Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-39127 |
Entity Registrant Name | Canaan Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 28 Ayer Rajah Crescent #06-08 |
Entity Address, Country | SG |
Entity Address, Postal Zip Code | S139959 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | false |
Document Financial Statement Error Correction [Flag] | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001780652 |
Amendment Flag | false |
Auditor Name | KPMG Huazhen LLP |
Auditor Firm ID | 1186 |
Auditor Location | Beijing, China |
Class A ordinary shares | |
Document Information [Line Items] | |
Title of each class | Class A ordinary shares, par value US$0.00000005 per share* |
Name of each exchange on which registered | NASDAQ |
Entity Common Stock, Shares Outstanding | 3,460,454,223 |
No Trading Symbol Flag | true |
Class B Ordinary Shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 311,624,444 |
ADS | |
Document Information [Line Items] | |
Title of each class | American Depositary Shares, each representing 15Class A ordinary share |
Trading Symbol | CAN |
Name of each exchange on which registered | NASDAQ |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 28 Ayer Rajah Crescent #06-08 |
Entity Address, Country | SG |
Entity Address, Postal Zip Code | S139959 |
Contact Personnel Name | James Jin Cheng, Chief Financial Officer |
City Area Code | +65 |
Local Phone Number | 6305 6618 |
Contact Personnel Email Address | IR@canaan-creative.com |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 96,154 | $ 101,551 |
Accounts receivable, net | 2,997 | |
Inventories | 142,287 | 211,640 |
Prepayments and other current assets | 122,242 | 242,523 |
Total current assets | 363,680 | 555,714 |
Non-current assets: | ||
Cryptocurrency | 28,342 | 12,531 |
Property, equipment and software, net | 29,466 | 85,350 |
Operating lease right-of-use assets | 1,690 | 4,250 |
Deferred tax assets | 66,809 | 21,740 |
Other non-current assets | 486 | 2,504 |
Non-current financial investment | 2,824 | 2,872 |
Total non-current assets | 129,617 | 129,247 |
Total assets | 493,297 | 684,961 |
Current liabilities: | ||
Accounts payable | 6,245 | 16,703 |
Contract liabilities | 19,614 | 662 |
Income tax payable | 3,534 | 7,228 |
Accrued liabilities and other current liabilities | 64,240 | 48,349 |
Operating lease liabilities, current | 1,216 | 2,314 |
Preferred shares forward contract liability | 40,344 | |
Total current liabilities | 135,193 | 75,256 |
Non-current liabilities: | ||
Operating lease liabilities, non-current | 210 | 1,441 |
Other non-current liabilities | 9,707 | 598 |
Total liabilities | 145,110 | 77,295 |
Contingencies (Note 17) | ||
Shareholders' equity: | ||
Treasury stocks (US$0.00000005 par value; 308,136,735 and 257,105,340 shares as of December 31, 2022 and 2023, respectively) | (57,055) | (57,055) |
Additional paid-in capital | 653,860 | 492,220 |
Statutory reserves | 14,892 | 14,892 |
Accumulated other comprehensive loss | (43,879) | (36,913) |
Retained earnings (accumulated deficit) | (219,631) | 194,522 |
Total shareholders' equity | 348,187 | 607,666 |
Total liabilities and shareholders' equity | $ 493,297 | $ 684,961 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | $ 0.00 | $ 0.00 |
Ordinary shares, shares authorized | 999,999,875,000 | 1,000,000,000,000 |
Ordinary shares, shares issued | 3,772,078,667 | 2,804,138,492 |
Common stock shares outstanding | 3,514,973,327 | 2,496,001,757 |
Treasury stocks, par value | $ 0.00 | $ 0.00 |
Treasury stock, shares | 257,105,340 | 308,136,735 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||
Other revenues | $ 622 | $ 106 | $ 1,259 |
Total revenues | 211,477 | 651,526 | 772,762 |
Cost of revenues | |||
Other cost | (2,308) | (223) | (639) |
Total cost of revenues | (452,257) | (421,239) | (331,005) |
Gross profit (loss) | (240,780) | 230,287 | 441,757 |
Operating expenses: | |||
Research and development expenses | (64,845) | (81,755) | (52,172) |
Sales and marketing expenses | (8,175) | (9,413) | (15,553) |
General and administrative expenses | (71,249) | (88,302) | (91,058) |
Impairment on property, equipment and software | (21,126) | 0 | 0 |
Impairment on cryptocurrency | (4,706) | (7,880) | 0 |
Total operating expenses | (170,101) | (187,350) | (158,783) |
Income (loss) from operations | (410,881) | 42,937 | 282,974 |
Interest income | 956 | 2,372 | 1,133 |
Change in fair value of financial instruments | (10,918) | 3,795 | 29,471 |
Excess of fair value of Series A Convertible Preferred Shares | (59,199) | ||
Investment income | 44 | ||
Foreign exchange gains, net | 12,309 | 35,935 | 2,236 |
Other income, net | 2,240 | 3,295 | 993 |
Income (loss) before income tax expense | (465,493) | 88,334 | 316,851 |
Income tax (expense) benefit | 51,340 | (18,450) | (7,765) |
Net income (loss) | (414,153) | 69,884 | 309,086 |
Foreign currency translation adjustment, net of nil tax | (6,966) | (36,267) | 5,276 |
Total comprehensive income (loss) | $ (421,119) | $ 33,617 | $ 314,362 |
Weighted average number of shares used in per Class A and Class B ordinary share calculation: | |||
- Basic | 2,579,202,596 | 2,560,106,403 | 2,521,667,815 |
- Diluted | 2,579,202,596 | 2,577,892,069 | 2,576,157,247 |
Net earnings (loss) per Class A and Class B ordinary share (cent per share) | |||
- Basic | $ (16.06) | $ 2.73 | $ 12.26 |
- Diluted | $ (16.06) | $ 2.71 | $ 12 |
Cost of revenues | |||
Share-based compensation expenses were included in: | |||
Share-based compensation expense | $ 207 | $ 154 | $ 42 |
Research and development expenses | |||
Share-based compensation expenses were included in: | |||
Share-based compensation expense | 9,098 | 10,251 | 15,961 |
Sales and marketing expenses | |||
Share-based compensation expenses were included in: | |||
Share-based compensation expense | 234 | 2,464 | 1,261 |
General and administrative expenses | |||
Share-based compensation expenses were included in: | |||
Share-based compensation expense | 32,535 | 50,146 | 59,233 |
Products | |||
Revenues | |||
Revenues | 176,898 | 618,890 | 768,142 |
Cost of revenues | |||
Cost of revenues | (368,116) | (366,474) | (329,238) |
Mining | |||
Revenues | |||
Revenues | 33,957 | 32,530 | 3,361 |
Cost of revenues | |||
Cost of revenues | $ (81,833) | $ (54,542) | $ (1,128) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustment, tax | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary shares | Treasury stocks | Additional paid-in capital | Statutory reserves | Accumulated other comprehensive loss | Retained earnings (accumulated deficit) | Total |
Beginning balance at Dec. 31, 2020 | $ (3,570) | $ 235,007 | $ 14,106 | $ (5,922) | $ (173,326) | $ 66,295 | |
Beginning balance (in shares) at Dec. 31, 2020 | 2,328,326,132 | 43,896,090 | |||||
Share Repurchase | $ (16,106) | (16,106) | |||||
Share Repurchase (in shares) | (34,683,225) | 34,683,225 | |||||
Repurchase of vested employee restricted share units for tax withholding | $ (23,353) | (23,353) | |||||
Repurchase of vested employee restricted share units for tax withholding (in shares) | (33,255,495) | 33,255,495 | |||||
Resale of vested employee restricted share units for tax withholding | $ 7,264 | (178) | 7,086 | ||||
Resale of vested employee restricted share units for tax withholding (in shares) | 13,043,895 | (13,043,895) | |||||
Share-based compensation expense | 76,497 | 76,497 | |||||
Vesting of restricted share units | 13 | 13 | |||||
Vesting of restricted share units (in shares) | 101,574,270 | (101,574,270) | |||||
New issuance of ordinary shares and warrants | 117,688 | 117,688 | |||||
New issuance of ordinary shares and warrants (in shares) | 202,380,975 | 70,833,345 | |||||
Issuance of ordinary shares as a reserve for share-based compensation awards (in shares) | 158,701,950 | ||||||
Profit appropriations to statutory reserves | 17 | (17) | |||||
Foreign currency translation | 5,276 | 5,276 | |||||
Net loss | 309,086 | 309,086 | |||||
Ending balance at Dec. 31, 2021 | $ (35,765) | 429,205 | 14,123 | (646) | 135,565 | 542,482 | |
Ending balance (in shares) at Dec. 31, 2021 | 2,577,386,552 | 226,751,940 | |||||
Share Repurchase | $ (37,379) | (37,379) | |||||
Share Repurchase (in shares) | (154,614,975) | 154,614,975 | |||||
Repurchase of vested employee restricted share units for tax withholding | $ (4,819) | (4,819) | |||||
Repurchase of vested employee restricted share units for tax withholding (in shares) | (17,102,175) | 17,102,175 | |||||
Resale of vested employee restricted share units for tax withholding | $ 20,908 | (10,158) | 10,750 | ||||
Resale of vested employee restricted share units for tax withholding (in shares) | 37,313,775 | (37,313,775) | |||||
Share-based compensation expense | 63,015 | 63,015 | |||||
Vesting of restricted share units (in shares) | 53,018,580 | (53,018,580) | |||||
Profit appropriations to statutory reserves | 769 | (769) | |||||
Foreign currency translation | (36,267) | (36,267) | |||||
Net loss | 69,884 | 69,884 | |||||
Ending balance at Dec. 31, 2022 | $ (57,055) | 492,220 | 14,892 | (36,913) | 194,522 | $ 607,666 | |
Ending balance (in shares) at Dec. 31, 2022 | 2,496,001,757 | 308,136,735 | 2,496,001,757 | ||||
Repurchase of vested employee restricted share units for tax withholding | $ (2,420) | $ (2,420) | |||||
Repurchase of vested employee restricted share units for tax withholding (in shares) | (13,904,625) | 13,904,625 | |||||
Resale of vested employee restricted share units for tax withholding | $ 2,420 | 2,420 | |||||
Resale of vested employee restricted share units for tax withholding (in shares) | 13,904,625 | (13,904,625) | |||||
Share-based compensation expense | 42,074 | 42,074 | |||||
Vesting of restricted share units (in shares) | 51,031,395 | (51,031,395) | |||||
Profit appropriations to statutory reserves | 0 | ||||||
Foreign currency translation | (6,966) | (6,966) | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost | 65,430 | 65,430 | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 493,188,945 | ||||||
Issuance of ordinary shares pursuant to preferred shares financing, net of offering cost | 53,625 | 53,625 | |||||
Issuance of ordinary shares pursuant to preferred shares financing, net of offering cost (in shares) | 354,751,230 | ||||||
Issuance of ordinary shares pursuant to share lending arrangement | 511 | 511 | |||||
Issuance of ordinary shares pursuant to share lending arrangement (in shares) | 120,000,000 | ||||||
Net loss | (414,153) | (414,153) | |||||
Ending balance at Dec. 31, 2023 | $ (57,055) | $ 653,860 | $ 14,892 | $ (43,879) | $ (219,631) | $ 348,187 | |
Ending balance (in shares) at Dec. 31, 2023 | 3,514,973,327 | 257,105,340 | 3,514,973,327 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income (loss) | $ (414,153) | $ 69,884 | $ 309,086 |
Adjustments for: | |||
Revenue recognized on acceptance of cryptocurrency | (58,959) | (35,500) | (3,361) |
Cost recognized on payment of cryptocurrency | 8,854 | 8,463 | |
Receipt of cryptocurrency as customer deposits | (4,922) | ||
Realised gain (loss) on sale of cryptocurrency | (6,135) | 170 | |
Depreciation and amortization of property, equipment and software | 59,641 | 33,689 | 1,706 |
Depreciation of operating lease assets | 483 | ||
Foreign exchange gain | (9,302) | (2,007) | (2,233) |
Provision of allowance for doubtful receivables | 14 | 13 | 143 |
Deferred income tax benefits | (45,686) | (7,791) | (15,348) |
Loss on disposal of property, equipment and software | 18 | 193 | 7 |
Share-based compensation expense | 42,074 | 63,015 | 76,497 |
Change in fair value of financial instruments | 10,918 | (3,795) | (29,471) |
Excess of fair value of Series A Convertible Preferred Shares | 59,199 | ||
Investment income | (44) | ||
Reduction in the carrying amount of the operating lease right-of-use assets | 2,481 | 2,254 | 2,758 |
Interest of operating lease liabilities | 115 | 193 | 253 |
Impairment charge to non-current financial investment | 4 | ||
Impairment loss of cryptocurrency | 4,706 | 7,880 | 175 |
Impairment loss of property, equipment and software | 21,126 | 0 | 0 |
Write-down of inventories | 174,838 | 69,524 | 7,859 |
Write-downs of prepayments | 5,627 | 12,828 | 0 |
Provision for reserve for inventory purchase commitments | 9,816 | 10,890 | |
Changes in assets and liabilities: | |||
Accounts receivable | (3,011) | 58 | 1,059 |
Inventories | (123,679) | (232,165) | (116,153) |
Prepayments and other current assets | 122,471 | (70,304) | (188,929) |
Other non-current assets | 2,008 | (2,032) | (62) |
Prepaid interest expense | 39 | ||
Accounts payable | (10,237) | 47,259 | (7,501) |
Notes payable | (2,140) | ||
Contract liabilities | 19,026 | (198,733) | 132,414 |
Income tax payable | (3,596) | (14,653) | 21,580 |
Accrued liabilities and other current liabilities | 6,332 | 60,294 | 17,031 |
Other non-current liabilities | 9,161 | (315) | (316) |
Operating lease liabilities | (2,365) | (1,914) | (3,253) |
Net cash provided by (used in) operating activities | (123,620) | (182,602) | 202,283 |
Cash flows from investing activities: | |||
Proceeds from disposal of short-term investments | 9,605 | ||
Purchase of property, equipment and software | (3,312) | (17,745) | (5,645) |
Proceeds from disposal of property, equipment and software | 2,295 | 25 | |
Proceeds from disposal of cryptocurrency | 40,645 | 9,642 | |
Payment for non-current financial investments | (3,137) | ||
Net cash provided by (used in) investing activities | 39,628 | (8,103) | 848 |
Cash flows from financing activities: | |||
Payment for repurchase of ordinary shares | (37,379) | (16,106) | |
Prepayment under share repurchase agreement | (89) | ||
Repurchase of warrants | (6,611) | ||
Proceeds from issuance of ordinary shares, net of issuance costs under At-the-Market Offering Agreements | 65,430 | ||
Payment for cost of issuance | (879) | ||
Proceeds from issuance of series A convertible preferred shares, net of issuance costs | 24,575 | ||
Repayment of borrowings | (5,490) | ||
Proceeds from resale of treasury stock | 2,420 | 10,397 | 6,992 |
Repurchase for tax withholdings on vesting of restricted share units | (2,420) | (22,585) | (3,844) |
Proceeds from issuance of ordinary shares and warrants | 158,634 | ||
Net cash provided by (used in) financing activities | 90,005 | (56,178) | 139,218 |
Net increase (decrease) in cash and restricted cash | 6,013 | (246,883) | 342,349 |
Effect of exchange rate changes on cash and restricted cash | (11,410) | (80,021) | 25,445 |
Cash and restricted cash at the beginning of year | 101,551 | 428,455 | 60,661 |
Cash and restricted cash at the end of year | 96,154 | 101,551 | 428,455 |
Cash | 96,154 | 101,551 | 421,027 |
Restricted cash | 7,428 | ||
Total cash and restricted cash shown in the statement of cash flows | 96,154 | 101,551 | 428,455 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 39 | ||
Cash paid for income tax | 2,876 | 45,421 | 68 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Transfer from inventory to operating lease assets | 2,379 | ||
Transfer from operating lease assets to inventory | 1,890 | ||
Mining equipment transfer from inventory to property, equipment and software | 24,052 | 69,712 | 23,038 |
Purchases of property, plant and equipment in accrued liabilities and other current liabilities | 6,362 | ||
Accrued tax withholdings on vesting of restricted share units | 2,420 | (4,465) | 19,794 |
Revenue recognized on acceptance of cryptocurrency | 58,959 | 35,500 | $ 3,361 |
Cost recognized on payment of cryptocurrency | 8,854 | $ 8,463 | |
Conversion of series A convertible preferred shares into Class A ordinary shares | $ 53,837 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2023 | |
Organization and principal activities | |
Organization and principal activities | 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. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies (a) Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below. (b) Use of estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that accounting estimation of variable consideration for revenue recognition, warrant liability, 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, 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. (c) Consolidation The Company’s consolidated financial statements include the financial statements of Canaan Inc. and its subsidiaries. All transactions and balances among Canaan Inc. and its subsidiaries have been eliminated upon consolidation. Subsidiaries are those entities in which Canaan Inc. directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. (d) Foreign currency The Company has elected to change its reporting currency from Chinese Renminbi (“RMB”) to United States Dollars (“US$”) on January 1, 2023. Prior years’ comparative financial information has been recast as if the Company always used US$ as its reporting currency. The functional currency of Canaan Inc. and its subsidiaries incorporated outside of the PRC is US$, while the functional currency of the PRC entities in the Company is RMB as determined based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured at the balance sheet date exchange rate. The resulting exchange differences are included in the consolidated statements of comprehensive income (loss) as foreign exchange related gains or loss. The financial statements of the Company are translated from the functional currency to the reporting currency, US$. Assets and liabilities of PRC entities are translated into US$ using the applicable exchange rates at the balance sheet date, income and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a separate component of shareholders’ equity on the consolidated financial statement. (e) Warrant Liability The freestanding warrants to purchase American Depositary Share (“ADSs”) at a future date were determined to be freestanding instruments that were accounted for as a liability. At initial recognition, the Company recorded the warrant liability on the consolidated balance sheets at its estimated fair value. The proceeds from issuance of ordinary shares and warrants are firstly allocated to warrant liability based on its fair value. The residual method is used to allocate the proceeds to shareholders’ equity. The warrant liability is subject to remeasurement at each reporting period and the Company adjusted the carrying value of the warrant liability to fair value at the end of each reporting period utilizing the binominal option pricing model, with changes in estimated fair value included in the change in fair value of financial instruments on the consolidated statement of comprehensive income (loss). (f) Fair value measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, for the assets or liabilities either directly or indirectly. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Company’s financial instruments consist principally of cash, non-current financial investments, accounts receivable, accounts payable, preferred shares forward contract liability and other liabilities. As of December 31, 2022 and 2023, the carrying values of cash, accounts receivable, accounts payable and other liabilities approximated to their fair values reported in the consolidated balance sheets due to the short term nature of these instruments. The Group’s non-financial assets, such as Property, equipment and software and cryptocurrency, would be measured at fair value only if they were determined to be impaired. On a recurring basis, the Company measures its financial instruments at fair value. The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: Fair value at December As of December 31, 2023 Level 1 Level 2 Level 3 31, 2023 Liabilities Preferred shares forward contract liability — — 40,344 40,344 (g) Cash Cash represents bank deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. As of December 31, 2022 2023 RMB denominated bank deposits with financial institutions in the PRC 11,109 10,098 US dollar denominated bank deposits with financial institutions in the PRC 61,742 37,170 Others denominated bank deposits with financial institutions in the PRC 2 32 Subtotal 72,853 47,300 US dollar denominated bank deposits with overseas financial institutions 26,334 46,522 RMB denominated bank deposits with overseas financial institutions 8 7 Others denominated bank deposits with overseas financial institutions 2,356 2,325 Total 101,551 96,154 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 are insured by the government authorities with amounts up to US$1,766 and US$3,013 as of December 31, 2022 and 2023, 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. On March 10, 2023, Signature bank was closed by the California Department of Financial Protection and Innovation. On March 12, 2023, New York State Department of Financial Services took possession of Signature Bank and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. As of December 31, 2022, the Company held cash deposits US$1.1 million at Signature Bank. All these cash deposits have been transferred to another bank subsequent to the receivership by the end of March 2023. (h) Accounts receivable Accounts receivable are presented net of allowance for credit loss. The allowance for credit loss is based upon the amount of losses expected to be incurred in the collection of these accounts pursuant to the guidance outlined in ASU 2016-13, Financial Instruments - Credit Loss (ASU 2016-13, Topic 326, or ASC 326), which the Company adopted on January 1, 2023. The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, including specific accounts, related aging, and on historical collection experience. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Our estimate could require a change based on changing circumstances, including changes in the economy or in the circumstances of individual customers. The Company takes a write-off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. Provision for credit losses, net of recoveries for the period are included in general and administrative expenses in the accompanying consolidation statements of comprehensive income (loss). During the years ended December 31, 2021, 2022 and 2023, the Company recorded provision of allowance for accounts receivables of nil, nil and US$14, respectively. (i) Inventories Inventories, consisting of finished goods, work in process and raw materials, which are purchased from contractual manufacturers and component suppliers. Inventories are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving and obsolete inventory, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. The Company considers all data available, including future demand and subsequent changes in product prices that may provide additional information about the valuation of inventories at the balance sheet date. (j) Cryptocurrency Cryptocurrency is comprised of cryptocurrencies earned as noncash consideration in exchange for providing hash computation services to a mining pool as well as in exchange for the sale of mining equipment which are accounted for in connection with the Company’s revenue recognition policy disclosed in Note 2(o). Cryptocurrency is accounted for as intangible assets with indefinite useful lives in non-current assets in the consolidated balance sheets, because at the time of assessment, there is no foreseeable limit to the period over which such assets are expected to generate cash flows. The Company sells its digital currency on a first-in-first-out basis. