Bitcoin (BTC) mining rig manufacturer, Canaan Inc has raised $50 million in a new funding round by selling preferred shares.
The company disclosed the development in a recent filing at the Securities and Exchange Commission (SEC) stating that funds raised will be deployed to expand research, innovation, and production capacity.
The $50 million raised came from an undisclosed institutional investor after 50,000 series A Canaan shares were issued with convertible preference and at $1,000 each.
“Pursuant to the second tranche of the Preferred Shares Financing, the Company issued 50,000 Preferred Shares at the price of US$1,000.00 per Preferred Share and caused The Bank of New York Mellon to deliver 2,800,000 American depositary shares (“ADSs”), each representing fifteen Class A ordinary shares of the Company, at the price of US$0.00000075 for each ADS.”
The company explained in the filing that funds raised will be deployed to improve its production capacity with special mention of innovation, research, and other corporate purposes.
This latest round of funding comes on the heels of a previous $25 million raised by the company to further its business operations. At the time of disclosure, the firm’s share price was up by 7% but suffered a 31% plunge this month.
Canaan to Improve Bitcoin Mining Capacity Before the Halving
As mining activity picked up across the board toward the end of last year, miners recorded increased profits, wiping out the previous year’s losses with the increased revenue.
The company seeks to take advantage of the rush among miners to improve their capacity. This urge is significantly pushed by the upcoming Bitcoin halving which will reduce miner rewards.
Traditionally, Bitcoin halvings are known as a bullish drive in the market. Though mining rewards are slashed, miners with increased capacity tend to produce and reap higher price rewards, resulting in multiple miners announcing expansions in Q4 2023.
The firm’s miner sales in Q2 2023 grew by 44% compared to Q1. Revenue was $79.3 million, showing strong year-on-year growth with Canaan’s Chief Financial Officer James Jin Cheng describing the situation as an improvement.
“Our mining revenue further set a new historic high in the second quarter of 2023. Recently, we have expanded into new mining projects in Africa and South America.”
In Q3, the company sold 3.8 Million Th/s per second of hardware a decrease from its Q2 performance. Still, it announced that it launched the A14 series with a higher computing power alongside securing a Type 2 license for cryptocurrency mining in Kazakhstan following new industry regulations.
.@canaanio Reports 48% Decline in Q3 #Bitcoin Miner Sales$CAN #BitcoinMining https://t.co/GSmM25fn0D
— TheMinerMag (@TheMinerMag_) November 28, 2023
This year, Canaan has announced follow-on purchase orders of 17,000 BTC mining machines for Stronghold Digital Mining and Cypher Mining Inc.
The post Bitcoin Mining Rig Maker Canaan Secures $50 Million In Preferred Shares Sale appeared first on Cryptonews.