Tech & Science Canaan Inc. Studies Unaudited 2nd Quarter 2020 Monetary Effects Nasdaq:CAN

Canaan Inc. Studies Unaudited 2nd Quarter 2020 Monetary Effects Nasdaq:CAN

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HANGZHOU, China, Aug. 31, 2020 (GLOBE NEWSWIRE) — Canaan Inc. (NASDAQ: CAN) (“Canaan” or the “Corporate”), a number one high-performance computing answers supplier, these days introduced its unaudited monetary effects for the 3 months ended June 30, 2020.

2nd Quarter 2020 Running and Monetary Highlights

Overall computing energy bought was once 2.6 million Thash/s, representing a year-over-year lower of 18.2% from 3.2 million Thash/s in the similar length of 2019 and a quarter-over-quarter build up of 198.5% from 0.Nine million Thash/s within the first quarter of 2020.
Overall internet revenues reduced by means of 26.3% yr over yr and larger by means of 160.9% quarter over quarter to RMB178.1 million (US$25.2 million) from RMB241.Five million in the similar length of 2019 and RMB68.Three million within the first quarter of 2020.
Gross benefit larger by means of 302.5% yr over yr and 1,711.5% quarter over quarter to RMB43.Three million (US$6.1 million) from RMB10.Eight million in the similar length of 2019 and RMB2.Four million within the first quarter of 2020. Gross margin expanded considerably to 24.3% from 4.5% in the similar length of 2019 and three.5% within the first quarter of 2020.
Web loss narrowed to RMB16.Eight million (US$2.Four million) from RMB263.1 million in the similar length of 2019 and RMB39.Nine million within the first quarter of 2020.
Non-GAAP adjusted internet loss was once RMB16.Zero million (US$2.Three million) in comparison to RMB46.Zero million in the similar length of 2019 and RMB38.2 million within the first quarter of 2020.

“Mr. Nangeng Zhang, Chairman and Leader Government Officer of Canaan, commented, “All the way through the second one quarter of 2020, the COVID-19 pandemic persisted to have an effect on the lives of folks around the globe and the Bitcoin halving match additionally led to important volatility in Bitcoin costs. Nonetheless, we remained keen on strengthening our analysis and construction features, refining our product choices, and executing our AI tasks. Those efforts enabled us to reach significant monetary and operational enhancements on a sequential foundation the second one quarter in addition to helped to be sure that our merchandise may handle their positions on the reducing fringe of technological innovation. Going ahead, we’re assured that our sturdy pipeline of next-generation merchandise will proceed to maintain our expansion momentum at some point.”

Mr. Quanfu Hong, Leader Monetary Officer of Canaan, mentioned, “Regardless of the demanding situations we skilled all through the second one quarter of 2020, we delivered every other quarter of forged monetary effects. Our overall internet revenues larger by means of 160.9% quarter over quarter to RMB178.1 million all through the length, pushed by means of a 198.5% sequential build up in our overall computing energy bought all through the second one quarter. Taking a look forward, we can proceed to put money into the ones spaces that may support our product choices, streamline our operations, and solidify our marketplace management. Despite the fact that the present macroeconomic uncertainties make forecasting tricky, we’re assured within the underlying power of our basics and constructive in regards to the long-term expansion potentialities of our industry.”

2nd Quarter 2020 Monetary Effects

Overall internet revenues in the second one quarter of 2020 have been RMB178.1 million (US$25.2 million) representing a 26.3% year-over-year lower from RMB241.Five million in the similar length of 2019 and a 160.9% quarter-over-quarter build up from RMB68.Three million within the first quarter of 2020. The year-over-year lower and quarter-over-quarter build up in overall internet revenues have been principally consistent with the adjustments in overall computing energy bought.

Price of revenues in the second one quarter of 2020 was once RMB134.Eight million (US$19.1 million) in comparison to RMB230.Eight million in the similar length of 2019 and RMB65.Nine million within the first quarter of 2020. The year-over-year lower and quarter-over-quarter build up in value of revenues have been consistent with the adjustments within the Corporate’s gross sales quantity of Thash and value in line with Thash.

