises of costs of (1) materials, components and parts; (2) production overhead, including mainly packaging and testing costs, subcontracting cost, amortization and depreciation of intangible assets, production equipment and utilities; and (3) direct labor, including cost to our production staff and outsourced production workers, (4) outsourcing production costs.
Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entities satisfy all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and receives approval from the relevant tax authority, in which case the dividends paid to the Hong Kong subsidiaries would be subject to withholding tax at the preferential rate of 5%.
Zhejiang Ebang and Ebang IT are qualified as enterprises of selling self-developed software products and enjoying a tax refund for the excess of 3% of their actual tax burden after the VAT is levied at the 17% or 16% or 13% tax rate since January 2011. 103 Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entities satisfy all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and receives approval from the relevant tax authority, in which case the dividends paid to the Hong Kong subsidiaries would be subject to withholding tax at the preferential rate of 5%.
The following table sets forth our selected consolidated cash flow data for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ US$ US$ (in thousands) Net cash provided by (used in) operating activities (15,850 ) 4,297 (11,653 ) Net cash provided by (used in) investing activities (6,511 ) 6,609 2,753 Net cash provided by financing activities 248,284 - - Effect of foreign exchange on cash, cash equivalents and restricted cash 880 394 (407 ) Net increase (decrease) in cash, cash equivalents and restricted cash 226,803 11,300 (9,307 ) Cash, cash equivalents and restricted cash at the beginning of the year 14,124 240,927 252,227 Cash, cash equivalents and restricted cash at the end of the year 240,927 252,227 242,920 111 Operating Activities Net cash used in operating activities for 2023 was US$11.7 million, which primarily reflected our net loss of US$38.0 million, as mainly adjusted for (1) depreciation and amortization expenses of US$3.5 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$0.3 million, (3) impairment of VAT recoverable adjustments of US$16.7 million, (4) provision of credit loss of US$1.0 million, (5) gain on foreign currency transactions of US$0.5 million, (6) gain on disposal of cryptocurrencies of US$0.7 million, (7) non-cash lease expenses of US$1.8 million, (8) impairment of intangible assets of US$3.7 million, (9) impairment of goodwill of US$2.3 million, (10) loss from cybersecurity event of US$2.3 million, (11) deferred income taxes of US$1.0 million, and (12) changes in working capital.
The following table sets forth our selected consolidated cash flow data for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ US$ US$ (in thousands) Net cash provided by (used in) operating activities 5,153 (11,530 ) (17,614 ) Net cash provided by (used in) investing activities 5,753 2,630 (9,892 ) Net cash provided by financing activities - - - Effect of foreign exchange on cash, cash equivalents and restricted cash 394 (407 ) (410 ) Net increase (decrease) in cash, cash equivalents and restricted cash 11,300 (9,307 ) (27,916 ) Cash, cash equivalents and restricted cash at the beginning of the year 240,927 252,227 242,920 Cash, cash equivalents and restricted cash at the end of the year 252,227 242,920 215,004 Operating Activities Net cash used in operating activities for 2024 was US$17.6 million, which primarily reflected our net loss of US$20.9 million, as mainly adjusted for (1) depreciation and amortization expenses of US$2.6 million, (2) write-down for the potentially obsolete, slow-moving inventories and lower of cost or market adjustment of US$0.3 million, (3) net reversal of credit loss of US$1.1 million, (4) loss on foreign currency transactions of US$2.2 million, (5) loss on disposal of cryptocurrencies of US$0.4 million, (6) non-cash lease expenses of US$1.4 million, (7) gain on short-term investment of US$0.4 million, (8) reversal of share-based compensation expenses of US$1.0 million, and (9) changes in working capital.
Our government grants decreased by 81.2% to US$0.08 in 2022, from US$0.4 million in 2021, primarily due to the decrease of non-recurring rebates from local government. Income taxes benefit .
Our government grants decreased by 17.5% to US$0.05 million in 2024, from US$0.06 million in 2023, primarily due to the decrease of non-recurring rebates from local government. Income taxes benefit .
Competitiveness in research and development We are a global blockchain technology and Fintech company with strong ASIC chip design capability, and research and development is key to the success of our blockchain and Fintech products. Our research and development expenses were US$6.6 million, US$5.1 million and US$7.4 million in 2021, 2022 and 2023, respectively.
Competitiveness in research and development We have strong ASIC chip design capability, expertise and technical reserves, and research and development departments, all of which is key to the success of our blockchain, Fintech and renewable energy products. Our research and development expenses were US$5.1 million, US$7.4 million and US$5.4 million, in 2022, 2023 and 2024, respectively.
A detailed summary of significant accounting estimates is as follows: Impairment of Intangible Asset and Goodwill We review our intangible assets for impairment and perform a goodwill impairment assessment on an annual basis through a qualitative or quantitative assessment and when events and circumstances indicate that the estimated fair value of a reporting unit may no longer exceed its carrying value.
The judgments and estimates used are disclosed in Note 3, Acquisitions in 2024. 110 Impairment of goodwill and an intangible asset recognized in connection with the acquisition of Ebonfx Australia We review our intangible assets for impairment and perform a goodwill impairment assessment on an annual basis through a qualitative or quantitative assessment and when events and circumstances indicate that the estimated fair value of a reporting unit may no longer exceed its carrying value.
The following table sets forth the breakdown of our revenues by category, both in absolute amount and as a percentage of total revenues for each category for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in thousands, except percentages) Product sales – Bitcoin mining machines and related accessories 39,756 77.3 25,800 79.8 266 5.5 Product sales – Telecommunications 8,567 16.7 3,737 11.6 516 10.6 Service – Cryptocurrency exchange service - - 70 0.2 1,044 21.5 Service – Management and maintenance (1) 3,127 6.0 86 0.3 392 8.1 Service – Cross-border payment and foreign exchange services - - 2,635 8.1 2,637 54.3 Total 51,450 100 32,328 100 4,855 100 (1) Primarily includes service fee of mining machine hosting services, maintenance services and training services.
