UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2024
Commission File Number: 001-39127
Canaan Inc.
28 Ayer Rajah Crescent
#06-08
Singapore 139959
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
EXPLANATORY NOTE
We are submitting our latest interim financial statements as Exhibit 99.1
(the “Exhibit”) to this current report on Form 6-K. If there is any discrepancy between the numbers disclosed in the Exhibit and the numbers disclosed in the exhibit of our prior 6-Ks, the
number disclosed herein will supersede.
Exhibit 99.1 to this Form 6-K shall be deemed to be filed
with the Securities and Exchange Commission and incorporated by reference into the Company’s registration statement on
Form F-3 (File No. 333-278762), and shall be a part thereof, to the extent not superseded by documents or reports subsequently
filed or furnished.
Exhibit Index
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Canaan Inc. |
|
|
|
By: |
/s/
Nangeng Zhang |
|
Name: |
Nangeng Zhang |
|
Title: |
Chairman and Chief Executive Officer |
Date: September 3, 2024
Exhibit 99.1
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Consolidated Balance Sheets as of December 31,
2023 and June 30, 2024 |
F-2 |
Unaudited Consolidated Statements of Comprehensive Loss for
the six months ended June 30, 2023 and 2024 |
F-5 |
Unaudited Consolidated Statements of Cash Flows for the six
months ended June 30, 2023 and 2024 |
F-7 |
Notes to the Consolidated Financial Statements |
F-9 |
CANAAN INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
As of December 31, 2023 and June 30,
2024
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
| |
As
of December 31, | | |
As
of June 30, | |
| |
Note | |
2023 | | |
2024 | |
| |
| |
US$ | | |
US$ | |
ASSETS | |
| |
| | |
| |
Current assets: | |
| |
| | | |
| | |
Cash | |
2(b) | |
| 96,154 | | |
| 66,788 | |
Accounts receivable, net | |
| |
| 2,997 | | |
| 8,159 | |
Inventories | |
4 | |
| 142,287 | | |
| 131,297 | |
Prepayments and other current assets | |
5 | |
| 122,242 | | |
| 129,748 | |
Total current assets | |
| |
| 363,680 | | |
| 335,992 | |
Non-current assets: | |
| |
| | | |
| | |
Cryptocurrency | |
6 | |
| 28,342 | | |
| 37,198 | |
Pledged cryptocurrency receivable | |
9 | |
| — | | |
| 32,655 | |
Property, equipment and software, net | |
7 | |
| 29,466 | | |
| 42,267 | |
Intangible asset | |
| |
| — | | |
| 1,007 | |
Operating lease right-of-use assets | |
| |
| 1,690 | | |
| 3,719 | |
Deferred tax assets | |
| |
| 66,809 | | |
| 69,417 | |
Other non-current assets | |
| |
| 486 | | |
| 482 | |
Non-current financial investment | |
| |
| 2,824 | | |
| 2,806 | |
Total non-current assets | |
| |
| 129,617 | | |
| 189,551 | |
Total assets | |
| |
| 493,297 | | |
| 525,543 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| |
| | | |
| | |
Current liabilities: | |
| |
| | | |
| | |
Accounts payable | |
| |
| 6,245 | | |
| 29,936 | |
Contract liabilities | |
2(c) | |
| 19,614 | | |
| 50,585 | |
Income tax payable | |
| |
| 3,534 | | |
| 3,524 | |
Accrued liabilities and other current liabilities | |
8 | |
| 64,240 | | |
| 29,738 | |
Operating lease liabilities, current | |
| |
| 1,216 | | |
| 1,530 | |
Preferred Shares forward contract liability | |
12 | |
| 40,344 | | |
| — | |
Series A Convertible Preferred Shares | |
12 | |
| — | | |
| 1,514 | |
Total current liabilities | |
| |
| 135,193 | | |
| 116,827 | |
Non-current liabilities: | |
| |
| | | |
| | |
Long-term loans | |
9 | |
| — | | |
| 19,172 | |
Operating lease liabilities, non-current | |
| |
| 210 | | |
| 1,811 | |
Deferred tax liabilities | |
| |
| — | | |
| 171 | |
Other non-current liabilities | |
8 | |
| 9,707 | | |
| 9,362 | |
| |
| |
As
of December 31, | | |
As
of June 30, | |
| |
Note | |
2023 | | |
2024 | |
| |
| |
US$ | | |
US$ | |
Total non-current liabilities | |
| |
| 9,917 | | |
| 30,516 | |
Total liabilities | |
| |
| 145,110 | | |
| 147,343 | |
Contingencies (Note 17)
CANAAN INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS (CONTINUED)
As of December 31, 2023 and June 30,
2024
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
| |
As
of December 31, | | |
As
of June 30, | |
| |
Note | |
2023 | | |
2024 | |
| |
| |
US$ | | |
US$ | |
Shareholders’ equity: | |
| |
| | | |
| | |
Ordinary shares (US$0.00000005 par value; 999,999,875,000
and 999,999,875,000 shares authorized, 3,772,078,667 and 4,535,322,197 shares issued, 3,514,973,327 and 4,316,086,547 shares outstanding
as of December 31, 2023 and June 30, 2024, respectively) | |
11 | |
| — | | |
| — | |
Subscriptions receivable from shareholders | |
| |
| — | | |
| — | |
Treasury stocks (US$0.00000005 par value; 257,105,340 and
219,235,650 shares as of December 31, 2023 and June 30, 2024, respectively) | |
13 | |
| (57,055 | ) | |
| (57,055 | ) |
Additional paid-in capital | |
| |
| 653,860 | | |
| 755,239 | |
Statutory reserves | |
| |
| 14,892 | | |
| 14,892 | |
Accumulated other comprehensive loss | |
| |
| (43,879 | ) | |
| (52,865 | ) |
Accumulated deficit | |
| |
| (219,631 | ) | |
| (282,011 | ) |
Total shareholders’ equity | |
| |
| 348,187 | | |
| 378,200 | |
Total liabilities and shareholders’ equity | |
| |
| 493,297 | | |
| 525,543 | |
The accompanying notes are
an integral part of these consolidated financial statements.