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently if events or changes in circumstances indicate it is more likely than not that the asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. The Company has elected to bypass the optional qualitative impairment assessment and to track its cryptocurrency activity daily for impairment assessment purposes. The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, 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. The Company performs an analysis each day to identify whether events or changes in circumstances, principally decreases in the quoted price of cryptocurrency on the active trading platform, indicate that it is more likely than not that its cryptocurrencies are impaired. For impairment testing purposes, the lowest intraday trading price of cryptocurrency is identified at the single cryptocurrency level. The excess, if any, of the carrying amount of cryptocurrency and the lowest daily trading price of cryptocurrency represents a recognized impairment loss. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of previously recorded impairment losses is prohibited. During the years ended December 31, 2021, 2022 and 2023, the Company recorded impairment on cryptocurrency of nil, US$7,880 and US$4,706, respectively. The Company accounts for cryptocurrency received as customer deposits and liability to be settled in cryptocurrency at fair value of the underlying cryptocurrency with changes recorded in other income, net. As of December 31, 2022 and 2023, cryptocurrency received as customer deposits of nil and US$7,185 are recorded in accrued liabilities and other current liabilities, respectively. As of December 31, 2022 and 2023, liability to be settled in cryptocurrency of nil and nil are recorded in accounts payable, respectively. Cryptocurrency awarded to the Company through its mining activities as well as in exchange for the sale of mining equipment are included as an adjustment to reconcile net loss to cash used in operating activities on the consolidated statements of cash flows. Proceeds from disposal of cryptocurrency are included within cash flows from investing activities on the consolidated statements of cash flows and any realized gains or losses from such disposals are included in general and administrative expenses on the consolidated statements of comprehensive income (loss). (k) Property, equipment and software Property, equipment and software are stated at historical cost less accumulated depreciation, amortization and impairment loss, if any. Depreciation and amortization is calculated using the straight-line method over the shorter of their estimated useful lives of these assets or the term of the related leases. The estimated useful lives are as follows: Leasehold improvements the shorter of their useful lives and the lease terms Computers and electronic equipment 3 Mechanical equipment 5 years Mining equipment 1.5 years Motor vehicles 5 years Software 3 years Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, equipment and software is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive income (loss). Construction in progress represents assets under construction. Construction in progress is transferred to property, equipment and software and depreciation or amortization commences when an asset is ready for its intended use. (l) Non-current financial investment The Company’s non-current financial investment include an equity investment without readily determinable fair value, and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock, and is measured and recorded using a measurement alternative that measures the non-current financial investment at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. The carrying values of the Company’s non-current financial investment without readily determinable fair values were US$2,872 and US$2,824 as of December 31, 2022 and 2023. No impairment loss was recognized for the three years ended December 31, 2023. (m) Impairment of long-lived assets For other long-lived assets including property, equipment and software, the Company evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2021, 2022 and 2023, the Company recognized impairment charge of nil, nil and US$21,126, respectively. (n) Contract liabilities Cash proceeds received from customers before product delivery is recognized as contract liabilities and is recognized as revenues when revenue recognition criteria are met. The prepayments received from customers as of December 31, 2022 and 2023 was US$662 and US$19,614, respectively and the significant increase was mainly due to increased payments received for the sales orders of mining equipment to be delivered in 2024. The revenue recognized during the years ended December 31, 2021, 2022 and 2023 for the beginning balance of contract liability was US$65,771, US$196,897 and US$380, respectively. (o) Revenue from contracts with customers (ASC 606) The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. Products revenue The Company generates revenue primarily from the sale of mining equipment directly to a customer, such as a business or individual engaged in Bitcoin mining activities. As the Bitcoin price fluctuates, the Company may adjust the selling price of mining equipment on a weekly basis, as customers are only willing to pay for machines based on their ability to recover their investment through mining Bitcoin over a relatively short period of time. The Company’s sales arrangements usually require a full prepayment before the delivery of products. The Company implemented an installment policy for certain significant, good-standing customers from 2023. The payment terms under installment policy generally consist of the installments over a period of 90 to 180 days. Revenues from product sales are recorded at the sales price (transaction price). The amount of variable consideration is included in the transaction price to the extent it is not constrained and that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period when such changes are known. The Company recognizes products revenue at a point in time based on management’s evaluation of when the control of the products has been passed to customers. The transfer of control is considered complete when products have been picked up by or shipped to the Company’s customers. The Company offers a standard product warranty of 360 days that the product will operate under normal use. At the time revenue is recognized, an estimate of future warranty costs is recorded as a component of cost of revenues. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. The amount of total warranty costs incurred was US$4,467, US$1,896 and US$3,596 for the years ended December 31, 2021, 2022 and 2023, respectively. Mining revenue The Company entered into a Bitcoin mining pool by executing a contract, as amended from time to time, with a mining pool operator to perform hash calculations in exchange for consideration. Providing hash computation services to a mining pool is an output of the Company’s ordinary activities. The provision of such hash computation services is the sole performance obligation. The mining pool arrangement is terminable at any time without substantial penalty by the mining pool and may be terminated without substantial penalty by the Company upon providing one contract day’s prior written notice. The Company’s enforceable right to compensation only begins when and continues while the Company provides hash computation services to its customer, the mining pool operator. Accordingly, the contract term with the mining pool is deemed to be less than 24 hours and to continuously renew throughout the day. Additionally, the Company concluded that the mining pool operator’s renewal right is not a material right because the renewal rights do not include any discounts; that is, the terms, conditions, and compensation amounts are at the then-current market rates. The Company is entitled to non-cash compensation based on the pool operator’s payout model. The payout methodologies differ depending on the type of third-party operated mining pool. Full-Pay-Per-Share (“FPPS”) pools pay block rewards and transaction fees, less mining pool fees and Pay-Per-Share (“PPS”) pools pay block rewards less mining pool fees but no transaction fees. For FPPS and PPS pools, the Company is entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. The Company receives Bitcoin from mining operation, which is considered noncash and all variable. The fair value of the Bitcoin award received would generally be determined using the quoted price of Bitcoin in the Company’s principal market at the time of 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 related noncash consideration. Revenue is recognized when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is the same day that control of the contracted service transfers to the mining pool and is the same day as the contract inception. After every 24-hour contract term, the mining pool transfers the Bitcoin consideration to the Company’s designated Bitcoin currency wallets. Consideration payable to the customer in the form of a pool operator fee, which is incurred only to the extent that the Company has generated consideration, is deducted from the bitcoin the Company receives and is recorded as contra - revenue, as it does not represent a payment for a distinct good or service. Other revenues The Company also generates a small portion of revenue from the leases of mining equipment and maintenance or development services under separate contracts. Revenue is recognized over the period when the related services were rendered to the customers. (p) Revenue from lease arrangements as lessor (ASC 842, Lease) From July 2019, the Company started to generate revenue from the leases of mining equipment for Bitcoin mining to its customers. The leases cannot generally be extended or terminated at the customer’s discretion. However, upon the mutual agreement of the parties, the leases can be early terminated after three months. Rental charges are computed based on a time rate of machine’s type and rental period. The leases of mining equipment meet the classification of operating leases, and revenues from operating leases are recognized on a straight-line basis over the contract terms. The Company ceased leasing mining equipment in the second quarter of 2021. (q) Value-added-tax (“VAT”) recoverable and surcharges Value added tax recoverable represent amounts paid by the Company for purchases. The surcharges (i.e., Urban construction and maintenance tax, educational surtax, local educational surtax), vary from 6% to 12% of the value-added-tax paid depending on the taxpayer’s location. (r) Cost of revenues Amounts recorded as cost of revenues relate to direct expenses incurred to generate revenue. Such costs are recorded as incurred. Cost of revenues consists of product costs, mining costs and other costs. Product costs include costs of raw material, contractual manufacturers for production, labor costs, shipping and handling costs, manufacturing and depreciation, warehousing costs, inventories write-downs, prepayments write-downs, provision for reserve for inventory purchase commitments and tax surcharges. Mining costs include direct production costs of mining operations, including electricity and hosting, as well as depreciation of deployed mining machines. Other costs include labor costs and other service costs. (s) Research and development expenses Research and development expenses consist primarily of salary and welfare for research and development personnel, consulting and contractor expenses, testing and tooling materials and other expenses in associated with research and development personnel. The Company recognizes research and development expenses as expense when incurred. (t) Sales and marketing expenses Sales and marketing expenses consist primarily of salary and welfare for sales and marketing personnel, promotion and marketing expenses and other expenses in association with sales and marketing personnel. Advertising expense is expensed as incurred and included in selling and marketing expenses. The advertising expenses were US$691, US$964 and US$1,643 for the years ended December 31, 2021, 2022 and 2023, respectively. (u) General and administrative expenses General and administrative expenses consist primarily of salary and welfare for general and administrative personnel, rental expenses and depreciation in association with general and administrative personnel, allowance for doubtful receivables, entertainment expense, general office expense and professional service fees. (v) Government grants Government grants generally consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. The eligibility to receive such benefits and amount of financial subsidy to be granted are determined at the discretion of the relevant government authorities. Government grants are recognized when there are reasonable assurances that the Company will comply with the conditions attach to them and the grants are received. Government grants for the purpose of giving immediate financial support to the Company with no future related costs or obligation are recognized in the Company’s consolidated statements of comprehensive income (loss) when the grants are received. Government grants with conditions attached to them are recognized as liabilities when received, and will be released to the consolidated statements of comprehensive income (loss) when the Company is not subject to further obligation or future refunds. US$883, US$2,861 and US$3,559 were recognized in other income, net for the years ended December 31, 2021, 2022, and 2023, respectively. Nil and US$9,191 were recognized in deferred government grant of accrued liabilities and other liabilities as of December 31, 2022 and 2023, respectively (Note 9). (w) Lease arrangement as lessee The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current, and operating lease liabilities, non-current in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The Company has elected not to recognize operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less and the Company recognizes lease expense for these leases on a straight-line basis over the lease terms. (x) Employee social security and welfare benefits Employees of the Company in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated defined contribution plan. The Company is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses in the consolidated statements of comprehensive income (loss) amounted to US$4,299, US$7,016 and US$9,561 for the years ended December 31, 2021, 2022 and 2023, respectively. (y) Income taxes The Company accounts for income taxes under the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax income rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that some portion or all deferred income tax asset will not be realized in the foreseeable future. The Compa |
Risks and concentration
Risks and concentration | 12 Months Ended |
Dec. 31, 2023 | |
Risks and concentration | |
Risks and concentration | 3. Risks and concentration (a) Concentration of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with financial institutions with high credit ratings and quality. The Company conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. Accounts receivable are unsecured and are derived from revenue earned through customers. The risk with respect to accounts receivable is mitigated by credit evaluations performed on them. The Company believes it is not exposed to significant credit risk on cash and accounts receivable. As of December 31, 2022 and 2023, accounts receivable were nil and US$2,997, respectively. Accounts receivable concentration of credit risk is as below: As of December 31, 2022 2023 Customer A — 97 % Customers which contributed more than 10% of total revenue are as below: For the Years Ended December 31, 2021 2022 2023 Customer B * 33 % * Customer C 18 % 22 % * Customer D * 16 % * Customer E * * 14 % * Less than 10% (b) Supplier concentration For the year ended December 31, 2021, the Company’s purchases of its integrated circuits mainly from one supplier. For the year ended December 31, 2022, the Company’s purchases substantially all its integrated circuits from three suppliers. For the year ended December 31, 2023, the Company’s purchases substantially all its integrated circuits from two suppliers. 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. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Inventories | 4. Inventories Inventories consist of the following: As of December 31, 2022 2023 Raw materials 113,306 95,065 Work in process 37,538 15,898 Finished goods 60,796 31,324 Total 211,640 142,287 During the years ended December 31, 2021, 2022 and 2023, the Company recognized inventories write-down of US$7,859, US$69,524 and US$174,838 in cost of revenues, respectively. |
Prepayments and other assets
Prepayments and other assets | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other assets | |
Prepayments and other assets | 5. Prepayments and other assets The current and non-current portions of prepayments and other assets consist of the following: As of December 31, 2022 2023 Prepayments and other current assets Prepayments to vendors (Note a) 158,687 46,277 VAT recoverable and refund 72,402 55,403 Deferred charges 6,166 7,546 Deposits 3,329 3,746 Prepayment for repurchase of ordinary shares 3 — Others (Note b) 1,936 9,270 Total 242,523 122,242 Other non-current assets Long-term rental and other deposits 2,448 486 Prepayments for purchase of software 56 — Total 2,504 486 Note a: Prepayments to vendors mainly represent prepayments made to third-party suppliers for foundry services. The Company also records a write-down 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. For the years ended December 31, 2021, 2022 and 2023, the Company recorded write-downs of nil , US $12,828 and US$ 5,627 for the prepayment to third-party suppliers in cost of revenues. Note b: During the years ended December 31, 2021, 2022 and 2023, the Company recorded provision of allowance for other receivables of US$ 143 , US$ 13 and US$ 0.3 , respectively. |
Cryptocurrency
Cryptocurrency | 12 Months Ended |
Dec. 31, 2023 | |
Cryptocurrency. | |
Cryptocurrency | 6. Cryptocurrency As of December 31 2022 2023 Gross carrying amount 15,076 32,603 Less: Impairment of cryptocurrency (2,545) (4,261) Net 12,531 28,342 Additional information about cryptocurrency consists of the following: For the years ended December 31, 2022 2023 Beginning balance 3,186 12,531 Revenue recognized on acceptance of cryptocurrency 35,500 58,959 Receipt of cryptocurrency as customer deposits — 4,922 Cost of revenues recognized on payment of cryptocurrency (8,463) (8,854) Proceeds from disposal of cryptocurrency (9,642) (40,645) Realized (gain)loss on disposal of cryptocurrency (170) 6,135 Impairment of cryptocurrency (7,880) (4,706) Ending balance 12,531 28,342 |
Property, equipment and softwar
Property, equipment and software, net | 12 Months Ended |
Dec. 31, 2023 | |
Property, equipment and software, net | |
Property, equipment and software, net | 7. Property, equipment and software, net Property, equipment and software consist of the following: As of December 31, 2022 2023 Cost: Mining equipment 102,964 95,215 Computers and electronic equipment 10,008 10,940 Leasehold improvements 4,805 5,772 Mechanical equipment 123 114 Software 2,360 3,283 Motor vehicles 78 243 Total cost 120,338 115,567 Less: Accumulated depreciation and amortization (34,988) (86,101) Property, equipment and software, net 85,350 29,466 Depreciation and amortization expenses recognized for the years ended December 31, 2021, 2022 and 2023 are summarized as follows: For the Years Ended December 31, 2021 2022 2023 Cost of revenues 266 31,002 54,478 Research and development expenses 438 900 400 Sales and marketing expenses 4 8 36 General and administrative expenses 998 1,779 4,727 Total 1,706 33,689 59,641 The Company determined that the carrying value of its mining equipment was not recoverable. The Company’s mining equipment is measured at fair value based on a non-recurring basis, if determined to be impaired. As of each relevant measurement date, the fair value of mining equipment, if determined to be impaired, are primarily represented by the price market participant would pay to acquire the mining equipment, which reflects the highest and best use of mining equipment. Fair value of the mining equipment was estimated using discounted cash flows under the income approach classified in Level 3 of the fair value hierarchy. Significant unobservable input used in the fair value measurement include Bitcoin prices. An impairment loss of US$21,126 was recognized for the year ended December 31, 2023, which is calculated as the amount by which the carrying value of the relevant mining equipment exceeded its estimated fair value. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 8. Leases The Company leases facilities under non-cancellable operating leases expiring on different dates. The terms of substantially all these leases are three years or less. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. All the Company’s leases qualify as operating leases. Variable lease cost and short-term leases (lease terms less than 12 months) are recognized as incurred. (a) The components of lease expenses were as follows: For the Years Ended December 31, 2021 2022 2023 Lease cost: Reduction in the carrying amount of ROU assets 2,758 2,254 2,481 Interest of operating lease liabilities 253 193 115 Expenses for short-term lease within 12 months — 216 417 Total lease cost 3,011 2,663 3,013 (b) Supplemental cash flow information related to leases was as follows: For the Years Ended December 31, 2021 2022 2023 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases 3,253 2,944 2,356 Operating lease right-of-use assets obtained in exchange for lease obligations: Operating leases 5,752 2,398 2,358 Operating lease liability settled through termination of lease: Operating leases 406 358 2,301 (c) Supplemental balance sheet information related to leases was as follows: As of December 31, 2021 2022 2023 Weighted-average remaining lease term Operating leases 2.4 year 1.9 year 1.2 year Weighted-average discount rate Operating lease 5.17% per annum 4.58% per annum 4.55% per annum (d) Maturities of operating lease liabilities were as follows: Years Ending December 31, As of December 31, 2023 2024 1,244 2025 212 Total undiscounted lease payments 1,456 Less: imputed interest (30) Total operating lease liabilities 1,426 Amounts due within 12 months 1,216 Non-current operating lease liability 210 |
Accrued Liabilities and Other L
Accrued Liabilities and Other Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities | |
Accrued Liabilities and Other Liabilities | 9. Accrued liabilities and other liabilities As of December 31, 2022 2023 Accrued liabilities and other current liabilities Provision for reserve for inventory purchase commitments (Note a) 10,890 20,706 Salary and welfare payable 20,744 19,623 Customer deposits — 7,185 Other tax payables 8,057 7,019 Customer refund 4,226 3,812 VAT received from customers related to contract liabilities 19 1,429 Warranty reserve (Note b) 1,716 878 Others 2,697 3,588 Total 48,349 64,240 Other non-current liabilities Deferred government grant — 9,191 Refund from depository bank – non-current 598 516 Total 598 9,707 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, 2022 and 2023, the Company’s purchase obligation to third-party suppliers for foundry service was US$66,868 and US$42,904, respectively. In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2023 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. For the year ended December 31, 2022 and 2023, a provision of US$10,890 and US$9,816 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 provision for warranty is as follows: For the year ended December 31, 2022 2023 Accrued warranty—beginning of year 2,827 1,716 Accrual for warranties issued during the year 1,896 1,902 Warranty claims paid (1,167) (1,532) Warranty expired (1,632) (980) Foreign currency translation adjustment (208) (228) Accrued warranty—end of year 1,716 878 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Warrants | 10. Warrants In connection with the issuance of ordinary shares (Note 11) in May 2021, the Company also issued warrants to the investors, which entitle the investors to purchase up to an aggregate of 4,047,620 ADS (representing 60,714,300 Class A ordinary Shares) at $16.38 per ADS (representing $1.09 Class A ordinary share). Also, the Company issued warrants to two placement agents, which entitle them to purchase up to an aggregate of 674,603 ADSs (representing 10,119,045 Class A ordinary shares) at $15.75 per ADS (representing $1.05 Class A ordinary share). The warrants are accounted for as a liability and remeasured to fair value at the end of each reporting period utilizing the binomial option pricing model, which involves significant assumptions including the risk-free interest rate, the expected volatility, expected dividend yield and expected term, the Company classifies the valuation techniques that use these inputs as Level 3. Fair Value at Fair Value at June 23, 2022 December 31, 2021 (remeasurement date) Risk Free Rate 0.37%-0.81 % 2.32%-2.63 % Volatility 131.47%-127.93 % 126.66%-140.39 % Expected dividend yield 0 % 0 % Expected term 2.3 years-3 years 1.9 years-2.1 years On June 23, 2022, the Company entered into separate warrant repurchase agreements with all warrant holders. The Company paid US$6.6 million (US$1.4 per ADS) to repurchase the outstanding warrants of 4,722,223 ADSs (representing 70,833,345 Class A ordinary shares), upon which the warrant liability was extinguished. Movement of warrant liability for the year ended December 31, 2022 is as follows: For the years ended December 31, 2022 Beginning balance 10,406 Issuance of warrant — Change in fair value of financial instruments (3,795) Repurchase of warrant liability (6,611) Ending balance — |
Ordinary shares
Ordinary shares | 12 Months Ended |
Dec. 31, 2023 | |
Treasury stocks | |
Ordinary shares | 11. Ordinary shares The Company’s authorized share capital is designated into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to fifteen votes. In addition, certain matters including those related to the change of control of the Company require an additional approval by the holders of a majority of Class A ordinary shares voting as a separate class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Class B ordinary shares will be automatically converted into the same number of Class A ordinary shares under certain circumstances, including any transfer of Class B ordinary shares by the holder thereof to any person or entity which is not an affiliate of such holder. As of January 1, 2021, the authorized ordinary shares are 1,000,000,000,000, of which 2,372,222,222 shares were issued and 2,328,326,132 shares were outstanding. These outstanding shares consist of (1) 2,016,701,688 Class A ordinary shares and (2) 311,624,444 Class B ordinary shares, which were held by the Chairman and CEO of the Company. On May 3, 2021, the Company issued 13,492,065 ADSs (202,380,975 Class A ordinary shares) to certain institutional investors for US$158,634, net of issuance cost. The Company also issued to the investors warrants to purchase up to an aggregate of 4,047,620 ADSs (60,714,300 Class A ordinary shares). Also, the Company issued warrants to two placement agents, which entitles them to purchase up to an aggregate of 674,603 ADSs (10,119,045 Class A ordinary shares). The Company classified the warrants as warrant liability and the fair value of the warrant liability was US$39,877 as of the issuance date, the residual proceeds of US$118,757 was allocated to the Company’s ordinary shares. On June 23, 2022, the Company repurchased the warrants and the warrant liability was extinguished (Note 10). 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 year ended December 31, 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. On November 10, 2023, the Company entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc., pursuant to which the Company may issue up to US$68,000 of the ADSs. For the year ended December 31, 2023, the Company issued 31,347,044 ADSs (470,205,660 Class A ordinary shares) with net proceeds of US$61,242. On November 24, 2023, the Company’s board of directors authorized the issuance of 125,000 Series A Convertible Preferred Shares by re-designation of the authorized but unissued Class A Ordinary Shares. As of December 31, 2023, the authorized ordinary shares are 999,999,875,000, of which 3,772,078,667 shares were issued and 3,514,973,327 shares were outstanding. These outstanding shares consist of (1) 3,203,348,883 Class A ordinary shares and (2) 311,624,444 Class B ordinary shares, which were held by the Chairman and CEO of the Company. |
Series A Convertible Preferred
Series A Convertible Preferred Shares | 12 Months Ended |
Dec. 31, 2023 | |
Series A Convertible Preferred Shares | |
Series A Convertible Preferred Shares | 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. Neither the Company is obliged to sell nor the Buyer is obliged to purchase for the Third Tranche. In connection with the issuance of the Preferred Shares, the Company also should 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. The rights, preferences and privileges of the Series A Convertible Preferred Shares are as follows: Conversion Rights At any time after the issuance, the holder has the right to convert any portion of the outstanding and the unpaid Conversion Amount (the “Conversion Amount”, equals to US$1,072.80 per preferred share plus any accrued and unpaid dividends, and 15% p.a. late charges if any) into variable number of ADSs by dividing the difference of the conversion price less the issuance fee, where conversion price is the lower of (1) 120% of the Weighted Average Price of the ADSs on the trading day immediately preceding the applicable issuance date of the Series A Preferred Shares (i.e. a fixed monetary amount US$1.81); and (2) 92.5% of the lowest daily average market price over 5 days before conversion, as specified in the Securities Purchase Agreement. Redemption Rights The Company shall redeem the Preferred Shares remained outstanding on the Maturity Date in cash in an amount equal to 105% of the Conversion Amount. The Maturity Date is the date that is 12 months immediately following the issuance of the Preferred Shares, which may be extended at the option of the Buyer when certain events occur. Voting Rights No voting rights are carried by the Series A Preferred Shares. Dividend Rights The Buyer will be entitled to receive dividends in the same manner of Class A Ordinary Shares holders on a as converted basis. Liquidation Preferences In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Buyer shall be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its shareholders, an amount per Series A Preferred Share equal to the greater of (1) Conversion Amount and (2) the amount that would have been received had the Series A Preferred Shares been converted into the Class A ordinary shares issuable upon conversion of the Series A Preferred Shares immediately prior to liquidation event. On December 11, 2023, the Company closed the First Tranche and issued 25,000 convertible Preferred Shares to the Buyer with total net proceeds of US$24,575. Concurrently, the Company also delivered 8,000,000 ADSs (120,000,000 Class A ordinary shares) collectively as pre-delivery shares (the “Pre-delivery Shares”) to the Buyer. As of December 31, 2023, all the Preferred Shares issued pursuant to the First Tranche were converted to 23,650,082 outstanding ADSs (354,751,230 Class A ordinary shares) at the conversion prices from $1.06 to $1.42, which are the lower of US$1.81 and 92.5% of the lowest daily average market price over 5 days before the conversion. As the First Tranche of Preferred Shares, Forward Contract, Pre-delivery shares can be separately exercised, i.e. each can continue to exist unchanged when the other is exercised, the Company concluded that they were freestanding. For the First Tranche, the Company had an unconditional obligation to issue variable number of the Preferred Shares, and the monetary value of the obligation is predominantly based on a fixed amount that is known at the inception. The Company classified the Preferred Shares as a liability, recorded initially at fair value upon issuance date, and remeasured at fair value with changes recognized in earnings. The Forward Contract Liabilities are exercisable by the Buyer for the Second Tranche, so as to embody an obligation of the Company to repurchase the Company’s equity shares by transferring assets. In accordance with ASC 480, the Forward Contract Liabilities is accounted for as a liability, recorded initially at fair value upon issuance date, and remeasured to fair value at the end of each reporting period with changes recognized in earnings. The Pre-delivery Shares are considered a form of stock borrowing facility and was accounted for as own-share lending arrangement. The Company did not receive any proceeds or pay any consideration related to the borrowed shares, except that the Company received a one-time nominal fee of US$6.00 upon the issuance of the Pre-delivery Shares and will pay the same amount to the Buyer upon the return of Pre-delivery Shares, respectively. As of December 31, 2023, no Pre-delivery Shares were returned to the Company. The Company accounted for the share lending arrangement as an issuance cost associated with the First Tranche, and recorded at fair value upon issuance date against additional paid-in capital. Although legally issued, the Pre-delivery Shares were not considered outstanding, and therefore excluded from basic and diluted earnings (loss) per share unless default of the share lending arrangement occurs, at which time the Pre-delivery Shares would be included in the basic and diluted earnings (loss) per share calculation. The fair value of the First Tranche (US$44,421), Forward Contract Liabilities (US$38,842) and Pre-delivery Shares (US$511) upon issuance date in aggregate exceeded the net proceeds from the financing (US$24,575) by US$59,199, which was recognized as the excess of fair value of Series A Convertible Preferred Shares financing for the year ended December 31, 2023. The fair value of the First Tranche upon the conversion dates was US$53,837, and the change in fair value of the First Tranche was US$9,416 for the year ended December 31, 2023. As of December 31, 2023, the Forward Contract Liabilities was not exercised by the Buyer and the Second Tranche was not closed. The Company estimate the fair value of First Tranche and the Forward Purchase Liability 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 First Tranche December 14, 2023 to December 11, 2023 December 21, 2023 (issuance date) (remeasurement dates) Risk Free Rate 4.98 % 4.69%-4.81 % Volatility 100.55 % 96.00%-103.81 % Expected bond yield 7.83 % 7.37%-7.48 % Fair Value of Forward Contract Liability December 11, 2023 (issuance date) December 31, 2023 Discount Rate 4.98 % 5.14 % The assumptions are inherently uncertain and subjective. Changes in any unobservable inputs may have a significant impact on the fair value of First Tranche and Forward Contract Liability. The movement of Preferred Shares and Forward Contract Liability for the year ended December 31, 2023 consist of the followings: Forward Contract First Tranche Liabilities Beginning balance — — Fair value upon issuance 44,421 38,842 Change in fair value 9,416 1,502 Conversion to outstanding ADSs (53,837) — Ending balance — 40,344 |
Treasury stocks
Treasury stocks | 12 Months Ended |
Dec. 31, 2023 | |
Treasury stocks | |
Treasury stocks | 13. Treasury stocks 2018 Equity Incentive Plan In April 2018, the Company established a trust to hold 51,624,000 of the Company’s issued ordinary shares. These ordinary shares were contributed by the Co-Founders and employees and held in a trust (the “Trust”) for the benefit of the employees who are under the 2018 Equity Incentive Plan (Note 14). The ordinary shares issued to the Trust are accounted for as treasury stocks of the Company and presented as such for all periods presented. The Trust does not hold any other assets or liabilities as of December 31, 2022 and 2023, nor earn any income nor incur any expenses for the years ended December 31, 2021, 2022 and 2023. As of January 1, 2021, 18,096,900 issued ordinary shares are accounted as treasury stocks. In 2021, 5,757,945 restricted share units were transferred from treasury stock to ordinary shares. The Company did not retire any of the repurchased Class A ordinary shares in 2022 and 2023 under the 2018 Incentive Plan (Note 14). As of December 31, 2022 and 2023, 12,338,955 and 12,338,955 issued ordinary shares are accounted as treasury stocks, respectively. Amended 2018 Plan In April 2021, the Board of Directors of the Company amended the 2018 Plan (the “Amended 2018 Plan”) (Note 14). In May and September 2021, the Company issued 94,927,065 Class A ordinary shares and 63,774,885 Class A ordinary shares, which were then reserved under the Amended 2018 Plan. For the year ended December 31, 2021, 95,816,325 restricted share units that have been vested were transferred from treasury stock to ordinary shares under the 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 year ended December 31, 2021, the Company withheld 33,255,495 Class A ordinary shares for US$23,353 and sold 13,043,895 Class A ordinary shares for US$7,264. For the year ended December 31, 2022, the Company withheld 17,102,175 Class A ordinary shares for US$4,819 and sold 37,313,775 Class A ordinary shares for US$20,908. For the year ended December 31, 2023, the Company withheld 13,904,625 Class A ordinary shares for US$2,420 and sold 13,904,625 Class A ordinary shares for US$2,420. The Company did not retire any of the repurchased Class A ordinary shares. As of December 31, 2023 and 2022, nil and 9,867,045 issued ordinary shares are accounted as treasury stocks. For the year ended December 31, 2023, 9,867,045 restricted share units were transferred from treasury stock to ordinary shares upon vesting under the Amended 2018 Plan. Share Repurchase Program As of January 1, 2021, 1,719,946 outstanding ADSs (25,799,190 shares) are accounted as treasury stocks. Effective September 19, 2021, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$20 million worth of its outstanding (i) American Depositary Share (“ADS”) each representing 15 Class A ordinary shares, and or (ii) Class A ordinary shares over the next 12 months starting from September 20, 2021 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 year ended December 31, 2021, total of 2,312,215 outstanding ADSs (34,683,225 shares) were repurchased but have not been retired with a total consideration of US$16,106, which is shown as treasury stock (Note 2(ab)). 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 year ended December 31, 2022, total of 10,307,665 outstanding ADSs (154,614,975 shares) were repurchased but have not been retired with a total consideration of US$37,379, which is shown as treasury stock (Note 2(ab)). During the year ended December 31, 2023, no outstanding ADSs were repurchased. For the year ended December 31, 2023, 41,164,350 restricted share units were transferred from treasury stock to ordinary shares upon vesting. As of December 31, 2023, a total of 173,933,040 repurchased ordinary shares are accounted as treasury stocks. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Compensation | |
Share-Based Compensation | 14. Share-based compensation In April 2021, the Board of Directors of the Company amended the 2018 Plan. Under the Amended 2018 Plan, in April 2021 and on every January 1 thereafter during which the 2018 Plan remains in effect, the maximum aggregate number of Class A ordinary shares which may be subject to awards under the 2018 Plan will be automatically increased by 15.0% of the total number of Class A ordinary shares issued and outstanding on December 31 of the preceding calendar year, if and whenever the unallocated Class A ordinary shares which may be issuable under the 2018 Plan account for less than 3% of the then total issued and outstanding Class A ordinary shares. In May and September 2021, the Company issued 94,927,065 Class A ordinary shares and 63,774,885 Class A ordinary shares, which were then reserved under the Amended 2018 Plan. (a) Restricted share units The following table summarizes the RSUs activity for the years ended December 31, 2021, 2022 and 2023: Number of Weighted average shares grant date fair value US$ Outstanding as of December 31, 2020 9,040,000 0.23 Granted 236,768,940 0.58 Forfeited (6,991,000) 0.48 Vested (101,574,270) 0.33 Outstanding as of December 31, 2021 137,243,670 0.74 Granted 62,410,200 0.25 Forfeited (22,844,235) 0.32 Vested (53,018,580) 0.68 Outstanding as of December 31, 2022 123,791,055 0.60 Granted 102,323,925 0.15 Forfeited (28,129,155) 0.29 Vested (51,031,395) 0.60 Outstanding as of December 31, 2023 146,954,430 0.35 In 2023, the Company granted 102,323,925 RSUs to the Company’s employees under the Amended 2018 Plan. The Company used closing price of ordinary share to determine the fair value of the RSUs. Compensation expense related to RSUs with service conditions is recognized over the requisite service period, which is generally the vesting term of up to five years. As of December 31, 2023, there was USD32,933 unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of 36.45 months. (b) Share options The following table summarizes the share options for the years ended December 31, 2021, 2022 and 2023: Weighted-Average Weighted per Share Average Number of Exercise Remaining Aggregate shares Price Contractual Term Intrinsic Value US$ Years US$ Outstanding as of December 31, 2020 — — — — Granted 114,000,000 0.76 — — Outstanding as of December 31, 2021 114,000,000 0.76 9.10 — Outstanding as of December 31, 2022 114,000,000 0.76 8.12 — Granted 30,000,000 0.40 — — Outstanding as of December 31, 2023 144,000,000 0.69 7.53 — Expected to vest as of December 31, 2023 144,000,000 0.69 7.53 — Exercisable as of December 31, 2023 84,000,000 0.69 7.53 — The aggregate intrinsic value as of December 31, 2023 in the table above represents the difference between the fair value of the Company’s ordinary share on December 31, 2023 and the exercise price. The fair values of the share options granted by the Company to employees for the year ended December 31, 2023 are as follows: For the Year Ended December 31, 2023 Weighted average grant date fair value of option per share 0.53 Aggregate grant date fair value of options 75,638 As of December 31, 2023, there was USD22,955 unrecognized compensation expense related to share options, which is expected to be recognized over a weighted-average period of 20.21 months. The assumptions used to estimate the fair values of the share options granted were as follows: For the Year Ended December 31, For the Year Ended December 31, 2021 2023 Risk-free rate of return (1) 1.25% to 1.85 % 3.85% to 3.92 % Dividend yield (2) 0 % 0 % Expected volatility (3) 136.91% to 142.01 % 124.86 % Expected term (4) 10 years 10 years Exercise multiple (5) 2.80 2.80 Fair value of ordinary share US$3.78 per ADS to US$17.51 per ADS US$1.79 per ADS 1) The risk-free rate of return was estimated based on the yield of US Strip Bond with a maturity life equal to the remaining maturity life of the Company’s options as of the valuation date. 2) Dividend yield is zero as the Company has never declared or paid any cash dividends on its shares, and the Company does not anticipate any dividend payments in the foreseeable future. 3) The expected volatility was estimated based on the historical volatility of comparable peer public companies and the Company with a time horizon close to the contract life of the Company’s options. 4) Expected term is the contract life of the option. 5) The expected exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. As the Company did not have sufficient information of past employee exercise history, it has considered the statistics by making reference to a widely-accepted academic research publication. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 15. Income Taxes (a) Cayman Islands Under the current tax laws of Cayman Islands, the Company is not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends. (b) Singapore The Company’s subsidiaries incorporated in Singapore are subject to profits or income tax rates of 17.0%, on their estimated assessable profits for the years ended December 31, 2021, 2022 and 2023. Dividends income received from subsidiaries in mainland China are not subject to Singapore profits or income tax. (c) Hong Kong and United States The Company’s subsidiaries incorporated in Hong Kong and United States are subject to profits or income tax rates of 16.5% and 21.0%, respectively, on their estimated assessable profits for the years ended December 31, 2021, 2022 and 2023. Dividends income received from subsidiaries in mainland China are not subject to Hong Kong and United States profits or income tax. (d) PRC Enterprise Income Tax (“EIT”) On March 16, 2007, the National People’s Congress of the PRC enacted an Enterprise Income Tax Law (“EIT Law”), under which Foreign Investment Enterprises (“FIEs”) and domestic companies would be subject to EIT at a uniform rate of 25%. The EIT law became effective on January 1, 2008. Canaan Creative Co., Ltd. (“Canaan Creative”) obtained its High and New Technology Enterprises (“HNTE”) certificate with a valid period of three years in 2019. Therefore, Canaan Creative is eligible to enjoy a preferential tax rate of 15% from 2019 to 2021 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. In October 2022, Canaan Creative received approval from the tax authority on the renewal of its HNTE status which entitled it to the preferential income tax rate of 15% effective retroactively from 2022 to 2024. Hangzhou Canaan Intelligence Information Technology Co., Ltd. (“Hangzhou Canaan”) obtained its HNTE certificate with a valid period of three years in 2019, and therefore is eligible to enjoy a preferential tax rate of 15% from 2019 to 2021 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. Thereafter, Hangzhou Canaan did not renew its HNTE certificate or integrated circuit enterprise qualification. Canaan Creative (SH) Co., Ltd. (“Canaan Creative (SH)”) obtained its High and New Technology Enterprises (“HNTE”) certificate with a valid period of three years in 2022. Therefore, Canaan Creative (SH) is eligible to enjoy a preferential tax rate of 15% from 2022 to 2024 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. In addition, in accordance with Caishui (2016) No. 49 issued by the Stated Tax Bureau on May 4, 2016, Canaan Creative (SH) is qualified as an as an integrated circuit enterprise and enjoying a 5-year tax holiday (two-year full exemption followed by three-year half reduction) beginning from 2022 after utilizing all prior years tax losses. Therefore, Canaan Creative (SH) is eligible to enjoy a preferential tax rate of 0% from 2022 to 2023 and 12.5% from 2024 to 2026. The Company’s other PRC subsidiaries are subject to the statutory income tax rate of 25%. (e) PRC Withholding Income Tax on Dividends The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% if the immediate holding company in Hong Kong owns directly at least 25% of the shares of the FIE and could be recognized as a Beneficial Owner of the dividend from PRC tax perspective. As of December 31, 2023, the aggregated amount of undistributed earnings of the Company entities located in the PRC that are available for distribution to the Company were US$22,903. The Company plans to indefinitely reinvested undistributed earnings earned from its PRC subsidiaries in its operations in the PRC. Therefore, no withholding income tax for undistributed earnings of its subsidiaries were provided as of December 31, 2023. Income (loss) before income tax expense consisted of: For the Years Ended December 31, 2021 2022 2023 Mainland China 290,666 126,902 (251,871) United States of America (951) (15,858) (79,753) Cayman 30,544 2,024 (69,376) Singapore 1,013 (16,644) (8,970) Others (4,421) (8,090) (55,523) Total 316,851 88,334 (465,493) A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows: For the Years Ended December 31, 2021 2022 2023 PRC statutory income tax rates 25.0 % 25.0 % (25.0) % Permanent book-tax difference 1.4 % (2.4) % (1.9) % Share-based compensation 3.4 % 5.5 % 1.0 % Super deduction of R&D expense (2.6) % (14.0) % (2.9) % Others 0.6 % 6.1 % 0.0 % Different tax rates in other jurisdictions (2.2) % 2.0 % 7.8 % Effect of tax holiday (7.8) % (16.9) % 4.7 % Change in valuation allowance (14.0) % 12.6 % 3.4 % Total 2.4 % 20.3 % (11.0) % Effects of tax holidays entitled by the PRC subsidiaries 24,832 15,354 21,998 Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) per Class A and Class B ordinary share (US$ cent per share) 0.98 0.60 0.85 Composition of income tax expense The current and deferred portions of income tax expense included in the consolidated statements of comprehensive income (loss) are as follows: For the Years Ended December 31, 2021 2022 2023 Current income tax expense (benefits) 23,113 26,241 (5,654) Deferred income tax benefits (15,348) (7,791) (45,686) Income tax expense (benefits) 7,765 18,450 (51,340) Deferred tax assets and liabilities Deferred taxes were measured using the enacted tax rates for the periods in which they are expected to be reversed. The tax effects of temporary differences that give rise to the deferred tax asset balances as of December 31, 2022 and 2023 are as follows: As of December 31, 2022 2023 Deferred tax assets Tax losses carried forward 10,290 57,519 Write-down of inventories 15,540 26,608 Property, equipment and software 5,012 6,597 Share-based compensation 4,427 5,646 Warranty reserve 139 281 Operating lease right-of-use assets — 260 Allowance for doubtful accounts 203 200 Total gross deferred tax assets 35,611 97,111 Less: Valuation allowance (13,871) (30,042) Deferred tax assets, net of valuation allowance 21,740 67,069 Deferred tax liabilities Operating lease liabilities — (260) Total gross deferred tax liabilities — (260) Net deferred tax assets 21,740 66,809 As of December 31, 2022 and 2023, the Company had tax loss carry-forwards of approximately US$53,652 and US$339,766 which arose from its PRC and offshore subsidiaries. Most of the PRC subsidiaries are qualified as HNTE or technology small and medium enterprise (“SMEs”), the carryforwards period for net operating losses under the EIT Law is changed from five years to ten years. The net operating loss carryforwards by the PRC mainland companies will expire in varying amounts between 2029 and 2034. PRC mainland companies tax losses of US$13,478, US$140, US$2,443, US$13, US$530, US$225,867 will expire, if unused, by 2029, 2030, 2031, 2032, 2033 and 2034, respectively. Other than the expiration, there are no other limitations or restrictions upon the Company’s ability to use these operating loss carryforwards. Valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance was provided for tax loss carry-forward because it was more likely than not that such deferred tax assets will not be realized due to lack of profitable history to support the Company’s estimate of its future taxable income. If events occur in the future that allow the Company to realize part or all its deferred income tax, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. As of December 31, 2022 and 2023, valuation allowances of US$13,871 and US$30,042 were provided because it was more likely than not that the Company will not be able to utilize certain tax loss carry-forwards and other deferred tax assets generated by its subsidiaries. If events occur in the future that allow the Company to realize more of its deferred tax assets than the presently recorded amount, an adjustment to the valuation allowances will increase income when those events occur. Movement of valuation allowance is as follows: For the Years Ended December 31, 2021 2022 2023 Beginning balance 46,712 2,821 13,871 Additions (decreases) during the year (43,891) 11,050 16,171 Ending balance 2,821 13,871 30,042 The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2022 and 2023, the Company did not have any significant unrecognized uncertain tax positions. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Basic and Diluted Earnings (Loss) Per Share | |
Basic and Diluted Earnings (Loss) Per Share | 16. Basic and diluted earnings (loss) per share Basic and diluted earnings (loss) per share have been calculated in accordance with ASC 260 on computation of earnings (loss) per share for the years ended December 31, 2021, 2022 and 2023 as follows: For the Years Ended December 31, 2021 2022 2023 Basic earnings (loss) per share calculation Numerator: Net income (loss) 309,086 69,884 (414,153) Denominator: Weighted-average ordinary shares outstanding 2,521,667,815 2,560,106,403 2,579,202,596 Basic earnings (loss) per Class A and Class B ordinary share (US$ cent per share) 12.26 2.73 (16.06) For the Years Ended December 31, 2021 2022 2023 Diluted earnings (loss) per share calculation Numerator: Net income (loss) 309,086 69,884 (414,153) Denominator: Weighted-average ordinary shares outstanding 2,521,667,815 2,560,106,403 2,579,202,596 Add: weighted-average RSUs 54,489,432 17,785,666 — Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share 2,576,157,247 2,577,892,069 2,579,202,596 Diluted earnings (loss) per Class A and Class B ordinary share (US$ cent per share) 12.00 2.71 (16.06) The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti- dilutive are as follows: For the Year Ended December 31, 2021 2022 2023 Weighted-average RSUs — — 30,741,795 Share options 114,000,000 114,000,000 144,000,000 Warrants 70,833,345 — — |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Contingencies | |
Contingencies | 17. Contingencies On April 15, 2021, a new putative class action was filed in the United States District Court for the Southern District of New York against the Company and certain officers of the Company. The complaint alleges that the Company’s press release issued in February 2021 about increased visibility into revenue and the size and quality of orders the Company was receiving were materially false and misleading. Plaintiff claims that the truth about the Company’s revenue was revealed in April 2021, when the Company announced its latest financial results. On December 14, 2021, the Court so-ordered this stipulation. On February 7, 2022, lead plaintiffs filed an amended complaint asserting the same claims under Sections 10(b) and 20(a) of the Exchange Act against the same set of defendants. The amended complaint alleges the Company’s November 30, 2020 and February 10, 2021 press releases and the April 9, 2021 interview of the Company’s chief executive officer in an article published by Decrypt contained false and misleading statements regarding the pre-sale orders the Company had received and the Company’s ability to secure sufficient chip supply to meet the increasing demand for mining machines. On April 8, 2022, Canaan filed a motion to dismiss the amended complaint, which has been fully briefed as of July 7, 2022. On March 27, 2023, the Court granted the Company’s motion to dismiss in full. The Court also granted lead plaintiffs leave to amend their amended complaint within 30 days of the Court’s order. On May 10, 2023, lead plaintiffs informed the Court that they decided not to file a second amended complaint. On May 12, 2023, the Court entered the judgment dismissing this action with prejudice. Plaintiffs did not appeal. Also, 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | 18. Subsequent events On January 22, 2024, pursuant to the Securities Purchase Agreement, the Company closed the second tranche of the preferred shares financing (the “Second Tranche Preferred Shares Financing”) and issued 50,000 Preferred Shares in total at the price of US$1,000 per Preferred Share, raising total net proceeds of US$49,860. As of the date of the report, 45,000 Preferred Shares issued pursuant to the Second Tranche Preferred Shares Financing were converted to outstanding ADSs. In connection with the issuance of the Preferred Shares, the Company also delivered additional 2,800,000 ADSs (42,000,000 Class A ordinary shares) as pre-delivery shares. |
Condensed Financial Information
Condensed Financial Information of the Parent Company | 12 Months Ended |
Dec. 31, 2023 | |
Condensed financial information of the parent company | |
Condensed financial information of the parent company | 19. Condensed financial information of the parent company Rules 12-04(a) and 4-08(e)(3) of Regulation S-X require condensed financial information as to the financial position, cash flows and results of operations of a parent company as of and for the same periods for which the audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year. The following condensed financial statements of the Parent Company have been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Parent Company used the equity method to account for its investment in its subsidiaries. Such investment is presented on the separate condensed balance sheets of the Parent Company as “Receivables from subsidiaries”. The Parent Company, its subsidiaries were included in the consolidated financial statements whereby the inter-company balances and transactions were eliminated upon consolidation. The Parent Company’s share of income (loss) from its subsidiaries is reported as “share of income (loss) from subsidiaries” in the condensed financial statements. The Parent Company is a Cayman Islands company and, therefore, is not subject to income taxes for all years presented. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. As of December 31, 2022 and 2023, there were no material commitments or contingencies, significant provisions for long-term obligations or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any. For the purpose of the Company’s stand-alone financial statements, its investments in subsidiaries were reported using the equity method of accounting. The Company’s share of income (loss) from its subsidiaries was reported as a share of income (loss) of subsidiaries in the accompanying parent company only financial statements. Ordinarily, under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of the parent only financial information, the Company has continued to reflect its share, based on its proportionate interest, of the losses of its subsidiaries regardless of the carrying value of the investment even though the Company is not obligated to provide continuing support or fund losses. Condensed Financial Information of the Parent Company CONDENSED BALANCE SHEETS As of December 31, 2022 2023 US$ US$ ASSETS Current assets: Cash 5,682 6,902 Prepayments and other current assets 180 644 Total current assets 5,862 7,546 Non-current assets: Investments in and receivables from subsidiaries 602,798 382,605 Total assets 608,660 390,151 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Preferred shares forward contract liabilities — 40,344 Refund from depository bank – current 316 580 Other payable 80 524 Non-current liabilities: Refund from depository bank – non-current 598 516 Total liabilities 994 41,964 Shareholders’ equity: Ordinary shares — — Subscriptions receivable from shareholders — — Treasury stocks (57,055) (57,055) Additional paid-in capital 492,220 653,860 Statutory reserves 14,892 14,892 Accumulated other comprehensive loss (36,913) (43,879) Retained earnings (accumulated deficit) 194,522 (219,631) Total shareholders’ equity 607,666 348,187 Total liabilities and shareholders’ equity 608,660 390,149 CONDENSED STATEMENTS OF COMPREHENSIVE LOSS For the year ended December 31, 2021 2022 2023 US$ US$ US$ Operating expenses: General and administrative expenses (1,033) (3,120) (4,538) Loss from operations (1,033) (3,120) (4,538) Interest income — 1 323 Other income, net 316 316 337 Change in fair value of financial instruments 29,471 3,795 (10,918) Excess of fair value of Series A Convertible Preferred Shares — — (59,199) Share of income (losses) from subsidiaries 356,491 58,734 (340,158) Net income (loss) 385,245 59,726 (414,153) Foreign currency translation adjustment, net of nil tax (3,432) 14,444 (6,966) Total comprehensive income (loss) 381,813 74,170 (421,119) CONDENSED STATEMENTS OF CASH FLOWS For the year ended December 31, 2021 2022 2023 US$ US$ US$ Cash flows from operating activities Receipt of refund from depository bank — — 520 Other cash used in operating activities (1,014) (3,078) (4,459) Net cash used in operating activities (1,014) (3,078) (3,939) Cash flows from investing activities Decrease (increase) in receivables from subsidiaries (136,643) 43,869 (84,760) Net cash provided by (used in) investing activities (136,643) 43,869 (84,760) Cash flows from financing activities Repurchase of warrants — (6,358) — Payment for repurchase of ordinary shares (16,240) (33,643) — Prepayment under share repurchase agreement (90) — — Payment for cost of issuance (81) — — Proceeds from issuance of ordinary shares and warrants 158,634 — — Proceeds from issuance of ordinary shares, net of issuance costs — — 65,430 Proceeds from issuance of Series A Convertible Preferred Shares, net of issuance costs — — 24,575 Net cash provided by (used in) financing activities 142,223 (40,001) 90,005 Net increase in cash 4,566 790 1,306 Effect of exchange rate changes on cash 251 52 (86) Cash, beginning of year 23 4,840 5,682 Cash, end of year 4,840 5,682 6,902 |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Basis of preparation | (a) Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below. |
Use of estimates | (b) Use of estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that accounting estimation of variable consideration for revenue recognition, warrant liability, 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, 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. |
Consolidation | (c) Consolidation The Company’s consolidated financial statements include the financial statements of Canaan Inc. and its subsidiaries. All transactions and balances among Canaan Inc. and its subsidiaries have been eliminated upon consolidation. Subsidiaries are those entities in which Canaan Inc. directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. |
Foreign currency | (d) Foreign currency The Company has elected to change its reporting currency from Chinese Renminbi (“RMB”) to United States Dollars (“US$”) on January 1, 2023. Prior years’ comparative financial information has been recast as if the Company always used US$ as its reporting currency. The functional currency of Canaan Inc. and its subsidiaries incorporated outside of the PRC is US$, while the functional currency of the PRC entities in the Company is RMB as determined based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured at the balance sheet date exchange rate. The resulting exchange differences are included in the consolidated statements of comprehensive income (loss) as foreign exchange related gains or loss. The financial statements of the Company are translated from the functional currency to the reporting currency, US$. Assets and liabilities of PRC entities are translated into US$ using the applicable exchange rates at the balance sheet date, income and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a separate component of shareholders’ equity on the consolidated financial statement. |
Warrant Liability | (e) Warrant Liability The freestanding warrants to purchase American Depositary Share (“ADSs”) at a future date were determined to be freestanding instruments that were accounted for as a liability. At initial recognition, the Company recorded the warrant liability on the consolidated balance sheets at its estimated fair value. The proceeds from issuance of ordinary shares and warrants are firstly allocated to warrant liability based on its fair value. The residual method is used to allocate the proceeds to shareholders’ equity. The warrant liability is subject to remeasurement at each reporting period and the Company adjusted the carrying value of the warrant liability to fair value at the end of each reporting period utilizing the binominal option pricing model, with changes in estimated fair value included in the change in fair value of financial instruments on the consolidated statement of comprehensive income (loss). |
Fair value measurements | (f) Fair value measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, for the assets or liabilities either directly or indirectly. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Company’s financial instruments consist principally of cash, non-current financial investments, accounts receivable, accounts payable, preferred shares forward contract liability and other liabilities. As of December 31, 2022 and 2023, the carrying values of cash, accounts receivable, accounts payable and other liabilities approximated to their fair values reported in the consolidated balance sheets due to the short term nature of these instruments. The Group’s non-financial assets, such as Property, equipment and software and cryptocurrency, would be measured at fair value only if they were determined to be impaired. On a recurring basis, the Company measures its financial instruments at fair value. The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: Fair value at December As of December 31, 2023 Level 1 Level 2 Level 3 31, 2023 Liabilities Preferred shares forward contract liability — — 40,344 40,344 |
Cash | (g) Cash Cash represents bank deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. As of December 31, 2022 2023 RMB denominated bank deposits with financial institutions in the PRC 11,109 10,098 US dollar denominated bank deposits with financial institutions in the PRC 61,742 37,170 Others denominated bank deposits with financial institutions in the PRC 2 32 Subtotal 72,853 47,300 US dollar denominated bank deposits with overseas financial institutions 26,334 46,522 RMB denominated bank deposits with overseas financial institutions 8 7 Others denominated bank deposits with overseas financial institutions 2,356 2,325 Total 101,551 96,154 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 are insured by the government authorities with amounts up to US$1,766 and US$3,013 as of December 31, 2022 and 2023, 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. On March 10, 2023, Signature bank was closed by the California Department of Financial Protection and Innovation. On March 12, 2023, New York State Department of Financial Services took possession of Signature Bank and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. As of December 31, 2022, the Company held cash deposits US$1.1 million at Signature Bank. All these cash deposits have been transferred to another bank subsequent to the receivership by the end of March 2023. |
Accounts receivable | (h) Accounts receivable Accounts receivable are presented net of allowance for credit loss. The allowance for credit loss is based upon the amount of losses expected to be incurred in the collection of these accounts pursuant to the guidance outlined in ASU 2016-13, Financial Instruments - Credit Loss (ASU 2016-13, Topic 326, or ASC 326), which the Company adopted on January 1, 2023. The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, including specific accounts, related aging, and on historical collection experience. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Our estimate could require a change based on changing circumstances, including changes in the economy or in the circumstances of individual customers. The Company takes a write-off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. Provision for credit losses, net of recoveries for the period are included in general and administrative expenses in the accompanying consolidation statements of comprehensive income (loss). During the years ended December 31, 2021, 2022 and 2023, the Company recorded provision of allowance for accounts receivables of nil, nil and US$14, respectively. |
Inventories | (i) Inventories Inventories, consisting of finished goods, work in process and raw materials, which are purchased from contractual manufacturers and component suppliers. Inventories are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving and obsolete inventory, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. The Company considers all data available, including future demand and subsequent changes in product prices that may provide additional information about the valuation of inventories at the balance sheet date. |
Cryptocurrency | (j) Cryptocurrency Cryptocurrency is comprised of cryptocurrencies earned as noncash consideration in exchange for providing hash computation services to a mining pool as well as in exchange for the sale of mining equipment which are accounted for in connection with the Company’s revenue recognition policy disclosed in Note 2(o). Cryptocurrency is accounted for as intangible assets with indefinite useful lives in non-current assets in the consolidated balance sheets, because at the time of assessment, there is no foreseeable limit to the period over which such assets are expected to generate cash flows. The Company sells its digital currency on a first-in-first-out basis. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently if events or changes in circumstances indicate it is more likely than not that the asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. The Company has elected to bypass the optional qualitative impairment assessment and to track its cryptocurrency activity daily for impairment assessment purposes. The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, 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. The Company performs an analysis each day to identify whether events or changes in circumstances, principally decreases in the quoted price of cryptocurrency on the active trading platform, indicate that it is more likely than not that its cryptocurrencies are impaired. For impairment testing purposes, the lowest intraday trading price of cryptocurrency is identified at the single cryptocurrency level. The excess, if any, of the carrying amount of cryptocurrency and the lowest daily trading price of cryptocurrency represents a recognized impairment loss. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of previously recorded impairment losses is prohibited. During the years ended December 31, 2021, 2022 and 2023, the Company recorded impairment on cryptocurrency of nil, US$7,880 and US$4,706, respectively. The Company accounts for cryptocurrency received as customer deposits and liability to be settled in cryptocurrency at fair value of the underlying cryptocurrency with changes recorded in other income, net. As of December 31, 2022 and 2023, cryptocurrency received as customer deposits of nil and US$7,185 are recorded in accrued liabilities and other current liabilities, respectively. As of December 31, 2022 and 2023, liability to be settled in cryptocurrency of nil and nil are recorded in accounts payable, respectively. Cryptocurrency awarded to the Company through its mining activities as well as in exchange for the sale of mining equipment are included as an adjustment to reconcile net loss to cash used in operating activities on the consolidated statements of cash flows. Proceeds from disposal of cryptocurrency are included within cash flows from investing activities on the consolidated statements of cash flows and any realized gains or losses from such disposals are included in general and administrative expenses on the consolidated statements of comprehensive income (loss). |