The following table sets forth the breakdown of our revenues by category, both in absolute amount and as a percentage of total revenues for each category for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except percentages) Service – Cryptocurrency exchange services 70 0.2 1,044 21.5 1,291 22.0 Service – Cross-border payment and foreign exchange services 2,635 8.1 2,637 54.3 2,307 39.3 Service – Rental services - - - - 718 12.2 Product sales – Solar and battery storage products and related accessories - - - - 571 9.7 Product sales – Telecommunications products 3,737 11.6 516 10.6 501 8.5 Product sales – Bitcoin mining machines and related accessories 25,800 79.8 266 5.5 - - Others (1) 86 0.3 392 8.1 481 8.3 Total 32,328 100 4,855 100 5,869 100 (1) Other revenues mainly include revenue from our management and maintenance services and SaaS data visualization and analytics solutions. 97 We have historically generated a significant portion of our revenues from sales in China.
The Bitcoin price and expected economic returns on Bitcoin mining activities could significantly affect the demand of mining machines and in turn the average selling price of Bitcoin mining machines. See “—Key Factors Affecting Our Results of Operations” for details of factors affecting economic return on Bitcoin mining activities and the market demands.
The Bitcoin price and expected economic returns on Bitcoin mining activities could significantly affect the demand of mining machines and in turn the average selling price of Bitcoin mining machines.
If any adverse development in such new businesses arises, our results of operations and prospects may be significantly and negatively affected. We may not be able to develop those new businesses as successfully as contemplated, or at all. Product mix We develop, manufacture and sell a range of blockchain and telecommunications products.
We may not be able to develop those new businesses as successfully as contemplated, or at all. 95 Product and Service mix We develop, manufacture and sell a range of blockchain, telecommunications and renewable energy products.
In September 2022, the State Taxation Administration of the PRC further announced that for the enterprises entitled to the current pre-tax deduction ratio of 175% for research and development expenses, such ratio is raised to 200% during the period from October 1, 2022 to December 31, 2022 We were subject to VAT at a rate of 17% for the period from beginning of 2018 until end of April 2018, of 16% from May 2018 to the end of March 2019, and of 13% since April 2019 on the gross sales price of our products, less any deductible VAT we have already paid or borne.
We were subject to VAT at a rate of 17% for the period from beginning of 2018 until end of April 2018, of 16% from May 2018 to the end of March 2019, and of 13% since April 2019 on the gross sales price of our products, less any deductible VAT we have already paid or borne.
We generated 77.3%, 79.8% and 5.5% of our revenue from sales of Bitcoin mining machines and related accessories in 2021, 2022 and 2023, respectively. Generally, revenues from sales of our Bitcoin mining machines and related accessories are primary affected by the number of Bitcoin mining machines sold and their average selling price.
Product Sales – Bitcoin mining machines and related accessories Revenues from sales of blockchain products primarily comprises sales of Bitcoin mining machines and accessories. Generally, revenues from sales of our Bitcoin mining machines and related accessories are primary affected by the number of Bitcoin mining machines sold and their average selling price.
The following table sets forth the breakdown of our cost of revenues by category, both in absolute amount and as a percentage of the cost of revenues, for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in thousands, except percentages) Product sales – Bitcoin mining machines and related accessories 15,275 68.7 6,343 37.5 17,004 78.9 Product sales – Telecommunications 6,505 29.3 6,170 36.5 1,347 6.2 Service - Cryptocurrency exchange services - - 58 0.4 741 3.4 Service – Management and maintenance services 447 2.0 2,833 16.7 581 2.7 Service - Cross-border payment and foreign exchange services - - 1,512 8.9 1,886 8.8 Total 22,227 100.0 16,916 100.0 21,559 100.0 Gross Profit/Loss Historically, our gross profit/loss of sales of Bitcoin mining machines were primarily affected by Bitcoin prices, which had a significant effect on the average selling price of our products, and, to a lesser extent, the average per unit production costs of our Bitcoin mining machines, which in turn resulted in a much lower demand and average selling price of our Bitcoin mining machines, thereby leading to lower revenues.
The following table sets forth the breakdown of our cost of revenues by category, both in absolute amount and as a percentage of the cost of revenues, for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except percentages) Service - Cryptocurrency exchange services 58 0.4 741 3.4 668 14.3 Service - Cross-border payment and foreign exchange services 1,512 8.9 1,886 8.8 1,642 35.1 Service – Rental services - - - - 456 9.7 Product sales - Solar and battery storage products and related accessories - - - - 431 9.2 Product sales - Telecommunications 6,170 36.5 1,347 6.2 933 19.9 Product sales - Bitcoin mining machines and related accessories 6,343 37.5 17,004 78.9 - - Others 2,833 16.7 581 2.7 549 11.8 Total 16,916 100.0 21,559 100.0 4,679 100.0 Gross Profit/Loss Our gross profit and gross profit margin of cryptocurrency exchange services, the cross-border payment and foreign exchange services, SaaS data visualization and analytics solutions, and rental services are primarily affected by the market price of the third-party service provider, amount of fixed direct labor cost and percentage of commissions that we paid to sales employees.
The following table sets forth the breakdown of our revenues by geographical location of our customers, both in absolute amount and as a percentage of total revenue, for the periods indicated: Years Ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in thousands, except percentages) Mainland China 51,433 100.0 29,624 91.6 1,174 24.2 Australia - - 2,704 8.4 3,681 75.8 Other countries and regions 17 - - - - - Total 51,450 100.0 32,328 100.0 4,855 100.0 103 Product Sales – Bitcoin Mining Machines and Related Accessories Revenues from sales of blockchain products primarily comprises sales of Bitcoin mining machines and accessories.