Gross benefit in the second one quarter of 2020 larger by means of 302.5% yr over yr and 1,711.5% quarter over quarter to RMB43.Three million (US$6.1 million) from RMB10.Eight million in the similar length of 2019 and RMB2.Four million within the first quarter of 2020. Gross margin in the second one quarter of 2020 expanded to 24.3% from 4.5% in the similar length of 2019 and three.5% within the first quarter of 2020.

Overall working bills in the second one quarter of 2020 have been RMB62.2 million (US$8.Eight million) in comparison to RMB279.7 million in the similar length of 2019 and RMB73.Five million within the first quarter of 2020.

Analysis and construction bills in the second one quarter of 2020 have been RMB26.1 million (US$3.7 million) in comparison to RMB35.Nine million in the similar length of 2019 and RMB41.Eight million within the first quarter of 2020. The discounts in analysis and construction bills have been principally because of the decreases in fabrics used for analysis and construction functions in the similar length of 2019 and the second one quarter of 2020. As a share of overall internet revenues, analysis and construction bills in the second one quarter of 2020 was once 14.6% in comparison to 14.9% in the similar length of 2019 and 61.2% within the first quarter of 2020.

Promoting and advertising and marketing bills in the second one quarter of 2020 have been RMB6.Five million (US$0.Nine million) in comparison to RMB5.6 million in the similar length of 2019 and RMB4.1 million within the first quarter of 2020, each will increase have been principally pushed by means of the larger salaries of the group of workers within the Corporate’s gross sales and advertising and marketing departments. As a share of overall internet revenues, gross sales and advertising and marketing bills in the second one quarter of 2020 have been 3.7% in comparison to 2.3% in the similar length of 2019 and six.1% within the first quarter of 2020.

Common and administrative bills in the second one quarter of 2020 have been RMB29.6 million (US$4.2 million) in comparison to RMB238.1 million in the similar length of 2019 and RMB27.6 million within the first quarter of 2020. In the second one quarter of 2019, the share-based repayment allotted to common and administrative bills within the quantity of RMB213.1 million was once because of the far more than appraised truthful price over the switch value of atypical stocks transferred from the prevailing shareholders to different current shareholders who have been additionally the workers. When put next with the primary quarter of 2020, the slight build up was once principally because of the rise of wage, the pro carrier fees and different day-to-day administrative bills.

Loss from operations in the second one quarter of 2020 was once RMB18.Nine million (US$2.7 million) in comparison to RMB268.Nine million in the similar length of 2019 and RMB71.1 million within the first quarter of 2020.

Web loss as a consequence of atypical shareholders in the second one quarter of 2020 was once RMB16.Eight million (US$2.Four million) in comparison to RMB263.1 million in the similar length of 2019 and RMB39.Nine million within the first quarter of 2020.

Non-GAAP adjusted internet loss in the second one quarter of 2020 was once RMB16.Zero million (US$2.Three million) in comparison to RMB46.Zero million in the similar length of 2019 and RMB38.2 million within the first quarter of 2020. Non-GAAP adjusted internet loss excludes share-based repayment expense. For additional data, please consult with “Use of Non-GAAP Monetary Measures” on this unencumber.

Fundamental and diluted internet loss in line with ADS in the second one quarter of 2020 have been each RMB0.11 (US$0.02) in comparison to RMB1.88 in the similar length of 2019 and RMB0.25 within the first quarter of 2020. Each and every ADS represents 15 of the Corporate’s Magnificence A atypical stocks.

As of June 30, 2020, the Corporate had money and money equivalents of RMB157.Zero million (US$22.2 million) in comparison to RMB516.6 million as of December 31, 2019. The lower was once principally because of upper temporary investments because the Corporate had invested RMB347.6 million (US$49.2 million) in temporary investments as of June 30, 2020, in comparison with RMB11.Zero million in temporary investments as of December 31, 2019. The corporate bought temporary monetary merchandise to obtain upper returns however on the identical time can withdraw at any time.