Property, equipment and software | (k) Property, equipment and software Property, equipment and software are stated at historical cost less accumulated depreciation, amortization and impairment loss, if any. Depreciation and amortization is calculated using the straight-line method over the shorter of their estimated useful lives of these assets or the term of the related leases. The estimated useful lives are as follows: Leasehold improvements the shorter of their useful lives and the lease terms Computers and electronic equipment 3 Mechanical equipment 5 years Mining equipment 1.5 years Motor vehicles 5 years Software 3 years Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, equipment and software is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive income (loss). Construction in progress represents assets under construction. Construction in progress is transferred to property, equipment and software and depreciation or amortization commences when an asset is ready for its intended use. |
Non-Current financial Investment | (l) Non-current financial investment The Company’s non-current financial investment include an equity investment without readily determinable fair value, and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock, and is measured and recorded using a measurement alternative that measures the non-current financial investment at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. The carrying values of the Company’s non-current financial investment without readily determinable fair values were US$2,872 and US$2,824 as of December 31, 2022 and 2023. No impairment loss was recognized for the three years ended December 31, 2023. |
Impairment of long-lived assets | (m) Impairment of long-lived assets For other long-lived assets including property, equipment and software, the Company evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2021, 2022 and 2023, the Company recognized impairment charge of nil, nil and US$21,126, respectively. |
Contract liabilities | (n) Contract liabilities Cash proceeds received from customers before product delivery is recognized as contract liabilities and is recognized as revenues when revenue recognition criteria are met. The prepayments received from customers as of December 31, 2022 and 2023 was US$662 and US$19,614, respectively and the significant increase was mainly due to increased payments received for the sales orders of mining equipment to be delivered in 2024. The revenue recognized during the years ended December 31, 2021, 2022 and 2023 for the beginning balance of contract liability was US$65,771, US$196,897 and US$380, respectively. |
Revenue from contracts with customers (ASC 606) | (o) Revenue from contracts with customers (ASC 606) The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. Products revenue The Company generates revenue primarily from the sale of mining equipment directly to a customer, such as a business or individual engaged in Bitcoin mining activities. As the Bitcoin price fluctuates, the Company may adjust the selling price of mining equipment on a weekly basis, as customers are only willing to pay for machines based on their ability to recover their investment through mining Bitcoin over a relatively short period of time. The Company’s sales arrangements usually require a full prepayment before the delivery of products. The Company implemented an installment policy for certain significant, good-standing customers from 2023. The payment terms under installment policy generally consist of the installments over a period of 90 to 180 days. Revenues from product sales are recorded at the sales price (transaction price). The amount of variable consideration is included in the transaction price to the extent it is not constrained and that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period when such changes are known. The Company recognizes products revenue at a point in time based on management’s evaluation of when the control of the products has been passed to customers. The transfer of control is considered complete when products have been picked up by or shipped to the Company’s customers. The Company offers a standard product warranty of 360 days that the product will operate under normal use. At the time revenue is recognized, an estimate of future warranty costs is recorded as a component of cost of revenues. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. The amount of total warranty costs incurred was US$4,467, US$1,896 and US$3,596 for the years ended December 31, 2021, 2022 and 2023, respectively. Mining revenue The Company entered into a Bitcoin mining pool by executing a contract, as amended from time to time, with a mining pool operator to perform hash calculations in exchange for consideration. Providing hash computation services to a mining pool is an output of the Company’s ordinary activities. The provision of such hash computation services is the sole performance obligation. The mining pool arrangement is terminable at any time without substantial penalty by the mining pool and may be terminated without substantial penalty by the Company upon providing one contract day’s prior written notice. The Company’s enforceable right to compensation only begins when and continues while the Company provides hash computation services to its customer, the mining pool operator. Accordingly, the contract term with the mining pool is deemed to be less than 24 hours and to continuously renew throughout the day. Additionally, the Company concluded that the mining pool operator’s renewal right is not a material right because the renewal rights do not include any discounts; that is, the terms, conditions, and compensation amounts are at the then-current market rates. The Company is entitled to non-cash compensation based on the pool operator’s payout model. The payout methodologies differ depending on the type of third-party operated mining pool. Full-Pay-Per-Share (“FPPS”) pools pay block rewards and transaction fees, less mining pool fees and Pay-Per-Share (“PPS”) pools pay block rewards less mining pool fees but no transaction fees. For FPPS and PPS pools, the Company is entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. The Company receives Bitcoin from mining operation, which is considered noncash and all variable. The fair value of the Bitcoin award received would generally be determined using the quoted price of Bitcoin in the Company’s principal market at the time of 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 related noncash consideration. Revenue is recognized when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is the same day that control of the contracted service transfers to the mining pool and is the same day as the contract inception. After every 24-hour contract term, the mining pool transfers the Bitcoin consideration to the Company’s designated Bitcoin currency wallets. Consideration payable to the customer in the form of a pool operator fee, which is incurred only to the extent that the Company has generated consideration, is deducted from the bitcoin the Company receives and is recorded as contra - revenue, as it does not represent a payment for a distinct good or service. Other revenues The Company also generates a small portion of revenue from the leases of mining equipment and maintenance or development services under separate contracts. Revenue is recognized over the period when the related services were rendered to the customers. |
Revenue from lease arrangements as lessor (ASC 842, Lease) | (p) Revenue from lease arrangements as lessor (ASC 842, Lease) From July 2019, the Company started to generate revenue from the leases of mining equipment for Bitcoin mining to its customers. The leases cannot generally be extended or terminated at the customer’s discretion. However, upon the mutual agreement of the parties, the leases can be early terminated after three months. Rental charges are computed based on a time rate of machine’s type and rental period. The leases of mining equipment meet the classification of operating leases, and revenues from operating leases are recognized on a straight-line basis over the contract terms. The Company ceased leasing mining equipment in the second quarter of 2021. |
Value-added-tax ("VAT") recoverable and surcharges | (q) Value-added-tax (“VAT”) recoverable and surcharges Value added tax recoverable represent amounts paid by the Company for purchases. The surcharges (i.e., Urban construction and maintenance tax, educational surtax, local educational surtax), vary from 6% to 12% of the value-added-tax paid depending on the taxpayer’s location. |
Cost of revenues | (r) Cost of revenues Amounts recorded as cost of revenues relate to direct expenses incurred to generate revenue. Such costs are recorded as incurred. Cost of revenues consists of product costs, mining costs and other costs. Product costs include costs of raw material, contractual manufacturers for production, labor costs, shipping and handling costs, manufacturing and depreciation, warehousing costs, inventories write-downs, prepayments write-downs, provision for reserve for inventory purchase commitments and tax surcharges. Mining costs include direct production costs of mining operations, including electricity and hosting, as well as depreciation of deployed mining machines. Other costs include labor costs and other service costs. |
Research and development expenses | (s) Research and development expenses Research and development expenses consist primarily of salary and welfare for research and development personnel, consulting and contractor expenses, testing and tooling materials and other expenses in associated with research and development personnel. The Company recognizes research and development expenses as expense when incurred. |
Sales and marketing expenses | (t) Sales and marketing expenses Sales and marketing expenses consist primarily of salary and welfare for sales and marketing personnel, promotion and marketing expenses and other expenses in association with sales and marketing personnel. Advertising expense is expensed as incurred and included in selling and marketing expenses. The advertising expenses were US$691, US$964 and US$1,643 for the years ended December 31, 2021, 2022 and 2023, respectively. |
General and administrative expenses | (u) General and administrative expenses General and administrative expenses consist primarily of salary and welfare for general and administrative personnel, rental expenses and depreciation in association with general and administrative personnel, allowance for doubtful receivables, entertainment expense, general office expense and professional service fees. |
Government grants | (v) Government grants Government grants generally consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. The eligibility to receive such benefits and amount of financial subsidy to be granted are determined at the discretion of the relevant government authorities. Government grants are recognized when there are reasonable assurances that the Company will comply with the conditions attach to them and the grants are received. Government grants for the purpose of giving immediate financial support to the Company with no future related costs or obligation are recognized in the Company’s consolidated statements of comprehensive income (loss) when the grants are received. Government grants with conditions attached to them are recognized as liabilities when received, and will be released to the consolidated statements of comprehensive income (loss) when the Company is not subject to further obligation or future refunds. US$883, US$2,861 and US$3,559 were recognized in other income, net for the years ended December 31, 2021, 2022, and 2023, respectively. Nil and US$9,191 were recognized in deferred government grant of accrued liabilities and other liabilities as of December 31, 2022 and 2023, respectively (Note 9). |
Lease arrangement as lessee | (w) Lease arrangement as lessee The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current, and operating lease liabilities, non-current in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The Company has elected not to recognize operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less and the Company recognizes lease expense for these leases on a straight-line basis over the lease terms. |
Employee social security and welfare benefits | (x) Employee social security and welfare benefits Employees of the Company in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated defined contribution plan. The Company is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses in the consolidated statements of comprehensive income (loss) amounted to US$4,299, US$7,016 and US$9,561 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Income taxes | (y) Income taxes The Company accounts for income taxes under the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax income rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that some portion or all deferred income tax asset will not be realized in the foreseeable future. The Company evaluates its uncertain tax positions using the provisions of ASC 740-10, Income Taxes |
Share-based compensation | (z) Share-based compensation The Company grants restricted shares and share options to eligible employees and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Employees’ share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; or b) for share-based awards granted with only service conditions, using the graded vesting method, over the vesting period; or c) for share-based awards with service conditions, using the graded vesting method, net of estimated pre-vesting forfeitures, over the vesting period. If the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed as occurred. A change in any of the terms or conditions of share-based awards is accounted for as a modification of the awards. The Company calculates incremental compensation expense of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period when the modification occurs. For awards not being fully vested, the Company recognizes the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original awards over the remaining requisite service period after modification. Share-based compensation in relation to the restricted shares is measured based on the fair market value of the Company’s ordinary shares at the grant date of the award. Share-based compensation in relation to the share options is estimated using the Binomial Model. The determination of the fair value of share options is affected by the share price of the Company’s ordinary shares as well as the assumptions regarding a number of complex and subjective variables, including the expected share price volatility, risk-free interest rate, exercise multiple and expected dividend yield. The fair value of these share options was determined by management with the assistance from an independent valuation firm. |
Statutory reserves | (aa) Statutory reserves The Company’s subsidiaries incorporated in the PRC are required on an annual basis to make appropriations of retained earnings set at certain percentage of after-tax profit determined in accordance with PRC accounting standards and regulations (“PRC GAAP”). Appropriation to the statutory general reserve should be at least 10% of the after tax net income determined in accordance with the legal requirements in the PRC until the reserve is equal to 50% of the entities’ registered capital. The Company is not required to make appropriation to other reserve funds and the Company does not have any intentions to make appropriations to any other reserve funds. The general reserve fund can only be used for specific purposes, such as offsetting the accumulated losses, enterprise expansion or increasing the registered capital. Appropriations to the general reserve funds are classified in the consolidated balance sheets as statutory reserves. There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Company has not done so. Relevant laws and regulations permit payments of dividends by the PRC subsidiaries and affiliated companies only out of their retained earnings, if any, as determined in accordance with respective accounting standards and regulations. Accordingly, the above balances are not allowed to be transferred to Canaan Inc. in terms of cash dividends, loans or advances. The Company has made US$17, US$769 and nil appropriations to statutory reserve for the years ended December 31, 2021, 2022 and 2023, respectively. |
Repurchase of share | (ab) Repurchase of share The Company accounts for treasury stock using the cost method. Under the cost method, when the Company’s shares are acquired for purposes other than retirement, the costs of the acquired stock will be shown separately as a deduction from the total of capital stock. |
Earnings (loss) per share | (ac) Earnings (loss) per share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalents shares outstanding during the period. Dilutive equivalent shares are excluded from the computation of diluted earnings (loss) per share if their effects would be anti- dilutive. ordinary share equivalents consist of the ordinary shares issuable in connection with the Company’s ordinary shares issuable upon the conversion of the share-based awards, using the treasury stock method. |
Comprehensive income (loss) | (ad) Comprehensive income (loss) Comprehensive income (loss) is defined as the change in shareholders’ equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive income (loss) is reported in the consolidated statements of comprehensive income (loss). Accumulated other comprehensive loss of the Company include the foreign currency translation adjustments. |
Segment reporting | (ae) Segment reporting Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision makers in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results including revenue, gross profit and operating profit at a consolidated level only. The Company does not distinguish between markets for the purpose of making decisions about resources allocation and performance assessment. Hence, the Company has only one operating segment and one reportable segment. Long-lived assets consist of cryptocurrency, property, equipment and software, net, operating lease right-of-use assets and other non-current assets. As of December 31, 2023, the long-lived assets, net of US$9,266 were located in the United States, US$6,708 were located in Ethiopia and US$1,679 were located in Central Asia. The remaining long-lived assets were mainly located in PRC. The Company’s revenue segregated by geographic region is disclosed below. The geographical region of revenue generated is based on the location where the customers based or the services were provided: For the Years Ended December 31, Geographic region 2021 2022 2023 Mainland China 275,824 18,267 115,526 United States of America 48,461 93,921 28,101 Kazakhstan 110,272 57,546 24,571 Malaysia — 119,337 15,326 Thailand 44,787 2,774 3,701 Indonesia — 215,198 300 Canada 62,371 18,271 259 Australia 56,001 60,379 9 Cyprus 98,142 36,230 7 Other countries or regions 76,904 29,603 23,677 Total 772,762 651,526 211,477 |
Recently issued accounting pronouncements | (af) Recently issued accounting pronouncements i. New and amended standards adopted by the Company: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 was further amended in November 2018 by ASU 2018-19 and in November 2019 by ASU 2019-10. All guidance is collectively referred to as “ASC326”. This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability. The guidance is effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC for annual reporting periods, and interim periods within those years beginning after December 15, 2019. For all other entities, it is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As the Company is an “emerging growth company” and elects to apply for the new and revised accounting standards at the effective date for a private company, ASC326 has been applied for the year beginning on January 1, 2023. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. ii. New and amended standards not yet adopted by the Company: In August 2020, the FASB issued Accounting Standards Update 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. As the Company is an “emerging growth company” and elects to apply for the new and revised accounting standards at the effective date for a private company. The Company adopted ASU 2020-06 for the year beginning on January 1, 2024 and does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial statements. On December 13, 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted, and should be applied using a modified retrospective transition method with a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the beginning of the year of adoption. The Company early adopted ASU 2023-08 on January 1, 2024, which has a cumulative adjustment to increase the opening balance of retained earnings by US$18,723. In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories and additional reconciling items that meet quantitative thresholds and expands disclosures for income taxes paid by requiring disaggregation by certain jurisdictions. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods; early adoption is permitted. The Company plans to adopt ASU 2023-09 for the year beginning on January 1, 2025 and does not expect the updated guidance to have a material impact on its disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to enhance reportable segment disclosures by requiring disclosures of significant segment expenses regularly provided to the CODM, requiring disclosure of the title and position of the CODM and explanation of how the reported measures of segment profit and loss are used by the CODM in assessing segment performance and allocation of resources. ASU 2023-07 is effective for all public entities for annual periods beginning after December 31, 2023; early adoption is permitted. The Company adopted ASU 2023-07 for the year beginning on January 1, 2024 and does not expect the updated guidance to have a material impact on its disclosures. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair value at December As of December 31, 2023 Level 1 Level 2 Level 3 31, 2023 Liabilities Preferred shares forward contract liability — — 40,344 40,344 |
Schedule of cash and cash equivalents | Cash represents bank deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. As of December 31, 2022 2023 RMB denominated bank deposits with financial institutions in the PRC 11,109 10,098 US dollar denominated bank deposits with financial institutions in the PRC 61,742 37,170 Others denominated bank deposits with financial institutions in the PRC 2 32 Subtotal 72,853 47,300 US dollar denominated bank deposits with overseas financial institutions 26,334 46,522 RMB denominated bank deposits with overseas financial institutions 8 7 Others denominated bank deposits with overseas financial institutions 2,356 2,325 Total 101,551 96,154 |
Schedule of estimated useful lives | The estimated useful lives are as follows: Leasehold improvements the shorter of their useful lives and the lease terms Computers and electronic equipment 3 Mechanical equipment 5 years Mining equipment 1.5 years Motor vehicles 5 years Software 3 years |
