Canaan H1 revenue $94.6M, loss $186.4M

Canaan Inc. (CAN) reports unaudited results for the six months ended June 30, 2026, showing a sharp contraction in activity and higher losses.

Rhea-AI Filing Summary

Canaan Inc. (CAN) reports unaudited results for the six months ended June 30, 2026, showing a sharp contraction in activity and higher losses. Total revenues were US$94.6 million, down from US$183.0 million a year earlier, as product revenue and mining revenue both declined. The company swung from a gross profit of US$10.0 million to a gross loss of US$52.2 million, driven by lower sales and a much larger inventory write-down of US$44.0 million, plus additional write-downs on prepayments and reserves for foundry purchase commitments.

Net loss widened to US$186.4 million from US$97.5 million, reflecting negative fair value movements on cryptocurrency (a US$34.2 million loss) and derivatives (a US$24.9 million loss), impairment of mining equipment of US$9.2 million, and equity-method losses of US$3.9 million. Cash used in operating activities improved to US$51.9 million from US$199.6 million, and cash on hand was US$66.0 million at June 30, 2026. Total assets fell to US$446.2 million and shareholders’ equity to US$292.7 million, partly due to continued losses and share repurchases.

The company expanded its mining infrastructure exposure by acquiring 49% stakes in three mining entities (the ABC Projects) and additional mining equipment, issuing 53.8 million ADSs as consideration, and accounting for these holdings under the equity method. Canaan continued to rely on Bitcoin-backed loan facilities, with current and long-term loans totaling US$58.8 million and associated pledged cryptocurrency and receivables on its balance sheet. The estimated useful life of mining equipment was extended from 1.5 to 2 years, reducing depreciation and decreasing net loss by US$7.4 million in the period.

Positive

• Operating cash burn decreased: net cash used in operating activities improved from US$199.6 million to US$51.9 million for the six months ended June 30, 2026, reducing near-term cash outflows despite ongoing losses.
• Cash position remains material: Canaan held US$66.0 million of cash at June 30, 2026, providing liquidity to support operations and investment commitments.
• Change in useful life lowered expenses: extending mining equipment useful life to 2 years reduced depreciation and decreased net loss by US$7.4 million and loss per share by US$0.07 cent for the six months ended June 30, 2026.

Negative

• Revenue nearly halved: total revenues fell from US$183.0 million to US$94.6 million (about a 48% decline) for the six months ended June 30, 2026, with both product and mining revenues lower.
• Margins deteriorated sharply: results moved from a US$10.0 million gross profit to a US$52.2 million gross loss, including an inventory write-down of US$44.0 million and higher cost pressures.
• Net loss almost doubled: net loss increased from US$97.5 million to US$186.4 million, driven by negative fair value changes in cryptocurrency and derivatives, asset impairment, and equity-method losses.
• Equity base eroded: shareholders’ equity declined from US$437.4 million at December 31, 2025 to US$292.7 million at June 30, 2026, reflecting cumulative losses and share repurchases.
• High customer concentration: one customer accounted for 99% of accounts receivable and up to 35% of revenue in the six months ended June 30, 2026, increasing concentration risk.
• Dependence on a single IC supplier: substantially all integrated circuits were purchased from one supplier, and the company notes that a change in suppliers could delay manufacturing and adversely affect operating results.

Filing Explained

The filing shows completed ATM issuance alongside a larger unused ceiling, with 615,643,331 RSUs and 60,000,000 options still outstanding.

As a Form 6-K, this filing furnishes Canaan’s unaudited interim financial statements for the six months ended June 30, 2026, and it is incorporated by reference into the company’s F-3 registration statements. The 2025 ATM agreement permits up to US$270,000 of ADS issuance, while the period’s ATM issuance produced US$735 in net proceeds and 1,529,562 ADSs (22,943,430 Class A ordinary shares), so the filing reports capacity separately from completed issuance.

An ATM program permits gradual open-market issuance; under the supplied dilution definition, the 22,943,430 ordinary shares issued under this program increase total shares and reduce an existing holder’s percentage ownership absent offsetting changes. At June 30, 2026, 615,643,331 RSUs and 60,000,000 options were outstanding and excluded from diluted loss per share as anti-dilutive; the filing does not report their exercise or issuance.

Separately, as of September 11, 2026, the company had repurchased an additional 13,585,855 ADSs for US$5,462 using proceeds from an August cryptocurrency sale, placing that activity after the June 30, 2026 balance-sheet date.

Key Figures

Total revenues H1 2026: US$94.6 million Net loss H1 2026: US$186.4 million Gross profit (loss): US$(52.2) million +5 more

8 metrics

Total revenues H1 2026 US$94.6 million For the six months ended June 30, 2026; down from US$183.0 million in 2025

Net loss H1 2026 US$186.4 million For the six months ended June 30, 2026; versus US$97.5 million in 2025

Gross profit (loss) US$(52.2) million Gross loss for the six months ended June 30, 2026; prior-year gross profit US$10.0 million

Inventory write-down US$44.0 million Recorded in cost of revenues for the six months ended June 30, 2026

Change in fair value of cryptocurrency US$(34.2) million Loss for the six months ended June 30, 2026; prior-year gain US$8.3 million

Cash balance US$66.0 million Cash at June 30, 2026 on the consolidated balance sheet

Operating cash flow H1 2026 US$(51.9) million Net cash used in operating activities for the six months ended June 30, 2026; US$(199.6) million in 2025

Long-term loans outstanding US$58.8 million US$23.9 million current and US$34.9 million non-current long-term loans at June 30, 2026

Key Terms

equity method of accounting, At-the-market offering agreement, Loan-to-Value Ratio, inventory purchase commitments, +2 more

6 terms

equity method of accounting financial

"accounts for its 49% equity interest in each of the ABC Projects under the equity method of accounting"

An equity method of accounting is the way a company reports its financial interest in another business when it has significant influence but not full control, typically owning between about 20% and 50% of the voting stock. Instead of listing the investment at purchase cost or consolidating every line item, the investor records its proportional share of the other company’s profits or losses and adjusts the investment value for dividends or impairments, so investors see the economic impact of that stake. This matters because it changes reported earnings and asset values in a way that reflects ongoing performance—similar to showing your share of a small business’s monthly profit on your own books rather than just the amount you originally paid for your share—and helps gauge how much influence that stake has on the investor’s financial health.

At-the-market offering agreement financial

"entered into an At-the-market offering agreement (the “2025 ATM Agreement”) with Macquarie Capital Limited"

An at-the-market offering agreement lets a public company sell newly issued shares into the open market over time at the current trading price through an appointed broker, rather than all at once. Investors care because it provides the company flexible access to cash but can slowly reduce each existing shareholder’s ownership and put downward pressure on the stock price—like a shop owner quietly adding items for sale to a crowded shelf.

