F-1: AGMH Seeks $6M Convertible Advance Amidst China Regulatory Scrutiny

AGM Group Holdings Inc. is seeking to raise up to $6 million through convertible advances while navigating complex Chinese regulatory landscapes and reporting improved Q2 2025 financial results.

Summary

• AGM Group Holdings Inc. (AGMH) is undertaking a proposed offering of up to US$6,000,000 in convertible advances, to be issued in three tranches.
• The first tranche involves US$1,500,000 at an 8% discount and US$500,000 at a 15% discount.
• The company will not receive proceeds from the sale of up to 7,649,160 Class A Ordinary Shares by the Selling Shareholder, L1 Capital Global Opportunities Master Fund, which are convertible from advances and pre-delivery shares.
• For the six months ended June 30, 2025, revenue from continuing operations significantly increased to US$20,309,043 from US$3,826,875 in the prior year period.
• Net loss from continuing operations substantially decreased to US$557,092 for the six months ended June 30, 2025, compared to US$14,015,220 for the same period in 2024.
• The company reported a total comprehensive income of US$9,101,420 for the six months ended June 30, 2025, a significant improvement from a loss of US$15,107,368 in the prior year.
• AGMH completed the sale of its subsidiary, Nanjing Lucun, on May 7, 2025, resulting in a loss on sale of US$7,851,720.
• The Board of Directors approved an increase in authorized shares from 8,000,000 to 90,000,000, effective October 2, 2025.

Sentiment

Score: 6

Explanation: While recent financial results show a strong rebound in revenue and a significant reduction in net loss for continuing operations, the company faces substantial and evolving regulatory risks in China, a material weakness in internal controls, and a history of volatile revenue. The capital raise provides necessary funding but also introduces dilution. The competitive product performance is a positive, but overall uncertainty remains high.

Positives

• Significant increase in revenue from continuing operations to US$20,309,043 for the six months ended June 30, 2025, compared to US$3,826,875 for the same period in 2024.
• Substantial reduction in net loss from continuing operations to US$557,092 for the six months ended June 30, 2025, from US$14,015,220 in the prior year.
• Achieved total comprehensive income of US$9,101,420 for the six months ended June 30, 2025, a positive swing from a US$15,107,368 loss in the same period of 2024.
• Nasdaq confirmed the company maintained compliance with listing rules through September 29, 2025, allowing continued listing.
• The company's PRC subsidiary, Beijing Bixin, has been duly incorporated and is validly existing as a limited liability company under PRC Laws, with its business license and articles of association valid and in full force.
• The KOI MINER C16 ASIC crypto miner boasts a hash rate up to 113 TH/s and power efficiency of 30 J/T, outperforming competitors like Bitmain's Antminer S19 pro, Canaan's AvalonMiner1246, and MicroBT's Whatminer M30S++.

Negatives

• Net cash used in operating activities increased significantly to US$5,577,823 for the six months ended June 30, 2025, from US$590,727 in the prior year.
• Cash and cash equivalents decreased to US$532,850 as of June 30, 2025, from US$1,233,764 as of June 30, 2024.
• The company recorded a loss of US$7,851,720 from the sale of its discontinued operation, Nanjing Lucun.
• Identified a material weakness in internal control over financial reporting due to a lack of personnel with appropriate accounting knowledge and experience, which persisted as of December 31, 2024.
• Revenue from continuing operations for the year ended December 31, 2024, declined significantly to US$32,044,575 from US$68,758,258 in 2023 and US$203,106,017 in 2022.
• The company is highly dependent on a limited number of customers (three customers accounted for 64%, 21%, and 12% of 2024 revenue) and suppliers (two suppliers accounted for 75% and 25% of 2024 cost of revenues).
• A contract dispute resulted in a trial court ruling against Beijing Bixin for RMB 733,987.98 (approximately US$102,107), which the company is appealing.