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Trade Outlook

Because of the ongoing uncertainty from the unexpectedly converting international surroundings associated with the COVID-19 pandemic and corresponding financial downturn, the Corporate won’t factor any monetary steerage within the close to time period.

Convention Name Knowledge

The Corporate’s control staff will hang a Direct Tournament convention name on Monday, August 31, 2020, at 8:00 A.M. Japanese Time (or 8:00 P.M. Beijing Time at the identical day) to speak about the monetary effects. Main points for the convention name are as follows:

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All contributors should use the hyperlink equipped above to finish the web registration procedure prematurely of the convention name. Upon registering, each and every player will obtain a suite of player dial-in numbers, the Direct Tournament passcode, and a novel get admission to PIN, which can be utilized to sign up for the convention name.

A replay of the convention name might be available thru September 8, 2020, by means of dialing the next numbers:

Global: +61-2-8199-0299
United States: +1-646-254-3697
Hong Kong, China: +852-3051-2780
Replay PIN: 3977618

A are living and archived webcast of the convention name may also be to be had on the Corporate’s investor family members web page at investor.canaan-creative.com.

About Canaan Inc.

Established in 2013, Canaan Inc. supplies high-performance computing answers to successfully remedy advanced issues. In 2016, Canaan effectively initiated the manufacturing of its first 16nm chip and handed the check to obtain China’s nationwide high-tech endeavor certification. In 2018, Canaan completed primary technological breakthroughs to release the Ok210, the sector’s first-ever RISC-V-based edge synthetic intelligence (AI) chip, which is now extensively used for get admission to keep watch over in scenarios comparable to sensible door locks and extra. Canaan Inc. is lately targeted at the analysis and construction of complex era, together with such spaces as AI chips, AI algorithms, AI architectures, gadget on a chip (SoC) integration and chip integration. The use of the AI chip as its base, Canaan Inc. has established an highbrow price chain. Canaan Inc. additionally supplies a set of AI carrier answers and is in a position to tailor those answers to the wishes of its companions. For more info, please discuss with: investor.canaan-creative.com.

Trade Fee Knowledge

This announcement accommodates translations of positive RMB quantities into U.S. bucks (“US$”) at specified charges only for the ease of the reader. Except in a different way mentioned, all translations from RMB to US$ have been made on the charge of RMB7.0651 to US$1.00, the midday purchasing charge in impact on June 30, 2020, within the H.10 statistical unencumber of the Federal Reserve Board. The Corporate makes no illustration that the RMB or US$ quantities referred may well be transformed into US$ or RMB, because the case is also, at any explicit charge or in any respect.

Protected Harbor Observation

This announcement accommodates ahead−taking a look statements. Those statements are made underneath the “secure harbor” provisions of the U.S. Non-public Securities Litigation Reform Act of 1995. Those ahead−taking a look statements will also be known by means of terminology comparable to “will,” “expects,” “anticipates,” “long term,” “intends,” “plans,” “believes,” “estimates” and equivalent statements. Amongst different issues, the industry outlook and quotations from control on this announcement, in addition to Canaan Inc.’s strategic and operational plans, include ahead−taking a look statements. Canaan Inc. might also make written or oral ahead−taking a look statements in its periodic studies to the U.S. Securities and Trade Fee (“SEC”) on Bureaucracy 20−F and six−Ok, in its annual report back to shareholders, in press releases and different written fabrics and in oral statements made by means of its officials, administrators or workers to 3rd events. Statements that don’t seem to be ancient details, together with statements about Canaan Inc.’s ideals and expectancies, are ahead−taking a look statements. Ahead−taking a look statements contain inherent dangers and uncertainties. A lot of elements may purpose precise effects to fluctuate materially from the ones contained in any ahead−taking a look observation, together with however now not restricted to the next: the Corporate’s objectives and techniques; the Corporate’s long term industry construction, monetary situation and result of operations; the predicted expansion of the Bitcoin business and the cost of Bitcoin; the Corporate’s expectancies relating to call for for and marketplace acceptance of its merchandise, particularly its Bitcoin mining machines; the Corporate’s expectancies relating to keeping up and strengthening its relationships with manufacturing companions and consumers; the Corporate’s funding plans and techniques, fluctuations within the Corporate’s quarterly working effects; festival in its business in China; and related executive insurance policies and rules in terms of the Corporate and cryptocurrency. Additional data relating to those and different dangers is integrated within the Corporate’s filings with the SEC, together with its registration observation on Shape F−1, as amended, and its annual studies on Shape 20−F. All data equipped on this press unencumber and within the attachments is as of the date of this press unencumber, and Canaan Inc. does now not adopt any legal responsibility to replace any ahead−taking a look observation, except for as required underneath appropriate legislation.

