Crypto mining rig manufacturer Canaan has obtained over $50m from preferred share financing to boost research and development and expand its production scale.
In a recent filing, The Nasdaq-listed firm announced that it generated the capital by issuing and selling up to 125,000 series A convertible preferred shares to an institutional investor whose identity was not revealed.
Canaan plans to allocate the net proceeds towards enhancing its research and development activities, scaling up production, and covering general corporate expenses.
The company, known for its ticker symbol “CAN,” made its debut on the Nasdaq Global Market in 2019 through an initial public offering (IPO). The IPO, held on Nov. 21, 2019, helped Canaan raise $90 million. However, since its market entry, the value of CAN’s shares has plummeted by 88%, with a 41% decrease recorded in the current year.
Canaan’s financial performance has been challenging, as evidenced by its third-quarter results from the previous year. The firm reported a substantial net loss of $80.1 million, a stark contrast to the net income of $6.3 million recorded in the same quarter of 2022.
On a related note, Canaan’s stock value experienced a 6.45% decline, closing at $1.45 on Jan. 25. Since the start of the month, the stock has dropped by 32.87%.
Despite these setbacks, Canaan remains active in product development. Celebrating its tenth anniversary towards the end of 2023, the company launched two new mining devices. One of these devices is notable for its high efficiency, with an energy consumption rating of fewer than 20 joules per terahash, rivaling the performance of devices from competitors like Microbt and Bitmain.
Earlier this month, Canaan revealed it had obtained subsequent orders for more than 17,000 bitcoin mining machines from Cipher Mining Inc. and Stronghold Digital Mining Inc., with both buyers also being companies listed on the Nasdaq.
