If Federal Reserve Chair Jerome Powell really does reduce interest rates, then forward-looking investors ought to consider blockchain stocks. True, you can always go for the individual cryptocurrencies. However, this arena carries both market and what I would term “administrative” risks. From data breaches to agonizingly forgetting passwords, a lot of stuff can go wrong.I’m not saying that with blockchain stock picks that nothing can go wrong. Of course, this sector naturally carries high risks. For one thi ...

Cipher's JV entities have purchased 16,700 A1466 model Avalon Miners; the 11,000 previously bought A1346 model Avalon Miners have been delivered and installed at Cipher's Odessa Facility Stronghold has purchased 1,100 A1346 model Avalon Miners; the 2,000 previously bought A1346 model Avalon Miners have been delivered and installed at Stronghold's Patha Creek Plant SINGAPORE, Jan. 3, 2024 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan"), a leading high-performance computing solutions provider, today an ...

Canaan Inc. (NASDAQ:CAN) Q3 2023 Earnings Conference Call November 28, 2023 8:00 AM ET Company Participants Clark Soucy - IR Director Nangeng Zhang - Chairman and CEO James Jin Cheng - CFO Conference Call Participants Lucas Pipes - B. Riley Securities Michael Donovan - H.C. Wainwright Michael Legg - The Benchmark Company Shuang Sun - Guosheng Securities Operator Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.'s Third Quarter 2023 Earnings Conference Call. At this time, all partici ...

Exhibit 10.2 CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES A CONVERTIBLE PREFERRED SHARES OF CANAAN INC. Canaan Inc. (the "Company"), an exempted company incorporated and existing under the Companies Act (As Revised) of the Cayman Islands (the "Companies Act"), does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Company (the "Board") by the Amended and Restated Memorandum and Articles of Association of the Company (the "Memorandum and Articles of Asso ...

Canaan Inc. (NASDAQ:CAN) Q2 2023 Earnings Call Transcript August 29, 2023 8:00 AM ET Company Participants Clark Soucy - IR Director Nangeng Zhang - Chairman and CEO James Jin Cheng - CFO Conference Call Participants Mike Legg - The Benchmark Company Kevin Dede - H.C. Wainwright Shuang Sun - Guosheng Securities Operator Ladies and gentlemen, thank you for standing by and welcome to Canaan Inc.’s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the ma ...

Exhibit 99.1 Canaan Inc. Reports Unaudited Second Quarter 2023 Financial Results - Total Computing Power Sold Achieved 6.1 Million Thash/s, up 45.2% QoQ - - Bitcoin Mining Revenues Reached US$15.9 Million, up 43.3% QoQ - Singapore, August 29, 2023 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), a leading highperformance computing solutions provider, today announced its unaudited financial results for the three months ended June 30, 2023. Second Quarter 2023 Operating and Financial Hig ...

Canaan Inc. (NASDAQ:CAN) Q1 2023 Earnings Conference Call May 26, 2023 8:00 AM ET Company Participants Clark Soucy - IR Director Nangeng Zhang - Chairman & CEO James Cheng - CFO Conference Call Participants Kevin Dede - H.C. Wainwright Shuang Sun - Guosheng Securities Mike Legg - The Benchmark Company Jiaer Zhu - China Renaissance Operator Ladies and gentlemen, thank you for standing by, and welcome to Canaan Inc. First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only ...

Exhibit 99.1 Canaan Inc. Reports Unaudited First Quarter 2023 Financial Results - Total Computing Power Sold Rebounded to 4.2 Million Thash/s, up 126.8% QoQ - Singapore, May 26, 2023 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), a leading high-performance computing solutions provider, today announced its unaudited financial results for the three months ended March 31, 2023. Starting from January 1, 2023, the Company changed its reporting currency from Renminbi to U.S. dollar. The al ...

