AGM GROUP HOLDINGS, INC.

AGM Group Holdings Inc. (AGM) operates as a technology company focused on technology hardware research and development, manufacturing, assembling, and sales, with a strategic emphasis on the global technology hardware supply chain and fintech blockchain ecosystem. The company's core business model revolves around the sale of cryptocurrency mining machines and standardized computing equipment, with revenue recognized at the point of transfer of control to customers. AGM is a holding company incorporated in the British Virgin Islands, conducting a substantial majority of its operations through subsidiaries in the People's Republic of China (PRC) and Hong Kong SAR, as well as in Canada and Singapore.

The company's primary product in the cryptocurrency mining sector is the KOI MINER C16 ("C16"), an ASIC crypto miner launched in August 2021. The C16 is equipped with the C3012 chip, manufactured using Semiconductor Manufacturing International Corp.'s N+1 process, and boasts a hash rate of up to 113 TH/s and a power efficiency ratio of 30 J/T. This miner supports the mining of Bitcoin, Bitcoin Cash (BCH), and other cryptocurrencies, with its parameters stated to surpass competitors' models such as Bitmain's Antminer S19 Pro, Canaan's AvalonMiner1246, and MicroBT's Whatminer M30S++.

For the fiscal year ended December 31, 2024, AGM reported total revenues of $32,044,575 ¹, a significant decrease of 53.4% from $68,758,258 ² in 2023. Cost of revenues also decreased by 61.6% to $25,188,174 ³ from $65,605,382 ⁴ in the prior year. Gross profit for 2024 was $6,856,401 ⁵, resulting in a gross margin of 21.4% ⁶, a notable increase from 4.6% ⁷ in 2023. Operating income for 2024 stood at $5,947,359 ⁸, down from $15,820,560 ⁹ in 2023. Net income from continuing operations was $3,407,637 ¹⁰, and the company reported a net income of $3,119,095 ¹¹ for the year, translating to diluted EPS of $0.13 ¹². As of December 31, 2024, cash and cash equivalents and restricted cash totaled $1,178,970 ¹³, with working capital of $12,989,232 ¹⁴. Total liabilities were $33,013,668 ¹⁵, including $2,200,451 ¹⁶ due to related parties.

The decrease in total revenue for 2024 was primarily attributed to a reduction in sales contracts, the decision not to sell two main products, and postponed delivery dates, which delayed revenue recognition. Despite the revenue decline, the gross margin improved significantly due to increasing Bitcoin prices leading to higher selling prices for cryptocurrency mining machines, while procurement costs remained stable. Selling, general and administrative expenses were $909,042 ¹⁷ in 2024, an increase of $13.6 million ¹⁸ compared to 2023, mainly due to a reversal of allowance for credit losses of $15.5 million ¹⁹ recorded in 2023. The company also reported a loss from discontinued operations of $288,542 ²⁰ in 2024, a substantial improvement from the $18,855,185 ²¹ loss in 2023.

During the reported period, AGM engaged in a registered direct offering and concurrent private placement that closed on March 4, 2025, generating approximately $5.4 million ²² in gross proceeds. These proceeds are intended to fund a purchase agreement dated December 1, 2024, to acquire 2,000 Bitcoin mining machines for a total price of US$9.62 million ²³. The company also completed the sale of Nanjing Lucun Semiconductor Co., Ltd., a wholly-owned subsidiary, for a total transfer consideration of US$57,450,000 ²⁴ on May 6, 2025. Additionally, the company experienced multiple changes in its independent registered public accounting firm and faced delisting notices from Nasdaq due to non-compliance with minimum bid price requirements, though it regained compliance temporarily in September 2024 before receiving another delisting determination letter on April 1, 2025.

AGM Group Holdings Inc. plans to utilize the net proceeds from its recent offering, which generated approximately $5.4 million ²² in gross proceeds, primarily for the purchase of Bitcoin mining machines. Specifically, the company has a purchase agreement dated December 1, 2024, with a third-party vendor to acquire 2,000 Bitcoin mining machines for a total purchase price of US$9.62 million ²³. The company will pay 10% of this purchase price within fifteen business days of the vendor agreement date, with the remaining 90% due within fifteen business days upon receiving delivery notification. This acquisition is a key part of the company's strategy to strengthen its position in the technology hardware market.

Beyond the immediate purchase, the vendor agreement also includes an option for AGM to acquire up to approximately 30,000 ²⁵ additional mining units, exercisable until December 31, 2025 ²⁶. Any excess capital raised from the offering will be directed towards investments in data centers and working capital, indicating a broader strategy for infrastructure development and operational flexibility. The company's management retains broad discretion over the allocation of these net proceeds, acknowledging that actual expenditures may vary based on evolving business conditions and the difficulty in predicting product development costs.

