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AGM Group Holdings Inc. (NASDAQ: AGMH), an integrated technology company focusing on providing fintech software services and producing high-performance hardware and computing equipment, today announced its unaudited financial results for the three months ended September 30, 2021.
Third Quarter 2021 Operating and Financial Highlights:
● Total computing power sold was 79,200 TH/s, compared with nil in the same period of 2020.
● Total revenues were $5.34 million, an increase of approximately $5.30 million from $31,261 in the same period of 2020.
● Gross profit was $0.71 million, an increase ofapproximately $0.69 million from $21,138 in the same period of 2020.
● Net income was $0.20 million, compared to netloss of $0.32 million in the same period of 2020.
Mr. Chenjun Li, Chairman and Co-Chief ExecutiveOfficer of the company commented, "We are very excited in the impressive strides we have made across multiple fronts, which followedour announcement of new business lines and growth strategy in August. We have gained considerable attention and interests to ourfirst ASIC crypto mining machine-KOI MINER C16, thanks to its top industry metrics.Notably, we secured purchase orders for 67,500 cryptocurrency mining machines within just three months from various companies. These achievementsexemplify the strong industry recognition we received in our product and further establish our leading position in the cryptocurrencymining industry. Additionally, despite a global semiconductor shortage and logistic challenges, we are effectively navigating market dynamicsby securing our supply chain capabilities through the AGMH-HighSharp partnership and exploring opportunities for manufacturing operationin North America that can bring us closer to our end customers. We are confident we will distinguish ourselves with our technical capabilitiesto become a leader in producing high-powered ASIC mining machines.”
Mr. Wenjie Tang, Co-Chief Executive Officer ofthe company, commented, “By leveraging the new growth strategy, we were off to a firm start financially, with revenues of $5.34million in the third quarter, primarily from sales of crypto mining machines, and computing hardware. The initial success boosts our confidencethat we are on the right path of business transformation. Apart from the new initiative, we remain diligent to push the development ofour legacy fintech business as planned. We believe the combined strengths of our solid infrastructure, technology, and our experiencedsenior management team will enable us to deliver lasting value for shareholders. We will further advance our mission to become an integratedtechnology company focusing on blockchain-oriented ASIC chip design, advanced cryptocurrency mining equipment production, and fintechsoftware services.”
Mr. Steven Sim, Chief Financial Officer of theCompany, commented, "Our solid financial performance for the third quarter demonstrates thesuccess and profitability of our transition and engagement into the ASIC chip design and cryptocurrency mining equipment manufacturingspace. Notably, our income from operations and net income turned to positive over the period, compared to both losses in the prior year.Moreover, we are optimistic on the strategic importance of our partnership with HighSharp, of which the progress will be on track withthe schedule. Heading into 2022, our imperatives will be delivering the substantial number of mining machines ordered as scheduled, rampingup our production capacity, and securing more purchase orders. As we seek to sustain our future growth trajectory, we will keep investinginto strengthening our R&D, cutting-edge technologies, and manufacturing capacity to propel further development in our core cryptominer manufacturing business and other initiatives.”
Third Quarter 2021 Business Highlights & Recent Developments
● Strategic Initiative for North American ManufacturingBase
In November, AGMH announcedthat the Company is exploring strategic opportunities to set up its North American manufacturing operations in the United States or Canadato strengthen its leadership position in the Bitcoin mining sector.
● Purchase Order from Code Chain
In November, AGMH receiveda purchase order from Code Chain New Continent Limited (“Code Chain”) (NASDAQ: CCNC) for 10,000 units of 100 TH/S KOI miningmachines worth $65 million. This agreement also provides Code Chain with an option to purchase an additional 10,000 mining machines.
● Strategic Partnership with Meten
In October, AGMH enteredinto a strategic partnership with Meten Holding Group Ltd. (“Meten”) (NASDAQ: METX) to focus on research and development supportfor blockchain applications and establishing a cryptocurrency mining supply chain. The agreement includes an initial order from Metenfor 1,500 Bitcoin mining machines worth US$12 million.
● Purchase Order from MinerVa
In October, AGMH agreedto supply MinerVa Semiconductor Corp. ("MinerVa") with 25,000 units of its 100 TH/S crypto mining machine to build the MinerVasuite of crypto mining machines. MinerVa is the distributor of industrial grade crypto mining machines to leading global large-scale miningcompanies.
● Purchase Order from Nowlit Solutions
In October, AGMH receiveda purchase order from Nowlit Solutions Corp., a leading crypto currency equipment supply chain services and consultancy company in NorthAmerica, for 30,000 units of 100 TH/S ASIC crypto mining machines.
Third Quarter 2021 Financial Results:
Revenues:
Total revenues were $5.34 million, an increaseof approximately $5.30 million from $31,261 in the same period of 2020. The increase was primarily due to the increase in sales revenuesfrom cryptocurrency mining machine and standardized computing equipment sales since August, compared with nil in the same period of 2020.Total computing power sold increased to 79,200 TH/s, compared to nil in the same period of 2020. The growth came after the Company announcedin August to initiate a new growth strategy to become a key participant and contributor in the global blockchain ecosystem.
Cost of Revenues:
Cost of revenues was $4.62 million, an increaseof approximately $4.61 million from $10,123 in the same period of 2020. The increase was primarily due to the increase in procurementcosts of crypto mining machines and standardized computing equipment, compared with nil in the same period of 2020.
Gross Profit:
Gross Profit was $0.71 million, an increase of$0.69 million from $21,138 in the same period of 2020. The increase was primarily due to the substantial increase in revenues.
Operating expenses:
Total operating expenses were $0.34 million, anincrease of 17.1% from approximately $0.29 million in the same period of 2020.
● Selling, general, and administrative expensesconsist primarily of sales and administrative employee-related expenses, professional fees, travel costs, research and development costs,and other corporate expenses. Selling, general, and administrative expenses were $0.33 million, an increase of 20.2% from $0.27 millionin the same period in 2020. The increase was primarily due to expenses related to an establishment of a new wholly foreign-owned enterprise.
● Research and development expenses were $10,304,a decrease of 35.6% from $16,007 in the same period in 2020. The decrease was primarily due to the decrease in FinTech R&D. The Companyhad not invested in cryptocurrency mining machine R&D until Sep 30, 2021.
Income from operations:
Income from operations was $0.37 million, comparedwith loss from operations of $0.27 million in the same period of 2020.
Other income (expenses):
Other expenses, net of other income was $15,005,compared to other expenses, net of other income, of $5,324 in the same period of 2020. The increase in other expenses, net of other income,was primarily attributed to foreign exchange loss, interest expenses, and bank charges.
Net income:
Net income was $0.20 million, compared to netloss of $0.32 million in the same period of 2020.