Loan-to-Value Ratio financial

"the loan amount will be 68% of the then-current fair market value (the “Loan-to-Value Ratio”) of the pledged Bitcoins"

The loan-to-value ratio (LTV) measures how large a loan is compared with the worth of the asset used as collateral, expressed as a percentage — for example, a $80,000 loan on a $100,000 property equals an 80% LTV. It matters to investors because higher LTVs mean higher risk of loss if the asset falls in value, and they influence borrowing costs, loan approval, and the stability and pricing of securities backed by such loans; think of it like how deep your financial safety net is under a loan.

inventory purchase commitments financial

"a provision of US$4,870 has been recognized in cost of revenues for the Company’s inventory purchase commitments under foundry service contracts"

warranty reserve financial

"Movement of warranty reserve is as follows"

A warranty reserve is money a company sets aside to pay future repairs, replacements or refunds under product warranties, like a rainy-day fund for fixing problems that arise after a sale. It matters to investors because larger or growing reserves can reduce reported profits and signal higher expected product costs or quality issues, while too-small reserves can mean surprise expenses later and risk to cash flow and valuation.

other-than-temporary financial

"An impairment loss on the equity method investments is recognized ... when the decline in value is determined to be other-than-temporary"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How did Canaan Inc. (CAN) perform financially in the first half of 2026?

Canaan reported US$94.6 million in revenue and a net loss of US$186.4 million for the six months ended June 30, 2026, versus US$183.0 million in revenue and a US$97.5 million loss a year earlier, with margins turning from profit to a US$52.2 million gross loss.

What is Canaan Inc.’s (CAN) liquidity position as of June 30, 2026?

Canaan held US$66.0 million in cash at June 30, 2026. Net cash used in operating activities for the first six months of 2026 was US$51.9 million, and total assets were US$446.2 million with shareholders’ equity of US$292.7 million.

How have cryptocurrency movements affected Canaan Inc. (CAN)?

For the six months ended June 30, 2026, Canaan recorded a US$34.2 million loss from change in fair value of cryptocurrency and a US$24.9 million loss from derivatives. Cryptocurrency on the balance sheet decreased to a fair value of US$47.0 million.

What major inventory-related charges did Canaan Inc. (CAN) record?

Canaan recognized US$44.0 million of inventory write-down in cost of revenues in the six months ended June 30, 2026, plus a US$0.9 million write-down of prepayments and a US$4.9 million reserve for inventory purchase commitments under foundry service contracts.

What new investments did Canaan Inc. (CAN) make in mining projects?

On February 19, 2026, Canaan acquired 49% equity interests in three mining entities (the ABC Projects) and related mining equipment from Cipher, issuing 53,762,660 ADSs valued at US$24.8 million. The equity-method investment balance was US$11.8 million at June 30, 2026.

How much debt and Bitcoin-collateralized borrowing does Canaan Inc. (CAN) have?

At June 30, 2026, Canaan reported US$23.9 million of current long-term loan obligations and US$34.9 million of non-current long-term loans. These loans are secured by pledged Bitcoin, with related cryptocurrency receivables totaling US$70.9 million current and US$41.8 million non-current.

Did Canaan Inc. (CAN) repurchase or issue shares during the period?

Yes. In the six months ended June 30, 2026, Canaan repurchased ADSs representing 42.2 million Class A shares and later repurchased an additional 13.6 million ADSs for US$5.5 million. It also issued 1.5 million ADSs via an at-the-market program, raising US$0.7 million.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 09/11/2026 - 04:01 PM Accepted by SEC EDGAR 09/11/2026 - 04:01 PM Learn about SEC filing dates

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of September 2026

Commission File Number: 001-39127

Canaan Inc.

28 Ayer Rajah Crescent

#06-08

Singapore 139959

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x            Form 40-F ¨

EXPLANATORY NOTE

We are submitting our latest interim financial statements as Exhibit 99.1 (the “Exhibit”) to this current report on Form 6-K. If there is any discrepancy between the numbers disclosed in the Exhibit and the numbers disclosed in the exhibit of our prior 6-Ks, the number disclosed herein will supersede.

This current report on Form 6-K is hereby incorporated by reference into the registration statements of Canaan Inc. on Form F-3 (File No. 333-285125), and shall be a part thereof from the date on which this current report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBITS

Exhibit No.		Description
Exhibit 99.1		Unaudited Interim Condensed Consolidated Financial Statements for the six months periods ended June 30, 2025 and 2026

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Canaan Inc.
	By:	/s/ Nangeng Zhang
	Name:	Nangeng Zhang
	Title:	Chairman and Chief Executive Officer

Date: September 11, 2026

Exhibit 99.1

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Consolidated Balance Sheets as of December 31, 2025 and June 30, 2026	F-2
Unaudited Consolidated Statements of Comprehensive Loss for the six months ended June 30, 2025 and 2026	F-4
Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2026	F-6
Notes to the Consolidated Financial Statements	F-8

CANAAN INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

As of December 31, 2025 and June 30, 2026

(all amounts in thousands, except share and per share data, or as otherwise noted)

				As of December 31,				As of June 30,
		Note		2025				2026
				US$				US$
ASSETS
Current assets:
Cash		2(c)			80,778				66,006
Accounts receivable, net		4			19,290				1,725
Inventories		5			180,816				128,835
Prepayments and other current assets		6			99,243				83,134
Cryptocurrency receivable, current		8			52,699				29,139
Held-for-sale assets, current					464				1,713
Total current assets					433,290				310,552
Non-current assets:
Cryptocurrency		7			83,339				47,019
Cryptocurrency receivable, non-current		8			35,133				41,786
Investment in equity investees		10			—				11,790
Property, equipment and software, net		9			44,028				27,388
Intangible assets					689				583
Operating lease right-of-use assets					2,880				2,090
Deferred tax assets					191				197
Other non-current assets					489				3,835
Non-current financial investment					2,845				1,000
Total non-current assets					169,594				135,688
Total assets					602,884				446,240
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term loans		12			28,515				23,888
Accounts payable					25,600				15,455
Contract liabilities		2(d)			9,317				4,107
Income tax payable					11,403				11,832
Accrued liabilities and other current liabilities		11			54,548				51,986
Operating lease liabilities, current					1,706				1,228
Total current liabilities					131,089				108,496
Non-current liabilities:
Long-term loans		12			23,731				34,901
Operating lease liabilities, non-current					948				481
Deferred tax liabilities					117				99
Other non-current liabilities		11			9,631				9,557
Total liabilities					165,516				153,534

