China-based Ebang has filed a revised IPO prospectus with the US Securities and Exchange Commission (SEC), where it was disclosed that the company had selected Nasdaq Global Market Market to list its shares, under the ticker “EBON.”
One of the largest bitcoin mining manufacturers, the company is planning to raise $106 million through 19.32 million shares at a price range of $4.50 to $6.50.
Ebang onboarded Prime Number Capital as the latest underwriter to join the US-based Loop Capital Markets and Hong Kong-based AMTD Global Market Limited.
If successful, Ebang would be the second bitcoin miner maker to be listed on Nasdaq after Canaan Creative, which raised $90 million via its IPO — falling short of already slashed price target. Currently, CAN shares sold $9 apiece, are down more than 78% since its IPO.
Other bitcoin miners like Bitmain are also trying for an IPO, but currently, they are struggling with top management issues.
Risky Factors & Challenges
In its IPO prospectus filed on Wednesday, the company mentioned bitcoin’s volatility and its financial situation as the risky factors. Ebang’s operations will continue to be “significantly impacted by the fluctuation of Bitcoin price,” it said.
Detailing its financial situation, the company said it recorded an increase in sales volumes and average selling price of its Ebit mining machines resulting in revenues to increase from $6.4 million in Q1 2019 to $6.4 million in Q1 2020.
Ebang had a net loss of $41.1 million and $11.8 million in 2019 and 2018, respectively, and divulged “generate positive cash flow from operating activities and achieve or sustain profitability” is a challenge.
As per the unaudited financial results, in Q1 2020, Ebang’s had a net loss of $2.5 million, up from $0.6 million net loss in the same quarter last year, which was “primarily due to the significant decrease in certain non-recurring local government’s tax rebates.”
The company also addressed the increased regulatory scrutiny of the Chinese firms in the US in the prospectus.
Pointing to the Holding Foreign Companies Accountable Act, or the Kennedy Bill, passed on May 20, 2020, by the US Senate, Ebang said it could “cause investor uncertainty for affected issuers, including us, and the stock price could be materially and adversely affected.”
Moreover, it may prohibit Ebang’s Class A ordinary shares from trading on the Nasdaq stock market.