Cango Inc. Announces Third Amendment to Share-Settled Crypto Mining Assets Acquisitions

Rhea-AI Summary

Cango Inc. (NYSE: CANG) announced a third amendment to its Share-Settled Crypto Mining Assets Acquisitions agreement from November 2024. The amendment adjusts the share issuance structure, with 146,670,925 Class A ordinary shares to be issued at closing and potential 97,780,616 bonus shares upon trigger events. The amendment addresses changes due to Cango's PRC business disposal on May 27, 2025, modifying conditions for Adjustment Shares issuance based on a US$7.0 million threshold. Golden TechGen Limited (GT) will own 18.79% of shares post-closing, with all sellers collectively owning 41.38%. GT underwent ownership changes, with three new shareholders each holding one-third voting power: Ning Wang, Youngil Kim, and Wye Sheng Kong. The transaction's completion remains subject to closing conditions.

Positive

• Acquisition of significant crypto mining capacity with 18 Exahash per second hashrate
• Strategic restructuring through PRC Business Disposal completed on May 27, 2025
• Experienced new leadership at GT with professionals from finance, fintech, and blockchain sectors

Negative

• Potential share dilution with 146.6M shares to be issued plus possible 97.7M bonus shares
• Risk of additional share dilution through Adjustment Shares if PRC Business Disposal consideration is reduced
• Uncertainty in transaction completion due to pending closing conditions

Insights

Crypto and Corporate Finance Analyst

Cango's third amendment to its crypto mining assets acquisition alters share issuance terms and post-transaction ownership structure following recent PRC business divestiture.

Cango has announced a third amendment to its agreement for acquiring crypto mining machines with 18 Exahash per second hashrate capacity through share issuance. This amendment makes significant adjustments to the transaction structure, particularly following Cango's recent divestiture of its PRC business.

The revised terms specify that Cango will issue 146,670,925 Class A ordinary shares to sellers at closing, with potential for an additional 97,780,616 bonus shares upon meeting triggering conditions. This represents substantial dilution for existing shareholders, as the sellers will collectively own approximately 41.38% of Cango's outstanding shares post-transaction.

A key modification addresses the adjustment mechanism following Cango's May 27 sale of its PRC business. Previously, additional shares would be issued if the PRC business's net asset value declined by RMB50 million or more by 2026. Now, adjustment shares will be triggered if the consideration from the PRC business disposal is reduced by approximately $7.0 million due to indemnifiable losses or holdbacks.

The amendment also reveals a significant ownership change at Golden TechGen Limited (GT), which will become Cango's largest seller with 18.79% ownership post-transaction. GT has undergone a complete control change, with three new shareholders - Ning Wang, Youngil Kim, and Wye Sheng Kong - each holding one-third voting power, replacing previous owner Max Hua.

This transaction represents a fundamental strategic pivot for Cango toward crypto mining, moving away from its original PRC-focused business model. The extensive share issuance and ownership restructuring indicate a comprehensive transformation of Cango's business focus, capital structure, and governance. However, investors should note the transaction remains subject to closing conditions with no guarantee of completion.

HONG KONG, June 4, 2025 /PRNewswire/ -- Cango Inc. (NYSE: CANG) ("Cango" or the "Company") today announced that it has entered into the third amendment (the "Third Amendment") to the On-Rack Sales and Purchase Agreement (the "Purchase Agreement") dated November 6, 2024 for the acquisitions of on-rack crypto mining machines with an aggregate hashrate of 18 Exahash per second through issuance of Class A ordinary shares of the Company to the sellers (the "Share-Settled Transactions").

The Company announced signing of the Purchase Agreement on November 6, 2024, and amendments to the agreement on March 26, 2025 and April 3, 2025. The Third Amendment further adjusted the number of shares to be issued to the sellers based on the updated total number of shares of the Company outstanding on a fully diluted basis and as a result a total of 146,670,925 Class A ordinary shares of the Company will be issued to the sellers at the closing, and a total of 97,780,616 bonus shares (the "Bonus Shares") may be issued to the sellers upon the bonus triggerring event as provided in the original Purchase Agreement.

The Third Amendment also implemented certain changes necessitated by the Company's sale of its PRC business (the "PRC Business Disposal"), which was consummated on May 27, 2025. Under the original Purchase Agreement, the Company would be required to issue additional shares to the sellers (the "Adjustment Shares") if the net asset value (after certain adjustments) of the Company's PRC business were to be reduced by RMB50 million or more by the end of 2026 as compared to September 30, 2024. After the Third Amendment, the Company will be required to issue the Adjustment Shares if the total consideration that the Company is entitled to receive from the PRC Business Disposal is reduced by approximately US$7.0 million (or approximately RMB50 million) (the "Threshold") or more. Such reduction may result from (i) the amount of indemnifable losses payable by the Company to the buyer of the PRC business and (ii) the portion of the purchase price of the PRC business held back by the buyer and is finally determined not to be releasable to the Company, in each case as determined under the PRC Business Disposal agreement. To the extent such reduced amount exceeds the Threshold, the Company will be required to issue additional shares to the sellers calculated based on the excess of such reduced amount over the Threshold, and if such excess increases over time as a result of the increase in the reduced amount, additional shares will be issued by the Company to the sellers.

