One casualty in the instant recession of 2020 has been the market for initial public offerings. The stock market peaked in February and by the time the selling zenith came on March 23 the S&P 500 was down just over 35% and the Dow was down close to 40% from peak to trough. The stock market has bounced back in a major way, but the economic numbers have only just begun to show how awful the economy has become.

There just isn’t an appetite yet for emerging speculative companies. Or is there? A limited number of IPO filings have started coming back through the Securities and Exchange Commission filing system. One particular IPO filing from Friday afternoon came from a company called Ebang International Holdings Inc. for up to $100 million in Class A common shares.

If there is just one thing that should stand out, it’s the company’s business: Ebang is a Chinese contract manufacturer of cryptocurrency mining machines. The company even calls itself a leading application-specific integrated circuit (ASIC) chip design company and a leading manufacturer of high performance Bitcoin mining machines.

Ebang also said in its filing that it was one of the earliest contract manufacturers of Bitcoin mining machines in China to own self-developed proprietary ASIC chips. While much of the future focus will be away from just being tied to Bitcoin, it is Bitcoin that made the company. Its IPO filing says:

In 2018 and 2019, sales of our Bitcoin mining machines and related accessories accounted for 96.3% and 82.4% of our revenues, respectively.

As for the Class A shares, they will list either on the NASDAQ or New York Stock Exchange under the “EBON” stock ticker. The two underwriters are listed as AMTD and Loop Capital Markets.

After its IPO, Ebang’s share capital will consist of Class A ordinary shares and Class B ordinary shares, with equal rights except for the control issue. The Class A shares will get one vote each, while the Class B shares will get 20 votes each. In short, one person will be able to have full control of the company’s direction and operations similar to many other technology companies which have come public in recent years.

Ebang’s IPO filing indicates that the company is looking to grow into the upstream and downstream markets in blockchain and cryptocurrency with plans to diversify its offerings and to achieve a more stable financial performance. Ebang’s filing indicated that it plans to start with cryptocurrency mining and farming business and plans to explore using blockchain technology in non-cryptocurrency industries. Those other industries were listed as financial services and healthcare.

The IPO filing showed that its revenue history is $319.0 million in 2018 and $109.1 million in 2019. That generated a gross profit of $24.4 million in 2018 and generated a gross loss of $30.6 million in 2019. Ebang’s net loss was $11.8 million in 2018 and its net loss was $41.1 million in 2019. The IPO filing also indicated that the company had an outstanding loan balance of $30.8 million.

According to the Ebang IPO filing:

We have strong ASIC chip design capability underpinned by nearly a decade of industry experience and expertise in the telecommunications business. We are one of the few fabless integrated circuit, or IC, design companies with the advanced technology to independently design ASIC chips, established access to third-party wafer foundry capacity and a proven in-house capability to produce blockchain and telecommunications products, according to the F&S report. We have dedicated our technology and efforts to ASIC applications for Bitcoin mining machines and were a leading Bitcoin mining machine producer in the global market in terms of computing power sold in 2019, according to the F&S report…

Our Ebit E10 model, launched in December 2017, was the first commercially available mining machine to use 10 nm ASIC chips among major mining machine producers, according to the F&S report. Our latest commercialized Ebit E12 series mining machines, which incorporate the most recent iteration of our proprietary 10 nm ASIC chips, are capable of a hash rate of up to 50 TH/s and a computing power efficiency of 57W/TH. We have completed the design of our 8 nm ASIC chips and 7 nm ASIC chips and are ready to mass-produce our proprietary 8 nm ASIC chips when the market conditions become suitable. We currently focus on developing our proprietary 5 nm ASIC chips and mining machines for non-Bitcoin cryptocurrencies such as Litecoin and Monero. We will continue to devote significant resources to new innovations applying blockchain technology.

There has been a longstanding wave of concerns that U.S. investors have had about some Chinese companies and U.S. IPOs. The list of concerns and risks is simply too long to list. That said, we would emphasize that Ebang’s “RISK FACTORS” portion of its IPO filing is more than 40 pages long. That rivals some of the largest “Risk Factors” out there from the likes of Uber, Lyft and Alibaba.

For its location of primary offices, the IPO Filing said:

Our principal executive offices are located at 26-27/F, Building 3, Xinbei Qianjiang International Building, Qianjiang Economic and Technological Development Zone, Yuhang District, Hangzhou, Zhejiang, China. Our telephone number at this address is +86 571-8817-6197. Our registered office in the Cayman Islands is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111.

Investors should submit any inquiries to the address and telephone number of our principal executive offices… The information contained on our websites is not a part of this prospectus. Our agent for service of process in the United States is located at 122 East 42nd Street, 18th Floor, New York, N.Y. 10168, United States.

We have seen many trends come and go in Bitcoin, cryptocurrencies, and blockchain.

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