Contingencies (Note 19)

CANAAN INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS (CONTINUED)

As of December 31, 2025 and June 30, 2026

(all amounts in thousands, except share and per share data, or as otherwise noted)

				As of December 31,				As of June 30,
		Note		2025				2026
				US$				US$
Shareholders’ equity:
Class A Ordinary shares (US$0.00000005 par value; 999,643,050,556 authorized, 10,431,482,973 and 11,237,922,873 shares issued, 9,703,445,043 and 10,557,490,218 shares outstanding as of December 31, 2025 and June 30, 2026, respectively)		14			1				1
Class B Ordinary shares (US$0.00000005 par value; 356,624,444 shares authorized, 311,624,444 shares issued and outstanding as of December 31, 2025 and June 30, 2026, respectively)		14			—				—
Subscriptions receivable from shareholders					—				—
Treasury stocks (US$0.00000005 par value; 366,981,615 and 342,319,770 shares as of December 31, 2025 and June 30, 2026, respectively)		15			(37,172	)			(20,255	)
Additional paid-in capital					1,177,057				1,192,812
Statutory reserves					14,892				14,892
Accumulated other comprehensive loss					(56,653	)			(47,632	)
Accumulated deficit					(660,757	)			(847,112	)
Total shareholders’ equity					437,368				292,706
Total liabilities and shareholders’ equity					602,884				446,240

The accompanying notes are an integral part of these consolidated financial statements.

CANAAN INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

For the Six Months Ended June 30, 2025 and 2026

(all amounts in thousands, except share and per share data, or as otherwise noted)

				For the six months ended June 30,
		Note		2025				2026
				US$				US$
Revenues
Products revenue					130,245				56,493
Mining revenue					52,326				36,781
Other revenues					414				1,281
Total Revenues					182,985				94,555
Cost of revenues
Products cost					(117,949	)			(102,642	)
Mining cost					(54,935	)			(43,065	)
Other cost					(149	)			(1,087	)
Total cost of revenues					(173,033	)			(146,794	)
Gross profit (loss)					9,952				(52,239	)
Operating expenses:
Research and development expenses					(35,353	)			(30,255	)
Sales and marketing expenses					(7,408	)			(3,104	)
General and administrative expenses					(33,269	)			(30,100	)
Impairment on property, equipment and software		9			—				(9,220	)
Gain on disposal of property, equipment and software					1,379				1,147
Total operating expenses					(74,651	)			(71,532	)
Loss from operations					(64,699	)			(123,771	)
Interest expense, net					(603	)			(1,271	)
Change in fair value of cryptocurrency		7			8,312				(34,211	)
Change in fair value of financial instruments other than derivatives					(21,877	)			—
Change in fair value of financial derivatives		13			9,385				(24,882	)
Excess of fair value of convertible preferred shares					(28,179	)			—
Foreign exchange gains (losses), net					1,173				(7,037	)
Other income, net					477				10,196
Loss before income tax expense					(96,011	)			(180,976	)
Income tax expense		17			(1,478	)			(1,453	)
Equity in losses of equity investees		10			—				(3,926	)

				For the six months ended June 30,
		Note		2025				2026
				US$				US$
Net loss					(97,489	)			(186,355	)
Foreign currency translation adjustment, net of nil tax					319				9,021
Total comprehensive loss					(97,170	)			(177,334	)
Weighted average number of shares used in per Class A and Class B ordinary share calculation:
— Basic		18			5,385,963,052				10,198,604,961
— Diluted		18			5,385,963,052				10,198,604,961
Net loss per Class A and Class B ordinary share (cent per share)
— Basic		18			(1.81	)			(1.83	)
— Diluted		18			(1.81	)			(1.83	)
Share-based compensation expenses were included in:
Cost of revenues					156				175
Research and development expenses					3,133				1,288
Sales and marketing expenses					112				72
General and administrative expenses					9,986				7,623

The accompanying notes are an integral part of these consolidated financial statements.

CANAAN INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2025 and 2026

(all amounts in thousands, except share and per share data, or as otherwise noted)

		For the six months ended June 30,
		2025				2026
		US$				US$
Cash flows from operating activities
Net cash used in operating activities			(199,555	)			(51,924	)
Cash flows from investing activities:
Purchase of property, equipment and software			(21,001	)			(5,552	)
Proceeds from disposal of property, equipment and software			483				3,837
Proceeds from disposal of cryptocurrency			51,107				20,749
Purchase of cryptocurrency			(2,413	)			(27	)
Proceeds from disposal of non-current financial investments			—				2,936
Payment for non-current financial investments			—				(1,000	)
Payment of transaction cost related to acquisition of equity investee			—				(1,582	)
Distribution from equity investees			—				3,550
Contribution to equity investees			—				(258	)
Net cash provided by investing activities			28,176				22,653
Cash flows from financing activities:
Proceeds from issuance of ordinary shares, net of issuance costs under At-the-Market Offering Agreements			42,222				735
Proceeds from issuance of convertible preferred shares, net of issuance costs			99,529				—
Proceeds from supplier financing arrangement			—				9,999
Proceeds from borrowings from long-term loan, net of issuance cost			—				9,560
Repayment of long-term loan			—				(7,436	)
Payment for repurchase of ordinary shares			(2,135	)			(2,000	)
Proceeds from resale of treasury stock			1,030				217
Repurchase for tax withholdings on vesting of restricted share units			(1,030	)			(217	)
Net cash provided by financing activities			139,616				10,858
Net decrease in cash			(31,763	)			(18,413	)
Effect of exchange rate changes on cash			1,179				3,641
Cash at the beginning of period			96,488				80,778
Cash at the end of period			65,904				66,006
Supplemental disclosure of cash flow information:
Cash paid for interest			810				736
Cash paid for income tax			1,083				1,054
Supplemental disclosure of non-cash investing and financing activities:
Mining equipment transfer from inventory to property, equipment and software			24,492				3,129
Issuance of ordinary shares pursuant to share lending arrangement			944				—

The accompanying notes are an integral part of these consolidated financial statements.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

1. Organization and principal activities

Canaan Inc., an exempted company with limited liability incorporated in the Cayman Islands, through wholly-owned subsidiaries (collectively referred to as the “Company”), is principally engaged in integrated circuit (the “IC”) design and sale of Bitcoin mining equipment and related components, with sales primarily conducted in the United States and Singapore, as well as mining activity mainly in the North America and Ethiopia.

2. Summary of significant accounting policies

(a) Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Canaan Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements of the Company. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2025.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2026, the results of operations and cash flows for the six months ended June 30, 2025 and 2026, have been made.

The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet dates, and the reported revenues and expenses during the reported periods.