Schedule of revenue segregated by geographic region | The geographical region of revenue generated is based on the location where the customers based or the services were provided: For the Years Ended December 31, Geographic region 2021 2022 2023 Mainland China 275,824 18,267 115,526 United States of America 48,461 93,921 28,101 Kazakhstan 110,272 57,546 24,571 Malaysia — 119,337 15,326 Thailand 44,787 2,774 3,701 Indonesia — 215,198 300 Canada 62,371 18,271 259 Australia 56,001 60,379 9 Cyprus 98,142 36,230 7 Other countries or regions 76,904 29,603 23,677 Total 772,762 651,526 211,477 |
Risks and concentration (Tables
Risks and concentration (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Risks and concentration | |
Summary of accounts receivable concentration of credit risk and customers contribution of total revenue | Accounts receivable concentration of credit risk is as below: As of December 31, 2022 2023 Customer A — 97 % Customers which contributed more than 10% of total revenue are as below: For the Years Ended December 31, 2021 2022 2023 Customer B * 33 % * Customer C 18 % 22 % * Customer D * 16 % * Customer E * * 14 % * Less than 10% |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Schedule of inventories | As of December 31, 2022 2023 Raw materials 113,306 95,065 Work in process 37,538 15,898 Finished goods 60,796 31,324 Total 211,640 142,287 |
Prepayments and other assets (T
Prepayments and other assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other assets | |
Schedule of prepayments and other assets | As of December 31, 2022 2023 Prepayments and other current assets Prepayments to vendors (Note a) 158,687 46,277 VAT recoverable and refund 72,402 55,403 Deferred charges 6,166 7,546 Deposits 3,329 3,746 Prepayment for repurchase of ordinary shares 3 — Others (Note b) 1,936 9,270 Total 242,523 122,242 Other non-current assets Long-term rental and other deposits 2,448 486 Prepayments for purchase of software 56 — Total 2,504 486 |
Cryptocurrency (Tables)
Cryptocurrency (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cryptocurrency. | |
Schedule of cryptocurrency | As of December 31 2022 2023 Gross carrying amount 15,076 32,603 Less: Impairment of cryptocurrency (2,545) (4,261) Net 12,531 28,342 |
Schedule of additional information about cryptocurrency | For the years ended December 31, 2022 2023 Beginning balance 3,186 12,531 Revenue recognized on acceptance of cryptocurrency 35,500 58,959 Receipt of cryptocurrency as customer deposits — 4,922 Cost of revenues recognized on payment of cryptocurrency (8,463) (8,854) Proceeds from disposal of cryptocurrency (9,642) (40,645) Realized (gain)loss on disposal of cryptocurrency (170) 6,135 Impairment of cryptocurrency (7,880) (4,706) Ending balance 12,531 28,342 |
Property, equipment and softw_2
Property, equipment and software, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, equipment and software, net | |
Schedule of property, equipment and software | As of December 31, 2022 2023 Cost: Mining equipment 102,964 95,215 Computers and electronic equipment 10,008 10,940 Leasehold improvements 4,805 5,772 Mechanical equipment 123 114 Software 2,360 3,283 Motor vehicles 78 243 Total cost 120,338 115,567 Less: Accumulated depreciation and amortization (34,988) (86,101) Property, equipment and software, net 85,350 29,466 |
Schedule of depreciation and amortization expenses | For the Years Ended December 31, 2021 2022 2023 Cost of revenues 266 31,002 54,478 Research and development expenses 438 900 400 Sales and marketing expenses 4 8 36 General and administrative expenses 998 1,779 4,727 Total 1,706 33,689 59,641 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Components of lease expenses | (a) The components of lease expenses were as follows: For the Years Ended December 31, 2021 2022 2023 Lease cost: Reduction in the carrying amount of ROU assets 2,758 2,254 2,481 Interest of operating lease liabilities 253 193 115 Expenses for short-term lease within 12 months — 216 417 Total lease cost 3,011 2,663 3,013 |
Summary of supplemental cash flow information related to leases | For the Years Ended December 31, 2021 2022 2023 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases 3,253 2,944 2,356 Operating lease right-of-use assets obtained in exchange for lease obligations: Operating leases 5,752 2,398 2,358 Operating lease liability settled through termination of lease: Operating leases 406 358 2,301 |
Summary of supplemental balance sheet information related to leases | As of December 31, 2021 2022 2023 Weighted-average remaining lease term Operating leases 2.4 year 1.9 year 1.2 year Weighted-average discount rate Operating lease 5.17% per annum 4.58% per annum 4.55% per annum |
Schedule of maturities of lease liabilities | Years Ending December 31, As of December 31, 2023 2024 1,244 2025 212 Total undiscounted lease payments 1,456 Less: imputed interest (30) Total operating lease liabilities 1,426 Amounts due within 12 months 1,216 Non-current operating lease liability 210 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities | |
Schedule of accrued liabilities and other liabilities | As of December 31, 2022 2023 Accrued liabilities and other current liabilities Provision for reserve for inventory purchase commitments (Note a) 10,890 20,706 Salary and welfare payable 20,744 19,623 Customer deposits — 7,185 Other tax payables 8,057 7,019 Customer refund 4,226 3,812 VAT received from customers related to contract liabilities 19 1,429 Warranty reserve (Note b) 1,716 878 Others 2,697 3,588 Total 48,349 64,240 Other non-current liabilities Deferred government grant — 9,191 Refund from depository bank – non-current 598 516 Total 598 9,707 |
Schedule of product warranty liability | Movement of provision for warranty is as follows: For the year ended December 31, 2022 2023 Accrued warranty—beginning of year 2,827 1,716 Accrual for warranties issued during the year 1,896 1,902 Warranty claims paid (1,167) (1,532) Warranty expired (1,632) (980) Foreign currency translation adjustment (208) (228) Accrued warranty—end of year 1,716 878 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Summary of Significant Unobservable Inputs Used In Calculation Of Warrant Liability | Fair Value at Fair Value at June 23, 2022 December 31, 2021 (remeasurement date) Risk Free Rate 0.37%-0.81 % 2.32%-2.63 % Volatility 131.47%-127.93 % 126.66%-140.39 % Expected dividend yield 0 % 0 % Expected term 2.3 years-3 years 1.9 years-2.1 years |
Schedule of movement of warrant liability | For the years ended December 31, 2022 Beginning balance 10,406 Issuance of warrant — Change in fair value of financial instruments (3,795) Repurchase of warrant liability (6,611) Ending balance — |
Series A Convertible Preferre_2
Series A Convertible Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Series A Convertible Preferred Shares | |
Schedule of changes in the value | Forward Contract First Tranche Liabilities Beginning balance — — Fair value upon issuance 44,421 38,842 Change in fair value 9,416 1,502 Conversion to outstanding ADSs (53,837) — Ending balance — 40,344 |
First Tranche Preferred Shares Financing | |
Series A Convertible Preferred Shares | |
Schedule of significant assumptions | Fair Value of First Tranche December 14, 2023 to December 11, 2023 December 21, 2023 (issuance date) (remeasurement dates) Risk Free Rate 4.98 % 4.69%-4.81 % Volatility 100.55 % 96.00%-103.81 % Expected bond yield 7.83 % 7.37%-7.48 % |
Series A Convertible Preferred Shares Forward Purchase Liabilities | |
Series A Convertible Preferred Shares | |
Schedule of significant assumptions | Fair Value of Forward Contract Liability December 11, 2023 (issuance date) December 31, 2023 Discount Rate 4.98 % 5.14 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Stock Option Activity | The following table summarizes the share options for the years ended December 31, 2021, 2022 and 2023: Weighted-Average Weighted per Share Average Number of Exercise Remaining Aggregate shares Price Contractual Term Intrinsic Value US$ Years US$ Outstanding as of December 31, 2020 — — — — Granted 114,000,000 0.76 — — Outstanding as of December 31, 2021 114,000,000 0.76 9.10 — Outstanding as of December 31, 2022 114,000,000 0.76 8.12 — Granted 30,000,000 0.40 — — Outstanding as of December 31, 2023 144,000,000 0.69 7.53 — Expected to vest as of December 31, 2023 144,000,000 0.69 7.53 — Exercisable as of December 31, 2023 84,000,000 0.69 7.53 — |
Summary of fair values of the share options granted | The fair values of the share options granted by the Company to employees for the year ended December 31, 2023 are as follows: For the Year Ended December 31, 2023 Weighted average grant date fair value of option per share 0.53 Aggregate grant date fair value of options 75,638 |
Summary of assumptions used to determine the fair value of stock options | The assumptions used to estimate the fair values of the share options granted were as follows: For the Year Ended December 31, For the Year Ended December 31, 2021 2023 Risk-free rate of return (1) 1.25% to 1.85 % 3.85% to 3.92 % Dividend yield (2) 0 % 0 % Expected volatility (3) 136.91% to 142.01 % 124.86 % Expected term (4) 10 years 10 years Exercise multiple (5) 2.80 2.80 Fair value of ordinary share US$3.78 per ADS to US$17.51 per ADS US$1.79 per ADS |
Restricted Share Units | |
Summary of Restricted Shares Activity | The following table summarizes the RSUs activity for the years ended December 31, 2021, 2022 and 2023: Number of Weighted average shares grant date fair value US$ Outstanding as of December 31, 2020 9,040,000 0.23 Granted 236,768,940 0.58 Forfeited (6,991,000) 0.48 Vested (101,574,270) 0.33 Outstanding as of December 31, 2021 137,243,670 0.74 Granted 62,410,200 0.25 Forfeited (22,844,235) 0.32 Vested (53,018,580) 0.68 Outstanding as of December 31, 2022 123,791,055 0.60 Granted 102,323,925 0.15 Forfeited (28,129,155) 0.29 Vested (51,031,395) 0.60 Outstanding as of December 31, 2023 146,954,430 0.35 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of income (loss) before income taxes | Income (loss) before income tax expense consisted of: For the Years Ended December 31, 2021 2022 2023 Mainland China 290,666 126,902 (251,871) United States of America (951) (15,858) (79,753) Cayman 30,544 2,024 (69,376) Singapore 1,013 (16,644) (8,970) Others (4,421) (8,090) (55,523) Total 316,851 88,334 (465,493) |
Schedule of Reconciliation Between Effective Income Tax Rate and PRC Statutory Income Tax Rate | A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows: For the Years Ended December 31, 2021 2022 2023 PRC statutory income tax rates 25.0 % 25.0 % (25.0) % Permanent book-tax difference 1.4 % (2.4) % (1.9) % Share-based compensation 3.4 % 5.5 % 1.0 % Super deduction of R&D expense (2.6) % (14.0) % (2.9) % Others 0.6 % 6.1 % 0.0 % Different tax rates in other jurisdictions (2.2) % 2.0 % 7.8 % Effect of tax holiday (7.8) % (16.9) % 4.7 % Change in valuation allowance (14.0) % 12.6 % 3.4 % Total 2.4 % 20.3 % (11.0) % Effects of tax holidays entitled by the PRC subsidiaries 24,832 15,354 21,998 Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) per Class A and Class B ordinary share (US$ cent per share) 0.98 0.60 0.85 |
Schedule of Composition of Income Tax Expense | The current and deferred portions of income tax expense included in the consolidated statements of comprehensive income (loss) are as follows: For the Years Ended December 31, 2021 2022 2023 Current income tax expense (benefits) 23,113 26,241 (5,654) Deferred income tax benefits (15,348) (7,791) (45,686) Income tax expense (benefits) 7,765 18,450 (51,340) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to the deferred tax asset balances as of December 31, 2022 and 2023 are as follows: As of December 31, 2022 2023 Deferred tax assets Tax losses carried forward 10,290 57,519 Write-down of inventories 15,540 26,608 Property, equipment and software 5,012 6,597 Share-based compensation 4,427 5,646 Warranty reserve 139 281 Operating lease right-of-use assets — 260 Allowance for doubtful accounts 203 200 Total gross deferred tax assets 35,611 97,111 Less: Valuation allowance (13,871) (30,042) Deferred tax assets, net of valuation allowance 21,740 67,069 Deferred tax liabilities Operating lease liabilities — (260) Total gross deferred tax liabilities — (260) Net deferred tax assets 21,740 66,809 |
Schedule of Movement of Valuation Allowance | Movement of valuation allowance is as follows: For the Years Ended December 31, 2021 2022 2023 Beginning balance 46,712 2,821 13,871 Additions (decreases) during the year (43,891) 11,050 16,171 Ending balance 2,821 13,871 30,042 |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Basic and Diluted Earnings (Loss) Per Share | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings (loss) per share have been calculated in accordance with ASC 260 on computation of earnings (loss) per share for the years ended December 31, 2021, 2022 and 2023 as follows: For the Years Ended December 31, 2021 2022 2023 Basic earnings (loss) per share calculation Numerator: Net income (loss) 309,086 69,884 (414,153) Denominator: Weighted-average ordinary shares outstanding 2,521,667,815 2,560,106,403 2,579,202,596 Basic earnings (loss) per Class A and Class B ordinary share (US$ cent per share) 12.26 2.73 (16.06) For the Years Ended December 31, 2021 2022 2023 Diluted earnings (loss) per share calculation Numerator: Net income (loss) 309,086 69,884 (414,153) Denominator: Weighted-average ordinary shares outstanding 2,521,667,815 2,560,106,403 2,579,202,596 Add: weighted-average RSUs 54,489,432 17,785,666 — Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share 2,576,157,247 2,577,892,069 2,579,202,596 Diluted earnings (loss) per Class A and Class B ordinary share (US$ cent per share) 12.00 2.71 (16.06) |
Effects of Outstanding RSUs Excluded From Computation of Diluted Loss Per Share Due to Anti-Dilutive Effect | The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti- dilutive are as follows: For the Year Ended December 31, 2021 2022 2023 Weighted-average RSUs — — 30,741,795 Share options 114,000,000 114,000,000 144,000,000 Warrants 70,833,345 — — |
Condensed Financial Informati_2
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Condensed financial information of the parent company | |
Schedule of Condensed Balance Sheets | CONDENSED BALANCE SHEETS As of December 31, 2022 2023 US$ US$ ASSETS Current assets: Cash 5,682 6,902 Prepayments and other current assets 180 644 Total current assets 5,862 7,546 Non-current assets: Investments in and receivables from subsidiaries 602,798 382,605 Total assets 608,660 390,151 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Preferred shares forward contract liabilities — 40,344 Refund from depository bank – current 316 580 Other payable 80 524 Non-current liabilities: Refund from depository bank – non-current 598 516 Total liabilities 994 41,964 Shareholders’ equity: Ordinary shares — — Subscriptions receivable from shareholders — — Treasury stocks (57,055) (57,055) Additional paid-in capital 492,220 653,860 Statutory reserves 14,892 14,892 Accumulated other comprehensive loss (36,913) (43,879) Retained earnings (accumulated deficit) 194,522 (219,631) Total shareholders’ equity 607,666 348,187 Total liabilities and shareholders’ equity 608,660 390,149 |
Schedule of Condensed Statements of Comprehensive Loss | CONDENSED STATEMENTS OF COMPREHENSIVE LOSS For the year ended December 31, 2021 2022 2023 US$ US$ US$ Operating expenses: General and administrative expenses (1,033) (3,120) (4,538) Loss from operations (1,033) (3,120) (4,538) Interest income — 1 323 Other income, net 316 316 337 Change in fair value of financial instruments 29,471 3,795 (10,918) Excess of fair value of Series A Convertible Preferred Shares — — (59,199) Share of income (losses) from subsidiaries 356,491 58,734 (340,158) Net income (loss) 385,245 59,726 (414,153) Foreign currency translation adjustment, net of nil tax (3,432) 14,444 (6,966) Total comprehensive income (loss) 381,813 74,170 (421,119) |
Schedule of Condensed Statements of Cash Flows | CONDENSED STATEMENTS OF CASH FLOWS For the year ended December 31, 2021 2022 2023 US$ US$ US$ Cash flows from operating activities Receipt of refund from depository bank — — 520 Other cash used in operating activities (1,014) (3,078) (4,459) Net cash used in operating activities (1,014) (3,078) (3,939) Cash flows from investing activities Decrease (increase) in receivables from subsidiaries (136,643) 43,869 (84,760) Net cash provided by (used in) investing activities (136,643) 43,869 (84,760) Cash flows from financing activities Repurchase of warrants — (6,358) — Payment for repurchase of ordinary shares (16,240) (33,643) — Prepayment under share repurchase agreement (90) — — Payment for cost of issuance (81) — — Proceeds from issuance of ordinary shares and warrants 158,634 — — Proceeds from issuance of ordinary shares, net of issuance costs — — 65,430 Proceeds from issuance of Series A Convertible Preferred Shares, net of issuance costs — — 24,575 Net cash provided by (used in) financing activities 142,223 (40,001) 90,005 Net increase in cash 4,566 790 1,306 Effect of exchange rate changes on cash 251 52 (86) Cash, beginning of year 23 4,840 5,682 Cash, end of year 4,840 5,682 6,902 |
Summary of significant accoun_4
Summary of significant accounting policies - Fair value of financial instruments (Details) - Series A Convertible Preferred Shares Forward Purchase Liabilities - Fair Value, Recurring $ in Thousands | Dec. 31, 2023 USD ($) |
Fair value of financial instruments | |
Balance at fair value | $ 40,344 |
Level 3 | |
Fair value of financial instruments | |
Balance at fair value | $ 40,344 |
Summary of significant accoun_5
Summary of significant accounting policies - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | |
Deposits with signature bank | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash deposits | $ 1,100 | |
China | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 72,853 | $ 47,300 |
Overseas | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 101,551 | 96,154 |
RMB | China | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 11,109 | 10,098 |
RMB | Overseas | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 8 | 7 |
US dollar | China | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 61,742 | 37,170 |
US dollar | Overseas | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 26,334 | 46,522 |
Other Currency | China | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | 2 | 32 |
Other Currency | Overseas | ||
Disclosure Of Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents, at carrying value | $ 2,356 | $ 2,325 |
Summary of significant accoun_6
Summary of significant accounting policies - Additional Information (Details) ₸ in Thousands, ¥ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 HKD ($) | Dec. 31, 2023 SGD ($) | Dec. 31, 2023 KZT (₸) | |
Summary of significant accounting policies | |||||||
Allowance for accounts receivable | $ 14 | $ 0 | $ 0 | ||||
Accounts payable | 0 | 0 | |||||
Impairment on cryptocurrency | 4,706 | 7,880 | 0 | ||||
Customer deposits | 7,185 | 0 | |||||
Impairment of indefinitely lived intangible assets | 4,706 | 7,880 | 0 | ||||
Non-current financial investment without readily determinable fair values | 2,824 | 2,872 | |||||
Impairment loss | 0 | ||||||
Impairment loss of property, equipment and software | 21,126 | 0 | 0 | ||||
Prepayment received from customers | 19,614 | 662 | |||||
Revenue recognized from contract liability | $ 380 | 196,897 | 65,771 | ||||
Payment terms under credit sales | The payment terms under installment policy generally consist of the installments over a period of 90 to 180 days. | ||||||
Standard product warranty | 360 days that the product will operate under normal use | ||||||
Warranty costs incurred | $ 3,596 | 1,896 | 4,467 | ||||
Advertising expense | 1,643 | 964 | 691 | ||||
Deferred government grant | 9,191 | 0 | |||||
Employee social security and welfare benefit expenses | $ 9,561 | 7,016 | 4,299 | ||||
Appropriation to statutory general reserve percentage | 10% | ||||||
Statutory general reserve required maximum percentage of registered capital | 50% | ||||||
Number of operating segment | segment | 1 | ||||||
Number of reportable segment | segment | 1 | ||||||
Cumulative adjustment to increase retained earnings | $ (219,631) | 194,522 | |||||
Accounting Standards Update 2023-08 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Summary of significant accounting policies | |||||||
Cumulative adjustment to increase retained earnings | 18,723 | ||||||
Bank Time Deposits [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | 3,013 | 1,766 | |||||
Deposits with signature bank | |||||||
Summary of significant accounting policies | |||||||
Cash deposits | 1,100 | ||||||
CHINA | Deposits With Financial Institution [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | ¥ | ¥ 500 | ||||||
HONG KONG | Deposits With Financial Institution [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | $ 500 | ||||||
UNITED STATES | |||||||
Summary of significant accounting policies | |||||||
Long lived assets, net | 9,266 | ||||||
UNITED STATES | Deposits With Financial Institution [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | 250 | ||||||
SINGAPORE | Deposits With Financial Institution [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | $ 75 | ||||||
KAZAKHSTAN | Deposits With Financial Institution [Member] | |||||||
Summary of significant accounting policies | |||||||
Bank deposits insured by government authorities | ₸ | ₸ 15,000 | ||||||
Central Asia | |||||||
Summary of significant accounting policies | |||||||
Long lived assets, net | 1,679 | ||||||
ETHIOPIA | |||||||
Summary of significant accounting policies | |||||||
Long lived assets, net | 6,708 | ||||||
Other Income [Member] | |||||||
Summary of significant accounting policies | |||||||
Government grants received | $ 3,559 | 2,861 | 883 | ||||
Minimum | |||||||
Summary of significant accounting policies | |||||||
Value added tax recoverable percentage | 6% | ||||||
Maximum | |||||||
Summary of significant accounting policies | |||||||
Value added tax recoverable percentage | 12% | ||||||
Statutory Reserves | |||||||
Summary of significant accounting policies | |||||||
Profit appropriations to statutory reserves | $ 0 | 769 | $ 17 | ||||
Cryptocurrency | |||||||
Summary of significant accounting policies | |||||||
Impairment on cryptocurrency | 4,706 | 7,880 | |||||
Customer deposits | 7,185 | 0 | |||||
Impairment of indefinitely lived intangible assets | $ 4,706 | $ 7,880 |
Summary of significant accoun_7
Summary of significant accounting policies - Schedule of Estimated Useful Lives (Details) | Dec. 31, 2023 |
Leasehold Improvements | |
Property, Equipment and Software | |
Estimated useful lives | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Computers and Electronic Equipment | Minimum | |
Property, Equipment and Software | |
Estimated useful lives | 3 years |
Computers and Electronic Equipment | Maximum | |
Property, Equipment and Software | |
Estimated useful lives | 5 years |
Mechanical Equipment | |
Property, Equipment and Software | |
Estimated useful lives | 5 years |
Mining Equipment | |
Property, Equipment and Software | |
Estimated useful lives | 1 year 6 months |
Motor Vehicles | |
Property, Equipment and Software | |
Estimated useful lives | 5 years |
Software | |
Property, Equipment and Software | |
Estimated useful lives | 3 years |
Summary of significant accoun_8
Summary of significant accounting policies - Summary of Revenue Segregated by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of significant accounting policies | |||
Total net revenues | $ 211,477 | $ 651,526 | $ 772,762 |