CANAAN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
For the Six Months Ended June 30, 2023
and 2024
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
| |
For
the six months ended June 30, | |
| |
Note | |
2023 | | |
2024 | |
| |
| |
US$ | | |
US$ | |
Revenues | |
| |
| | |
| |
Products revenue | |
| |
| 102,054 | | |
| 85,197 | |
Mining revenue | |
| |
| 26,985 | | |
| 19,768 | |
Other revenues | |
| |
| 46 | | |
| 1,984 | |
Total Revenues | |
| |
| 129,085 | | |
| 106,949 | |
Cost of revenues | |
| |
| | | |
| | |
Products cost | |
| |
| (188,684 | ) | |
| (139,418 | ) |
Mining cost | |
| |
| (57,924 | ) | |
| (23,189 | ) |
Other cost | |
| |
| (98 | ) | |
| (799 | ) |
Total cost of revenues | |
| |
| (246,706 | ) | |
| (163,406 | ) |
Gross loss | |
| |
| (117,621 | ) | |
| (56,457 | ) |
Operating expenses: | |
| |
| | | |
| | |
Research and development expenses | |
| |
| (36,915 | ) | |
| (29,990 | ) |
Sales and marketing expenses | |
| |
| (3,922 | ) | |
| (2,651 | ) |
General and administrative expenses | |
| |
| (34,835 | ) | |
| (24,749 | ) |
Impairment on property, equipment and software | |
7 | |
| (9,111 | ) | |
| (798 | ) |
Impairment on cryptocurrency | |
6 | |
| (2,363 | ) | |
| — | |
Total operating expenses | |
| |
| (87,146 | ) | |
| (58,188 | ) |
Loss from operations | |
| |
| (204,767 | ) | |
| (114,645 | ) |
Interest income | |
| |
| 666 | | |
| 271 | |
Interest expense | |
| |
| — | | |
| (14 | ) |
Change in fair value of cryptocurrency | |
6 | |
| — | | |
| 28,457 | |
Change in fair value of financial instruments | |
12 | |
| — | | |
| 2,115 | |
Excess of fair value of Series A Convertible Preferred
Shares | |
| |
| — | | |
| (376 | ) |
Foreign exchange gains, net | |
| |
| 15 | | |
| 9,521 | |
Other income (expense), net | |
| |
| 1,254 | | |
| (7,710 | ) |
Loss before income tax expense | |
| |
| (202,832 | ) | |
| (82,381 | ) |
Income tax benefit | |
15 | |
| 7,797 | | |
| 1,108 | |
| |
| |
For
the six months ended June 30, | |
| |
Note | |
2023 | | |
2024 | |
| |
| |
US$ | | |
US$ | |
Net loss | |
| |
| (195,035 | ) | |
| (81,273 | ) |
Foreign currency translation adjustment,
net of nil tax | |
| |
| (14,360 | ) | |
| (8,986 | ) |
Total comprehensive loss | |
| |
| (209,395 | ) | |
| (90,259 | ) |
Weighted average number
of shares used in per Class A and Class B ordinary share calculation: | |
| |
| | | |
| | |
— Basic | |
16 | |
| 2,523,208,771 | | |
| 3,918,710,608 | |
— Diluted | |
16 | |
| 2,523,208,771 | | |
| 3,918,710,608 | |
Net loss per Class A and Class B ordinary share (cent
per share) | |
| |
| | | |
| | |
— Basic | |
16 | |
| (7.73 | ) | |
| (2.07 | ) |
— Diluted | |
16 | |
| (7.73 | ) | |
| (2.07 | ) |
Share-based compensation expenses were included in: | |
| |
| | | |
| | |
Cost of revenues | |
| |
| 126 | | |
| 116 | |
Research and development expenses | |
| |
| 4,776 | | |
| 3,567 | |
Sales and marketing expenses | |
| |
| 69 | | |
| 56 | |
General and administrative expenses | |
| |
| 18,709 | | |
| 10,697 | |
The accompanying notes are an integral part of
these consolidated financial statements.
CANAAN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2023
and 2024
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
For the six months
ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Cash flows from operating activities | |
| | | |
| | |
Net cash used in operating
activities | |
| (48,229 | ) | |
| (110,259 | ) |
Cash flows from investing activities: | |
| | | |
| | |
Purchase of property, equipment and software | |
| (1,962 | ) | |
| (2,921 | ) |
Proceeds from disposal of property, equipment and software | |
| — | | |
| 7,788 | |
Proceeds from disposal of cryptocurrency | |
| 22,974 | | |
| 31,805 | |
Payment for an acquisition, net of cash
acquired | |
| — | | |
| (1,030 | ) |
Net cash provided by investing activities | |
| 21,012 | | |
| 35,642 | |
Cash flows from financing activities: | |
| | | |
| | |
Proceeds from issuance of ordinary shares,
net of issuance costs under At-the-Market Offering Agreements | |
| 4,188 | | |
| — | |
Proceeds from issuance of series A convertible
preferred shares, net of issuance costs | |
| — | | |
| 49,860 | |
Proceeds from long-term borrowings, net
of issuance cost | |
| — | | |
| 7,920 | |
Proceeds from resale of treasury stock | |
| 1,406 | | |
| 572 | |
Repurchase for tax
withholdings on vesting of restricted share units | |
| (1,406 | ) | |
| (572 | ) |
Net cash provided by financing activities | |
| 4,188 | | |
| 57,780 | |
Net decrease in cash | |
| (23,029 | ) | |
| (16,837 | ) |
Effect of exchange rate changes on cash | |
| (12,384 | ) | |
| (12,529 | ) |
Cash at the beginning of period | |
| 101,551 | | |
| 96,154 | |
Cash at the end of period | |
| 66,138 | | |
| 66,788 | |
CANAAN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2023
and 2024
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
For the
six months ended June 30, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Supplemental disclosure of cash flow information: | |
| | |
| |
Cash paid for income tax | |
| 2,893 | | |
| 48 | |
Supplemental disclosure of non-cash investing and financing activities: | |
| | | |
| | |
Mining equipment transfer from inventory to property, equipment
and software | |
| 7,209 | | |
| 27,541 | |
Accrued tax withholdings on vesting of restricted share units | |
| 1,406 | | |
| 572 | |
Revenue recognized on acceptance of cryptocurrency | |
| 44,462 | | |
| 33,791 | |
Cost of revenues recognized on payment of cryptocurrency | |
| 8,119 | | |
| 3,851 | |
Cryptocurrency received as customer deposits | |
| 10,106 | | |
| - | |
Pledged cryptocurrency derecognized under long-term loans agreements | |
| - | | |
| 37,316 | |
Return of cryptocurrency | |
| - | | |
| 10,561 | |
Cryptocurrency received under long-term loans agreements | |
| - | | |
| 11,248 | |
Conversion of series A convertible preferred shares into Class A
ordinary shares | |
| - | | |
| 86,715 | |
Issuance of ordinary shares pursuant to share lending arrangement | |
| - | | |
| 236 | |
The accompanying notes are an integral part of
these consolidated financial statements.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| 1. | Organization and principal activities |
Canaan Inc., an exempted company with
limited liability incorporated in the Cayman Islands, through wholly-owned subsidiaries (collectively referred to as the “Company”),
is principally engaged in integrated circuit (the “IC”) design and sale and lease of final mining equipment by integrating
its IC products for Bitcoin mining and related components in the People’s Republic of China (the “PRC”), Singapore
and other countries and regions.