[PART I](index=6&type=section&id=PART%20I) [ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](index=6&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This section is not required for this report - This item is not required to be filled in this annual report[17](index=17&type=chunk) [ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](index=6&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This section is not required for this report - This item is not required to be filled in this annual report[17](index=17&type=chunk) [ITEM 3. KEY INFORMATION](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines the company's holding structure, operational and legal risks in PRC, regulatory requirements, cash flow mechanics, and detailed risk factors - Canaan Inc. is a Cayman Islands holding company, with all operations conducted through its operating subsidiaries, meaning investors purchase equity in the holding company, not the operating subsidiaries[18](index=18&type=chunk) - The company faces significant risks related to PRC regulations, including those concerning overseas offerings, foreign investment, virtual currency, cybersecurity, and data privacy, which could materially impact operations and ADS value[18](index=18&type=chunk) - Under the Holding Foreign Companies Accountable Act (HFCAA), the company's ADSs could be delisted if its China-based auditor cannot be inspected by the PCAOB for two consecutive years, though PCAOB inspections in 2022 mitigated immediate risk[18](index=18&type=chunk)[200](index=200&type=chunk)[206](index=206&type=chunk) - Canaan Inc.'s ability to pay dividends depends on distributions from its PRC subsidiaries, which are subject to PRC regulations on retained earnings and statutory reserve funds, with no dividends paid by PRC subsidiaries to the holding company in 2020, 2021, or 2022[27](index=27&type=chunk)[29](index=29&type=chunk) [D. Risk Factors](index=13&type=section&id=D.%20Risk%20Factors) This subsection details the principal risks facing the company, including Bitcoin price volatility, market dependency, AI expansion challenges, supply chain vulnerabilities, and evolving regulatory landscapes - The company's results are significantly impacted by Bitcoin mining's economic returns, with price volatility adversely affecting demand and pricing for mining machines, potentially leading to inventory write-downs, such as the **RMB 629.4 million** write-down in 2022[46](index=46&type=chunk)[48](index=48&type=chunk) - A significant portion of revenue, **94.8% in 2022**, comes from Bitcoin mining machines, and the business would be materially harmed if this market diminishes[50](index=50&type=chunk) - The company faces risks in its expansion into the AI market, where AI revenue remains small at **RMB 9.3 million in 2022**, and failure to penetrate this market could adversely affect growth prospects[52](index=52&type=chunk)[53](index=53&type=chunk) - As a fabless IC design company, Canaan depends on a limited number of third-party foundry partners, with purchases from three major partners accounting for **76.2% of total procurement in 2022**, and insufficient foundry capacity could significantly delay product shipments[77](index=77&type=chunk)[78](index=78&type=chunk) - The company is subject to PRC government crackdowns on Bitcoin mining and trading, with regulations deeming cryptocurrency-related activities illegal and classifying mining as an "obsolete industry," potentially harming the market for its products[61](index=61&type=chunk) - The company's ADSs may be delisted under the HFCAA if the PCAOB is unable to inspect its China-based auditors for two consecutive years, though inspections were conducted in 2022, future inability remains a risk[42](index=42&type=chunk)[200](index=200&type=chunk)[206](index=206&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=79&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of Canaan Inc., detailing its history, business model as a fabless IC designer for Bitcoin mining and AI, product lines, and organizational structure [A. History and Development of the Company](index=79&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Founded by Mr. Nangeng Zhang, the company shipped the world's first ASIC-based Bitcoin mining machines in 2013, completed its Nasdaq IPO in 2019, and expanded globally - The company was founded by Mr. Nangeng Zhang and his team, shipping the world's first batch of ASIC-based mining machines in **January 2013** under the Avalon brand[281](index=281&type=chunk) - Canaan Inc. completed its initial public offering (IPO) on the Nasdaq Global Market on **November 21, 2019**, issuing **10 million ADSs** at **US$9.00 per ADS** for gross proceeds of **US$90 million**[283](index=283&type=chunk) - In **April 2022**, the company entered into an at-the-market (ATM) offering agreement to sell up to **US$750 million** in ADSs, with no sales made under this offering as of December 31, 2022[284](index=284&type=chunk) [B. Business Overview](index=80&type=section&id=B.