Risks

• Financial and operating performance may be adversely affected by epidemics, natural disasters, and other catastrophes.
• The company might require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
• Unauthorized disclosure of sensitive or confidential customer information or failure to comply with privacy laws could harm the business.
• Significant contributors to the Bitcoin network could propose amendments to its protocols and software, negatively impacting business.
• The company has an evolving business model subject to various uncertainties, and may not be able to manage growth effectively or identify emerging opportunities.
• The development and acceptance of cryptographic and algorithmic protocols governing cryptocurrencies is uncertain, and a decline in demand for Bitcoin could materially affect operations.
• Banks and financial institutions may cut off services to businesses engaged in Bitcoin-related activities.
• If any person or group obtains control of more than 50% of the processing power on the Bitcoin network, it could erode user confidence.
• The Bitcoin network's open-source nature may lead to inconsistent or ineffective changes, or forks in the blockchain, negatively affecting demand for mining machines.
• Marketing efforts may not be effective or cost-efficient, and successful marketing could lead to increased public scrutiny.
• The company may not adequately respond to price fluctuations and rapidly changing technology in the blockchain industry.
• Loss of major customers or delays in payments from them could adversely affect financial condition.
• Dependence on a limited number of suppliers poses risks of delays or cost increases.
• Failure to offer high-quality product support may adversely affect customer relationships and financial results.
• New lines of business or services may subject the company to additional risks, including difficulties in integration and regulatory compliance.
• Business depends on the continued efforts of senior management, and their loss could severely disrupt operations.
• Competition for qualified and skilled employees is intense.
• Lack of insurance could expose the company to significant costs and business disruption.
• The company is a holding company and relies on dividends from subsidiaries, which may be limited by PRC regulations or tax implications.
• The Chinese government exerts substantial influence over business activities, and changes in policies or denial of future approvals could hinder the ability to offer securities or cause their value to decline.
• PRC laws and regulations are evolving, and differences in interpretation and enforcement could limit legal protection.
• Strict procedures for acquisitions of Chinese companies by foreign investors (M&A Rules) could make growth through acquisitions difficult.
• Difficulty enforcing judgments obtained against the company due to its BVI incorporation and assets/management primarily outside the U.S.
• Exposure to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.
• Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of operations in China.
• Dividends payable to foreign investors and gains on sale of Class A Ordinary Shares by foreign investors may become subject to PRC tax law.
• Strict procedures on currency exchange may limit PRC investors' ability to make investments.
• More stringent criteria applied to emerging market companies' auditors by SEC and PCAOB could add uncertainties to trading of Class A Ordinary Shares.
• The dual-class voting structure concentrates control with certain shareholders, limiting other shareholders' influence.
• BVI laws provide little protection for minority shareholders.
• The market price of Class A Ordinary Shares may be volatile or decline regardless of operating performance.
• Extreme stock price volatility, unrelated to actual performance, may make it difficult for investors to assess value.
• As a foreign private issuer, disclosure obligations differ from U.S. domestic reporting companies, potentially providing less information or at different times.
• The company does not intend to pay dividends for the foreseeable future.
• Requirements of being a public company may strain resources and divert management attention.
• Public disclosure obligations may put the company at a disadvantage to private competitors.
• Securities analysts may not cover Class A Ordinary Shares, negatively impacting market price.
• Issuance of Class A Ordinary Shares upon conversion of outstanding advances could have a significant dilutive impact.

Future Outlook

The company intends to retain all available funds and future earnings for business operation and expansion, not anticipating declaring or paying any dividends in the foreseeable future. Future dividend policy will be determined by the Board of Directors based on financial condition, capital requirements, and business prospects. The company also plans to continue investing in infrastructure, research and development to enhance existing services and attract more users to its software.

Management Comments

• We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.
• We believe that we maintain a good working relationship with our employees, and we have not experienced any significant labor disputes.
• We believe that we may not be subject to the cybersecurity review by the CAC, pursuant to the Cybersecurity Review Measures and the Data Security Management Regulations, given that: (i) we presently maintain fewer than one (1) million individual customers in our business operations as of the date of this prospectus; and (ii) data processed in our business is less likely to have a bearing on national security, thus it may not be classified as core or important data by the authorities.
• We believe that we are required to complete filing procedures with the CSRC pursuant to the Trial Administrative Measures. We submitted the initial filing documents to the CSRC on October 9, 2023, and the CSRC published the notification on our completion of the required filing procedures on January 8, 2024 for this offering.