| 2. | Summary of significant accounting policies |
The accompanying unaudited condensed consolidated financial
statements of Canaan Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial
statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the U.S.
Securities and Exchange Commission (“SEC”). The consolidated balance sheet as of December 31, 2023 was derived from
the audited consolidated financial statements of the Company. The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31,
2023.
In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30,
2024, the results of operations and cash flows for the six months ended June 30, 2023 and 2024, have been made.
The preparation of the unaudited
condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet dates,
and the reported revenues and expenses during the reported periods.
The Company believes that accounting
estimation of variable consideration for revenue recognition, valuation of series A convertible preferred shares, preferred shares forward
contract liability, pre-delivery shares, deferred tax assets, write-down for inventories and prepayments, provision for reserve for inventory
purchase commitments, valuation and recognition of share-based compensation, impairment on cryptocurrency, fair value of cryptocurrency,
fair value of derivative assets and liabilities and impairment of property, equipment and software reflect significant judgments and
estimates used in the preparation of its consolidated financial statements.
Management bases the estimates on
historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed
to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual
results could materially differ from these estimates.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Cash represents bank deposits placed
with banks or other financial institutions, which are unrestricted as to withdrawal or use.
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
RMB denominated bank deposits with financial institutions in the PRC | |
| 10,098 | | |
| 22,129 | |
US dollar denominated bank deposits with financial institutions in the PRC | |
| 37,170 | | |
| 3,569 | |
Others denominated bank deposits with financial institutions in the PRC | |
| 32 | | |
| 139 | |
Subtotal | |
| 47,300 | | |
| 25,837 | |
US dollar denominated bank deposits with overseas financial institutions | |
| 46,522 | | |
| 36,420 | |
RMB denominated bank deposits with overseas financial institutions | |
| 7 | | |
| 6 | |
Others denominated bank deposits with overseas financial institutions | |
| 2,325 | | |
| 4,525 | |
Total | |
| 96,154 | | |
| 66,788 | |
The bank deposits with financial institutions
in the mainland of the PRC, Hong Kong, United States, Singapore and Kahzakhstan are insured by the government authorities up to RMB500,
HKD500, US$250, SGD75 and KZT15,000 per bank, respectively. The bank deposits including term deposits and restricted cash are insured
by the government authorities with amounts up to US$3,013 and US$2,901 as of December 31, 2023 and June 30, 2024, respectively.
The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks
on cash held in bank accounts. To limit exposure to credit risk, the Company primarily places bank deposits with large financial institutions
in the PRC mainland, Hong Kong, United States, Singapore and Kahzakhstan with acceptable credit rating.
The prepayments received from customers
as of December 31, 2023 and June 30, 2024 was US$19,614 and US$50,585, respectively. The revenue recognized during the six
months ended June 30, 2023 and 2024 for the beginning balance of contract liability was US$380 and US$10,024, respectively.
Effective January 1, 2024, the
Company early adopted ASU 2023-08, resulting in US$18,893 increase to cryptocurrency and US$18,893 decrease to accumulated deficit
on the Consolidated Balance Sheets as of the beginning of the fiscal year ended December 31, 2024.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
As a result of adopting ASU 2023-08,
the Company measures cryptocurrency at fair value as of each reporting period in accordance with ASC 820, Fair Value Measurement (“ASC
820”), based on quoted prices on the active trading platform that the Company normally transacts and has determined is its principal
market for bitcoin (Level 1 inputs), based on all information that is reasonably available. Since bitcoin is traded on a 24-hour period,
the Company utilizes the price at the start of day Coordinated Universal Time (00:00:00 UTC), which aligns with the Company's revenue
recognition policy. Gains and losses from the remeasurement of cryptocurrencyare included within change in fair value of cryptocurrency,
net in the consolidated statements of comprehensive loss. The Company sells cryptocurrency and gains and losses from such transactions,
measured as the difference between the cash proceeds and the carrying basis of cryptocurrency as determined on a first-in-first-out basis,
are also included within change in fair value of cryptocurrencyin the consolidated statements of comprehensive loss. The Company recorded
change in fair value of cryptocurrencyof $28.5 million during the six months ended June 30, 2024.
| (e) | Pledged cryptocurrency
receivable |
The Company enters into borrowing
arrangements that require the Company to pledge collateral in the form of cryptocurrency. If the lender obtains control or has the right
to sell, pledge, or rehypothecate the Company’s collateral, the Company derecognizes the pledged bitcoins, and recognizes a receivable
from the lender when pledge was made. Pledged cryptocurrency receivable which will be released within one year is included in the current
assets and which will be released over one year is included in the non-current assets. Pledged cryptocurrency receivable are initially
and subsequently measured at the fair value. Changes in fair value are recorded in other income (expenses), net. If the lender does not
obtain control or have the right to sell, pledge, or rehypothecate the collateral, the pledged bitcoins does not meet the derecognition
criteria and is recorded in cryptocurrency, restricted.