The Company believes that accounting estimation of valuation of convertible preferred shares, deferred tax assets, write-down for inventories and prepayments, provision for reserve for inventory purchase commitments, and impairment of property, equipment and software reflect significant judgments and estimates used in the preparation of its consolidated financial statements.

Management bases the estimates on historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from these estimates.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

The Company assesses the estimated useful lives of its long-lived assets on an ongoing basis. In the first quarter of 2026, the Company revised the useful life of mining equipment, which are included in “Property, equipment and software”, from 1.5 years to 2 years, based on the historical and current use of the mining equipment as well as industry trends and practices. This change in estimated useful life is accounted for as a change in accounting estimate, prospectively beginning in fiscal year 2026. The effect of the change was a reduction in depreciation expense and a decrease in net loss of US$7,437 for the six months ended June 30, 2026. The effect of change in basic and diluted loss per share was a decrease of US$0.07 cent per share for the six months ended June 30, 2026.

(b) Fair value measurements

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:

As of December 31, 2025		Level 1				Level 2				Level 3				Fair value at December 31, 2025
Prepayments and other current assets (Note 13)			—				181				—				181
Cryptocurrency receivable (Note 13)			—				87,832				—				87,832
Cryptocurrency (Note 7)			83,339				—				—				83,339
Accounts payable (Note 13)			—				(2,927	)			—				(2,927	)
Accrued liabilities and other current liabilities (Note 13)			—				(5,566	)			—				(5,566	)
Long-term loans (Note 13)			—				(49,711	)			—				(49,711	)

As of June 30, 2026		Level 1				Level 2				Level 3				Fair value at June 30, 2026
Cryptocurrency receivable (Note 13)			—				70,925				—				70,925
Cryptocurrency (Note 7)			47,019				—				—				47,019
Accounts payable (Note 13)			—				(2,465	)			—				(2,465	)
Long-term loans (Note 13)			—				(48,687	)			—				(48,687	)

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

(c) Cash

Cash represents bank deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use.

		As of December 31,				As of June 30,
		2025				2026
US dollar denominated bank deposits with financial institutions in the U.S.			17,743				54,665
Financial institutions in the PRC
RMB denominated bank deposits			3,689				2,627
US dollar denominated bank deposits			3,186				640
Others denominated bank deposits			77				6
Subtotal			6,952				3,273
Financial institutions in Singapore
US dollar denominated bank deposits			52,624				4,524
Singapore dollar (SGD) denominated bank deposits			1,270				1,184
Others denominated bank deposits			7				7
Subtotal			53,838				5,715
Bank deposits with other overseas financial institutions			2,245				2,353
Total			80,778				66,006

The bank deposits with financial institutions in the mainland of the PRC, Hong Kong, United States, Singapore, Malaysia and Kahzakhstan are insured by the government authorities up to RMB500, HKD500, US$250, SGD100, Malaysia Ringgit (MYR) 250 and Kahzakhstan Tenge (KZT) 15,000 per bank, respectively. The bank deposits are insured by the government authorities with amounts up to US$2,831 and US$3,059 as of December 31, 2025 and June 30, 2026, 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, United States, and Singapore with acceptable credit rating.

(d) Contract liabilities

The prepayments received from customers as of December 31, 2025 and June 30, 2026 was US$9,317 and US$4,107, respectively. The revenue recognized during the six months ended June 30, 2025 and 2026 for the beginning balance of contract liability was US$22,322 and US$5,513, respectively.

(e) Investment in equity investees

Investment in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control and are accounted for using the equity method of accounting in accordance with ASC Subtopic 323-10, Investments-Equity Method and Joint Ventures: Overall (“ASC 323-10”). Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net profit or loss into its consolidated statements of operations. A difference between the cost of an investment and the amount of underlying equity in net assets of an investee shall be accounted for as if the investee were a consolidated subsidiary. If the difference is assigned to depreciable or amortizable assets or liabilities, then the difference should be amortized or accreted in connection with the equity earnings based on the Company’s proportionate share of the investee’s net income or loss. The Company evaluates its equity method investments for impairment under ASC 323-10. An impairment loss on the equity method investments is recognized in the consolidated statements of operations when the decline in value is determined to be other-than-temporary.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

3. Risks and concentration

(a) Concentration of credit risk

As of December 31, 2025 and June 30, 2026, accounts receivable were US$19,290 and US$1,725, respectively.

Accounts receivable concentration of credit risk is as below:

		As of December 31,				As of June 30,
		2025				2026
Customer A			44	%			*
Customer B			23	%			*
Customer C			20	%			99	%
Customer D			13	%			*

* Less than 10%

For the six months ended June 30, 2025 and 2026, customer which contributed more than 10% of total revenue is as below:

		For the six months ended June 30,
		2025				2026
Customer A			*				35	%
Customer E			*				23	%
Customer F			21	%			15	%

* Less than 10%

(b) Supplier concentration

For the six months ended June 30, 2025 and 2026, the Company’s purchases substantially all its integrated circuits from one supplier.

Although only a limited number of manufacturers for such integrated circuits are available, management believes that they could change their suppliers within these manufacturers which provided integrated circuits on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

4. Accounts receivable, net

Accounts receivable, net consist of the following:

		As of December 31,				As of June 30,
		2025				2026
Accounts receivable			19,382				1,733
Less: allowance for doubtful accounts			(92	)			(8	)
Total			19,290				1,725

The movement of the allowance for doubtful accounts is as follows:

		For the Six months ended June 30,
		2025				2026
Balance at the beginning of the year			1,093				92
Additions charged to bad debt expense			11				2,623
Write-off of bad debt allowance			(151	)			(2,707	)
End Balance			953				8

5. Inventories

Inventories consist of the following:

		As of December 31,				As of June 30,
		2025				2026
Raw materials			99,769				71,754
Work in process			23,543				16,555
Finished goods			57,504				40,526
Total			180,816				128,835

During the six months ended June 30, 2025 and 2026, the Company recorded write-down of US$3,465 and US$44,039 in cost of revenues, respectively.

6. Prepayments and other current assets

The prepayments and other current assets consist of the following:

		As of December 31,				As of June 30,
		2025				2026
VAT recoverable and refund			57,828				53,226
Prepayments to vendors (Note a)			33,997				22,468
Deferred charges			2,724				2,369
Deposits			2,145				2,294
Others			2,549				2,777
Total			99,243				83,134

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

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. During the six months ended June 30, 2025 and 2026, the Company recorded write-downs of US$5 and US$860 for the prepayment to third-party suppliers in cost of revenues.