Mainland China | |||
Summary of significant accounting policies | |||
Total net revenues | 115,526 | 18,267 | 275,824 |
United States of America | |||
Summary of significant accounting policies | |||
Total net revenues | 28,101 | 93,921 | 48,461 |
Kazakhstan | |||
Summary of significant accounting policies | |||
Total net revenues | 24,571 | 57,546 | 110,272 |
Malaysia | |||
Summary of significant accounting policies | |||
Total net revenues | 15,326 | 119,337 | |
Thailand | |||
Summary of significant accounting policies | |||
Total net revenues | 3,701 | 2,774 | 44,787 |
Indonesia | |||
Summary of significant accounting policies | |||
Total net revenues | 300 | 215,198 | |
Canada | |||
Summary of significant accounting policies | |||
Total net revenues | 259 | 18,271 | 62,371 |
Australia | |||
Summary of significant accounting policies | |||
Total net revenues | 9 | 60,379 | 56,001 |
Cyprus | |||
Summary of significant accounting policies | |||
Total net revenues | 7 | 36,230 | 98,142 |
Other countries or regions | |||
Summary of significant accounting policies | |||
Total net revenues | $ 23,677 | $ 29,603 | $ 76,904 |
Risks and concentration (Detail
Risks and concentration (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration of credit risk | Accounts receivable | Customer A | |||
Risks and concentration | |||
Concentration risk, percentage | 97% | ||
Customer concentration risk | Total revenue | Customer B | |||
Risks and concentration | |||
Concentration risk, percentage | 33% | ||
Customer concentration risk | Total revenue | Customer C | |||
Risks and concentration | |||
Concentration risk, percentage | 22% | 18% | |
Customer concentration risk | Total revenue | Customer D | |||
Risks and concentration | |||
Concentration risk, percentage | 16% | ||
Customer concentration risk | Total revenue | Customer E | |||
Risks and concentration | |||
Concentration risk, percentage | 14% |
Risks and concentration - Addit
Risks and concentration - Additional information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Risks and concentration | ||
Accounts receivable current | $ 2,997 | |
Concentration of credit risk | ||
Risks and concentration | ||
Accounts receivable current | $ 2,997 | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw materials | $ 95,065 | $ 113,306 |
Work in process | 15,898 | 37,538 |
Finished goods | 31,324 | 60,796 |
Total | $ 142,287 | $ 211,640 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventories | |||
Inventory write-down | $ 174,838 | $ 69,524 | $ 7,859 |
Prepayments and other assets -
Prepayments and other assets - Summary of Prepayments and other assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepayments and other current assets | ||
Prepayments to vendors (Note a) | $ 46,277 | $ 158,687 |
VAT recoverable and refund | 55,403 | 72,402 |
Deferred charges | 7,546 | 6,166 |
Deposits | 3,746 | 3,329 |
Prepayment for repurchase of ordinary shares | 3 | |
Others (Note b) | 9,270 | 1,936 |
Total | 122,242 | 242,523 |
Other non-current assets | ||
Long-term rental and other deposits | 486 | 2,448 |
Prepayments for purchase of software | 56 | |
Total | $ 486 | $ 2,504 |
Prepayments and other assets _2
Prepayments and other assets - Summary of Prepayments and other assets (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Prepayments and other assets | |||
Write-downs of prepayments | $ 5,627,000 | $ 12,828,000 | $ 0 |
Allowance for credit loss, other receivables | $ 300 | $ 13,000 | $ 143,000 |
Cryptocurrency - Schedule of Cr
Cryptocurrency - Schedule of Cryptocurrency (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cryptocurrency. | ||
Gross carrying amount | $ 32,603 | $ 15,076 |
Less: Impairment of cryptocurrency | (4,261) | (2,545) |
Net | $ 28,342 | $ 12,531 |
Cryptocurrency - Additional inf
Cryptocurrency - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cryptocurrency | |||
Beginning balance | $ 12,531 | ||
Revenue recognized on acceptance of cryptocurrency | 58,959 | $ 35,500 | $ 3,361 |
Cost of revenues recognized on payment of cryptocurrency | (8,854) | (8,463) | |
Proceeds from disposal of cryptocurrency | (40,645) | (9,642) | |
Realised gain (loss) on sale of cryptocurrency | (6,135) | 170 | |
Impairment on cryptocurrency | (4,706) | (7,880) | 0 |
Ending balance | 28,342 | 12,531 | |
Cryptocurrency | |||
Cryptocurrency | |||
Beginning balance | 12,531 | 3,186 | |
Revenue recognized on acceptance of cryptocurrency | 58,959 | 35,500 | |
Receipt of cryptocurrency as customer deposits | 4,922 | ||
Cost of revenues recognized on payment of cryptocurrency | (8,854) | (8,463) | |
Proceeds from disposal of cryptocurrency | (40,645) | (9,642) | |
Realised gain (loss) on sale of cryptocurrency | 6,135 | (170) | |
Impairment on cryptocurrency | (4,706) | (7,880) | |
Ending balance | $ 28,342 | $ 12,531 | $ 3,186 |
Property, equipment and softw_3
Property, equipment and software, net - Schedule of Property, Equipment and Software (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Equipment and Software | ||
Total cost | $ 115,567 | $ 120,338 |
Less: Accumulated depreciation and amortization | (86,101) | (34,988) |
Property, equipment and software, net | 29,466 | 85,350 |
Mining Equipment | ||
Property, Equipment and Software | ||
Total cost | 95,215 | 102,964 |
Computers and Electronic Equipment | ||
Property, Equipment and Software | ||
Total cost | 10,940 | 10,008 |
Leasehold Improvements | ||
Property, Equipment and Software | ||
Total cost | 5,772 | 4,805 |
Mechanical Equipment | ||
Property, Equipment and Software | ||
Total cost | 114 | 123 |
Software | ||
Property, Equipment and Software | ||
Total cost | 3,283 | 2,360 |
Motor Vehicles | ||
Property, Equipment and Software | ||
Total cost | $ 243 | $ 78 |
Property, equipment and softw_4
Property, equipment and software, net - Schedule of Depreciation and Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Equipment and Software | |||
Depreciation and amortization of property, equipment and software | $ 59,641 | $ 33,689 | $ 1,706 |
Impairment loss | 21,126 | 0 | 0 |
Mining Equipment | |||
Property, Equipment and Software | |||
Impairment loss | 21,126 | ||
Cost of Revenues | |||
Property, Equipment and Software | |||
Depreciation and amortization of property, equipment and software | 54,478 | 31,002 | 266 |
Research and development expenses | |||
Property, Equipment and Software | |||
Depreciation and amortization of property, equipment and software | 400 | 900 | 438 |
Sales and marketing expenses | |||
Property, Equipment and Software | |||
Depreciation and amortization of property, equipment and software | 36 | 8 | 4 |
General and administrative expenses | |||
Property, Equipment and Software | |||
Depreciation and amortization of property, equipment and software | $ 4,727 | $ 1,779 | $ 998 |
Leases - Components of Lease Ex
Leases - Components of Lease Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease cost: | |||
Reduction in the carrying amount of ROU assets | $ 2,481 | $ 2,254 | $ 2,758 |
Interest of operating lease liabilities | 115 | 193 | 253 |
Expenses for short-term lease within 12 months | 417 | 216 | |
Total lease cost | $ 3,013 | $ 2,663 | $ 3,011 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities: | |||
Operating cash flows from operating leases | $ 2,356 | $ 2,944 | $ 3,253 |
Operating lease right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 2,358 | 2,398 | 5,752 |
Operating lease liability settled through termination of lease: Operating leases | |||
Operating leases | $ 2,301 | $ 358 | $ 406 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | |||
Weighted-average remaining lease term Operating leases | 1 year 2 months 12 days | 1 year 10 months 24 days | 2 years 4 months 24 days |
Weighted-average discount rate Operating lease | 4.55% | 4.58% | 5.17% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
2024 | $ 1,244 | |
2025 | 212 | |
Total undiscounted lease payments | 1,456 | |
Less: imputed interest | (30) | |
Total operating lease liabilities | 1,426 | |
Amounts due within 12 months | 1,216 | $ 2,314 |
Non-current operating lease liability | $ 210 | $ 1,441 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities | ||
Provision for reserve for inventory purchase commitments (Note a) | $ 20,706 | $ 10,890 |
Salary and welfare payable | 19,623 | 20,744 |
Customer deposits | 7,185 | 0 |
Other tax payables | 7,019 | 8,057 |
Customer refund | 3,812 | 4,226 |
VAT received from customers related to contract liabilities | 1,429 | 19 |
Warranty reserve (Note b) | 878 | 1,716 |
Others | 3,588 | 2,697 |
Total | 64,240 | 48,349 |
Other non-current liabilities | ||
Deferred government grant | 9,191 | 0 |
Refund from depository bank - non-current | 516 | 598 |
Total | $ 9,707 | $ 598 |
Accrued Liabilities and Other_4
Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Liabilities and Other Liabilities | ||
Provision for reserve for inventory purchase commitments | $ 9,816 | $ 10,890 |
Foundry service | ||
Accrued Liabilities and Other Liabilities | ||
Provision for reserve for inventory purchase commitments | 9,816 | 10,890 |
Purchase obligation | $ 42,904 | $ 66,868 |
Accrued liabilities and other_5
Accrued liabilities and other liabilities - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Liabilities and Other Liabilities | ||
Accrued warranty-beginning of year | $ 1,716 | $ 2,827 |
Accrual for warranties issued during the year | 1,902 | 1,896 |
Warranty claims paid | (1,532) | (1,167) |
Warranty expired | (980) | (1,632) |
Foreign currency translation adjustment | (228) | (208) |
Accrued warranty-end of year | $ 878 | $ 1,716 |
Warrants - Summary of Significa
Warrants - Summary of Significant Unobservable Inputs Used In Calculation Of Warrant Liability (Details) - Warrants To Purchase Common Stock | Jun. 23, 2022 Y | Dec. 31, 2021 Y |
Risk Free Rate | Maximum | ||
Warrants | ||
Fair value of the warrant liability | 2.63 | 0.81 |
Risk Free Rate | Minimum | ||
Warrants | ||
Fair value of the warrant liability | 2.32 | 0.37 |
Volatility | Maximum | ||
Warrants | ||
Fair value of the warrant liability | 140.39 | 127.93 |
Volatility | Minimum | ||
Warrants | ||
Fair value of the warrant liability | 126.66 | 131.47 |
Expected dividend yield | ||
Warrants | ||
Fair value of the warrant liability | 0 | 0 |
Expected term | Maximum | ||
Warrants | ||
Fair value of the warrant liability | (2.1) | (3) |
Expected term | Minimum | ||
Warrants | ||
Fair value of the warrant liability | 1.9 | 2.3 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Jun. 23, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2021 | May 03, 2021 | |
Warrants | ||||||
Payments for repurchase of warrants | $ 6,611 | |||||
Change in fair value of financial instruments | $ (10,918) | $ 3,795 | $ 29,471 | |||
ADR [Member] | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 674,603 | |||||
ADR [Member] | Warrants | Separate warrant repurchase agreements | ||||||
Warrants | ||||||
Price paid per share | $ 1.4 | |||||
Shares outstanding | 4,722,223 | |||||
Class A ordinary shares | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 10,119,045 | |||||
Class A ordinary shares | Warrants | ||||||
Warrants | ||||||
Class of warrant or right, exercise price of warrants or rights | $ 1.05 | |||||
Class A ordinary shares | Warrants | Separate warrant repurchase agreements | ||||||
Warrants | ||||||
Shares outstanding | 70,833,345 | |||||
Tranche One | ADR [Member] | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, exercise price of warrants or rights | 16.38 | |||||
Tranche One | Class A ordinary shares | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, exercise price of warrants or rights | 1.09 | |||||
Tranche Two | ADR [Member] | Warrants | ||||||
Warrants | ||||||
Class of warrant or right, exercise price of warrants or rights | $ 15.75 | |||||
Tranche Two | ADR [Member] | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 674,603 | |||||
Tranche Two | Class A ordinary shares | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 10,119,045 | |||||
Investor Warrants | Tranche One | Warrants | Separate warrant repurchase agreements | ||||||
Warrants | ||||||
Payments for repurchase of warrants | $ 6,600 | |||||
Investor Warrants | Tranche One | ADR [Member] | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 4,047,620 | |||||
Investor Warrants | Tranche One | Class A ordinary shares | Warrants To Purchase Common Stock | ||||||
Warrants | ||||||
Class of warrant or right, number of securities called by warrants or rights | 60,714,300 |
Warrants - Movement of warrant
Warrants - Movement of warrant liability (Details) - Warrant liability $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Movement of warrant liability | |
Beginning balance | $ 10,406 |
Change in fair value of warrant liability | (3,795) |
Repurchase of warrant liability | $ (6,611) |
Ordinary shares - Additional In
Ordinary shares - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
May 03, 2021 | Dec. 31, 2023 | Nov. 24, 2023 | Nov. 10, 2023 | Dec. 31, 2022 | Jan. 01, 2021 | |
Ordinary shares | ||||||
Ordinary shares, shares authorized | 999,999,875,000 | 1,000,000,000,000 | 1,000,000,000,000 | |||
Ordinary shares, shares issued | 3,772,078,667 | 2,804,138,492 | 2,372,222,222 | |||
Issuance of ordinary shares | $ 65,430 | |||||
Fair value of the warrant liability | $ 39,877 | |||||
Proceeds from Issuance of Common Stock | $ 65,430 | |||||
Residual proceeds of warrants allocated to ordinary shares | $ 118,757 | |||||
Common stock shares outstanding | 3,514,973,327 | 2,496,001,757 | 2,328,326,132 | |||
ADS | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 4,047,620 | |||||
Class of warrant or right, number of securities called by warrants or rights | 674,603 | |||||
Class A ordinary shares | ||||||
Ordinary shares | ||||||
Common stock vote per share | one vote | |||||
Issuance of ordinary shares | $ 158,634 | |||||
Class of warrant or right, number of securities called by warrants or rights | 10,119,045 | |||||
Common stock shares outstanding | 2,016,701,688 | |||||
Class B Ordinary Shares | ||||||
Ordinary shares | ||||||
Common stock vote per share | fifteen votes | |||||
Class B Ordinary Shares | Chairman and CEO | ||||||
Ordinary shares | ||||||
Common stock shares outstanding | 311,624,444 | |||||
Institutional Investors | ADS | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 13,492,065 | |||||
Institutional Investors | Class A ordinary shares | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 202,380,975 | |||||
Class of warrant or right, number of securities called by warrants or rights | 60,714,300 | |||||
At-the-Market Offering Agreements | ||||||
Ordinary shares | ||||||
Ordinary shares, shares authorized | 999,999,875,000 | |||||
Ordinary shares, shares issued | 3,772,078,667 | |||||
Proceeds from Issuance of Common Stock | $ 4,188 | |||||
Common stock shares outstanding | 3,514,973,327 | |||||
At-the-Market Offering Agreements | ADS | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 1,532,219 | |||||
At-the-Market Offering Agreements | Class A ordinary shares | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 22,983,285 | |||||
Common stock shares outstanding | 3,203,348,883 | |||||
At-the-Market Offering Agreements | Class B Ordinary Shares | ||||||
Ordinary shares | ||||||
Common stock shares outstanding | 311,624,444 | |||||
At-the-Market Offering Agreements | Series A Convertible Preferred Shares | ||||||
Ordinary shares | ||||||
Preferred shares, shares authorized | 125,000 | |||||
At Market Issuance Sales Agreement | ||||||
Ordinary shares | ||||||
Proceeds from Issuance of Common Stock | $ 61,242 | |||||
At Market Issuance Sales Agreement | ADS | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 31,347,044 | |||||
At Market Issuance Sales Agreement | ADS | Maximum | ||||||
Ordinary shares | ||||||
Issuance for sale of shares | $ 68,000 | |||||
At Market Issuance Sales Agreement | Class A ordinary shares | ||||||
Ordinary shares | ||||||
Issuance of ordinary shares (in shares) | 470,205,660 |
Series A Convertible Preferre_3
Series A Convertible Preferred Shares - First Tranche and Second Tranche of Series A Convertible Preferred Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 11, 2023 | Nov. 27, 2023 | May 03, 2021 | Dec. 31, 2023 | |
Series A Convertible Preferred Shares | ||||
Net proceeds | $ 24,575 | |||
Fixed monetary amount per share | $ 1.81 | |||
Percentage of lowest daily average market price | 92.50% | |||
Number of days preceding the conversion considered for lowest daily average market price | 5 days | |||
Minimum | ||||
Series A Convertible Preferred Shares | ||||
Preferred stock conversion price | $ 1.06 | |||
Maximum | ||||
Series A Convertible Preferred Shares | ||||
Preferred stock conversion price | $ 1.42 | |||
ADS | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 4,047,620 | |||
Preferred Shares | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issuable | 125,000 | |||
Issue price per share | $ 1,000 | |||
Net proceeds | $ 24,575 | $ 24,575 | ||
Redemption price on percentage of conversion amount | 105% | |||
Maturity term of preferred shares | 12 months | |||
Preferred Shares | ADS | ||||
Series A Convertible Preferred Shares | ||||
Per share preferred stock convertible conversion ratio | $ 1,072.80 | |||
Fixed monetary amount per share | $ 1.81 | |||
Unpaid dividend in percentage | 15% | |||
Percentage of weighted average price | 120% | |||
Percentage of lowest daily average market price | 92.50% | |||
Number of days preceding the conversion considered for lowest daily average market price | 5 days | |||
First Tranche Preferred Shares Financing | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 25,000 | 25,000 | ||
First Tranche Preferred Shares Financing | Class A ordinary shares | ||||
Series A Convertible Preferred Shares | ||||
Number of shares converted | 354,751,230 | |||
First Tranche Preferred Shares Financing | ADS | ||||
Series A Convertible Preferred Shares | ||||
Number of shares converted | 23,650,082 | |||
Second Tranche Of The Preferred Shares Financing | Minimum | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 25,000 | |||
Second Tranche Of The Preferred Shares Financing | Maximum | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 50,000 | |||
Pre-delivery Shares | ||||
Series A Convertible Preferred Shares | ||||
Price of nominal fee received | $ 6 | |||
Pre-delivery Shares | Class A ordinary shares | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 120,000,000 | 120,000,000 | ||
Pre-delivery Shares | ADS | ||||
Series A Convertible Preferred Shares | ||||
Number of shares issued | 8,000,000 | 8,000,000 |
Series A Convertible Preferre_4
Series A Convertible Preferred Shares - Significant assumptions (Details) | Dec. 31, 2023 | Dec. 21, 2023 | Dec. 11, 2023 |
Discount Rate | |||
Significant assumptions | |||
Measurement input | 5.14 | 4.98 | |
First Tranche Preferred Shares Financing | Risk Free Rate | Level 3 | Minimum | |||
Significant assumptions | |||
Measurement input | 4.69 | 4.98 | |
First Tranche Preferred Shares Financing | Risk Free Rate | Level 3 | Maximum | |||
Significant assumptions | |||
Measurement input | 4.81 | ||
First Tranche Preferred Shares Financing | Volatility | Level 3 | |||
Significant assumptions | |||
Measurement input | 100.55 | ||
First Tranche Preferred Shares Financing | Volatility | Level 3 | Minimum | |||
Significant assumptions | |||
Measurement input | 96 | ||
First Tranche Preferred Shares Financing | Volatility | Level 3 | Maximum | |||
Significant assumptions | |||
Measurement input | 103.81 | ||
First Tranche Preferred Shares Financing | Expected dividend yield | Level 3 | |||
Significant assumptions | |||
Measurement input | 7.83 | ||
First Tranche Preferred Shares Financing | Expected dividend yield | Level 3 | Minimum | |||
Significant assumptions | |||
Measurement input | 7.37 | ||
First Tranche Preferred Shares Financing | Expected dividend yield | Level 3 | Maximum | |||
Significant assumptions | |||
Measurement input | 7.48 |
Series A Convertible Preferre_5
Series A Convertible Preferred Shares - Changes in the value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warrants | |||
Excess of fair value of Series A Convertible Preferred Shares | $ 59,199 | ||
Change in fair value of financial instruments | (10,918) | $ 3,795 | $ 29,471 |
Preferred Shares | |||
Warrants | |||
Excess of fair value of Series A Convertible Preferred Shares | (59,199) | ||
First Tranche Preferred Shares Financing | |||
Warrants | |||
Fair value at issuance | 44,421 | ||
Change in fair value | $ (9,416) | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change in fair value of financial instruments | ||
Conversion to outstanding ADSs | $ (53,837) | ||
Change in fair value of financial instruments | 9,416 | ||
Series A Convertible Preferred Shares Forward Purchase Liabilities | |||
Warrants | |||
Fair value at issuance | 38,842 | ||
Change in fair value | (1,502) | ||
Ending balance | $ 40,344 |
Series A Convertible Preferre_6
Series A Convertible Preferred Shares - Pre-delivery Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 11, 2023 | Nov. 27, 2023 | May 03, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Series A Convertible Preferred Shares | ||||||
Proceeds from issuance of series A convertible preferred shares, net of issuance costs | $ 24,575 | |||||
Excess of fair value of Series A Convertible Preferred Shares | 59,199 | |||||
Change in fair value of financial instruments | $ (10,918) | $ 3,795 | $ 29,471 | |||
ADS | ||||||
Series A Convertible Preferred Shares | ||||||
Number of shares issued | 4,047,620 | |||||
Pre-delivery Shares | ||||||
Series A Convertible Preferred Shares | ||||||
Price of nominal fee received | $ 6 | |||||
Number of shares returned | 0 | |||||
Fair value at issuance | $ 511 | |||||
Pre-delivery Shares | Class A ordinary shares | ||||||
Series A Convertible Preferred Shares | ||||||
Number of shares issued | 120,000,000 | 120,000,000 | ||||
Pre-delivery Shares | ADS | ||||||
Series A Convertible Preferred Shares | ||||||
Number of shares issued | 8,000,000 | 8,000,000 | ||||
Preferred Shares | ||||||
Series A Convertible Preferred Shares | ||||||
Issue price per share | $ 1,000 | |||||
Proceeds from issuance of series A convertible preferred shares, net of issuance costs | $ 24,575 | 24,575 | ||||
Excess of fair value of Series A Convertible Preferred Shares | (59,199) | |||||
First Tranche Preferred Shares Financing | ||||||
Series A Convertible Preferred Shares | ||||||
Number of shares issued | 25,000 | 25,000 | ||||
Fair value at issuance | 44,421 | |||||
Fair value upon conversion | 53,837 | |||||
Change in fair value of financial instruments | 9,416 | |||||
Series A Convertible Preferred Shares Forward Purchase Liabilities | ||||||
Series A Convertible Preferred Shares | ||||||
Fair value at issuance | $ 38,842 |
Treasury stocks - Additional In
Treasury stocks - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
May 03, 2021 | Jan. 01, 2021 | Sep. 30, 2021 | May 31, 2021 | Jan. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 16, 2022 | Sep. 19, 2021 | Apr. 30, 2018 | |
Treasury stocks | |||||||||||
Treasury stock, shares | 257,105,340 | 308,136,735 | |||||||||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | $ 2,420 | $ 4,819 | $ 23,353 | ||||||||
Issuance of ordinary shares in at-the-market offering, net of offering cost | $ 65,430 | ||||||||||
Stock repurchase program authorized amount | $ 20,000 | ||||||||||
Common stock shares outstanding | 2,328,326,132 | 3,514,973,327 | 2,496,001,757 | ||||||||
2018 Equity Incentive Plan | |||||||||||
Treasury stocks | |||||||||||
Ordinary shares Held in trust | 51,624,000 | ||||||||||
Restricted Share Units | |||||||||||