Long-term loans are carried at amortized
cost. Transaction costs are recorded as direct deductions from the related loan liabilities and amortized to interest expense using the
effective interest method over the terms of the loan term loan. Interest expense on debt includes long-term loan interest expense, as
well as amortization of debt issuance costs.
Cryptocurrency borrowings are accounted
for as hybrid instruments, with a dollar-denominated debt host contract that contains an embedded derivative. The initial fair value
of the embedded derivative is zero and subsequently measured at the fair value, with changes in fair value recognized in other income
(expense), net .
The Company may enter into arrangements
that result in obtaining the right to receive or obligation to deliver a fixed amount of cryptocurrency in the future. Such arrangements
are accounted as hybrid instruments, consisting of a receivable or debt host contract that is initially measured at the fair value of
the underlying cryptocurrency and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in
the fair value of the underlying cryptocurrency. The embedded forward is bifurcated from the host contract, and is subsequently measured
at fair value. The Company presents the embedded derivative instrument together with the host contract.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| 3. | Risks and concentration |
| (a) | Concentration of credit risk |
As of December 31, 2023 and June 30, 2024, accounts
receivable were US$2,997 and US$8,159, respectively.
Accounts receivable concentration of credit risk is as
below:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Customer A | |
| 97 | % | |
| — | |
Customer B | |
| — | | |
| 51 | % |
Customer C | |
| — | | |
| 32 | % |
Customer D | |
| * | | |
| 13 | % |
* Less
than 10%
For the six months ended June 30, 2023 and 2024, customers
which contributed more than 10% of total revenue are as below:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Customer A | |
| 11 | % | |
| * | |
Customer B | |
| — | | |
| 13 | % |
Customer C | |
| — | | |
| 13 | % |
* Less
than 10%
| (b) | Supplier concentration |
For the six months ended June 30,
2023 and 2024 the Company’s purchases substantially all its integrated circuits from one supplier.
Although only a limited number of
manufacturers for such integrated circuits are available, management believes that they could change their suppliers within these manufacturers
which provided integrated circuits on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible
loss of sales, which would affect operating results adversely.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Inventories consist of the following:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Raw materials | |
| 95,065 | | |
| 69,022 | |
Work in process | |
| 15,898 | | |
| 6,783 | |
Finished goods | |
| 31,324 | | |
| 55,492 | |
Total | |
| 142,287 | | |
| 131,297 | |
During the six months ended June 30,
2023 and 2024, the Company recorded write-down of US$78,428 and US$89,929 in cost of revenues, respectively.
| 5. | Prepayments and other current assets |
The prepayments and other current assets consist
of the following:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Prepayments and other current assets | |
| | | |
| | |
Prepayments to vendors (Note a) | |
| 46,277 | | |
| 60,926 | |
VAT recoverable and refund | |
| 55,403 | | |
| 51,513 | |
Deferred charges | |
| 7,546 | | |
| 5,653 | |
Deposits | |
| 3,746 | | |
| 3,341 | |
Others | |
| 9,270 | | |
| 8,315 | |
Total | |
| 122,242 | | |
| 129,748 | |
Note a: Prepayments to vendors mainly
represent prepayments made to third-party suppliers for foundry service. The Company also records a provision for the prepayment to third-party
suppliers when the Company believes that the net realizable value (being the estimated selling price of final products, less the costs
of completion and selling expenses) is less than carrying amount. During the six months ended June 30, 2023 and 2024, the Company
recorded write-downs of US$267 and US$9,696 for the prepayment to third-party suppliers in cost of revenues.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
The following table presents the Company’s
cryptocurrency holdings as of June 30, 2024 and December 31, 2023, respectively:
| |
As
of June 30, 2024 | | |
As
of December 31,
2023 | |
(in thousands, except for quantity) | |
Quantity | | |
Cost Basis | | |
Fair Value | | |
Carrying
Value | |
Bitcoin | |
| 604 | | |
| 27,152 | | |
| 37,184 | | |
| 26,867 | |
Others | |
| 1,964 | | |
| 9 | | |
| 14 | | |
| 1,475 | |
Total Cryptocurrency | |
| | | |
| 27,161 | | |
| 37,198 | | |
| 28,342 | |
Note:
Prior to the adoption of ASU 2023-08 on January 1, 2024, the carrying value of cryptocurrency represents the post-impairment value
of all cryptocurrency held. After the adoption of ASU 2023-08 the cost basis of cryptocurrency represents the fair value of cryptocurrency
at the time of service contract inception. The Company has adopted an accounting policy to aggregate individual contracts with individual
terms less than 24 hours within each intraday period and apply a consistent valuation point, the start of day Coordinated Universal Time
(00:00:00 UTC), to value the Bitcoin received.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Additional information about cryptocurrency consists
of the following:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Beginning Balance | |
| 12,531 | | |
| 28,342 | |
Cumulative effect of the adoption of ASU 2023-08 | |
| — | | |
| 18,893 | |
Revenue recognized on acceptance of cryptocurrency | |
| 44,462 | | |
| 33,791 | |
Cryptocurrency received under long-term loans agreements | |
| — | | |
| 11,248 | |
Cryptocurrency received as customer deposits | |
| 10,106 | | |
| — | |
Pledged cryptocurrency derecognized under long-term loans agreements | |
| — | | |
| (37,316 | ) |
Return of cryptocurrency | |
| — | | |
| (10,561 | ) |
Cost of revenues recognized on payment of cryptocurrency | |
| (8,119 | ) | |
| (3,851 | ) |
Proceeds from disposal of cryptocurrency | |
| (22,974 | ) | |
| (31,805 | ) |
Change in fair value of cryptocurrency | |
| — | | |
| 28,457 | |
Realized gain on disposal of cryptocurrency | |
| (4,878 | ) | |
| — | |
Impairment | |
| (2,363 | ) | |
| — | |
Ending Balance | |
| 28,765 | | |
| 37,198 | |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| 7. | Property, equipment and software, net |
Property, equipment and software consist of the
following:
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Cost: | |
| | | |
| | |
Mining equipment | |
| 95,215 | | |
| 83,514 | |
Computers and electronic equipment | |
| 10,940 | | |
| 10,079 | |
Leasehold improvements | |
| 5,772 | | |
| 5,035 | |
Mechanical equipment | |
| 114 | | |
| 113 | |
Software | |
| 3,283 | | |
| 3,529 | |
Construction in progress | |
| — | | |
| 8,334 | |
Motor vehicles | |
| 243 | | |
| 243 | |
Land | |
| — | | |
| 120 | |
Total cost | |
| 115,567 | | |
| 110,967 | |
Less: Accumulated depreciation and amortization | |
| (86,101 | ) | |
| (68,700 | ) |
Property, equipment and software, net | |
| 29,466 | | |
| 42,267 | |
Depreciation
expense during the six months ended June 30, 2023 and 2024 was US$35,284 and US$13,034, respectively. The Company recognized impairment
of US$9,111 and US$798 during the six months ended June 30, 2023 and 2024, respectively.