The following table sets forth the breakdown of our revenues by geographical location of our customers, both in absolute amount and as a percentage of total revenue, for the periods indicated: Years Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except percentages) Mainland China 29,624 91.6 1,174 24.2 1,516 25.8 Australia 2,704 8.4 3,681 75.8 4,353 74.2 Total 32,328 100.0 4,855 100.0 5,869 100.0 Service - Cryptocurrency exchange services Revenues from our cryptocurrency exchange services for 2023 and 2024 were mainly generated from facilitating the customers’ transactions via our proprietary exchange platform or through an offline, OTC transaction facilitation process.
The sales of blockchain products accounted for 77.3%, 79.8% and 5.5% of our total revenues for 2021, 2022 and 2023, respectively, and the sales of telecommunications products accounted for 16.7%, 11.6% and 10.6% of our total revenues for 2021, 2022 and 2023.
The sales of blockchain products accounted for 79.8%, 5.5% and nil of our total revenues for 2022, 2023 and 2024, respectively, the sales of telecommunications products accounted for 11.6%, 10.6% and 8.5% of our total revenues for 2022, 2023 and 2024, respectively, and the sales of renewable energy products accounted for 9.7% of our total revenue for 2024, as we have only commenced this business in 2024.
Sales of our telecommunications products are primarily driven by the demand from the major telecommunications service providers in China as end users. Sales of telecommunications products could also be affected by any adjustment of our business focus and sales and marketing efforts from time to time.
Sales of telecommunications products could also be affected by any adjustment of our business focus and sales and marketing efforts from time to time. Changes in the mix of our telecommunications products sold could also affect the gross profit margin in the telecommunications business.
Our revenue generated in 2023 is mainly related to the sale of Bitcoin mining machine accessories. Product Sales – Telecommunications Revenues from our telecommunications business primarily comprises sales of fiber-optic communication access devices and enterprise convergent communication terminals. We also produce and sell a small portion of related parts and accessories.
Product Sales – Telecommunication products Revenues from our telecommunications business primarily comprise sales of fiber-optic communication access devices and enterprise convergent communication terminals. We also produce and sell a small portion of related parts and accessories. Sales of our telecommunications products are primarily driven by the demand from the major telecommunications service providers in China as end users.
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Our most critical accounting policies are summarized below. For a description of all our significant accounting policies, see Note 2 to our audited consolidated financial statements in this annual report.
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Our critical accounting policies are summarized below. Business Combination We account for the business combination using the acquisition method of accounting in accordance with ASC 805, “Business Combinations”.
Revenue is measured as the difference between the exchange rate set by the Company to the customer and a rate available in the wholesale foreign exchange market.
Revenue is measured as the difference between the exchange rate set by the Company to the customer and a rate available in the wholesale foreign exchange market. Service – SaaS data visualization and analytics solutions Revenues from our SaaS data visualization and analytics solutions include service fees for the provision of advanced data collection and analytics services provided to customers.
The introduction of new process and design technologies also enables us to gradually lower the production costs of ASICs with comparable computing power. However, the application of such process technologies also commands high initial setup costs, particularly when the new production techniques first become available, which translates to higher per unit costs.
However, the application of such process technologies also commands high initial setup costs, particularly when the new production techniques first become available, which translates to higher per unit costs. We have successfully and independently completed the design of 6nm ASIC chips and the design of a chip for simultaneous Litecoin and Dogecoin mining in 2021.
Performance and cost of our products The pricing of and demand for our Bitcoin mining machines are closely related to their performance. In general, more advanced process technologies, such as the 7nm and 8nm process technology we designed, can accommodate designs that produce ASICs with higher power efficiency.
In general, more advanced process technologies, such as the 7nm and 8nm process technology we designed, can accommodate designs that produce ASICs with higher power efficiency. The introduction of new process and design technologies also enables us to gradually lower the production costs of ASICs with comparable computing power.
At the same time, as the most advanced production capabilities of IC foundries ramp up, the initial high unit cost for IC fabrication may also decrease, which will likely translate to lower fabrication costs and a positive effect on our business, results of operations and financial condition.
At the same time, as the most advanced production capabilities of IC foundries ramp up, the initial high unit cost for IC fabrication may also decrease, which will likely translate to lower fabrication costs and a positive effect on our business, results of operations and financial condition. 94 Pricing We believe that our Fintech business and result of operations are affected by general pricing factors in the brokerage industry, including economic conditions, broad trends in commerce and finance, price fluctuations in cryptocurrencies, changes in trading volumes, private wealth growth of existing and potential customers, global asset allocation needs, and changes in the regulatory system of the online brokerage industry and the Internet industry.
We have successfully and independently completed the design of 6nm ASIC chips and the design of a chip for simultaneous Litecoin and Dogecoin mining in 2021. We are currently focusing on developing our proprietary 5nm-optimized ASIC chips and optimized mining machines for non-Bitcoin cryptocurrencies such as Litecoin.
As of the date of this annual report, we have developed our proprietary 5nm-optimized ASIC chips and optimized mining machines for non-Bitcoin cryptocurrencies such as Litecoin.
Our results of operations will also be significantly affected by developments in overall blockchain technology and cryptocurrency markets, and in particular, the Bitcoin market.
Our results of operations will also be significantly influenced by the overall development of the Fintech market.
Our gross profit/loss and gross profit/loss margin of mining machine hosting services and processing services provided by us are primarily affected by the average service fees that we charge our customers. Our gross profit/loss and gross profit/loss margin of sales of telecommunications products are primarily affected by the market price of the product and our cost of revenues.
Our gross profit/loss and gross profit/loss margin of sales of solar and battery storage products and related accessories and telecommunication products are primarily affected by the market price of the product and our cost of revenues.
