Crypto Mining Equipment Maker Ebang Reports ‘Significant’ Profit Drop in New IPO Filing

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Crypto Mining Equipment Maker Ebang Reports ‘Significant’ Profit Drop in New IPO Filing

Ebang, the manufacturer of crypto mining equipment has reportedly re-filed the IPO prospectus with the Hong Kong Stock Exchange (HKEX). The company stated that it has noticed a “significant decreases” in gross profit and revenue of Q3 2018.

The data uncovered by the HKEX states that Ebang applied for the IPO once again on December 20. In its filing, the company disclosed its complete financial information until 30th June 2018. Thus followed the initial filling of the company to sell its shares on the exchange had lapsed.

According to the data, the company was able to book revenue of $304 million (2.1 billion Yuan) in the first half of 2018, which was eight times of the same period of the previous year. The company has also reported a profit of $135 million, which is 16 times that of the same period of last year.

The company in the ‘material adverse change’ section of the latest filling stated that its average monthly sales orders specifically for the Bitcoin mining machines were down in Q3 2018. The company stated that it experienced a drastic decrease in revenue as well as in gross profit for the three months ended 30th September 2018, as compared to the previous three months ended 30th June 2018.

Nevertheless, the company refrained from disclosing the financial details for Q3, 2 018. The HKEX takes account of the situation when the entire crypto market is a notable decline. This is, in fact, one of the important factors for the exchange to consider while evaluating applications for IPO from crypto mining companies like Bitmain and Ebang.

According to the guidelines for submitting an IPO application, a company is required to disclose at least 6 months of financial data. Ebang was compelled to disclose financial numbers of the first half of 2018 and volunteered not to disclose the results of Q3 2018.

However, a reliable source familiar with the matter told CoinDesk that Bitman and Ebang are required to disclose the Q3 financial results to the exchange at the start of 2019 if they would like to go ahead with the process of IPO listing.

Ebang, however, has not disclosed as how much it intends to gather funds through the IPO. The source reportedly said that the company planned for its IPO soon after its size reduced by more than half ever since it filed the IPO filing for the first time. According to a Reuters report (May 2018), Ebang intended to raise as much as $1 billion.

Ebang first applied for the IPO to the HKEX on June 24. In its initial filing, the company revealed financial data for the period ending 31st December 2017. The application, however, turned inactive after the six months of filing.

The company until now has not revealed any of its plans for the IPO to the media. The company, however, will disclose Q3 2018 results in the near time which is expected to have a serious impact on the evaluation of its IPO application.