| 8. | Accrued liabilities and other liabilities |
| |
As of December 31, | | |
As of June 30, | |
| |
2023 | | |
2024 | |
Accrued liabilities and other current liabilities | |
| | | |
| | |
Salary and welfare payable | |
| 19,623 | | |
| 9,295 | |
Other tax payables | |
| 7,019 | | |
| 6,963 | |
Customer refund | |
| 3,812 | | |
| 3,792 | |
VAT received from customers related to contract liabilities | |
| 1,429 | | |
| 1,720 | |
Customer deposits | |
| 7,185 | | |
| 1,190 | |
Provision for reserve for inventory purchase commitments (Note a) | |
| 20,706 | | |
| — | |
Warranty reserve (Note b) | |
| 878 | | |
| 387 | |
Professional services payable | |
| 56 | | |
| 2,156 | |
Others | |
| 3,532 | | |
| 4,235 | |
Total | |
| 64,240 | | |
| 29,738 | |
Other non-current liabilities | |
| | | |
| | |
Deferred government grant | |
| 9,191 | | |
| 9,134 | |
Refund from deposit bank - non-current | |
| 516 | | |
| 228 | |
Total | |
| 9,707 | | |
| 9,362 | |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Note a: The Company
entered into several contracts to purchase foundry service. These contracts represent firm purchase commitments which are evaluated for
potential losses. As of December 31, 2023 and June 30, 2024, the Company’s purchase obligation to third-party suppliers
for foundry service was US$42,904 and nil, respectively.
In connection
with the preparation of the Company’s consolidated financial statements for the six months ended June 30, 2024 the Company
assessed the loss contingency under the foundry service contracts taking into account the estimated selling price of mining equipment.
The provision was determined by applying a methodology similar to that used in the lower of cost or net realizable value with respect
to inventory, using estimates of the costs to convert raw materials into final products in order to determine net realizable value. During
the six months ended June 30, 2023 and 2024, a provision of US$25,477 and nil has been recognized in cost of revenues for the Company’s
inventory purchase commitments under foundry service contracts as a result of the decline in the estimated selling price of mining equipment
based on the most recent subsequent selling price.
Note b: For mining
equipment, the Company provides its customers for 360 days warranty, subject to certain conditions, such as normal use. The Company provides
for the estimated costs of warranties at the time revenue is recognized. Factors that affect the Company’s warranty obligation include
product defect rates and costs of repair or replacement.
Movement of warranty
reserve is as follows:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Beginning Balance | |
| 1,716 | | |
| 878 | |
Accrual for warranties issued during the period | |
| 82 | | |
| 1,586 | |
Warranty claims paid | |
| (526 | ) | |
| (1,585 | ) |
Warranty expired | |
| (907 | ) | |
| (456 | ) |
Foreign currency translation adjustment | |
| (44 | ) | |
| (36 | ) |
Ending Balance | |
| 321 | | |
| 387 | |
On June 12, 2024, the Company, through
a wholly-owned subsidiary, entered into Master Loan and Pledge Agreements (the “Agreements”) with a third party (the “Lender”).
Pursuant to the Agreements, the Lender will provide loans in tranches in USDT (also known as Tether, a stablecoin pegged to the U.S. Dollar)
with a term of 18-month and an interest rate of 2.75% per annum. The Agreements also require the Company to transfer certain amounts of
its Bitcoins to the Lender as collateral, and the loan amount will be 68% of the then-current fair market value (the “Loan-to-Value
Ratio”) of the pledged Bitcoins. If the fair market value of Bitcoins fallen to below 70% of the fair market value at the loan receipt
date, the Company is required to add Collateral. The repayment of the loan principal may be made in USD, USDT or if mutually agreed upon
in writing prior to repayment, any other digital currency.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Pursuant to the Agreements, in June 2024, the Company pledged 330 Bitcoins as collateral to the Lender with a fair value of US$21,041
at closing and obtained a loan with principal amount of 14,308,156 USDT. The net
proceeds received in June 2024, after deducting issuance cost of 178,615 USDT, were 11,252,124 USDT (with a fair value of US$11,248).
The issuance costs are reported as a direct deduction from the principal of the associated loan. The remaining net proceeds of 2,769,869
USDT (with a fair value of US$2,765), after deducting issuance cost of 107,548 USDT, were subsequently received in July 2024. For the
six months ended June 30, 2024, the Company was not required to add additional Bitcoins as collateral.