Because market demand is dependent on the development of the blockchain technology, as well as innovations in cryptocurrency applications, our results of operations will significantly depend on our ability to keep pace with market demand to attract new customers or retain existing customers as well as to maintain or increase our market share.
As market demand hinges on the widespread application of digital technology and the shift towards automation and digitization in the financial services industry, our operational outcomes will significantly hinge on our ability to keep pace with market demands, attract new customers or retain existing ones, and maintain or increase our market share.
Net cash used in investing activities for 2021 was US$6.5 million, mainly attributable to (i) collections from short-term investment of US$474.4 million, (ii) cash paid for short-term investment of US$472.4 million, and (iii) cash paid for the purchases of property, plant and equipment and intangible assets of US$8.5 million. 112 Financing Activities We did not occur any cash flows from financing activities during 2023 and 2022.
Investing Activities Net cash used investing activities for 2024 was US$9.9 million, mainly attributable to (i) collections from short-term investment of US$31.6 million, (ii) cash paid of short-term investment of US$36.3 million, (iii) prepayment of property, plant and equipment of US$4.7 million, (iv) payments for business combination of US$0.3 million.
Capital Expenditures We made capital expenditures of US$8.5 million, US$14.1 million and US$1.0 million, in 2021, 2022 and 2023, respectively.
Financing Activities We did not occur any cash flows from financing activities during 2024, 2023 and 2022. Capital Expenditures We made capital expenditures of US$14.9 million, US$1.1 million and US$4.9 million, in 2022, 2023 and 2024, respectively.
As both the regulatory landscape develops and journalistic familiarity with Fintech increases, mainstream media’s understanding of Fintech and the regulation thereof may improve.
As both the regulatory landscape develops and journalistic familiarity with Fintech increases, mainstream media’s understanding of Fintech and the regulation thereof may improve. Similarly, the renewable energy business faces evolving regulations and dependent on government incentives (e.g., subsidies, tax credits). The regulatory environment for renewable energy is subject to constant change and varies widely across jurisdictions.
As a result of the foregoing, our loss from operations was US$48.0 million in 2022, compared to income from operation of US$2.0 million in 2021. Interest income. Our interest income increased by 145.1% to US$4.4 million in 2022, from US$1.8 million in 2021, primarily due to the interest income from our investments in term deposit and financing products in 2022.
LTD, and nil for 2024. Loss from operations. As a result of the foregoing, our loss from operations decreased by 43.4% to US$30.4 million in 2024, compared to loss from operations of US$53.6 million in 2023. 105 Interest income.
As a result of the foregoing, we recorded a gross profit of US$15.4 million in 2022, compared to US$29.2 million in 2021. Operating expenses. Our total operating expenses increased by 133.2% to US$63.4 million in 2022, from US$27.2 million in 2021, primarily due to increases in both selling expenses and general and administrative expenses. ● Selling expenses.
As a result of the foregoing, we recorded a gross profit of US$1.2 million in 2024, compared to a gross loss US$16.7 million in 2023. Operating expenses.
Our general and administrative expenses increased by 58.0% to US$40.7 million in 2022, from US$25.8 million in 2021, primarily due to increases in amortization expenses relating to intangible assets and employee stock ownership plan related expenses. ● Impairment of intangible assets.
Our general and administrative expenses increased by 4.9% to US$30.5 million in 2024, from US$29.0 million in 2023, primarily due to increases in such expenses for exploring new markets and businesses, as well as related investments in the renewable energy business. ● Impairment of intangible assets.
Our loss from investment decreased by 86.1% to US$0.5 million in 2022, from loss from investment of US$3.7 million in 2021, mainly due to an investment loss of $3.9 million incurred from marketable securities in 2021 and only US$0.6 million incurred in 2022. Exchange gain (loss) .
Our net gain (loss) on disposal of cryptocurrency assets decreased by 150.3% to a net loss of US$0.4 million in 2024, from a net gain of US$0.7 million in 2023, mainly due to fluctuation of price of cryptocurrencies. Exchange (loss) gain .
Other income . Our other income increased by 674.4% to US$1.0 million in 2022 from US$0.1 million in 2021. Other income in 2022 was primarily due to preexisting liabilities being exempt before the deregistration of a subsidiary. Loss from investment.
Our interest income decreased by 4.8% to US$11.4 million in 2024, from US$11.9 million in 2023, primarily due to the reduction of interest rates. Other income . Our other income decreased by 71.0% to US$0.3 million in 2024 from US$1.1 million in 2023.
For the majority of the cross-border payment and foreign exchange services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with us to provide payment services to the customers.
Service revenue - Rental services Revenues from our rental and property management services include rental income and other related management service we provided. For rental and property management services, customers agree to the terms and conditions of all transactions when signing a service contract with us.
Our income taxes benefit decreased by 80.7% to US$0.07 million in 2022, compared to US$0.4 million in 2021, primarily due to the allowance on the deferred tax assets based on the economic forecast of the Company’s operation in relation to the realization of such deferred tax assets. Net income (loss) .
Our income taxes benefit decreased by 95.8% to US$0.04 million in 2024, compared to US$1.0 million in 2023, primarily due to the reversal of deferred tax liability relating to the impairment of intangible assets recognized from a business acquisition that closed in March 2022 in during 2023, while no such transaction happened in 2024. Net loss .
Meanwhile, we may modify aspects of our business model relating to our strategy, including pursuing business opportunities outside of the blockchain and Fintech industries, including the sustainable energy industry. Commencement of all new businesses, however, may also incur significant costs and experience a prolonged ramp-up period.
Commencement of all new businesses, however, may also incur significant costs and experience a prolonged ramp-up period. If any adverse development in such new businesses arises, our results of operations and prospects may be significantly and negatively affected.