7. Cryptocurrency

Cryptocurrency consist of the following:

		As of December 31, 2025									As of June 30, 2026
(in thousands, except for quantity)		Quantity			Cost Basis			Fair Value			Quantity			Cost Basis			Fair Value
Bitcoin		813			74,143			71,431			699			45,806			40,708
ETH		3,951			16,249			11,780			3,952			16,252			6,174
USDT		127,138			127			128			136,816			137			137
Total Cryptocurrency					90,519			83,339						62,195			47,019

Additional information about cryptocurrency consists of the following:

		For the six months ended June 30,
		2025				2026
Beginning Balance			61,821				83,339
Revenue recognized on acceptance of cryptocurrency*			74,383				40,786
Cryptocurrency received under long-term loans agreements*			20,742				4,250
Cryptocurrency received as customer deposits*			2,564				—
Purchase of cryptocurrency			2,413				27
Return of cryptocurrency as prepayment*			1,626				—
Pledged and derecognized cryptocurrency under long-term loans agreements*			(31,099	)			(10,195	)
Return of cryptocurrency as customer deposits*			(218	)			—
Cost of revenues recognized on payment of cryptocurrency*			(27,592	)			(16,228	)
Proceeds from disposal of cryptocurrency			(51,107	)			(20,749	)
Change in fair value of cryptocurrency			8,312				(34,211	)
Ending Balance			61,845				47,019

* represents non-cash investing or financing activity.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

8. Cryptocurrency receivable

Cryptocurrency receivable consist of the following:

		As of December 31, 2025							As of June 30, 2026
(in thousands, except for quantity)		Quantity			Fair Value				Quantity			Fair Value
Bitcoins transferred to fixed term product (Note a)		100				8,783			100				5,828
Bitcoin pledged for current portion of long-term loans (Note 12)		500				43,916			400				23,311
Cryptocurrency receivable, current						52,699							29,139
Bitcoin pledged for long-term loans (Note 12)		400				35,133			717				41,786
Cryptocurrency receivable, non-current						35,133							41,786

Note a: On December 23, 2024, the Company transferred 100 Bitcoins to a crypto assets exchange institution to purchase a fixed term investment product with a minimum annual return of 1% for one year and the Company extended for another one year in December 2025.

9. Property, equipment and software, net

Property, equipment and software consist of the following:

		As of December 31,				As of June 30
		2025				2026
Cost:
Mining equipment			126,691				120,315
Computers and electronic equipment			14,218				14,627
Leasehold improvements			5,217				5,350
Mechanical equipment			115				118
Software			3,871				4,129
Construction in progress			4,369				929
Motor vehicles			244				246
Land			120				120
Total cost			154,845				145,834
Less: Accumulated depreciation and amortization			(110,817	)			(118,446	)
Property, equipment and software, net			44,028				27,388

Depreciation and amortization expense during the six months ended June 30, 2025 and 2026 was US$19,064 and US$14,009, respectively. The Company recognized impairment of nil and US$9,220 during the six months ended June 30, 2025 and 2026, respectively.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

10. Investment in equity investees

On February 19, 2026, the Company, through a wholly-owned subsidiary, acquired a 49% equity interest in each of Alborz LLC, Bear LLC and Chief Mountain LLC (collectively, the "ABC Projects") from Cipher Mining Technologies Inc. ("Cipher"). As part of the same transaction, the Company also purchased 6,840 mining equipment from Cipher. The Company issued 53,762,660 ADSs (806,439,900 Class A ordinary shares) to Cipher as consideration for the acquired equity interest and mining equipment, with the fair value of US$24,801 on the settlement date.The issued ADSs are subject to a lock-up period of six months.

The Company does not have a controlling voting interest in, and its investment does not meet the definition of a variable interest entity under ASC 810 with respect to, any of the ABC Projects. However, the Company has the ability to exercise significant influence over the operating and financial policies of each of the ABC Projects. Accordingly, the Company accounts for its 49% equity interest in each of the ABC Projects under the equity method of accounting in accordance with ASC 323, Investments—Equity Method and Joint Ventures.

The Company initially recorded its investment in the equity interests of the ABC Projects at cost of US$15,878, representing the fair value of the consideration allocated to the equity interests acquired.

At acquisition date, the fair value of the mining equipment held by the ABC Projects was lower than their historical cost as recorded by each of the ABC Projects, resulting in a basis difference between the Company's share of carrying amount of its equity method investments and its proportionate share of the underlying net assets of the ABC Projects. The initial basis difference was US$26,194. The Company accretes this basis difference over the remaining expected depreciation period of the underlying mining equipment, with the accretion recorded each period within equity in net losses of equity investees in the consolidated statements of comprehensive loss, until the related mining equipment are fully depreciated by the ABC Projects and the corresponding basis difference is fully accreted.

In April and May 2026, the Company delivered an aggregate of 3,600 used mining equipment to Bear LLC and Chief Mountain LLC, among which 49% of the consideration was treated as capital contributions and the remaining 51% of the consideration of US$3,527 was settled by cash by Bear LLC and Chief Mountain LLC through funding from the other investor. The Company recorded the gain from the sale of used mining equipment of US$856 in the gain on disposal of property, equipment and software. The capital contributions by the Company were recorded at the cost of US$3,130, plus associated sales tax of US$258, which increased the carrying value of the Company's investments in equity investees. No basis difference arose from these contributions, as the fair value of the contributed mining equipment approximated their cost at the time of contribution.

The movement of investment in equity investees for the six months ended June 30, 2026 consist of the following:

		Investment in equity investees
Beginning balance as of January 1, 2026			—
Initial capital contribution			15,878
Cost of mining equipment contributed			3,388
Accretion of basis differences related to initial acquisition			7,346
Equity in net losses of equity investees			(11,272	)
Capital distribution			(3,550	)
Ending balance as of June 30, 2026			11,790

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

11. Accrued liabilities and other liabilities

		As of December 31,				As of June 30,
		2025				2026
Accrued liabilities and other current liabilities
Salary and welfare payable			22,999				12,041
Payables under supplier financing arrangement  (Note a)			—				10,157
Provision for reserve for inventory purchase commitments (Note b)			3,904				8,773
Other tax payables			6,240				5,812
Customer refund			3,738				3,819
Warranty reserve (Note c)			4,146				3,201
Professional services payable			3,740				3,069
VAT received from customers related to contract liabilities			490				298
Customer deposits			5,566				—
Others			3,725				4,816
Total			54,548				51,986
Other non-current liabilities
Deferred government grant			9,261				9,557
Others			370				—
Total			9,631				9,557

Note a: In March 2026, the Company entered into a supplier financing arrangement with a third party entity as financing source to pay to the Company’s vendor in the amount of US$9,999. The monthly interest rate was 0.5% before June 30, 2026 and 1.2% then after. The Company expected to repay such payables in one year and classified it as other current liabilities. As of June 30, 2026, the total outstanding balance including accrued interest was US$10,157.