%20Business%20Overview) Canaan operates as a fabless IC designer, primarily selling Bitcoin mining machines, expanding into AI, and initiating Bitcoin mining operations as a secondary business line - Canaan operates as a fabless IC designer, focusing on proprietary high-performance computing ASICs for Bitcoin mining machines and AI solutions[286](index=286&type=chunk)[291](index=291&type=chunk) - The company has expanded into Bitcoin mining operations as a second business engine, with revenue from this segment growing from nil in 2020 to **RMB 218.6 million** in 2022[287](index=287&type=chunk) - Due to adverse PRC regulations, the company has shifted its customer base internationally, with sales to customers outside the PRC accounting for **97.2%** of total Bitcoin mining machine revenue in 2022, up from **16.0%** in 2020[302](index=302&type=chunk)[304](index=304&type=chunk) - As of December 31, 2022, the company's R&D team comprised **292 members**, representing **54.0%** of total employees, and held **205 patents**, **117 software copyrights**, and **71 IC layout-design rights**[307](index=307&type=chunk)[309](index=309&type=chunk)[324](index=324&type=chunk) [C. Organizational Structure](index=113&type=section&id=C.%20Organizational%20Structure) Canaan Inc. is a Cayman Islands holding company operating through wholly-owned subsidiaries in Hong Kong, Singapore, the United States, and various PRC cities for R&D, assembly, and distribution Principal Subsidiaries and Activities | Name of Subsidiary | Place of Incorporation | Equity Interest | Principal Activities | | :--- | :--- | :--- | :--- | | Canaan Creative (HK) Holdings Limited | Hong Kong | 100% | Research and development of ICs | | Hangzhou Canaan Intelligence Information Technology Co., Ltd. | Hangzhou, China | 100% | Research and development of ICs | | Canaan Creative Co., Ltd. | Beijing, China | 100% | Research and development of ICs | | Langfang Creative Technology Co., Ltd. | Langfang, China | 100% | Assembly of mining equipment and spare parts | | Canaan Creative Global Pte. Ltd. | Singapore | 100% | International headquarters, R&D, international distribution | | Canaan U.S. Inc. | United States | 100% | International distribution, mining business | | Canaan Creative International PTE. Ltd. | Singapore | 100% | Mining business | [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=116&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes Canaan's financial performance, condition, and key influencing factors, including revenue, cost structures, operating expenses, liquidity, capital resources, cash flow, and critical accounting estimates [A. Operating Results](index=117&type=section&id=A.%20Operating%20Results) This subsection details the company's financial performance, noting a 12.2% revenue decrease in 2022 due to lower Bitcoin mining machine sales and a significant inventory write-down, contrasting with strong 2021 growth Consolidated Results of Operations (RMB in millions) | Metric | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | **Total Revenues** | 447.7 | 4,986.7 | 4,378.9 | | **Cost of Revenues** | (409.9) | (2,136.0) | (2,831.1) | | **Gross Profit** | 37.8 | 2,850.7 | 1,547.8 | | **Income/(loss) from operations** | (253.9) | 1,828.3 | 304.7 | | **Net income/(loss)** | (215.1) | 2,000.3 | 486.3 | Revenue Breakdown by Source (RMB in millions) | Revenue Source | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | Products revenue | 427.5 | 4,956.9 | 4,159.6 | | Mining revenue | — | 21.7 | 218.6 | | Leases revenue | 19.0 | 7.6 | — | | **Total Revenues** | **447.7** | **4,986.7** | **4,378.9** | - In 2022, the company recorded an inventories write-down, prepayment write-down, and provision for reserve for inventory purchase commitments totaling **RMB 629.4 million** due to low demand and prices in the Bitcoin mining machine market[433](index=433&type=chunk)[454](index=454&type=chunk) - Revenue in 2022 decreased by **12.2%** from 2021, primarily due to a reduction in total computing power sold from **22.3 million Thash/s** in 2021 to **15.1 million Thash/s** in 2022[453](index=453&type=chunk) - Revenue in 2021 increased by **1,013.9%** from 2020, driven by a significant increase in both total computing power sold (from **6.6 million** to **22.3 million Thash/s**) and the average selling price per Thash/s (from **RMB 63** to **RMB 220**)[465](index=465&type=chunk) [B. Liquidity and Capital Resources](index=137&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company held RMB 707.3 million in cash, with 2022 net cash used in operating activities at RMB 1,696.7 million, primarily due to inventory increases and decreased contract liabilities Summary of Cash Flows (RMB in millions) | Cash Flow Activity | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 42.3 | 1,438.9 | (1,696.7) | | Net cash from investing activities | (49.6) | 5.1 | (30.3) | | Net cash from financing activities | (111.9) | 905.8 | (365.5) | | **Cash at end of year** | **395.8** | **2,731.7** | **707.3** | - Net cash used in operating activities in 2022 was **RMB 1,696.7 million**, primarily driven by a **RMB 1,559.1 million** increase in inventories and a **RMB 1,386.1 million** decrease in contract liabilities[480](index=480&type=chunk) - Net cash used in financing activities