Treasury stocks | |||||||||||
Shares transferred from treasury stock to ordinary shares | 41,164,350 | ||||||||||
Restricted Share Units | 2018 Equity Incentive Plan | |||||||||||
Treasury stocks | |||||||||||
Shares transferred from treasury stock to ordinary shares | 5,757,945 | ||||||||||
Restricted Share Units | Amended 2018 Plan | |||||||||||
Treasury stocks | |||||||||||
Treasury stock, shares | 0 | 9,867,045 | |||||||||
Number of shares transferred from treasury stock to ordinary shares upon vesting | 9,867,045 | ||||||||||
Restricted Ordinary Shares | 2018 Equity Incentive Plan | |||||||||||
Treasury stocks | |||||||||||
Treasury stock, shares | 12,338,955 | 12,338,955 | |||||||||
Restricted Ordinary Shares | Amended 2018 Plan | |||||||||||
Treasury stocks | |||||||||||
Treasury stock, shares | 95,816,325 | ||||||||||
Restricted Ordinary Shares | Initial Public Offering | 2018 Equity Incentive Plan | |||||||||||
Treasury stocks | |||||||||||
Restricted share units vested transferred from treasury stocks to ordinary shares | 18,096,900 | ||||||||||
Shares Repurchase | |||||||||||
Treasury stocks | |||||||||||
Share repurchased | 25,799,190 | 154,614,975 | 34,683,225 | ||||||||
Proceeds from repurchases | $ 37,379 | $ 16,106 | |||||||||
Stock repurchase program authorized amount | $ 100,000 | ||||||||||
Shares Repurchase | Restricted Ordinary Shares | |||||||||||
Treasury stocks | |||||||||||
Treasury stock, shares | 173,933,040 | ||||||||||
ADS | |||||||||||
Treasury stocks | |||||||||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 4,047,620 | ||||||||||
ADS | Share Repurchase Program | |||||||||||
Treasury stocks | |||||||||||
Share repurchased | 0 | ||||||||||
ADS | Shares Repurchase | |||||||||||
Treasury stocks | |||||||||||
Share repurchased | 1,719,946 | 2,312,215 | |||||||||
Common stock shares outstanding | 10,307,665 | ||||||||||
Class A ordinary shares | |||||||||||
Treasury stocks | |||||||||||
Issuance of ordinary shares in at-the-market offering, net of offering cost | $ 158,634 | ||||||||||
Common stock shares outstanding | 2,016,701,688 | ||||||||||
Class A ordinary shares | Amended 2018 Plan | |||||||||||
Treasury stocks | |||||||||||
Shares Issued in Period | 94,927,065 | 94,927,065 | |||||||||
Ordinary shares contributed for future share awards | 63,774,885 | 63,774,885 | |||||||||
Share-based payment arrangement, shares withheld for tax withholding obligation | 13,904,625 | 17,102,175 | 33,255,495 | ||||||||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | $ 2,420 | $ 4,819 | $ 23,353 | ||||||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 13,904,625 | 37,313,775 | 13,043,895 | ||||||||
Issuance of ordinary shares in at-the-market offering, net of offering cost | $ 2,420 | $ 20,908 | $ 7,264 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | May 31, 2021 | Apr. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based compensation | ||||||
Number of options granted | 30,000,000 | 114,000,000 | ||||
2018 Equity Incentive Plan | Common Class A | ||||||
Share-based compensation | ||||||
Share-Based Compensation Arrangement By Share-Based Payment Award Cumulative Annual Increase Percentage | 15% | |||||
Share-based compensation arrangement by share-based payment award, percentage of outstanding stock maximum | 3% | |||||
Number of additional shares authorized for issuance under share-based payment arrangement | 63,774,885 | 94,927,065 | ||||
Amended 2018 Plan | Common Class A | ||||||
Share-based compensation | ||||||
Issuance of ordinary shares (in shares) | 13,904,625 | 37,313,775 | 13,043,895 | |||
Share Options | ||||||
Share-based compensation | ||||||
weighted-average period for recognization of unrecognized compensation expense related to share options | 20 months 6 days | |||||
Unrecognized compensation expense related to share options | $ 22,955 | |||||
Restricted Share Units | ||||||
Share-based compensation | ||||||
Restricted share units granted | 102,323,925 | 62,410,200 | 236,768,940 | |||
Unrecognized compensation expense | $ 32,933 | |||||
weighted-average period for recognization of unrecognized compensation expense related to share options | 36 months 13 days | |||||
Restricted Share Units | Amended 2018 Plan | ||||||
Share-based compensation | ||||||
Restricted share units granted | 102,323,925 | |||||
Requisite service period | 5 years |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Shares Activity (Details) - Restricted Share Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based compensation | |||
Number of shares, Outstanding | 123,791,055 | 137,243,670 | 9,040,000 |
Number of shares, Granted | 102,323,925 | 62,410,200 | 236,768,940 |
Number of shares, Forfeited | (28,129,155) | (22,844,235) | (6,991,000) |
Number of shares, Vested | (51,031,395) | (53,018,580) | (101,574,270) |
Number of shares, Outstanding | 146,954,430 | 123,791,055 | 137,243,670 |
Weighted average grant date fair value, Outstanding | $ 0.60 | $ 0.74 | $ 0.23 |
Weighted average grant date fair value, Granted | 0.15 | 0.25 | 0.58 |
Weighted average grant date fair value, Forfeited | 0.29 | 0.32 | 0.48 |
Weighted average grant date fair value, Vested | 0.60 | 0.68 | 0.33 |
Weighted average grant date fair value, Outstanding | $ 0.35 | $ 0.60 | $ 0.74 |
Share-based compensation - Sche
Share-based compensation - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Options | |||
Number of shares , Beginning Balance | 114,000,000 | 114,000,000 | 0 |
Number of options granted | 30,000,000 | 114,000,000 | |
Number of shares , Ending Balance | 144,000,000 | 114,000,000 | 114,000,000 |
Number of shares , Expected to vest | 144,000,000 | ||
Number of shares , Exercisable | 84,000,000 | ||
Share Based Compensation Arrangement By Share Based Payment Award Options Weighted Average Exercise Price [Abstract] | |||
Weighted-Average per Share Exercise Price , Beginning Balance | $ 0.76 | $ 0.76 | $ 0 |
Weighted-Average per Share Exercise Price , Granted | 0.40 | 0.76 | |
Weighted-Average per Share Exercise Price , Ending Balance | 0.69 | $ 0.76 | $ 0.76 |
Weighted-Average per Share Exercise Price, Expected to vest | 0.69 | ||
Weighted-Average per Share Exercise Price , Exercisable | $ 0.69 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award Options Weighted Average Remaining Contractual Terms [Abstract] | |||
Weighted Average Remaining Contractual Term, Expected to vest | 7 years 6 months 10 days | 9 years 1 month 6 days | 9 years 1 month 6 days |
Share-Based Compensation Arrangements By Share-Based Payment Award Options Aggregate Intrinsic Value [Abstract] | |||
Aggregate Intrinsic Value, Beginning balance | $ 0 | $ 0 | |
Aggregate Intrinsic Value, Granted | 0 | $ 0 | |
Aggregate Intrinsic Value, Ending balance | 0 | $ 0 | $ 0 |
Aggregate Intrinsic Value, Expected to vest | 0 | ||
Aggregate Intrinsic Value, Exercisable | $ 0 |
Share-based compensation - Su_2
Share-based compensation - Summary of Fair Values of the Share Options Granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Share-Based Compensation | ||
Number of options granted | 30,000,000 | 114,000,000 |
Weighted average grant date fair value of option per share | $ 0.53 | |
Aggregate grant date fair value of options | $ 75,638 |
Share-based compensation - Su_3
Share-based compensation - Summary of Assumptions Used to determine the Fair Value of Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Share-based compensation | ||
Dividend yield | 0% | 0% |
Expected volatility | 124.86% | |
Expected term | 10 years | 10 years |
Exercise multiple | 2.80 | 2.80 |
Fair value of ordinary share | $ 1.79 | |
Maximum | ||
Share-based compensation | ||
Risk-free rate of return | 3.92% | 1.85% |
Expected volatility | 142.01% | |
Fair value of ordinary share | $ 17.51 | |
Minimum | ||
Share-based compensation | ||
Risk-free rate of return | 3.85% | 1.25% |
Expected volatility | 136.91% | |
Fair value of ordinary share | $ 3.78 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Mar. 16, 2007 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2017 | Dec. 31, 2020 | |
Income Taxes | ||||||
Statutory income tax rate | 25% | 25% | 25% | |||
Undistributed earnings available for distribution | $ 22,903 | |||||
Withholding income tax | 0 | |||||
Tax loss carry forwards | $ 339,766 | $ 53,652 | ||||
Tax loss carry forwards period | 10 years | 5 years | ||||
Operating loss carry forwards expiration start year | 2029 | |||||
Operating loss carry forwards expiration end year | 2034 | |||||
Deferred tax assets valuation allowance | $ 30,042 | $ 13,871 | $ 2,821 | $ 46,712 | ||
Canaan Creative Co Ltd [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 15% | |||||
Canaan Creative SH Co Ltd [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 15% | |||||
Income tax holiday, description | Canaan Creative (SH) is qualified as an as an integrated circuit enterprise and enjoying a 5-year tax holiday (two-year full exemption followed by three-year half reduction) beginning from 2022 after utilizing all prior years tax losses. Therefore, Canaan Creative (SH) is eligible to enjoy a preferential tax rate of 0% from 2022 to 2023 and 12.5% from 2024 to 2026. | |||||
Income tax holiday period | 5 years | |||||
Income tax full exemption holiday period | 2 years | |||||
Income tax half reduction holiday period | 3 years | |||||
Other PRC Subsidiaries | ||||||
Income Taxes | ||||||
Statutory income tax rate | 25% | |||||
Withholding income tax rate on dividends | 10% | |||||
PRC mainland and Hong Kong subsidiaries | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Limitations on Use | tax losses of US$13,478, US$140, US$2,443, US$13, US$530, US$225,867 will expire, if unused, by 2029, 2030, 2031, 2032, 2033 and 2034, respectively. | |||||
Tax Year 2019 to 2021 | Canaan Creative Co Ltd [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 15% | |||||
Tax Year 2019 to 2021 | Hangzhou Canaan Intelligence Information Technology Co., Ltd. [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 15% | |||||
Tax Year 2022 to 2023 | Canaan Creative SH Co Ltd [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 0% | |||||
Tax Year 2024 to 2026 | Canaan Creative SH Co Ltd [Member] | ||||||
Income Taxes | ||||||
Preferential tax rate | 12.50% | |||||
2029 | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2029 | |||||
2030 | PRC mainland and Hong Kong subsidiaries | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2030 | |||||
2031 | PRC mainland and Hong Kong subsidiaries | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2031 | |||||
2032 | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2032 | |||||
2033 | PRC mainland and Hong Kong subsidiaries | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2033 | |||||
2034 | PRC mainland and Hong Kong subsidiaries | ||||||
Income Taxes | ||||||
Operating Loss Carryforwards, Expiration year | 2034 | |||||
Hong Kong | ||||||
Income Taxes | ||||||
Statutory income tax rate | 16.50% | 16.50% | 16.50% | |||
Hong Kong | Other PRC Subsidiaries | FIE | ||||||
Income Taxes | ||||||
Ownership percentage | 25% | |||||
Hong Kong | Other PRC Subsidiaries | Maximum | ||||||
Income Taxes | ||||||
Withholding income tax rate | 5% | |||||
China | Enterprise Income Tax | ||||||
Income Taxes | ||||||
Statutory income tax rate | 25% | |||||
United States | ||||||
Income Taxes | ||||||
Statutory income tax rate | 21% | 21% | 21% | |||
Singapore | ||||||
Income Taxes | ||||||
Statutory income tax rate | 17% | 17% | 17% |
Income Taxes - Schedule of inco
Income Taxes - Schedule of income (loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||
Income (loss) before income taxes | $ (465,493) | $ 88,334 | $ 316,851 |
Mainland China | |||
Income Taxes [Line Items] | |||
Income (loss) before income taxes | (251,871) | 126,902 | 290,666 |
United States of America | |||
Income Taxes [Line Items] | |||
Income (loss) before income taxes | (79,753) | (15,858) | (951) |
Cayman | |||
Income Taxes [Line Items] | |||
Income (loss) before income taxes | (69,376) | 2,024 | 30,544 |
Singapore | |||
Income Taxes [Line Items] | |||
Income (loss) before income taxes | (8,970) | (16,644) | 1,013 |
Others | |||
Income Taxes [Line Items] | |||
Income (loss) before income taxes | $ (55,523) | $ (8,090) | $ (4,421) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation Between Effective Income Tax Rate and PRC Statutory Income Tax Rate (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
PRC statutory income tax rates | 25% | 25% | 25% |
Permanent book - tax difference | 1.90% | (2.40%) | 1.40% |
Share-based compensation | (1.00%) | 5.50% | 3.40% |
Super deduction of R&D expense | (14.00%) | (2.60%) | |
Super deduction of R&D expense | (2.90%) | ||
Others | 0% | 6.10% | 0.60% |
Different tax rates in other jurisdictions | (7.80%) | 2% | (2.20%) |
Effect of tax holiday | (4.70%) | (16.90%) | (7.80%) |
Change in valuation allowance | (3.40%) | 12.60% | (14.00%) |
Total | 11% | 20.30% | 2.40% |
Effects of tax holidays entitled by the PRC subsidiaries | $ 21,998 | $ 15,354 | $ 24,832 |
Class A and ClassB | |||
Income Taxes | |||
Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) per Class A and Class B ordinary share (US$ cent per share) | $ 0.85 | $ 0.60 | $ 0.98 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Composition of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Current income tax expense (benefits) | $ (5,654) | $ 26,241 | $ 23,113 |
Deferred income tax benefits | (45,686) | (7,791) | (15,348) |
Income tax expense (benefits) | $ (51,340) | $ 18,450 | $ 7,765 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||||
Tax losses carried forward | $ 57,519 | $ 10,290 | ||
Write-down of inventories | 26,608 | 15,540 | ||
Property, equipment and software | 6,597 | 5,012 | ||
Share-based compensation | 5,646 | 4,427 | ||
Warranty reserve | 281 | 139 | ||
Operating lease right-of-use assets | 260 | 0 | ||
Allowance for doubtful accounts | 200 | 203 | ||
Total gross deferred tax assets | 97,111 | 35,611 | ||
Less: Valuation allowance | (30,042) | (13,871) | $ (2,821) | $ (46,712) |
Deferred tax assets, net of valuation allowance | 67,069 | 21,740 | ||
Deferred tax liabilities | ||||
Operating lease liabilities | (260) | 0 | ||
Total gross deferred tax liabilities | (260) | 0 | ||
Net deferred tax assets | $ 66,809 | $ 21,740 |
Income Taxes - Schedule of Move
Income Taxes - Schedule of Movement of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Beginning balance | $ 13,871 | $ 2,821 | $ 46,712 |
Additions (decreases) during the year | 16,171 | 11,050 | (43,891) |
Ending balance | $ 30,042 | $ 13,871 | $ 2,821 |
Basic and Diluted Earnings (L_3
Basic and Diluted Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator : | |||
Net income (loss) | $ (414,153) | $ 69,884 | $ 309,086 |
Denominator: | |||
Weighted-average ordinary shares outstanding | 2,579,202,596 | 2,560,106,403 | 2,521,667,815 |
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share) | $ (16.06) | $ 2.73 | $ 12.26 |
Diluted earnings (loss) per share calculation Numerator : | |||
Net income (loss) | $ (414,153) | $ 69,884 | $ 309,086 |
Diluted net earnings/(loss) per share calculation: Denominator | |||
Weighted-average ordinary shares outstanding | 2,579,202,596 | 2,560,106,403 | 2,521,667,815 |
Add: weighted-average RSUs | 17,785,666 | 54,489,432 | |
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share | 2,579,202,596 | 2,577,892,069 | 2,576,157,247 |
Diluted earnings (loss) per Class A and Class B ordinary share (US$ cent per share) | $ (16.06) | $ 2.71 | $ 12 |
Class A and Class B ordinary share | |||
Denominator: | |||
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share) | $ (16.06) | $ 2.73 | $ 12.26 |
Diluted net earnings/(loss) per share calculation: Denominator | |||
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share | 2,579,202,596 | 2,577,892,069 | 2,576,157,247 |
Diluted earnings (loss) per Class A and Class B ordinary share (US$ cent per share) | $ (16.06) | $ 2.71 | $ 12 |
Basic and Diluted Earnings (L_4
Basic and Diluted Earnings (Loss) Per Share - Effects of Outstanding RSUs Excluded From Computation of Diluted Loss Per Share Due to Anti-Dilutive Effect (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-average RSUs | |||
Basic and diluted earnings (loss) per share | |||
Weighted-average of shares | 30,741,795 | 0 | 0 |
Share options | |||
Basic and diluted earnings (loss) per share | |||
Weighted-average of shares | 144,000,000 | 114,000,000 | 114,000,000 |
Warrants | |||
Basic and diluted earnings (loss) per share | |||
Weighted-average of shares | 0 | 0 | 70,833,345 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Jan. 22, 2024 | Dec. 11, 2023 | Nov. 27, 2023 | May 03, 2021 | Dec. 31, 2023 | |
Subsequent events | |||||
Net proceeds | $ 24,575 | ||||
ADS | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 4,047,620 | ||||
Pre-delivery Shares | ADS | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 8,000,000 | 8,000,000 | |||
Pre-delivery Shares | Class A ordinary shares | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 120,000,000 | 120,000,000 | |||
Subsequent events | ADS | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 2,800,000 | ||||
Subsequent events | Class A ordinary shares | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 42,000,000 | ||||
Subsequent events | Series A Convertible Preferred Shares Forward Purchase Liabilities | |||||
Subsequent events | |||||
Issuance of ordinary shares in at-the-market offering, net of offering cost (in shares) | 50,000 | ||||
Issue price per share | $ 1,000 | ||||
Net proceeds | $ 49,860 | ||||
Number of shares converted | 45,000 |
Condensed Financial Informati_3
Condensed Financial Information of the Parent Company - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Subsidiaries | |
Condensed Financial Statements Captions [Line Items] | |
Restricted net assets as percentage of consolidated and unconsolidated subsidiaries | 25% |
Condensed Financial Informati_4
Condensed Financial Information of the Parent Company - Schedule of Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||||
Prepayments and other current assets | $ 122,242 | $ 242,523 | ||
Total current assets | 363,680 | 555,714 | ||
Total assets | 493,297 | 684,961 | ||
Current liabilities: | ||||
Series A convertible preferred shares forward purchase liabilities | 40,344 | |||
Non-current liabilities: | ||||
Refund from depository bank - non-current | 516 | 598 | ||
Total liabilities | 145,110 | 77,295 | ||
Shareholders' equity: | ||||
Treasury stocks | (57,055) | (57,055) | ||
Additional paid-in capital | 653,860 | 492,220 | ||
Statutory reserves | 14,892 | 14,892 | ||
Accumulated other comprehensive loss | (43,879) | (36,913) | ||
Retained earnings (accumulated deficit) | (219,631) | 194,522 | ||
Total shareholders' equity | 348,187 | 607,666 | $ 542,482 | $ 66,295 |
Total liabilities and shareholders' equity | 493,297 | 684,961 | ||
Parent Company | ||||
Current assets: | ||||
Cash | 6,902 | 5,682 | ||
Prepayments and other current assets | 644 | 180 | ||
Total current assets | 7,546 | 5,862 | ||
Investments in and receivables from subsidiaries | 382,605 | 602,798 | ||
Total assets | 390,151 | 608,660 | ||
Current liabilities: | ||||
Series A convertible preferred shares forward purchase liabilities | 40,344 | |||
Refund from depository bank - current | 580 | 316 | ||
Other payable | 524 | 80 | ||
Non-current liabilities: | ||||
Refund from depository bank - non-current | 516 | 598 | ||
Total liabilities | 41,964 | 994 | ||
Shareholders' equity: | ||||
Treasury stocks | (57,055) | (57,055) | ||
Additional paid-in capital | 653,860 | 492,220 | ||
Statutory reserves | 14,892 | 14,892 | ||
Accumulated other comprehensive loss | (43,879) | (36,913) | ||
Retained earnings (accumulated deficit) | (219,631) | 194,522 | ||
Total shareholders' equity | 348,187 | 607,666 | ||
Total liabilities and shareholders' equity | $ 390,149 | $ 608,660 |
Condensed Financial Informati_5
Condensed Financial Information of the Parent Company - Schedule of Condensed Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | |||
General and administrative expenses | $ (71,249) | $ (88,302) | $ (91,058) |
Interest income | 956 | 2,372 | 1,133 |
Other income, net | 2,240 | 3,295 | 993 |
Change in fair value of financial instruments | 10,918 | (3,795) | (29,471) |
Excess of fair value of Series A Convertible Preferred Shares | 59,199 | ||
Net income (loss) | (414,153) | 69,884 | 309,086 |
Total comprehensive income (loss) | (421,119) | 33,617 | 314,362 |
Foreign currency translation adjustment, tax | 0 | 0 | 0 |
Parent Company | |||
Operating expenses: | |||
General and administrative expenses | (4,538) | (3,120) | (1,033) |
Loss from operations | (4,538) | (3,120) | (1,033) |
Interest income | 323 | 1 | |
Other income, net | 337 | 316 | 316 |
Change in fair value of financial instruments | (10,918) | 3,795 | 29,471 |
Excess of fair value of Series A Convertible Preferred Shares | (59,199) | ||
Share of income (losses) from subsidiaries | (340,158) | 58,734 | 356,491 |
Net income (loss) | (414,153) | 59,726 | 385,245 |
Foreign currency translation adjustment, net of nil tax | (6,966) | 14,444 | (3,432) |
Total comprehensive income (loss) | $ (421,119) | $ 74,170 | $ 381,813 |
Condensed Financial Informati_6
Condensed Financial Information of the Parent Company - Schedule of Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net cash used in operating activities | $ (123,620) | $ (182,602) | $ 202,283 |
Cash flows from investing activities | |||
Net cash provided by (used in) investing activities | 39,628 | (8,103) | 848 |
Cash flows from financing activities | |||
Repurchase of warrants | 6,611 | ||
Payment for repurchase of ordinary shares | (37,379) | (16,106) | |
Proceeds from issuance of ordinary shares and warrants | 158,634 | ||
Proceeds from issuance of ordinary shares, net of issuance costs under At-the-Market Offering Agreements | 65,430 | ||
Proceeds from issuance of series A convertible preferred shares, net of issuance costs | 24,575 | ||
Net cash provided by (used in) financing activities | 90,005 | (56,178) | 139,218 |
Net increase in cash | 6,013 | (246,883) | 342,349 |
Effect of exchange rate changes on cash | (11,410) | (80,021) | 25,445 |
Cash and restricted cash at the beginning of year | 101,551 | 428,455 | 60,661 |
Cash and restricted cash at the end of year | 96,154 | 101,551 | 428,455 |
Parent Company | |||
Cash flows from operating activities | |||
Receipt of refund from depository bank | 520 | 0 | 0 |
Other cash used in operating activities | (4,459) | (3,078) | (1,014) |
Net cash used in operating activities | (3,939) | (3,078) | (1,014) |
Cash flows from investing activities | |||
Decrease (increase) in receivables from subsidiaries | (84,760) | 43,869 | (136,643) |
Net cash provided by (used in) investing activities | (84,760) | 43,869 | (136,643) |
Cash flows from financing activities | |||
Repurchase of warrants | 0 | (6,358) | 0 |
Payment for repurchase of ordinary shares | 0 | (33,643) | (16,240) |
Prepayment under share repurchase agreement | 0 | 0 | (90) |
Payment for cost of issuance | 0 | 0 | (81) |
Proceeds from issuance of ordinary shares and warrants | 0 | 0 | 158,634 |
Proceeds from issuance of ordinary shares, net of issuance costs under At-the-Market Offering Agreements | 65,430 | 0 | 0 |
Proceeds from issuance of series A convertible preferred shares, net of issuance costs | 24,575 | 0 | 0 |
Net cash provided by (used in) financing activities | 90,005 | (40,001) | 142,223 |
Net increase in cash | 1,306 | 790 | 4,566 |
Effect of exchange rate changes on cash | (86) | 52 | 251 |
Cash and restricted cash at the beginning of year | 5,682 | 4,840 | 23 |
Cash and restricted cash at the end of year | $ 6,902 | $ 5,682 | $ 4,840 |