Note b: 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, 2025 and June 30, 2026, the Company’s purchase obligation to third-party suppliers for foundry service was US$136,134 and US$105,712, respectively.

In connection with the preparation of the Company’s consolidated financial statements, 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 six months ended June 30, 2025 and 2026, a provision of nil and US$4,870 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.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

Note c: For mining equipment, the Company provides its customers for 360 days warranty, subject to certain conditions, such as normal use. The Company provides for the estimated costs of warranties at the time revenue is recognized. Factors that affect the Company’s warranty obligation include product defect rates and costs of repair or replacement.

Movement of warranty reserve is as follows:

		For the six months ended June 30,
		2025				2026
Beginning Balance			582				4,146
Accrual for warranties issued during the period			1,732				1,027
Warranty claims paid			(839	)			(145	)
Warranty expired			(223	)			(1,946	)
Foreign currency translation adjustment			5				119
Ending Balance			1,257				3,201

12. Long-term loans

On June 12, 2024, the Company, through a wholly-owned subsidiary, entered into Master Loan and Pledge Agreements (the “Agreements 1”) with a third party (the “Lender 1”). Pursuant to the Agreements 1, the Lender 1 will provide loans in tranches in USDT (also known as Tether, a stablecoin pegged to the U.S. Dollar) with a term of 18-month and an interest rate of 2.75% per annum. The Agreements 1 also require the Company to transfer 330 Bitcoins to the Lender 1 as collateral, and the loan amount will be 68% of the then-current fair market value (the “Loan-to-Value Ratio”) of the pledged Bitcoins. If the fair market value of Bitcoins fallen to below 70% of the fair market value at the loan receipt date, the Company is required to add Collateral. The repayment of the loan principal may be made in USD, USDT or if mutually agreed upon in writing prior to repayment, any other digital currency.

Pursuant to the Agreements 1, in June 2024, the Company pledged 330 Bitcoins as collateral to the Lender 1 with a fair value of US$21,041 at closing and obtained a loan with principal amount of 14,308,156 USDT. The net proceeds received in June 2024, after deducting issuance cost of 178,615 USDT, were 11,252,124 USDT (with a fair value of US$11,248). The issuance costs are reported as a direct deduction from the principal of the associated loan. The remaining net proceeds of 2,769,869 USDT (with a fair value of US$2,767), after deducting issuance cost of 107,548 USDT, were subsequently received in July 2024. For the years ended December 31, 2024 and 2025, the Company was not required to add additional Bitcoins as collateral. In December 2025, the Company repaid the loan principal of US$8,931 and received 200 Bitcoins pledged as collateral. In January 2026, the Company repaid the remaining loan principle and received the remaining 130 Bitcoins pledged as collateral.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

On June 21, 2024, the Company, through a wholly-owned subsidiary, entered into a Master Loan Agreement (the “Agreement 2”) with another third party (the “Lender 2”). Pursuant to the Agreement 2, the Lender 2 will provide a loan in amount of US$8,041 with a term of 18-months and an interest rate of 6.75% per annum. The Agreement 2 also requires the Company to transfer 200 Bitcoins to the Lender 2 as collateral. If the fair market value of Bitcoin fallen such that the Loan-to-Value Ratio equals or exceeds 80%, the Company is required to add Collateral.

Pursuant to the Agreement 2, in June 2024, the Company pledged 200 Bitcoins as collateral to the Lender 2 with a fair value of US$12,370 at closing and obtained a loan in amount of US$8,041. The net proceeds received in June 2024, after deducting issuance costs of US$121, were US$7,920. The issuance costs are reported as a direct deduction from the principal of the associated loan. In December 2025, the Company repay the loan principal of US$8,041 and received 200 Bitcoins pledged as collateral.

On August 9, 2024, the Company, through a wholly-owned subsidiary, entered into a Master Loan Agreement (the “Agreement 3”) with another third party (the “Lender 3”). Pursuant to the Agreement 3, the Lender 3 will provide a loan in amount of US$2,058 with a term of 18-months and an interest rate of 5.00% per annum. The Agreement 3 also requires the Company to transfer 70 Bitcoins to the Lender 3 as collateral. If the fair market value of Bitcoins fallen to below 50% of the fair market value at the loan receipt date, the Company is required to add Collateral.

Pursuant to the Agreement 3, in August 2024, the Company pledged 70 Bitcoins as collateral to the Lender 3 with a fair value of US$4,117 at closing and obtained a loan in amount of US$2,058. The net proceeds received in August 2024, after deducting issuance costs of US$41, were US$2,017. The issuance costs are reported as a direct deduction from the principal of the associated loan. In February 2026, the Company repay the loan principal of US$2,058 and received 70 Bitcoins pledged as collateral.

On January 22, 2025, the Company, through a wholly-owned subsidiary, entered into additional loan agreement pursuant to the Agreement 1 (the “Agreements 1.1”) with the Lender 1 under the Agreement 1. Pursuant to the Agreements 1.1, the Lender 1 will provide loans in tranches in USDT with a term of 18-month and an interest rate of 2.5% per annum. The Agreements 1.1 also require the Company to transfer 300 Bitcoins to the Lender 1 as collateral. If the fair market value of Bitcoins fallen to below 70% of the fair market value at the loan receipt date, the Company is required to add Collateral.

Pursuant to the Agreements 1.1, in January 2025, the Company pledged 300 Bitcoins as collateral to the Lender 1 with a fair value of US$31,099 at closing and obtained a loan with principal amount of 21,165,052 USDT. The net proceeds received in January 2025, after deducting issuance cost of 423,301 USDT, were 20,741,751 USDT (with a fair value of US$20,742). The issuance costs are reported as a direct deduction from the principal of the associated loan. In May 2026, the Company entered into an addendum to Agreement 1.1 with Lender 1 to extend the maturity date to July 2027. During the six months ended June 30, 2026, the Company was required to add 17 additional Bitcoins as collateral.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

On December 19, 2025, the Company, entered into an additional loan agreement pursuant to the Agreement 1 (the “Agreements 1.2”) through a wholly-owned subsidiary and a Master Loan Agreement (the “Agreement 4”) through another wholly-owned subsidiary with the Lender 1. Pursuant to the Agreement 1.2 and Agreement 4, the Lender 1 will provide loans in tranches in USDT with a term of 18 - month and an interest rate of 2.5% per annum. The Agreement 1.2 and Agreements 4 each require the Company to transfer 200 Bitcoins to the Lender 1 as collateral. If the fair market value of Bitcoins fallen to below 70% of the fair market value at the loan receipt date, the Company is required to add Collateral.