in 2022 was **RMB 365.5 million**, mainly due to payments for repurchase of ordinary shares (**RMB 234.3 million**) and warrants (**RMB 44.3 million**)[483](index=483&type=chunk) - Capital expenditures were **RMB 2.2 million**, **RMB 37.7 million**, and **RMB 95.1 million** in 2020, 2021, and 2022, respectively, for purchasing equipment and software[486](index=486&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=144&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section introduces the company's leadership, details their compensation, outlines board practices and share incentive plans, and provides share ownership information - The board consists of **five directors**, including Chairman and CEO Nangeng Zhang and four independent directors[503](index=503&type=chunk)[517](index=517&type=chunk) - In 2022, the aggregate cash compensation paid to directors and executive officers was **RMB 27.0 million (US$3.9 million)**[511](index=511&type=chunk) - The company has an Amended and Restated 2018 Share Incentive Plan, under which **299,179,140 restricted share units** and **114,000,000 share options** have been granted as of December 31, 2022[516](index=516&type=chunk) - Chairman and CEO Nangeng Zhang beneficially owns **100%** of the Class B ordinary shares, representing approximately **65.3%** of the company's aggregate voting power as of December 31, 2022[129](index=129&type=chunk)[532](index=532&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=154&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section refers to Item 6.E for major shareholder details and confirms no related party transactions or interests of experts and counsel - Information on major shareholders is detailed in Item 6.E of the report[534](index=534&type=chunk) - The company reports no related party transactions[536](index=536&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=156&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section directs readers to Item 18 for financial statements, reiterates legal proceedings, outlines the dividend policy, and confirms no significant changes since the audited financial statements - The company has not declared or paid any dividends since its inception and intends to retain future earnings for business operation and expansion[538](index=538&type=chunk) - As a holding company, its ability to pay dividends depends on distributions from its PRC subsidiaries, which are subject to local regulations regarding profit distribution and statutory reserves[541](index=541&type=chunk) - The company has not experienced any significant changes since the date of its audited consolidated financial statements included in the annual report[542](index=542&type=chunk) [ITEM 9. THE OFFER AND LISTING](index=156&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section confirms the company's ADSs are listed on Nasdaq under "CAN", with each ADS representing 15 Class A ordinary shares, and notes other subsections are not applicable - The company's ADSs have been listed on the Nasdaq Global Market since **November 21, 2019**, under the ticker symbol "**CAN**"[543](index=543&type=chunk) - Each ADS represents **15 Class A ordinary shares** of the company[543](index=543&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=158&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers supplementary corporate information, including memorandum and articles of association, material contracts like ATM offering and warrant repurchase agreements, and a summary of tax implications in the Cayman Islands, PRC, and United States - In **April 2022**, the company entered into an at-the-market (ATM) offering agreement allowing for the sale of up to **US$750 million** in ADSs[548](index=548&type=chunk) - In **June 2022**, the company repurchased over **4.72 million** outstanding warrants for approximately **US$6.61 million**, which were originally issued in May 2021[549](index=549&type=chunk) - The company is not subject to income or capital gains tax in the Cayman Islands; however, if deemed a PRC resident enterprise, it could face a **25% EIT** on worldwide income, and dividends to non-PRC shareholders could be subject to a **10% withholding tax**[552](index=552&type=chunk)[553](index=553&type=chunk) - The company believes it was not a Passive Foreign Investment Company (PFIC) for the 2022 taxable year, but notes this determination is made annually and is subject to change[568](index=568&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=170&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's exposure to market risks, including foreign exchange risk, interest rate risk, and credit risk, and how they are managed - The company faces foreign exchange risk as its business is effectively denominated in Renminbi (RMB), while its ADSs are traded in U.S. dollars, and fluctuations in the RMB/USD exchange rate can affect the value of investments in ADSs[591](index=591&type=chunk)[592](index=592&type=chunk) - Interest rate risk is not currently considered material, but future investments in interest-earning instruments could be exposed to fluctuations in interest rates[595](index=595&type=chunk) - Credit