Changes in the mix of our telecommunications products sold could also affect the gross profit margin in the telecommunications business. Service - Management and Maintenance Revenues from our management and maintenance services include service fees for provision of mining machine hosting services to buyers of our Bitcoin mining machines, and provision of maintenance and other services.
Generally, revenues from sales of our renewable energy products and related accessories are primarily affected by the number of products sold, their average selling price, and sales and marketing efforts from time to time. Changes in the mix of our renewable energy products sold could also affect the gross profit margin in our renewable energy business.
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With years of industry experience and expertise, we have become a global Bitcoin mining machine producer. Based on our deep understanding of the Fintech industry and compliance with laws and regulations in various jurisdictions, we have launched professional, convenient and innovative Fintech service platforms.
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Operating results Overview With years of manufacturing experience and expertise in blockchain technology and Fintech, we have established ourselves as a key participant in these fields. Our development and launch of innovative Fintech service platforms have been well-received in the market, leveraging advanced technologies and cutting-edge financial services.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changePeng has over 19 years of experience in the areas of business operation and production and supply chain management. From September 2003 to January 2010, Ms. Peng was a deputy general manager at Hangzhou Ebang Communication Technology Co., Ltd., where she was responsible for assisting in managing the daily operation of the company. Ms.
Biggest changePeng was a deputy general manager at Hangzhou Ebang Communication Technology Co., Ltd., where she was responsible for assisting in managing the daily operation of the company. Ms. Peng is mainly responsible for our production and supply chain management, which includes overseeing the procurement of raw materials and production and quality control. Ms.
He has been a director of Zhejiang Jianxue Technology Co., Ltd. since November 2019, Jiangsu Mole Biotechnology Co., Ltd. since April 2016, Shanghai Xinfangxun Communication Technology Co., Ltd. since November 2015 and Hangzhou Kaipu Technology Co., Ltd. since September 2015. Mr. Gao has also been the deputy manager of Zhejiang Zheke Investment Management Co., Ltd. since May 2012.
He has been a director of Hangzhou Jianxue Technology Co., Ltd. since November 2019, Jiangsu Mole Biotechnology Co., Ltd. since April 2016, Shanghai Xinfangxun Communication Technology Co., Ltd. since November 2015 and Zhejiang Kaipu Technology Co., Ltd. since September 2015. Mr. Gao has also been the deputy manager of Zhejiang Zheke Investment Management Co., Ltd. since May 2012.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award agreement.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award agreement.
We may grant awards to employees and consultants of our company, our parent company and any of our subsidiaries, our directors, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule.
We may grant awards to employees and consultants of our company, our parent company and any of our subsidiaries, our directors, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing and making recommendations to the board of directors with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; 115 ● reviewing and making recommendations to the board of directors with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its business operations to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares of our company, including the registering of such shares in our share register.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its business operations to shareholders at such meetings; ● declaring dividends and distributions; 116 ● appointing officers and determining the term of office of officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares of our company, including the registering of such shares in our share register.
The number of Class A ordinary shares held by CVI is based on information included in the Schedule 13-G filed by CVI with the SEC on February 14, 2024 reporting its beneficial ownership of Class A ordinary shares. 123 We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
The number of Class A ordinary shares held by CVI is based on information included in the Schedule 13-G filed by CVI with the SEC on February 14, 2024 reporting its beneficial ownership of Class A ordinary shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant, except that the maximum exercisable term is 10 years from the date of a grant. The following paragraphs describe the principal terms of the 2021 Plan. Types of awards.
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant, except that the maximum exercisable term is 10 years from the date of a grant. 113 The following paragraphs describe the principal terms of the 2021 Plan: Types of awards.
We determine employees’ remuneration based on factors including qualifications, contributions and years of experience. In order to maintain the quality, knowledge and skills of our employees, we appreciate the importance of training to employees. We provide regular trainings to our employees, which include orientation training for new employees and continuing on-the-job training for existing employees. E.
We determine employees’ remuneration based on factors including qualifications, contributions and years of experience. In order to maintain the quality, knowledge and skills of our employees, we appreciate the importance of training to employees. We provide regular trainings to our employees, which include orientation training for new employees and continuing on-the-job training for existing employees. 117 E.
None of our directors has a service contract with us that provides for benefits upon termination of service as a director. Committees of our board of directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
None of our directors has a service contract with us that provides for benefits upon termination of service as a director. 114 Committees of our board of directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Interested Transactions A director may, subject to any separate requirement for audit committee approval under applicable law, the Articles or the Nasdaq Rules, or disqualification by the chairman of the relevant board meeting, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any directors in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter. 121 D.
Interested Transactions A director may, subject to any separate requirement for audit committee approval under applicable law, the Articles or the Nasdaq Rules, or disqualification by the chairman of the relevant board meeting, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any directors in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter.
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. 117 Exercise of options. The plan administrator determines the exercise price for each award, which is stated in the award agreement.
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of options. The plan administrator determines the exercise price for each award, which is stated in the award agreement.
(2) 343,332 – 5.2 * * Represents less than 1% of our total outstanding shares. ** Except as indicated otherwise below, the business address of our directors and executive officers is 12 Marina View, #20-02B, Asia Square Tower 2, Singapore, 018961. *** For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after the date of April 25, 2024. **** For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
(2) 343,332 – 5.2 * * Represents less than 1% of our total outstanding shares. ** Except as indicated otherwise below, the business address of our directors and executive officers is 12 Marina View, #20-02B, Asia Square Tower 2, Singapore, 018961. *** For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after the date of April 28, 2025. **** For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
He has served as an independent director of China Satellite Communications Co., Ltd., China Communications Services Corporation Limited, Beijing Digital Telecom Co., Ltd. and Beijing Tongtech Co., Ltd. since May 2016, June 2015, May 2013 and August 2023, respectively. He has also served as a director of Wooboo Mobile Media Co., Ltd. since July 2016. Mr.