Pursuant to the Agreement 1.2 and Agreements 4, in December 2025, the Company pledged 400 Bitcoins as collateral to the Lender 1 with a fair value of US$34,184 at closing and obtained a loan with principal amount of 24,244,102 USDT. The net proceeds received in December 2025, after deducting issuance cost of 484,882 USDT, were 23,759,220 USDT (with a fair value of US$23,752). The issuance costs are reported as a direct deduction from the principal of the associated loan. As of June 30, 2026, the Company was not required to add additional Bitcoins as collateral.

On March 20, 2026, the Company, through a wholly-owned subsidiary, entered into a Master Loan Agreement (the “Agreement 5”) with the Lender 2. Pursuant to the Agreement 5, the Lender 2 will provide a loan in amount of US$9,706 with a term of 18-month and an interest rate of 3.0% per annum. The Agreement 5 also require the Company to transfer 200 Bitcoins to the Lender 2 as collateral. If the fair market value of Bitcoins fallen to below 72% of the fair market value at the loan receipt date, the Company is required to add Collateral.

Pursuant to the Agreement 5, in March 2026, the Company pledged 200 Bitcoins as collateral to the Lender 2 with a fair value of US$13,983 at closing and obtained a loan in amount of US$9,706. The net proceeds received in March 2026, after deducting issuance costs of US$146, were US$9,560. The issuance costs are reported as a direct deduction from the principal of the associated loan. As of June 30, 2026, the Company was not required to add additional Bitcoins as collateral.

On June 29, 2026, the Company, entered into an additional loan agreement pursuant to the Agreement 4 (the “Agreements 4.1”) through a wholly-owned subsidiary with the Lender 1. Pursuant to the Agreement 4.1, the Lender 1 will provide loans in tranches in USDT with a term of 18 - month and an interest rate of 2.25% per annum. The Agreement 4.1 also require the Company to transfer 200 Bitcoins to the Lender 1 as collateral. If the fair market value of Bitcoins fallen to below 70% of the fair market value at the loan receipt date, the Company is required to add Collateral.

Pursuant to the Agreement 4.1, in June 2026, the Company pledged 200 Bitcoins as collateral to the Lender 1 with a fair value of US$11,896 and obtained a partial loan disbursement with principal amount of 4,250,000 USDT. The remaining loan principal was received in July 2026. As of June 30, 2026, the Company was not required to add additional Bitcoins as collateral.

As of June 30, 2026, US$23,888 from Agreements 1.2 and Agreements 4 were classified as current portion of the long-term loans. Interest expense pertaining to the above loans amounted to US$736 and US$1,268 was recorded for the six months ended June 30, 2025 and 2026, respectively.

13. Derivatives

During the periods presented, the Company’s derivatives were all embedded forward contracts to receive or deliver a fixed amount of cryptocurrency in the future.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

Impact of derivatives on the Consolidated Balance Sheets

The following table summarizes the balance sheet impact of derivative instruments outstanding as of June 30, 2026 and December 31, 2025 as measured in U.S. dollar equivalents, none of which were designated as hedging instruments at June 30, 2026:

Consolidated Balance Sheets Location		Notional				Derivative Fair Value				Total
June 30, 2026
Prepayments and other current assets (1)			182				(1	)			181
Cryptocurrency receivable			98,787				(27,862	)			70,925
Accounts payable (1)			3,106				(641	)			2,465
Long-term loans (1)			48,738				(51	)			48,687
December 31, 2025
Prepayments and other current assets (1)			182				(1	)			181
Cryptocurrency receivable			83,743				4,089				87,832
Accounts payable (1)			2,926				1				2,927
Accrued liabilities and other current liabilities (1)			6,893				(1,327	)			5,566
Long-term loans (1)			49,760				(49	)			49,711

(1) Represents the portion of the Consolidated Balance Sheet line item that is denominated in cryptocurrency.

Impact of derivatives on the Consolidated Statements of Comprehensive Loss

Gains and losses on derivative instruments recorded in the Consolidated Statements of Comprehensive Loss were as follows:

		For the six months ended June 30,
		2025				2026
Cryptocurrency receivable			10,264				(27,102	)
Accrued liabilities and other current liabilities			(443	)			1,380
Accounts payable			(399	)			835
Long-term loans			(37	)			5
Total			9,385				(24,882	)

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

14. Ordinary shares

As of June 30, 2026, the authorized ordinary shares are 999,999,675,000, of which 11,549,547,317 shares were issued and 10,869,114,662 shares were outstanding. These outstanding shares consist of (1) 10,557,490,218 Class A ordinary shares and (2) 311,624,444 Class B ordinary shares, which were held by the Chairman and CEO of the Company.

At-the-Market Offering Agreements

On December 23, 2024, the Company entered into an At-the-market offering agreement (the “2024 ATM Agreement”) with Macquarie Capital Limited, Keefe, Bruyette & Woods, Inc., China Renaissance Securities (Hong Kong) Limited, Compass Point Research & Trading, LLC, Craig-Hallum Capital Group LLC, Northland Securities, Inc., Rosenblatt Securities Inc., The Benchmark Company, LLC, and B. Riley Securities Inc. (“B. Riley”) as sales agents (the “sales agents”). The Company issued 50,000,000 ADSs (750,000,000 Class A Ordinary Shares) to its share depositary bank as a reserve in relation to the 2024 ATM Agreement. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued but are treated as escrowed shares for accounting purpose, and therefore, have been excluded from the computation of net earnings (loss) per ordinary share for accounting purposes. For the year ended December 31, 2024, no ADS was utilized under the 2024 ATM Agreement. During the six months ended June 30, 2025, the Company issued 21,088,579 ADSs (316,328,685 Class A Ordinary shares) with net proceeds of US$42,222. The Company terminated the 2024 ATM Agreement in October 2025.

On October 24, 2025, the Company entered into an At-the-market offering agreement (the “2025 ATM Agreement”) with Macquarie Capital Limited, Keefe, Bruyette & Woods, Inc., China Renaissance Securities (Hong Kong) Limited, Compass Point Research & Trading, LLC, Northland Securities, Inc., Rosenblatt Securities Inc., The Benchmark Company, LLC, B. Riley Securities Inc. (“B. Riley”) and CLSA Limited as sales agents (the “sales agents”), pursuant to which the Company may issue up to US$270,000 of the ADSs. The remaining ADSs as the reserve in relation to the 2024 ATM Agreement could be used as a reserve in relation to the 2025 ATM Agreement. During the six months ended June 30, 2026, the Company issued 1,529,562 ADSs (22,943,430 Class A Ordinary shares) with net proceeds of US$735.