risk is managed by placing cash with high-credit-rated financial institutions and performing customer credit evaluations, generally without requiring collateral[596](index=596&type=chunk) [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](index=171&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section primarily addresses the company's American Depositary Shares (ADSs), identifying The Bank of New York Mellon as depositary, detailing ADS representation, and outlining associated fees and expenses - The Bank of New York Mellon acts as the depositary for the company's American Depositary Shares (ADSs)[597](index=597&type=chunk) ADS Holder Fees and Expenses | Fee | For | | :--- | :--- | | $5.00 (or less) per 100 ADSs | Issuance or cancellation of ADSs | | $0.05 (or less) per ADS | Any cash distribution | | $0.05 (or less) per ADS per calendar year | Depositary services | | Registration or transfer fees | Transfer of shares to or from the depositary | | Taxes and governmental charges | As necessary (e.g., stock transfer taxes, withholding) | [ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](index=174&type=section&id=ITEM%2013.%20DEFAULTS%2C%20DIVIDEND%20ARREARAGES%20AND%20DELINQUENCIES) The company reports no defaults, dividend arrearages, or delinquencies - The company reports that there have been no instances of defaults, dividend arrearages, or delinquencies[604](index=604&type=chunk) [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](index=174&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section confirms no material modifications to security holder rights and details the full utilization of approximately US$78.5 million in net IPO proceeds for supply chain optimization, R&D, business expansion, and debt repayment - The net proceeds of approximately **US$78.5 million** from the November 2019 IPO have been fully utilized as of December 31, 2022[604](index=604&type=chunk) - Approximately **US$73.7 million** of the IPO proceeds were used for supply chain optimization, R&D improvements, business expansion, and debt repayment, with the rest allocated to general corporate purposes[605](index=605&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=174&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section addresses the company's internal controls, confirming the effectiveness of disclosure controls and internal control over financial reporting as of December 31, 2022, and noting the remediation of prior material weaknesses - Management concluded that as of December 31, 2022, the company's disclosure controls and procedures were effective[607](index=607&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, based on the COSO 2013 framework[610](index=610&type=chunk) - Material weaknesses identified in 2020 and 2021 related to insufficient U.S. GAAP expertise and lack of documented closing procedures have been remediated as of December 31, 2022[611](index=611&type=chunk)[612](index=612&type=chunk) [ITEM 16A-16J. Corporate Governance and Other Disclosures](index=176&type=section&id=ITEM%2016A-16J.%20Corporate%20Governance%20and%20Other%20Disclosures) This section covers corporate governance and disclosures, including the audit committee financial expert, code of ethics, principal accountant fees, share repurchase programs, and HFCAA status - The Board of Directors has identified independent director Yaping Zhang as the audit committee financial expert[615](index=615&type=chunk) Principal Accountant Fees (RMB in thousands) | Fee Type | 2021 | 2022 | | :--- | :--- | :--- | | Audit Fees (PwC) | 1,946 | 1,074 | | Audit Fees (KPMG) | 7,160 | 13,500 | | Audit-Related Fees | — | 965 | | Tax Fees | 657 | 330 | | **Total** | **9,763** | **15,869** | - The company announced a share repurchase program of up to **US$100 million** in **March 2022**; as of **March 31, 2023**, **14,339,826 ADSs** had been repurchased, with approximately **US$72.9 million** remaining available[623](index=623&type=chunk) - On **September 9, 2021**, the company dismissed PricewaterhouseCoopers Zhong Tian LLP (PwC) and engaged KPMG Huazhen LLP as its independent registered public accounting firm[624](index=624&type=chunk) [PART II](index=183&type=section&id=PART%20II) [ITEM 17 & 18. FINANCIAL STATEMENTS](index=183&type=section&id=ITEM%2017%20%26%2018.%20FINANCIAL%20STATEMENTS) This section indicates the inclusion of full audited consolidated financial statements for 2020, 2021, and 2022, along with accompanying notes and reports from independent registered public accounting firms - The report includes audited consolidated financial statements for the years ended **December 31, 2020, 2021, and 2022**[634](index=634&type=chunk)[639](index=639&type=chunk) - The financial statements for the years ended **December 31, 2021 and 2022** were audited by KPMG Huazhen LLP, while those for the year ended **December 31, 2020** were audited by PricewaterhouseCoopers Zhong Tian LLP[641](index=641&type=chunk)[649](index=649&type=chunk) [ITEM 19. EXHIBITS](index=183&type=section&id=ITEM%2019.%20EXHIBITS) This section lists the exhibits filed as part of the annual report, including the Amended and Restated Memorandum and Articles of Association, ADS Deposit Agreement, and Share Incentive Plan - Key exhibits filed with the report include the company's Amended and Restated Memorandum and Articles of Association (Exhibit 1.1), the ADS Deposit Agreement (Exhibit 2.1), and the Amended and Restated 2018 Share Incentive Plan (Exhibit 4.1)[635](index=635&type=chunk)