Use of Non­GAAP Monetary Measures

In comparing Canaan’s industry, the Corporate considers and makes use of adjusted internet source of revenue as a supplemental measure to study and assess its working functionality. The presentation of this non-GAAP monetary measure isn’t meant to be thought to be in isolation or as an alternative choice to monetary data ready and introduced in keeping with U.S. GAAP. The Corporate defines adjusted internet loss as internet loss with the exception of percentage­founded repayment expense.

Canaan believes that adjusted internet source of revenue is helping to spot underlying developments within the Corporate’s industry that would in a different way be distorted by means of the impact of the bills that the Corporate excludes in adjusted internet source of revenue. The Corporate believes that adjusted internet source of revenue supplies helpful details about our working effects, complements the entire figuring out of Canaan’s previous functionality and long term potentialities and permits for higher visibility with admire to key metrics utilized by the Corporate’s control in its monetary and operational decision-making.

The non-GAAP monetary measure “adjusted internet loss” isn’t outlined underneath U.S. GAAP, isn’t introduced in keeping with U.S. GAAP and has obstacles as an analytical device. One of the most key obstacles of the use of adjusted internet loss is that it does now not replicate all the pieces of source of revenue and expense that have an effect on the Corporate’s operations. Proportion-based repayment has been and would possibly proceed to be incurred in Canaan’s industry and isn’t mirrored within the presentation of adjusted internet loss. Additional, the non-GAAP monetary measure “adjusted internet loss” would possibly fluctuate from the non-GAAP data utilized by different firms, together with peer firms, and subsequently their comparison is also restricted.

Investor Members of the family Touch

Canaan Inc.
Mr. Shaoke Li
E mail: [email protected]

ICR Inc.
Jack Wang
Tel: +1 (347) 396-3281
E mail: [email protected]

CANAAN INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(all quantities in hundreds of RMB, except for percentage and in line with percentage knowledge, or as in a different way famous)

  As of
December 31,
  As of June 30,
  2019    2020   2020
  RMB    RMB    US$ 
ASSETS                      
Present property:                      
Money and money equivalents   516,607       157,022       22,225  
Limited money   8,239       5,098       722  
Brief-term investments   11,005       347,559       49,194  
Accounts receivable   2,872       10,160       1,438  
Inventories   196,067       88,115       12,472  
Prepayments and different recent property   206,020       175,347       24,819  
Overall recent property   940,810       783,301       110,870  
Non-current property:                      
Belongings, apparatus and instrument   22,602       17,330       2,453  
Running rent property         88,287       12,496  
Proper-of-use property, internet   22,764       17,706       2,506  
Different non-current property   5,250       2,230       316  
Overall non-current property   50,616       125,553       17,771  
Overall property   991,426       908,854       128,641  
LIABILITIES, AND SHAREHOLDERS EQUITY                      
Present liabilities                      
Brief-term money owed   99,903       181,093       25,632  
Accounts payable   99,050       16,158       2,287  
Notes payable   27,462       14,912       2,111  
Contract liabilities   8,288       1,078       153  
Amassed liabilities and different recent liabilities   40,691       24,139       3,417  
Hire liabilities, recent   9,838       9,128       1,292  
Overall recent liabilities   285,232       246,508       34,892  
Non-current liabilities:                      
Hire liabilities, non-current   13,399       7,580       1,073  
Different non-current liabilities         9,826       1,391  
Overall non-current liabilities   13,399       17,406       2,464  
Overall liabilities   298,631       263,914       37,356  
Shareholders fairness:                      
Abnormal stocks (US$0.00000005 par price; 1,000,000,000,000 stocks
   licensed, 2,372,222,222 stocks issued, 2,350,123,270 stocks
   exceptional as of December 31, 2019 and June 30, 2020, respectively)
  1       1        
Subscriptions receivable from shareholders   (1 )     (1 )      
Treasury shares (US$0.00000005 par price; 22,098,952 stocks as of
   December 31, 2019 and June 30, 2020, respectively)
               