He has served as an independent director of China Communications Services Corporation Limited, Beijing Digital Telecom Co., Ltd. and Beijing Tongtech Co., Ltd. since June 2015, May 2013 and August 2023, respectively. He has also served as a director of Wooboo Mobile Media Co., Ltd. since July 2016.
Lyu holds a bachelor’s degree in radio engineering and a master’s degree in management engineering from Beijing University of Posts and Telecommunications and a doctor’s degree in engineering from Kyoto University. 115 Mingming Su has served as our director since November 2021. Mr.
Lyu holds a bachelor’s degree in radio engineering and a master’s degree in management engineering from Beijing University of Posts and Telecommunications and a doctor’s degree in engineering from Kyoto University. 111 Mingming Su has served as our director since November 2021. Mr.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of April 25, 2024, including through the exercise of any option, warrant or other right or the conversion of any other security.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of April 28, 2025, including through the exercise of any option, warrant or other right or the conversion of any other security.
As of the date of this annual report, we have granted 152,370 restricted shares after forfeitures under the 2020 Plan and we did not grant any awards under the 2021 Plan. The following paragraphs describe the principal terms of the 2020 Plan. Types of awards. The 2020 Plan permits the awards of options, restricted shares or restricted share units.
As of the date of this annual report, we have granted 107,486 restricted shares after forfeitures under the 2020 Plan and we did not grant any awards under the 2021 Plan. The following paragraphs describe the principal terms of the 2020 Plan: Types of awards. The 2020 Plan permits the awards of options, restricted shares or restricted share units.
The audit committee is responsible for, among other things: ● selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services performed by our independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and our independent registered public accounting firm; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and our independent registered public accounting firms; ● reporting regularly to the full board of directors; and ● performing such other matters that are specifically delegated to our audit committee by our board of directors from time to time. 119 Compensation Committee Our compensation committee consists of Dong Hu, Tingjie Lyu and Mingming Su.
The audit committee is responsible for, among other things: ● selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services performed by our independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and our independent registered public accounting firm; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and our independent registered public accounting firms; ● reporting regularly to the full board of directors; and ● performing such other matters that are specifically delegated to our audit committee by our board of directors from time to time.
Share ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares, as of April 25, 2024 with respect to: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5.0% of our ordinary shares.
Share ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares, as of April 28, 2025 with respect to: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5.0% of our ordinary shares.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and senior management Our board of directors is currently composed of five members. The table below sets forth certain information are as of April 25, 2024. concerning our current board of directors and our senior management as of the date of this annual report.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and senior management Our board of directors is currently composed of five members. The table below sets forth certain information are as of April 28, 2025. concerning our current board of directors and our senior management as of the date of this annual report.
Compensation Compensation For the fiscal year ended December 31, 2023, we paid an aggregate of approximately US0.5 million in cash to our directors and executive officers, respectively. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of approximately US$0.5 million in cash to our directors and executive officers, respectively. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
To our knowledge, as of April 25, 2024, 4,952,972 Class A ordinary shares, representing approximately75.7% of our issued and outstanding ordinary shares, were held by one record holder in the United States, which is Cede & Co., a nominee of The Depository Trust Company, and none of our Class B ordinary shares are held by record holders in the United States.
To our knowledge, as of April 28, 2025, 4,952,966 Class A ordinary shares, representing approximately 75.7% of our issued and outstanding ordinary shares, were held by one record holder in the United States, which is Cede & Co., a nominee of The Depository Trust Company, and none of our Class B ordinary shares are held by record holders in the United States.
Directors and Executive Officers Age Position/Title Dong Hu 50 Chairman of the Board, Chief Executive Officer and Chief Financial Officer Chunjuan Peng 47 Director and Deputy General Manager Yanqing Gao 59 Independent Director Tingjie Lyu 68 Independent Director Mingming Su 39 Independent Director Dong Hu is our founder and has served as chairman of the board of directors, and our chief executive officer since May 2018 and our chief financial officer since May 2022.
Directors and Executive Officers Age Position/Title Dong Hu 51 Chairman of the Board, Chief Executive Officer and Chief Financial Officer Chunjuan Peng 48 Director and Deputy General Manager Yanqing Gao 60 Independent Director Tingjie Lyu 69 Independent Director Mingming Su 40 Independent Director Dong Hu is our founder and has served as chairman of the board of directors, and our chief executive officer since May 2018 and our chief financial officer since May 2022.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors, or for appointment to fill any vacancy; ● reviewing annually with our board of directors its composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations; ● making recommendations to our board of directors on corporate governance matters and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure compliance. 120 Duties of Directors Under Cayman Islands law, our directors owe to us certain fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider to be in good faith and in our best interests.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors, or for appointment to fill any vacancy; ● reviewing annually with our board of directors its composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations; ● making recommendations to our board of directors on corporate governance matters and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure compliance.
The calculations in the table below are based on 6,543,938.22 ordinary shares outstanding as of April 25, 2024, comprising of 4,989,746.22 Class A ordinary shares and 1,554,192 Class B ordinary shares, assuming no exercise of outstanding warrants and excluding ordinary shares reserved for issuance under our Amended and Restated 2020 Share Incentive Plan and 2021 Share Incentive Plan. 122 Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 6,543,938.22 ordinary shares outstanding as of April 28, 2025, comprising 4,989,746.22 Class A ordinary shares and 1,554,192 Class B ordinary shares, assuming no exercise of outstanding warrants and excluding ordinary shares reserved for issuance under our Amended and Restated 2020 Share Incentive Plan and 2021 Share Incentive Plan.
The following table sets forth a breakdown of our employees by function as of December 31, 2023: Function Number of Employees Management 5 Research and development 130 Production 29 Sales and marketing 41 Finance, operations and others 98 Total 303 The remuneration payable to our employees includes salaries, project incentives, year-end bonuses and allowances.