Financial Statements [Unaudited Condensed Consolidated Balance Sheets](index=1&type=section&id=CANAAN%20INC.%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2022, Canaan Inc.'s total assets decreased to RMB 4.77 billion from RMB 5.63 billion a year prior, primarily due to a significant reduction in cash and cash equivalents, while total liabilities saw a substantial decline to RMB 538.3 million from RMB 2.17 billion, mainly driven by a sharp drop in contract liabilities, consequently increasing total shareholders' equity from RMB 3.46 billion to RMB 4.24 billion Consolidated Balance Sheet Highlights (in thousands RMB) | Balance Sheet Item | Dec 31, 2021 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **5,632,257** | **4,774,038** | **-15.2%** | | Cash and cash equivalents | 2,684,342 | 707,261 | -73.7% | | Inventories | 812,363 | 1,473,990 | +81.4% | | **Total Liabilities** | **2,173,567** | **538,311** | **-75.2%** | | Contract liabilities | 1,340,731 | 4,613 | -99.7% | | **Total Shareholders' Equity** | **3,458,690** | **4,235,727** | **+22.5%** | [Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss) (Quarterly)](index=2&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%2F%28LOSS%29) For the fourth quarter ended December 31, 2022, the company experienced a significant downturn, reporting a net loss of RMB 610.2 million, a stark reversal from the RMB 1.2 billion net income in the same period of 2021, driven by a sharp decline in revenues to RMB 391.9 million and a gross loss of RMB 431.1 million as the cost of revenues surpassed sales Q4 2022 Financial Performance vs. Prior Periods (in thousands RMB) | Metric | Q4 2022 | Q3 2022 | Q4 2021 | | :--- | :--- | :--- | :--- | | Total Revenues | 391,926 | 978,207 | 2,184,555 | | Gross Profit/(Loss) | (431,053) | 219,336 | 1,486,949 | | Income/(Loss) from Operations | (835,812) | (66,977) | 1,213,225 | | Net Income/(Loss) | (610,220) | 46,060 | 1,196,529 | | Basic EPS (RMB) | (0.2426) | 0.0180 | 0.4598 | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Annual)](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) For the full year ended December 31, 2022, Canaan Inc. reported total revenues of RMB 4.38 billion, a 12.2% decrease from RMB 4.99 billion in 2021, with profitability declining sharply as gross profit fell 45.7% to RMB 1.55 billion and net income plummeted by 75.7% to RMB 486.4 million, partially offset by a significant increase in mining revenue Full Year 2022 vs 2021 Financial Performance (in thousands RMB) | Metric | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | 4,378,907 | 4,986,706 | -12.2% | | Gross Profit | 1,547,800 | 2,850,745 | -45.7% | | Income from Operations | 304,710 | 1,828,325 | -83.3% | | Net Income | 486,357 | 2,000,282 | -75.7% | | Basic EPS (RMB) | 0.1900 | 0.7932 | -76.0% | - Mining revenue showed substantial growth, increasing from **RMB 21.7 million** in 2021 to **RMB 218.6 million** in 2022, a tenfold increase[9](index=9&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) The company provides reconciliations from GAAP net income to non-GAAP adjusted net income for both quarterly and annual periods, with adjustments primarily excluding non-cash items such as share-based compensation expenses and the change in fair value of warrant liability to offer a different perspective on operational performance [Quarterly Reconciliation](index=3&type=section&id=reconciliation%20of%20net%20income%2F%28loss%29%20to%20non-GAAP%20adjusted%20net%20income%2F%28loss%29%20for%20the%20period%20indicated) For the fourth quarter of 2022, the non-GAAP adjusted net loss was RMB 513.7 million, derived from the GAAP net loss of RMB 610.2 million after adding back RMB 96.5 million in share-based compensation expenses Q4 2022 Non-GAAP Reconciliation (in thousands RMB) | Metric | Q4 2022 | | :--- | :--- | | Net Loss (GAAP) | (610,220) | | Add: Share-based compensation | 96,548 | | **Non-GAAP Adjusted Net Loss** | **(513,672)** | [Annual Reconciliation](index=5&type=section&id=reconciliation%20of%20net%20income%20to%20non-GAAP%20adjusted%20net%20income%20for%20the%20years%20indicated) For the full year 2022, non-GAAP adjusted net income was RMB 869.2 million, a significant decrease from RMB 2.3 billion in 2021, calculated by adjusting the GAAP net income of RMB 486.4 million primarily for RMB 407.4 million in share-based compensation and a RMB 24.6 million gain from the change in fair value of warrant liability Full Year 2022 vs 2021 Non-GAAP Reconciliation (in thousands RMB) | Metric | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net Income (GAAP) | 486,357 | 2,000,282 | | Add: Share-based compensation | 407,397 | 491,461 | | Less: Change in fair value of warrant liability | (24,598) | (190,178) | | **Non-GAAP Adjusted Net Income** | **869,156** | **2,301,565** |