Industry Context

The company operates in the rapidly evolving cryptocurrency and blockchain technology hardware industry, characterized by fast technological changes and new product introductions. It faces intense competition from companies with varying business models and resources. The industry is also subject to significant governmental and quasi-governmental regulation, particularly in China, which can impact business operations and foreign investment. The acceptance and widespread use of Bitcoin and other cryptocurrencies remain uncertain, contributing to price volatility and potential shifts in demand.

Comparison to Industry Standards

• The company's KOI MINER C16 ASIC crypto miner, with a hash rate up to 113 TH/s and power efficiency of 30 J/T, surpasses competitors' models such as Bitmain's Antminer S19 pro (104 TH/s, 30 J/T), Canaan's AvalonMiner1246 (90 TH/s, 38 J/T), and MicroBT's Whatminer M30S++ (112 TH/s, 31 J/T). This indicates a competitive edge in product performance.

Management Changes

Corporate Governance

Legal Proceedings

• A claim was filed against Beijing Bixin for a contract dispute, with the trial court ruling against Beijing Bixin for RMB 733,987.98 (approximately US$102,107). The company has filed an appeal.

Related Party Transactions

• The company primarily finances its operations through proceeds borrowed from related parties, specifically HongKong Kisen Co., Limited (ultimately controlled by the Chief Strategy Officer).
• As of June 30, 2025, the outstanding amount due to HongKong Kisen was US$2,173,365.
• The company has outstanding loans to AGM Group Ltd. (US$1,350,000), Muliang Agriculture Limited (US$465,000), and Northnew Management Limited (US$3,095,426), all at a 1% interest rate.

Stakeholder Impact

• Shareholders face potential dilution from the convertible advances and resale of shares by the Selling Shareholder. The dual-class structure concentrates voting power, limiting influence for Class A shareholders. Reduced protection under BVI law compared to U.S. standards. Potential for volatility in share price due to market factors and regulatory uncertainties. No anticipated dividends in the foreseeable future.
• Employees are noted to have a good working relationship with management, and the 2025 Share Incentive Plan could provide benefits.
• Customers are a concentration risk, with a few major customers accounting for a significant portion of revenue. Maintaining high-quality product support is crucial for customer retention.
• Suppliers also represent a concentration risk, with a limited number accounting for a large portion of the cost of revenues, potentially leading to supply chain vulnerabilities.
• Creditors' ability to recover funds is tied to the company's financial performance and its ability to repatriate funds from PRC subsidiaries, which is subject to evolving PRC regulations and capital controls.

Next Steps

• Complete the filing procedure with the China Securities Regulatory Commission (CSRC) within three business days after the offering is completed.
• Submit a report and other required materials to the CSRC in due course after the offering.
• Apply for a tax resident certificate from the relevant Hong Kong tax authority when Beijing Bixin plans to declare and pay dividends to AGM HK, AGM Defi Tech, and AGM Electronic.
• Continue to monitor tax status regarding potential classification as a PRC resident enterprise.
• Continue to evaluate and potentially consummate strategic investments or acquisitions.
• Address the identified material weakness in internal control over financial reporting.
• Manage transitions to new technologies to remain competitive in the rapidly changing blockchain industry.

Key Dates

Recommendation

While the company has shown significant improvement in revenue and reduced net loss from continuing operations in the most recent interim period, and has a competitive product in the ASIC miner market, it faces substantial and evolving regulatory risks in China, a material weakness in internal controls, and a history of volatile annual revenue. The proposed convertible advance offering, while providing capital, also introduces potential dilution. The dual-class share structure concentrates voting power, limiting minority shareholder influence. Given the mixed financial signals, the high regulatory uncertainty, and corporate governance concerns, a 'hold' recommendation is appropriate for existing investors to monitor developments, while new investors should exercise caution due to the inherent risks.

Keywords

AGMH, Convertible Advance, SEC Filing, Financial Results, Cryptocurrency Mining, ASIC Miner, China Regulation, Corporate Governance, Risk Factors, Nasdaq Listing, Share Dilution, Technology Hardware, Blockchain, Foreign Private Issuer, Dual-Class Shares