Upon closing of the Share-Settled Transactions as amended (and before completion of the transactions contemplated by the Definitive Agreement described below), Golden TechGen Limited ("GT"), which is expected to be the largest seller in these transactions, will own approximately 18.79% of the Company's total outstanding shares, and all the sellers in the Share-Settled Transactions will in the aggregate own approximately 41.38% of the Company's total outstanding shares before the issuance of any Bonus Shares or Adjustment Shares.

The Company announced on June 2, 2025 a definitive agreement (the "Definitive Agreement") entered into among the Company's co-founders, Mr. Xiaojun Zhang and Mr. Jiayuan Lin (collectively, the "Founders"), their holding companies, Enduring Wealth Capital Limited ("EWCL") and the Company. Upon completion of the transactions contemplated by the Definitive Agreement, assuming the Share-Settled Transactions are consummated as amended and assuming no issuance of the Bonus Shares or Adjustments Shares, EWCL will hold approximately 2.82% of the Company's total outstanding shares and 36.74% of the total voting power of the outstanding shares of the Company; the Founders collectively will hold 18.54% of the Company's total outstanding shares and 12.07% of the total voting power of the outstanding shares of the Company; and GT will hold 18.79% of the Company's total outstanding shares and 12.23% of the total voting power of the outstanding shares of the Company.

Furthermore, GT recently notified the Company that it has undergone a change of control whereby Mr. Max Hua, GT's previous owner, no longer holds any shares in GT and three new shareholders, Mr. Ning Wang, Mr. Youngil Kim and Mr. Wye Sheng Kong, each holds one third of the total voting power of the shares of GT. Mr. Ning Wang, CFA, FRM, is a finance professional with more than 16 years of experience across equities, fixed-income and digital-asset markets. He has previously managed large, diversified investment portfolios in senior roles at global financial institutions. Mr. Youngil Kim is a seasoned professional with extensive experience in fintech, strategic planning, and business development, particularly in the crypto and blockchain industry. Mr. Wye Sheng Kong is a finance professional with rich experience in treasury management, wealth planning, banking operations. and financial advisory services. Pursuant to the Third Amendment, Mr. Ning Wang, an executive director and one of the shareholders of GT, or his successor duly approved by the board of directors of the Company, will exercise the director nomination and appointment rights previously granted to Mr. Hua by the Company from closing of the Share-Settled Transactions.

The closing of the Share-Settled Transactions is subject to certain closing conditions that are yet to be satisfied or waived and the Company is working with the relevant parties towards the closing of the Share-Settled Transactions. There can be no assurance that the closing conditions will be satisfied nor that the Share-Settled Transactions will be completed before the contemplated closing date stipulated in the Purchase Agreement or at all.

About Cango Inc.

Cango Inc. (NYSE: CANG) is primarily engaged in the Bitcoin mining business, with operations strategically deployed across North America, the Middle East, South America, and East Africa. The Company entered the crypto asset space in November 2024, driven by advancements in blockchain technology, the growing adoption of digital assets, and its commitment to diversifying its business portfolio. In parallel, Cango continues to operate an online international used car export business through AutoCango.com, making it easier for global customers to access high-quality vehicle inventory from China. For more information, please visit: www.cangoonline.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Cango may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Cango's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the completion, amendment or reversal of any transactions entered into, proposed or considered by Cango; Cango's goal and strategies; Cango's expansion plans; Cango's future business development, financial condition and results of operations; Cango's expectations regarding demand for, and market acceptance of, its solutions and services; Cango's expectations regarding keeping and strengthening its relationships with dealers, financial institutions, car buyers and other platform participants; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cango's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Cango does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

Yihe Liu
Cango Inc.
Tel: +86 21 3183 5088 ext.5581
Email: ir@cangoonline.com 

Helen Wu
Piacente Financial Communications
Tel: +86 10 6508 0677
Email: ir@cangoonline.com

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SOURCE Cango Inc.

FAQ

What is the total hashrate of crypto mining machines being acquired by Cango (CANG)?

Cango is acquiring crypto mining machines with an aggregate hashrate of 18 Exahash per second through the Share-Settled Transactions.

How many shares will Cango (CANG) issue in the crypto mining assets acquisition?

Cango will issue 146,670,925 Class A ordinary shares at closing, with potential additional 97,780,616 bonus shares upon trigger events.

What percentage of Cango (CANG) will Golden TechGen Limited own after the transaction?

Golden TechGen Limited will own approximately 18.79% of Cango's total outstanding shares and 12.23% of total voting power after the transaction.

Who are the new shareholders of Golden TechGen Limited in the Cango (CANG) deal?

The new shareholders are Ning Wang, Youngil Kim, and Wye Sheng Kong, each holding one-third of GT's total voting power.

What triggers the Adjustment Shares issuance in Cango's (CANG) agreement?

Adjustment Shares will be issued if the consideration from PRC Business Disposal is reduced by US$7.0 million or more due to indemnifiable losses or withheld purchase price.