The following table sets forth a breakdown of our employees by function as of December 31, 2024: Function Number of Employees Management 5 Research and development 93 Production 25 Sales and marketing 16 Finance, operations and others 79 Total 218 The remuneration payable to our employees includes salaries, project incentives, year-end bonuses and allowances.
A director will be removed from office automatically if, among other things, the director (1) becomes bankrupt or makes any arrangement or composition with his or her creditors; (2) dies or is found by our company to be of unsound mind; or (3) is removed from office pursuant to any other provisions of our Articles.
A director will be removed from office automatically if, among other things, the director (1) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his or her creditors; (2) dies or is found by our company to be of unsound mind; or (3) is removed from office pursuant to any other provisions of our Articles.
From August 2009, he worked as a teacher of the College of Computer Science and Technology at the same university until October 2017.
Between August 1998 and August 2009, he was a teacher of the College of Information Engineering at Zhejiang University of Technology. From August 2009, he worked as a teacher of the College of Computer Science and Technology at the same university until October 2017. Mr.
Our board of directors affirmatively determined that Yanqing Gao, Tingjie Lyu and Mingming Su are independent directors, and that we have a majority of independent directors serving on our board of directors. 118 A director may, subject to any separate requirement for audit committee approval under applicable law, the Articles or the Nasdaq Rules, or disqualification by the chairman of the relevant board meeting, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any director in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter.
A director may, subject to any separate requirement for audit committee approval under applicable law, the Articles or the Nasdaq Rules, or disqualification by the chairman of the relevant board meeting, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any director in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter.
Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use, except for our benefit, any confidential information of our company, any of its subsidiaries or their customers and suppliers.
An executive officer may terminate his or her employment at any time with one month’s prior written notice. 112 Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use, except for our benefit, any confidential information of our company, any of its subsidiaries or their customers and suppliers.
Employees As of December 31, 2023, we had a total of 303 employees, among which, 46 full-time employees were located outside of China.
D. Employees As of December 31, 2024, we had a total of 218 employees, among which, 61 full-time employees were located outside of China.
Lyu has over 39 years of experience in the telecommunications industry. Since June 1985, Mr. Lyu successively served as a teacher, an associate professor and a professor at Beijing University of Posts and Telecommunications, College of Economic Management. Mr.
He was an independent director of China Satellite Communications Co., Ltd. from June 2017 to August 2023. Mr. Lyu has over 40 years of experience in the telecommunications industry. Since June 1985, Mr. Lyu successively served as a teacher, an associate professor and a professor at Beijing University of Posts and Telecommunications, College of Economic Management. Mr.
Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one for one basis, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.
Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one for one basis, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. 118 (1) Represents (1) 1,554,192 Class B ordinary shares held by Top Max Limited and (2) 3,750 Class A ordinary shares held by Top One Limited .
Su obtained his bachelor’s degree majoring in library science and minoring in English from Anhui University in July 2007. Mr. Su also obtained his Master of Management majoring in library science from Chinese Academy of Sciences in March 2010. Board Diversity Disclosure The following information was provided by our directors on a voluntary basis.
Su obtained his bachelor’s degree majoring in library science and minoring in English from Anhui University in July 2007. Mr. Su also obtained his Master of Management majoring in library science from Chinese Academy of Sciences in March 2010. B.
Mr. Hu is the chairman of our compensation committee. We have determined that each of Messrs. Lyu and Su satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Rules. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Compensation Committee Our compensation committee consists of Dong Hu, Tingjie Lyu and Mingming Su. Mr. Hu is the chairman of our compensation committee. We have determined that each of Messrs. Lyu and Su satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Rules.
A copy of the Clawback Policy has been filed herewith as Exhibit 97.1. 116 Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers.
A copy of the Clawback Policy was filed as Exhibit 97.1 to our Annual Report on Form 20-F filed with the SEC on April 26, 2024. Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers.
Peng is mainly responsible for our production and supply chain management, which includes overseeing the procurement of raw materials and production and quality control. Ms. Peng graduated from Jiangxi Normal University with a self-taught associate degree in tourism management in June 1997. Yanqing Gao has served as our director since June 2021.
Peng graduated from Jiangxi Normal University with a self-taught associate degree in tourism management in June 1997. Yanqing Gao has served as our director since June 2021.
He has also served as a director and chief executive officer of Zhejiang Ebang since January 2010. Mr. Hu has over 24 years of experience in the network communication and computing industry. Between August 1998 and August 2009, he was a teacher of the College of Information Engineering at Zhejiang University of Technology.
He has also served as a director and chief executive officer of Zhejiang Ebang since January 2010. Mr. Hu has over 25 years of experience in the network communication and computing industry. In addition, he is also a leading figure in the blockchain, Fintech, and renewable energy industries.
Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Hu graduated from Zhejiang University of Technology with an undergraduate degree in industrial automation in July 1998. In September 2008, Mr. Hu obtained a master of business administration (MBA) degree from Zhejiang University. Chunjuan Peng is our deputy general manager and has served as a director since May 2018.
Hu is primarily responsible for overseeing the sales and marketing, research and development, business strategy and overall management of our company. Mr. Hu graduated from Zhejiang University of Technology with an undergraduate degree in industrial automation in July 1998. In September 2008, Mr. Hu obtained a master of business administration (MBA) degree from Zhejiang University.
She has also served as a deputy general manager of Zhejiang Ebang since January 2010 and a director of Zhejiang Ebang from January 2010 to March 2021. She has served as a director of Hangzhou Yibang Botong and HK Ebang Information since November 2021 and August 2022, respectively. Ms.
Chunjuan Peng is our deputy general manager and has served as a director since May 2018. She has also served as a deputy general manager of Zhejiang Ebang since January 2010. Ms. Peng has over 20 years of experience in the areas of business operation and production and supply chain management. From September 2003 to January 2010, Ms.