On June 21, 2024, the Company, through
a wholly-owned subsidiary, entered into a Master Loan Agreement (the “Agreement 2”) with another third party (the “Lender
2”). Pursuant to the Agreement 2, the Lender 2 will provide a loan in amount of US$8,041 with a term of 18-months and an interest
rate of 6.75% per annum. The Agreement also requires the Company to transfer 200 Bitcoins to the Lender 2 as collateral. If the fair market
value of Bitcoin fallen such that the Loan-to-Value Ratio equals or exceeds 80%, the Company is required to add Collateral.
Pursuant to the Agreement 2, in June 2024,
the Company pledged 200 Bitcoins as collateral to the Lender 2 with a fair value of US$12,370 at closing and obtained a loan in amount
of US$8,041. The net proceeds received in June 2024, after deducting issuance costs of US$121, were US$7,920. The issuance costs
are reported as a direct deduction from the principal of the associated loan. For the six months ended June 30, 2024, the Company
was not required to add additional Bitcoins as collateral.
Interest expense pertaining to the above
loans amounted to US$14 was recorded for the six months ended June 30, 2024.
Pledged cyptocurrency receivable
The following table presents the Company’s
pledged cypotocurrency receivable as of June 30, 2024:
| |
As of June 30,
2024 | |
(in thousands, except for quantity) | |
Quantity | | |
Fair Value | |
Bitcoin Receivable | |
| 530 | | |
| 32,655 | |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
During the periods presented, the Company’s
derivatives were all embedded forward contracts to receive or deliver a fixed amount of cryptocurrency in the future.
Impact of derivatives on the Consolidated
Balance Sheets
The following table summarizes the balance
sheet impact of derivative instruments outstanding as of June 30, 2024 and December 31, 2023 as measured in U.S. dollar equivalents,
none of which were designated as hedging instruments at June 30, 2024:
Consolidated Balance
Sheets Location | |
Notional | | |
Derivative Fair Value | | |
Total | |
June 30, 2024 | |
| | |
| | |
| |
Pledged cryptocurrency receivable | |
| 37,316 | | |
| (4,661 | ) | |
| 32,655 | |
Accrued liabilities and other current liabilities (1) | |
| 514 | | |
| 676 | | |
| 1,190 | |
Accounts payable (1) | |
| 512 | | |
| * | | |
| 512 | |
Long-term loans (1) | |
| 11,248 | | |
| 4 | | |
| 11,252 | |
December 31, 2023 | |
| | | |
| | | |
| | |
Accrued liabilities and other current liabilities (1) | |
| 4,503 | | |
| 2,682 | | |
| 7,185 | |
| (1) | Represents the portion of the Consolidated Balance Sheet line item that is denominated in cryptocurrency. |
Impact of derivatives on the Consolidated
Statements of Comprehensive Loss
Gains and losses on derivative instruments
recorded in other income (expense), net, in the Consolidated Statements of Comprehensive Loss were as follows:
| |
For the six months ended June 30, | |
| |
2024 | | |
2023 | |
Pledged cryptocurrency receivable | |
| (4,661 | ) | |
| - | |
Accrued liabilities and other current liabilities | |
| (4,566 | ) | |
| (1,398 | ) |
Accounts payable | |
| (776) | | |
| 824 | |
Long-term loans | |
| (4) | | |
| - | |
Total | |
| (10,007 | ) | |
| (574 | ) |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
The Company’s derivative assets
and liabilities measured and recorded at fair value on a recurring basis are classified within Level 2 of the fair value hierarchy. The
Company has valued all Level 2 assets and liabilities based on quoted market prices for the underlying cryptocurrency.
As of June 30, 2024, the authorized
ordinary shares are 999,999,875,000, of which 4,535,322,197 shares were issued and 4,316,086,547 shares were outstanding. These outstanding
shares consist of (1) 4,004,462,103 Class A ordinary shares and (2) 311,624,444 Class B ordinary shares, which were
held by the Chairman and CEO of the Company.
At-the-Market Offering Agreements
On April 8, 2022, the Company
entered into an At-the-market offering agreement, providing for a potential at-the-market equity offering program, with H.C. Wainwright &
Co., LLC. For the six months ended June 30, 2023, the Company issued 1,532,219 ADSs (22,983,285 Class A ordinary shares) with
net proceeds of US$4,188. Effective November 10, 2023, the Company terminated its at-the-market offering agreement with H.C. Wainwright &
Co., LLC.
12. |
Series A Convertible Preferred Shares |
On November 27, 2023, the Company
entered into a Securities Purchase Agreement with an institutional investor (the “Buyer”), pursuant to which the Company shall
issue and sell to the Buyer up to 125,000 Series A Convertible Preferred Shares (the “Preferred Shares”) in three tranches
at the price of US$1,000 for each Preferred Share. According to the Securities Purchase Agreement, the Company will issue 25,000 Preferred
Shares (“First Tranche”) to the Buyer on the closing date of the First Tranche (“First Closing Date”). Upon the
First Closing Date, the Company is obligated to issue a number of Preferred Shares (“Second Tranche”) that is not less than
25,000 and not more than 50,000 (the “Forward Contract Liabilities”). The closing of the third tranche of preferred shares
financing (the “Third Tranche”), would be contingent upon mutual agreement between the Company and the Buyer. The Company
is not obliged to sell nor is the Buyer obliged to purchase the Third Tranche. In connection with the issuance of the Preferred Shares,
the Company also is required to deliver 8,000,000 ADSs (120,000,000 Class A ordinary shares) collectively as pre-delivery shares
(the "Pre-delivery Shares") to the Buyer. The Pre-delivery Shares shall be returned to the Company when the Buyer does not hold
any preferred shares.
As of December 31, 2023, all the
First Tranche of the Preferred Shares have been converted to Class A ordinary shares of the Company. On January 22, 2024, the
Company completed the second tranche of the preferred shares financing. Pursuant to the Second Tranche Preferred Shares Financing, the
Company issued 50,000 Preferred Shares in total at the price of US$1,000.00 per Preferred Share and caused The Bank of New York Mellon
to deliver an additional 2,800,000 ADSs collectively as pre-delivery shares (the “Pre-delivery Shares”), each representing
fifteen Class A ordinary shares of the Company, at the price of US$0.00000075 for each ADS.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
The fair value of the Second Tranche
(US$68,496), Forward Contract Liabilities (US$18,496) and Pre-delivery Shares (US$236) upon issuance date in aggregate exceeded the net
proceeds from the financing (US$49,860) by US$376, which was recognized as the excess of fair value of Series A Convertible Preferred
Shares financing for the six months ended June 30, 2024.