The company aims to become an integrated technology company with a focus on blockchain-oriented ASIC chip design, advanced encryption mining machine production, and financial technology software services. This mission underscores a long-term growth strategy that involves continuous investment in technology and market expansion. For its ASIC business, the company relies on direct engagement by senior sales personnel to promote product attributes, functions, operation, and maintenance. Marketing efforts also include search engine marketing, search engine optimization, inherent virus marketing features within products, and social network marketing to target users, with the belief that brand value will rapidly develop due to the educational value of its products compared to competitors.

AGM's operational outlook includes addressing its liquidity needs and capital resources. As of December 31, 2024, the company had working capital of $13.0 million ¹⁴ and believes its current cash and cash generated from operations will be sufficient for at least the next twelve months. The company is not dependent on related parties for loans. However, the company expects to incur additional costs associated with being a public company in the United States, primarily due to increased expenses related to accounting and tax services, legal expenses, and investor and stockholder-related expenses. These additional long-term expenses may necessitate seeking other sources of financing, such as additional borrowings or public or private equity or debt capital.

The company currently intends to retain all available funds and future earnings for the operation and expansion of its business and does not anticipate declaring or paying any dividends in the foreseeable future. Any future dividend policy will be determined at the discretion of the Board of Directors, considering financial condition, results of operations, capital requirements, contractual obligations, and business prospects.

AGM Group Holdings Inc. faces a multitude of material risks spanning macroeconomic, competitive, regulatory, geopolitical, and operational domains. Macroeconomic and geopolitical risks include the potential adverse effects of epidemics, natural disasters, wars, terrorist activity, social unrest, and heightened travel security measures, as well as geopolitical uncertainty and international conflict, such as the Russia-Ukraine and Hamas-Israel conflicts, and rising tensions between China and Taiwan, which can affect travel volume and overall business operations. The company is also exposed to the evolving nature of the global economy, including interest rate environments, inflation, supply chain disruptions, labor shortages, and fluctuations in capital markets, which could negatively impact customer purchasing behavior and access to financing. Operationally, the company is highly dependent on its top three customers, which accounted for 64%, 21%, and 12% ²⁷ of total revenue in 2024, making it vulnerable to the loss or delayed payments from these significant clients. Similarly, reliance on a limited number of suppliers, with the top two accounting for 75% and 25% ²⁸ of total cost of revenues in 2024, poses risks related to delivery delays, cost increases, and the lengthy process of qualifying new suppliers. The company's business model is evolving within the rapidly changing cryptocurrency and blockchain technology hardware industry, requiring continuous innovation and adaptation to new technologies, with the risk of failing to identify and capitalize on emerging trends. Furthermore, the company has identified material weaknesses in its internal control over financial reporting, specifically a lack of personnel with appropriate U.S. GAAP accounting knowledge and experience, ineffective oversight, and inadequate design of internal controls, which remained unaddressed as of December 31, 2024. Regulatory risks are significant, particularly those related to operating in China, including evolving PRC laws and regulations, potential government intervention, and uncertainties regarding future approvals for overseas listings or offerings. The company believes it is not currently subject to certain cybersecurity review measures as it does not process over one million users' personal information, but acknowledges the uncertainty of future interpretations and implementations of these regulations. There is also a risk that the company could be classified as a "resident enterprise" in China, subjecting its worldwide income to a 25% ²⁹ PRC enterprise income tax rate, and potentially imposing a 10% ³⁰ withholding tax on dividends paid to non-PRC stockholders, with approximately 82% ³¹ of its revenue currently being non-China source income. The dual-class share structure concentrates voting control with certain shareholders, including executive officers and directors, limiting the influence of other shareholders. The company also faces delisting risk from Nasdaq due to its Class A ordinary shares falling below the minimum bid price requirement, having received a determination letter on April 1, 2025, for a closing bid price of $0.10 ³² or less for ten consecutive trading days.

Management's message to shareholders conveys a commitment to navigating the evolving technology landscape and strengthening the company's position within the global technology hardware supply chain and fintech blockchain ecosystem. The overall tone indicates a focus on strategic growth through product development and market expansion, as evidenced by the launch of the KOI MINER C16 and plans for future acquisitions of mining machines. Management explicitly stated its intention to use the net proceeds from the recent offering, approximately $5.4 million ²², to fund the purchase of 2,000 Bitcoin mining machines for US$9.62 million ²³, with an option to acquire up to 30,000 ²⁵ additional units by December 31, 2025 ²⁶. Strategic priorities include investing in data centers and working capital with any excess capital. Despite facing significant operational and regulatory challenges, including material weaknesses in internal controls and Nasdaq delisting notices, management is actively implementing measures to strengthen financial reporting and internal controls, such as hiring qualified personnel and establishing training programs. The company currently intends to retain all available funds and future earnings for business operations and expansion, and does not anticipate declaring or paying any dividends in the foreseeable future.