15. Repurchase of shares

On May 27, 2025, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$30 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 six months starting from May 27, 2025 depending on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements and general business conditions, the relevant rules under United States securities laws and regulations, and the relevant stock exchange rules. On December 17, 2025, the Board of Directors approved the renewal of the share repurchase program over a 12 months period beginning December 12, 2025.

During the six months ended June 30, 2026, 2,815,144 outstanding ADSs (representing 42,227,160 Class A ordinary shares) were repurchased. For the six months ended June 30, 2025 and 2026, 69,382,845 and 66,889,005 restricted share units were transferred from treasury stock to ordinary shares upon vesting, respectively.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

16. Share-based compensation

The following table summarizes restricted share units (“RSUs”) activity during the six months ended June 30, 2026:

		Number of shares				Weighted average grant date fair value
						US$
Outstanding as of January 1, 2026			551,294,295				0.09
Granted			180,460,950				0.04
Forfeited			(49,222,909	)			0.04
Vested			(66,889,005	)			0.10
Outstanding as of June 30, 2026			615,643,331				0.08

As of January 1, 2026 and June 30, 2026, the Company’s outstanding, and vested and expected to vest share option is 60,000,000. There was no change on the share options during the six months ended June 30, 2026. The exercisable share option is 60,000,000 as of June 30, 2026.

17. Income Taxes

The Company recorded an income tax expense of US$1,478 and US$1,453 for the six months ended June 30, 2025 and 2026, respectively, representing effective tax rates of 1.5% and 0.8%, respectively.

The effective income tax rate of 0.8% in 2026 and 1.5% in 2025 were lower than the statutory income tax rate of 25.0% which was primarily due to additional valuation allowances provided.

18. Basic and diluted loss per share

Basic and diluted loss per share have been calculated in accordance with ASC 260 on computation of loss per share for the six months ended June 30, 2025 and 2026, as follows:

		For the six months ended June 30,
		2025				2026
Basic loss per share calculation
Numerator:
Net loss			(97,489	)			(186,355	)
Denominator:
Weighted-average number of ordinary shares outstanding used in calculating basic and diluted loss per Class A and Class B ordinary share			5,385,963,052				10,198,604,961
Basic loss per Class A and Class B ordinary share (US$ cent per share)			(1.81	)			(1.83	)

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

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 as of June 30, 2025 and 2026 are as follows:

		As of June 30,
		2025				2026
RSUs			720,336,900				615,643,331
Share options			60,000,000				60,000,000
Convertible preferred shares			2,325,019,875				—

19. Contingencies

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. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings.

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

20. Changes in shareholders’ equity

				Clsss A Ordinary shares						Clsss B Ordinary shares									Treasury stocks												Accumulated
		Note		Number of Shares			Amount			Number of Shares			Amount			Subscription Amount			Number of Shares			Amount			Additional paid-in capital			Statutory reserves			other comprehensive loss			Accumulated deficit			Total shareholders’ equity
Balance as of January 1, 2025				5,052,538,578			—			311,624,444			—			—			229,281,465			(57,055	)		816,363			14,892			(57,456	)		(450,490	)		266,254
Share Repurchase				(46,856,670	)		—			—			—						46,856,670			(2,135	)		—			—			—			—			(2,135)
Share-based compensation expense				—			—			—			—						—			—			13,387			—			—			—			13,387
Repurchase of vested employee restricted share units for tax withholding				(14,859,360	)		—			—			—						14,859,360			(1,030	)		—			—			—			—			(1,030)
Resale of vested employee restricted share units for tax withholding				14,859,360			—			—			—						(14,859,360	)		1,030			—			—			—			—			1,030
Issuance of ordinary shares in at-the market offering, net of offering cost		14		—			—			—			—						—			—			42,101			—			—			—			42,101
Issuance of ordinary shares pursuant to preferred shares financing, net of offering cost				1,977,030,615			—			—			—						—			—			100,222			—			—			—			100,222
Issuance of ordinary shares pursuant to share lending arrangement				105,000,000			—			—			—						—			—			944			—			—			—			944
Vesting of restricted share units				69,382,845			—			—			—						(69,382,845	)		16,544			(16,544	)		—			—			—			—
Foreign currency translation				—			—			—			—						—			—			—			—			319			—			319
Net loss				—			—			—			—						—			—			—			—			—			(97,489	)		(97,489)
Balance as of June 30, 2025				7,157,095,368			—			311,624,444			—			—			206,755,290			(42,646	)		956,473			14,892			(57,137	)		(547,979	)		323,603

CANAAN INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all amounts in thousands, except share and per share data, or as otherwise noted)

				Class A Ordinary shares						Class B Ordinary shares						Subscription			Treasury stocks												Accumulated
		Note		Number of Shares			Amount			Number of Shares			Amount			receivables from shareholders			Number of Shares			Amount			Additional paid-in capital			Statutory reserves			other comprehensive loss			Accumulated deficits			Total shareholders’ equity
Balance as of January 1, 2026				10,064,501,358			1			311,624,444			—			—			366,981,615			(37,172	)		1,177,057			14,892			(56,653	)		(660,757	)		437,368
Share Repurchase		15		(42,227,160	)		—			—			—			—			42,227,160			(2,022	)		—			—			—			—			(2,022	)
Share-based compensation expense				—			—			—			—			—			—			—			9,158			—			—			—			9,158
Repurchase of vested employee restricted share units for tax withholding				(7,493,670	)		—			—			—			—			7,493,670			(217	)		—			—			—			—			(217	)
Resale of vested employee restricted share units for tax withholding				7,493,670			—			—			—			—			(7,493,670	)		217			—			—			—			—			217
Issuance of ordinary shares in at-the-market offering, net of offering cost		14		—			—			—			—			—			—			—			735			—			—			—			735
Shares issued as consideration for the equity investment in ABC projects		10		806,439,900			—			—			—			—			—			—			24,801			—			—			—			24,801
Vesting of restricted share units				66,889,005			—			—			—			—			(66,889,005	)		18,939			(18,939	)		—			—			—			—
Foreign currency translation				—			—			—			—			—			—			—			—			—			9,021			—			9,021
Net loss				—			—			—			—			—			—			—			—			—			—			(186,355	)		(186,355	)
Balance as of June 30, 2026				10,895,603,103			1			311,624,444			—			—			342,319,770			(20,255	)		1,192,812			14,892			(47,632	)		(847,112	)		292,706

21. Subsequent events

As of the date of this report, the Company repurchased additional 13,585,855 ADSs for US$5,462 using proceeds generated from sale of cryptocurrency in August.

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