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He is also an executive director of each of Zhejiang Ebang, Ebang IT, Hangzhou Dewang, Ebang Hongfa, Hangzhou Ebang Shuotai and Hangzhou Yibang Botong, Zhejiang Ebang Communication and Hangzhou Ebang Shengye and a director of HK Ebang Communications, HK Ebang Technology, and HK Ebang Digital, Ebang Digital Asset Management, Ebang Digital Asset Custody, Ebang Trust, Ebang Financial Services, Ebonex Singapore Pte.
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Our board of directors affirmatively determined that Yanqing Gao, Tingjie Lyu and Mingming Su are independent directors, and that we have a majority of independent directors serving on our board of directors.
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Ltd., Singapore Ebang Pte. Ltd., Ebon Pay Pte. Ltd., Ebon Management, Ebonex Australia, Australia Ebon Pty Ltd, Ebon Management Australia and Compass Global. Mr. Hu is primarily responsible for overseeing the sales and marketing, research and development, business strategy and overall management of our company. Mr.
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Duties of Directors Under Cayman Islands law, our directors owe to us certain fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider to be in good faith and in our best interests.
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Board Diversity Matrix (As of date of April 26, 2024) Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 5 Female Male Non-Binary Did not disclose Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 B.
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Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
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An executive officer may terminate his or her employment at any time with one month’s prior written notice.
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(1) Represents (1) 1,554,192 Class B ordinary shares held by Top Max Limited and (2) 3,750 Class A ordinary shares held by Top One Limited .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

5 edited+2 added−0 removed1 unchanged
Biggest changeAs of December 31, 2022 and 2023, the operating lease liabilities to Hangzhou Yiquansheng is approximately $266,000 and $0 respectively. 124 C. Interests of Experts and Counsel Not applicable.
Biggest changeAs of December 31, 2022, 2023 and 2024, the operating lease liabilities to Hangzhou Yiquansheng is approximately US$266,000, US$0 and US$0 respectively. Product Sales Agreements with Redback Technologies For the period from May 2024 to November 2024, the Company sold US$337,100 of products to Redback Technologies.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” Other Transactions with Related Parties Property Tenancy Agreements with Zhejiang Wansi Computer Manufacturing Company Limited As of the date of this annual report, some of our PRC subsidiaries have entered into several tenancy property management agreements with Zhejiang Wansi Computer Manufacturing Company Limited (“Zhejiang Wansi”).
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 119 Other Transactions with Related Parties Property Tenancy Agreements with Zhejiang Wansi Computer Manufacturing Company Limited As of the date of this annual report, some of our PRC subsidiaries have entered into several tenancy property management agreements with Zhejiang Wansi Computer Manufacturing Company Limited (“Zhejiang Wansi”).
The lease term is from May 2021 to December 2023. Hangzhou Yiquansheng is 100% owned by Mr. Hu, our controlling shareholder, chairman of the board of directors, chief executive officer and chief financial officer. In 2021, 2022 and 2023, lease expenses from Hangzhou Yiquansheng were approximately US $379,000, US$558,000 and US$495,000 respectively.
The lease term is from May 2021 to December 2023. Hangzhou Yiquansheng is 100% owned by Mr. Hu, our controlling shareholder, chairman of the board of directors, chief executive officer and chief financial officer. In 2022, 2023 and 2024, lease expenses from Hangzhou Yiquansheng were approximately US$558,000, US$495,000 and nil respectively.
The lease terms are for consecutive one-year terms. Zhejiang Wansi is 68.68% owned by the spouse of Dong Hu, our controlling shareholder, chairman of the board directors, chief executive officer and chief financial officer. Zhejiang Wansi is therefore an associate of Mr. Hu. In 2021, 2022 and 2023, lease expenses from Zhejiang Wansi were approximately US$32,000, US$44,000 and US$29,000, respectively.
The lease terms are for consecutive one-year terms. Zhejiang Wansi is 68.68% owned by the spouse of Dong Hu, our controlling shareholder, chairman of the board directors, chief executive officer and chief financial officer. Zhejiang Wansi is therefore an associate of Mr. Hu. In 2022, 2023 and 2024, lease expenses from Zhejiang Wansi were approximately US$44,000, US$29,000 and US$28,000, respectively.
As of December 31, 2021, 2022 and 2023, the operating lease liabilities to Zhejiang Wansi is approximately $49,000 and $18,000 and $31,000 respectively. Property Tenancy Agreements with Hangzhou Yiquansheng Communication Technology Company Limited In May 2021, our PRC subsidiary Zhejiang Ebang entered into a tenancy property management agreement with Hangzhou Yiquansheng Communication Technology Co., Ltd. (“Hangzhou Yiquansheng”).
As of December 31, 2022, 2023 and 2024, the operating lease liabilities to Zhejiang Wansi is approximately US$18,000 and US$31,000 and US$40,000 respectively. Property Tenancy Agreements with Hangzhou Yiquansheng Communication Technology Company Limited In May 2021, our PRC subsidiary Zhejiang Ebang entered into a tenancy property management agreement with Hangzhou Yiquansheng Communication Technology Co., Ltd. (“Hangzhou Yiquansheng”).
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On November 8, 2024, the Company acquired 100% equity interest of Redback Technologies and it ceased to be a related party of the Company. Loan Agreements with Redback Technologies For the period from May 2024 to November 2024, Redback Technologies borrowed AUD3,696,386 (approximately US$2.3 million) and RMB626,797 (approximately US$86,000) from the Company.
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On November 8, 2024, the Company acquired 100% equity interest of Redback Technologies and it ceased to be a related party of the Company. The preexisting loans to Redback Technologies were considered settled upon the acquisition. C. Interests of Experts and Counsel Not applicable.