Further paid-in capital   1,631,609       1,634,083       231,289  
Statutory reserves   97,307       97,307       13,773  
Amassed different complete loss   (55,542 )     (49,140 )     (6,955 )
Amassed deficit   (980,579 )     (1,037,310 )     (146,822 )
Overall shareholders fairness   692,795       644,940       91,285  
Overall liabilities and shareholders fairness   991,426       908,854       128,641  
                       
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CANAAN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(all quantities in hundreds of RMB, except for percentage and in line with percentage knowledge, or as in a different way famous)

  For the 3 Months Ended
  June 30,
 2019 
  March 31,
 2020
  June 30,
 2020 
  June 30, 
2020 
       
  RMB   RMB   RMB   US$
Web revenues                              
Merchandise income   240,401       67,032       162,925       23,061  
Rentals income         994       15,109       2,139  
Services and products income   370       24       57       8  
Different income   775       223       35       5  
Overall internet income   241,546       68,273       178,126       25,213  
Price of income   (230,793 )     (65,885 )     (134,849 )     (19,087 )
Gross benefit   10,753       2,388       43,277       6,126  
Running expense                              
Analysis and construction bills   (35,912 )     (41,794 )     (26,073 )     (3,690 )
Promoting and advertising and marketing bills   (5,615 )     (4,132 )     (6,520 )     (923 )
Common and administrative bills   (238,131 )     (27,589 )     (29,587 )     (4,188 )
Overall working bills   (279,658 )     (73,515 )     (62,180 )     (8,801 )
Loss from operations   (268,905 )     (71,127 )     (18,903 )     (2,675 )
Passion source of revenue   442       1,824       873       124  
Funding source of revenue   1,120       1,063       1,923       272  
Passion expense   (3,482 )     (1,185 )     (1,519 )     (215 )
Foreign currency echange (loss) achieve   4,515       240       80       11  
Price added tax refunds   348                    
Others, internet   2,897       29,239       831       118  
Loss prior to source of revenue tax bills   (263,065 )     (39,946 )     (16,715 )     (2,365 )
Source of revenue tax expense               (72 )     (10 )
Web loss   (263,065 )     (39,946 )     (16,787 )     (2,375 )
Foreign exchange translation adjustment, internet of nil tax   (2,547 )     6,483       (81 )     (11 )
Overall complete loss   (265,612 )     (33,463 )     (16,868 )     (2,386 )
Weighted reasonable selection of stocks
   utilized in in line with percentage calculation:
                             
— Fundamental and diluted   2,100,081,511       2,350,123,270       2,350,123,270       2,350,123,270  
Web loss in line with percentage (cent in line with percentage)                              
— Fundamental and diluted   (12.53 )     (1.70 )     (0.71 )     (0.10 )
Proportion-based repayment bills
   have been integrated in:
                             
Analysis and construction bills   2,404       1,120       132       19  
Gross sales and advertising and marketing bills   110       11       11       2  
Common and administrative bills   214,557       600       600       85  

The desk beneath units forth a reconciliation of internet loss to non-GAAP adjusted internet loss for the length indicated:

  For the 3 Months Ended
  June 30,
 2019
  March 31,
 2020
  June 30,
 2020
  June 30,
2020
       
  RMB   RMB    RMB    US$
Web loss   (263,065 )     (39,946 )     (16,787 )     (2,375 )
Upload: Proportion-based repayment expense   217,071       1,731       743       106  
Non-GAAP adjusted internet loss   (45,994 )     (38,215 )     (16,044 )     (2,269 )

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