For the six months ended June 30, 2024, 49,000 out
of the 50,000 Preferred Shares issued pursuant to the Second Tranche were converted to 48,082,902 outstanding ADSs (721,243,530 Class A
ordinary shares) at the conversion prices from $0.73 to $1.31, which are the lower of US$1.81 and 92.5% of the lowest daily average market
price over 5 days before the conversion. The fair value of the Second Tranche upon the conversion dates was US$86,715, and the change
in fair value of the Second Tranche was US$19,733 for the six months ended June 30, 2024.
The movement of Preferred Shares and
Forward Contract Liability for the six months ended June 30, 2024 consist of the followings:
| |
Forward Contract
Liabilities | | |
Second
Tranche | |
Beginning balance as of January 1, 2024 | |
| 40,344 | | |
| — | |
Fair value upon issuance | |
| — | | |
| 50,000 | |
Change in fair value | |
| (21,848 | ) | |
| 19,733 | |
Conversion to second tranche | |
| (18,496 | ) | |
| — | |
Converted from forward contract liabilities | |
| — | | |
| 18,496 | |
Conversion to outstanding ADSs | |
| — | | |
| (86,715 | ) |
Ending balance as of June 30, 2024 | |
| — | | |
| 1,514 | |
The Company estimate the fair value of
Second Tranche using the Monte Carlo model, which involves significant assumptions including the risk-free interest rate, the expected
volatility and expected bond yield. The Company classifies the valuation techniques that use these inputs as Level 3.
| |
Fair Value of Second Tranche | |
| |
January 22, 2024
(issuance date) | | |
January 26, 2024
to April 24, 2024
(remeasurement
dates) | |
Risk Free Rate | |
| 4.77 | % | |
| 4.77%-5.00% | |
Volatility | |
| 96.44 | % | |
| 96.03%-110.00% | |
Expected bond yield | |
| 9.35 | % | |
| 7.68%-9.53% | |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Amended 2018 Plan
Under the Amended 2018 Plan, the Company withholds the shares
issued to the employees to meet the income tax withholding requirement upon the vesting of the Restricted share units. For the six months
ended June 30, 2023, the Company withheld 7,923,090 Class A ordinary shares for US$1,406 and sold 7,923,090 Class A ordinary
shares for US$1,406. For the six months ended June 30, 2024, the Company withheld 5,530,665 Class A ordinary shares for US$572
and sold 5,530,665 Class A ordinary shares for US$572. The Company did not retire any of the repurchased Class A ordinary shares.
For the six months ended June 30, 2023, 9,867,045 restricted share units were transferred from treasury stock to ordinary shares
upon vesting under the Amended 2018 Plan. For the six months ended June 30, 2024, no restricted share units were transferred from
treasury stock to ordinary shares upon vesting under the Amended 2018 Plan.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
Share Repurchase Program
Effective March 16, 2022,
the Board of Directors approved a share repurchase program to repurchase in the open market up to US$100 million worth of its
outstanding (i) American depositary shares, each representing 15 Class A ordinary shares, and/or (ii) Class A
ordinary shares over the next 24 months starting from March 16, 2022 depending on a number of factors, including, but not
limited to, price, trading volume and general market conditions, along with Canaan’s working capital requirements and general
business conditions, the relevant rules under United States securities laws and regulations, and the relevant stock exchange
rules. During the six months ended June 30, 2023 and 2024, no outstanding ADSs were repurchased. For the six months ended
June 30, 2023 and 2024, 21,712,110 and 37,869,690 restricted share units were transferred from treasury stock to ordinary
shares upon vesting, respectively.
| 14. | Share-based compensation |
The following table summarizes restricted
share units (“RSUs”) activity during the six month ended June 30, 2024:
| |
Number of shares | | |
Weighted average grant date fair value | |
| |
| | |
US$ | |
Outstanding as of January 1, 2024 | |
| 146,954,430 | | |
| 0.35 | |
| |
| | | |
| | |
Granted | |
| 183,038,355 | | |
| 0.09 | |
Forfeited | |
| (17,139,180 | ) | |
| 0.24 | |
Vested | |
| (37,869,690 | ) | |
| 0.59 | |
Outstanding as of June 30, 2024 | |
| 274,983,915 | | |
| 0.15 | |
The Company recorded an income
tax benefit of US$7,797 and US$1,108 for the six months ended June 30, 2023 and 2024, representing effective tax rates of 3.8%
and 1.3%, respectively.
The effective income tax rate of 1.3%
in 2024 was lower than the statutory income tax rate of 25.0% which was primarily due to (i) additional valuation allowances provided;
(ii) preferential tax rate of 15% applicable to Canaan Creative and Canaan Creative (SH) in 2024. The effective income tax rate of
3.8% in 2023 was lower than the statutory income tax rate of 25.0% which was primarily due to preferential tax rate of 15% applicable
to Canaan Creative in 2023.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| 16. | Basic and diluted loss per share |
Basic and diluted loss per share have
been calculated in accordance with ASC 260 on computation of loss per share for the six months ended June 30, 2023 and 2024, as follows:
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Basic loss per share calculation | |
| | | |
| | |
Numerator: | |
| | | |
| | |
Net loss | |
| (195,035 | ) | |
| (81,273 | ) |
Denominator: | |
| | | |
| | |
Weighted-average ordinary shares outstanding | |
| 2,523,208,771 | | |
| 3,918,710,608 | |
Basic loss per Class A and Class B ordinary share (US$ cent per share) | |
| (7.73 | ) | |
| (2.07 | ) |
| |
For the six months ended June 30, | |
| |
2023 | | |
2024 | |
Diluted loss per share calculation | |
| | | |
| | |
Numerator: | |
| | | |
| | |
Net loss | |
| (195,035 | ) | |
| (81,273 | ) |
Denominator: | |
| | | |
| | |
Weighted-average ordinary shares outstanding | |
| 2,523,208,771 | | |
| 3,918,710,608 | |
Add: weighted-average RSUs | |
| — | | |
| — | |
Weighted-average number of shares used in calculating diluted earnings per Class A and Class B ordinary share | |
| 2,523,208,771 | | |
| 3,918,710,608 | |
Diluted loss per Class A and Class B ordinary share (US$ cent per share) | |
| (7.73 | ) | |
| (2.07 | ) |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
The Company is and, from time to time,
may in the future become, involved in other legal proceedings in the ordinary course of business. The Company currently believes that
the outcome of any of these existing legal proceedings, either individually or in the aggregate, will not have a material impact on the
operating results, financial condition or cash flows of the Company. With respect to existing legal proceedings, the Company has either
determined that the existence of a material loss is not reasonably possible or that it is unable to estimate a reasonably possible loss
or range of loss. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings.
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| 18. | Changes in shareholders’ equity |
|
|
| |
Ordinary
shares | |
| |
Treasury
stocks | |
| |
| |
Accumulated | |
| |
| |
|
|
Note | |
Number
of
Shares | |
Amount | |
Subscription
receivables from
shareholders | |
Number
of
Shares | |
Amount | |
Additional
paid-in capital | |
Statutory
reserves | |
other
comprehensive loss | |
Accumulated
deficit | |
Total
shareholders’ equity | |
Balance
as of January 1, 2023 |
|
| |
2,496,001,757 | |
— | |
— | |
308,136,735 | |
(57,055 | ) |
492,220 | |
14,892 | |
(36,913 | ) |
194,522 | |
607,666 | |
Issuance
of ordinary shares in at-the-market offering, net of offering cost |
|
11 | |
22,983,285 | |
— | |
— | |
— | |
— | |
4,188 | |
— | |
— | |
— | |
4,188 | |
Share-based
compensation expense |
|
| |
— | |
— | |
— | |
— | |
— | |
23,680 | |
— | |
— | |
— | |
23,680 | |
Repurchase
of vested employee restricted share units for tax withholding |
|
13 | |
(7,923,090 | ) |
— | |
— | |
7,923,090 | |
(1,406 | ) |
— | |
— | |
— | |
— | |
(1,406 | ) |
Resale
of vested employee restricted share units for tax withholding |
|
13 | |
7,923,090 | |
— | |
— | |
(7,923,090 | ) |
1,406 | |
— | |
— | |
— | |
— | |
1,406 | |
Vesting
of restricted share units |
|
13 | |
31,579,155 | |
— | |
— | |
(31,579,155 | ) |
— | |
— | |
— | |
— | |
— | |
— | |
Foreign
currency translation |
|
| |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
(14,360 | ) |
— | |
(14,360 | ) |
Net loss |
|
| |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
(195,035 | ) |
(195,035 | ) |
Balance
as of June 30, 2023 |
|
| |
2,550,564,197 | |
— | |
— | |
276,557,580 | |
(57,055 | ) |
520,088 | |
14,892 | |
(51,273 | ) |
(513 | ) |
426,139 | |
CANAAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all amounts in thousands, except share and
per share data, or as otherwise noted)
| |
| |
Ordinary shares | |
| |
Treasury stocks | |
| |
| |
Accumulated | |
| |
| |
| |
Note | |
Number of Shares | |
Amount | |
Subscription receivables from shareholders | |
Number of Shares | |
Amount | |
Additional paid-in capital | |
Statutory reserves | |
other comprehensive (loss)/income | |
Retained earnings | |
Total shareholders’ equity | |
Balance as of December 31, 2023 | |
| |
3,514,973,327 | |
— | |
— | |
257,105,340 | |
(57,055 | ) |
653,860 | |
14,892 | |
(43,879 | ) |
(219,631 | ) |
348,187 | |
Cumulative effect of the adoption of ASU 2023-08 | |
2(d) | |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
18,893 | |
18,893 | |
Balance as of January 1, 2024 | |
| |
3,514,973,327 | |
— | |
— | |
257,105,340 | |
(57,055 | ) |
653,860 | |
14,892 | |
(43,879 | ) |
(200,738 | ) |
367,080 | |
Share-based compensation expense | |
| |
— | |
— | |
— | |
— | |
— | |
14,436 | |
— | |
— | |
— | |
14,436 | |
Repurchase of vested employee restricted share units for tax withholding | |
13 | |
(5,530,665 | ) |
— | |
— | |
5,530,665 | |
(572 | ) |
— | |
— | |
— | |
— | |
(572 | ) |
Resale of vested employee restricted share units for tax withholding | |
13 | |
5,530,665 | |
— | |
— | |
(5,530,665 | ) |
572 | |
— | |
— | |
— | |
— | |
572 | |
Issuance of ordinary shares pursuant to preferred shares financing, net of offering cost | |
12 | |
721,243,530 | |
— | |
— | |
— | |
— | |
86,707 | |
— | |
— | |
— | |
86,707 | |
Issuance of ordinary shares pursuant to share lending arrangement | |
12 | |
42,000,000 | |
— | |
— | |
— | |
— | |
236 | |
— | |
— | |
— | |
236 | |
Vesting of restricted share units | |
13 | |
37,869,690 | |
— | |
— | |
(37,869,690 | ) |
— | |
— | |
— | |
— | |
— | |
— | |
Foreign currency translation | |
| |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
(8,986 | ) |
— | |
(8,986 | ) |
Net loss | |
| |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
— | |
(81,273 | ) |
(81,273 | ) |
Balance as of June 30, 2024 | |
| |
4,316,086,547 | |
— | |
— | |
219,235,650 | |
(57,055 | ) |
755,239 | |
14,892 | |
(52,865 | ) |
(282,011 | ) |
378,200 | |
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